“It’s very important to have a really independent distribution in music. But let me be clear: very few people actually care about their dealer’s property. What interests them is great service, great information, great technology, and a stable partner they can rely on for the long term. “
Try as we can, Kenny Gates don’t bite.
The CEO and co-founder of [PIAS] MBW explains why its company has just decided to rebrand and re-categorize its sales and service business – a long-time partner of indie mainstays like Beggars Group, Domino, Partisan, Chrysalis, Secretly Group and Fat Cat – as [Integral].
It’s the perfect opportunity to stir up Gates’ thoughts about the upcoming $ 430 million sale of Kobalt’s AWAL to Sony Music.
We expect a passionate slogan about what “real” independence means in the world of sales. In fact, we’re hopeful that Gates are the old “majors who eat it all;” f ** k the Majors ”indie label Trope.
Instead, he fools us with two lines of reasoning.
The first is to express why he is feeling [Integral] can compete strongly with any rival in large ownership or otherwise, especially due to its international network (with 10 of its own branches worldwide plus eight partner offices) and the technology with which the B2B portal is operated.
The second? Gates suggests that the big bad wolves of the big record companies pose less of a threat to the health of the modern independent music market than a separate group of companies – those he calls “wolves in sheep’s clothing”.
Gates says that [Integral] represents both an investment in and a clarification of [PIAS]Services and sales offer.
He admits that when [PIAS]Own repertoire business has grown (accelerated by the acquisition and acceleration of Co-Op in 2012), some in the market are confused about the company’s dual strategy: part-in-house record label operation, part distribution and service partner the independent community.
Now this distinction is much clearer: the [PIAS] The Label Group is still home to the company’s own music activities, which are currently enjoying considerable success worldwide with Arlo Parks (in collaboration with their Transgressive Records label).
“The start of [Integral] gives both sides of our business more focus, more clarity and defined leadership. “
Kenny Gates, [PIAS]
In contrast, [Integral] Adrian Pope, who is led by UK-based managing director Adrian Pope, focuses exclusively on physical and digital distribution as well as an optional menu with additional services for independent artist and label partners worldwide.
These additional services include everything from dubbing licensing to radio and streaming advertising to vinyl production.
“Our offer needed clarity,” says Gates of the introduction of [Integral]. “This move gives both sides of our business more focus, more clarity and defined leadership.”
He adds, “It is in our DNA to serve the independent community and it is in our DNA to help our label mates reach the market in the best possible way.
“It shows our absolute commitment to sales – and our absolute commitment to independent sales – worldwide.”
What is an independent distributor after the sale of AWAL to Sony?
For years, the in-house indie sales arms of the big record labels – Caroline at Universal, The Orchard at Sony and ADA at Warner – have attracted Halse and Brickbats from the independent community because they are “faux” -independent. In other words, owned by multinationals that haven’t always had the best interest in indie labels.
Gates happily admits that he has personally addressed this criticism to the majors a few times in its nearly 40-year history [PIAS].
Recently, however, its main concern has shifted somewhat to those “wolves in sheep’s clothing” – supposedly “independent” sales and service companies financed by venture capital investments.
“There has been a lot of greed in the market – a lot of people invest and expect a lot of money sooner than later.”
Kenny GateS, [PIAS]
He says, “I am very cynical of some of those who define what they are doing as ‘independent’ distribution. They may consider themselves independent, but they are funded by venture capitalists who are more interested in a short-term return on their investment than any so-called “big” company in the business.
“I worry about this [VC-backed] Companies can afford to take a loss-making, aggressive market approach without a long-term strategy. This distorts the market and destroys the long-term ecosystem of the independent community. “
Gates who runs [PIAS] as a self-financing indie, adds. “Ten years ago, the value of music in the financial world, be it banks or the investment community, was essentially zero. Streaming has radically changed that, to the other extreme. A lot of greed has now entered the market – lots of people are investing and expecting a lot of money sooner rather than later. “
A key argument of [Integral] So for its indie label partners it is that it has been selling for over 30 years and intends to be here for more than 30 years.
Gates also points out that they are not only investing heavily in the digital side of their business – [PIAS makes the majority of its revenue from streaming – [Integral] is a proud and seasoned investor in physical music distribution and the power of independent retail to break an act.
Says Gates, “I believe that very few players in this market can really deliver high quality services when it comes to serving the physical market on a global scale. [Integral] can, and we appreciate how important physical music remains in not only breaking artists but building passionate fan bases as well.
“We appreciate the importance of physical music not only in breaking artists, but in building passionate fan bases as well.”
Kenny Gates, [PIAS]
“Ten years ago I saw the owner of a distributor come on stage at a conference and say, ‘Physical is dead. In a few years there will be no more physical ones. ‘I didn’t believe it then, I don’t believe it now and I’m happy to say the numbers seem on my side. “
Gates’ Argument: Although stores were closed during the 2020 pandemic, annual retail sales of vinyl in the US last year were $ 619.6 million, up from $ 140 million a year earlier.
At this growth rate, vinyl could become a billion dollar business by 2025.
Gates claims that [Integral] is “unrivaled” as a company, “with services and sales at the source in the markets, whether physical and digital, anywhere in the world”.
He also makes the point with that [Integral] wait now [PIAS]If the technology, discipline, and “quality of service” of the former company were ever not up to the gold standard, it would fail its sister company – something Gates says he won’t allow on his watch.
“The problem with physical for some [VC-backed] Distributors is that it is unpredictable; It can be a pain in the ass! It is labor intensive and requires a lot of investment, expertise, time and manpower. We are excited to make this resource available to you as the rewards for our customers can be enormous. “
“For me, it’s about love – a real love for the independent community that is doing well, breaking artists and growing their business.”
Kenny Gates, [PIAS]
Ultimately, however, he argues so [Integral]The outstanding quality includes “the immaterial things”.
[Integral] There are currently around 100 employees worldwide who, according to Gates, are permeated by a “DNA of musical culture” that money cannot buy.
“It’s really about attention and care,” he says. “I put it this way: For me it’s about love – a real love for the independent community that does it well, breaks artists and grows their business.
“This is a big difference to companies whose only goal is a business case and which should please their shareholders.
“We put soul and humanity into what we do every day. A lot of people don’t understand this – but for me it is crucial. “Music business worldwide