Earlier in the quarter we discussed The Great Merger Movement in which many industries went through horizontal and vertical integration in an effort to keep prices high. This article discusses the recent consolidation of the music industry from four major labels to three as EMI was purchased by Universal. With digital music and the internet the music industry has greatly suffered through a dramatic decrease in record sales. Currently Universal and Sony are the top labels in the industry right now with Warner Music Group falling behind. While consolidations during The Great Merger Movement were an effort to control consumers, the music industry consolidation seems to be driven in an effort to control artists. With advances in technology artists have been able to be relatively successful without major labels. Thus not only are labels hurt by a decrease in record sales, but they also are losing business to smaller labels and even the power of the internet. It will be interesting to see how the music industry will shift in an effort to bolster sales and artists signings, but it seems that consolidation is the right step to take.
http://www.nytimes.com/2011/11/12/business/media/emi-is-sold-for-4-1-billion-consolidating-the-music-industry.html?scp=2&sq=industry%20consolidation&st=cse
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