When Exceleration Music launched in January 2021, it became something of an anomaly in the music industry: A group of indie label execs, dedicated to investing in and acquiring other indie labels.
Backed by what the company has called “substantial investment capital” that allows it to make deals ranging from the hundreds of thousands to nine figures, Exceleration was co-founded by five executives with deep roots in the indie music community: former Concord Music Group CEO Glen Barros; former Concord Records president John Burk; former Merlin CEO Charles Caldas; former Ingrooves general manager Amy Dietz; and former Epitaph Records general manager Dave Hansen. Since launch, it has acquired or invested in indie labels including Alligator, Bloodshot, Kill Rock Stars, Mom+Pop, SideOneDummy and, most recently, the U.K. label Cooking Vinyl.
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Exceleration’s stated mission is to support the growth of indie labels and provide an “honorable exit” for label founders who are looking to step away, all while preserving the indie ethos on which they built their businesses. Over nearly five years, the company has grown substantially, most notably with its 2023 acquisition of global digital and physical distribution and music services company Redeye Worldwide — marking a sizable expansion of its capabilities and staff, which now numbers 175 employees.
Unlike so many players that have entered the music industry over the last decade, Exceleration isn’t just an investment fund but, in many cases, an active player in the companies in which they invest, with a view toward upholding what made them special in the first place. And in an era of growing consolidation, Exceleration remains an intriguing alternative to the major labels and investment giants that have become increasingly focused on buying their way into the independent market. Its founders describe themselves as “true believers that independent music is a cultural necessity, not an investment class.”
Billboard recently caught up with Barros and Dietz to discuss how Exceleration has evolved over the last five years, the company’s growing focus on international markets, how they feel about the majors’ aggressive push into the indie space, the increasing influence of AI and more.
How do you feel about the state of the indie label business currently, and related to that, why is a company like Exceleration needed now?
Glen Barros: Obviously, the industry is changing pretty rapidly. Even the indie world is pretty hard to define, with do-it-yourself artists and so forth. But in looking at the traditional labels out there, labels need the same things they always have to succeed, which are human and financial energy. That’s what we were trying to bring into the indie space: people who understood the indie world, the ethos of indies, the way indies operate, the pain points that most indies endure and try to manage through, things they do well, things they don’t do well.
[In terms of] why now, I think you have this ever-changing world, and it’s harder and harder to navigate. And can you provide, as much as possible, a one-stop solution for indies to do what they do best, which is make and market music? And how can we provide the other services that go around that? At the time when you know people need to exit, people need capital for growth, whatever it might be, we’re there to solve for that, too.
The formation of Exceleration was really in reaction to what we saw as a need in the market. In the last decade, you’ve seen a lot of capital flow into the industry, a lot of investment funds, which we are not. With that happening, it was creating a lot of angst. And so that was the genesis: How can we bring the right kind of capital in? The right kind of organization to solve those issues? Where we are today is a much more advanced state than when [we launched].
Can you give a better sense of just how hands-on Exceleration is?
Barros: Every deal we’ve done starts with listening to what our partner wants and needs. In some cases, it’s very little involvement, and in other cases, it’s everything. We’re acquiring the company and then building upon it and working to take it forward. Part of the original mission was to be very in tune with the needs of the community on an individual basis.
Amy Dietz: One common theme that we were hearing was that a lot of labels have been entrepreneurs operating by themselves for a long period of time. And one of the things that became attractive to them was the idea of being able to collaborate with more people who have different experiences but come from a similar value system and have had different successes. So, we can get quite involved with some of the labels and rights owners around what their A&R strategy might look like, and how they’re building out their year, and what resources they need.
We get very involved on a day-to-day basis around Redeye in particular, certainly with the labels as well. We’ve created different, I wouldn’t call them divisions, within the company, because we view it very much as all one company, but different areas of expertise. So, there are different people within what had been traditionally called Exceleration. That’s merged with the services that are being provided within a distribution platform. I come from a distribution background, so there’s a lot of getting involved, understanding what labels need from that perspective, understanding supply chains. It can be quite involved, while really empowering the leadership in each of these areas to step in and take care of the day-to-day.
Speaking of Redeye, can you talk about how that acquisition came about and how it’s changed the business?
Barros: We define our business as providing service to the indie community, and we put it in three buckets: financial services, operational services and administrative services. Originally, [we thought of] operational services as rights management, and business affairs and royalties and all those things that labels need. Labels [also] need distribution. What we realized was, we could really help to provide a strong alternative if we bring our resources to bear with Redeye and fuse it together with our labels. So, when the opportunity arose, it made all the sense to us that this was the right move.
