The strategic reason for the acquisition is rooted in the nature of digital distribution. There are no one-trick ponies in distribution. Digital distribution itself offers little differentiation from one provider to another. As a result, companies have diversified to both generate additional revenue and provide better overall service. Today a distributor offers everything from physical manufacturing and distribution to synchronization and marketing services.
The creation of these one-stop shops has led to numerous acquisitions in recent years. Just this week, YouTube administration company AdRev announced its acquisition of digital distributor DashGo. Earlier this year, the Orchard has bolstered its label services with the acquisitions of French Kiss Label Group and added digital content with its acquisition of BalconyTV. In earlier years, acquisitions of IODA Distribution and IRIS Distribution (by The Orchard), Fontana Distribution (by INgrooves) and CD Baby (by Disc Makers) consolidated the distribution business.
Founded in 2005, TuneCore has added numerous, complementary services to its basic distribution business. A publishing administration division was launched in 2011 with the hire of Jamie Purpora, the former evp of Music Publishing Administration at Bug Music Publishing. Two months ago, TuneCore launched YouTube Money, a service that administers rights and royalties for YouTube.
TuneCore has also used partnerships to build its suite of artist services. One recent example is TuneCore Smart Tracks, a service powered by SoundOut that provides detailed reviews of clients' music for fees ranging from $15 to $115 per song. A partnership with music-focused website builder Bandzoogle launched in June.
The addition of DropKloud fits with the TuneCore mission, says Frederic in a statement, “Our mission of providing independent artists with innovative services that don’t exist today is completely in-line with the TuneCore philosophy.”