🔵 The exit plans for indie labels

Many owners of large indies are approaching retirement point. What happens next?

I have a confession: there are a few topics that I have either avoided writing about altogether, or have procrastinated on pretty badly.

One is a co-written article that I remain slightly hesitant to publish, specifically about the future of labels. More on that soon (well, maybe!).

The other is about the succession plans for current mid-to-large indie labels; the long-standing incumbents, if you will. That is something I've contemplated covering for a while, but have been rather reticent to as it is arguably a delicate topic.

Reading the news this week that Cooking Vinyl has been acquired by Exceleration Music (disclosure: Exceleration is a Motive Unknown client) brought the topic back to the front of my mind, so I figured I’d get writing.

Certainly here in the UK - but likely elsewhere too - there are a fair few large indie labels whose founders remain in sole (or majority) control of their business. Those labels have been around for decades now, and as a consequence, the owners are reaching retirement age, or perhaps an age that, whilst not quite at retirement level, is certainly in the phase of life where one might justifiably be looking to cash out, then settle down and enjoy a quieter life.

Let’s be clear: that's entirely natural. I've no doubt I will reach a point with Motive Unknown where I'll decide that I want to spend more time relaxing, making music and gardening, and when that day comes I'll also feel that I've earned that right, having put decades into doing what I do. So, no judgement here on anyone wishing to retire!

At that point however, only two options are on the table: succession, or a sale. The former would see a business owner passing control to their children. The latter would involve finding a buyer, which could either be a third party (as is the case with Cooking Vinyl), or it could be your own staff, either via a management buyout (as happened recently with Defected), or in an arrangement called an Employee Owned Trust, which sees the business pass into the ownership of the staff itself, all managed by a central trust.

(The latter, it should be noted, comes with one huge benefit to the business owner: selling into an EOT means you pay no Capital Gains Tax, which can mean saving very significant sums of money.)

At some stage then, I feel it quite likely that we will see more indies looking to sell up. Whether that is a good or bad thing largely depends on who they are selling to. Cooking Vinyl may have been sold, for example, but there is nothing to suggest that it will change greatly, and there was even talk of it tapping into Exceleration’s international network to grow even larger. A sale does not spell doom, in other words, and we must be mindful to avoid suggesting that.

Past that, as any regular readers know, I would generally be saddened to see labels selling up to Universal, largely because it contributes to an already overbearing market share further increasing, which I don't feel is good for competition in the marketplace.

In general then, I'm not judging anyone for who they sell to. Honestly I feel that after decades of service to the industry, we simply don't have that right. Had PIAS sold to anyone but Universal (and not attempted to gaslight everyone that this was a great move for independent music), I'd have remained quiet, for example.

In my view, these types of sales feel quite logical as an outcome, and given the state of the market - where things are arguably flattening out that bit more now - one might even argue that if one were to be considering an exit, it might be wiser to do that sooner rather than later.

With all of that in mind, I would not be shocked at all to see further news of labels selling up. Awkward as it is to say it, it makes a lot of sense right now if you are the business owner.

This is all conjecture, of course, and you will note that I've not named any labels here. This is not about starting rumours; it is really about the bigger picture.

The question I feel is right to ask is this: if these changes are coming (and I feel it inevitable that they will), what will that do to the landscape, and how will it shift market forces?

Equally, is this something the independent industry should lean into, and discuss more openly? For example, could more be done to present options that provide clear exit paths for business owners so they can make informed decisions with greater support?

Ultimately, this returns to that thorny topic of market dominance. A slow trickle of large indies moving into major label ownership would be - in my view - a bad thing. It would increase major label market share, and at some point the scales tip so completely in the majors’ favour that all bargaining power for indies might be lost.

Perhaps this also dovetails into the issue of dilution, where that process that used to see labels blossom into long-term incumbents is in turn replaced with an ever-growing long tail of independent, DIY artists who may profit well from their own activities, but who lack any market bargaining power by being so fragmented and nebulous. Right now, trade bodies in the recorded music space tend to represent labels in the main. With fewer and fewer labels becoming large, powerful players in the space, perhaps that calls for a wider focus towards indie music companies, in whatever form that might take.

For these reasons, I feel this whole area is one to watch more closely. We are moving into a period of great change; one that might see legendary business figures sell their businesses and retire. With fewer long-term, legendary labels coming through, that could conceivably create something of a vacuum, and at that point the music industry - or at least the indie side - will start to evolve and really change in terms of the new, emerging businesses that comprise it, and how those businesses generate revenues. That isn’t to suggest that legendary labels will vanish, but I think it possible that evolutions will occur, and that could be very exciting to see.

Truly interesting times - I am fascinated to watch it all play out.

Have a great evening,

D.

PS - a random favour to ask: is anyone in London able to get me some time in a Dolby Atmos room/studio? I have a mix to preview, but need an Atmos room to do that. Literally needs no more than 15mins. Thank you in advance!

🎶 Listening to “More” by Pulp. I had this as my soundtrack when driving up to York this weekend just gone, and it is a real treat. This is one of those moments where a band returns and their new material serves perfectly to remind you of just how great they were (and are). A breath of fresh air - which, perversely, says a lot about the music dominating the landscape at the moment (IMO).

📖 Reading “Music Journalism Desperately Needs More Muckrakers” by Shawn Reynaldo. The paywall for this is down for 24hrs so read now if you’re not a paid subscriber. I agree wholeheartedly with Shawn on this one: more needs to be done to call out extractive business practices and general corporatization of the music landscape. This is an important point everyone should be contemplating. I also feel he is right that for the most part it is the independent writers calling this stuff out, not the long-established music press (or industry press).

📺 Watching “Tom Middleton on sleep, audio therapy, and Aphex Twin”. I love Scuba’s podcast, which recently evolved from an audio-only one to more of a TV podcast format on YouTube. This episode with Tom Middleton of Global Communication is a terrific listen, first covering Tom’s work in the sleep therapy space (which I was ignorant of, and which is fascinating), and then moving on to Tom’s history as a musician. Essential listening.

🤖 Playing with n8n - a kind of Zapier/Make platform for weaving together your various services (e.g. Google Workspace, Slack, Notion etc) with AI Agents to deliver personalised, learning bots that can assist your team. Truly the next step forward. Brilliant.