A little over two years ago I set out three reasons why I thought indie music was poised for a period of cultural and commercial success. Those reasons seem still valid now, but a series of events in the indie music world has shown that I overlooked some important factors.
My biggest mistake was to assume that major labels would not want to buy margin-shrinking and inherently weak independent distribution companies. Since 2015, several ‘insider’ distributors (the kind whose founders and owners sit on trade association boards) have been sold to major labels, or major owned distributors. It’s impossible to understand these acquisitions any way other than by the damage they do to market access for successful small record labels; these deals must be strategic.
The second mistake I made was in over-optimism that the ‘digital dividend’ would materialise for small businesses. Online platforms have revolutionised how teams can operate around the world, but indie labels seem to have missed out somehow. Perhaps their needs are so specialised that more generic tools – productivity suites, online accounting – just don’t have the same impact as in other industries.
Time then for a rethink. And it is one from the same fundamental optimism of a few years ago, but with some caution and new caveats. So instead of offering reasons why indie music will thrive, here are three conditions for survival as we head towards the end of Q1 of the 21st century:
Efficient Collective Rights Management
The indie music world seems to me to have fully accepted the need for intermediaries, aggregation, and where it’s necessary, collectivisation. What’s more, Merlin has set standards in rights management that have lifted the quality of licensing across the whole market.
A Thriving Marketplace for Services
Small businesses buy in more and use in-house teams less. Our community has not generated an effective market in the services we need, from sales and royalty systems to production, design, marketing, business information, and intelligence. Instead we have churn in providers, and risk for investors that customers will disappear at a moment’s notice.
An Indie Scale Connected Digital Platform
New music markets need new digital infrastructure to help indie labels manage releases and coordinate their relationships, not just with the music services they supply, but also the other services that they need to buy in. Platforms can transform industries, becoming almost like a computer operating system in the way they connect resources and processes. A platform is what connects the rights, the assets, the businesses and the people together to deliver all the other benefits of the digital world to independent music.
…And What Won’t Work…
And it is worth setting out what clearly won’t work, as aggressive major labels and VC funded businesses continue to take bites out of indie music infrastructure and catalogue.
The first and foremost of our impediments is the attitude that scale doesn’t matter in technology – that somehow a two person startup with a rented database and some code is an adequate answer to the massive platforms we now interact with daily. Our dependence on technology I have heard described, depressingly, as ‘the tail wagging the dog’. This particular tail has been wagging the dog for at least the last 15 years.
And a new respect for the strategic importance of technology should be accompanied by a scale up mentality in how we nurture service providers, rather than a start-up culture with the inevitable failure rates and, even worse, success through acquisition. All the best new talent is being snapped up by the big music services, leaving us data and capability poor. Better prospects over the longer term for the smartest people will mean that the other great benefits of working with music – the culture, and the community – really do help us stop the brain drain out of the supply side of our industry.
I remain optimistic that another two years could see us starting to gain traction with a global community of independent music companies and service providers, leading the conversation with the big tech platforms, and setting the terms for our businesses and for music. We just need to straighten up and fly right.