#135 - Denis Ladegaillerie - Believe - L’homme qui distribue les plus gros succès du hit-parade

I prefer to be called a provincial leader. It's a team effort. In a company like ours, we must put artists first. There is no individual success, only collective success. Our first operation was putting 500 tracks online for Music Day in 2005, which generated 30 euros in revenue, but we were proud because it was six months of work. You go from convincing someone to listen to a song to convincing an algorithm. Believe will be a success when we have the best teams in the world serving artist development. I knew I wanted an entrepreneurial adventure, and I had the romanticism of the entrepreneur. The hardest part to manage is the human side. What I love about music is that there is no other media of expression of the people that is more present in daily life.

I founded Believe 15 years ago. Before that, I had a decade of career between France and the United States, working for Vivendi Universal. I had the privilege of being at Vivendi during the J6M era, which I call the most expensive MBA in the world. I joined in early 2000 just before the Nasdaq crash and stayed until the creation of Believe. I saw the early days of the public internet. At that time, the broadband penetration rate in France was 15% in 2000, and it was 36 or 64 kbps. I illegally downloaded music on Napster. I remember the technical director telling us to stop because we were crashing the servers. We were all rebuilding our libraries of 80s and 90s songs. In 2000, it was the biggest year for CD sales, and no one had any idea what was coming with illegal downloading and iTunes. I moved to New York, worked as a lawyer, passed the bar in North Carolina and New York. I shared an apartment with friends who all quit their jobs to join startups in 1999. I saw the frenzy. I joined Vivendi's internet division in March 2000, just after the crash. My first mission was to try to undo an acquisition because the Nasdaq had crashed. We analyzed the portfolio of over a hundred companies. Some survived, like Elone and Alociné. The idea was that music would go digital. I had three simple ideas: digital music offers a better experience than physical, the ecosystem will find a way to finance production, and digital allows for more efficient artist development. We started Believe in 2005 with the idea of democratizing music distribution. We focused on artists who had no market. We built technology to ingest music and connect to platforms like Apple Music, Spotify, and YouTube. We are a technology company because we use technology to do things that were not possible without it. We have three key expertises: technology, music, and digital know-how. The long tail concept applies. We are a platform with fixed costs. We distribute music to millions of artists.

We are a tech company because we use technology to do things that were not possible without it. When people ask, I say yes, we are a tech company. We have built a platform that allows us to distribute music to millions of artists. The technology enables us to have a fixed-cost platform.

Whether you distribute ten million or fifteen million artists, your additional costs are marginal. Technology enables economies of scale, allowing us to operate in 45 countries. We still have to handle physical CDs for some artists, especially in transition markets. For example, in France, Johnny Hallyday sold 95% on CD, while Jul built his audience on YouTube and social media. This shows the coexistence of traditional and digital worlds.

Day one was around a table. I had returned to France wanting an entrepreneurial venture. I met Arnaud Chamon through a friend. He had left Sony/Universal and had a kitesurfing accident. We deconstructed the music value chain and decided to focus on artists lacking market access. I reinvested my savings, took no salary for three years. We signed distribution deals with platforms and artists. The first test was putting 500 tracks online for the Fête de la Musique 2005, generating only 30 euros but validating the model when one track became a hit.

I had some unemployment and had saved a few hundred thousand euros. I was unmarried with no kids, so it was ideal. I decided to reinvest everything into the company.

Exactly. We focus on artist relations and technology. We digitize and store music, encode for multiple platforms, and collect/distribute revenue. We also use data analytics for marketing. For example, we can track where an artist's audience is growing and target ads accordingly.

Actually, we push content to platforms. We maintain copies of all catalogs because new platforms appear constantly. We re-encode files in different formats. The technology also includes data collection from streaming services, which helps us plan campaigns.

We started by hiring a developer. I had some digital business experience. The first few years we built systems for digitization, revenue collection, and later data analytics.

Yes, I reinvested all my savings and took no salary for three years. It was a bet.

