🔵 The perilous state of indie's trade bodies
As companies sidestep Merlin for deals with TikTok, what does this say about our trade bodies in general?
Hi there -
New broke this week of Ditto Music, another distributor, breaking away from its Merlin membership to complete a direct deal with TikTok. This follows UnitedMasters doing the same thing last week.
Both moves certainly represent a victory for TikTok, and amount to a bruising blow for Merlin, which is meant to exist to represent the interests of its independent music members. For Big Tech, this also exposes a weakness that it can surely work to further exploit. After all, where TikTok sets a precedent, others (Meta, Spotify, Google etc) are sure to follow. In their eyes, the divide-and-conquer tactic now works, and they’d be crazy not to attempt the same strategy come their own negotiations.
As I mentioned in last week’s hot take about the UnitedMasters deal, a lawyer friend commented to me that upon challenging Merlin in the way TikTok did, what should have happened was that other trade bodies and collection agencies would have come together in solidarity, showing that you cannot mess with one entity without picking a fight with the whole industry operating in this space.
Instead, we now have two companies cutting deals, and I suspect more will only follow. Where that leaves Merlin is anyone’s guess, but for me it feels like very serious questions need to be asked about what it exists for as the suggestion here is that it cannot provide the one service it exists to deliver.
For me this feels like more grist to the mill that in 2024, indie trade bodies are severely lacking in real power.
I still feel that one reason might simply be that there are now too many, such that nobody really holds true negotiating clout. When AIM - the first indie trade body - was formed, it held enormous bargaining power, and represented a monumental coup for the indie market at the time. The BPI - initially resistant to it forming at all - had to eventually accept its position, and in time, AIM came to strike significant deals, some of which the indie labels still benefit from to this day. (Sidenote: you can read more about that in Eamonn Forde’s excellent “1999: The Year the Record Industry Lost Control” book.)
In 2024 though, the list of trade bodies representing either different geographic locations (e.g. AIM vs A2IM, it’s US counterpart), or different subsections within music (e.g. UK Music, the Council of Music Makers - both umbrellas of other bodies, which speaks volumes) has become so numerous that at times, I struggle to unpick who is representing whom when I receive yet another press release regarding someone’s position on AI (for example).
The Merlin/TikTok situation is clear proof that the power indies once wielded has been chronically eroded, and if that does not change soon, most of these bodies might labour on under the impression they carry weight, but in real terms, they simply will not. I don’t feel many do even now, and anecdotally from chats with all manner of other people across the industry, I can safely state that I am far from alone in that assertion.
Last week I wrote about how a large chunk of the music industry’s problems come down to value creation versus value extraction, and that arguably not enough businesses are focused on creating value, preferring instead to just extract it.
If we accept that assertion to be true, then I wonder if this starts to represent the new lines across which trade bodies and others should now be divided. Or, if not, perhaps it is time for trade bodies to look at significant consolidation, so as to ensure they have a single, global presence capable of taking on the likes of TikTok, and actually winning.
Have a great weekend,
D.
🎶 listening to “Night Drive” by Rico Scott. This one came via my colleague Stone; a thumping deep techno track that some might say veers into dub techno territory but which IMO bumps just a little too hard for that. Either way, I love it. Great music to walk around town to.
📺 watching “Pete & Bas - Mugshot Freestyle”. I’ll admit to developing a weird fascination with Pete and Bas, two geriatric London rappers delivering tight rhymes over pretty solid beats. Is it a novelty? Possibly, but it is generating a ridiculous amount of interest (400k views on this in a week - numbers many artists would love to hit!) and with an album dropping Nov 22nd it might just be the weird sleeper hit of 2024. Americans: good luck wrapping your heads around this one, LOL.
🤖 playing with Jamahook. (Disclosure, also a Motive Unknown client). This is the kind of AI use that I love - i.e. where it provides a genuinely useful service to, in this case, someone making music. Jamahook is a “sound assistant”, which scans both your local samples and draws from its own cloud-based library to suggest samples that are either matching your track in terms of key and harmony, or which might fit from a rhythmic perspective etc. As a guy with 250k+ samples on my drive, this is spot-on as a means to find sounds I’d otherwise have zero hope of unearthing. Brilliant.
Stories worth reading from the Music Industry:
UMG's Virgin Music Group Acquires Outdustry: Exploring India and China
Virgin said that Outdustry will continue under its current brand with its marketing services, publishing and label businesses. Its CEO Ed Peto will take up an additional role as SVP of international strategy at Virgin Music Group. “Ed will be a key player as we chart our global expansion plans,” said VMG co-CEO JT Myers. “Bringing everything we’ve built at Outdustry into Virgin Music Group represents an enormous opportunity to expand our vision globally,” added Peto.
👆🏻Hot take: I have been mulling over what it is about UMG’s Virgin setup that leaves me so underwhelmed compared to similar major offerings. My conclusion was that it just feels like a fairly ad-hoc set of companies now thrown together, lacking real cohesion and direction. That might all change of course, but with a push to 1) make more money and almost certainly then 2) lay off more staff, it feels like Virgin might get backed into a corner.
Block CEO Jack Dorsey primes Tidal staff for more layoffs
“We’re going to part ways with a number of folks on our team,” wrote Dorsey. “We’re going to lead with engineering and design, and remove the product management and product marketing functions entirely. We’re reducing the size of our design team and foundational roles supporting Tidal, and we will consider reducing engineering over the next few weeks as we have more clarity around leadership going forward.” Fortune suggested – based on its sources within Tidal – that as many as 100 staff could be laid off, which would represent around a quarter of its workforce.
