“It is very important to have truly independent distribution in music. But let me make this clear: very few people actually care about the ownership of their distributor. What they care about is great service, great information, great technology, and a stable partner they can rely on for the long term.”
Try as we might, Kenny Gates is not biting.
The CEO and co-founder of [PIAS] is explaining to MBW why his company has just decided to re-brand and re-categorize its distribution and services business – a long-time partner of indie mainstays like Beggars Group, Domino, Partisan, Chrysalis, Secretly Group and Fat Cat – as [Integral].
We’re expecting an impassioned rant about what “real” independence means in the world of distribution. We’re even hopeful Gates might wheel out the old “majors eat everything; f**k the majors” indie label trope.
Instead, he wrong-foots us with two lines of argument.
The first is to express why he feels [Integral] can strongly compete with any rival out there, major-owned or otherwise, particularly due to its international network (with 10 owned offices worldwide plus eight partner offices), and the technology that runs its B2B Portal.
The second? Gates suggests the “big bad wolves” of the major record companies are, in his eyes, less of a threat to the health of the modern independent music marketplace than a separate set of companies – ones he calls “wolves in sheep’s clothing”.
Gates says that [Integral] represents both an investment in, and a clarification of, [PIAS]’s services and distribution offering.
He admits that, as [PIAS]’s own repertoire business has grown (accelerated by the acquisition and acceleration of Co-Op in 2012), some in the marketplace have become confused over the firm’s dual strategy: part-in-house record label operation, part-distribution and services partner to the independent community.
Now, that distinction is much clearer: the [PIAS] Label Group remains the home of the company’s own recorded music activity, which is currently enjoying notable global success with the likes of Arlo Parks (in partnership with her label, Transgressive Records).
“The launch of [Integral] gives both sides of our business more focus, more clarity, and defined leadership.”
Kenny Gates, [PIAS]
By contrast, [Integral] – led by it UK-based MD, Adrian Pope – focuses solely on physical and digital distribution, plus an optional menu of additional services, for independent artist and label partners worldwide.
Those additional services cover everything from sync licensing to radio and streaming promotion, as well as the production of vinyl.
“Our offering needed clarity,” says Gates of the launch of [Integral]. “This move gives both sides of our business more focus, more clarity, and defined leadership.”
He adds: “It’s in our DNA to serve the independent community, and it’s in our DNA to help our fellow labels to reach the market in the best way possible.
“It shows our absolute commitment to distribution – and our absolute commitment to independent distribution – worldwide.”
But in the wake of AWAL’s sale to Sony, what even is independent distribution?
For years, the major record companies’ in-house indie distribution arms – Caroline at Universal, The Orchard at Sony, and ADA at Warner – have attracted jibes and brickbats from the independent community for being “faux” independents. In other words, being owned by multinational companies who haven’t always had the best interests of indie labels at heart.
Gates happily admits he’s personally stuck this criticism to the majors a few times during the near-40 year history of [PIAS].
However, in recent times, his primary concern has shifted somewhat towards those “wolves in sheep’s clothing” – ostensibly “independent” distribution and services companies who are being bankrolled by Venture Capital investment.
“A lot of greed has come into the market – a lot of people are investing and expecting a lot of money back sooner rather than later.”
Kenny GateS, [PIAS]
He says: “I’m very cynical about some of those who define what they do as ‘independent’ distribution. They might call themselves independents, but they are funded by venture capitalists who are more eager to get a short-term return on their investment than any so-called “major” company in this business.
“My worry is that these [VC-backed] companies can afford to take a loss-leading, aggressive approach to the market without any long-term strategy. That distorts the market, and it is destructive to the long term ecosystem of the independent community.”
Gates, who runs [PIAS] as a self-financing indie, adds. “Ten years ago, the value of music in the financial community, whether banks or the investment community, was basically zero. Streaming has changed that radically, to the other extreme. Now a lot of greed has come into the market – a lot of people are investing and expecting a lot of money back sooner rather than later.”
A key argument from [Integral] to its indie label partners, then, is that it’s been doing distribution for over 30 years already, and that it intends to be here for another 30-plus years.
Gates also makes the point that, as well as investing heavily into the digital side of its business – [PIAS makes the majority of its revenue from streaming – [Integral] is a proud and expert investor in physical music distribution, and the power of independent retail to help break an act.
Says Gates: “It is my belief that very few actors in this market can give true quality service in terms of working the physical market on a global level. [Integral] can, and we appreciate how important physical music remains not only to breaking artists, but to building passionate fan-bases.
“we appreciate how important physical music remains not only to breaking artists, but to building passionate fan-bases.”
Kenny Gates, [PIAS]
“Ten years ago, I saw the owner of one distributor come on stage at a conference and say, ‘Physical is dead. In a few years there won’t be physical anymore.’ I didn’t believe it then, I don’t believe it now, and I’m glad to say the numbers seem to be on my side.”
Gates’ point: despite stores being shuttered throughout the pandemic hit 2020, annual US retail sales of vinyl hit $619.6 million last year, up $140 million year-on-year.
At that rate of growth, vinyl could become a billion-dollar annual business in the States by 2025.
Gates claims that [Integral] is “unrivalled” as a company “with services and distribution at source in the markets, whether physical and digital, everywhere in the world”.
He also makes the point that with [Integral] now servicing [PIAS]’s own records, if the former firm’s technology, discipline and “quality of service” ever wasn’t gold-standard, it would be letting down its own sister company – something Gates says he won’t let happen on his watch.
“The problem with physical for some [VC-backed] distributors is that it’s not predictable; it can be a pain in the arse! It’s labour intensive, it requires a lot of investment, expertise, time, and headcount. We’re happy to give it that resource, because the rewards for our clients can be huge.”
“This, for me, is about love – a real love for the independent community doing well, breaking artists, and growing their businesses.”
Kenny Gates, [PIAS]
However, he ultimately argues that [Integral]’s standout quality involves “the intangible things”.
[Integral] now counts around 100 staff worldwide, whom Gates says are steeped in “a DNA of music culture” that money cannot buy.
“It really is about attention and care,” he says. “I’ll say it: this, for me, is about love – a real love for the independent community doing well, breaking artists, and growing their businesses.
“That is a big difference between that and companies whose only goal is a business case and to please their shareholders.
“We put soul and humanity into what we do every day. A lot of people don’t understand that – but, to me, it is crucial.”Music Business Worldwide