Denis Ladegaillerie has had time to assume.
Within the months it took to orchestrate the advanced equipment required to take Consider personal – by way of a joint consortium with TCV and EQT – the CEO has been observing. Analyzing. Drawing conclusions not nearly his personal $2 billion firm, however in regards to the basic dynamics reshaping the worldwide music enterprise.
The consequence? A sequence of knowledgeable takes that problem typical knowledge at each flip.
On market construction: With 70% of file business revenues now coming from outdoors the Prime 200 in most markets, Consider has constructed a complete enterprise philosophy round what Ladegaillerie calls “middle-first” considering – essentially completely different instruments, offers, and techniques than these designed for famous person economics.
On the Common/Downtown merger that’s presently exercising regulators and a few indie rivals? Ladegaillerie is relaxed.
“Do I believe that’s going to vary something for us? I can’t converse for the business, however as an organization, we really feel superb about our means to compete,” he says flatly.
The European Fee, he suggests, ought to maybe spend extra time pondering why algorithmic suggestions are creating an Anglo-American monoculture throughout non-charting streams in most EU markets.
“The primary subject for EU/UK lawmakers is probably not the Downtown merger,” says Ladegaillerie. “It’s 28% of streams being from native artists within the UK, 36% in Germany, 41% in France.”
On the expertise that basically issues: Neglect AI panic (“marginal income alternative, marginal menace”). Ladegaillerie is much extra targeted on Spotify‘s Discovery Mode, which he claims Consider is utilizing “at a bigger scale than anybody else” – with 98% of tracks displaying constructive monetary returns.
Once I meet up with Ladegaillerie in London, Consider has simply accomplished its transition again to personal possession, valued at round USD $2 billion.
The corporate that began in 2005 as a digital distribution pioneer now operates throughout 50+ international locations, serving everybody from bed room producers by way of TuneCore to established unbiased labels and artists looking for refined advertising and marketing providers.
The timing of our dialog is especially revealing.
Whereas bigger rivals are saying substantial cost-cutting packages, Ladegaillerie says Consider’s headcount is rising. Whereas others fear about streaming saturation in mature markets, he sees “loads of progress” forward. And whereas segments of the enterprise obsess over consolidation and market focus, he’s quietly constructing a machine that thrives on the precise reverse ideas.
“We’re in a brand new period of Consider,” he says, outlining a 10-year strategic plan dubbed “From Entry to Success”.
“The previous decade has primarily been about leveraging expertise to democratize market entry, which is what we’ve seen with an increasing number of unbiased artists capturing market share. However entry doesn’t imply success,” he says.
“The years forward shall be outlined by how, on this new panorama, file labels drive their artists to success. That’s in regards to the high quality of the music, the manufacturing, the standard of [your] movies, and the way refined you could be round the entire digital viewers improvement levers.”
What emerges from our dialog isn’t simply Ladegaillerie’s pleasure over the way forward for the “center tier” or unbiased distribution. It’s a complete worldview about the place worth lies in fashionable music — one which sees the business’s present evolution not as a menace to be managed, however as a chance to be seized…
What are the important thing priorities you’re taking a look at inside Consider’s ‘entry to success’ technique?
Primary: We’re going to proceed investing in scaling our artist providers enterprise. Up to now three to 5 years, we’ve created 15 imprints — file labels like KithLabo in Indonesia, PLAYCODE in Japan, and All Night time Lengthy in France. We’re going to proceed doing this.
Precedence quantity two is accelerating, increasing, and deepening our label providers. As a result of the world is extra advanced than it as soon as was, as a result of our labels must minimize by way of the noise with their artists, the extent of providers they require goes far past easy distribution and financing.
“We need to deepen our partnerships with the DSPs, whether or not it’s Spotify by way of Discovery Mode, Marquee, or Showcase, or TikTok, or YouTube.”
Now you even have to supply skilled strategic recommendation: What market indicators do you want [in order] to function? What kind of contract? How do you execute advertising and marketing?
