State Champ Radio

by DJ Frosty

Current track

Title

Artist

Current show
blank

State Champ Radio Mix

12:00 am 12:00 pm

Current show
blank

State Champ Radio Mix

12:00 am 12:00 pm


independent labels

LONDON – Independent labels trade body IMPALA is calling on regulators to investigate Universal Music Group’s acquisition of [PIAS] over concerns that the deal restricts competition in the global record business and “narrows options for artists and labels.” 
[PIAS] co-founders Kenny Gates and Michel Lambot announced earlier this week that they were selling their remaining shares in the indie label group to Universal Music Group (UMG), which already owns a 49% stake in the company, for an undisclosed sum.

The deal gives UMG full ownership of [PIAS]’s services division [Integral], which provides physical and digital distribution services to more than 100 indie label partners including ATO, Beggars Group and Secretly Group and will henceforth merge with Virgin Music Group.

Trending on Billboard

Also falling under UMG’s control because of the share sale is the [PIAS] Label Group, home to indie imprints Play It Again Sam, harmonia mundi, Spinefarm, Source and partner labels such as ATO, Heavenly, Mute and Transgressive. Despite the change in ownership, [PIAS] says its label group business will remain completely autonomous.

In response, IMPALA and several of its associate national trade groups are calling on competition regulators to launch an investigation into what it described as “unchecked concentration in the music market [which] continues to be a serious problem.”

“The bottom line is UMG’s acquisition of [PIAS] will increase the power of [UMG] across Europe and beyond, including the U.K. and the USA, and IMPALA expects regulators in these jurisdictions to take action,” said the Brussels-based organization, which represents over 6,000 indie music companies in Europe, in a press release on Friday (Oct. 18). 

Helen Smith, IMPALA’s executive chair, said she “expects” regulators to review the [PIAS] acquisition “and answer the question the industry is asking about how it is possible for UMG to gain more market share after it was already considered too big?”

“A share deal is one thing, this is something else,” said Smith, who is calling for competition officials to assess how the deal impacts physical and digital music markets, including distribution services, “as well as the impact on competitors, digital services, artists and fans.” 

Geert de Blaere, the chair of Belgian association BIMA, said that while the Belgian market owes a debt of gratitude to [PIAS] for showing entrepreneurs what is possible, the impact of the company’s takeover by UMG “will be structural, significant and long lasting” for the independent music business. 

“This is completely different to a share deal as UMG takes over the market share of [PIAS]. Scale and stability in the whole independent sector will be lost. Incremental shifts in the market across the majors leverages disproportionate influence in the hands of a few companies. Each time that happens the result is more control over how the market develops,” said de Blaere in a statement.

Supporting calls for an investigation, IMPALA chair Dario Draštata said the deal strengthens UMG in terms of market share, “eliminates a principal competitor” and “narrows options for artists and labels.”

Representatives for UMG and [PIAS] did not respond to requests for comment when contacted by Billboard.

The acquisition of [PIAS] by the world’s biggest music company further grows the dominant market share enjoyed by UMG and follows the expiration of a 10-year ban on the music giant acquiring certain music companies or catalogs in Europe.

Those restrictions were placed on UMG in 2012 by the European Commission as one of the conditions of the company’s $1.9 billion takeover of EMI going ahead. As part of that process, the European Union’s executive branch forced UMG to divest the Parlophone Label Group, which was bought by Warner Music Group (WMG) for around $750 million, as well as the offloading of numerous EMI entities in Europe, and the Chrysalis, Mute, Sanctuary and Co-op Music labels.

To receive regulatory approval to buy EMI, UMG committed to not re-acquire any of the assets sold, or re-sign any artists signed with labels it had divested for a period of 10 years. Just a few months after that decade-long ban expired in September 2022, Universal acquired a 49% minority stake in [PIAS], which owns some of those previously off-limits catalogs, including Co-op Music.

On Tuesday (Oct. 15), UMG announced it had grown its minority interest to full ownership, following Gates and Lambot’s decision to sell their controlling stake.  

The acquisition of [PIAS] by UMG is part of a growing trend of major labels looking to the independent sector to increase their market share, either by enhancing their distribution offerings for indie artists and labels or by investing in, or buying, independent music companies.

