As Redeye Worldwide, the global distribution and music services company, celebrated its 30th anniversary, distributed labels, retail store owners, digital music service providers and staff from both Redeye and its parent company, Exceleration Music, converged on the company’s home in Durham, N.C., for its annual Label Hang.
In all, almost 250 people attended the three-day conference, which ran from Oct. 13-15. During the gathering, Exceleration and Redeye executives laid out their vision of what supplementary services they want to offer their labels while helping them achieve economies of scale. The conference served as a forum that allowed attendees to listen and exchange ideas on how to deal with industry issues, opportunities and problems.
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Exceleration — which bought RedEye and its in-house labels Yep Roc and Sundazed in 2023 —was born in early 2020 amid the COVID-19 pandemic — a time when a lot of private equity money was floating into the industry looking for assets to buy. At the time, indie label owners were stressed about whether they should sell or not, while institutional investors were even willing to buy income streams, Glen Barros, managing partner of Exceleration, told Billboard on the last day of the conference
“I was offended that suddenly music was an investment commodity,” Barros said. “To buy an artist’s work and throw it into a portfolio felt wrong. But anybody from the music industry knows soul and heart is where the music comes from. So those investors were missing that, at the heart of the music business, it is run by humans for humans.”
Barros, who spent 25 years of his career helming and helping to build Concord into an indie powerhouse, decided after he left that company to start raising capital to purchase music companies and assets.
He would take a different approach from most of the incoming institutional investors. Where it made sense, Exceleration would keep the original label entrepreneurs in place after the acquisition — if they wanted to become a part of the Exceleration team.
“The important part of the Redeye Label Hang is it brings people and teams together, and it celebrates the humanity of running businesses,” Barros said. In his approach to running a company that invests in music assets, he explained, “you have to take care of all your constituencies, your employees, artists, customers, and investors.”
The Redeye conference was scheduled with that approach in mind, seeking to enhance communications between the distributor and its labels. Throughout the conference’s programming, a slate of services provided by Redeye and Exceleration that the distributed labels can draw upon was presented.
Conference Panel Discussions
A panel on the last day presented by Exceleration Partners entitled “Growing Your Toolkit: Marketing Service Opportunities” featured executives from third-party companies talking about what services they could provide to labels, or that labels should be aware of and can make their own arrangements to use if they so choose. Those companies included Ochre, which provides labels and artists with a direct-to-consumer infrastructure; DISCO, which provides a forum for labels and songwriters to present their music to film/TV and commercial supervisors for possibly lucrative synch licensing opportunities; and Third Chair, which scours social media on behalf of its client music rights holders to find unlicensed uses of their music, and then pursues compensation on behalf of their clients for those unauthorized uses.
Other issues touched upon during the conference throughout various panels and segmented group discussions included sharing ideas on the best PR firms for different music genres; how to come up with a list of influencers who can support each genre; how social media can be utilized to build fan engagement; and why the music press is still an important tool. As Exceleration’s head of global marketing Darin Soler put it, “Press is not dead; you don’t want to forget press but use other social media as well. Both pop up in [Google] searches.”
The double-edged sword of AI was discussed throughout various panels. In a group discussion, one participant called upon one of the label executives in the audience to explain how he uses AI to improve his business. And the last panel of the conference — “AI Music, Navigating Fan Creations, Artist/Label Protections & Fraud” — was dedicated to the topic.
On the conference’s opening day, Redeye staff fielded a panel entitled, “DSP Download and Ask Us Anything: Trends, Tactics and Your Questions Answered.” That type of exercise is emblematic of Redeye’s overall approach. As Redeye co-founder Tor Hansen said at the convention, “It’s always been our goal to continue to grow and improve by listening to our partners and team to best understand their needs and how we best can help achieve their goals.”
In looking back on the company’s anniversary, Hansen continued, “It’s hard to believe it’s been 30 years, but in many ways, we still feel like we’re just getting started… We’re looking forward to much more to come!”
Company Roots
Redeye co-founder Glenn Dicker offered an observation reflecting both Hansen’s philosophy and the Excelertion doctrine. As he told Billboard, “After 30 years, one of the biggest things that I think about is that even though things have changed dramatically in that time, in many ways the things that were important in our early days remain our priority today. At Redeye, we value people and relationships first and foremost. With a strong and growing foundation of some of the greatest music out there coupled with our passionate team, we intend to continue to provide an environment where our partners can remain independent and thrive doing so.”
That same people-first axiom applies to how Exceleration came to be. Barros said he built the team even before he began putting together his plans for building the business. “The partnership is core,” said Barros, who added he began first conversing with former Epitaph Records GM Dave Hansen (no relation to Tor Hansen) about all the changes going on in the industry and where the opportunities were. From there, it was time to build a team, including Jon Burk, who worked for Barros at Concord, heading up A&R before becoming president of the label. “We knew Charles [Caldas] was leaving Merlin [where he had been CEO) and we thought, ‘Who else?’ And that’s how former InGrooves Music Group executive vp Amy [Dietz] came up.”
The five Excleration partners had all known one another through participating as board or committee members of A2IM, Merlin and the Recording Academy. “The way we divide up the responsibilities is I handle finance; Jon handles the creative side; Charles has global; Amy has distribution and Dave has marketing, but we collaborate and work across each of the areas,” Barros said.
Barros also applies his “people first” philosophy to acquisition deals. Distinguishing itself from institutional investors, Exceleration usually doesn’t chase iconic music deals because there is often a lot of money chasing those types of deals, Barros said, “Whereas we tend to do deals where the structure is more creative. ”
When Exceleration looks at a deal, he explained, “besides asking, ‘Is it great music?’ we also ask, ‘Can we add value to it… and can we do a deal that serves every constituency?’”
