Editor’s note: The following is an op-ed by Darius Van Arman, founder of the independent record label Jagjaguwar, which has released music by Bon Iver, Sharon Van Etten, Angel Olsen, Dinosaur Jr., and dozens of others. Van Arman also co-leads Secretly Group, Secretly Distribution, Numero Group, and Ghostly International. He is based in Brooklyn.
I remember the moment I started to believe that Jagjaguwar — the independent record label I founded 30 years ago — could become a real business, not just a labor of love. It was a rainy morning in 1996. I was checking my post office box in Charlottesville, Virginia, when I pulled out a waxy, green-tinted envelope that took some determination to rip open. In it was a mysterious check for $350. The accompanying letter was from the buyers at Cargo Distribution, an independent music distributor based in the UK, explaining how they’d come across Jennifer Nine’s glowing Melody Maker review of A Derby Spiritual, the debut album by Drunk, a band from Richmond, Virginia. It was just the second release on my tiny bedroom imprint. And the people at Cargo hadn’t even heard it. But they wanted to buy 50 copies. And so, just like that, I’d found distribution!
I don’t think I had ever felt as energized by such a new awareness of possibility, and the chain of events that led to this life-changing moment couldn’t have been simpler or more human. A few months before, my friend and occasional house-mate, the poet and songwriter David Berman, had given me Jennifer’s mailing address, insisting I send her a copy. It took a while to snowball home, but from that morning onwards I began telling myself: “Send one promo CD to a writer and you’ll sell 50!” Cargo went on to place more orders, and I would find a sister-label in Secretly Canadian, who then helped distribute the record throughout the United States. In a matter of months, I turned a small profit which I invested right back into releasing more new records. In short, from one critical spark and a few others that followed, Secretly Group and Secretly Distribution would be born.
I wonder if someone starting up an independent label in the year 2025 could encounter the same kind of luck. Right now, a great many independent artists and labels are truly struggling. It’s become more difficult than ever to profitably release new music, find and develop fan bases for new artists, or make your distinctive mark on music culture. Several significant market shifts have occurred over the last 30 years, making conditions far more hostile for independent-minded artists and labels, especially those driven to create art and music that propels culture forward — those with an eye to alter the mainstream, rather than submit to it.
On all fronts, market concentration is reducing access, the cumulative result of a persistent, decades-long drip-drip of dominant corporations growing bigger by swallowing up smaller companies. It’s eliminating previously diverse paths to market as well as mechanisms for fans to learn about new artists and new music. And it’s not just the major record labels. Live music promoters, venues, and ticketing companies have also consolidated immensely, especially in America and the UK, but also on continental Europe and beyond. For example, just last week the Belgian competition authority opened an investigation into Live Nation’s attempt to buy the festival Pukkelpop. Couple this reality with the increased costs of touring and the rising difficulties in crossing borders, and it should come as no surprise that there are now fewer opportunities for developing artists to hone their craft the best way possible: by building a fan base directly, performing their songs on the road, face to face with real people.
Media consolidation over the same time period now also means that there’s not much left of an independent music press. In America, no more City Papers or Village Voice, once revered publications whose names many now won’t even remember. In the UK, Melody Maker and NME have been downsized and merged into a shadow of what these once-glorious music weeklies used to be. There’s no thriving webzine or blog culture to replace these traditional town criers, and even Pitchfork, since its absorption into GQ, has significantly less bite. Worsening this shrinkage, what little remains of the music press is being further diminished by the prevailing power of algorithm-based platforms that choose what our eyes and ears get served up. Very recently, the independent publishing community has experienced a media traffic apocalypse. More on this later; suffice it to say that the emergent modes of more direct communication between publishers and readers, vis-Ã -vis Discord, Reddit, and Substack, have not fully arrived, nor are they winning the battle for today’s limited attention spans, compared to say, TikTok, Meta’s Reels, Amazon’s Twitch, or YouTube. All of those serve up their own opportunities, of course, whilst simultaneously reducing the voice of the independent music press.
And, yes, the recording industry is more consolidated than it’s ever been, down from six majors in the ’90s to just three today. And once again, the marketplace stands on the brink of even further consolidation, with Universal trying to gobble Downtown Music Holdings. So we find ourselves in an era when approximately 70% of global music distribution and over 80% of music distribution in the US and Europe are controlled by just three conglomerates, and this trio are more focused than ever on generating profits from the large catalogs of music that they already control. It is a fair question to ask whether the majors have become less interested in investing in the emergence of new music by new artists, which often requires riskier investment and which may cannibalize revenues from their bell cows, compared to 30 years ago — especially when you take into account their recent wave of layoffs that have significantly impacted support for new, frontline releases.
