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Merged Sony-BMG Would Be World's No. 1 – Report

Universal Music maintained its status as the world’s market leader in 2003, but a combined Sony/BMG would have challenged its dominance.

The International Federation of the Phonographic Industry (IFPI), a music industry trade group, released market share figures that show BMG and Sony had an aggregate share of 25.1% in 2003. Universal posted a 23.5% share, down from 25.4% in 2002.

The Sony-BMG merger plan cleared a major hurdle June 17 when European competition commissioner Mario Monti gave his approval of the deal.

BMG was among the companies posting a share gain in 2003, increasing to 11.9% from 9.6% in 2002, thanks to a string of international hits by acts such as Avril Lavigne, Pink, Dido, Britney Spears and Justin Timberlake.

Also gaining marketshare in 2003 were EMI at 13.4%, compared with 12.2% in 2002, and Warner Music, at 12.7% against 11.8% in 2002.

Sony’s global share went down from 13.8% in 2002 to 13.2%.

EMI moves up one rank and becomes the world’s second-largest record company in terms of market share. EMI is followed by Sony, Warner and BMG.

“BMG had a fantastic year, thanks to good repertoire,” an industry analyst says. “In the past few years, the changes we’ve seen reflect the hits and repertoire success. There has not been much activity on the acquisition side.”

The last significant acquisition was BMG taking over Zomba, home of Spears and ‘N Sync, in November 2002. IFPI’s BMG figures include Zomba for 2002 and 2003.

IFPI statistics show that EMI has enjoyed a significant recovery in North America, where its share grew from 8.9% in 2002 to 10.5% in 2003. It also posted growth in Europe, Japan, Asia and Australasia. Contributing to EMI’s share growth in 2003 were albums from Coldplay, the Beatles and Norah Jones.

“The company is pleased with solid progress,” an EMI representative says.

A representative for Universal Music International says the decline in 2003 figures does not come as a surprise, since 2002 was the company’s best-ever year. During that time frame, such major acts as Eminem, U2, Shania Twain, Andrea Bocelli and Elton John, among others, released new albums.

“That was not the case in 2003,” says the Universal rep, who points to a strong 2004. The rep added that the company has had a good year so far, and albums are expected from U2, John, Black Eyed Peas, 50 Cent and Bocelli before year’s end.

A spokesperson for Warner Music attributes the company’s gain to “tremendous A&R successes” during the year, such as Michael Buble and Sean Paul, as well as ongoing hits from Red Hot Chili Peppers and Madonna.

Sony and BMG declined to comment.

Independents still represent the largest share with 25.3% globally, down from 27.1% in 2002. IFPI head of research Keith Jopling says the indie share is calculated by subtracting the major companies’ share from the total share. It does not include repertoire licensed to majors.

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