Believe CEO accuses major record companies of lobbying streaming platforms to lower royalty rates for DIY artists
Are the major record companies trying to pressure music streaming services to pay DIY artists lower royalties than established superstars receive?
Based on Believe boss Denis Ladegaillerieyes, they are.
He claims that some majors are driving this change as “they have consistently lost market share over the last 5 years” due to the number of releases through DIY platforms.
Ladegaillerie, founder and CEO of Paris-based Believe – the company that owns the DIY distribution giant TuneCore – declared in a Recent interview with MBW.
We asked the French executive to whom he argued that songs uploaded by DIY artists should receive lower royalties on streaming services than songs by stars. world famous stars.
His response was constructive.
“I know the major record labels are pushing lower prices for [DIY] artist, and I don’t think it’s true; I think that is wrong.”
Denis Ladegaillerie, Trust
“I know the major record labels are pushing lower prices for [DIY] artist, and I don’t think it’s true; I think it was wrong,” he told us.
Ladegaillerie added: “The reason the major record labels are pushing this is that they have been consistently losing market share over the past five years. [due to the volume of releases coming out via DIY platforms].
“They’re trying to find a way to regain lost market share through higher value, but I don’t think that’s the right way to do it.”
[READ MBW’S FULL INTERVIEW WITH DENIS LADEGAILLERIE THROUGH HERE.]
Ladegaillerie’s accusations don’t happen in a vacuum.
They followed a suggestion recently hypothesized by Worldwide music business on our ‘Talking Trends’ podcast.
On that podcast last monthMBW founder, Tim Ingham, suggestions that some or all majors may soon put pressure on Spotify pay higher royalties to ‘quality’ or ‘premium’ artists – especially superstars that attract subscribers to the service.
If that happens, he suggests, the obvious losers will be DIY distributors and their artists.
The reason for that hypothetical scenario, he explained, is that the big companies are facing an uphill battle for market share in front of the “ocean” of releases uploaded by independent artists. streaming service every day.
“For the big record companies, it’s not just their revenue that matters that they dominate the streaming market,” Ingham said on the podcast. Importantly, it also affects their leverage as they renegotiate licensing agreements with Spotify or Apple or Amazon and other music streaming platforms or owners.
“The smaller the cumulative market share of large companies when they conduct licensing negotiations every few years, the less power they have. And the gradual erosion of the market share of the big companies in the future seems inevitable when you analyze the data. “
To add some statistical context at the time, just a few of the prominent DIY distributors active in the market today, DistroKiddeclares that it is responsible for distributes 30% to 40% of all new music today.
Majors are limited in their ability to compete with this volume.
Rob StringerPresident of Sony Music Group, tell an analyst on a Sony presented last month’s financials how the company’s combined strategy with AWAL and Fruit garden is helping it compete at this scale.
“If there are 80,000 tracks per day uploaded on major DSPs, then [major label] Stringer said market share will be diluted by default.
He added: “The reason we have such a strong strategy in The Orchard and [via] Our recent acquisition of AWAL is to account for a portion of those 80,000 – [to] there is a larger percentage of the network used for content.
“Because otherwise, the market share would literally be diluted by default by absolute song volume [being released] – even, quite frankly, if [some of that music] literally like flotsam and jetsam, and it’s just the stuff that’s taking some market share due to scale. “
“If you’re a top artist in the industry, you’re already getting more value from the services than if you were an up-and-coming artist with fewer followers and streams.”
Denis Ladegaillerie, Trust
Elsewhere in MBW’s interview with Ladegaillerie, Believe’s CEO said: “I heard the expression that Rob Stringer used last week, ‘flotsam and jetsam’. I had to look up the meaning [laughs]! It was interesting to see that comment, and then at the same time to see Universal announce that they were dropping Spinnup.[[[[Universal Music GroupSpinnup of DIY distribution closes in May and now invites only.]
“In my view, there is a lesson here: Lauren Spencer-Smith signed to TuneCore, ranked 4th in the UK charts and No.1 in four countries; LANDY in France was the artist TuneCore a year and a half ago and was No.1 Billboards chart six months ago. There are many other examples.
“My view is that these emerging artists will be exactly the same [royalty] ranks like any other artist on the streaming platform. If you are a major artist, the argument is: ‘I am contributing subscribers and users to the service.’ Exactly.
“But as an artist, you extract value from that relationship, because often [when the] DSPs are using your image and popularity, they are buying billboards, buying digital marketing campaigns, contributing significantly to your own marketing as an artist .
“That reduces your own marketing costs and, at the end of the day, increases your royalties. So if you’re an industry-leading artist, you’re already getting more value from the services than if you were an up-and-coming artist with fewer followers and streams.
“When I talk to many DSPs, I ask them, ‘Do we have more fake streams via TuneCore on your platform than the major record labels?’ I get a no. ‘Do we piracy at a higher rate than the major firms?’ Also a no.
“Is there an operating cost? [to the services] justify a different treatment of royalties [DIY] artist? No.”
Lauren Spencer-Smith’s career explodes when she uploads her hit Crossed Fingers through TuneCore earlier this year.
She signed a big contract with Universal’s Island Profile.Worldwide music business