Another significant change is how the advent of streaming services has shifted the underlying economics from a primarily sales-based retail system to one that is now a consumption-based rental model. While there are both positive and negative aspects of this shift, it is worth highlighting how the way things used to work in the ’80s and ’90s served as such an effective incubator for small independents like my own. Jagjaguwar was among those born at the apex of the compact disc, a format that was high-margin, meaning the cost to manufacture was between 10 and 20% of the dealer price you could wholesale it at. You could repress quickly, so you didn’t ever feel compelled to over-press initially. And because the compact disc was so compact, it was relatively cheap to ship and store. It was common in those days for labels to make back their investment on a new album by a new artist within the first year. Getting your money back that fast in turn meant you could re-invest faster in more new music. Around it went.
Fast forward to today’s denser, slower-moving reality, and despite some technical innovations, the economics of streaming services are not nearly as kind to start-up businesses. A label or an artist receives less than half a penny per stream on average from an on-demand streaming service. It requires millions of streams to recoup the investment of making music. Yes, there are often a number of success stories involving unknown artists streaming millions out of nowhere. Whether their music is released on a label, or whether it’s self-released via one of the many digital distributors serving creators directly, too often they prove to be rare break-outs whose careers are not sustained by subsequent releases. The simple reality is that the vast majority of extraordinary artists making brilliant music right now, like the brilliant young people trying to launch exciting new labels to support them, will receive no spark at all. Take, for example, that album by Drunk that opened Jagjaguwar’s future. It’s been on Spotify for 15 years and has been streamed less than 20,000 times during that time span, earning less than $100 in total. In fact, it’s currently de-monetized on Spotify for not reaching their threshold of streams-per-month to trigger any recording royalties at all, a rule pitched by market leaders as one partial remedy to stem the glut of content clogging up the streaming systems. Whoever is starting the next Jagjaguwar today, good luck!
Or, take various other issues relating to the new economics and technical evolution of these all-you-can-eat streaming models. On one hand, a monthly subscription to a service like Spotify, Apple Music, or Deezer opens up access to the world’s commercially available recorded music — which, on the surface, has the positive impact of making culture more accessible and affordable to people of all countries and social backgrounds. But it does so by implicitly commodifying recorded music. Value-wise, many consumers now find all music recordings interchangeable with each other, as if all music in the streaming age were different soda flavors on offer, sitting side by side, in a soda fountain machine. Related to this commodification is how streaming economics, paired with algorithm-based discovery tools, has not-so-subtly incentivized mass conformity in the marketplace. Release a style of music that garners lots of repeat listening and that, more often than not, sounds like other music that garners lots of streams, and you will be better rewarded by the algorithmic matrix, as discovery algorithms latch on and boost access to what listeners keep coming back to. These systems are, after all, not in the business of empowering listeners, let alone educating them. They’re in the subscriber-retention business!
On the other hand, if you’re a cutting-edge label, or a daring artist creating new music that threatens to reshape or expand the mainstream into uncharted territory, you’re more likely to be skipped and excluded. You will suffer financially, because the discovery algorithms work to sideline music that’s more challenging to the average listener. And this dynamic is not about to change anytime soon. Today’s biggest streaming deals involve the largest catalog owners. Streaming has made the monetization curve smoother and more predictable than ever before in music business history. That’s why both capital investors from outside the industry, as well as the business brains working within it, are so heavily focused on the old — catalog acquisition, that is — rather than investing in new music and young artists.
How did we get here? So often in history, a society gets saved from one calamity to only find itself trapped in the unforeseen consequences of another big mess. Spotify may have been this industry’s Robespierre or Mao Zedong, saving the embattled music business and its copyright owners from the apocalypse of peer-to-peer file-sharing as unleashed by Napster at the turn of the new century. But in doing so, it introduced a multitude of new problems and undesirable side effects, creating new winners and losers.
As independents who believe that music is more than just sound, we were seduced by the promise of ubiquitous and almost cost-free direct access to the world’s markets. We hoped very much that the coming age of streamed data, and the artistic meritocracy which could only be unlocked by that simplified access, would make the marketplace more interesting and fairer. We hoped the new system would be a place where the corporate gatekeepers of yore wouldn’t be able to abuse their power as much. We believed that culture itself would grow more open, creating an immense and sustainable space for expression from along the fringes. However, what we find around us is a very different picture. Something more homogenized, tilted, artless, and anti-different. There are still gatekeepers to contend with, they just have a different shape, and they’ll continue to transact with the biggest rightsholders to determine who gets access and who gets paid.
