🔵 Revisiting the precarious state of UK music distribution

Is a complete collapse on the cards and if so, what happens after that?

Hi there,

Over the last couple of years I have written about Utopia a fair bit. My more recent writing reflected on its divestment of businesses like Sentric Music and Absolute, but also asked what this meant for the UK distribution business, comprised of Proper and Cinram Novum, now trading in a combined form as UDS.

Those two businesses represent a sizeable chunk of the UK’s physical distribution for recorded music, and before now I was questioning why it was that the likes of Sony and Universal - both longstanding clients of Cinram - have not stepped in before now to intervene.

Cut to last week, and it would appear that in fact both businesses have stepped in now to provide financial support to Utopia, whose general health as a business is probably best described as “catastrophic” at this point.

It is easy to blame Utopia for this mess, but in reality UK distribution was in dire straits before the Swiss fintech firm stepped in. This whole space is evidently something of a hot potato that nobody wants to hold.

Naturally, indie labels are now expressing concern regarding Sony and Universal deal, suggesting that it might lead to both businesses exerting pressure on UDS to prioritise their respective releases over indie titles.

Given both labels were longstanding clients of Cinram before Utopia acquired it, I can’t help but think that if this was ever a plausible option, they would have been doing it for years now anyway. I do believe Utopia’s Drew Hill when he says that “Sony and UMG have no control over operational workflow on site”.

I feel this also highlights a “damned if you do, damned if you don’t” predicament for the majors. Had they stood by and allowed this business to collapse into administration, indies (and others) would have decried their failure to act. If they take action and step in (as they have), indies complain that there may be undue influence.

Perhaps the bigger issue to focus on is just how viable physical distribution is, both here in the UK and possibly even worldwide. These distribution businesses were for sale before and could not find a buyer before Utopia stepped up.

So what happens if the money runs out and the majors (well, Sony and Universal) refuse to throw another lifeline? The results would be nothing short of disastrous, and you’d likely see bricks and mortar stores collapse pretty quickly, along with major e-tailers following suit. The ripple effect would be severe and far-reaching.

It sounds extreme and unlikely, but we’re basically at the cusp of this happening already. This has been a long time coming.

It has me wondering if what we are looking at in 2023 is some kind of gigantic reset, throwing us back to something akin to the music landscape in the 1970s. I could see a collapse happening, and equally something akin to “Rough Trade Distribution 2.0” then emerging from the ashes as indies seek to re-take control by starting their own networks of distribution again.

In reality, I suspect it more likely that Sony and Universal might continue supporting this operation, largely because their respective physical sales income means that even the loss leader on the distro side might be nicely offset by the margins on physical sales. Nonetheless, this isn’t something we should take for granted.

Much with my point in yesterday’s newsletter, I feel we need to be deadly serious about how valuable these operations are, and accept that every operating company in music - no matter how large or small - has a vested interest in them surviving. The impact of this all going under would have a ripple effect out to every corner of the music industry, be that sales, marketing, promotion and beyond. That must be avoided at all costs.

Have a great evening,

D.

🎶 listening to “Sufferation Time (Babe Roots RMX)” by Babe Roots. As a massive fan of Basic Channel’s minimal dub techno, not to mention roots dub from the 70s, I was like a kid in a candy shop when Rhythm & Sound emerged circa 2001 with that dub techno take applied to reggae itself, courtesy of the same Basic Channel team. This Babe Roots (LOVE that name!) track picks up a very similar vibe, and is an absolute gem as a result. Enjoy!

📺 watching “Synplant 2 - Industry Game Changer”. This is quite a long video, but it walks through the Synplant 2 synth which uses AI to take a sample you feed it and turn that into a synth patch, with countless ways to then mutate the sound from there. Incredible stuff. There’s a reason everyone is talking about this synth!

🤖 playing with Soundverse, another AI music creation platform that certainly looks promising (depending on one’s expectations). I still feel these sites could ultimately be a threat to the likes of Splice, replace the world of samples with “prompt digging” to get what you’re after.

Stories from the Music Industry:

Indie companies worry as major labels intervene in vinyl and CD distribution

The Switzerland-based company called in the liquidators for its Utopia UK (R&D) operation this summer. For the separate distribution arm of its business, UDS, it sought financial assistance from the major labels Universal Music Group and Sony Music Entertainment (to fund the move of its warehousing from Aylesbury to Bicester, as reported by music business title CMU), leading to fears of an unhealthy level of influence over the independent sector. Hill already admits: “Part of me wishes now I hadn’t gone to [the majors] to say: ‘Do you want to come along for the ride?’”

👆🏻Hot take: I feel the majors are in a “damned if you do, damned if you don’t” position here for the most part. The bigger story is arguably how we got to this mess to start with.

The Spotify Top 20 is a snapshot of a much bigger story about independence in music

Who controls the biggest 20 global tracks on Spotify right now? If you’re thinking the major record companies you’re… half right. SPOT’s latest Daily Top 20 Global Songs chart (as of October 9) is a striking snapshot of a global industry whereby hit artists (and ‘non-major’ music companies outside the ‘Big Three’) are holding on to ownership of recording copyrights more often than you might expect.

👆🏻Hot take: I suspect most would be surprised at how little content is major label-owned in this list, but in reality I think it just shows how blurred the lines are getting as to what is technically ‘indie’ these days. The term means increasingly little.

