On September 16, Music Week published a new interview with AIM CEO Gee Davy in which, among other subjects, she addressed the unfolding Virgin/UMG acquisition of Downtown Music and also comments previously made by Kenny Gates in his own recent Music Week Interview about PIAS’ decision to sell the remaining shares they hold in the company to Universal Music Group. Here, Nat Pastor and JT Myers, co-CEOs of Virgin Music Group, offer their response to Davy regarding some of the key points she, and other organisations, have made…
"We respect the important role IMPALA and AIM play in representing portions of the independent community. But we must also correct the record. AIM’s claim that they are innocent bystanders in an 'industry spat' initiated by Virgin and UMG is disingenuous, as evidenced by multiple public statements by them and their surrogates.
We agree with AIM that there is often common cause between the majors and independents – whether that is fair monetization from digital platforms, responsible AI, or combating fraud. We will occasionally disagree on the best mechanism to achieve these goals, as appears to be the case with the concept of an 'Artist-Centric framework', which is intended to promote better platform hygiene and disincentivize spam and noise content. We can let our differences define our relationship, or we can commit to better dialogue to maximize areas of collaboration. We think Virgin is well-positioned to be a nexus for better dialogue and cooperation between UMG and the independent community, and we will continue to make efforts to improve communication with these organisations.
But a productive dialogue must be grounded in shared facts.
Many of these organisations have continually misrepresented the market share of our parent company UMG in order to bolster their case against Virgin’s acquisition of Downtown, and to sow fear among the independent community by over-stating UMG’s size while downplaying the growth of the independent sector.
They’ve made allegations that UMG would misuse confidential royalty data from Downtown’s Curve business, breaching customer contracts and violating their trust, without any evidence to support such a serious claim. Such a grave claim – one that risks undermining our customers’ trust and pre-emptively damaging the reputations of the Virgin and Downtown teams – is extraordinarily irresponsible.
And AIM’s leadership has now attacked the integrity of Kenny Gates, one of IMPALA’s founders and one of the most respected and influential independent executives in industry’s history. Any of you who know Kenny know that he is the same guy today as he was before the PIAS/UMG deal: he is outspoken and compelled to tell the truth as he sees it; he continues to advocate for the spirits and values of independence, and PIAS continues to work closely with many independent labels. It’s disappointing to see how quickly these organizations will move to publicly tear down those who disagree with their position, even those who worked on behalf of those same organizations for years.
Virgin Music and Downtown are proud to work with many of the world’s most successful and fiercely independent labels, all of whom consider themselves 'real independents' regardless of AIM’s rhetoric. The independent sector continues to grow and diversify, and we believe this partnership provides resources, transparency, and innovation that help our partners compete and thrive in an increasingly dynamic global market. The leadership of AIM and IMPALA may disagree, but they do not speak for everyone, even amongst their own membership.
Ultimately, those of us in the label services space are judged by our results, and our customers vote with their feet. We look forward to proving the value that the Virgin and Downtown union will bring to the marketplace. And we hope we can engage in a good-faith dialogue with the independent trade associations around the world on areas of improved collaboration following the completion of the transaction.
We have previously met with Gee Davy to express our willingness to engage in a productive dialogue and suggest areas where we may be able to help AIM advance its policy goals. The ball has been in AIM’s court for months – we are here and ready to discuss how Virgin can help build a more productive relationship between UMG and their organization and hope they choose to engage with us so together we can work towards benefitting the entire music ecosystem."
Nat Pastor & JT Myers, co-CEOs, Virgin Music Group
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