Dominating the music industry
Up to 90% of the global music market is accounted for by just five corporations: EMI Records, Sony, Vivendi Universal, AOL Time Warner and BMG. Collectively, these corporations are known as ‘the Big Five’, and operate in all of the major music markets in the world. Each of the corporations maintains their headquarters in the US, the largest of the world’s markets.
Of the Big Five, Vivendi Universal is the largest, with 29% of the market share and wholly owned record operations or licensees in 63 countries. Its nearest rival is AOL Time Warner, with 15.9% of the market share. Each of the corporations operates in a variety of fields beyond recorded music, incorporating publishing, electronics and telecommunications, thus extending their influence to cover more markets within the global entertainment industry.
In achieving their dominance in music sales, the Big Five each own a large portfolio of labels, from formerly independent labels to large regional operators in different territories. The biggest exception to their domination of the market is in India, where the large film music market has so far defied these corporations.
Africa has also proved to be a difficult market for the American-owned corporations, largely because the economic situation outside South Africa means a lack of profitable markets. In South Africa, Gallo Records is one of the biggest record labels, not only because of its representation of African music, but also from being exclusive licensee for Warner Music International.
The Big Five are not always in competition with each other, and it is in their best interests to act together at times. EMI is the sole licensee of BMG material in Greece. A press material in May 2002 stressed that the deal would work well for both companies, with EMI licensing some important international artists, and BMG’s Greek artists being looked after by a company with a much bigger local presence. Co-operation and partnerships, then, can yield not only greater profits, but maintain their status as corporate giants.
Many well-known smaller labels are in fact owned by one of the Big Five companies. While labels are often started by entrepreneurs, the dominance of the major labels makes large scale success difficult for these firms. And should they achieve a high degree of success, they excite to the predatory instincts of the large corporations. This gives the major labels a wider ranging repertoire in different geographical markets and musical genres.
While small labels will continue to exist, they become increasingly unable to grow without becoming part of one of the Big Five companies. This pattern looks set to continue into the future as the larger companies continue their strategy of acquisition, and potentially merge amongst themselves in an attempt to dominate the market even further.
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