The year 2014 marked a pivotal moment for the music business. Streaming was growing at a breathless pace: Spotify surpassed 10 million paying subscribers, and the UK charts began incorporating digital streams toward their official weekly rankings, reflecting changing listening habits. At the same time, the industry was still debating what this transformation would mean for the long-term economics of recorded music.
Questions surrounding digital ownership, streaming economics and artist remuneration remained unresolved, and two major news stories illustrated those tensions. The first came in September, when Apple and the rock band U2 automatically added Songs of Innocence to more than 500 million iTunes accounts as part of a promotional campaign. Although conceived as an unprecedented album launch, the initiative generated widespread criticism from users who objected to receiving music they had not chosen to download, highlighting changing expectations around ownership and user control in the digital era.
The second came in November, when Taylor Swift withdrew her catalogue from Spotify. Swift argued that music should retain its economic value and questioned whether ad-supported streaming provided adequate compensation for artists, famously saying that “valuable things should be paid for”. Her decision became one of the defining moments in the broader debate over the economics of streaming, prompting discussion across the music industry about how subscription and free-tier models should coexist.
Different approaches to platform economics
As debates over the economics of streaming intensified in 2014, Believe adopted a different approach to the emerging relationship between music companies and digital platforms. While many rights holders focused on the so-called “value gap” – the perceived difference between the scale of online music consumption and the revenues generated from it – Believe placed greater emphasis on the long-term growth potential of streaming and advertising-supported platforms.
These differing perspectives became particularly visible when YouTube was preparing to launch its paid subscription music service. At the time, it was common for major record companies to negotiate substantial upfront advances as part of their licensing agreements with digital services, alongside ongoing royalty payments. Believe instead evaluated the proposed commercial terms by comparing them with its existing agreements with platforms including Spotify, Deezer and Rdio.
After analysing royalty statements and contractual terms across those services, Believe concluded that YouTube’s proposed payout rates were broadly consistent with prevailing market conditions. Rather than seeking additional upfront payments, the company chose to support a licensing model based primarily on ongoing usage, and communicated its reasoning directly and transparently to clients in a memorandum circulated in June 2014:
“From a detailed analysis of our current agreements with Deezer, Spotify and Rdio, as well as statements received from those services in the past year, our conclusion is that the rate offered by YouTube on the YouTube Subscription service is aligned on current market rates.“
Believe’s approach reflected a broader conviction that audience growth and monetisation would increasingly be driven by the scale of engagement on digital platforms. Its collaboration with Queen illustrated this strategy. Working closely with the band’s management, Believe expanded Queen’s YouTube presence through channel optimisation, metadata management, catalogue availability and new video formats, contributing to sustained audience growth and the channel surpassing one million subscribers by early 2014.
“You had a situation in 2013 and 2014 where the value gap discussion was at its height, and yet we were working with the band who were making all of their catalogue available on YouTube,” recalls Gideon Mountford, Believe’s Global Head of Video at the time. “That was unheard of at that time. The band and the management said, ‘Let’s create lyric videos for every single track. Let’s create long-form videos. Let’s really embrace this platform, because we know that this is where young people are consuming content. We need to be relevant to young people.’ And so we were able to create this great opportunity.“
Build locally, connect globally
As soon as you operate in the top 10 or 20 markets, suddenly you have a global business […] That business needs to invest in helping local artists develop. We wanted to build locally, while connecting globally.
Romain Vivien
Global Head of Music & President, Europe
As digital platforms like Spotify, Apple, and YouTube became increasingly global, international scale became an important factor in securing visibility and editorial support for artists across streaming services. Believe recognized that independent artists and labels would also need access to that scale. The company’s international expansion was therefore designed to combine global reach with strong local market presence.
Rather than relying primarily on the international circulation of a limited number of global releases, Believe invested in local teams and artist development across its territories, using its expanding territory network to protect and elevate local talent inside their own hometown markets. By securing a top-three market position in many of the world’s key music markets, Believe gained the scale and relationships needed to engage directly with global digital services while representing the interests of independent artists and labels across diverse local music ecosystems.
“As soon as you operate in the top 10 or 20 markets, suddenly you have a global business,” explains Romain Vivien. “First and foremost, that business needs to invest in helping local artists develop. We wanted to build locally, while connecting globally. Our presence in those markets was very important.“
By building up massive local rosters, Believe earned a permanent seat at the table with the world’s biggest digital companies.
“A local and global presence, built through market share and a relevant portfolio of artists and labels, puts you in a very good position to engage with Spotify, Deezer and the other key digital services,” Romain Vivien continues. “To have those conversations, you need a local presence and a strong local roster. That’s how you connect artists with audiences.”
The all-in-one financial cushion
During the physical era, recorded music sales remained the primary source of revenue for most record companies. As the industry transitioned toward streaming, the economics of artist development increasingly encouraged a broader range of complementary services and revenue streams.
To thrive in the streaming age, Believe’s response was to support a more integrated artist services model. Alongside digital distribution, the company invested in full-service labels that handled every single financial aspect of an artist’s career, including music publishing, merchandising and live activities. This enabled both artists and labels to bring together multiple aspects of career development within a single partnership.
Diversifying revenue streams also created greater flexibility to fund artist development over the longer term.
“Being 360 makes a lot of sense,” Romain Vivien notes. “If you look at most of the labels we have invested in, we took a share in, or we bought in France, they’re all 360-degree businesses. They have publishing. They have live. That allows us to multiply the conversation with the artists, to retain them, to provide a higher level of services and to monetise. When we invest, we monetise on two or three business lines and two or three revenue streams. It makes a lot of sense, and also it gives you more capacity to invest, to bring those artists to the top.“
Owning the rights: audio recordings vs. songwriting
Moving from distribution to label and artist services and from access to success means we also need to own IP and catalogue, because that’s what creates long-term value. This will also give us something which is very important: control, and the ability to invest over time and make long-term decisions.
Romain Vivien
Global Head of Music & President, Europe
The final pillar of Believe’s 2014 economic blueprint was a massive push to buy up music catalogues, which means the permanent legal ownership of past hit songs. Every single track in existence contains two completely separate, distinct legal copyrights. There is the master right, which is ownership of the specific sound recording (the actual audio file you hear when you press play on a streaming platform). Then there is the publishing right, which is ownership of the underlying musical composition (the written lyrics, melody, and chords created by the songwriter).
Traditionally, these rights are split across completely separate, competing corporations, making it an administrative nightmare to clear a song for a global streaming campaign, a movie, or a commercial. Believe set out to break this fragmentation by buying catalogues where they could control both sets of rights under one roof, giving them total operational freedom and long-term financial control over their investments.
“We are willing to continue investing around €100 million in M&A, investing into labels or buying catalogue,” says Romain Vivien of a strategy whose foundations were already taking shape in 2014. “Moving from distribution to label and artist services and from access to success means we also need to own IP and catalogue, because that’s what creates long-term value. This will also give us something which is very important: control, and the ability to invest over time and make long-term decisions. Having control, with consent and transparency from and to the artists, specifically on both sides of the rights, recording and publishing, allows us to have better conversation, develop more licensing opportunities and, ultimately, create more value for the artists and producers.“
By the close of 2014, as streaming revenues climbed 39% to hit $1.57 billion globally, the path forward was clear. Believe had added another layer to its modem music model: combining technology, diversified revenue, stream-by-stream transparency, and local control into an integrated platform designed to support artists over the long term.
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Article written by Eamonn Forde. Eamonn Forde is an award-winning music business journalist and author. He writes for The Guardian, Forbes; Music Week, and Music Business Worldwide and several other publications.
