A couple of weeks ago, I received an email from an artist I follow on Bandcamp. In the email, the artist confirmed he was shutting down his physical store due to new regulations coming into effect that basically render it financially unworkable to retail physical of any form.
The drastic nature of the email gave me cause to go and research the claims being made here. What I discovered was arguably worse than I was anticipating.
There are two new developments relating to e-commerce and Europe. One is bad. The other is absolutely devastating.
First are the import duties being levied on products coming in from outside the EU. This is a charge of âŹ3 per line type. In simple terms, if someone in Europe wanted to buy an LP from the UK, there will be a âŹ3 levy added. If they wanted to buy an LP, a CD, and a T-shirt, there would be a âŹ9 charge, because that involves three different types of product. However, if they bought five CDs, for example, it is still only âŹ3.
I think everyone would agree that that is one more thing pushing up costs, and that in turn is not great. Crucially, though, where this hits hardest is for DIY artists who are not able to use e-commerce businesses who may, for example, have a European base through which to manufacture and deliver products.
The second law coming into effect is substantially more damaging. It is called the Packaging and Packaging Waste Regulation Law, aka PPWR. This law is already in effect as of August the 12th, though I believe it is being phased in.
The main issues with the law relate to the cost of compliance. In short, if you wish to sell physical products into an EU country, you now need to pay a tariff in every single country that you wish to sell to. In Germany, for example, the cost is around âŹ1,000. In other countries, I believe it varies, but the costs are all still monumentally high for loan operators and small businesses in general.
Alongside that, the new law requires compliance with regards to packaging materials and how recyclable those are. Frankly, this law and everything about it is a monumentally deep topic, and for the purposes of clarity, as much as anything, Iâm going to avoid taking a deep dive here. For what itâs worth, though, Shawn Reynaldo wrote an excellent breakdown of the intricacies of this law on his own First Floor Substack, which I highly recommend subscribing to. I believe his article is free for now, so if youâre quick, you can read it here.
To better understand the impact of all of this, I reached out to two people in the industry who are much closer to the coalface here: Toby Harris at 100% and Andy Allen at BSI Merch and Artist Services. As businesses of differing sizes, I was curious to get their perspectives on how this might all impact trade and what their general feeling is about it all.
In order to address all the issues of retailing in Europe, both businesses have long since set up European entities through which to trade. That, in turn, means that their clients do not need to wade through the paperwork that selling in Europe creates, as these companies essentially take care of it for them. Obviously, though, with regards to PPWR, it means a fairly substantial outlay, and that, in turn, is a cost that businesses can either absorb or pass back.
Ultimately, these new regulations are a pain for businesses such as 100% and BSI, but they are not insurmountable for the simple reason that the scale at which these businesses operate means that, to some extent, they are relatively insulated.
Sometimes topics like this reveal realities of a sort. For example, services businesses like my own, but also BSI and 100%, are able to exist because we work with large artists or labels whose long-term stability is bordering on cast iron. By having those large global clients, any services business, be it marketing, ecommerce, or elsewhere, is able to maintain a certain level of turnover.
Where this comes crashing down, however, is when you come down the scale from multi-million-selling global acts to the DIY artists or those that I would term as âworking classâ - that is, actively releasing records and with the modest-sized audience, but potentially holding down other income in order to live comfortably.
These are the artists who may, for example, press 500 copies of an album on vinyl, knowing that they can sell it globally, but in small numbers to each territory - perhaps 100 in the US, 50 in the UK, 50 in Germany and so on. Now, with European import laws, PPWR, and other tariffs such as the import duties in the US, these artists are essentially seeing their routes to market entirely cut off. They are not big enough to work with an e-commerce company, as the money simply isnât there for those types of businesses to get involved. However, they also cannot afford the outlays to trade in Europe that would easily exceed âŹ20,000.
As a consequence, they basically have no route to market outside of their domestic territory.
Andy made a comment that really stuck with me::
âI want to have it where we have a pathway, where weâve got these bands that can start off, that we can help build a momentum around, where theyâve got some income coming in where they can survive and not be signed to a label, not sign their rights away. But right now, we are experiencing how fucking hard it is for a band to get some momentum and get going, and I donât have the answers.â
Andy is absolutely right, too.