We use servers that encode and re-encode content for different platforms. We also receive streaming data in real time to guide marketing.

Exactly. The technology enables us to automate much of the work. We have three tech pillars: content ingestion, revenue collection/distribution, and data management for marketing.

Yes. For Naps, we could see his audience growing from Marseille to Paris. Data tells us when and where to promote.

Not yet. We focus on music, but the logic is similar.

Indeed. Today, algorithms prioritize artists who are highly engaged with their audience. Jul succeeds because he produces content constantly and interacts heavily. It's about artist engagement, not just songs.

No, it's more about the artist. For hip-hop artists like Jul, fans listen to the entire album. High engagement drives algorithmic promotion. The album format persists in some genres.

Yes, but for one-hit wonders, it's different. The key is regular content production.

Exactly. The traditional model of radio/TV promotion is gone. Now it's about understanding algorithms and digital marketing. Our mission is to develop artists using these new tools.

So I produce this thing, put it on YouTube, get 60 million views, it goes on TikTok, I don't need Believe, I don't need a producer, I screw them all. But they often need an intermediary to distribute everything. That's the beauty: you're no longer in a mono-offer where your only choice is to sign a record deal giving away your rights for a long time. We developed a model adapted to each artist. For example, with TuneCore, you can make your music available, we pay you 100% of royalties, you pay €50 per year per album. If you sell 2 million albums, we'll come see you to move to another service. Take Jul: he started small, sold 1,500 albums on his own, then 10-15,000, then we gave him an advance of €30-100k for a better clip, then he sold 50,000, then we helped with marketing partnerships with Apple Music, billboards in Marseille and Paris, half a million euros in marketing. Then we helped him do a concert at the Vélodrome. Our job is to help the artist reach their entire audience, whether digital, physical, or media. For Jul, we recently did a partnership with ASX for a basketball shoe, selling 20,000 pairs at €100 each in a weekend. Another example is PNL: they came to us saying they only need pre-financing for their expensive clips and distribution; they handle all the creative marketing themselves. So we offer a service adapted to their needs. The core of what we invented is not to be a mono-service but to serve artists at every stage.

Our core business is developing artists. Last year, Jul was the biggest artist in France, Ultimo in Italy (first time an artist had three albums in the top 10 in the same year), Mero in Germany. These are artists we developed from unknown to top. They either come to us directly or are signed to a label that we distribute. We don't produce; they produce themselves. We give advances for clips, but we don't own the recordings. The artist owns them. Our model is different from traditional labels where the label owns the catalog. Now, with digital, we also sign top artists from competitors because our digital expertise is stronger. For example, we're releasing the new album of Kalash Criminel, who was on a major label. We have many discussions with top artists who see that 95% of their sales are digital and our digital expertise is better. Regarding economics: 100 million streams generate about €400,000. An artist like Jul does about 850 million streams per year on streaming platforms alone. The market is growing: in Scandinavia, 50% of the population has a paid subscription; in France, only 7-8%; in the US, 20-23%. So the market will multiply by 3 in France in 10 years, and by 10 in emerging countries. It's a good time to be a local artist because local artists are growing faster than international ones. Our focus is on developing star artists in each local market.

Our values are respect, transparency, equity, expertise. I apply them to myself. When we started with Arnaud, we did a 50/50 split. He had the artist network, I had the distributor network and more experience. After about 24 months, Arnaud needed cash, so I bought his shares. He stayed as an employee because we had mechanisms for him to participate in future value creation. The hardest part is the human side. When you go from 3 people to 1,200 in 15 years, people evolve differently. Managing that is difficult. I had a conversation with an entrepreneur I admire who said he's fed up with HR issues. But it's a human adventure. My personal motto, from Tim Cook, is 'people, strategy, execution' in that order. As CEO, your first priority is to surround yourself with the right people and create the right culture. For Believe, we have a double human capital: our teams and our artists. If you don't have the right people, you won't attract the right artists. The most rewarding thing is seeing people develop, from interns to managing hundreds of millions in business.

