Nuno Saraiva has had a 30 year career in the music industry as an artist, songwriter, music publisher, record label, consultant, music exporter and project manager. He is founder of the SCL-Lusitanian Label Group in Portugal, and also a board member of IMPALA; ex-board member of EMEE; a publisher member of IMPF; Executive Director of independent music trade body AMAEI Portugal; and President of AEMI, the Portuguese independent music publishers’ association, He is a strong believer in independent music, diversity and equality, as well as conducting business in an open and fair fashion, he employs a humanist approach to music and to business and does not like greedy people, selfish people or bullies.
As I witness the ongoing debate about cultural diversity and the acquisition of Downtown by UMG, I am immediately transported in my mind to Sofia and the recent SoAlive conference. I participated in a couple of very interesting panels and heard many things which caused me to ponder my own future in music, and the future of music itself.
Independents as amateurs?
One of the most striking comments I heard in Sofia is that independent music companies are like ‘amateur football clubs’ – said by a representative of a major label. Yes, breathe deep and take that in: The future of independents is that we are amateurs within the musical ecosystem.
The implication is that, while independents play with passion, the “real game” happens elsewhere. Tell that to the independents who are working with international success stories. That comparison feels both unfair and revealing. It suggests a future where only a few large organisations dominate and everyone else is relegated to the sidelines.
To me, this assertion frames the debate surrounding Universal Music Group’s bid to buy Downtown Music Holdings. On the surface, this might look like just another business deal. But for independent music businesses, it raises questions about competition, access and autonomy in the music ecosystem.
Switching home truths
At the end of last year, I bought a niche distributor with great Portuguese repertoire. A long-standing client of FUGA, I decided to switch, given the threat of UMG’s acquisition.
First let me explain why I decided to move away from FUGA, because it is relevant: I got into the music business first as an artist and then as a label and publisher, to offer other artists something different and fair. My label operates on 50/50 deals and knowledge sharing, with a transparent humanist approach.
Independence has always been about choice, the ability to work on your own terms, decide who to work with and what kind of deals to strike. That’s why staying independent has always been so important to us as a business.
It is also essential to point out that “independent” is not a marketing term, it is a real concept that artists and music fans should be able to rely on. This must be called out in the age of post-truth we presently find ourselves in.
As the new owner of a Merlin-member distributor using FUGA to deliver its music to digital service providers, the proposed acquisition of Downtown by UMG poses a huge threat to both the independence of us as a business and for our artists.
This is not something we, or any business should have to stand for, either in terms of owning our own metadata, music masters, royalty information or simply market share. Market share leads to neighbouring rights payouts, sustainability and healthy growth. It’s about market access and whether independents will be in the music market as competitors or as amateurs.
At the SoAlive conference, another participant in the panel talked about how it’s easy to unwind from service contracts and that there are plenty of other options. This, of course, couldn’t be further from the truth.
As I told the audience in Sofia, it takes a huge amount of time and money, and you have to be really determined.
It took me months to shift our music to another delivery partner, and the process was super complex, even for a small catalogue of seven thousand tracks.
And it was – and continues to be – expensive. There have been significant unexpected costs that I am still having to deal with ten months later.
Diversity washing
I also heard in Sofia that the future is fine because UMG is one of the most diverse companies there is. The example given was the expressive Portuguese genre Fado, where UMG do indeed have some great artists. Of course, we all know Portugal is only about Fado and Ronaldo, right? Except it isn’t – it has a wealth of other good players and amazingly diverse music across our small territory.
I had to respond and explain that what UMG is doing is about a few top spots in a key local genre. This sounds good, but in reality, this is diversity washing.
UMG and the rest of the majors simply cannot “upstream” whatever local artists they sign; they are primarily distributors of Anglo-American music into the smaller markets and not the other way around. So whatever local artists they sign generally stay local – stifling the potential of new diverse musical exports in favour of the usual commercial homogeneous music.
New ways to compete unfairly
If anyone needs an illustration of how market concentration leads to less diversity, look at the 1000-stream threshold enacted by UMG and Spotify: they have invented a kind of “Reverse Robin Hood” economics, taking small earnings from the many to top up the few.
Individually, payments due on tracks under the threshold are crumbs – but when you sweep up crumbs from the entire long tail, the total becomes a feast for those already at the top.
Vibrant new artists from smaller markets suffer the most, seeing their tracks demonetised when they don’t make the threshold. When streaming started, every play was treated equally. Now, to borrow from ‘Animal Farm’, some streams have become “more equal than others”.
Spinning the narrative
We should also be deeply concerned by the attacks on those who speak out about further consolidation in our sector and the false accusations being spread about the precious work of our trade associations.
To my mind this is also another indicator of the future, where legitimate opposition based on third party data, facts and expert assessments is shouted down as inaccurate and misleading or worse. I see this as a form of unfair competition which in many ways is far more worrying than UMG’s attempts to acquire more muscle in the independent sector.
A market leader can try to gain more power through acquisition for as long as the regulators allow it, but this is something else. Who wants a bold market leader who inspires and embraces debate and opposition? I know I do, we all need big business in our market.
I have seen a lot said over the past few months. On Friday my concerns were dismissed as “fearmongering and conspiracy theories far more familiar to extremist groups and activist US investors than European entrepreneurs”.
Wow. As a European entrepreneur, I take great offence to this. At the same time it’s an excellent and timely illustration of the concern – a cynical reframing of the debate to make it look like it’s about freedom and entrepreneurship when it’s about consolidation, attempting to dismiss legitimate public interest issues as an “absurd distraction” for the EU whose time would be better spent taming US tech monopolies and AI companies.
We need to stand up for European culture and diversity
Back to culture. Or should I say football? Europe’s creative ecosystem thrives on diversity. We must treasure and champion European musical culture and diversity, bringing talent up through the ranks so that every European country – not just Portugal – can have their own Ronaldo success story.
That’s why we need competition rules to ensure independent companies can compete on fair terms, so that they can get better at exporting to their neighbouring countries and be free to choose their digital path to market without fear of being trapped.
Independent record companies have always been the promoters of cultural diversity and champions of new music. We collectively account for over 80% of all new releases in Europe. IMPALA’s new paper shows the material and detrimental impact on cultural diversity should independent companies be stifled and see their income, reduced as a result of further market concentration.
That’s why it’s crucial for the UMG / Downtown deal to be blocked, along with any deals that make major companies too big.
As for my future in music: I remain steadfastly independent and always will. “Amateur” is a word that comes from “amare” – to love – and that is exactly why I have dedicated my entire life to music. I may not know much about coaching football teams, but I know what it means to play for love as well as trophies.
For the sake of that love – for creativity, fairness, and diversity – let’s make sure the music field stays open to everyone.
