Consolidation is good for business: music mergers would reduce costs--something that would benefit the whole industry.(Editorial)

Those who were at Midem in January 2000 are unlikely to forget the day when news came through about EMI and Warner's plans to merge their music divisions. Few would have thought, however, that three-and-a-half years later, they would be no closer to the altar.

Yet, here we are, talking once more about the coming together of two music industry giants, icons of the British and US music cultures respectively.

Whether EMI's offer to Time Warner--to acquire its record division--comes to fruition remains a moot point. It may be a long time since this long saga first got underway, but there is plenty of water to flow under the bridge before it reaches conclusion.

But what has become increasingly clear in recent months is that the industry as a whole needs to reduce excess costs overall. After a nine-month period in which prices have continued to decline--putting further pressure on margins--and sales globally have shown little sign of revival, there is little conclusion to draw other than that the music industry can afford little excess fat.

The benefits of a combined EMI and Warner--or a merger of any of the various candidates--would be felt not only by the ...