Believe Digital has licensed YouTube’s new subscription service on behalf of its clients, but the company’s CEO Denis Ladegaillerie says his fellow indies’ fight for better terms is to be commended.
In a leaked memo to clients today, Believe explained that it had signed a deal with YouTube which involved no monetary advance - and ‘significantly’ improved royalty rates for clients.
And in a first-person note to the same partners, Ladegaillerie (pictured) showed solidarity with those independent labels, represented by the Worldwide Independent Network (Win), demanding better rates from certain digital services - whilst warning that the indies’ fight for fairer terms involved a bigger battle than just taking on YouTube.
You can read his thoughts from the memo below in full.
My personal view, as CEO of Believe Digital, has always been that properly leveraging the power entrusted in us by our labels and artists is one of the key responsibilities that we have at Believe Digital. If we were to betray that trust by accepting unfair terms or conditions, the viability of our business would be threatened.
It’s important to remember we are a totally independent company representing independent labels and artists and we strive to ensure that our clients are represented properly in the market with no other agenda than to maximize exposure and revenue for them whilst of course growing our business and market share in order to be able to negotiate these deals properly.
Aside from the anti-competition issues raised by WIN (blocking of the content by YouTube, which we can not comment on other than to say that we have not experienced them ourselves), my personal opinion is that the views recently expressed by WIN and IMPALA address true, important and very legitimate concerns:
On the financing of the independent music sector in Europe: in a market that has shrunk significantly (and continues to do so in a number of countries), putting in place a proper framework to improve the access of independent labels to financing is a critical element. In a new digital world, where major labels are acquiring a competitive advantage by extracting large advances from digital music services, this is clearly a key issue. Whether the solution is that independent labels should follow the same logic as a major and extract large advances from digital music services is another question.
The build-up of large and powerful fully independent distribution companies, that have an even stronger ability than today to contribute to the financing of the independent music eco-system can be another one, coupled with stronger pan-European financing mechanism to fund creation.
On the impact of the streaming business model on artists and labels:Should the value of music be measured by the number of times it is listened to? Is the value of listening one time to a Stockhausen interpretation for someone who is passionate about classical music lower than the value of a teenager listening 20 times a day to the new dance music hit song? Right now, from a financial standpoint on YouTube, Spotify and other streaming services, the answer is yes. How do we address that issue of value in the near future is a key question.
On the exposure of independent artists and labels in the digital music space: in a digital music landscape dominated by large international companies, algorithm based recommendations, where music discovery is more and more driven by services like YouTube, Deezer and Spotify, how do we ensure that local independent artists and labels are properly exposed and promoted is also essential. What proposals can be constructed to address this issue.
All of these concerns are true, important, legitimate (with a few others like the availability of public domain tracks or covers for example) and must be addressed to ensure the vitality of music creation and the independent music space.
Are they limited to YouTube ? No, my personal view is that these are structuring market issues that must be addressed, in initiatives driven by Impala, WIN and other organizations in an institutional framework.