Darius Van Arman (Secretly Group) on the Importance of Equality and Transparency in the Streaming Age

The last 15 years have been a wild ride, but the dust is finally starting to settle, and we’re on the brink of a more efficient, transparent, and sustainable music business. All Together Now is a series of Q&As with some of the best and brightest minds in the music business regarding the changes they are experiencing and the steps they are taking to adapt. We interview influential artists and songwriters, as well as leaders from labels, management teams, publishers, and streaming services to hear what they think it takes for us to come together to build a faster, smarter music industry. All together now.

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Darius Van Arman has a lot on his plate. The music business visionary is one of the co-founders and co-owners of the Secretly Group, which consists of influential indie labels Jagjaguwar (started by Van Arman in 1996), Secretly Canadian, and Dead Oceans, as well as the respected reissue house, The Numero Group, and a publishing arm, Secretly Publishing. Collectively, the group has helped launch artists such as Bon Iver, Sharon Van Etten, Phosphorescent, Angel Olsen, and Foxygen. Van Arman is also a co-founder and co-owner of Fort William Management, a firm that manages the likes of The War on Drugs, Grizzly Bear, Beirut and Grouplove. In case that all wasn’t enough, last year, Van Arman and the Secretly Group partnered with Dave Hansen, the GM of Epitaph Records, to start Independent Record Pressing, a vinyl record manufacturing plant in Bordertown, New Jersey.

In his spare time, Van Arman sits on the board of directors for Merlin, SoundExchange, and A2IM, three of the leading advocacy groups for independent labels and artists. In June of 2014, he traveled to Washington, DC to speak to Congress on behalf of A2IM. “In the end,” he wrote in an essay that Billboard published a day before his testimony, “all the independent sector wants is a free market with a level playing field.” A few weeks later, the WIN Fair Digital Deals Declaration was released. Van Arman co-authored the decree, which outlined a collective plan for transparent accounting related to digital transactions. Over 700 labels, including Beggars Group, Sub Pop, Domino, Tommy Boy, and Epitaph, signed it. Equality and transparency. It’s the same message a group of Grammy luncheon attendees heard last month, nearly two years later, from Van Arman and his main advocacy cohort, Beggars Group head Martin Mills. “[Artists] deserve fair and equitable trading terms and transparent accounting.” The man is consistent.

It’s easy to find inspiration in Van Arman’s work ethic and his positivity. “I do truly believe,” he wrote to us last week, “that sometime soon we will have a bigger music industry than what we had in the heyday of the 90s and early 2000s.” Read on to find out why he thinks that’s a possibility.

SONGSPACE: It’s clear that you believe the odds are stacked against the independents due to what you describe as the anti-competitive market influence that scale provides the majors. What’s the most illustrative example of this you can point to? If it were up to you, how would you go about leveling the playing field?

VAN ARMAN: Scale advantage can be good. It can increase efficiencies and brings down prices for consumers. A healthy market has plenty of participants doing what they can to obtain scale advantage, because it can make them more competitive. However, scale advantage can be abused, and that’s when markets become distorted, which is not good for anyone.

For example, when a big distributor tells a retail store that they can order its product only if the store agrees to give forty percent of its floor space over to the distributor, that’s an abuse of scale advantage. It doesn’t serve consumers, as the floor space doesn’t reflect actual demand in the marketplace for the products. And it creates costly inefficiencies, as a lot of that floor space would be wasted by the mismatched demand. That kind of behavior indirectly increases prices, and it stymies the otherwise competitive offerings of smaller distributors.

That’s just one example. In the digital streaming market, there are many sophisticated ways a company can abuse its scale advantage, many of which would not be transparent to other companies or consumers.
What can the independents do to level the playing field (and get in the way of the abuse of scale advantage)? I think the most effective way is to participate in collective licensing. Indies getting together, like a strong bundle of sticks, and achieving better market rates (and better market conditions) for themselves is a great counter-balance to the weight that a few, overly-concentrated companies can throw around.

Is it possible to achieve true transparency given all of the entrenched interests that benefit from the status quo? What steps do you think artists, songwriters and managers can take to push the ball forward?

The current culture of the music industry is not comfortable with true transparency yet, even on the artist, songwriter or manager side. But we’re moving in the right direction. We’ve already gotten the ball rolling, as independents, by openly and loudly communicating standards of transparency that all of us should be striving for. I was a co-author of the WIN Fair Digital Deals Declaration, which was the first of its kind to establish a fair trading standard for the whole music industry. Our thinking: set the standard, then watch the market volunteer to move towards it, because it unlocks value for everyone. Artists, songwriters and managers are all part of the independent movement. Hopefully they will help carry the same flag forward. Or maybe it is time for all of us — labels, artists, songwriters, managers, publishers, producers — to sit down together to co-author new standards.

Does streaming have the capacity to create better outcomes for artists and creators than in the record industry’s heyday of the 90s and early 2000s?

There will be winners and losers. The change in the music marketplace is a fundamental one. Companies and artists are now earning their bread off of music consumption, not music sales. And some artists make music that won’t be listened to over and over again. I do truly believe that sometime soon we will have a bigger music industry than what we had in the heyday of the 90s and early 2000s. On the aggregate, labels and artists will be richer. However, this story won’t be true for every artist or every label because of the more direct connection in the new music economy between compensation and actual consumption of music by music consumers.

Justin Vernon announced last week that Bon Iver was “no longer winding down.” The last album came out in 2011, when Spotify was just getting rolling in the States. Say Bon Iver was to release a new record, how would the development of streaming affect the marketing strategy?

Not at all, as our goals will be the same as when we released music by Justin in 2008 or 2011 or any other time. Let the music speak for itself, and help make it as accessible to as many people as possible without sacrificing any of the dignity that Justin brings to his work.

In the early days of your career, you launched a small record label to put out your friend’s band’s first record. 20 years later, you are involved in a label group, a management company, and now a vinyl pressing plant. Is that sort of diversity necessary for a 2016 independent music business? What would you say to a current college student looking for advice on starting a label?

I am a big believer in starting small, and I think there are many examples of companies who have remained focused and are just a label (or just a publisher, or just a management business, etc.) and have not diversified, and are doing quite well. So I don’t believe you have to diversify to survive or flourish. Just do what you do well, work hard and be nice to people! The rest usually sorts itself out.

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