We have three areas of expertise. First, music: our commercial teams manage relationships with artists. Out of 1,200 people, 400 are in Paris, 800 in 44 countries. They handle artist relations and partnerships with local platforms like Spotify, TikTok. Second, technology: all our tech and product teams are in Paris, developing the platform. Third, support: finance, legal, etc., also in Paris. The key to success is having strong central functions to guide local execution. For example, we have the number one artist in Estonia, and we have teams in Russia, Eastern Europe, etc.

It's roughly one-third each: top artists, middle class, and developing artists. In France, about 100 artists make the first third, a few thousand make the middle, and 30-40,000 make the developing tier. We use data to spot rising artists. We're working on technology to analyze music itself to identify potential hits even before they have data. Algorithms can detect well-constructed melodies, good vocals, etc. This helps us avoid listening to countless demos. The beauty is that music is unpredictable; a song can suddenly connect with an audience. That's why our system is healthier for developing artists than the old model.

What excites me is the human and entrepreneurial adventure. I love variety. This week, I worked on an artist wanting to release a clip denouncing police violence, on how to anticipate technological development for the next years, and tomorrow I'll work on reorganizing a team or accelerating training in Russia or China where the music industry doesn't exist. The challenge of choosing where to allocate time is difficult. I've read a lot to understand. Over 15 years, you go from doing everything yourself to delegating, to being a COO, then CEO. At our scale, success depends entirely on people. My number one responsibility is to have the right first line of management: a good CEO, good communication director, good CTO, good COO, etc. We've prioritized diversity and gender equality. So it's about having the right balance at the center and in the countries.

So the first responsibility is that. The second, linked to that, is about the men and women who work at Believe. We will ultimately succeed when we have the best teams in the world serving artist development. And as you see with TikTok—it didn't exist 18 months ago—when a phenomenon like TikTok appears, you have to reorganize as quickly as possible to retrain your entire teams. You say, 'Look, there's this thing called TikTok that works very well with young artists in certain demographics, so we'll create training modules so everyone understands how to use it as fast as possible.' The time we spend training our teams is absolutely key and fundamental to future success. So ensuring we have the right infrastructure to train our teams everywhere is key. The third key thing in the human component—something I understood later—is creating the right culture. Culture is your compass: it's both where you're going and how you're going. With a culture of respect, equity, transparency—these are values that must exist in our relationships with artists and internally. You can't ask your teams to treat artists with respect if we ourselves or our managers aren't trained to treat their own teams with respect, equity, and transparency. So that's the most important subject. We've seen clients who defined their values but then treated my collaborators like dogs at 4 AM on a Saturday—that doesn't work. Culture also emerges on its own. In my company, we discovered values we already had, some we instilled and others that blossomed on their own, like the value of courage—being able to speak up to clients, collaborators, etc. It's organic. You can't just tell people to become a certain way. The key is your choice of key managers: if they understand and share your values, they'll cascade them. You also have a communication role as a leader to constantly re-explain what's important. Discipline in execution is also crucial: making sure where you want to go is very clear, setting guides and measuring progress.

You're right. We're building models with our HR director. What I've learned over 15 years is that in a company like Believe, there is no individual success—only collective success. I'd rather be called a provincial notary than a rock star because it's about teamwork. In creative fields, the key is to combine creativity and discipline. You need a couple or trio at the head of each business unit: one creative/marketing person and an alter ego who is business-oriented. The dialogue between them creates the right team. If you only have a creative, you'll have great artists but chaos and you can't scale. If you only have a business person, it'll be well-organized but the artists won't be great. So you need both. And you need respect between different types of people—artistic people who come in at 10 AM and go to concerts at 11 PM, and developers who arrive at 7 AM and work from home at midnight. Creating complementarity and listening is particularly important in a model like ours.

