Indie music mogul: The net's great for us

The internet has revived interest in music, thinks Mills, by encouraging people to experiment.

"It's made so much more possible - a greater and deeper love of music. It's re-stimulated my own involvement in music generally, rather than just my business. The links people send you allow you to go off down a path and discover something great.

"People who in their 30s a few years ago who may have stopped listening to new music, or were listening to iterations of music they heard in their late teens or early twenties, are now able to discover entirely new things. You've got new artists being discovered by 30, 40, 50 and 60 year olds. You'll now have a group of friends talking about music and sending links. I think that comes from the integration of the laptop into both our working and our personal lives, the internet is so great at spreading the word."

It's also made production cheaper.

"The scale of our investment has changed. Recording is cheaper these days. Film making is cheaper. You can make the raw materials that we invest in miles more cheaply. The excesses of record deals largely disappeared, so we much more able to invest at a realistic level, rather than an insane level, which we sometimes had to do, and sometimes we still do. But we're probably signing 20 new artists a year across the 4 labels, and investing significantly in all of them. We still spend 20-30 per cent of our turnover on artists. So although it's at a level more sensible than it was, it's still very significant, and it's what we do."

In recent years, the Beggars labels have had established acts knocking on their door, such as Radiohead. I wondered if this altered the investment pattern?

“You're never going to get rid of free music”

"It's great to release Radiohead and Damon Albarn, but it's something we do occasionally. The artists we've done we thought were truly exceptional. We've no desire to be where Sanctuary were in their heyday. We're all about getting a band to a stage where you can see it's working."

The reason for the independents singing a different tune to the majors, he suggests, is quite interesting.

"You read the industry is 60 per cent of the size it was ten years ago. But that 40 per cent that has gone is almost entirely the cream at the top. Records that sold two million now sell 500,000 - that's where that's gone. At the same time it's easier to sell those slightly smaller levels.

"What's called pejoratively 'the new middle class' is someone like, say, Calexico or Midlake, who can sell 100,000 plus records every time they put out a record; they can play to 3-4,000 people in 30 or 40 cities around the world. And they can make a pretty good living out of that, doing what they love doing, and can do it on their own terms, and that's fantastic. We've got a bunch of bands like that, they're not necessarily seeking stardom or riches. That's incredibly healthy."

But it's still recorded music that drives the success, most of the time.

"99 per cent of what you hear about artists who can survive on their own playing live is crap. It's recorded music that drives success in other areas. Something like Enter Shikari was clearly a contrary example, and Mumford and Sons are something of an exception too - they built a large live following before putting out records - but there are very few exceptions."

Radical Reforms needed

Despite the sunny outlook, and his belief that its "probably bottomed out, the onslaught of free music is retreating", Mills says the industry needs to reform itself radically, and lose its fear of commercial experiments. The future is in new services we haven't seen yet - but it's still too hard for these services to start selling music.

Some kind of statutory licensing would help the next Spotify or We7, he thinks. Not an open-to-all statutory, where punters could come and help themselves to all the world's music for a fiver a month - but a B2B experiment - something to help intermediaries obtain licenses.

"We have to make licensing easier and faster, not necessarily cheaper, but easier. We'd like to see some kind of short-term government-endorsed trial structure that we could experiment with for 12 or 24 months, and see the impact of it."

“Having a single way of consuming music for a fixed amount, that's same for everyone around the world, is nuts I think. It's not needed”

What would stop some joker turning up, who had no business plan, or maybe even no intention of ever paying for the licenses?

It would need some kind of government agency to approve licensees. But regulators already decide who can run a TV station, or call themselves a bank - there is a threshold. "You'd have a validation process so not everybody who turned up got one."

Mills says the flat-fee collective licensing of ISPs, touted by some as a panacea with a zeal bordering on the religious, doesn't have much industry support.

"Peter Jenner has been very vocal about that for a long time. He likes to characterise himself as a crazy eccentric. He's a lovely guy but there isn't a huge amount of support in the music industry for something that radical, and it's not needed. A lot of markets are working quite well. Look at the growth of the download market, it's pretty healthy. We have 5 to 10 per cent growth a year in digital albums, it's heading to 30 per cent of the market now.

"Having a single way of consuming music for a fixed amount, that's same for everyone around the world, is nuts I think. It's not needed."

It would also be bad for independent labels who cater to music lovers. By contrast, he'd welcome an offering of a fixed bundle of downloads, via an ISP.

"Unlimited all-you-can-eat offers would hurt us badly. Our market is dedicated high-spending music fans. If you're Universal, sacrificing the few high-spending fans they have to get many more low-spending fans is probably a good bet. We're on the other side of the mirror. Much as I would embrace it philosophically, I can't embrace it practically. There has to be a limit or cap. It would hurt our artists."

The industry also has to create a global database of repertoire, he says.

"We need a database to track and identify tracks properly and who the performers are. We should have had it ten years ago, it becomes a bigger task with each year. It's a minefield of partially-attributed rights. When you license a song for a compilation in Australia, you don't know where the money will end up."