Precedence three is scaling our publishing enterprise [following the acquisition of Sentric]. We’ve achieved a variety of work constructing an answer that we expect is now a major aggressive benefit in assortment.
We additionally need to deepen our partnerships with the DSPs, whether or not it’s Spotify by way of Discovery Mode, Marquee, or Showcase, or TikTok, or YouTube. It’s all about placing these partnerships on the heart of monetizing catalog and growing artists. There’s a a lot better alignment that should occur within the subsequent 10 years with the DSPs.
Our fifth precedence is folks. We have to upskill everybody, in do [more sophisticated] digital advertising and marketing, to ship higher worth to the artists and labels – and construct the instruments to make that occur. There’s a variety of work to do in constructing the software program that our inner groups use to serve their purchasers.
Geographically, the place are you focusing for progress?
We’re constructing on our current power in Europe and Asia after which making first-level investments in three particular areas: the US, the UK, and Japan – the world’s largest markets, the place we have now invested lower than we have now in different markets [to date].
In Japan, TuneCore Japan is already the third-largest participant by way of native market share. We’ve additionally signed a take care of Teichiku and some giant labels to distribution [deals], and we’ve launched the artist providers imprint PLAYCODE round hip-hop.
“We’re making first-level investments in three particular areas: the US, the UK, and Japan.”
Can we break the highest artists in the US and UK tomorrow, as we’ve achieved in different territories? Sure, I’ve little doubt about that as a result of we have now all of the levers [required] on the Spotifys of the world, YouTube, TikTok.
Radio and tv at the moment are much less influential in these markets. It’s only a matter of time.
You’ve mentioned beforehand that you simply felt there was a definite lack of acquisition alternatives within the UK at scale.
That’s right. Our DNA as an organization is to assist the buildup of native ecosystems, so once I see that within the UK, native artists in 2024 represented simply 28% of streams – that’s a killer for me.
If the UK had the identical price of native artists as you see within the US, Japan, or Brazil at 60-70%, you’d virtually triple the market dimension. Meaning extra jobs, extra native labels, extra folks. That provides you greater [domestic] corporations, extra affect, and the flexibility to market.
“Once I see that within the UK, native artists in 2024 represented simply 28% of streams – that’s a killer for me.”
Folks say it’s okay that the UK market is small as a result of it exports quite a bit. However guess what – in some unspecified time in the future, in case your home market isn’t sturdy, your means to export turns into weaker; you could have a more durable time breaking artists regionally.
The UK must get away of that mindset. You could strengthen your native market.
Earlier You talked about Consider’s use of Spotify Discovery Mode. It’s a platform that’s SPLIT OPINION within the enterprise, however presumably you see it as useful to democratization?
We’ve achieved a variety of work with Spotify round this. I’m instructed that we function Discovery Mode at a bigger scale than anybody else, extra profitably than anybody else.
Over 98% of the tracks we have now in this system have [provided] considerably constructive returns; that’s monetary returns, not simply progress of streams.
We transfer tons of of 1000’s of tracks each month out and in [of Discovery Mode], and that course of is only AI-driven. You need to perceive how the system works to pick the correct tracks – it’s super-technical.
“Over 98% of the tracks we have now in Discovery Mode have considerably constructive returns; that’s monetary returns, not simply progress of streams.”
It’s a core driver for all of our labels globally. We predict we’re extra environment friendly than anybody at driving digital catalog revenues on Spotify, partially by way of Discovery Mode.
Discovery Mode’s limitation isn’t its means to drive revenues and discovery; it really works nicely. It’s its means to truly assist new artist improvement, putting the correct stability between catalog and frontline artists. That’s the dialogue we’re having with Spotify for the time being.
It appears to be like to me such as you, TCV, and EQT every personal round a 3rd of the brand new, personal Consider. How do you stability management, and past capital, what do they bring about to the desk?
When you might want to elevate financing capital to make acquisitions in music, you want traders who’re sensible.
