IMPALA warns of consolidation as Warner buys Zebralution
Warner Music Group has bought the German digital distributor Zebralution, and the independent label coalition IMPALA has answered with a mixed statement. It praises the business, but it says the deal pushes a trend that thins out the independent sector.
IMPALA's two messages
IMPALA says big markets need big companies, and it hopes the purchase raises competition among the majors. It adds that consolidation keeps going and that this dilutes the independent sector.
The coalition speaks first to Warner. Zebralution is a "much-cherished independent business," it says. Clients who want to stay independent should be allowed to leave promptly. Clients who remain should get the same access as all Warner artists to pay and promotional tools.
It then turns to EU policymakers. Independent labels and distributors are essential to Europe's cultural diversity, IMPALA says, and they need conditions to grow and compete. With the EU reviewing copyright, AI and competition policy, the group urges a sector-specific approach.
A label with a crowded ownership trail
This is a re-acquisition of sorts. Zebralution was a direct IMPALA member after Warner divested it. That divestment came under an agreement with IMPALA, struck when Warner bought Parlophone after UMG had to sell two-thirds of EMI to win European Commission clearance. IMPALA calls the divestment a success in itself.
An independent consortium of co-founders and other indie music figures bought it in April 2017. In December 2019 it passed to the German collection society GEMA. Early this year GEMA sold all of it to Insight Partners, which merged it into Bookwire.
Now Warner has bought back the Zebralution Music arm. Bookwire keeps the audiobook and ebook division.
What IMPALA wants from the wider market
IMPALA points to its recommendations for the digital music ecosystem, which it calls essential. It says it will keep working with the industry on streaming integrity. It also asks for action on diversity and for changes in line with its Digital Music Plan.
It closed with a line aimed at Europe: "Let's make Europe the best place in the world for culture."
Our take
The statement is a warning and a list of conditions rather than an objection. The test is practical. How quickly Zebralution clients can leave, and whether those who stay get equal tools, will show whether Warner meets IMPALA's expectations. The deal terms are not given in the statement, so any effect on the German distribution market is still unknown.
Source: Digital Music News