MBW Views is a series of op-eds from eminent music industry people… with something to say. The following MBW op/ed comes from Richard Leach, CEO of Curve Royalty Systems.
Here, Leach explains why the European Commission’s investigation into Curve as part of the Universal/Downtown probe – and Curve’s subsequent divestment from UMG/Virgin to Jamen Capital and Merlin – changed how he thinks about the word ‘independent’.
This op/ed is adapted from a speech Leach delivered at AIM‘s Connected event in London on Thursday (September 10).
Independence means freedom from outside control, rule, or support. It is the state of living, acting, and making choices by yourself without needing help or taking orders from other people or nations.
Broadly speaking, no-one is independent, not in this industry anyway.
Whereas “interdependent” is an adjective that means “dependent upon one another” or “mutually dependent”. It describes two or more people, things, or groups that rely on each other for support, survival, or function.
What I have come to believe, is that for the majority ‘independent’ means either the ability, freedom or opportunity to speak for oneself, or the freedom of choice of a trusted 3P partner to speak on your behalf – that’s why AIM, Merlin, IMPALA, IMPF, A2IM, AIMPF exist and are so important and cherished.
Let me expand.
Almost every Curve client has asked us a variant of the same question:
“What are your intentions?”
It’s not a casual question. Royalty infrastructure isn’t a short-term commitment. Music businesses don’t move platforms every couple of years. So when we are asked about future plans, what is really being asked is:
‘Can the client trust that the decision they’re making today won’t become a problem in five years?’
We always answered the question honestly. Curve may have come to market in 2019, but myself and the two co-founders have been working in the music industry since 2003. We did not have a ‘get rich quick, tech-bro agenda’. We do what we do because we have made this industry our home. Our intentions have always been to serve the “independent” partners that we have worked with for decades.
BUT…success has a habit of creating situations that good intentions alone can’t navigate. Successful businesses, like ours:
- attract buyers,
- founders and/or investors of successful businesses like (deserve even) an exit,
- buyers have agendas,
- and agendas have a way of quietly reordering priorities.
Good intentions don’t immunise against that.
For companies providing critical infrastructure to the music industry, trust is shaped as much by how a business is owned as by how it behaves. Intentions matter. Structures endure.
That wasn’t how I thought about ownership when Curve became part of Downtown Music Holdings in 2022.
As I said, we always answered that question honestly. Downtown was independent. There was no cause for concern. What we didn’t do was ask the follow-up question.
We knew Downtown had backers. But we didn’t take the time to learn how long those backers had been invested, what their return horizon might look like, or what the realistic buyer’s universe for Downtown actually was. Had we done so, we might have been less self-assured that yes, a sale of Downtown will probably happen eventually, but hey, we have years yet to focus on our mission.
Downtown believed in Curve when we were still proving what we could become, invested significantly in the business, and gave us the opportunity to grow far faster than we could alone. I remain grateful for that. But I was too humble and did not leverage our position in our sale to Downtown to understand better what the future might hold.
It turns out we didn’t have very long.
Within two years, UMG’s Virgin Music Group had agreed to acquire Downtown, Curve was at the centre of a European Commission investigation, and we were watching a public debate about our operations, conducted, we felt, on the wrong terms.
What do I mean by that?
Today, I concur that the EC’s theory of harm was/is sound: if UMG owned Curve, they COULD gain access to commercially sensitive data – royalty rates, advances, DSP sales etc – that belongs to the independent labels, publishers and distributors who use our platform, our cherished customers. They MIGHT use this intelligence to poach artists, undercut competitors, tilt the playing field. The rascals.
I resisted this argument for a long time. Not because I was naïve about competitive dynamics, but because it didn’t match my experience: we would simply never have handed the data over. Trust is the bedrock of Curve. The second anyone believes we’re doing anything untoward with client data, we are finished. We are ISO certified, moving toward SOX certification, bound by confidentiality obligations to every client. It’s not a question of willpower; it’s architecture. It’s existential.
However, eventually (it took time, I’m stubborn), I came to accept the EC’s position; not because I was persuaded it was even likely (UMG doesn’t need your data to pinch your artist, if they want them, they will just stick one more zero on the number than you!), but because I had to acknowledge it was possible. A theory of harm doesn’t require probability. It just requires plausibility. And the Commission was right: the structure created the conditions. Fair enough.
Anyway, as I said to the EC case team when I was summoned to Brussels in January, “I don’t agree with how you have made your decision, but I do agree WITH the decision.”
Though I now see the logic of the decision, I still feel that what is far more important to Curve and its customers is not explicitly addressed in that logic.
The threat that was bothering us at Curve was something more mundane, more inevitable, and in some ways more insidious.
It was the drag of corporate complexity.
When we sold to Downtown, Curve was thirteen people. By the time of the divestment announcement, we were thirty-seven. A team of thirteen has a singular way of working. This is the thing we’re building next. This is the thing we need to fix right now. The agenda is short and the focus is fierce.