In 2019, UMG acquired independent distribution and marketing company Ingrooves Music Group. One year later, Sony Music bought J. Erving‘s digital distribution and label services company Human Re Sources from Q&A, followed in 2021 by its purchase of artist services company AWAL and Kobalt Neighbouring Rights from Kobalt Music Group.

Major indie label acquisitions over the past decade include WMG buying Netherlands-based Spinnin’ Records in 2017 and Sony Music’s purchase of U.K. dance label Ministry of Sound in 2016.

On a smaller scale, WMG has been steadily growing its recorded music interests in Central and Eastern Europe, buying minority stakes in Croatia’s Dancing Bear Music, Slovenian independent label NIKA and Serbia’s Mascom. And this week, WMG Benelux announced the acquisition of Dutch label Cloud 9 Recordings.

Referencing the major labels’ pursuit of key independent labels, Draštata, who is also president of Balkan indie label trade association RUNDA, said the practice was becoming an “issue across Europe.”

“The loss of such big players for the independent sector compounds the competitive impact and the risk is that this trend will continue,” said Draštata in a statement. “We have been signalling the problem of creeping dominance for many years and it’s time for a new competition approach to address this question.”

TikTok’s decision to boycott Merlin and pursue direct deals with Merlin’s member labels is a troubling move that undermines the rights of labels to choose how their music is licensed. While TikTok frames this shift as a way to tackle streaming fraud, it’s clear that the real motive is to weaken the bargaining power of independent labels and use that leverage to suppress rates.
Merlin has built strong partnerships over the last 16 years with more than 40 digital services worldwide. These partners recognize the value Merlin brings—efficiency, scale, and a deep understanding of the independent music community. TikTok’s move to sideline Merlin is not about protecting against fraud but about undermining the ability of independent labels to achieve competitive terms, not just now but for the long term. The ultimate consequence of its refusal to negotiate with Merlin for the music that earns TikTok billions of dollars, will be to damage artists’ ability to make a living from their art. 

This tactic is not new. It echoes the historical struggles of the music industry with partners such as terrestrial radio and MTV, both of which profited massively from the use of recorded music while refusing to pay artists under the pretext of “promotional value” or “exposure” — ostensibly for the sale of an artist’s CDs or LPs. In this largely digital economy the stream is the sale – and it has been widely reported that TikTok pays rights holders far less than other services for equivalent uses of music. 

Trending on Billboard

Richard James Burgess, President and CEO of A2IM

Independent labels choose Merlin to license their rights, because of its expertise, experience and track record in striking these kinds of deals. This ensures compensation at levels enabling them to compete with the majors and protects independents from being unfairly exploited. TikTok’s decision to bypass Merlin and demand direct deals is an assault on the freedom of small and medium sized enterprises to determine their own business strategies. The fact that TikTok is giving Merlin members a matter of days to accept TikTok’s terms or lose access to its massive platform, is an unfair exercise of its market power.

This apparent divide-and-conquer strategy is, we believe, designed to keep payouts for indie artists low by exploiting their perceived reliance on TikTok’s platform. It’s not about addressing fraud or improving the digital music ecosystem. In fact, by exponentially multiplying the number of license deals TikTok will need to strike and by losing Merlin as a partner in the fight against fraudulent material, more fraud is likely to ensue. Merlin simplifies licensing, making it easier for platforms to access diverse, independent music. Fragmenting this system hurts artists and fans and will limit the range of music available on TikTok.

At its core, this issue is about respecting the rights of independent labels to determine how their music is licensed. TikTok’s behavior doesn’t reflect a problem with Merlin; it reflects TikTok’s lack of respect for the value of music. Every other major platform has struck responsible deals with Merlin that balance the needs of the service with optimized compensation for artists. TikTok’s refusal to do so sets a dangerous precedent for recording artists and their labels.

TikTok must stop undermining and disrespecting the independent music community. It can do this by working with the labels’ rights management agency of choice to establish a fair, transparent licensing system that benefits all stakeholders in the music ecosystem. Independent labels have the right to choose their representatives to negotiate deals that truly reflect the value of their artists’ creative contributions. Anything less is a disservice to the artists and the fans and undermines the very fabric of music culture.

