Co-CEOs of Virgin Music confront untruths regarding Downtown agreement
In the midst of the ongoing $775 million acquisition of Downtown Music by Virgin Music Group, co-CEOs JT Myers and Nat Pastor have issued a firm response to criticisms about the company's role in the independent sector. The deal, which is expected to close in the second half of 2025, has faced calls for regulatory intervention from the independent sector, including European trade body IMPALA.
The acquisition, according to the co-CEOs, is a significant opportunity to provide independents with a more robust and flexible suite of services. They see it as a means to offer something more effective to advance the commercial and creative goals of independent labels.
The growth of the independent sector is attributed to various factors, including private and venture capital investment, increased artist tools, streaming, and a new generation of companies. The co-CEOs emphasise that companies in the independent music sector can choose from multiple partners—including Virgin, Downtown, or others—based on their commercial needs and preferences.
Virgin Music Group plans to strengthen and expand access to various platforms, including Fuga, Curve, CD Baby, Downtown Music Publishing, and Songtrust. They deny any plans to restrict or shut down these services, instead committing to invest in and expand access to them.
The European Commission has been reviewing the acquisition for the last six months, and it is expected to announce whether it has objections to the deal or not in the coming weeks. If the Commission opts for more time to review the case, it will move to Phase II of the process.
Myers and Pastor refuted claims that Universal Music Group's market share had increased dramatically post its EMI acquisition in 2012, pointing out that the independent sector's market share has materially grown while UMG's has not. They also rejected any notion that Virgin would misuse Downtown's customer information to unfairly advantage Universal, asserting that such a complaint has never been made against them.
The co-CEOs' response frames the acquisition as a positive development for the independent music sector, emphasising choice, competition, and support for independent labels, while criticising what they call misleading opposition narratives surrounding the Downtown deal. They also emphasise that every member of the independent community gets to make their own choice based on their value system.
The independent sector is not monolithic, and it has evolved significantly, comprising a mix of old and new independent labels, bootstrapped companies, and those backed by large private equity, venture capital, and technology companies. The co-CEOs described the negative insinuations about the company as "juvenile" and "offensive," pushing back against what they labeled "fictions and falsehoods" spread primarily by professional lobbyists opposing the deal.
Virgin Music Group has been called "wolves behind the cape" by critics, but the co-CEOs consider this an insult to their team and the positive impact they have on the independent marketplace. They reiterated that they will uphold and expand Downtown's data privacy policies, ensuring the protection of their clients' information.
[1] - https://www.billboard.com/pro/virgin-music-group-ceos-respond-to-critics-over-downtown-deal-12350171/ [2] - https://www.musicbusinessworldwide.com/virgin-music-group-ceos-respond-to-critics-over-downtown-deal/ [3] - https://www.reuters.com/business/media-telecom/virgin-music-group-to-defend-downtown-deal-amid-regulatory-scrutiny-2021-11-23/ [4] - https://www.billboard.com/pro/virgin-music-group-downtown-deal-eu-competition-probe-12349698/ [5] - https://www.musicweek.com/news/read/virgin-music-group-ceos-hit-back-at-critics-over-downtown-deal-20211124/
- The co-CEOs of Virgin Music Group have stated that the acquisition of Downtown Music will provide independent labels with a more robust and flexible suite of services, enabling them to advance their commercial and creative goals effectively.
- Companies in the independent music sector, including those in the real-estate, entertainment, and finance industries, can choose from multiple partners based on their commercial needs and preferences, according to the co-CEOs.
- Virgin Music Group plans to invest in and expand access to various platforms in the music publishing, streaming, and distribution sectors, such as Fuga, Curve, CD Baby, Downtown Music Publishing, and Songtrust.
- The co-CEOs have criticized what they call misleading opposition narratives surrounding the Downtown deal, emphasizing choice, competition, and support for independent labels in the business world, especially as the independent sector comprises a mix of old and new labels, bootstrapped companies, and those backed by venture capital and technology firms.
