On paper, starting a music company in 2005 looked like a certified one-way ticket to bankruptcy. The recorded music business was in a total free-fall after Napster arrived in 1999, locked in a steady decline that wouldn’t actually stop until 2014.
In reality though, it was a brilliant, ahead-of-its-time move. It showed a sharp understanding of the massive shifts happening in how music was distributed and consumed, and proved that digital would be the ultimate engine to power the industry’s comeback.
Ringtones vs. the future: breaking away from the old school
I remember vividly in 2005 […] there were two things for major record label CEOs. One was that the future of digital music was phone personalisation. The second was that the internet was not going to allow us to develop artists.
Denis Ladegaillerie
Founder & CEO, Believe
Back then, the majors were heavily focused on short-term, highly lucrative revenue drivers tied to pre-smartphone mobile content and personalisation. At a time when physical CD sales were plummeting, the global ringtone market was exploding into a multi-billion-dollar phenomenon. For traditional music executives, selling a 15-second monophonic clip for €3 felt like an easy financial lifeline, one that didn’t require embracing the wider open internet or rethinking their business models.
“I remember vividly in 2005, when we created the company, there were two things for major record label CEOs,” says Denis Ladegaillerie, CEO and founder of Believe. “One was that the future of digital music was phone personalisation, such as ringtones. The second was that the internet was not going to allow us to develop artists”.
Believe anticipated a very different future. Instead of banking on flip-phone novelty tones, the company precision-tooled its operational agenda to stay fleet of foot, allowing them to quickly spot new opportunities, new possibilities, and entirely new digital revenue streams.
Back to the Future: 2005, the digital starter pack
Digital might have been a niche in 2005, but it was the only part of the record business with significant growth potential.
Apple had brought its iTunes Music Store to Europe in early 2004, proving that consumers would pay for digital music as long as the offering was broad and simple to use. Indeed, record company trade body IFPI reported that global legal downloads had tripled in the first half of that year. In August of 2005, Apple launched the iPod Nano, following the iPod in 2001, and this was the device that truly brought portable digital music into the mainstream.
Still in 2005, Napster To Go had launched, showing how a company that was once castigated as the terror of the record business was, under new ownership, now keen to build a licensed and monetised future for music online.
And in July that year, News Corp bought MySpace for $580m, showing how quickly social media and new forms of direct distribution were impacting online behaviours. There were now over 1bn internet users globally, equal to 15% of the global population.
It was right in the chaotic middle of this transition, with CDs dying and streaming not yet fully born, that Believe quietly laid its foundations.
Zigging While the Major Labels Zagged
Believe was deliberately positioned with a distinct vision from the traditional major label model and digital-first operational model, recognising early that digital transformation would have far-reaching implications beyond music distribution and monetisation.
“At the time, the core thinking was really about how technology would transform the music market,” says Denis Ladegaillerie reflecting on the company’s mission when it was founded. “Three core ideas underpinned that vision:
The first was that technology would democratise access to music. The second, which has only begun to play out over the past three or four years, was that as music consumption and discovery became digital, the key levers of artist development would also migrate to digital platforms and channels. The third was that technology would transform the creative process itself. That shift is now beginning to take shape through today’s generative AI technologies”.
When Apple announced in September 2005 that iTunes had 1.7 million tracks available for download, it sounded like a lot. In reality, it was a tiny fraction of the hundreds of millions of songs available today. Old-school record labels were dragging their feet, digitising and licensing only a tiny sliver of their catalogues.
Where others saw a slow start, Believe saw a massive, wide-open opportunity. They realised a huge amount of incredible music was being left off the internet, and they moved fast to fill the gap.
“At the time people were saying, ‘The internet has never allowed the development of any artists’” Denis Ladegaillerie recalls.”Guess what. Twenty years later, that has changed”.
The Believe blueprint: first access, then success
Access doesn’t mean success. In the democratisation of access, you are in a world where everyone’s music is available, but no one has told artists what to do to develop themselves.
Denis Ladegaillerie
CEO and founder of Believe
Believe initially focused on empowering independent French hip-hop acts, among them the legendary MC Solaar.
“Their music was not being made available on digital music services by the major record labels or indie labels, who didn’t have access,” explains Ladegaillerie. “That’s what we started with in 2005.”
The philosophy at the time was about giving artists access to a global market digitally. This became the guiding principle of the company for its first years, but the shift thereafter was about moving from delivering access to driving success.
“Access is just developing technologies to enable artists and labels to make their music available on DSPs,” says Denis Ladegaillerie. “So it’s purely about access. You’re a new artist and you’re entry level or mid-level, and your music is accessible to everyone.”
“But access doesn’t mean success. In the democratisation of access, you are in a world where everyone’s music is available, but no one has told artists what to do to develop themselves.“
This is what powers the company today, but its foundational approach was giving artists access to global audiences that were previously impossible to reach except for a select few.
The YouTube revolution: threat or opportunity?
YouTube served as the first real arena where music fans encountered ad-supported streaming at a massive scale. Crucially, it turned passive audiences into active creators by mixing official artist content with user-generated videos.
The impact of the video-sharing platform was swift and by late 2006, barely 18 months after its launch, it was acquired by Google for $1.65bn. The major labels eyed it suspiciously as a continuation of the problems unleashed by the original Napster, damning it as a platform bloated with pirated content and therefore something that had to be contained.
Believe, however, viewed it as a symbol of what was to come for both distribution and artistic creativity. For Believe, it was a signpost to the future.
“Twenty years ago, major record labels only viewed themselves, both culturally and from a business standpoint, as the top global talent development houses”, says Denis Ladegaillerie of where their focus dramatically diverged from that of Believe. “This meant that everything that went in the direction of enlarging the market, leveraging digital in order to develop artists, was against the culture.“
This unwavering pursuit of a first-mover advantage, forged in the uncertain and tempestuous year of 2005, is exactly what has guided the company ever since.
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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.
