The proposed acquisition of Downtown by Virgin Music Group has prompted a vocal campaign against the deal by sections of the independent community – with a recent development being a dedicated Block The Deal website featuring a range of opposition from across Europe.
The proposal to acquire the independent services company by UMG’s Virgin Music is currently being scrutinised by the European Commission. In the meantime, Virgin Music co-CEOs Nat Pastor and JT Myers have issued a strong defence of the deal and hit out at “irresponsible” comments – including the “misrepresentation” of UMG’s market share.
In its latest move, European indie labels body IMPALA has published a new paper examining the potential impact of Downtown’s sale to UMG on cultural diversity.
Amid the war of words over the future ownership of Downtown, a pair of industry veterans – Marc Marot and Nick Stewart – have entered the debate in a jointly written opinion piece for Music Week. Here, the pair explain why they believe the campaign by parts of the indie sector against the Virgin deal is based on “fearmongering”...
Our names are Marc Marot and Nick Stewart. We represent between us a century of music industry expertise, including independent artists, major labels, and successes of European and specifically EU artists who have sold hundreds of millions of albums.
We have worked with one of the giants of the independent label community, Island Records, as its managing director and head of A&R, both during its independent days, having signed many of its most successful artists in music history, including an obscure Irish band U2, which the major labels had turned down.
With the greatest of respect for the earnest belief of the industry groups and a number of activist labels, we consider the campaign by a relatively small enclave – within a vast diversity of tens of thousands of independent labels – to be contrary to every value and belief that independent labels have had since the formation of the contemporary music industry.
Those values are, most importantly:
The artist has to come first. Not ideology, and certainly not the badge attached to whoever can bring those artists to success.
The very meaning of independence is entrepreneurship.
Entrepreneurship is totally meaningless unless you have the ability to align with the best services for your company and your artists.
While we don't doubt the sincerity of the industry groups, the campaign against Virgin's acquisition of Downtown is, in practice, a fundamental assault on entrepreneur and artist rights to be heard, to use the megaphones of whoever will take their art to the broadest possible worldwide audience.
And it is based on what we consider fearmongering and conspiracy theories far more familiar to extremist groups and activist US investors than European entrepreneurs.
Finally, we don't like being told who we can get services and financing from, who we can entrust with our legacies and especially what to believe about an industry we know and love.
The notion that Downtown should end up in the hands of extractive private equity, known for its rapid cost-cutting and insensitivity to creative artists and executives, is ludicrous
Marc Marot & Nick Stewart
There has always been a dispute in the independent labels community about what constitutes an independent label. A very long time ago, the dispute was settled by declaring any label that is not "owned or controlled" by a major label will qualify as an independent. That is in the bylaws of every industry group that represents us. And that's the way it should be.
Virgin is one of the great music brands, and PIAS, its partner, is a legendary independent and IMPALA founders. That they have aligned with Universal Music Group tells us exactly what has to happen post the 10 dark years of 1999-2009 in which the industry lost half its revenue and more than half its executive, entrepreneurial and creative talent. The industry needs as many pathways to success and investment as it can get in an age when large platforms rule and AI looms.
The notion that Downtown should end up in the hands of extractive private equity, known for its rapid cost-cutting and insensitivity to creative artists and executives, is ludicrous. They made the right choice in picking a solid long-term partner to independents, which Universal has been to Island Records and countless others.
Finally, the campaign is an absurd distraction of the European Commission's time, which is better spent taming the very large and incredibly predatory work of the large American tech monopolies and AI.
AI-driven platforms are both an actual existential threat – separating artists from the work through software – and an indispensable tool for creativity and discovery. It all depends on how that energy is channeled. Challenging that energy for Europe's entrepreneurs is the Commission's superpower. It should use it. Not meddle in the rights of entrepreneurs like us.
We are happy to write here, with our many years of expertise to provide context and background as to why the opposition is so vociferous and why it represents literally a small enclave rather than the vast diversity of the European independent sector.
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