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Label News (more headlines) 12-11-2003

European Independents Slam Universal's Alleged Payola Deal With Viva

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European independent music companies have issued a statement through their trade body Impala slamming Universal's alleged agreement with Germany-based broadcaster Viva to guarantee video-time for Universals' artists in return for payment.

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According to information published in the Spiegel on Sunday 8 December 2003, Viva and Universal agreed in October 2002 that Viva would include 50 videos from Universal on their "newcomer rotation" in the following 12 months. Universal apparently pays €18.000 per video plus € 0,20 per album sold. The Spiegel also said that Viva and Universal meet in advance to agree which bands Universal should produce videos for. The alleged agreement came to light after a Universal manager apparently gave bands a guarantee of video time if they signed with Universal. The Spiegel also claimed that Viva had approached EMI with the same model but the deal didn't materialise.

Impala issued the following statement in response:

"The alleged agreement between Universal raises the sensitive issue of payola – a practice which is outlawed and universally condemned throughout the music business. It also highlights the dangers of anti-competitive behaviour in the market place.

It illustrates how difficult it is for independent record companies to get access to Viva's programming – the most popular music television channel in German speaking territories. Most new music comes from the independent sector but this music doesn't get exposure because of market access problems and deals like this which foreclose the market to other operators. This type of deal also produces an unfair advantage when it comes to signing new talent. It is not possible for smaller companies to compete on a level playing field.

Impala sees this as an illustration of the dangers of market concentration and the fact that an additional merger of the majors will only worsen the situation. It is concerned that similar agreements could exist elsewhere.  

What the market needs is intense scrutiny by competition watchdogs to make it more difficult to conclude this type of agreement. This is the only way to ensure fair competition and market access for all players. This alleged deal cheats independent companies, artists and of course citizens. Quality and diversity suffer as well as the sector's image and the social value of music.

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