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- July 4, 2022
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In some ways, Downtown Music Services is a very different company than it was in the first half of last year.
That’s because its parent company, Downtown Holdings, sold the entirety of its owned copyrights to Concord for around $400 million in April 2021.
Yet in another sense, Downtown Music Services hasn’t changed one bit; it’s just become more important to its owner’s mission.
While the rest of the music business seems to be banking on the future value of copyrights, Downtown is betting on building the best possible company it can to service those rights, globally.
To do that, in the wake of the Concord copyright sale last year, Downtown brought together two of its key subsidiaries – Downtown Music Publishing, and indie artist and label distribution/marketing outfit DashGo – to form Downtown Music Services.
On day one of its existence, Downtown Music Services (DMS) was a serious player in the global industry: it was projected to generate over $600 million from its music services businesses, across both records and publishing, in 2021 alone.
Over the past year, DMS has made interesting moves like inking deals with French band Air, with a number of LoFi record labels, and with Daniel Lopatin, who was executive producer on The Weeknd’s recent worldwide No.1 album, Dawn FM.
Perhaps DMS’s most interesting deal since the Concord copyright sale came last month, when it announced a “major expansion” of its operations – including multiple new hires – in Spanish-speaking Latin America.
DMS is run by its CEO, Mike Smith (formerly head of Downtown Music Publishing), alongside its COO, Ben Patterson (President and founder of DashGo).
Here, Los Angeles-based Patterson (pictured, main) answers MBW’s questions about DMS’s place within the global music business, its ambitions in the LatAm region, and how he believes the industry is going to evolve in the years ahead…
Which two or three changes/evolutions to the music rights business do you expect to most prominently change the industry in the decade ahead, and why?
A decade in music is a millennium in other industries. Ten years ago Spotify hadn’t launched in the US yet, TikTok didn’t exist. [So] it’s very hard to confidently predict these changes, but I’ll try.
One that’s been slowly gaining momentum over the last ten years is now really exploding and that’s the intermingling of remix, interpolation, synchronization, sampling, and sharing rights. YouTube’s ContentID created a gold standard for identifying the music used in User Generated Content (UGC) videos and compensating rightsholders – but now everyone licensing music wants broad rights to allow users to adapt and re-share music on their platforms.
“Artists and their attorneys are reluctant to give away pre-cleared sync rights, remix, or even truncation rights. but for some artists, it’s career-changing.”
From Instagram auto-creating Reels from official music videos, to Spotify and Apple seeking rights for DJ mixes, to the well-known Tik Tok mash-ups, duets and remixes – these all require a broad grant of rights, and a rethinking of how those are granted, tracked and compensated.
Artists and their attorneys are reluctant to give away pre-cleared sync rights, remix or even truncation rights. But for some [projects] – like Imanbek tackling SAINt JHN’s Roses – it’s career-changing.
Recently we witnessed [this trend] firsthand as Sadie Jean created the Duets trend on TikTok and launched her debut WYD Now? via SELENE.
She recently released a remix version including some of those duets, but clearing those features – that were spontaneous on TikTok – took real human time, phone calls, and legal work [which took more time] than any of the artists anticipated.
Getting artists, labels, and partners comfortable with this evolution and finding equitable ways to grant, track and pay for these uses and reuses in ways that are near-frictionless, but honor the creative integrity of the artist is an ongoing challenge and one Downtown’s group of companies is committed to.
It will continue to expand into web3, metaverse, blockchain, and other innovations in distributed data tracking happening now. DMS is committed to supporting our client’s creative and business goals in all of these areas.
Who will these evolutions in the business benefit, and whose models do they threaten?
I like to see winners everywhere in music, and think this is one that can benefit all parties – even if the balance of income shifts in the process.
Artists are mostly already comfortable with the social media remixes of their music. Platforms love the engagement and streams that the creativity of users can generate, and fans love (and expect) the flexibility to sample and interpolate.
“Artists are mostly already comfortable with the social media remixes of their music.”
For Downtown, as well as other rights administrators and distributors, the complexity of tracking and accounting for the usage is an extra burden, and negotiating the allocation of revenue is a task we’ve chosen to take on and are really good at.