EQT has achieved a variety of work round music—they checked out [a potential, pre-IPO] acquisition of Common a number of years in the past and are traders in Epidemic Sound. TCV has been an investor in [Believe] since 2014 and can also be an investor in Spotify and Netflix. They’re undoubtedly sensible.
The second secret’s strategic alignment. Earlier than taking the corporate personal, we did a variety of work to make sure everybody was aligned on the technique.
“On the general public market, Consider was considerably undervalued, which prevented us from elevating cash [at the right price] to make giant acquisitions. That’s not a difficulty.”
The final aspect is that you really want shareholders who can deploy capital on the proper valuation. On the general public market, Consider was considerably undervalued, which prevented us from elevating cash [at the right price] to make giant acquisitions.
That’s not a difficulty.
Your query about stability of energy is attention-grabbing. My view as a founder is it doesn’t matter whether or not you could have 10, 20, or 30 [percent ownership]. These personal fairness funds make a enterprise out of supporting entrepreneurs and administration groups. So long as you might be aligned on technique and that technique lets you create worth, you’re in management.
You begin shedding management the day you’re not creating worth.
Are you grateful {that a} sure aggressive takeover try from Warner Music Group final 12 months in the end WENT AWAY?
Sure, we’re blissful. I’m not anti-major; I believe unbiased labels could be served very nicely in a serious file label setup. The Orchard and Sony have demonstrated that very nicely.
However after we [mapped out] this new section of progress, I instructed TCV we don’t need to promote to a strategic purchaser as a result of we expect there’s extra worth to be created right here. So we’re blissful it didn’t occur.
I like Robert [Kyncl]. His group is wise, and there would have been some strategic worth [from a merger]. But it surely was not what we needed to do.
The place do you assume the subsequent section of distribution and artist providers goes? Listening is turning into extra dispersed and superstardom is turning into more and more uncommon.
I used to be simply wanting on the SNEP figures for H1 2025 in France.
We’re truly main the Prime 200 as the most important file label [by chart market share in France]. However the Prime 200 in France accounted for under 19.7% of the full market by worth.
In most territories, the [Top 200] accounts for 25-30% of the market, which implies the [biggest] worth is basically within the ‘center’ – outdoors of the highest chart.
“In H1 2025, the Prime 200 [tracks] in France accounted for under 19.7% of the full market by worth.”
We’re a ‘middle-first’ firm. That’s our DNA – 70% of the [industry] revenues are within the center. We’ve been working in these segments for some time, and we all know how they work. I really feel actually good about our positioning.
However there’s additionally a chance for us to maneuver up and serve extra artists on the high. You need to construct a mannequin that gives the correct degree of service, with the correct offers which can be completely different at every degree.
Consider has not historically served the ‘higher tier’ of artists. Three corporations particularly would possibly say you’ll by no means have the ability to provide what they provide – take a look at all of the folks they’ve and the cash they will provide upfront. Are these dynamics altering?
I must discover a higher phrase for this, however we thrive with ‘digital artists’. A ‘digital artist’ is only a common artist who creates music, besides the best way that artist connects, interacts, and will get viewers discovery is digital.
That’s what’s opening up the chance for us [with charting artists] as a result of the market is turning into much less concentrated – it’s much less about radio, it’s much less about tv, it’s extra about partnerships with digital companions, digital advertising and marketing.
Due to that, we’re in a position to problem the normal labels on the high now in a really completely different method.
What about keeping off the menace from the majors within the ‘center tier’, although? They’re reaching into your territory simply as you’re reaching into theirs.
After we take into consideration how we construction offers with Spotify, YouTube, what instruments and providers we develop, we expect ‘middle-first’. That’s very completely different from main file labels – they assume ‘high’ and ‘world high’ first.
It signifies that when main file labels function in that [‘middle’] market section, after they do [artist deals] at a smaller scale, they don’t at all times know function with the correct economics, with the correct financial mannequin vs. the correct degree of service.
To some extent that creates confusion out there. Numerous time, we see [megastar] artists being served by the groups on the high with [label services] economics – the economics of the ‘center’, which we all know don’t make sense.
