In the back stairwell of a crowded Webster Hall amidst the bustling relaunched New Music Seminar, Billboard.biz caught up with Beggars Group Chairman Martin Mills three days before he is due to testify before the Senate Subcommittee on Antitrust Competition Policy and Consumer Rights hearing against the Universal Music Group-EMI merger. Mills, a British citizen whose label group includes Beggars, 4AD, Matador, Rough Trade, and XL as well as the single most successful recording artist of recent times in Adele, may seem an odd choice to speak against the major label merger in the U.S. Here Mills discusses why he opposes the merger, why going to Capitol Hill will be "a bit unusual" for him, why regulatory concessions won't be enough and what Beggars would look like without Adele.
Have you prepared your testimony?
It's nearly there.
Get ready -- you better wear a full three piece and pinstripes or something...
So I'm told, so I'm told. It's going to be a bit unusual for me.
Any advanced word on your testimony?
I think it's pretty well known that I'm in opposition to it, that I believe that this will damage the market and will hurt the opportunity for independents and for indies and other smaller majors to access the market. I think it's about dominance in market share, market control, and I just don't think that music is a commodity, using the word loosely, which should be subject to that kind of dominance.
If Universal makes the concessions EU regulators request in their statement of objections, do you believe they can they meet a standard that will make this a fair deal?
I don't really think that's the issue. I don't think that some small divestments really solve the problem. I think the problem of having one super dominant player in the industry is too big to be solved by small remedies, personally.
Sony reportedly had a bigger market share the first quarter than Universal -- which some have conspiracy theories about -- but perhaps sometimes the biggest players don't do well. And In fact your company has thrived these last few years under the current system, which many thought impossible.
There was a week last year in the UK where my company had a bigger share than Universal, let alone Sony. Maybe it was more than one week. But I think the Adele record has been a phenomenon, you can't draw any conclusions from that. What you should do is look at the second biggest independent record label. I think what this is about is the biggest player trying to increase and reestablish control of the market and put the genie back in a bottle and I think we all like the genie out of the bottle.
How come they called on you to testify in the US approval regulation process as a British citizen heading a British company (with operations in the U.S.)?
Well I don't know, actually. I'm not really sure. It's interesting that I'm doing this. I've done a similar thing with the House of Commons in the UK quite a few years ago on consumer pricing, so I have done it in the UK. I guess my label is fairly prominent in the independent world these days and I've been fairly outspoken about this merger and so I guess they probably wanted somebody to put that point of view.
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What about the Sony getting EMI Publishing, how come that didn't meet as much opposition?
It's more complex with Sony and also it's a more diversified acquisition. And of course you also have the restraining power of the collecting societies. It's not as straightforward as this. I think it's unfortunate it went through without any serious comments at all ... [pauses]. I shouldn't say that. It was cleared without remedies, I think that's unfortunate. But Universal is a much more black and white one about the biggest player trying to get much bigger, and frankly, Universal are a great company, they're a smart company. They're doing this for a reason. Ask yourself what reason they're doing it for.
Your NMS panel discussed how indie labels like yours and Benjy Grinberg's Rostrum -- which put out a No. 1 record by Mac Miller -- have managed to be fleet-footed and successful with the major label system largely intact.
What you're looking at is exceptions that prove the rule there. And clearly, independents have certain advantages over majors and majors have certain advantages over independents. And that's what the game is about, right? In the US, the majors dominate radio, the independents are stronger with the broad community, for example. We each have our strengths, we each have our home pitches if you like.
If you took away Adele's sales from your equation, how would the last two years have been for you?
We've been doing pretty okay. We do actually take Adele out of our numbers because it is truly a phenomenon and we can't expect the same thing to happen with the next record or indeed any other record from any label... probably. Even allowing for that we are growing, and I think the reason we've been growing is because at the moment, the digital marketplace is relatively open, it's relatively easy to spread the word about great music. We tend to sell albums, not tracks, which means for every fan we convert, we're making 10 times as much money as a company who sells tracks, so that's fairly helpful. It's been a fairly receptive environment for us and we've been putting out great music, which is fundamentally what it's all about. But I think my concern is that what this acquisition is about is trying to restrict that freedom and that ability to be nimble-footed and as I said, put the genie back in a bottle.
The fact that you've survived this long (Beggars Banquet launched in 1974) and even thrived it wouldn't seem this merger would have much effect on your business either way.
Again, why do you think Universal is doing it? Because they want to become less relevant? They're doing it for a reason, and the reason is because they think the extra market share will give them greater powers. It's got to be as simple as that -- why else would they do it? Why else would they take this huge risk, spend all this money?
Have you experienced any sort of collusion against your products from any of the majors over the years? Either tacitly or not? Perhaps a lack of radio airplay or retail advertising?
I wouldn't say any collusion, but certainly when the majors are trying to optimize their exposure in retail and media, that if they're successful in doing that, that automatically means less space for everyone else. It has to. You've only got 40 spots on the radio playlist -- iif Universal are fighting hard to get 18 rather than 17, that's one less for everyone else. Has to be. Sony have had a great year, but I think fundamentally we all know that Universal is the market leader. And we know that the market leader sets the terms of trade the rest of the market has to work with.