What Crisis?

Alison Wenham is fed up with reading that Ministry Of Sound and Gut Records’ protest against Impala’s conditional support for a Warner bid for EMI has caused any sort of crisis for the U.K. indie organization she heads. She suspects much of the fuss has been orchestrated.

Asked who she thought was conducting it, the Association of Independent Music chief exec told Pollstar she’s "at a loss" to understand what’s behind it, but felt the timing and the wording of both record companies’ complaints suggest that at least some sort of collusion was likely.

"The same phrases kept coming up. It was weird – like listening to a tape loop," she explained.

MOS had openly demanded the immediate resignation of the Impala executives responsible for making the decision to cooperate with a Warner approach for EMI.

It also wrote to AIM executives urging them not to ratify the agreement, claiming it not only was unconstitutional but had not been disclosed or discussed in advance in any detail with the U.K. indie organization’s board or members. Gut Records took a similar line.

Wenham was stung by the charge that she been part of anything unconstitutional, she said.

Apart from questioning whether a two-prong – or arguably a one-prong – revolt in an organization that has more than 1,000 members constitutes a crisis, Wenham insisted the agreement with Warner doesn’t conflict with Impala or AIM’s earlier attitude toward major mergers.

She admitted that the indies’ idealistic goal is a market without mergers, but acknowledged they have to accept it’s "not within our gift" to see them all off, and the obvious pragmatic stance has been (and still remains) to oppose "mergers without remedies."

The problem with the remedy agreed with Warner over a potential EMI takeover is that it involves the U.S. major giving the indies a bundle of money to fund their Merlin Internet platform, which has led to accusations of self interest from those who think the Impala execs have sold them down the river.

An unnamed "industry insider" was quoted telling The Guardian it’s an "outrageous" bargain that lacks principles. But Impala president Patrick Zelnick told the paper the indies haven’t been bought off.

In an Impala company statement, he said his organisation has been consistent at opposing mergers without strong remedies, and also told The Independent that a market consisting of three majors and a strong independent sector is preferable to having a market where two companies dominate the shelves.

Wenham sees the Merlin platform as a vital weapon if the indies are going to hang on to their market share in a digital age because it represents the sector’s best chance of having the combined clout of a major.

Although she said she’s "not a lawyer or a lobbyist," she’s fought hard to see her members collectively have the sway of a major, particularly in her much-chronicled battle with Apple chief exec Steve Jobs, who called her tactics "mean and nasty," over his bid to introduce iTunes into Europe without bothering to cut a deal with the indies over use of their material.

He’d reached agreements with Sony, BMG, EMI, Universal and Warner to sell their songs, but Apple reportedly hoped to use its clout to force the independents into a lesser deal.

Not only did the independents dislike this offer, they resented the fact that it appeared inferior to deals with the majors. What annoyed them even more was Jobs’ insistence at the launch that the majors and independents were offered the same deal.

AIM handed out its own press statement at the iTunes launch, which pointed out that a lot of British music wouldn’t be available on this much-hyped new site about to make its entry to Europe.

The relationship between Wenham and Jobs began acrimoniously and then got worse, even to the point where the Apple chief made a personal call to clear the air.

"Had the conversation been civil I would have been impressed that he had bothered to pick up the phone. But because of the incivility I just was fairly unimpressed, frankly," Wenham told The Daily Telegraph at the time.

Jobs came to the table before the media fuss and negative public relations started putting a dampener on the iTunes launch.

Wenham ended up cutting the indies a deal that was much better than anything Apple had been wanting to offer. Ironically, MOS will have been one of the main beneficiaries.

If Wenham is right about there being an orchestrated fuss, conspiracy theorists looking at the events of March 3rd, when EMI released a notice saying it received a new offer from Warner, may well find themselves starting out on a potentially endless game of "Cluedo," or "Clue" as it’s called in North America.

Within a couple of hours of EMI’s notice, Warner replied by confirming the approach – although neither side mentioned a bid price – and also said it had agreed to conditions that satisfied the European independent sector.

Next came the Impala statement saying it had supported a Warner approach for EMI on certain conditions.

The indies’ press offices denied they were forced to release that statement because of what EMI and Warner said earlier in the day. But the ensuing fuss indicated that it went out before the organization’s U.K. wing had fully canvassed its members on the matter – hence the outcry from MOS.

Any of the other majors, arguably including EMI, could be said to have a motive for trying to discredit the indie agreement with Warner, but it’s far from obvious who may have done what, where and with which weapon.