When Universal Music Group took ownership of [PIAS] in 2024, co-founder Kenny Gates told Music Week all about the decision in an exclusive interview. 

In the new edition of the magazine, executive chairman Kenny Gates is joined by new CEO Edwin Schröter for a two-part special on the company’s new era.

The UK operation has just announced a major signing with Massive Attack inking a deal with the Play It Again Sam label.

Here, Kenny Gates and Edwin Schröter discuss how UMG has supported [PIAS] for the new era, as well as giving their take on the Downtown deal and reflecting on the changing relationship between indies and majors… 

Now the changes have had time to bed in, how do you reflect on the initial reaction to the UMG deal?

Kenny Gates: “We’ve heard everything. You know, ‘UMG doesn’t care about music…’ To me, UMG is an organisation, and as such, can be perceived by outsiders as a big bad wolf. I have always done a lot of my business based on instinct and trust. Trust is everything to me. I don’t feel my deal is with UMG, but with two people who have gained my trust – Boyd Muir [COO] and Sir Lucian Grainge [chairman and CEO]. I feel, maybe naively, that I have done a deal with people I like and trust. That, to me, made the difference.”

Edwin Schröter: “The environment is changing. What was once majors versus indies is increasingly becoming music companies versus non-music companies in a business that needs music at its heart. The questioning of the intention was disappointing, but it’s up to us to prove people wrong and see that [PIAS], under a Universal umbrella as an autonomous company, can succeed and be better than it was before.”

What was once majors versus indies is increasingly becoming music companies versus non-music companies in a business that needs music at its heart

Edwin Schröter

KG:“Integral was built and survived thanks to a stream of mergers and partnerships. I have counted seven of them – three in the UK, and one each in Holland, Belgium, France and Germany. It’s not as if we don’t care. We still care about the independent ecosystem. What hurt me is the personal attacks about selling out and going to a major when we’ve been defending and have been part of the independent world for a very long time. It was kind of difficult sometimes to hear… But actually I thought it was going to be worse. 

“Actually, IMPALA and some of the major independents were quite graceful about it, and they also understand that, you know, it came from not being able to have the capital to build.”

Do you feel those perceptions have shifted slightly as time has gone on?

ES: “The artist and management community has changed, and the management community was quite supportive from the beginning, and excited in a way. I think it’s more from the peer label community, and hopefully the perception is changing. It’s always disappointing that people don’t speak to the people that are involved in the plan that you’re making, whether that’s [PIAS] being sold to Universal, or Downtown being sold to Universal [Virgin Music Group completed its acquisition of Downtown Music Holdings in February, following regulatory approval]. 

“It’s a choice that was made. It’s not like Universal enforced people and said, ‘We’re buying it and you have no say.’ There’s an open marketplace and entrepreneurs choose a partner for a reason.”

The Downtown deal also prompted criticism, but there have also been some voices in the indie sector speaking out in support of it…

ES: “The main thing is that in the distribution business, you need scale, partners. The same would have been true for Downtown: combining it while ensuring it retains the strengths of its different entities. I think when people look back, they will see that Virgin hopefully has taken all the best bits of those things: the culture of Integral, the tech and systems of Downtown and FUGA, and Virgin’s resources.”

UMG recognises our adventures as entrepreneurs over the last 42 years and that we’ve done a few things right

Kenny Gates

KG: “There were two distinctive businesses within the [PIAS] group: the distribution side, which is volume and low-margin, and the record company side, which is a label group. The distribution side was losing a lot of money. We needed to make a decision after five or six years of seeing new distribution companies sponsored by VCs, private equity and sometimes pension funds, all offering a huge amount of advances to acquire business and try to do the Amazon model, which is to try and be the last man standing. In terms of the business, it’s a race to the bottom.

“As craftsmen of the independent sector, we could not compete with that mindset. Also, Universal recognised the label group side of our business, and said, ‘You know what? Our label Spinefarm, which is metal, would be a better fit with [PIAS] in terms of nurturing and giving the service they need, so why don’t you take Spinefarm into your umbrella of labels?’” 

In that regard, does it feel like people have overlooked it being a two-way street, then? 

KG: “Yes, and also UMG recognises our adventures as entrepreneurs over the last 42 years and that we’ve done a few things right. They understand that they don’t fully grasp the independent world and give us full autonomy to run the label group in the way we want to. That’s why we’re very excited – there’s a real trust. There was an incredible mistrust within the independent community toward major companies, but all the fear, which you could also call a conspiracy theory, about Universal, none of it has materialised. It’s been the opposite. They’ve loved our company culture.”

To read the full [PIAS] interview with Niall Doherty subscribers can click here – part two with the [PIAS] team is here.

PHOTO: PAUL HARRIES

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