👆🏻Hot take: the question here is really whether this is just cutbacks to stem losses, or whether it is a more focused, strategic move to change the direction of the company. Right now it feels like the former, but who knows, perhaps we might be proven wrong in time.
Another large indie distributor inks direct agreement with TikTok, as Ditto leaves behind expiring Merlin deal with platform
Lee Parsons, CEO and co-founder of Ditto, confirmed to MBW today (October 25) that his team has struck a new direct agreement with TikTok after sources tipped us off on the deal. Parsons said: “We’re happy to confirm we have a new direct agreement with TikTok, which includes elements covering CapCut, the main TikTok platform, and TikTok’s Commercial Music Library. As a result of this agreement, we have secured improved commercial opportunities for our artists.”
👆🏻Hot take: the biggest issue here is that I feel the likes of UnitedMasters and Ditto aren’t signing deals to somehow bury Merlin, but that with members now sidestepping that dispute, Merlin is indeed greatly undermined. The precedent that sets is worrying, and I fear the trade body may now be moribund unless something decisive happens soon.
Rostrum Pacific unveils AI-powered music distribution platform SpaceHeater
“With real-time AI attribution, we offer unmatched transparency and accuracy when it comes to tracking how artists’ music is used to train AI models and in determining fair compensation for AI-generated outputs. This level of insight is simply best-in-class. Rostrum Pacific is proud to be the first label group and distributor working with AI attribution, driving innovation and setting a new standard for the future of music.”
👆🏻Hot take: with very “pro-ethical” people on this team I am really keen to see how this might shape up. Frankly it’s just refreshing to see news of people leaning into this all from the more constructive, ethical angle. More of that please.
The latest entrant in the music-streaming space is... Nintendo?
This week Nintendo has launched its own music-streaming service, although it’s focused on a very specific area: game soundtracks. Nintendo Music is available on iOS and Android devices at launch – strangely not on the Switch console. While the catalogue is restricted to soundtracks from Nintendo games over the last four decades, the features mirror those of established streaming services: curated playlists (including by mood); downloads for offline listening; and recommendations – in this case based on the games that people have played on their Switch.
👆🏻Hot take: granted this is a leap in logic, but if this app does take off, I wonder if it might further lend weight to the concept of more niche music apps that focus on curation, rather than the “everything available to all” model of Spotify et al.
Notable news from the world of tech:
OpenAI’s search engine is now live in ChatGPT
ChatGPT is officially an AI-powered web search engine. The company is enabling real-time information in conversations for paid subscribers today (along with SearchGPT waitlist users), with free, enterprise, and education users gaining access in the coming weeks. Rather than launching as a separate product, web search will be integrated into ChatGPT’s existing interface. The feature determines when to tap into web results based on queries, though users can also manually trigger web searches.
👆🏻Hot take: I see this as the first really notable challenge on Google’s dominance in this space for quite some time. I gather Google have updates it is rolling out soon, but I wonder if the simplicity of GPT versus the hot mess that Google Search has now become may be quite the damaging blow.
How Virtual Reality Died
Guess what? These same four companies—Meta, Apple, Microsoft, Google—have a new dream technology built on fakery. It’s called artificial intelligence. What an amazing coincidence! Do these four CEOs coordinate their moves in secret? Or are they just obsessed with imitating each other in some kind of warped Girardian way? But their AI plans aren’t much different than the virtual reality debacle. In VR, we go into a fake world to interact with real people. In AI, we remain in the real world but interact with fake people. That’s not much of an improvement. By my measure, it’s actually a step backward.
👆🏻Hot take: I fully agree with this take from Ted Gioia. I have no doubt AI has uses, but the degree to which we’re being told that it should exist in every corner of our lives is overbearing and further proof of Big Tech’s desire to be all-pervasive.
What is Dopamine Design? And why did it take over store shelves?
So, where does this leave us? As attention spans continue to shrink, Dopamine Design is only going to evolve further. Consumers will demand even more immediacy, more visual excitement, and brands will have to respond by making packaging an experience in itself. The days of minimalist designs quietly asking for your trust are fading. Now, the game is about hitting hard, fast, and joyfully.
👆🏻Hot take: I think what makes me sad reading this is that it appears everyone accepts this attention-deprived state as an inevitability. It is not, and I’d argue what’s required is not even more gaudy design approaches but a challenge to the very way in which social media and other platforms are driving down our attention spans and pushing us towards increasingly shallow levels of engagement.
Looking for something else to read? Here you go:
Confessions of a Spotify Vandal
A folk-pop mischief-maker who goes by Catbreath has collected hundreds of thousands of streams by giving his songs prankish titles like “Chill Music,” “Gym Bangers,” and “My Discover Weekly.”
👆🏻Hot take: this is eminently worth your time because I think it lays bare just how broken the entire streaming system has become. When artists are now naming songs just to cheat an algorithm and drive interest and plays, something has gone very wrong indeed.
‘Fandom has toxified the world’: Watchmen author Alan Moore on superheroes, Comicsgate and Trump
Enthusiasm can be a productive force for good, but our culture has rapidly become a fan-based landscape that the rest of us are merely living in.
👆🏻Hot take: I found myself agreeing with Alan Moore on this one. It feels like fans are becoming increasingly demanding and entitled, and that crosses a line which encroaches on how artists can create their art. This whole issue feels like one increasingly gathering pace, but I’m just not sure where it all ends up.