MBW Views is a series of op-eds from eminent music industry people… with something to say.
The following comes from Bruno Guez, CEO of Revelator, the independent distributor and label platform
As indie labels gather in New York this week for A2IM’s Indie Week, there’s a discordant backdrop: a sense of foreboding as the indie sector once more falls prey to larger players chasing market-share.
Whether it’s Believe fraternizing with private equity, Stem swallowed by Concord, or Universal smacking its lips at that tasty morsel Downtown (featuring FUGA), the indie sector is going through one of its periodic crises of confidence as some of its greatest assets are snapped up by bigger (and sometimes meaner) players.
I get it. The concern is justified. When the market consolidates it leaves fewer options for independents.
That’s not just fewer options in terms of route to market. It’s more fundamental than that: it’s fewer options as to how you, as an independent, run your business.
Instead of being independent, you potentially become dependent. You run the risk of deals which lock you out of decision-making over vital areas of your business.
All too often, majors are where independence goes to die. I have been here before.
When I founded Quango Music Group in 1995 our successes with Zero 7, Kruder & Dorfmeister and Bomb the Bass came with the support of my mentor and friend Chris Blackwell, founder of the quintessential indie label, Island Records. But Chris had already sold Island to Universal’s predecessor PolyGram and, as time went on, cost-cutting consolidation followed “efficiency” after “efficiency”.
With the CD business collapsing, our new major masters – clueless how to cope with the digital revolution – narrowed our ability to manoeuvre and do the best for our business.
Our saving grace was getting the label back and striking direct digital deals with the new emerging platforms, allowing us to survive and flourish.
It was during that process that I saw the potential of new technologies, and how they could transform the ability of independents to compete.
Ultimately that was the drive behind the creation of my current business, Revelator, providing indie labels with the technological tools – starting with distribution – which allow them to compete on equal terms with even the largest players.
Two decades on, the majors are still up to their old market-share-chasing tricks. Just as PolyGram snapped up Island and A&M, so Universal has taken INGrooves, mtheory, PIAS and, they hope, Downtown.
Like so many others, I do not believe the Downtown deal should pass. It is a step too far.
Either way, I believe the tide of history has turned and ultimately the majors will fail.
We already know that by ownership independents account for nearly half of the recorded music market. The reality is that the feeding frenzy in the independent sector is a sign of the majors’ weakness rather than their strength.
Streaming has shattered the barriers to market entry the majors created in the CD age. That trend will only continue.
The key is technology. Few indies are motivated by a fervent interest in the back-office function required to run a label. Their strength is they are motivated by a passion for the music.
Now, technology allows them effectively to outsource the processes required to take their music to market and monetise it – not just distribution, but marketing, royalties, the whole kit and the caboodle.
In my own business it’s a daily obsession: What can we automate? How can we use AI to make things better? How can I win back time to do the things I want to do?
I know of two- or three-person businesses, focusing on dance singles, generating 400m streams a month.
I firmly believe it is only a matter of time before we see such a label achieving unicorn status: a $1bn valuation.
Independents know they can outcompete the majors when it comes to music.
With technology I believe they will increasingly prove they can outcompete the majors in monetising that music, too.
I wish all of my friends and colleagues at Indie Week success.
The future is independent.Music Business Worldwide