The truth that main labels at the moment are scaling their enterprise [into the middle tier] will pressure them to assume: What economics do I really need to attain right here? How a lot capital do I even need to deploy there versus the [top]?
For us, it’s good as a result of that course of is in the end going to make the market more healthy.
Sony just lately confirmed that it OWNS MINORITY STAKES in round half of The Orchard’s high 20 purchasers. What do you make of that pattern?
It’s sensible and really pure. We do the identical factor!
The labels we’ve seen develop the quickest [at Believe] are the labels the place the high quality of partnership is the best – the place the extent of [collaboration] with the groups round technique, develop artists, what market segments to enter, has been the best.
After we can strike these partnerships which can be actually shut from a industrial standpoint after which rework them into minority investments or majority investments, relying on the state of affairs, we are able to ship most worth and cement these relationships.
The proposed Common/Downtown merger is getting a variety of consideration in Europe, with the EC evaluating if it’s anti-competitive in any method. The place do you stand on it as a contest subject?
I’ve two solutions.
My first reply by way of Europe, together with the UK, is that the primary subject [for EU/UK lawmakers] is probably not the Downtown merger. It’s 28% of streams being from native artists within the UK, 36% in Germany, 41% in France.
What the authorities in Brussels or politicians must be taking a look at is that this: Europe is the most important market from a [music] publishing standpoint. There’s no purpose why it shouldn’t be the biggest market from a recorded music standpoint. But it surely’s not.
“Do I believe [UMG buying Downtown] goes to vary something for us? I can’t converse for the business, however as CEO of Consider, we really feel superb about the place we stand and our means to compete.”
We should always have politicians targeted very strongly on: What situations do we have to create to enhance [Europe’s] place? How will we foster the event of a powerful native ecosystem? That’s far more highly effective.
Do I believe [UMG buying Downtown] goes to vary something for us?
I can’t converse for the business, however as CEO of Consider, as an organization, we really feel superb about our means to compete.
I believe that we will ship a superior high quality of service to our artists and labels.
To be 100% clear, in case you get up tomorrow and Common has totally acquired Downtown, you’re not shedding any sleep?
As I mentioned, we really feel superb about our means to compete.
You talked about market share points with native repertoire. I assumed with the rise of unbiased hip-hop particularly, native language music was dominating greater than ever in European nations?
That’s the notion, not the fact.
Take a market like France. The primary market section is local-artist hip-hop. However the quantity two market section by way of revenues and streams? Worldwide pop. Quantity three? Worldwide rock. Quantity 4? Worldwide hip-hop. Quantity 5? French pop.
Now think about that French pop is one-fifth the scale of the bigger market segments. So [in terms of the total French market] you could have round 60% of the streams which can be worldwide music.
“Once more, take a look at the SNEP figures in France: The Prime 200 is 70% native artists. However as quickly as you go under the Prime 200 or Prime 500, you go from 70% native to 80% worldwide.”
In Germany, it’s the identical. You could have native hip-hop as the most important market section, however that’s the one native section you could have [amongst the most popular genres]. Schlager isn’t even within the high 5.
In contrast, once you take a look at China, Japan, Brazil, you see 60-70% of streams from native artists. That’s double the market alternative [for local artists] than we see in European international locations.
It’s tremendous vital for Europe to rebuild that – it’s straight tied to employment, together with [tax] income and cultural affect.
Once more, take a look at the SNEP figures in France: The Prime 200 is 70% native artists. However as quickly as you go under the Prime 200 or Prime 500, you go from 70% native to 80% worldwide.
The highest artists are very nicely supported by the native DSPs throughout all territories. However the backside [sub-Top 200] is being pushed by algorithm-based advice, which isn’t as localized accurately. That’s what’s driving a variety of the Anglo-American content material.
What could be achieved? Name up the EC and say: ‘Neglect UMG/Downtown, nobody cares. Put thresholds on streaming playlists for native artists!’?
I’m not calling for regulation. This isn’t about playlist quotas.
