🔵 D2C exclusives and the perils of ignoring the wider ecosystem

Or, why it is past time we all recognised the need for a full, flourishing ecosystem around music

Last week, the US indie record store community wrote an open letter calling for an end to D2C (Direct to Consumer) exclusivity windows on artist websites. The practice, they wrote, “undermines the principles of fairness, inclusivity, and accessibility that are fundamental to the spirit of music itself”.

For me, this was another reminder of the degree to which stakeholders are often operating in too selfish a manner, one I’d argue is continuing the erosion of the music ecosystem around us.

Put simply: any labels windowing D2C exclusives need to understand that whilst they might have the power to do this with established artists, the support they’d get for new, up-and-coming acts is very much at indie retail and via other aspects of the music ecosystem. Ergo, acting selfishly when one can is something of a fool’s errand, one which might see more stores closing, removing further hubs of culture from the landscape.

No specific business was called out in the letter, but I can’t help but think that when the entire membership of A2IM was listed as a signatory, the likely targets are the majors rather than the indies.

I’ve been generally critical of Universal of late, though I cannot deny it is on a tear in terms of growth, market control and generally steering policy around most things in the music industry. If, as I suspect might be the case, it is one of the bigger culprits in the D2C exclusive space, it is yet more reason to be concerned about the company’s means to control certain outcomes in the market, such as favouring big box retail over indie stores in a bid to drive the latter out of business.

Historically, there has always been a symbiotic relationship between the majors and the indies. I actually think the indies have tended to be more in denial about this than the majors, often because to admit it might appear disempowering on some level. To me though it was always clear: the majors often fed off the indies, luring successful artists away with more money and bigger budget campaigns. Equally the indies needed the majors to ensure the existence of the ecosystem overall. Without those bigger hit albums, the whole economy was worse off. There was always a balance of sorts, even if it didn’t look like it.

In 2024 however, the lines are now so blurred that “indie” doesn’t really mean anything at all. Some of the biggest companies empowering indie artists are, in the main, owned by one of the majors. Equally, the shift in certain dynamics around the market has meant that artists have more power than ever, in turn making them less reliant on major labels for continued success.

In the face of that, it feels clear that the majors are now swallowing up more and more of the indie landscape in order to ensure survival. There’s an argument this has always happened on some level, but of late it feels like the gloves have come off and everything is fair game.

D2C is perhaps the latest case in point. If Universal and the other majors seek to exploit windowed exclusives, the damage hits the smallest people first - i.e the indie retailers. That in turn weakens the indie ecosystem even more, and places more dependence on the majors.

I’d argue it also potentially dooms anyone attempting this to repeat the same mistakes of the past, such as when Sony thought it could sell digital music in a format that only Sony’s own devices supported.

Equally though, I suspect this might also thread into the strange, slightly misplaced focus the majors are all starting to put into superfans. I could well believe that at a board meeting somewhere, it was agreed that superfans had far more value than was being exploited, and that one way to get that leverage back was to drive sales through D2C by making releases exclusive in the artist/label store for a period before retailers could create a presale too.

None of this will end well.

D2C exclusives will indeed harm indie retailers, and that will not be a win for anyone except maybe the majors. Equally though, the superfan aspirations are, I feel, doomed to failure too. The power dynamics are not there; the artist does not need a label to own the fan relationship. It it an attempt to create a new dependency at a time where control has long since slipped away on that front.

Considered in those terms, all of these moves - the exclusives, the craven lust for superfans etc - will fail. If these moves are not stopped before they gain traction however, the damage it might cause the industry is substantial.

I know I keep saying it, but we must surely be at a point where the likes of Universal should be investigated for its control over the market, and this D2C spat might well be the latest example of why this is so necessary.

Have a great evening,

D.

🎶 listening to “Step It Up (Leftfield Remix)” by Stereo MCs. Confession: despite being a Stereo MCs fan back in the day, and being a massive Leftfield stan, I had no idea this remix even existed. The joke is on me too, as this is Leftfield at their golden era finest. It also had me thinking that we’re surely overdue a comp of all Leftfield’s remixes. There were LOADS at one point - get them back out there!

📺 watching “The Affordable Joe Dart Bass” on YouTube. Anyone selling any kind of product needs to watch this video for a best-in-class example of how to sell something. Even I want one now, and 1) I rarely play bass, and 2) I have an Ernie Ball MusicMan already!

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Stories from the Music Industry:

Sir Lucian Grainge confirms ‘greater compensation’ is coming from TikTok for UMG artists and songwriters

Grainge writes in today’s memo: “Under the new agreement, artist and songwriter compensation will be greater than under our prior TikTok deal, and the total value UMG’s artists and songwriters garner from this partnership will be more closely aligned with other platforms in the social music category. “Further, TikTok will implement tools and processes to help address provenance and attribution issues, helping artists and songwriters to more effectively monetize their work.”

