A group led by Japan's Sony Corp has purchased Britain's EMI Music Publishing for $US2.2 billion ($A2.20 billion) from Citigroup, creating the world's largest music copyrights company.
EMI's catalogue includes hits from Motown, the Beatles, Jay-Z and Norah Jones.
Now all that remains of the storied British label group is its recorded music division, which Vivendi's Universal Music Group has offered to buy for $US1.9 billion.
That deal is being looked at by European and US regulators. If they approve it some time later this year, the world's major music companies will be reduced from four to three.
Recorded music companies have argued that they need to combine resources to survive in an industry crippled by piracy, as the legitimate digital distribution of music is still in its infancy.
But because of its diverse revenue sources publishing has remained a steady business over the years, despite the onslaught of the internet and the continuing decline of compact disc (CD) sales.
And by acquiring EMI, Sony/ATV, a 50-50 joint venture between Sony and the Michael Jackson estate, will control just over two million copyrighted songs. The new entity is expected to capture nearly a third of publishing revenue in the world.
Size wouldn't necessarily give the company the ability to use its dominance to boost licensing revenue, Sony/ATV argued, because licensing rates are closely controlled by laws in various countries.
Friday's clearance by the US Federal Trade Commission (FTC) means that regulators agreed the new entity would not have the market power to raise rates on its own or co-ordinate such a move with others, which could have affected the price of songs.
"We've gone over the rainbow and hit the pot of gold," said Sony/ATV chief executive Marty Bandier, adapting a lyric from The Wizard of Oz song Over the Rainbow, which is part of the EMI catalogue.
Last year, publishing companies generated about $US3.9 billion in revenue, relatively unchanged over the past several years, according to Simon Dyson, editor of Music & Copyright, an industry newsletter.
Publishing's revenues have held up better than the recording side because there are more streams of revenue that aren't tied to declining sales of CDs.
Sony/ATV's 11.7 per cent share and EMI's 19.3 per cent share means the combined entity will now control about 31 per cent of the global market for music copyrights, surpassing Universal Music Publishing Group's 22 per cent.
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