Impala – SIDE-LINE

Universal Music Group (UMG) has now acquired 100% of [PIAS] – Independent sector not exactly happy and wants investigation

Bernard - Side-Line Staff — Fri, 18 Oct 2024 07:52:54 +0000

Universal Music Group (UMG) has completed its acquisition of 100% of the independent music giant [PIAS], a deal met with mixed reactions from the independent sector as you will read below. UMG, the world’s largest music company, first acquired a 49% stake in [PIAS] in 2022, but as of October 15, 2024, it now holds full ownership.

Impala, a representative body for over 6,000 independent music companies across Europe, voiced its unease in a mail sent out earlier today. Helen Smith, Executive Chair of IMPALA, expressed concerns about UMG’s growing market dominance, noting that the acquisition leaves a “huge hole” in the independent sector.

With [PIAS] no longer classified as an independent company, the loss of one of the sector’s key players could limit options for both artists and labels seeking alternatives to the major label system. Smith also pointed out that UMG had previously been restricted from making major acquisitions by the European Commission following its 2012 purchase of EMI, a restriction that has since expired.

Smith expects regulators to investigate the acquisition “and answer the question the industry is asking about how it is possible for UMG to gain more market share after it was already considered too big. We would expect both physical and digital markets to be assessed including for distribution services, as well as the impact on competitors, digital services, artists and fans. A share deal is one thing, this is something else.”

Impala chair Dario Draštata added: “This type of creeping power is an issue across Europe. Apart from strengthening UMG in terms of market share, it eliminates a principal competitor and should be investigated. It also narrows options for artists and labels. It is not a question of an arithmetical increase of market share points by one major, but rather a sea change in the competitive dynamics of the music market, to the severe detriment of competitors and consumers. Sony has been doing the same and we see similar moves in Central and Eastern Europe with Warner Music Group buying stakes in several leading independent music companies across the region. The loss of such big players for the independent sector compounds the competitive impact and the risk is that this trend will continue. We have been signalling the problem of creeping dominance for many years and it’s time for a new competition approach to address this question.”

New strategies and finances for indie sector

Impala also points to ongoing work on innovative solutions on the finance side to provide independents with different options, as well as opportunities to develop new approaches.

Smith adds that Impala want to see more independent companies like [PIAS] not fewer. “We need a revamp of exit strategy options, new solutions to access finance, provide tax incentives and grow our market share. A review of whether competition is fit for purpose in today’s music market is also in order, and proper solutions for issues like the RAAP case. Above all, it’s about a combination of strategies that put diversity at the top of the pyramid. There are plenty of solutions and we urge the whole market to join us on this exercise. It is credit to Michel and Kenny that the [PIAS] example is the springboard to re-opening these discussions.”

Despite the concerns, some also see potential opportunities. Kenny Gates, co-founder of [PIAS], reassured that while UMG now owns the company, [PIAS] will remain operationally autonomous, maintaining its independent ethos. Gates also referred to UMG’s resources and global reach, saying that the acquisition would help [PIAS] and its artists continue to grow on a global scale, without compromising their core values.

About Impala

Impala was established in 2000 and now represents over 6000 independent music companies in Europe. 99% of Europe’s music companies are small, micro and medium businesses and self-releasing artists who produce more than 80% of all new releases and account for 80% of the sector’s jobs.

Impala’s mission is to grow the independent music sector sustainably, return more value to artists, promote diversity and entrepreneurship, improve political access, inspire change, and increase access to finance.

Impala works on a range of key issues for its members, runs various award schemes and has a programme aimed at businesses who want to develop a strategic relationship with the European independent sector – Friends of IMPALA.

