EMI/Time Warner merger puts e-music on the map

NEWS EMI and Time Warner have merged their music businesses and made it clear that the impact of the Internet is one of the main reasons for their union. The new company - to be known as Warner EMI Music - will have sales of over £4.8bn a year. It will be worth approximately £12bn, and will have a stable of acts featuring pop headliners such as Madonna, Robbie Williams, The Beatles, and The Spice Girls. EMI has struggled in recent years, and been rumoured to be on the wishlist of rivals, including Bertelsmann's BMG Entertainment, Seagram's Universal Music Group and Sony Music Entertainment, as well as music industry outsiders such as Microsoft and News Corporation. However, Time Warner's record-breaking merger with high-flying AOL greatly strengthens its online credentials. The board of Warner EMI Music will have 11 members, six from Warner and five from EMI, and in a statement Gerry Levin, Time Warner CEO, said: "Warner EMI will have a winning combination of management depth, a world-class roster of recording talent and, alongside AOL Time Warner, the expertise to fully exploit the true potential of digital media." EMI, although lagging rivals in the important US market, has been aware of the opportunity the Internet presents. Last year, it took a small stake in Preview Systems, whose technology allows the secure downloading of music, and struck deals with Liquid Audio and musicmaker.com. EMI and Time Warner claim their merger is expected to be closed in the second half of 2000, but there is already speculation a company such as Bertelsmann may register a higher, hostile bid.