Everybody’s Got a Price Tag. Including Indie Labels…

We’re all guilty of romanticizing the indie label, if for no other reason than the music sucks less.  But cred and creativity aside, indies sometimes behave worse than the majors, and it’s often difficult to tell the two apart (see Big Machine, Macklemore & Ryan Lewis, Gotye, etc.)  And if the gigantic merger between Universal Music Group and EMI has taught us anything, it’s that indies have a price tag — just like everyone else.

That curiously rotten fish odor first started surfacing around indie consortium IMPALA, typically a 12-round fighter against the major label behemoths.  Back in the day, IMPALA actually forced a second regulatory review of the joint venture between Bertelsmann and Sony Music Entertainment.  The European Commission agreed to the extra review after tenacious lobbying.

Ultimately, the deal wasn’t annulled by the Europeans, but the message was clear: IMPALA was a force to be reckoned with, and an extremely influential representative of the indie community.  Even outside the music industry, the group had garnered respect worldwide and changed the way mergers were approached.  IMPALA was clearly fighting above its weight: moving forward, if you wanted to make a big deal, you had to get those little labels on your side, at least in Europe.

Which is exactly what happened in the UMG+EMI tie-up, now an embarrassing black mark for the group.  Sensing a tough fight, Universal Music Group started operating like smart companies do when dealing with public officials and regulators.  According to the inside details, the strategy involved appeasing regulators and handing out stuff to indies, including cut-rate deals on divested sub-labels.  It was a swap-meet with world class offers, and everyone was buying.

Which is why after initially opposing the deal, IMPALA chairman Patrick Zelnik suddenly stood up and started supporting the mega-marriage.  “I think it could be just what the sector needs,” Zelnik told the Financial Times, while anticipating a sweet offer for himself on a divested Virgin Records.

One day later, a civil war ensued within Impala, not to mention the broader indie community.  “We all respect Patrick Zelnik’s view, but the Financial Times article is the Naive position, not the Impala position,” Impala executive chair Helen Smith back-pedaled.  The deal was ultimately consecrated with heavy concessions, despite stated opposition from the indies.

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July 19th, 2012: Monday: Indies Support the UMG Merger. Tuesday: Indies Reject the UMG Merger…

Fast-forward to the present, and the art of lying down has reached a new renaissance.  After Universal agreed to sell its supremely-valuable Parlophone Label Group to Warner Music Group, indie consortia Merlin, Impala, and AIM all seemed completely compliant.  That is, even though the shift would essentially keep Parlophone within a small clique of major label cronies.  Somehow, according to public statements, moving the property to the smaller Warner was better than the alternatives, and helped to balance major label competition (that is, between three different mega-labels).

Sounds logical enough, though surprising for a group so adamantly opposed to the original merger.  But maybe this had something to do with it: just this week, Impala, Merlin, and Warner Music Group announced a ‘landmark deal’ that would see member indies buying, licensing, or otherwise reaping rewards from Parlophone assets.  “The deal aims to bring more scale into the independent sector through an opportunity to buy, license or distribute a significant portion of PLG assets or their equivalent in WMG-owned assets,” the release stated.

The rest, as they say…

10 Responses

  1. Caspian

    IMPALA, AIM and MERLIN – they DO NOT represent the majority of Indies – far from it. They represent a small slice of the Indies and don’t seem able to actually DO anything apart from release press releases about how they’ve been unable to prevent or affect anything.

  2. El Aguila

    So…. Impala fought the purchase of EMI by Universal, and several other mergers over the last several years – managed to get the UNI / EMI merger diluted, and now they’ve pulled off a deal where some of the recordings go into independent hands. In the name of fighting market concentration. Doesn’t that mean that they’ve achieved what they set out to do?

    Confused by the slant on this article.

    • n' Stuff

      Revisionism is always a dangerous craft. Impala wanted to block the merger, then the chairman as you can see tried to shift the entire stance (Chairman = top guy who sets the agenda).

  3. El Aguila

    It’s an association of labels – not a label. It doesn’t have a “top dog” who “sets the agenda”.

  4. Visitor

    It’s a story as old as business itself.

    Everyone has a price and after all the posing, posturing and moralizing they can be bought off.

  5. El Aguila

    Yep, everybody’s got a price. Otherwise no deal would ever get done. This is, I think, a good thing, on balance.

  6. Guest

    Actually, the result will be that some of the Parlophone or Warner catalogues may be sold off to idependent labels. The result will be “less large majors” – which is what they have been campaigning for….. “Price tag” is not a relevant analogy. A move which may apparently strengthen the Indies is how this should be reported.