👆🏻Hot take: my immediate thought here is that this is a victory for Universal… but what about everyone else? Will similar terms be provided, or is this the exception to the rule? I fear the latter but let’s see…

UK lawmakers call for AI legislation to protect artists from deepfakes, copyright infringement

The report calls for the UK to pass new laws that would protect artists’ personalities from being copied by AI without permission; mandate transparent labelling of AI-generated content; and require AI developers to gain permission from copyright holders to use their materials for training, among other things.

👆🏻Hot take: a fairly common sense call, IMO. I am only surprised these laws aren’t being passed more quickly, given the widespread deepfaking etc going on.

Tracklib launches ‘Sounds,’ a royalty-free sampling feature

Music sampling platform Tracklib has unveiled a brand new feature providing royalty-free loops and one-shots. This new addition, called Sounds, complements Tracklib’s existing library of song samples, creating a one-stop shop for music producers subscribed to Tracklib’s service.

👆🏻Hot take: a smart move from TrackLib here. I really like this service as it just focuses on quality first, with a sound business model to back that up.

Artists have earned $123m via Bandcamp Fridays since 2020 and fans have paid artists and their labels $1.3bn via the platform to date

Direct to fan platform Bandcamp is celebrating its 40th Bandcamp Friday on May 3. The initiative was launched during Covid lockdown in March 2020 and sees the platform waive its share of revenues from artists’ sales. Bandcamp, which was acquired by Songtradr in September, reports that artists have generated $123 million via this initiative since then. According to the company, fans have paid artists and their labels $1.3 billion via Bandcamp to date. Bandcamp was founded in 2008.

👆🏻Hot take: I continue to feel that Bandcamp does not get the recognition it deserves. Furthermore it is irritating to see things like James Blake’s Vault app launching when Bandcamp can do all of that and a whole lot more. Lean into Bandcamp for god’s sake - it’s great, and it’s there, ready to go. Use it!

SoundCloud launches ‘fan-powered’ Buzzing Playlists to spotlight up-and-coming artists

Updated weekly, Buzzing Playlists will showcase fresh music from rising Next Pro artists across pop, hip hop, R&B, and electronic genres. This provides a platform for these artists to gain exposure and find new fans, while listeners can discover new music based on what other fans are enjoying. Industry professionals can also use these playlists to identify promising new talent.

👆🏻Hot take: I love this move from SoundCloud, which I read as a genuine attempt to help surface emerging music rather than play to the “quantity not quality” leanings of most algorithms on DSPs. Kudos to them.

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Notable stories from the world of tech:

ByteDance would shut down TikTok in US rather than sell it, sources say

ByteDance would prefer to shut down TikTok rather than sell it if the Chinese company exhausts all legal options to fight legislation to ban the platform from app stores in the US, four sources said. The algorithms TikTok relies on for its operations are deemed core to ByteDance’s overall operations, which would make a sale of the app with algorithms highly unlikely, said the sources close to the parent.

👆🏻Hot take: I am really curious to see how a TikTok ban in the US might shift the cultural dynamics around social media in general. Either users will pivot en masse to some other app, or influence will just shift to non-US personalities and the American cultural heft diminishes accordingly.

How the EU used its Digital Services Act to rein in TikTok Lite

For Anupam Chander, professor of law at Georgetown University, the timing of the two approaches to crack down on TikTok invite comparisons—ones that don’t play favorably for the U.S. model of outright banning. “The EU approach is more sensible, putting faith in regulators rather than seeking to place faith in new owners,” he says. “Of course, we need to be cautious about regulators as well. But the U.S. action is more draconian.”

👆🏻Hot take: this is a great point. The EU’s approach to rein in TikTok feels less heavy-going, and dare I say it slightly less hypocritical too (given the sheer volume of ex-US data that US Big Tech hordes).

Spotify claims Apple wants 'tax' for in-app pricing tweak

"Apple has once again defied the European Commission's decision, rejecting our update for attempting to communicate with customers about our prices unless we pay Apple a new tax," a Spotify spokesperson stated to the media. "Their disregard for consumers and developers is matched only by their disdain for the law."

👆🏻Hot take: Spotify have a fair point here. It feels like Apple is doing everything it can to avoid doing as ordered by the EU.

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Looking for something else to read? Here you go:

Everyone Was Wrong Declaring Pitchfork Dead

Layoffs have had little impact on the website.

👆🏻Hot take: a great point is being made here regarding Pitchfork post-GQ merger, namely that in reality, very little has changed. I think it says a lot about the kind of doomerism that we’re seeing so much of lately - Bandcamp’s acquisition by Songtradr being another perfect example IMO.

Five Mixes: My Nominees for the National Recording Registry, 1974-2001

Frankie Knuckles, Jeff Mills, Richie Hawtin—this is history, folks

👆🏻Hot take: I was largely unaware of the NRR before reading this, but I love this passionate pitch for why the five mixes selected should be added into the registry.

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