Bernard - Side-Line Staff

Chief editor of Side-Line – which basically means I spend my days wading through a relentless flood of press releases from labels, artists, DJs, and zealous correspondents. My job? Strip out the promo nonsense, verify what’s actually real, and decide which stories make the cut and which get tossed into the digital void. Outside the news filter bubble, I’m all in for quality sushi and helping raise funds for Ukraine’s ongoing fight against the modern-day axis of evil. Besides music I’m also an SEO and AI content flow specialist and have an interest in everything finance from stocks to crypto. There is music in everything!

side-line.com

UPDATED – Are there economic benefits of sustainability in the independent music sector? Impala thinks so

Bernard - Side-Line Staff — Thu, 25 Jul 2024 07:28:20 +0000

UPDATE: Impala reached out to us and gave extra input and feedback, this has been added to this article.

Impala, the Independent Music Companies Association, has published the findings of its first survey examining the economic advantages of adopting sustainable practices within the European independent music sector. According to the survey there are multiple benefits for labels that implement sustainability measures, including cost reductions, enhanced innovation, and improved brand perception.

Let’s have a detailed look at what they communicate. You can download the business case right here. But first this…

Danger of Greenwashing

Below you can read what Impala indicated as being ‘sustainable’ practices. But, in some cases you can actually wonder if it’s not about greenwashing, because the cost for instance of producing lightweight vinyl is lower but the prices in retail will often remain the same. So, it could often be a cost element that plays, and not really the sustainable idea.

Impala reacts to us by saying that they strongly refute that assertion: “First, it is important to highlight the goal of the business case itself, which is to promote action among our members and in the supply chain. IMPALA is committed to aligning with climate science and works closely with expert advisors to ensure our approach is appropriate.

Furthermore, the report and IMPALA as an organisation don’t promote making sustainability claims without scientific backing, which is detrimental to both climate action and the organisation’s reputation. Should any companies want to display their commitment to the cause, it’s great to know that there are organisations like B Corp working on providing certified credentials.”

Greenwashing is when companies mislead stakeholders about their environmental practices to appear more sustainable than they are. Greenwashing can undermine genuine efforts, erode trust, and misguide consumers and industry stakeholders.

No Sign of the Famous Unplayed Catalogue Tracks Server Cost

Strangely enough we don’t see any mentioning of the huge cost that comes with unplayed tracks on Spotify. As we reported, Spotify will not be paying royalties for songs with fewer than 1,000 streams in a year.

But the deeper issue is the cost related to tracks that never get played. Nearly 25% of the tracks on streaming services had no streams at all. With the constant growth of the music catalog, unstreamed songs are predicted to reach a whopping 100 million by 2028.

The cost of maintaining these platforms has increased dramatically, from $35 million in 2019 to more than $130 million in 2022. So removing the unplayed tracks from Spotify would be a real sustainable move as it would mean less energy use to keep servers up with unplayed tracks.

In a reaction Impala says this: “Regarding streaming, IMPALA has had a position on the scope of responsibility for a while now, which we included in our ‘standards’ report published early last year. In a nutshell, while we’re working closely with DSPs to encourage greater transparency and support them towards measuring and reducing the impact of streaming, their emissions are excluded from the responsibility of labels, who we represent.

You can find the full report here, and I’ve also included the relevant text below. We’ll also include this in our business case report to avoid future misinterpretation. Thank you for bringing that to our attention.”

This is the relevant text that we were sent by Impala:

Standardising the sector’s approach on streaming is vital. The group reviewed the whole chain and reached a key set of conclusions related to the scope of responsibility concerning digital distribution.

Emissions from downstream digital distribution (the distribution of digital recordings through Digital Service Providers [DSPs] and consumption by fans through streaming services or digital download) are excluded from the responsibility of labels for the following reasons:

Scope of responsibility – labels do not own or control DSPs which are the responsibility of third parties who are already taking responsibility for the relevant emissions.
Influence – record companies have no direct control over the distribution of digital files once they have distributed to DSPs, or influence over emission reduction programmes.
Size – due to a lack of available data, it’s not possible for the recorded sector to estimate with accuracy the size of emissions from digital distribution. The necessary data is controlled by DSPs and their downstream partners. Some DSPs are working towards gathering data from their operations and are establishing emissions calculation methodologies. We refer to this, as availability of data is part of the GHG protocol, but as noted above, scope of responsibility and lack of influence mean that DSP emissions (including subscriber emissions) are not counted as record company emissions. (This is the same as for other downstream areas of activity in the music market, such as physical retail.)

