A2IM CEO Richard Burgess on Spotify's Direct Licensing Plan: 'We Should Have Equal Access to Their Data'
When Spotify announced that they were offering advances worth up to six figures to indie artists and managers in exchange for licensing music directly to their platform, many label execs understandably spoke out in protest -- particularly in the indie community.
One indie-label executive told Billboard not only that indie companies have little leverage to prevent these direct-to-platform deals because of their dependence on streaming income, but also that Spotify's announcement triangulated and intensified the already-close race for survival between smaller labels and companies that offer label & marketing services: "We're competing with Kobalt, with AWAL, with Caroline -- it's not great to have another hat thrown in."
Richard Burgess, CEO of the American Association of Independent Music (A2IM), expressed similar sentiments during a keynote interview Thursday morning (Jun. 21) at A2IM's annual Indie Week conference in New York. The chief's complaints centered around data ownership -- mirroring an ongoing debate that has been happening for years between the wider music industry and big-tech behemoths like Apple and Google.
"The problem is that Spotify has data that we don’t have," said Burgess. "They can see data before our labels can see it, so they have the opportunity to jump and make an investment on an artist that’s not a guess or based on gut, the way everyone here in this room has to work -- it's based on hard knowledge and facts. But we think that's our data too, and we should have equal access to that data. Otherwise, it distorts the playing field in a very unhealthy way. We’re obviously having a lot of conversations with the DSPs right now about that."
Burgess' comments underscored how indie and major labels alike ultimately have little control over distribution, in the sense that they lean heavily on streaming services to provide the consumption and engagement data they need to serve their artists effectively and make smarter business decisions. In turn, these services can arbitrarily pick and choose what data to show to -- and hide from -- content suppliers and rights holders. Some third-party resources like Chartmetric are working to close precisely these data gaps, creating their own metrics for gauging activity like playlist engagement beyond follower count alone.
During the A2IM interview, moderator Inc. Magazine and Inc.com editor James Ledbetter also asked Burgess to comment on the current state of A&R. "I've heard artist development described as a lost art that no one knows how to do anymore," said Ledbetter.
Burgess agreed to the extent that the influence of data and the quickening pace of technology has removed patience and genuine cultivation from much of modern artist development, particularly for majors who need to report quarterly performance results to parent companies not focused on music.
"It took Bruce Springsteen three albums to break as an artist," said Burgess. "It's hard to imagine that level of development and commitment these days at a major label -- but indie labels still do that all the time."
In fact, this is where Spotify's direct-licensing practices and the goals of trade organizations like A2IM might actually be aligned: increasing the leverage and competitiveness of the indie music landscape against that of corporate incumbents.
Back in October 2017, a report from the Worldwide Independent Network pinned indie labels' market share of the global recorded music market at 38.4 percent, an increase of merely 0.9 percent year-over-year. The U.S. landscape was comparable, where indies' share of recorded music grew 1.7 percent year-over-year to 37 percent of the national market. “My goal is to grow that share to 50 percent," said Burgess.
The CEO also emphasized how he "wasn't a Luddite" and was generally excited about the role that technological advancements like virtual reality and blockchain could play moving the entire music industry forward. He also claimed that the indie community in particular could benefit from the growing market for stems, in that deconstructing and monetizing songs based on individual stems and instruments could grow the revenue pie for recorded music even further, disrupting the nature of release strategies for the better.
"I don’t think technology inherently makes anything better or worse. It is what it is, and we have to move with the times," said Burgess. "It's about how we harness technology in the best way for musicians, artists and labels."