 Thank you for the opportunity to discuss the significant consumer harms the universal music group and EMI music merger would cause if allowed I'm speaking today on behalf of public knowledge and the Consumer Federation of America Online music and digital platforms they ride on hold tremendous promise for consumers and artists Gone are the days when music fans can only listen to the latest album if they travel to a physical record store Bought the album and bought it back home to play on a stereo system Technology now allows consumers to buy music at the click of a button and listen to that music on any number of personal devices Artists also have been more empowered and capable to retain their independence by utilizing digital distribution platforms Rather than going to a label Now imagine that it's last year 2011 great year, and you're in the business of starting a digital music service in the United States this chart Represents the billboard hot 100 songs for 2011 is measured by sales and streaming activity If you wanted to attract the consumers who are the most active music listeners these hundred songs would have been the essential package Without them any avid music fan would see your services incomplete And you would not be able to attract the critical mass of subscribers necessary to make a profit By the way, every single one of these artists is signed with one of the four major music labels Now imagine a world where UMG and EMI had already merged and they decided that they will withhold their songs from your digital music service If that was the case Then this is What your digital music service library would look like? The playlist suddenly looks very sparse after all you wouldn't have six of the top 10 songs for 2011 you wouldn't even have a majority of the top 100 songs a Combined UMG and EMI would own 51 of them The fact is you just would not have a viable digital music service and as a result you would be beholden to the merge entity That's the harm this merger presents to consumers Despite all of the improvements in technology and reduced cost of distribution The music business is not immune to the exertion of market power as more consumers demand their music through the internet This merged entity a super label so to speak has the inherent incentive and ability to maintain dominance by exerting its market power over this nascent business That's why we believe this merger should be blocked if it is not you will see less competition and choice and distribution Stifled innovation and higher prices Already the music industry has gone through breathtaking consolidation as six major record labels have become four Already innovative online music companies are challenged to enter the US market For example the online streaming service Deezer Which is similar to Spotify? It has enjoyed success in 200 territories around the world But it has not been able to enter the US market because of licensing EMI music has gone against this trend. They were the first label to sell a digital download They were the first label to remove digital rights management from their mp3s and iTunes Allowing consumers to listen to their music on any device and they're the only label that actively works as a liaison between application developers and artists through their open EMI project If this merger is allowed consumers and artists will be the losers Removing a maverick competitor like EMI from the market will ensure that the remaining three players obtain more control over the future of online music I asked that the members of the subcommittee take a hard look at this merger and its impact on consumers and artists. Thank you