AS HEAD OF INDEPENDENT LABEL GIANT BEGGARS GROUP, Martin Mills has both championed forward-looking music and been a voice of dissent in the industry. The avuncular Brit was the engine behind Merlin, which has created opportunity for indies to get treated on a par with majors by digital services, and to offer such services licensing efficiencies; he spoke out against UMG’s acquisition of EMI; and he has passionately represented the indie sector’s interests before the EU and other regulatory bodies. Meanwhile, the man who started as a mobiledisco operator and London record-store proprietor—and whose Beggars Banquet and 4AD labels were formative players in the alternative world in the ’70s and ’80s—now sits atop a global powerhouse featuring XL (Adele [licensed to Columbia in the U.S.], Vampire Weekend, Sigur Ros, The xx); 4AD (The National, Deerhunter, Future Islands, tUnE-yArDs); Rough Trade (Warpaint, Houndmouth, Howler); and Matador (Queens of the Stone Age, Cat Power, Interpol, Stephen Malkmus & the Jicks, Pavement, Belle and Sebastian, Yo La Tengo). After talking to us, though, Mills was probably begging for relief.

Let’s start by talking about the current structure of the Beggars Group, how it came about and how the individual labels partake of the whole.
The structure is that the Beggars central engine room, if you like, runs the businesses, and the labels handle artist signings, project direction and PR. In terms of how it evolved from being Beggars Banquet into the group of labels, I guess it started with 4AD, which was a couple of people who were already working for us and wanting to start a label, and then XL had a similar genesis. Once we had them, we had the kernel of the group; Matador and Rough Trade were each existing labels that we became partners with [in 2002 and 2007, respectively], and together they formed the quartet.

Was there a moment when you saw it evolving from a single label to this larger conception?
There certainly wasn’t one eureka moment. For a long time, it was like putting one foot in front of the other, without knowing where you were going, and there was never any intention, hope or even ambition that this would become a lifetime’s work. We started in ’76 with the record labels. It was probably when we got to 1989 and The Cult and Love and Rockets were happening and 4AD was beginning to get geared up with those early Boston bands [such as the Pixies]. That was probably the point where I realized that this was something that was sustainable.

Speaking of 4AD, that company, as I understand it, began as a sort of staging area for artists you wanted to upstream to the main label. Then, in a relatively short time, it evolved into a brand that alternative-music consumers flocked to. I’m wondering how that happened.
It did start with a farm-team intention because, at that point, Beggars was having a fabulous time and also getting completely overwhelmed with the success of Gary Numan. He was the third or fourth artist to be signed; two years into the whole life of the label, we had three of his albums in the Top 20 in the U.K. and platinum-selling albums in most markets around the world. While it was brilliant, it also took us away from what we always intended to be.

The idea of aligning Ivo Watts-Russell and Peter Kent to start running 4AD was to be that again, to start again at the beginning doing something small that people were passionate about. It was also tied in with the independent chart system in the U.K., because Beggars was licensed to Warners and had a distribution deal for the stuff that Warners didn’t particularly love. As such, we didn’t qualify for the independent charts, which were a very important part of establishing profile. So we developed 4AD, and subsequently Situation 2, to go through the Cartel, and subsequently Pinnacle, and be in the independent charts. This allowed us to build a following, until records could cross over to what was meant to be the mothership.

But 4AD became its own powerful mothership pretty quickly and established an identity that was even stronger than Beggars. So it made no sense for any switching over to happen after the success of Bauhaus, and the two labels grew in parallel.

With the current direction of 4AD, although there is little resemblance to that initial clique of gothy projects that broke out in the ’80s, it once again has a very distinctive voice.

The intention, when Ivo decided to retire and we took over his part of the business, was to evolve 4AD with total respect for what it had been, but allow it to transition into something that was still faithful to the original principles, while still being modern, ambitious and new. I think if you look at many of the current artists that are important to 4AD, they do connect back; Grimes connects back to a Cocteau Twins type of era. SOHN connects back to the ’80s. Acts like Deerhunter and Bon Iver, whom we have in Europe but not in the U.S., are very connected with what 4AD has always been about. There’s also Merchandise, a tremendous band that many labels were interested in signing; they ultimately signed with 4AD because they had connections with its origins and they felt proud to be on the label.

What led to the shuttering of Beggars as a new label?
It was to get rid of the confusion that existed between Beggars Banquet the label and Beggars, the group of labels, because having a single label with the same name as the group implied that it was the lead label, which had stopped being the case a decade or two before. It just felt like the right time for Beggars Banquet to have a rest, with the key artists moving on to become a part of 4AD, which physically is in the same building here. It just made sense; it was to do with perception, to clarify that Beggars the group is the umbrella, which covers four labels, all of which have their own strong identities.

Let’s talk about digital distribution, something that you’ve worked very hard to have more control over. How big a portion of your revenue does it represent, and how does the role of digital differ in the indie world?
It’s been a fundamental and exciting shift. One of the things that keeps me waking up on Monday morning and thinking, ‘Oh good, it’s Monday morning,’ is not just the new music but also the challenges of the digital world. I think, overall, the digital world has been very beneficial for independents. We’ve been there from the very beginning; we had our entire catalog up, digitized for download purchase, in the last century, in fact.

The playing field is, for the moment at least, more level on digital. It creates opportunities to get music out to fans, whilst avoiding the traditional, established gatekeepers. I think it allows us to punch above our weight. It also connects the world into a single entity, and it allows control of your distribution, which historically was the majors’ province, to be retained in the hands of the label. For us, managing our own digital distribution worldwide is a fundamental part of how we strategically operate these days. Our new IDC deal enables that.

