The following op/ed comes from UK-based Hunter Giles (pictured inset), who co-founded and leads Infinite Catalog, a royalty accounting software + service company.
gamma (lower case g) is the newest “modern media and music company” on the block, with heavy-hitting partners, a Rolodex of seasoned media execs, and big plans to “revolutionize the way artists create, distribute, and monetize their content and brand.”
To kick things off they acquired distribution and pub-admin company Vydia, and launched a marketing campaign, presumably ironic for a company empowering creators, featuring the proverbial dancing monkey.
They also have a lot of money at their disposal – a reported cool billion (still cool).
They join the ranks of similarly well-heeled services-oriented music companies like Downtown and Utopia, which for my money are beginning to resemble inside-out majors — companies aiming to operate at the same scale and culturally-relevant heights as traditional majors, but by taking a decidedly inverse approach.
Their deep pockets all but ensure they’ll have an impact on the music industry writ large.
So what exactly is their approach, how does it differ from that of traditional majors, and what does their rise portend?
What Makes An Inside-Out Major
The biggest difference, of course, is with respect to copyright. Traditional majors focus on owning and acquiring as many as possible, while inside-out majors proudly sell themselves as empowerers of creator independence. Downtown sold their publishing catalog to finance their pivot to services, Utopia declares “we will never own copyrights”, and gamma seems to be trying for a hybrid approach, with a long-term licensing deal for the Death Row catalog (how long isn’t clear).
Distribution is the beating heart of this new breed — it’s not surprising gamma started with Vydia — but while each major owns a self-described independent distributor, they don’t advertise themselves as an interconnected services stack. The Orchard (Sony), Virgin Music/Ingrooves and 49% of PIAS (Universal), and ADA (Warner) barely mention their respective affiliations). Inside-out majors, on the other hand, are all about the stack, touting their multi-faceted capabilities/brands, and the ability to work with creators at “every stage of their career” (Downtown) “from creation to consumption” (Utopia) to “revolutionize the way artists create, distribute, and monetize” content (gamma again).
If you’re a big enough songwriter, major publishers will happily administer your pub rights instead of buying them outright, but they do both kinds of deals side by side under the same publishing brand. No major publisher has built or bought a creator-oriented, anyone-can-admin version of Songtrust (Downtown), Sentric (Utopia), or Vydia (gamma) equivalent, while no inside-out major seems to be doing co-pub deals (the publishing equivalent of life-of-copyright deals).
Finally, majors love to flirt with brands, fashion, new media, and tech, but it’s typically around the edges, with the latter often the simple leveraging of catalog in exchange for equity and the ability to influence platform dynamics. Without owned catalogs to leverage (or coast on), inside-out majors are taking a more intentional approach — Downtown and Utopia regularly buy or develop new tech/companies for their stacks, while gamma seems to be ensuring the scope stays as wide as possible, “with endeavors in music, films, merchandise, fashion, web3 and other areas.”
What Does It All Mean
What might the rise of inside-out majors mean for traditional majors, indie labels and publishers, and music’s creator class?
For traditional majors, they’re yet another near-term threat to working with active, big-selling artists, both emerging or established. The traditional majors’ reduced stranglehold on press, radio, and other previously well-guarded amplifiers set the stage for the inside-out’s rise — combine that shift with the latter’s increasing abilities to offer funding, distribution, admin and marketing prowess without demanding copyright ownership, and suddenly it feels a whole lot easier to pass on a traditional deal, hence gamma being able to launch with Usher, Rick Ross, and potentially Travis Scott as part of their roster (in what form is not yet known, but my bet’s on licensing agreements with terms between 5-20 years… like a great many indie deals before it).
And yet… I wouldn’t say they’re currently a long-term threat, thanks to the majors’ formidable copyright moats, firmly entrenched when they were the only capitalized game in town. If the new generation of artists and managers learn to take smaller advances and bigger royalty %s, it won’t be hard for majors to adapt to that — quietly shift to licensing and/or profit-share deals (which shift I still think is all but inevitable), and you’re basically there. Selling independence, by design, means you’re not locking anyone in, so once there’s a comparable offer across town (potentially with a higher advance or better royalty % underwritten by income from the catalog), the pendulum can swing back the other way pretty quickly.
Further, the tech involved isn’t the hard part — the majors already have a lot of it, they just aren’t renting it out to the wider market. Adapting internal tech/services to work for the open market isn’t easy, but if the inside-outs gain real traction I’d expect traditional majors to reposition themselves in a similar way, not unlike what they’ve done with distribution, and strap in for a war of attrition with their would-be usurpers. Given all that, ****one wonders whether one of the bigger catalog buyers of late (Hipgnosis, etc) might make a more likely buyer of (or seller to) an inside-out major, pairing their new copyright-secured castle, err, catalog, with the latter’s tech and services.
Interestingly, inside-out majors feel like even less of a threat for indie labels and publishers. Music creators will surely consider these new offerings alongside any indie deal, but at the same time, many of these services have been widely available for years (especially self-distribution), and artists want first and foremost “to become respected and recognized in my scene”, something that may come more easily by signing with an indie already tapped into that scene.
In prioritizing scale, inside-out majors will invariably de-prioritize the kind of one-to-one relationship you get with a bespoke team dedicated to your mutual success and with skin in the game. Further, while traditional majors aren’t likely to utilize anything in their inside-out brethren’s stack themselves, indies certainly will, potentially lowering their overhead costs and improving their ability to move a promising artist in the right direction. Lastly indie deals are already typically licenses and/or profit-share deals, so indies won’t need to change their fundamental offering like the majors will, and can simply utilize improved service stacks to help themselves and their artists grow while they’ve got them.
Will the inside-out majors be good for music’s creator class? There’s already been a decade+ of democratized distribution via DistroKid, Tunecore and the like. So far we’ve seen that enabling scale for the masses comes with the inevitable trade-off of more and more content and players fighting for attention, making it harder, not easier, to break through to anything resembling a career. I can’t see this dynamic changing with respect to even more relationship-based services like sync pitching, brand deals, songwriting opportunities, or many of the other areas the inside-out majors want to stack together, so for now, their rise feels like a wash for artists overall.
Looking back at that MIDIA survey asking indie artists “what success looks like”, in addition to the aforemetioned top priority of respect and recognition, it’s striking to see that artists’ last choice is “To sign a label services deal with a record label.” Will signing a label services deal with an inside-out major be any more desirable?
No one’s yet grown up with dreams of signing to an inside-out major, so my guess is no — which would mean the gammas, Downtowns, and Utopias of the world have their work cut out for them. That Utopia already appears to be flailing is… notable. As we’ve seen in the past, it’s easy to make big proclamations about fixing/saving/optimizing the music industry — if your business model all but requires you to do so, you’ll need to do better than just offering another option for artists and managers to consider. Whether or not their rise portends an equally spectacular fall likely depends on whether they can actually improve things for the ecosystem overall. Here’s hoping.Music Business Worldwide