UK Online Music Stores Create Dance Download Alliance To Combat Exclusivity Agreement
Seven UK dance music download stores have joined together to create the Dance Download Alliance (DDA). The seven members, 3Beat Digital, Audiojelly, DJdownload, Juno Download, TrackitDown, Trax2Burn and Xpressbeats, have joined together to counteract a proposal offered to dance labels and distributors by Beatport who offers an exclusivity arrangement, as an option, on all new releases from labels if they chose to participate.
The DDA has been quoted as saying that “we believe that the short and long term effects of such a proposal will damage the dance music industry as a whole. Consequences for labels, artists and distributors, as well as download retailers and ultimately customers, could be severe.”
The DDA is threatening to dump labels who “join a blanket exclusivity arrangement” since it “would not be economically viable for us to continue to stock repertoire from labels” who [accept said arrangement].” The letter to participating labels also goes on to warn: “The loss of the support and promotion of seven major UK online dance retailers (as well as our many affiliate stores) will undoubtedly have a major impact on your label’s and artists’ profiles across the web, as well as your ability to maximise additional revenue streams such as compilations and licensing. Leaving customers without the choice of where to buy your music could also increase the chances of your music being traded through P2P networks stimulating a rise in dance music piracy.”
Banding together the UK’s leading online retailers is a savvy move for this new coalition. Having access to up-to-the-minute releases from labels is the lifeblood of Dance music-oriented retailers, both online and offline. The seven retailers are determined to not let this new exclustivity option succeed, which would significantly harm their businesses, and may have taken a page out of the recent online royalty rate hike battle that found instant strength in numbers.
“The Dance Download Alliance believes that fair competition and consumer choice are foundations for a healthy and flourishing dance download market,” claims the DDA. However, if you read between the lines, you can smell the desperation.
The alliance is painting Beatport as a company who’s following Apple’s cutthroat tactics in order to solidify their top position, and to gain the upper hand against their competitors. Leveraging market position has allowed iTunes to not only dominate the market, but also to control pricing. In addition, prominent positioning on the retailer’s site often makes a significant impact on the fiscal results of a new release, so many labels are forced to play ball. However, this isn’t the case in terms of Beatport.
FutureMusic has learned that Beatport’s exclusivity on new releases is simply one of three tiers that the retailer offers labels. The labels can choose to participate, and are not being strongarmed into a “blanket exclusivity arrangement” as the UK Dance Download Alliance has alleged. In addition, labels who chose not to participate in the exclusive option are not being punished by Beatport, as some have also suggested.
The Future: The DDA’s retailers also provide the backend for the Ministry Of Sound, M8, Judgemusic and DJ Magazine’s online stores, which adds some juice to their position, but also unveils some behind the scenes politics. The exclusivity option that the DDA is spinning does have a small chance of hurting the US download concern, but since they are so far ahead of their competitors in both customers and technology, it may not make a difference to dance record labels who want to give their releases the best possible chance for economic success in this over-saturated market.
Another take is that the Alliance was formed, not so much as to combat exclusivity, but for survival. Beatport is annihilating most of their competitors in the Dance music download space, and gaining ground all the time. New record labels want to be on Beatport, and are joining the other online retailers just for a little icing on the cake. Now that these UK retailers are finding themselves insignificant, they may be playing a little dirty.