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Business News Deals Labels & Publishers
Utopia Music announces new deal to enhance its offering in physical distribution
By Chris Cooke | Published on Tuesday 16 May 2023
The music distribution division of Utopia Music has announced a new partnership with logistics firm DP World that involves the opening of a new “state-of-the-art, specifically designed warehouse” in the Oxfordshire town of Bicester to facilitate the distribution of physical music and video products.
Although Utopia’s core business is in the digital and data domain – it dubbing itself a “music fintech company” – the firm got itself established in physical distribution in the UK market via the 2022 acquisition of the Proper Music Group. Later the same year it acquired another UK distributor, Cinram, saying at the time that that deal had helped stop the Cinram company from becoming insolvent.
The new distribution hub in Bicester will basically replace the warehouse in nearby Aylesbury that came with Cinram acquisition. Utopia says in an official statement on the new deal that “stock will be moving from UDS’s current warehouse in Aylesbury – which was inherited from Cinram when Utopia acquired its assets in 2022 – to the new facility across the summer”.
Although streaming now accounts for two thirds of recorded music revenues in the UK, the sale of CDs and vinyl albums last year still accounted for 16% of the market according to figures from trade group BPI, and vinyl sales are still growing year on year.
So, while they now generate a minority of revenues, plenty of labels still see physical products as an important part of the business, hence why there is still an opportunity for the small number of players still active in the physical distribution domain.
Alluding to all that, Drew Hill – MD at Proper and VP Of Distribution Services for Utopia Music – says: “With physical music showing its resilience over and over again in recent times, we are delighted to be doubling down on our commitment to the sector with this £100m+ commitment. With state-of-the-art facilities, robotics and increased capacity at the new warehouse, we can’t wait to capitalise on this expansion for both our clients and customers”.
Rashid Abdulla, CEO and MD Europe for DP World, adds: “This contract is a significant step in our journey as we expand our logistics offerings in the UK and we are excited about working with Utopia in a fast-growing industry”.
“We see this as a great opportunity”, he goes on, “to realise our investment in the best technological innovations to build agile, streamlined, and sustainable supply chain solutions that can respond to ever-changing challenges whilst minimising costs and reducing environmental impact”.
Despite the upbeat announcements on the physical distribution side of its operations, Utopia’s core digital and data business has faced several challenges in the past year of course.
That has resulted in its workforce being downsized, plus some of the companies it bought during a previous acquisition spree have been sold on, most notably Sentric Music, which was acquired by Believe in March.