It’s so simple as asking the DSPs to publish, a few occasions a 12 months: ‘I’ve delivered XYZ algorithmic suggestions. What number of have been native? What number of have been worldwide? To what market [genres]?’
The DSPs will then have the ability to ask themselves questions. I believe they may need to develop into good residents of the world [by protecting local artists in their algorithms]. In my expertise, that may be sufficient to affect and transfer the problem by way of regular industrial and human incentives.
We’ve seen unspectacular progress in streaming subscriptions in H1 2025 in mature markets just like the US, Germany, and France. Do you could have any issues for the way forward for the enterprise?
With my Consider hat on, no. We’re positioned in a number of the fastest-growing markets. If we have been extra weighted to the US, UK, or Scandinavia, sure, I’d be extra involved as a result of paid streaming adoption is [growing] slower.
There’s loads of progress within the current markets for us as an organization, and the truth that a few of these giant markets are ‘new’ territories for us provides us loads of progress alternative.
I additionally assume there’s loads of progress potential in streaming pricing, each by way of segmentation, the ‘supremium’ tiers, and common worth will increase.
There’s at all times a dialogue round AI music. Is there hazard coming from Suno/Udio/Anthropic and so on. or is that this going to be a novelty subject?
My tackle that is unchanged: marginal income alternative, marginal menace. All the information I’ve checked out helps this.
Sure, there are an increasing number of AI tracks being distributed on the platforms. The most recent information from Deezer reveals 28% of tracks [being uploaded to the platform] are totally AI. However these tracks are solely producing 0.5% of whole streams.
“You possibly can produce as many gen-AI tracks as you need – if there’s not one thing distinctive about them, it’s not going to hit [meaningfully] into the revenues of artists.”
You possibly can produce as many gen-AI tracks as you need – if there’s not one thing distinctive about them, it’s not going to hit [meaningfully] into the revenues of artists.
I’m not too involved about it. I believe the entire tech gamers have an curiosity in behaving correctly.
I’d be fearful if I assumed Spotify or one other service was going to make use of this to decrease their content material prices. But it surely’s virtually not possible for them to do this as a result of their enterprise is based on working with artists.
Music Enterprise Worldwide has run numerous headlines prior to now 12 months about cuts at bigger music corporations. Is Consider shifting in the wrong way?
Sure, we’re investing. In 2024 there have been a number of international locations the place we made changes, however globally, our headcount continued rising. And it’s going to develop once more in 2025.
That’s being pushed by market progress. Now we have alternatives in publishing, so we’re hiring folks on the publishing aspect. And as I mentioned, we’re constructing new label imprints because the markets develop into extra digital.
“Globally, our headcount continued rising in 2024. And it’s going to develop once more in 2025.”
The largest distinction between us and the foremost file corporations is that the Consider mannequin was created initially as a world mannequin. Our accounting, authorized, monetary groups – all of our tech techniques – are already totally built-in and streamlined.
Main labels have been constructed as primarily monetary holding corporations of native companies, at a time when CD manufacturing logistics have been principally native. They haven’t but achieved the transfer of actually streamlining their companies [to be global]. In addition they haven’t totally addressed: What’s being generated by catalog? What’s the actual profitability of my frontline label? What ought to the stability be?
While you’re rising actually quick, you’ll be able to disguise that. While you develop slower, it’s far more troublesome.
Common is suing you within the US; the primary allegation is that a considerable amount of uploads by way of TuneCore have infringed copyright. Do you could have an replace on that state of affairs?
We don’t touch upon pending litigation. [Believe has previously said it “strongly refutes” UMG’s claims, and “will fight them”.]
If I might offer you a magic wand to vary one factor in regards to the music business at the moment, what would you modify?
I’ve been anticipating this query.
The file business already has the magic wand in its hand. We’re already shaping the way forward for music – we’re shaping it after we’re having conversations with Spotify, YouTube, and others.
Now we have sufficient affect collectively as an business to have the ability to make it possible for the best way these applied sciences are being rolled out shall be in a method that creates worth.Music Enterprise Worldwide