Digital distribution is a vital part of our industry and makes up a significant portion of income for our members. We’re therefore working closely with DSPs to encourage greater transparency and will support towards measuring and reducing the impact of streaming. As part of the Music Climate Pact and our own Climate Charter, we call on DSPs to work collaboratively to share data and knowledge on this issue.

Here is what Impala says in its current version of their business case regarding sustainability.

Financial Savings and Environmental Impact Reduction:
- Companies reported important savings in manufacturing, distribution, energy, and travel costs. For instance, labels like K7! Music have reduced costs by opting for green vinyl (PET), which cuts energy consumption by 70-80% compared to PVC.
Internal Innovation:
- Embracing sustainability has driven internal innovation. For example, some companies have optimized logistics by shifting from air to sea freight and encouraged remote meetings, maximizing staff efficiency. The introduction of new formats, like 140g vinyl instead of 180g, has proven cost-effective with minimal impact on audio quality.
Supply Chain Improvements:
- Sustainable practices have led to operational efficiencies and cost savings. Local sourcing and just-in-time inventory management have minimized excess stock and lowered storage costs. For instance, labels reported benefits from using lightweight materials, reducing transportation and packaging costs.
Strengthening Supply Chain Relations:
- Enhanced transparency and collaboration within supply chains foster positive changes. Suppliers publishing their sustainability data and collaborating on certification systems have presented new opportunities for large-scale sector improvements.
Competitive Position and Brand Awareness:
- Sustainability has bolstered companies’ competitive positions. Labels such as Secretly Group and Beggars Group have seen improved brand perception and competitive advantage through their sustainability efforts. For instance, public engagement and recognition as sector leaders have enhanced their visibility and appeal.
Regulatory Compliance and Financial Resilience:
- Proactive sustainability measures help companies stay ahead of regulatory changes. By implementing tools like the Impala Carbon Calculator, companies can prepare for future regulations and tax incentives, ensuring long-term financial resilience.
Attracting and Retaining Talent:
- Sustainability initiatives have positively impacted employee recruitment and retention. Companies noted that a focus on sustainability fosters a purpose-driven work environment, attracting younger generations who value social responsibility.
Attracting Artists:
- Labels with strong sustainability reputations attract more artists. Artists increasingly engage with labels on sustainability practices, contributing to positive public perception and industry leadership.

Survey Methodology

The survey was conducted through ‘qualitative interviews’ with selected Impala member labels from different territories, sizes, and stages of their sustainability journey. Research projects from entities such as Music Declares Emergency, British Phonographic Industry (BPI), and Key Production supported the survey findings, showing that music fans prioritize climate action and are willing to pay more for sustainable products, so Impala claims.

Impala itself offers tools like the Carbon Calculator to help members track and report their carbon footprint. The program aims to halve greenhouse gas emissions before 2030 and achieve net-zero emissions before 2050. It encourages members to take action by measuring their carbon footprint, reducing emissions, and investing in environmental projects.

About Impala

Established in 2000, Impala represents over 6,000 independent music companies across Europe. Known for their innovation and artist discovery, these companies produce more than 80% of all new releases and account for 80% of the sector’s jobs.

Bernard - Side-Line Staff

side-line.com

Electro indie pop act Phoeno returns with ‘Follower’ – watch the video

Bernard - Side-Line Staff — Thu, 10 Mar 2022 15:52:43 +0000

A while back we wrote about the debut single, “Alive”, by the electro indie pop act Phoeno. Out now is the band’s newest single, “Follower”, it is available on all streaming platforms from today on and comes accompanied by a brand new video.