The state of affairs for any new artist right now is about as bad as itâs ever been.
Letâs break it down:
Algorithms on DSPs are skewing towards US artists because they dominate the global consumption picture for the most part (a topic Annabella Coldrick, CEO of the Music Managers Forum, wrote about recently for Music Week).
Gigging in the UK (though in many other countries too) has become harder and harder as venues shut down.
Thanks to Brexit costs of touring Europe is making it unfeasible for many below a certain threshold.
Now, on top of all of that, artists cannot even sell product outside of their own home territory without incurring massive fines or charging unfeasibly high prices.
Generally I aim to find positives in industry developments. Too often people focus purely on the negatives because they tend to elicit clicks. In this instance though, I just cannot find any up side.
Action must be taken; these artists are the future of our industry, and right now, we are systematically removing any opportunities they might have to break out. That is both mind-boggling, ridiculous and terrifying all at the same time.
Change is desperately needed.
Until next time,
D.
đ§ listening to âLEX-XXâ which drops Sept 4th. Now, here at MU, we love Lex. Granted, they have been one of our longest-serving and most beloved clients, but it runs a bit deeper than that, with one of my team even releasing music on the label wayyyy back when it started out. I consider us blessed to work with so many labels I was buying back when I was a DJ, both in clubs and on the radio. Ninja Tune, Warp, LuckyMe and Lex are all fine examples. So, when this promo landed in my inbox, it amounted to a wonderful trip through Lexâs greatest hits and remixes, and features a smorgasbord of names I tend to Stan for: Prefuse 73, Gescom, Boards of Canada, DJ Premier, MF DOOM⊠the list is loooong. Manna from heaven, itâs really that simple.
đ§ also listening to âLow Timesâ by Ghost Dubs. I am a HUGE Ghost Dubs fan; his last album set a new bar on that collision of nerve-jangling noise with the kind of focused, directed sub bass that you didnât think was possible to achieve. Hence, any new Ghost Dubs gets my attention. Low Times is from his forthcoming new album, âObliqueâ, and sports remixes from the man himself and The Bug. All coming soon on The Bugâs mighty Pressure label.
đ€ playing with various AI MCPs. MCPs have taken a little while to become truly useful to me. For those unfamiliar, they are a means to interface a platform with an LLM like Claude, allowing natural language interactions. They are still reaching maturity, so many are a bit limited in function, but this is where AI truly shines for me - i.e. in making tedious processed that nobody enjoys much, MUCH simpler to execute.
Soundtrack The Page updates
First up, THANK YOU for all the feedback and love for STP. Given this is just a pet project, Iâm loving how much it has resonated with everyone. Thank you also for your book recommendations; I am compiling a list and will aim to work through that, adding more as we go.
Since I last emailed though, two more guides have been added. The first is for Tim Lawrenceâs amazing âLove Saves The Day: A History of American Dance Music Culture, 1970-1979â, which is chock full of rare tracks and awesome albums, thanks in no small part to the playlists the author obtained from the likes of David Mancuso and Nicky Siano.
The second guide - which took a long time to nail - is Mark Prendergastâs incredible âThe Ambient Century: From Mahler to Moby - The Evolution of Sound in the Electronic Ageâ. This contains over 900 works to enjoy, and as the title suggests, it covers a period spanning well over a century. There is so much incredible music to enjoy that you could frankly spend a month on this one and still have half of it left to check out.
I can also reveal that the next guide going up will be Dan Charnasâ âDilla Timeâ, charting the life of the legend that was J Dilla. Expect that in the next few days!
Oh - I also implemented a News page and an RSS feed on the site, with the latter being a good way to keep informed the moment new guides go up. At some point Iâll probably create a dedicated email list for this all too so that people can be told when new guides go up.
Finally, thanks to everyone spreading the word! Massive love to Stephan Kunze and Shawn Reynaldo who have shared STP with their subscribers. Thatâs hugely appreciated.