There will be history books written about how today’s consumers are surrounded by so much content, yet how it’s near impossible for so many to discern the signal from the noise. The sheer volume of recordings on streaming services is increasing every day, and we are just at the dawn of generative artificial intelligence. So immense will this world of content become, that most of us will feel lost without algorithms or new AI guardian angels guiding our attention spans to comfortable terrain. This new paradigm raises serious civilizational questions. Who designs the algorithms? How are the algorithms influencing our behavior and limiting what is available to us? Who benefits from the polarization of choice that occurs when algorithms go into hyperdrive? What are the broader implications on concepts such as free will, democracy, and social justice?
While these matters deserve closer examination for the public as a whole, one set of questions rise above all others for independent-minded artists and labels. It’s existential. And it relates to control. Are individuals, including music creators and the companies that support them, notably independent record labels, still able to contribute to the shape of mainstream culture? Or, rather, is mainstream culture — being neatly packaged and presented to us via vast technology platforms powered by algorithms and artificial intelligence and reflecting the influence of market concentration in the music and media industries — on the verge of irreversibly shaping who we are as individuals and as a society? This is the fight we are waking up to, and, essentially, the struggle for independence in this modern age.
Perhaps Max Schmermbeck, a budding philosopher and bartender in the Netherlands, says it best. Becoming subversive “has to do with subverting and disrupting those technologies and systems that constantly attempt to make us fit the mold, to smooth things over, to make us jump through endless hoops. In our modern era, the existential struggle is about the right to deviate, to be an anomaly, to be unadapted, weird, and messy.” In other words, being independent means empowering yourself to think according to your own values — not mainstream values. It means being able to choose which systems you are a part of and who you are affiliated with, so that your artistic and spiritual expression can remain as uncorrelated, unique, true, and as freaky as you’re inspired to be. This is how we propel culture forward: by enabling a myriad of individual artistic expressions, all independent of each other, that work to shift and expand the boundaries of what is deemed normal (or even work to eradicate altogether the false god we call normality).
This past summer, I became personally embroiled in a heated debate about the world’s largest music company, Universal, acquiring one of the largest independent companies, Downtown Music Holdings, which owns smaller businesses such as FUGA, Curve, Songtrust, and CD Baby. On its surface, this may seem like an esoteric or inside-baseball argument about when, in the music industry, big really is too big, and what constitutes anti-competitive behavior, and by extension, to what extent competition regulators should take action to halt or mitigate an acquisition like this. I am no economist, nor am I a policy maker, but as an owner of an independent label, I’ve experienced first-hand the very real and negative consequences of unchecked consolidation. It’s shaped my belief that the three majors becoming even bigger is not good for the music industry as a whole. Nor is it good for consumers and related sectors, such as physical record stores.
How so? One example of market concentration gone horribly wrong is the Direct Shot fiasco, which occurred a number of years ago once Universal, Sony, and Warner Music Group all relied on the same American warehousing and logistics vendor, Direct Shot, to facilitate shipment of their physical records to record stores. When — perhaps inevitably — Direct Shot failed to handle the huge volume of traffic collectively thrown at their system by all three majors, the critical and previously steady flow of a huge proportion of new releases and restocks to record stores was interrupted. This single point of failure not only prevented consumers from getting physical copies of new releases when those releases were available on digital services, it potentially contributed to some switching off of physical formats altogether. It also threatened the short-term viability of independent record stores. In short, when supply chains over-consolidate, the system can break under its own weight.
Squarely, this is what’s now at stake with Universal’s attempt to acquire Downtown Music Holdings. Included in this deal is the world’s largest independent music digital supply chain company, FUGA. If this deal were to get through the regulation process, then, potentially, just one super giant, Universal, could be responsible for delivering the music assets underlying almost a majority of revenue generation and listening hours on digital services. This is a serious structural problem. There is also the serious issue of vast amounts of confidential and competitively sensitive information becoming available to Universal, not just from FUGA (i.e. what deals the indies are on, etc.) but from FUGA’s sister companies Curve — which offers royalty services to some of the biggest independent labels — CD Baby, and Songtrust.
