Universal Music yesterday announced it was acquiring independent distribution company INgrooves in a deal which will significantly boost the mega-major's label services business. It's the latest move by a major to increase its role in the distribution and marketing of music that is actually being released by other entities, either independent labels or artist-owned companies.
There has been a link between Universal and INgrooves for quite some time, with the major already having a small minority stake in the distribution firm. Universal has also utilised INgrooves' digital distribution services and, in 2012, sold it Fontana Distribution.
The Fontana deal saw INgrooves move into physical as well as digital music distribution. It also seemed to suggest that Universal wanted to downsize its indie label distribution business Stateside, though after its subsequent acquisition of the EMI record company, it again expanded its label services operations under the latter company's Caroline brand.
All three majors have been growing their distribution and label services businesses in recent years, Warner via its ADA division, and Sony through an assortment of acquisitions, most of which have since been merged into its main services company The Orchard. Given that general trend, when key INgrooves investor Shamrock Capital let it be known it was keen to sell, Universal seemed like an obvious buyer.
Confirming the deal yesterday, Universal said that INgrooves will remain a standalone division led by its current CEO Bob Roback. Though there will be a "strategic partnership" with the aforementioned Caroline International, which will – and I quote – "form a robust platform for distribution, marketing and label and artist services throughout the world". Fun stuff.
Posted on: 14/02/2019Categories: News from CMU Online
