UMG’s Virgin to acquire Downtown Music, CD Baby, Songtrust
Universal Music Group’ Virgin to acquire Downtown Music Holdings, significantly expanding its independent music footprint, for $775 million.
UMG’s Virgin to acquire Downtown Music, CD Baby, Songtrust
Downtown will become part of Virgin Music Group, UMG’s global independent music division. The sale includes Downtown-owned CD Baby, Songtrust, FUGA, Downtown Artist & Label Services, Curve Royalties and Downtown Music Publishing.
The acquisition by UMG comes at a challenging time for DIY and independent music services firms and distributors. Streamers are changing their payment structures and eliminating compensation for the smallest artists. Also, many creators are failing to gain lasting traction due to an oversaturated market.
Potential Conflicts
The acquisition of such a broad independent music portfolio by UMG comes with some unusual potential conflicts.
Most notably, Downtown’s FUGA serves as the B2B conduit to Spotify and other DSPs for more than 1000 rightsholders including staunchly independent music companies like Armada, Beggars, Bandlab, Domino, Epitaph and Redeye Distribution.
UMG has recently sued TuneCore, one of CD Baby’s top competitors, alleging $500 million in copyright infringement.
Indie Opposition
Independent music trade groups are sure to line up in opposition to the acquisition. Minutes after the news broke, the UK’s Association Of Independent Music (AIM) issued this statement:
“The potential sale of Downtown Music – including FUGA, a longstanding favourite with independents – to Universal’s Virgin Music Group is more concerning news for the global independent music community. Following on from the recent PIAS/Integral acquisition, it plays into a continuing trend towards over-consolidation and reduction of independent routes to market. It is vital to uphold a true choice of partners for artists and labels and ensure that negotiating power does not become unbalanced. Only in this way can homegrown artists and businesses access fair deals, investment and growth.”
Bruce Houghton is the Founder and Editor of Hypebot, a Senior Advisor at Bandsintown, President of the Skyline Artists Agency, and a Berklee College Of Music professor.