How else has the strategy changed over the last five years?
Barros: When we started this, the theory was that with the five of us coming together and with relationships that we had, we wouldn’t really have to market ourselves and that we’d be able to do it in an organic, relationship-based way. And so, it is snowballing a bit, because the more we do, the more visible we are, and we’re starting to get a lot more incoming.
But now, we really do want to expand beyond just the financial side of things and go more into the operational, administrative services. I think what you’ll see over time is a couple of things. One is more and more services being incorporated into the group, and geographic expansion, because a lot of what we’ve done to date has been U.S.-based. The one we just did most recently was [to acquire] Cooking Vinyl in the U.K. But even before that, we really changed Redeye’s operation in the U.K. to be far more focused on U.K. distribution. And there’s much more to come if things go the way we hope, in that territory, but also in Europe and South America, Asia.
Can you talk about the typical dollar size of your investments — even just a ballpark range of the biggest to the smallest deals that you’ve done?
Barros: We’ve done a lot of smaller deals that we don’t even announce. Those could be a few hundred thousand dollars, up to a million, something like that. And we’ve done a couple of bigger deals that are in the mid-eight-figure range. We’re looking at things that are even in the nine-figure range. From a capital perspective, the nice thing is, we really do have the ability to flex. That gives us the confidence to go out and try to make the right strategic moves and be sensible about it. Again, we’re not a fund. We don’t have this pressure to go out and spend a certain amount of money or chase deals. It’s very strategic and thoughtful. But when we have a deal that makes good sense, there’s really not a deal that we couldn’t pursue, size-wise.
Would you ever buy or invest in a live or merch business, or are you going to stay strictly focused on labels?
Barros: We’d never say never, but it would be hard for us to see how live would make sense. Mainly because it feels slightly disconnected to the mission of helping indies. Not to say that live is not an important part of the indie world, but there’s a gap between the rights space and the live space. Merch, that’s a different story. We’re not anywhere near that now, but that’s a little more closely related and may provide a good service to indies. So, possibly.
Dietz: The kinds of things that we’re talking about, where people need help, even with managing rights and what that looks like, I could see where something like [merch] could be a fit. Anything about fan bases and engaging fans and things like that.
I’m surprised that more companies like Exceleration haven’t popped up in the last few years. Why do you guys think that is?
Dietz: It’s a good question. You’re really getting your hands dirty. We’re really hands-on in what we’re doing and what we’re building. And so, depending on what somebody is looking to accomplish, there might be differing levels of that — whether you’re wanting to outsource some of these things, whether you want to really focus on a specific thing. We’re viewing this holistically. [Other] people might be wanting to stay really focused on [one thing].
Barros: If you think about how we built the company, kind of being at this nexus between the investor world and the indie world, and trying to bring the right kind of investment capital in, it’s pretty rare to find the right kind of investment cap. There’s plenty of money in the industry these days, but it’s generally chasing rights with no strings attached. Just cash flow.
That is treating music as an asset class. Anybody who spent their whole lives in the music world [is] a little offended by that. You now have a lot of investment capital going into the distribution side of things, but it’s all on the digital side. That’s where the market is, that’s the cutting edge, that’s the way they view it. And what we try to do is come in with this very holistic view of, those are only slices of the industry. What about the whole picture? That’s what we’ve tried to solve for. Like Amy said, it’s a lot of work. Everybody wants the proverbial low-hanging fruit. Well, we’ll climb the tree.
There’s this increasing trend of major labels gobbling up indie companies, which is in part a play to maintain market share. What do you think is lost when majors start buying up these companies?
Barros: I don’t begrudge anybody making the right decision for their business. The main issue is, when you look at the majors, serving indies is not their primary goal. That is not what they get up in the morning thinking about. We know the indie psyche. It’s obviously very diverse, because there’s a lot of different people in this space. But at its highest level, we get it. You’ve got to ask yourself the question: What are the majors really in it for? It’s not to say they can’t provide good service, and [they] obviously [have] lots of capital, and they can do the job. But I think it’s really the intention as to why you’re in that business that we were trying to use as a differentiator.
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UMG’s Downtown deal is currently being looked at by the antitrust agency in the EU. There’s been a lot of outcry in the indie community about the deal. I’m curious to get your thoughts on that.
Barros: It’s complicated. I think the issue here is that it’s more than just them adding rights to their business, or more distribution. It’s indie infrastructure. And that complicates it a lot. Going back to the same point I made earlier of, what’s the intention?
Glenn, you came from Concord, and Exceleration in some ways feels similar. How did your experience at Concord inform what you’re doing now?
