Britain’s competition watchdog has provisionally approved Sony Music’s $430m (£312m) deal to buy Awal – the artist services company that has worked with musicians such as Little Simz , Nick Cave and Finneas – after initially raising concerns that the takeover could lead to worse deals for artists or increased prices.
The Competition and Markets Authority (CMA) said a thorough investigation into the deal, driven by fears it could be bad for the music industry, concluded it would not reduce considerably competition in the UK now or in the future.
The CMA feared the takeover would result in the loss of another independent player in the industry, dominated by the big three – Sony Music, Warner Music and Universal Music.
However, he tentatively concluded that there are many other independent “artist and label” service providers, companies that provide a cheaper “do-it-yourself platform” for artists offering promotion, marketing and distribution, and that these offer better royalties and royalties than working with traditional record labels.
Major record labels have developed their own artist and label services, and artists can also turn to independent record labels that offer better terms than the music industry giants.
“We have carefully assessed whether this merger will result in any negative outcomes for the marketplace, artists and ultimately music fans, now and in the future,” said Margot Daly, President of the Investigation Panel of the CMA.
“Our tentative conclusion is that the agreement is not likely to affect competition in a way that will reduce the choice or quality of recorded music available, or increase prices. We believe that a combination of other major labels and independent vendors will continue to compete closely with Sony, so our tentative decision is to allow the merger.
The CMA will release its final report on the deal by March 17.
A Sony Music Entertainment spokesperson said, “Our investment in Awal will bring real benefits to artists and consumers amid intense competition at all levels of the music industry. We look forward to continuing to work with the CMA through the final stages of its review. »