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Universal Music announces INgrooves acquisition
By Chris Cooke | Published on Wednesday 13 February 2019
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.
In a statement, Universal’s CFO Boyd Muir says: “I’m THRILLED to advance UMG’s long-standing relationship with INgrooves, a company we already view as a member of our extended family. The continued success of the indie community is vital to the health of our industry, and through our investment in INgrooves, we will strengthen the services we can offer to independent artists and entrepreneurs. I’m pleased to welcome Bob and his team to UMG and I’m looking forward to growing INgrooves together”.
Roback, meanwhile, adds: “This acquisition by UMG represents the very best possible outcome for INgrooves, our employees and our artist and label partners. Our mission at INgrooves has always been to provide our clients with the very best services and maximise the value of their music. With UMG, we are gaining the resources, global reach and technology to take those efforts to another level”.
Within the indie community, some labels see the majors pushing ever more into distribution as a bad thing, pointing out that those majors count the catalogues they distribute when calculating market share. And higher market share can help a major secure better deals in the digital domain, the benefits of which are not always passed back to the distributed labels.
Whether any of INgrooves’ clients will be concerned about the acquisition remains to be seen, although most of the indie labels who do concern themselves about such things probably already had a problem with Universal’s minority stake in the company.
