TDU to take closer look at sale of Vale Music.
The anti-trust unit within Spain’s economy ministry, the SDU, has ordered the government’s competition tribunal (TDU) to investigate the sale of Vale Music, Spain’s biggest indie label, to Universal Music Iberian Peninsula (Spain and Portugal).
The SDU wants to know whether Universal’s acquisition will have any adverse effect on the Spanish music market.
An SDU report reveals that the four major labels, Universal, Sony BMG, Warner and EMI, control 79.5% of Spain’s music market. This will climb to 91.5%, if the Universal-Vale transaction is approved. The surprise sale of Vale to Universal, for an undisclosed price, was announced June 22 (Billboard, July 8, 2006).
Vale Music grabbed an 11% market share in 2005, said labels’ body Promusicae, just nine years after its creation as a dance-music compilation specialist.
It cornered the sales of CD albums based on the reality-TV show Operación Triunfo. Since 1997, Vale said it has sold 40 million units, including 10 million units by Operación Triunfo acts.
Universal, on the other hand, is the third biggest label in Spain, with a 2005 market share of 16.9%. The combined Universal-Vale share would place it just ahead of leader Sony BMG’s 27.9% share.
The TDU will decide whether or not the music genres of Universal and Vale, which specializes in dance-pop, are too similar. The TDU will study the impact of the purchase, and its ruling is expected within two months.