It’s my belief that market regulators should block a deal like this. It’s not an isolated phenomenon but part of an ongoing pattern of consolidation in recent years by the top two music giants, Universal and Sony. Since 2021, Universal has acquired European distributor PIAS, Believe’s European physical distribution business (including GoodToGo), and Dutch music company 8Ball Music, while Sony has acquired global distributor AWAL, Brazilian music company Som Livre, Latin American distributor Altafonte Network, and Ultra Records. Along with Downtown, these companies were key constituents of the independent music landscape, and, when viewed together, these deals represent a sizable shift of marketshare from the indie sector to the big two.
It must be said, however, in isolation, mere consolidation is not the problem. Water will always come down the mountain, and, similarly, there will always be consolidation in any kind of competitive marketplace. This is not, in itself, an unhealthy dynamic. Scale advantage can unlock value. It can help creators find the resource they need to make the biggest possible cultural impact on a global scale, and it can help smaller companies compete against much larger companies. But, again, it comes down to a question of balance. When the largest players become too large, the market over concentrates and the openness and vitality of the overall music-creating ecosystem is directly threatened, especially when the biggest companies gain the necessary leverage to be able to rewrite the rules for other market participants.
Allow me to share a recent example of how outsized market leverage has reshaped the marketplace. In the fall of 2023, Universal and digital service Deezer announced that they had developed a new economic model together “that better reflects the true value of artist-fan relationships.” It was described as an “artist-centric” model, shifting revenues away from some lower streamers to the benefit of higher streamers, and it also demonetized functional content such as white noise and ocean sounds. The argument for this approach was that “quality” music was being too negatively impacted by the glut of “garbage” content on digital services. To some extent, this was and remains a worthy concern: The sheer volume of recordings hitting digital services, a significant portion being fraudulent, non-musical or infringing, is a real problem that financially hurts not just the majors, but independent labels, and middle class career artists. But here, instead of an industry-wide consortium working together to fix a common problem, the world’s biggest licensor unilaterally decided what the shape of monetization would be for all rights holders. And research analysts at J.P Morgan approved! At the time, J.P Morgan’s research note said the following about the artist-centric model: “We would expect it to be followed by further DSP deals (if DSPs want to maintain equal access to UMG’s must-have content) in the coming months… if broadly adopted, it could drive a 9% uplift to majors’ subscription revenues today”.
The standard digital subscription model shares a fixed pot of revenue with rights holders based on their respective share of streams, so in a world where the majors receive a 9% uplift, everyone else earns less. Perhaps some of the rights holders who would be negatively impacted are the so-called “merchants of garbage,” which is what Universal CEO Lucian Grainge called any group who “expressed a concern about artist-centric,” but the fact remains, this new model has also negatively impacted many important artists contributing valuable creative expression to the marketplace. Take that debut Drunk album again, the one that sparked life into the 30-year Jagjaguwar adventure. The Universal-Deezer model has decided that those recordings are now worth less than more mainstream recordings on a stream-by-stream basis.
An analogous dynamic is now occurring with digital publishing companies, thanks to the outsized market leverage that big tech platforms have achieved, another horror story of market concentration. Because AI-generated summaries are now replacing traditional search results at search engine monopoly Google, media companies such as Bustle and Stereogum are contending with a “media traffic apocalypse.” Stereogum editor-in-chief Scott Lapatine recounted, in a post titled “Getting Killed By AI,” how this apocalypse is threatening the viability of the website he founded. “Advertising still accounts for the vast majority of Stereogum’s revenue,” wrote Lapatine, “but starting this year the so-called ‘media traffic apocalypse’ caused by Google’s pivot to AI search has cut our ad revenue by 70%.” Charlotte Klein of New York Magazine covered this recent market shift in her article “Inside The Media’s Traffic Apocalypse.” “The whole premise of internet publishing — that you could reach audiences far and wide — is starting to crumble,” Klein wrote, “forcing publishers to reevaluate what kind of stories they produce and what kind of readers they want, and, ultimately, to think smaller and more bespoke.” Sound familiar? These are the exact same headwinds that new music artists and newer record labels (without the cushioning of large legacy catalogs) are now facing at the hands of algorithms on streaming services.