A team inside a larger organisation operates in a fundamentally different environment. Not a worse one, necessarily. But a far more complex one. We reported into senior management at Downtown Music Group, who reported to the board at Downtown Music Holdings, who reported to the shareholders, who, it turns out, wanted to capitalise on their investment. Which meant that Downtown itself was going through transformation, centralising processes, running a sale process, navigating an EC investigation, managing the inevitable politics. And at a ground level priorities were shifting, multiple agendas competed for the same resources, the work of alignment, as it often does, crowded out the work itself.
Let me be clear, eyes wide open or half squinting, or even clammed shut: we signed up for this. Of course, we did not know everything that was going on or about to happen. But I’ve worked at larger companies. I had a pretty good idea of what MIGHT be in store for us. We weren’t acquired simply to run Curve; we were brought in to help build Downtown. I don’t regret the collaboration, and I’m proud of what we achieved together, it certainly contributed to the continual improvement of the platform. But we also started pushing in multiple different directions at once, diluting efforts across various fronts. And we underestimated the strain. I can tell you, that, just like DIY, integrations are always longer, harder and more expensive than you think they will be. We were only just finding a pathway through when Phase 2 was announced, and we then were somewhat in limbo until the divestment closed. The whole thing took over a year .
This is not a story about bad actors. Downtown are not the villains. Nor, deep breath, are UMG. This is about the structural cost of success, in other words what happens when a small, focused business enters a larger one. It happens every time. It’s not a conspiracy, it’s just how organisations work.
And in a market where independent businesses are making decade-long commitments to their critical royalty infrastructure, the slow dilution of focus is a harm as real as any theory about data access. It just doesn’t have a paragraph number in the merger regulations, doesn’t make for salacious headlines or have immediate catastrophic consequences, but it does create a creeping drag on businesses not generously equipped with resources to absorb easily.
The EC investigation also helped reframe how I think about the word “independent.” I believe it is employed… imprecisely in this industry.
No one is truly independent. Not the labels, the publishers, not the distributors or the platforms and not Curve. We are all embedded in a web of relationships, dependencies and mutual obligations. When we converge around this word ‘independent’ what we are trying to preserve is not isolation: it’s autonomy. The ability to remain wholly focused on your clients, to make decisions on their behalf without those decisions being filtered through someone else’s P&L, to be the kind of partner any business can select and trust without wondering who they’re eventually going to sell to.
Whilst it serves as a lightning rod, I think “Independence” does not describe what we’re protecting. Interdependence – a network of aligned, mutually reinforcing relationships that collectively preserve autonomy – is closer to the truth I think.
“We never really saw ourselves ‘independent’ anyway. Instead, we see ourselves as a hub of interdependence amongst our client base. In that, we have always taken a ‘hive-mind’ or ‘crowd-sourced’ approach to the continual development of the service.”
Richard Leach, Curve
Which brings me to what happened next in our little story.
At the beginning of last month the divestment finally closed with Curve being acquired by Jamen Capital and Merlin. For those that don’t know, Jamen is a London-based investment firm built specifically to provide growth capital to independent music businesses without exchanging equity. Merlin is the global digital licensing body for independent labels; a membership organisation constitutionally structured so that no major label can hold any ownership stake.
That matters. Curve’s “independence” is now not just a statement of intent but is an architectural fact. It is built into the agreement between Merlin and Jamen that Curve cannot be directly sold into major label ownership. EVER. Indeed, there is even a restriction to sell Curve to a list of large businesses for a good number of years. (I’m curious to see what the circumstances would be where Merlin would ever want to sell Curve). This is an ownership structure in which alignment is embedded in the fabric of the partnership rather than assumed. This is not a promise that can be walked back in a future board meeting. It is as close to a guarantee as these things get.
So, after nigh-on four years of acquisitions, investigations and unexpected lessons, experience has taught me that trust is best served not just by well-articulated, and indeed sincere intentions alone, it is most meaningful when it is intrinsically built into ownership.
We never really saw ourselves ‘independent’ anyway. Instead, we see ourselves as a hub of interdependence amongst our client base. In that, we have always taken a ‘hive-mind’ or ‘crowd-sourced’ approach to the continual development of the service. We take everything we see, feel and hear across the client-base (and beyond) and synthesize all those perspectives and practices into Curve. So, all of our clients are, in some way, dependent upon, and benefitting greatly from, being inter-connected through using Curve.
Importantly for Curve, and for its clients, the more immediate significance is simpler: for the first time in a number of years, 100% of our attention and energy is directed towards the people we serve. This week the Curve management team spent a lot of time with the newly formed board. The total ownership of the company, indeed the totality of the decision-making authority, was in the room.
The complexity is gone. The agenda is short. The focus is fierce once again.Music Business Worldwide