The challenge remains for the artist: to build a sustained career is not one song exploding because of re-use, but artful leverage of that to kindle a bonfire of fandom that supports catalog, future releases, and touring.
Could you summarise DashGo / DMS’s experiences & success in Latin America to date? Why has that part of the world got you particularly excited, especially when it comes to the role of the services model?
I’m extremely excited about our success and team across Spanish-speaking Latin America and Brazil.
This isn’t new for DMS, we’ve been supporting Musica Mexicana catalogs and artists for over a decade, and we’ve been deeply engaged in Central and South America for the better part of the decade as well.
In addition to being a fast-growing listener and streaming territory, the artists and labels [in LatAm] are very independent-minded. The values of retained ownership, strategic partnership, and support align extremely well with Downtown Music’s structure.
“I’m extremely excited about our success and team across Spanish-speaking Latin America and Brazil.”
Our sister company, CDBaby, has also been active in the region for over a decade and we were able to support the continued growth of some of those clients as they graduated beyond DIY.
Labels like Alzada have seen exponential growth and artists like Santa Fe Klan, No Te Va Gustar, Johnny Hooker, and Illapu have all trusted us with their music. We’ve been able to expand staffing across the region to support them locally.
Musica Mexicana has long been a driver for us; we are proud to represent Los Tucanes de Tijuana and have worked closely with them to triple their streaming audience in the past few years.
How can DMS compete with the global scale of major companies like Universal/Virgin Music/InGrooves and Sony/Orchard?
In many ways, we’re already out-competing them.
It’s challenging but flattering to see those companies look toward our releases for A&R.
Christian Nodal’s “Adios Amor” was originally supported by DashGo. Ultimately I think by having a long-term, service-oriented view, rather than an ownership model focused on current hits, we’re able to attract and retain amazing artists.
A curated roster allows us to provide a more in-depth focus for longer time frames, but we must be careful to maintain the staffing to fulfill our promises.
That’s why I’m so excited about our recent slate of hirings and promotions to fill that [LatAm] team out – from Estefania Parra Lora to Daniella Gutierrez, Martin Liviche, and Juan Nunez, we are building a deep roster of creative support for the artists.
Where do you see the biggest growth opportunities lie for DMS in the years ahead?
I believe that we’ll continue to see global growth as streaming accelerates in Southeast Asia and Africa, and continues to grow in Latin America.
Additionally, our genre curation work has done well for LoFi – where we’ve built a creative network of artists, labels and playlists supported by strong editorial and strategic advertising.
“We’ll continue to see global growth as streaming accelerates in Southeast Asia and Africa, and continues to grow in Latin America.”
There are many other adjacent genres in which I believe we can apply our learnings from [LoFi].
Finally, continued focus on creating and enhancing services around UGC-driven platforms like YouTube, TikTok, Meta, and others, I believe will bear fruit as the scope of music use, integration, and monetization continues to grow on those platforms and new ones.
Being nimble and attentive has informed our strategy since the very beginning and there is no sign of a slowdown in music innovation.
One year on, what to your mind is the defining difference between DMS and any other operators in this marketplace?
Our commitment to under-promising and over-delivering has served us well.
Everyone on the team has visibility and awareness of each client’s music and goals and expectations and we see ourselves as partners with them – so client wins are our wins.
It’s hard to put into an elevator pitch, but our client services, be you a label or publisher, artist or writer, are truly outstanding and we strive to keep improving. We stay focused on the areas we can materially impact on a project – streaming, digital advertising, release strategy, and support.
If there was one thing you could change about the music business right here and now, what would it be and why?
Just go to sleep, and the music business will be different when you wake up! It changes all the time.
In some ways, I’ve been doing the same job for nearly 20 years but it’s simultaneously always new – as artists, DSPs and fans create new ways to discover and enjoy music.
On a superficial level, I’d suggest all artists: stop doing waterfall releases. They really gum up distribution, impact algorithmic plays of [your] already-released songs, and clients are frequently frustrated by the results.Music Business Worldwide
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