Exceleration’s Acquisitions and Investments
So far Exceleration has acquired, made investments in or formed strategic partnerships with more than a dozen labels and/or artists, including Alligator, Ace Fu, Azadi, Bloodshot, Candid, Cooking Vinyl, DangerBird Records, Down The Road, Heroic, Kill Rock Stars, Mack Avenue, Mom+Pop, Plus One, Reach Records, SideOneDummy, Sundazed, the Ray Charles Foundation/Tangerine Records, the Ryuichi Sakamoto estate and Yep Roc Records. In every deal done, “the mandate is to figure out how to do the right things for those music rights,” Barros said.
Barros declined to provide the terms of those deals or the source of funding, but financial sources tell Billboard that Exceleration has raised $300 million or more from family offices and other institutional investors and has so far deployed about $175 million to $200 million through the various deals it has struck.
Letting Indies ‘Do What They Were Made to Do’
While the company’s purpose for investing in music assets is to seek financial returns for Exceleration and its investors, another big part of the vision is to serve the needs of the indie sector and to help indie music companies do things that they may not do well. As Exceleration partner Dave Hansen puts it, “Our goal is to build services or strike partnerships with music service providers for the ‘indie-verse’ like trying to come up with things that can help indie labels scale advertising or better participate in the D2C [direct to consumer] business.”
For those areas, Exceleration created a data management team and a high-level marketing team. “We can help indie labels with data management so that they can make good choices to run their businesses,” Barros said, adding that those types of services “let indies do what they were made to do, concentrate on A&R.”
But that’s not all Exceleration offers. “Along the way, the idea got bigger because as we grew we saw more possibilities. We said, let’s expand this and truly serve the indie sector’s infrastructure. And that’s where Redeye comes along. We didn’t do this to do distribution, but to expand our services, just like we bought Dave out to get his share of [Independent Record Pressing],” which provides Exceleration with a stake in vinyl manufacturing.
The vinyl format remains a lucrative but fraught part of the indie music sector. It’s important to have the right amount of product available for distribution at the right time — when consumers want it — or else revenue will be missed out on; or, even worse, labels will be forced to deal with costly product returns. “We really believe in physical, but we know that a lot of labels struggle with financing physical, so we are looking for ways to mitigate that,” Barros said.
“So now we have three buckets to serve the indie sector: financial servicing, where we can ask, ‘Do you need funding or do you want to sell?’, operational help or provide administrative services,” Barros said. “Also, we can help indie labels with data management so that they can make good choices to run their businesses.”
Exceleration offers its help not only to the labels it has acquired and/or formed financial and/or operational partnerships with, but also to the 150 or so active labels distributed by Redeye, a global distributor servicing both physical and digital music formats; and many more distributed labels through its Scandinavian subsidiary Borders Music. Depending on whether deals are sourced from its U.S., Scandinavian or Australian operations, Redeye handles all kinds of distribution deals, with some being global for both physical and digital, some being physical only, some being only for the U.S., and others covering only foreign territories.
Consequently, it’s hard to easily describe how much of Redeye’s distribution business is U.S. versus global or physical versus digital. Most of the statistics Billboard heard on this topic during the conference had U.S. revenue at around 50% to 55% physical and 45% to 50% digital, while approximately 55% to 60% of total revenue is U.S. versus 40% to 45% international, though Exceleration executives say the latter is growing faster.
Among the labels distributed by Redeye are: Beggars Banquet, Mom + Pop, Domino Daptone, New West, Warp, Barsuk and Double Double Whammy; while some of the top acts Redeye distributes include Radiohead, Arctic Monkeys, Wet Leg, Thee Sacred Souls, Madvillain, Alex G, Title Fight, The Darkness, Alison Krauss, Ray Charles, Elliot Smith, Deacon Blue and Beach Bunny.
An Indie Distribution Powerhouse
Headquartered in Hillsborough, N.C., a suburb of Durham, Redeye has an 80,000-square-foot distribution center packed to the rafters with physical product. While the distributor has a bigger presence in physical product than many of its competitors, the company arrived early in the digital distribution space as one of the first to embrace the long-defunct eMusic.
Besides its distribution center, Redeye also has offices in New York, Los Angeles, Chicago, San Francisco, London, Berlin, Sydney and Gothenburg, Sweden, where the company gained another distribution center after acquiring Borders Music at the end of 2019. Exceleration has staff working remotely, which “allows us to hire the best people, so it doesn’t matter where they are,” Barros said.
While company executives declined to provide financials, Billboard estimates that Redeye generates about $125 million in annual revenue from its distributed labels, which includes Exceleration-owned and -partnered imprints.
One of the reasons Exceleration believes it can help indie labels better manage their businesses is because of the in-house labels it owns. “We work with our own labels in a lot of different ways so we understand the pressures that indie label entrepreneurs are under,” said Dietz. On the other hand, she added, “We are not here to tell anyone how to run their business. We are here to help them.”
She added that the Label Hang and exchange of ideas that happen there will help Exceleration and Redeye focus on what services they should build to provide for their label partners next. “Exceleration is about the point of view of music and people, and everything follows from there,” Dietz said.
As Exceleration looks forward, Barros added, “You will see us invest in music and record labels and publishing, but we will also invest in services to bring more to the table for artists and labels. We want to build something for the better that is here for the long haul for the indie world.”