Markets evolve all the time, and music is no different. New technologies emerge, consumer behavior moves unpredictably as tastes change and new laws come into existence. Change is constant and affects everyone, big and small. In the free market framework we live in, companies have to keep innovating if they’re to remain relevant and profitable. However, a free market can only be considered free as long as it remains fair and competitive. The greater good is harmed when an unfair, anti-competitive system takes over. That’s why, when any industry veers towards oligopoly, regulation is not only morally right, it’s economically good for the overall system’s health. Nor should we be afraid to say how our shared culture, including that of great music, is a different kind of marketplace that maybe shouldn’t be considered a marketplace at all. Important artistic and cultural expression is not meant to be chasing efficiency, profitability, or obey the material rules of price competition. This is what makes independent labels like Jagjaguwar, and all our peers and rivals, such a unique kind of working endeavor.
I’ve always admired how Martin Mills described the business of the company he founded, Beggars, as supporting both art and commerce. While independents like us need to collaborate with our competitors (even the majors) from time to time to help assure sustainable market conditions for everyone (i.e. protecting the commerce), we also need to do everything we can to protect the art, by working to staunch further market concentration while vigorously defending the independent routes to market that already exist. It’s the reason Secretly and Beggars invested in Cargo Independent Distribution, the distributor I mentioned in the beginning, who gave my younger self a lifeline. It’s how we ensure there will always be an independent physical distribution path into and across the important music market of the UK. After all, we need the likes of Cargo to continue igniting the sparks of the future.
One encouraging sign is how economists and regulators are starting to understand antitrust and market concentration in a way that aligns with the “art and commerce” dualism described above. It used to be that economists and regulators were squarely focused on price competition and whether a merger would negatively impact consumer prices. If not, then the merger in question wasn’t problematic in their eyes. This increasingly outdated perspective is often referred to as the Chicago School of antitrust, which advocated for approaches emphasizing efficiency and minimal government intervention. However, with the rise of dominant e-commerce platforms like Amazon, which lowered prices while weakening many important cultural industries, there’s been a new view of competition as viewed through a more contemporary lens.
Perhaps the most influential articulation of how other factors should be considered when examining antitrust, is the 2017 law review article, Amazon’s Antitrust Paradox, by Lina Khan, a legal scholar who went on to become the chair of the Federal Trade Commission under Joe Biden. “The long-term interests of consumers include product quality, variety, and innovation,” she wrote, “factors best promoted through both a robust competitive process and open markets. By contrast, allowing a highly concentrated market structure to persist endangers these long-term interests.” That this kind of thinking is now emergent affirms that independent culture businesses like our own are on the right track. When we think about the value of our business, it’s not strictly tied to profits or revenues. Rather, it’s also the extent to which we can positively impact culture, support talent, and co-exist collaboratively and equitably with other stakeholders, including artists and label employees trying to do the same.
All of the market concentration stories I’ve shared here are inter-connected. Concentration in one sector contributes to concentration in another. Just one example is what Stereogum is going through right now with what I introduced above as the “media traffic apocalypse.” Stereogum has been an important champion of so much great music being produced along the fringes, including music by many of the artists that Jagjaguwar and Secretly Group partner with. When such important music criticism platforms like Stereogum are squeezed out, it becomes much harder for new music to be discovered and organically amplified.
This dynamic not only stifles how new artistic expression can impact culture or even become available to consumers, it also indirectly contributes to greater market concentration in the recording industry. Legacy recordings face less competition, which drives more profit and control to the largest recording companies. So, when thinking about the fight we find ourselves in, the struggle for independence in the modern age, we need to fearlessly push back against all market concentration wherever it arises: whether it be the largest companies in history becoming larger, whether it be the emerging dominance of tech platforms and the algorithms they utilize to control what we find, see and hear, or whether it be the small cadre of powerful interests working to establish regulation and laws about artificial intelligence that favor the rapid pace of technological innovation over the adequate protection of the labor and rights of artists and copyright owners everywhere.
As I reflect on how I started out in the music industry, and where that industry has since moved over the last 30 years, I continue to be optimistic. My sincere hope is that independent music businesses everywhere will realize what is stake and will step up their collective efforts to keep music open. If we care about where culture is heading, if we want new Jagjaguwars and new artists like Drunk to make their mark, then we need to cultivate a marketplace that continues to provide sustaining sparks to the new artists and new labels starting now. We need to safeguard not just our own independence but also the independence of all market participants, while proactively working to restore balance to our music ecosystem, as inaction at this critical time is the same as acquiescence. We could soon hit a point of no return, after which we will never regain what we’ve lost. It all comes down to a simple choice, really. Get busy fighting for new art and new voices, or get busy dying.
