MusicDish e-Journal - November 16, 2018
MusicDish Advertising Network
Search MusicDish e-Journal (Advanced)
Subscribe To MusicDish e-Journal
About | Contact | Advertise | RSS | Submit Article | Submit News | Artist Development | Premium PR Distribution
Mi2N | MusicDish*China | MusicDish Network | MusicDishTV | Urban Music News Network

Is Viacom Favoring Its Own?
By Eric de Fontenay (Founder & Publisher)
(more articles from this author)
Comment | Email | Print | RSS

A reader feedback on my voluntary structural separation proposal for Clear Channel went straight to the crux of the problem faced with today's media conglomerates that mix content & pipe, with significant market power in one or both sectors:

"Viacom owns Famous Music Publishing, a publishing co. which owns the rights to songs by J-Lo, Eminem, Pink, Aguilera, ... - the very artists that get the most play on MTV and the best space in the record chain stores. Is this a coincidence or a smart business move? and... Is it legal that a company buys up the competition to be the only broadcast force and then decides to broadcast mainly their own artists, and "makes" them a star by broadcasting them a thousand times a year?"

This is a question that worries several of us that follow the industry. There has been a justifiable concern that conglomerates owning key assets in content and controlling distribution channels would use these in an anti-competitive manner to restrain/foreclose competition in any or all of these markets. This is because the conglomerate, if it is a rational economic decision maker, will maximize overall revenue and profitability, even at the expense of certain divisions.

Content/pipe owners may have an incentive to license key works only to their affiliated distribution channels, hampering other channels from being able to compete. AOL/TW for example could decide to make a Warner artist track available exclusively through their online properties, refusing to license it to competing portals such as MSN. The logic in this case is that the AOL/TW group can maximize its revenues through the anticipated additional subscribers & ancillary income from AOL exceed the licensing revenues lost to Warner. The reason that labels have licensed their works (though that even took time) was that none have dominant control over existing catalogues.

On the other hand, the fact that Apple has acquired the rights to a fraction of the songs available on competing label-backed initiatives could raise serious concerns if it endures. At the least, one might ask whether the labels are favoring the Windows format, in part due to MS' Windows Media dominance on the web - a collusion of monopoly and cartel for their respective market advantage over smaller competing alternatives. Personally, while I believe that Apple's unparalleled success renders the issue moot, it illustrates the potential for anti-competitive abuse.

The other scenario is where the content/pipe owner is a dominant player in its distribution sector. If Viacom can realise greater profits by focusing on works over which they hold rights, despite potential revenue loss to MTV, it would be a rational strategy. As Viacom holds a Microsoft-style control over the cable music sector, those losses to its cable channels would likely be minimal while maximizing Famous Music Publishing's earnings/depressing competing publishers business. At the least, Viacom could use its dominance to make it more expensive/difficult for works owned by non-affiliated publishers as compared to its own.

The question of whether they have a right to engage in these practices is clearly no. There is significant legislative and regulatory precedent starting with the Sherman Antitrust Act reinforcing from a public policy perspective the illegality for a party with significant market power to use that market dominance to restrain trade or monopolize the market. This was why ATT was broken up into pieces, why Microsoft nearly risked the same fate and why several major label merger proposals have been rejected by regulatory agencies in the US & Europe. This has also been the primary justification behind cross-ownership restrictions thrown out by the FCC's new media ownership rules.

While I cannot say whether MTV is favoring Famous Music Publishing songs, I do believe that Viacom's near-monopoly over the cable music sector justifies examining whether structural separation between the parent and its affiliates is necessary. Structural separation would establish a virtual Chinese Wall between the parent and its affiliates that would limit the former's control over the latter as well as its ability to coordinate actions benefitting the group's overall profitability over those of the individual affiliates.

The 'undesirable' alternatives to structural separation range from outright divestiture of some of Viacom's music cable holdings to mandatory must-carry obligations that would force its distribution channels to set-aside a certain amount of their videoplay to unaffiliated publishers' works.