The video itself was shot by Luca Truffarelli, features Lloyd Cooney who you might have seen recently in RTE’s “Kin”.

Phoeno is the Dublin based duo Adam Matthews and Liam Corbett which formed in late 2019. The band offers a kind of synthpop which sounds like a blend between Mesh and Iris. The band itself says that their music “tends to blend genres as our influences range from 80’s synth to pop and rock, we think our music is very reflective of this influence while always endeavouring to bring something new to the table.”

We asked the band about their influences. Corbo: “I’m usually quite open-minded when it comes to musical genres – inspiration can come from anywhere if it’s a well written and produced track. The bands I always find myself going back to are Wild Beasts, Tame Impala, Radiohead, Local Natives, NIN, and Jaguar Ma.” Adam adds: “My inspirations are Kate Bush, Matthew Good, Joni Mitchell, Trent Reznor, and Depeche Mode.”

Check the new single “Follower” below.

Bernard - Side-Line Staff

side-line.com

Interesting case in the UK regarding streaming services – In a reaction IMPALA rejects equitable remuneration as part of the solution

Bernard - Side-Line Staff — Thu, 15 Jul 2021 08:01:25 +0000

The UK DCMS Committee has released its report on the economics of streaming, with the headline conclusion that “reform is needed in order to make the market fairer”. There is one point in the report however that needs some extra explanation and it’s the UK DCMS Committee’s view that ‘equitable remuneration’ is part of the solution. IMPALA, the European organisation for independent music companies and national associations, argues it is not part of the solution.

The equitable remuneration is a compulsory license that must be paid when recorded music is played on a publicly accessible location. It is a remuneration intended for the public use of the music repertoire of performing artists and music producers. The question of equitable remuneration has already been rejected during the European copyright directive negotiations, with the independent sector backing a range of other reforms in agreement with the artist community. The argument is that equitable remuneration is not a solution as it would not fundamentally shift the needle in a meaningful way and would be damaging for emerging artists.

From IMPALA’s point of view, all artists (and this means indie artists as well) should receive a proper royalty rate along with differentiation by streaming services to reallocate revenues. It’s in this respect crucial to know that independent music companies account for over 80% (!!) of all new releases and this also includes a substantial investment.

You can check IMPALA’s 10-point plan to make streaming fairer below.

End safe harbours effectively – no new loopholes.
Pay artists a fair contemporary digital royalty rate.
Reform allocation of streaming revenue. Different services may wish to explore any or all of the following proposals:
1. Differentiation of rates:
  1. Pro Rata Temporis Model – To deal with the value imbalance for long-form music content, for example by having a rate for the first 30 seconds to 5 minutes of a song, then further payments triggered at 5 minute intervals until 15m 30s.
  2. Active Engagement Model – Encourage artists to stimulate active fan engagement by attaching a premium value to tracks which the listener has sought out or reached by artist, track or album name, or where she has saved, “liked”, or pre-ordered an album or track, for example.
  3. Artist Growth Model – Enabling artists to accelerate revenues to a sustainable level thereby supporting a broader diversity of emerging, and credible niche talent. The top tier streams would generate a bit less and bottom ones a bit more to help emerging and niche artists.
  4. User Choice Model – Facilitate spaces within services for rightsholders to develop incremental revenues through direct relationships with fans, eg by offering access to extra tracks, better audio, and features.
2. No threshold for a song to start generating revenue from streaming.
Assure there will be no reductions in royalties in exchange for enhanced plays, or privileged treatment in algorithms, or other features that recreate elements of payola.
Agree and enable revenue enhancement mechanisms in markets where the services are failing to convert users to paid models.
More vigilance by music services on unlawful activity that removes value from creators, including streaming manipulation, ad-blocking and stream-ripping software.
Enable search by labels / performers / producers / composers / musicians / authors / publishers.
Boost local repertoire and languages by better profiling in playlisting and other features, as well as having track titles in more than one language or specific, and ringfenced funding mechanisms allocated to investment in new, local recordings.
Work collaboratively with a spectrum of labels, across all markets (e.g. through Merlin for independents) to ensure editorial algorithm developments don’t negatively affect diversity, local repertoire and opportunities for artist discovery.
Work with the recorded music sector to help assess and reduce the carbon footprint of digital music.