Barros: [I had] 25 years at Concord, and there were a few different periods for me, the last of which was one of significant acquisition and investment. That was really where I learned a lot about what was going on in the investor world, saw what was happening, how it was changing things. We also figured out how to put it together in a way that made it most effective, most efficient, but also maintained the music company core.
[Concord] really did inform a lot of what we’re doing, but Exceleration is its own thing now. It has its own vibe, which is pretty different. But where it is the same is, it has the heart and soul of a music company. We bring in investment capital, we have people that we brought in from all parts of the industry who are experts in what they do.
A lot of indies will save — let’s put it that way — on those areas of the business that aren’t the fun ones, and in fact, the ones that drive what they’re all about. We want to have every part of that really buttoned up, from administration to supply chain to accounting to everything being top-notch. That was very much what we built at Concord, and I’m very proud of that.
You guys work outside the pop sphere, more in niche genres. Do you guys have a promo team? Does something like radio play interest you at all?
Barros: We don’t have a promo team yet. It depends on how our industry evolves. Going back to the Concord thing — and Concord still has a very strong promotion team — but it wasn’t until we had a lot more scale that we saw that that made sense to do. Again, that’s a core function of a record company. For now, to the extent labels need it, it’s outsourced. But as we’re growing, there’s a lot of those things that are going to start coming in, so we’ll see. We’ll try to match the need in the industry, and we’ll build all the functions that serve our labels.
Dietz: I think Glenn hits an important point [in terms of] what is actually happening in the industry. Meaning, how important is radio for artists? Obviously, there’s still a need for it, but it has changed greatly as far as what that really is. As we look at how we’re building out what those services are, it is very much based on what’s happening in the market as well. And taking the things that are historical and will have needs, but also really having our eye on the kinds of tools that are needed in a world that is as much marked by TikTok as a radio hit.
You have labels with amazing catalogs. How involved are you in reissues?
Barros: Very active. With the labels we’ve invested in or own, in most cases we own the catalog. We may not own all of the go-forward business, but we do own the catalog. So we have a great focus on the reissues there. In terms of all the discussion of talking about how to serve superfans, we’re big believers that on the physical side of things, that is your superfan. Who’s spending all that money on vinyl, right? So, we think that’s a way to do it.
What do you think are the biggest issues facing the indie sector today, given all the recent changes with technology, most notably AI?
Barros: It’s the fact that there’s just so much content constantly flooding the market, trying to cut through. Trying to get any attention anywhere is more and more difficult. And I only see that getting worse with AI. So yes, we face the big challenges of AI in general, and what’s the rights situation there and all of that. But even beyond that, just the fact that it’s so easy to have more and more music flood into this marketplace. I find that very worrisome.
Dietz: I would echo that. We don’t have curators in the way that we did. And even talking about curators is complicated, because I feel like we have pendulum swings of this. There was a point that we had so much curation that you could call it gatekeeping, and not having an ability to really reach fans yourself, or there were only a few ways you could get to market.
[Now] we are kind of in a fully no gatekeeping [environment with] very few curation tools, and it’s become a little bit more anonymous. Thinking of this kind of pendulum back and forth, is there a space that we kind of come back to a little bit, where people want to have more emotional connection to [the music]? I don’t know how to answer all of those things, but I think people want some of that.
Independent labels are always challenged with resources, especially with the things that we were just talking about: all these different social media things you’re supposed to be doing, where everybody’s vying for attention. How do we help labels find the things that they really can focus in on, to create that level of connection?
Barros: And adapt to the market. The market changes so fast, and you have labels that keep doing what they’ve always done, and then it’s not working. Some of those changes are really, really hard to navigate. I don’t think anybody has all the answers, but [we’re] trying to find those answers.
You guys launched nearly five years ago now. Where do you see yourselves in the next five years?
Barros: I know the path we’ll be on. I don’t know how far along we’ll be, but we’ll be further ahead. Going back to my Concord days, we never set specific five-year, 10-year goals or anything like that. Yeah, sure, we put it in investor plans and things like that. And by the way, [at Exceleration] we’re way ahead of where we thought we’d be in five years. Really, what we’re trying to do is just keep this thing moving and growing and trying to build a company that stands the test of time.
Dietz: As a partner group, I think that’s how we view a lot of this. There are some North Stars in there, and you just kind of keep moving towards it. We’ll be farther along, [but] if the first five years are any indication, it might be hard for us to imagine exactly what that will be. We’re looking to try to do it in a sustainable way. We’re really paying attention to what we can really get done.
