Sony's Orchard Scoops Up Pair of Top European Distributors; Merlin Reacts

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The Orchard is growing its global footprint with the acquisition of leading European distributors Finetunes and Phonofile in a deal that the Sony-owned company describes as a ‘win-win' for all parties.

Under the terms of the deal, Germany-based Finetunes and Norway's Phonofile will each become wholly owned subsidiaries of The Orchard, which this year celebrates its 20th anniversary. Welcoming the two new additions, The Orchard CEO Brad Navin said the acquisitions "greatly enhances" the distributor's local representation in two of Europe's key digital markets.

"In joining together, we believe we have an exciting opportunity to provide even greater levels of service and global reach to our local clients," he went on to say in a statement, calling both teams "extremely knowledgeable and passionate."

"We look forward to driving growth opportunities for the expanded client base both at home and abroad," added Manlio Celotti, managing director of The Orchard Europe.

Founded by Oke Göttlich and Henning Thiess in 2003, Finetunes represents more than 2,500 direct and indirect licensors worldwide, has a database of more than 1 million tracks and operates offices in the U.K., U.S., France and Germany, where the company is headquartered. Phonofile AS was formed in 1999 and is the leading music aggregator in the Nordic region, representing over 1,000 record labels and with offices in New York, London, Oslo, Gothenburg and Copenhagen.

Last year, Finetunes and Phonofile merged under the umbrella of SendR -- a holding company predominantly owned by Göttlich and Thiess that also includes FONO (the Norwegian independent record labels' association) and NOPA (the Norwegian association for music composers and lyricists) among its main shareholders.

In line with The Orchard's acquisition, labels distributed by Finetunes and Phonofile will have access to company's services in over 25 global territories, including physical sales and distribution, marketing, promotion, sync licensing and royalty collection processing.

"Today is a big day for our finetunes family," commented founder Oke Göttlich. "We feel confident that our labels will be best positioned for a healthy and prosperous future alongside The Orchard, who is dedicated to serving independents on a global level."

However, not everyone welcomed the deal, with Merlin CEO Charles Caldas saying that the acquisition "is not positive news for the indie labels and artists affected by this deal."

"Merlin has long been vocal about our concerns that the majors, via their faux-indie imprints, are land-grabbing independents rights in order to bolster their market shares and use the value of those indie artists to extract disproportionate value from the market in their negotiations with digital services," Caldas went on to say, hitting out at The Orchard, which was wholly acquired by Sony Music Entertainment in March 2015.

"That value flows only one way," Caldas continued, "and it is not to the indie labels and their artists who actually create that value."