I hate to use the word marketshare, but our marketshare in digital downloads is higher than it is in physical, and when we talk to streaming services, we hear that we outperform our size as well. In terms of how big a share of our business is digital, last year in America it was about half; it was about 50% physical, which was quite a lot of vinyl (probably 20%), and the digital pie was split about a third with streaming and two-thirds with downloads. I think that 50% is a really good figure.

What the difference is between our 50%, and the reported figure of 65% for the market as a whole, must be the lump-sum deals that distort this market. Again this relates to the size of Universal — and not just them, but the other big majors — and their likely ability to leverage their scale with digital services and procure income that is not necessarily part of the sales income.

I think that’s a problem for the industry. Its reputation is unfortunately not great and things like this contribute to it. In my world, we do everything we can to make sure we pay the artist for everything we receive that they have a right to share in. Again, this comes back to one of the reasons why we formed [indie global rights agency] Merlin: to get to a position where we could compete and be in the same position.

With streaming revenue becoming a bigger part of the picture, there’s been considerable debate about how streaming services compensate labels.
I understand the concerns and the issues, because obviously the streaming revenues come in more slowly, but we’re great supporters of Spotify and many of the other streaming services. I think it’s pointless to resist it, because the tide is coming in and you have to go with it. I also think it is beneficial; when I’m looking at my royalty statements, which I do twice a year, I’m seeing the proportion of our artist revenues that are attributable to streaming growing rapidly and being very, very significant. People are saying that the long-term [revenue picture] is suffering from streaming; I don’t see that. I see artists who sell relatively small numbers of records or downloads profiting from streaming. I see artists who have been around for the last two to five years profiting a lot from streaming. I see that being a big part of their income in many cases, almost as much as half for some.

Perhaps you can say a bit about Impala, which has been a real source of strength for indie negotiating power.
The origins of it all were AIM, the Association of Independent Music, which started in the U.K. in 1999. It was a bunch of us coming together and deciding that independent labels had different needs from big labels. We decided that we needed to represent ourselves properly and we put a lot of effort into establishing a consensus to get AIM started and to actually fund it properly, to have someone who was really top quality running it; it’s proved, over the last 15 years, to be an incredible force for good and change in the independent world.

From that sprang Impala, the European version and A2IM in America and trade associations in pretty much every country in the world. They’re starting up literally every month. This month is Switzerland, for example. Behind it was the belief that collectively we were strong. We didn’t want to interfere with individual labels’ independence, because that’s clearly of crucial importance to everyone, but there’s a collective strength, which you cannot realize individually.

You spoke out quite passionately against the UMG/EMI merger. I’m wondering what your thoughts are about the state of play, now that that consolidation has been completed. Have the ramifications been what you feared?
I think that it’s becoming clear that they are, yes. The world generally sees monopolies as bad things, which is why there are competition authorities, and I think that monopolies are particularly dangerous in creative industries. If you look at the monopolies in the soft drinks market or the potato chip market, who cares, really? People might prefer one soft drink to another, but they’re fundamentally the same thing.

But you can’t say that in music. A Lady Gaga album is not substitutive for an Adele album, and when you have a company that effectively gets 50% of the marketplace, it means they have a totally dominant position. I think that’s fundamentally unhealthy, and that people have reason to be scared of the power of Universal. They’re a dominant employer in a world in which there are no trade unions.

We were able to extract concessions in Europe, and those concessions will be very valuable in rebalancing the marketplace. I think that achievement is a fantastic testament to the collective strength that we were able to exert, and the arrangements that resulted from that will be very good for the independents.

Having said all of that, I think Universal is a great company. If I was managing a band or an artist that was in their musical world and I was convinced that they were going to make my project a priority, I’d be there, because they’re the best at what they do.

What was it about punk music and alternative music that attracted you? You rather famously said that you were looking not for bands that people wanted, but bands that they were going to want. How did you do that?
The punk wave that we came in on was exciting in a revolutionary kind of way. When punk came along, we were running record shops and selling The Eagles and Jackson Browne and Barry White. We didn’t stock singles; they didn’t exist for us.

Then punk came along and all these 7” singles started getting imported; Stiff Records started up here, and it just was a tidal wave of excitement. People changed their musical habits in what seemed like literally overnight. I guess since that’s where we started from, we’ve always been looking for music that we feel overturns what’s been done before. The last thing we ever want is to sign something that is like something else that has already been. We’re always looking for uniqueness, for attitude, for people that can connect, for music that breaks boundaries and moves.

I have to ask you about Adele. What can you say about what’s next for her?
It’s fairly simple. When she makes another record, we’ll be releasing it, in the USA of course with Columbia. It’s been a phenomenal experience for her and for us, and that record just broke all records in every way in terms of how it reached people.

Why do you still do what you do?
I guess for the same reason that I always did it. I mean, when I was in my late teens, at university and whatever, music meant everything to me. Getting up in the morning and going down to the local record store and finding new albums by Love, and The Doors, and The Byrds, and The Incredible String Band and Fairport Convention meant the world to me and why I do this is to allow that connection to happen between the artists and fans of today.

We’ve been doing this for a long time now, and we’ve grown in a period of intense change, in terms of how global the marketplace has become, not just in terms of the Internet breaking down national boundaries, but also with the growth of Europe as a single market. It’s allowed what is essentially a cottage industry, like us, to have global reach. Take one recent example, Future Islands, who we’ve just released on 4AD. That Letterman performance they did a few weeks ago has reverberated literally all the way around the world and got the album off to a flying start in a way that could not possibly have happened 10 years ago.

I think the kinds of artists that we work with feel much more comfortable with a cottage industry than with a corporation in a big tower. That’s how they like to be represented and the fact that we can do that from our base in southwest London and offices all around the world and make a global connection is a fantastic thing.