This will mean job losses and won’t benefit the consumer at all!

Warner, BMG Close in on Merger – Sources
LONDON (Reuters) – Warner Music and BMG, home to pop diva Madonna and queen of soul Aretha Franklin, have entered the home stretch in talks over a joint venture and could wrap up a deal next month, sources familiar with the negotiations said.
In a deal that would create the world’s second biggest music company, the industry heavyweights are still negotiating the nuts and bolts of combining their recorded music empires but are getting closer to an agreement, the sources said.
“If there is a deal, it will be done by the end of September, but it could be sooner than that,” said one source.
“The two sides are working hard to finalize key issues such as valuation right now, but progress is being made.”
Warner Music and its U.S. parent AOL Time Warner and BMG and its privately owned German parent Bertelsmann all declined to comment.
With rampant piracy tearing into global music sales, Warner Music and BMG see a tie-up as their best bet for beating the industry blues by offering the prospect of cost savings of $250-$300 million between them each year, the sources said.
Warner and BMG, which rank as the world’s fourth and fifth biggest music companies respectively, see eye-to-eye on the broad structure of a deal that would take the shape of a 50-50 joint venture of their recorded music arms, one source said.
But the two sides are still hammering out the details of a deal, which could see one of them put up some money or additional assets to reach a 50-50 split, the source said.
“Size is one issue, but profitability is another, and we have to evaluate both as well as cash flow. The difference is not very big though,” the source said.
Last year, Warner had revenue of $4.2 billion while BMG racked up $2.7 billion. Those figures include music publishing and Warner’s CD/DVD manufacturing business, which would not be part of the venture. Analysts estimate a joint venture could be worth somewhere in the low single-digit billions of dollars.
Regulators could present the biggest obstacle to a deal.
Two previous deals hit the rocks — one between EMI GroupPlc and Warner, and another between EMI and BMG — two years ago after anti-trust authorities made clear they would not accept the world’s five big music companies shrinking to four.
Warner and BMG are optimistic a joint venture of just their recorded music companies, excluding music publishing, would have a better chance of success. But they are prepared for regulatory investigations to last a good eight months, one source said.
“People say we have a good chance of getting permission. We might have to make some divestments in some markets if the market share is too high, but it’s easier doing a deal that just involves recorded music,” said one source.
The two sides see industry giant Universal Music as their prototype. Universal Music, part of Vivendi Universal, has dominated the global music scene since its merger with Polygram in the late 1990s, boasting a market share in 2002 of 24.5 percent and artists ranging from U2 to Eminem.
Warner Music and BMG would have a combined global market share just less than Universal Music’s but would leapfrog current number two, Sony Music.
The two companies would bring together Warner Music’s artists REM, the Red Hot Chili Peppers and Alanis Morissette with BMG’s Avril Lavigne, Carlos Santana and Barry Manilow.
Talks between the companies gathered pace after Warner Music agreed to sell its CD/DVD manufacturing business last month.
But who takes what management roles is another issue yet to be finalized. Both Warner Music Chief Executive Roger Ames and BMG CEO Rolf Schmidt-Holtz are expected to take top roles.
“Clear leadership is key for this to work. But the management of both companies want this deal,” said one source.