Dr. Richard James Burgess is an acclaimed musician, singer, songwriter, record producer, composer, author, manager, marketer and inventor, who presently serves as the president and CEO of the American Association of Independent Music (A2IM).

A coalition of some of the world’s biggest independent labels, including Beggars Group, Partisan Records, Sub Pop and Because Music, have joined forces to launch a “first-of-its-kind” think tank to promote better understanding of the global music business among governments and policymakers — and advocate on the industry’s behalf.
The Organization for Recorded Culture and Arts, or ORCA for short, will develop and promote research, data, and “qualitative and quantitative evidence that underscore the significant economic, social, and cultural value of music,” said the newly-formed organization.

Founder members also include the U.K.’s Domino Recording Company; Germany-based City Slang and !K7 Music; Spain’s Everlasting Records; and U.S.-headquartered Exceleration Music, Secretly Group and Hopeless Records. Other participants are London-based Ninja Tune, Stockholm’s Playground Music and Canada’s Secret City Records.

Trending on Billboard

Artists that have either been discovered by or are currently signed to the 14 founder labels include Adele, Nirvana, The National, Pavement, Christine and the Queens, Fontaines D.C., Arctic Monkeys, Mitski and Phoebe Bridgers.    

“This is a concept long in the making, arising from a realization of shared values above and beyond our existing collective independent activities,” said Martin Mills, founder and chairman of Beggars Group, in a statement. “Music is an undervalued asset in the daily round, and we seek to translate the motivations underlying its production into an appreciation that art and commerce can live as one.”

In line with the organization’s launch, ORCA has published its inaugural research report, “Setting the Stage: How Music Works.” The free-to-access study is intended to provide government policymakers, finance institutions and cultural development agencies with an in-depth understanding of how the record industry operates and the economic and cultural benefits it generates.

The 155-page report was researched by the nonprofit Center for Music Ecosystems, which is working alongside ORCA, and features case studies of several indie-label artist success stories, including Guadalupe Plata (Everlasting Records), Patrick Watson (Secret City) and Christine and the Queens (Because), as well as an analysis of distribution practices, artist development and income revenues in the indie sector.

“We’re proud of the artists we choose to invest in and the people we choose to work with. We’re also aware of how little actual data there is out there that illustrates how this industry actually works or our contribution to it. We’re incredibly excited to get that ball rolling with this first report,” Tony Kiewel, president of Sub Pop Records, tells Billboard.

ORCA says future reports will focus on collecting primary data to demonstrate the benefits of independent record labels to the wider global music economy, looking at the positive impact the industry has on job creation, social equality, sustainability and culture. Members will meet at least once a month, with the next report due out later this year.  

“Whilst we are in competition with the other ORCA founders, we are similar in what drives us to find and develop new talent and there’s a shared incentive to making sure that the benefits of our work are understood beyond just the industry itself,” says Zena White, chief operating officer at Partisan Records and chair of The Worldwide Independent Network (WIN).

White says that one of ORCA’s primary goals will be to measure the economic and social impact of labels’ investments in artist development, which she says has “been sorely lacking” in the global independent sector.

The think tank also aims to address some commonly held misunderstandings about how the record label business model works, explains White, whose label roster includes IDLES, Cigarettes After Sex, Ezra Collective and PJ Harvey.

“Labels at their best underwrite living advances, recording and marketing costs that the artists’ entire ecosystem will benefit from. Of course, there are bad actors, but many are essential to ensuring that music gets made and that it’s heard,” she says.

“We have a fantastic network of global trade associations for independent music… [but] they badly need empirical data that backs up their conversations with governments and players at a local level,” White adds. “ORCA is supplementary to that network and hopes to be able to help.”

“The music business is an incredibly complicated and messy industry,” says Kiewel. “We’re often the canaries in the coal mine when it comes to new technologies. If there are policy conversations happening that affect the livelihoods of independent recording artists and the labels that support them then we think it’s important that they have a seat at that table. I believe that there are many people and policy makers who would be interested in what we have to say, and we want to make sure that those representing our community have tools to help convey their perspectives.”