Dominique Zgarka is the Executive Vice President at The SRG – ILS Group LLC, two Toronto based companies that merged and serve as Universal Music Group’s umbrella for its independent labels with offices in LA and Connecticut.
The music maverick has over 50 years experience and SRG – ILS is behind the current success of British reggae band UB40, whose latest album UB45 debuted at #5 on the UK Official Albums Chart.
WMV had the privilege of speaking with the top music executive from his home in Canada where he shares some unconventional wisdom about useful principles of making it in the music business.
“My story is a bit of a fairy tale, to say the least. I started a business when I was 17 years old. I invented something called a DJ record pool,” Zgarka shares.
This innovation known as the Canadian Record Pool involved a subscription service where major record companies seek out clubs and club-based DJs and get the new records to them as because they were often the first point of contact between music and consumers. Zgarka, along with his partner George Cuccuzella, quickly expanded into importing disco music from Europe, which led to the establishment of a distribution network and eventually a record label. “I signed Madonna’s first record. I signed Giorgio Moroder. I signed Grace Jones’ first record,” he recalls.
A straight talker, Zgarka thinks artists have it good now with streaming and they complain too much about the payment structures set by services like Spotify, Apple Music, Amazon Music, and YouTube. “You have so much bickering from artists on social media that Spotify, Amazon, and Apple don’t pay enough,” he told World Music Views.
Artist are not just bickering on social media, they are taking their fight to the highest office in places like the UK where over 150 artists, including Paul McCartney, Kate Bush, and Noel Gallagher, have signed a letter urging streaming platforms to pay better royalties.”For too long, streaming platforms, record labels and other internet giants have exploited performers and creators without rewarding them fairly,” an excerpt from the letter to England’s Prime Minister Boris Johnson in 2021 said.
Without referencing that particular letter, Zgarka quipped, “that’s all pure nonsense,” dismissing notions of unfair payments explaining, “Spotify and Apple, all of them, pay 70 cents on the dollar. They keep 30 percent to pay for their overheads, which is a very fair margin.”
Spotify does not pay artists directly; the company pays rights holders, which are mostly record labels and publishers. The 70% mentioned by Zgarka is split between the two.
The 2024 Billboard Canadian Power List nominee offers specific figures to illustrate how much streaming platforms pay per stream to his organization: “So in our case, that’s 70 percent, which, in the case of Spotify, is 0.003 cents per stream. It’s higher with Apple, higher with Amazon, higher with YouTube, but all around the same amount in the 0.003 to 0.007 cents range.”
Once the record and publishing companies receive their share, it is divided between the company and the artists based on their contractual agreements. “That money comes into the pot, and in our case, we take our percentage of that, and the artist gets their percentage of it,” he explains. “The artist gets the lion’s share, obviously.” Realizing he might have misspoken, he added, “Well, not obviously, but in our case, that’s how it works, it’s a very, very simple, clean deal.”
Discussing the longevity and adaptability of bands, Zgarka praises UB40 who released their first album “Signing Off,” on August 29, 1980: “This is UB45. People pass away, but they’ve been really good at finding the right artists to continue the sound and the quality.”
He attributes their sustained success to their inclusive and innovative approach to maintaining their legacy with collaborations and consistent quality. “UB40 has been great at making friends with talented artists all over the world,” he notes.
For the most part, reggae acts have a selling problem but the band is one of the most successful musical groups selling over 80 million records worldwide. Having witnessed the changes in the recording music industry over the years, the Zgarka said, “The numbers that we are doing as an industry right now are bigger than we’ve ever done in all the history of the music industry.”
The French music executive says this success is due to the hard-working artists who possess the strategic knowledge required in today’s market. “Artists have to be knowledgeable and have the right deal.” Likewise, artist who sign bad deals get the unfavorable end of the music business.
Max Romeo filed a suit against Universal Music Group to claim 47 years of unpaid royalties, that is almost as long as you have been alive.
There has always been an antagonistic relationship between artists and labels. Max Romeo, Horace Andy, Althea and Donna are just a few recent examples of artists who have filed complaints about not receiving royalties for their work. Max is suing Universal Music for $15 million and Horace told WMV that he has sought legal advice for over 40 years of uncollected royalties. Etana is also currently in litigation with VP Records for unpaid royalties.
Speaking generally Zgarka who tells Billboard that he prides himself on making good deals, told WMV the difference between a good and bad deal is the choice of legal representation. “There are artists who didn’t hire the right lawyer and got a bad deal. Well, they should have hired the proper lawyer.”
“There are artists who get blinded by thinking, ‘Oh, I’m going to go to one of these aggregators, you know, the TuneCores of the world or the DistroKids, and they’re gonna get my music on all the DSPs, and life is gonna be wonderful.’ No, it doesn’t work that way. If you don’t promote and market—which hasn’t changed in 50 years or today—if you didn’t promote or market your music, nobody would hear about it. Except today, there are 200,000 new songs a day,” he explained.
Reflecting on past practices, Dominique notes, “We didn’t have that 10, 20, 30 years ago, and we sold records for 20 dollars, not for 0.003 cents a song. So, it’s a tough market, tough competition. But if you work hard, work smart, have a proper lawyer representing you, and go through a multinational or an independent company that has proper infrastructure, it could be very, very, very, very satisfying,” Dominique said.
In 2024, there is an abundance of talent and over 100,000 songs released on DSPs everyday, which he finds exciting and promising.
“The days of being able to fool a consumer by having one or two good songs on an album and forcing them to pay 20 bucks—those days are gone. Yes, vinyl still exists, but it is a small part of the business,” Zgarka explained.