Home » News Beat » Is Viacom Favoring Its Own?
Email |Print |Comment |RSS

back | top

MusicDish Advertising Network

News Beat

» indieOn Connects Music to the Blockchain

» 13 Music Label Sold to MTN

» Darcus Beese Named President Of Island Records

» ASCAP Revenues Top $1.144 Billion In 2017

» BMG Appoints New Creative Directors In Nashville

News Beat Directory

» [2018-09-16] Live Nation Electronic Asia Inks Deal With Budweiser For Creamfields Festivals; Together, Creamfields And Budweiser Will Focus On Building Entirely New Content For Dedicated Electronic Music Fans Throughout Asia

» [2018-08-23] Andy Ma Appointed Warner Music China CEO; Andy Ma Has Also Been Appointed EVP, Commercial And Business Development For Greater China

» [2018-08-23] IndieOn Connects Music To The Blockchain; IndieOn Is Confident Of Creating A "music Miner" Who Listens More And Grow Their Token Value

» [2018-06-23] The 2018 MIDEM Silk Road International Music Alliance Signing; International Music Industries Signing Of A Mutual Resource Sharing Agreement With Shanghai Conservatory Of Music & The China Records Group

» [2018-06-06] Screen Music Connect To Explore The Music Of Film, Television And Interactive Media; Created By James Hannigan, Award-winning Composer And Game Music Connect Co-founder, Screen Music Connect Builds On The Success Of The Sold-out Game Music Conferences

» [2018-06-05] Fred Casimir To Develop BMG's Global Recordings Business; As Well As Building BMG's European Infrastructure, Casimir Was Instrumental In Developing BMG's Recordings Business

» [2018-06-03] 13 Music Label Sold To MTN; DSN Music Spins Off Record Label To Albuquerque Music Entrepreneur's New Group

» [2018-06-02] CISAC 2018 Annual Report; A Comprehensive Overview Of The Confederation's Work To Serve 4 Million Creators And 239 Authors Societies Across The World

» [2018-06-02] MusicDish Announces A Love Electric 2018 China Tour; The Tour Will Crisscross Through China With 12 Shows In 8 Cities, Including Guangzhou, Dongguan, Zhuhai, Shenzhen, Kunming, Jiaxin, Wuhan And Beijing

» [2018-06-02] Darcus Beese Named President Of Island Records; Renowned U.K. Music Executive To Join Universal Music Group's U.S. Label Leadership

» [2018-05-17] Avant-Garde Label Maybe Noise Launches In Beijing; The Official Launch Will Be On May 26 At Magnet Theater With A Performance Supporting Its First Vinyl Release: Png Z

» [2018-05-04] Award-Winning Lithuanian Rock Band Colours Of Bubbles "She Is The Darkness" 2018 China Tour; The Tour Will Kickoff In Shanghai Where The Band Will Represent Lithuania During The Country's Signing To The Silk Road Music Alliance
MusicDish Advertising Network

follow MusicDish on
Follow MusicDish on Twitter

Mi2N Music PR

The International Radio Festival Announce Final Line Up Of Radio Stations

Critically-Acclaimed Instrumental Rock Guitarist Mike Dekleva Releases His Second Four Song Instrumental Rock Music EP, "Psychedelia," On Friday, November 9, 2018

Smooth Gospel Artist LARRY CRAIG Drops Single To Radio

Amsterdam Dance Event Rounds Up Record Breaking 23rd Edition

Announcing Amped Studio 2.0

Award Winning Singer/Songwriter Halie Loren Has New Music Video In Production

Deadline Looms - The 15th Annual Acoustic Music Awards

Websites: Mi2N | MusicDish*China | MusicDish Network | MusicDishTV | Urban Music News Network
Services: Submit Article | Submit News | Submit Video | Artist Development | Premium PR Distribution

Copyright © 1997-2018 MusicDish LLC., all rights reserved.
About MusicDish e-Journal | Contact Us | Advertise | RSS | Internships