Independent music publishers propose 'ethical' AI guidelines

First: that AI developers should seek express permission to use music when training their models. Second: that they should keep records of the musical works used in that process. Third: that purely AI-generated music should be labelled as such, and fourth, that it should not receive copyright protection.

👆🏻Hot take: I feel grumpy saying this, but every trade body under the sun is coming forward to propose guidelines, and it now feels like a “too many cooks in the kitchen” scenarion. There needs to be more cohesion across the industry here so that we have ideally one voice speaking, not ten or more.

Ticketmaster to launch upsell option for MVT

The upsell, which will launch on Venues Day (17 October) and run for an entire month, means that anyone purchasing a ticket on Ticketmaster will be given the option to make a donation directly to MVT. The initiative will run annually, with Ticketmaster pledging to match all donations received.

👆🏻Hot take: a great move from Ticketmaster. Naturally though I’d argue it should keep that upsell option in permanently, recognising its own role in the situation venues find themselves in.

UK startup RoEx launches Automix AI-powered mixing service

“Looking to the future, we envisage our technology integrating seamlessly with various DAWs, whether they are traditional desktop systems or emerging cloud-based platforms,” he said. “While the exact roadmap is still unfolding, our direction is unwavering: to democratise professional music creation, making it accessible and intuitive for all.”

👆🏻Hot take: I’m really keen to see how AI mixing can catch on, purely because I’ve never met an artist who enjoys that mixdown process. Full disclosure: RoEx is a Motive Unknown client.

Spotify adds listening restrictions for its free users in India

Nearly five years after it launched in India, Spotify is adding a layer of restrictions for its free users there. As of today (9 October) they will not be able to use the repeat function; go back to specific parts of songs; rearrange the order in which they are set to stream; or disable Spotify’s ‘smart shuffle’ setting. The changes bring Spotify’s free tier in India closer to that which is available in Brazil. The company says that it will run in-app messages to educate free users about why they can no longer access certain functions.

👆🏻Hot take: is this an admission on its part that Spotify needs to push up its Average Revenue Per User? I can’t help but think so.

Stories from the Broader World of Tech:

TikTok now supports direct posting from AI-powered Adobe apps, CapCut, Twitch and more

TikTok today is introducing a new feature that will allow its users to post directly to the video platform from a range of popular editing apps, including Adobe’s AI-powered video editing software Premiere Pro, its AI creativity app Adobe Express, as well as others, including Twitch, SocialPilot and ByteDance’s CapCut.

👆🏻Hot take: a smart move from TikTok here. Makes complete sense.

Judge blasts Sonos for abusing patent system and throws out $32.5 million win against Google

“This was not a case of an inventor leading the industry to something new,” Alsup wrote in a decision that strongly criticized Sonos for bringing the suit in the first place. “This was a case of the industry leading with something new and, only then, an inventor coming out of the woodwork to say that he had come up with the idea first — wringing fresh claims to read on a competitor’s products from an ancient application.”

👆🏻Hot take: a crushing blow for Sonos here. Curious to see how this will impact patent cases in future.

You can now allow only verified users to reply to X posts

On the social media site formerly known as Twitter, you can now opt to allow only paying verified accounts to reply to your tweets. Again, it's more fee speech than free speech for this Elon Musk-owned outfit. "You can now limit replies to verified users," X's official account said on Monday.

👆🏻Hot take: everyone is angry about this but in reality, would anyone (Musk aside) actually make use of it? After all, blue tick users aren’t properly verified; they’re just paying customers - and ironically it’s now awash with the bots and bad actors Musk was supposedly keen to get rid of.

Need something else to read? Here you go:

Study reveals some teens receive 5,000 notifications daily, most spend almost two hours on TikTok

Kids officially don't like Facebook

👆🏻Hot take: a grim read. It’s an interesting point about TikTok being so favourable because using it just involves staring at video (ie rather than typing or otherwise interacting).

How to Use Chatbots—and Keep Their Limitations in Mind

Yes, ChatGPT can be helpful for everyday tasks, but users need to be aware of the downsides, from data privacy to racial bias.

👆🏻Hot take: a solid primer and reminder on how to get the most from ChatGPT.

How Marvel Lost Its Way

It is almost impossible to follow the plot of the first episode of Season 2 of Loki. I say this as someone who has been writing about the Marvel Cinematic Universe for a decade.

👆🏻Hot take: another chapter in the “lessons to learn from Disney’s mistakes” book. It’s a shame though; I love Marvel, but of late it’s been absolutely dreadful.

Motive Unknown is a strategic marketing agency based in the UK. Our artist clients cover anything from top-tier pop (Spice Girls, Robbie Williams) through hip hop (Run The Jewels, Dessa), electronic (Underworld, Moby) and more. Our label clients take in Dirty Hit (The 1975, Beabadoobee) Partisan Records (IDLES, Fontaines DC), Domino Records (Arctic Monkeys, Wet Leg), Warp Records (Aphex Twin, Danny Brown), LuckyMe (Baauer, Hudson Mohawke), and Lex Records (MF DOOM, Eyedress) among others.

Recent recorded music clients to join the family include Because Music (Christine & The Queens, Shygirl), Dangerbird (Grandaddy, Slothrust) and London Records (Bananrama, Sugababes). 

In addition to our recorded music division, we also have a successful growth marketing division which has a strong focus on music creation. Our clients in this space include Beatport, Plugin Boutique, Loopmasters, UJAM, RoEx, BT, Rhodes and more. 

Care to learn more? Click here to visit our website.