2. European Majors and Independent Record Companies

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Definion of Majors:

(Majors are UMG – Universal Music Group, WMG – Warner Music Group, Sony BMG and EMI)

  1. A world-wide presence and a vertically integrated organization. Majors or their affiliated companies also have publishing activities and are active on various downstream markets, such as radio/TV broadcasting and the online exploitation of music.
  2. A presence at all levels of the value chain in music recording: from the signing of artists, the manufacture of CDs, to the distribution to retailers, although these two latter activities tend to be more and more outsourced.
  3. Significant financial capacities, enabling them to offer artists and customers more attractive financial conditions than independents (for example higher advances for artists, much higher promotional and marketing expenditure).
  4. A large diversified portfolio of artists and a large diversified repertoire, as well as significant back catalogues.

Independents:

  1. Smaller organizations.
  2. A large number of players present on the market (thousands in the EEA).
  3. A focus on A&R and recording. Manufacturing and distribution are often outsourced. Independents often depend on the distribution networks of majors.
  4. Only some large independent record companies have their own distribution facilities.
  5. A national presence although a limited number of successful independents also have international operations.
  6. Limited budget for promotional and marketing expenditure, thus limiting the international promotion of artists and a more limited access to mass media.
  7. A focus on a particular repertoire (classical, dance music, etc.) or niche genres, although the largest independents generally cover several genres.
  8. Limited back catalogue, implying a higher dependency on new releases.
This item is part of the series of posts based on the European Antitrust Agency 2007 Music Industry Analysis for the Sony BMG Case. It’s home page is here.

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