Yes, it's permanent work. When you manage artists, you need strong reactivity and deal with sensitivity rather than rationality. That's a short-term time frame. Tech teams work on longer-term projects—months of investment. So when culture and mission are clear—'my job is to develop artists and labels with certain values'—that serves as a compass. But you also have artists who don't respect those values. That's a real question we're dealing with now. For example, with Tunecore, anyone can upload music and we have an obligation to distribute, like YouTube. Some content is offensive, violent, disrespectful to women. My approach is to find a balance. Believe's DNA is to give a voice to all artists—developing artists, middle-class artists, top artists. Music is the most present medium of people's expression. During COVID, people sang from their windows. On police violence, artists express themselves. In the 70s, music was sex, drugs, rock 'n' roll and moved society. So music is first a field of freedom. Our philosophy: as long as content is legal, we distribute it. If an artist brings content that risks being illegal, we explain we won't distribute it and advise against it. For example, on Black Tuesday, when many companies shut down, we said no, we'll work because 10,000 artists will upload music, including many from the black community expressing against police violence. We want that expression. But we donated all revenue from that day to an anti-racism association in the US. So we reconcile by having a legal baseline and then making choices on which top artists to sign based on their expression.

Artists are artists. We had a discussion with Romain Villen, our France CEO. Some artists live in a culture of high tension and express themselves that way with our teams. We're asking how to train our teams to handle those specific conversations so they don't take it personally and can diffuse the tension and bring the dialogue back to where we want it. That's real work. Between these important points and signing a new star artist or making a big acquisition, as CEO, I need to be involved in some. For acquisitions, always—I need to ensure the culture of the acquired company aligns with ours: service model, respect, transparency. I have initial discussions with local country heads, then the teams negotiate and integrate. For artists, I intervene indirectly—country heads come to me for advice on advance amounts or legal issues. I've never intervened in an artistic decision; that's not my role. But I meet with artist managers and label heads annually to understand their problems and how we can improve.

Our objective is to stay independent. Personally, I love what I do. We're at the very beginning of the growth curve on a market with huge investment opportunities. We've spent 15 years building the base of Believe, and we have another ten years of development. Markets are just becoming digital—France, Germany, even the US have only had mass streaming for three years with strong growth. So my goal and the management team's goal is to write that entire development phase. We want to hit a billion before even thinking about selling. But I don't think about it that way. We have investors like XAnge and 20tech in France since 2007-2008, and TCV, which invested in Netflix, Spotify, Expedia. We've always sought intelligence from investors, not just money. We've been lucky to never have to run a fundraising process—investors came to us. The value they bring is understanding rapid growth. For example, Simon Breakwell, co-founder of Expedia, gave advice on scaling commercial teams. That's invaluable.

I progress through difficulty, like everyone. Experience teaches you. When I started the company at 35, I had almost no managerial skills. Now at 50, I've learned. I read a lot—especially Harvard Business Review article series on specific topics. That helps formalize intuitions. The second learning lever is having a senior management team. You learn from daily interactions with people who have different experiences. Creating a culture of dialogue and debate is key.

Recently, I found 'Inspired' by Marty Cagan very interesting for a product-oriented company like ours. It's practically a playbook for building a product organization. It's very business-focused on the product side.

I'd say, 'Go for it, do it.' The last 15 years have been pure pleasure. Every day at the office—even now, post-COVID, starting to see people again—it's all moments of pleasure. Of course there are difficulties, problems that hit you in the face regularly. But when you have a top management team, see people develop everywhere, are in agreement with yourself on the company's values and mission, and fundamentally believe the mission is good—it's extremely satisfying. We've enabled artists who couldn't distribute before to distribute, and even improved deals for artists not with us through competitive pressure. That's rewarding.

I don't have one that comes to mind immediately. There have been many: the FBI raiding our New York office due to a security breach, artists threatening you, an artist showing up with a cast demanding cash because a dealer beat him up. Between music and technology, there's a wide variety of subjects that lead to some sleepless nights.

Thank you, Mathieu. I'm delighted. I hope your listeners learn as much as I do. I enjoy it thanks to you. See you soon.