Bernard - Side-Line Staff

side-line.com

Impala and IAO want to get all European artists back on the road and call for a cultural area touring permit across multiple geographic blocs in Europe

Bernard - Side-Line Staff — Thu, 08 Jul 2021 07:06:08 +0000

Impala (the European organisation for independent music companies and national associations) and IAO (the umbrella association for national organisations representing the rights and interests of Featured Artists in the music industry) have united to get all European artists back on the road.

In a statement they write: “The current touring crisis facing the music sector has to end. Facilitating live shows and touring is our best shot at recovery across the multiple geographical blocs that make up the greater European region. Reducing the costs and administrative burden of current work permit schemes and custom arrangements for cultural touring is key, particularly for grass roots, emerging, and niche artists.”

The organisations propose an approach that involves creating a new cultural area with a single touring permit, instead of treating Europe as a number of distinct blocs and countries. Their reasoning behind this: The music market is geographic and covers all countries and economic/political groupings in the region including EU, EFTA, EU neighbourhood countries, as well as individual countries such as the UK.

Known as the GECAT Pass (for Geographical European Cultural Area Touring), the idea is to get small and medium sized music tours back on the road quickly and efficiently.

The GECAT Pass involves 4 core elements:

Single travel permit for cultural touring for performers and support teams:

Annual and renewable work permit for creative workers on tour
Multiple geographical blocs making up the Geographical European Cultural Area
Single application in home country
Could limit the number of people per tour to cap eligible production size

Single customs licence for equipment (“carnet”)

Reduced admin burden with a single check at first and last border
Including limited amount of stock to be sold at events without trading permits
Light touch regime, proportionate to the economic value
Let small scale tours happen easily – and legally

Allow multiple stops before going home

Unlimited stops for equipment and people who are involved in cultural touring activity – could limit number and size of vehicles per tour for scale
Inclusion of dual use vehicles for people and goods (eg ‘splitter vans’)
Legalise normal cultural touring activity – especially for smaller tours

Home country VAT on merchandise sold at events

VAT paid in home country on return, for the small amounts included in customs licence
The key benefits of a GECAT Pass would be:

Promote cultural exchange across multiple geographical blocs and countries
Promote diversity and mobility of talent and repertoire
Promote post-pandemic economic and social recovery
Increase opportunities for niche and emerging artists
Reduce admin and costs for emerging artists and small scale productions
Put solid and reliable framework around touring
Promote co-operation, security and peace
Reduce carbon footprint from touring by promoting more smaller tours

IAO Chair Nacho García Vega comments: “The idea of the GECAT permit scheme is a simple fix to the barriers faced by the music and cultural sector across multiple geographical blocs. The recent issues created by Brexit have highlighted the administrative problems relating to touring that were already faced by European artists based in non-EU countries. It’s not only about the transit of people and goods, it’s also about the free flow of ideas and artistic expressions, essential for peace and co-operation in the whole region.”

IMPALA Executive Chair Helen Smith adds: “The touring crisis creates new opportunities as long as we can provide the framework and assurances that different geographical blocs and countries need. The idea is to guarantee a level-playing field and make sure that all artists have access to the same touring opportunities, regardless of where they are based or their level of development. The European music market stretches beyond political and economic groupings, so the key is for all geographical blocs and countries in the region to participate.”

To be continued…

Bernard - Side-Line Staff

side-line.com