Sony Merges The Orchard and Red Essential Into Single Artist/Label Services Division

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Sony Music U.K. is to merge its two artist and label services divisions Red Essential and The Orchard into one amalgamated company. Based in central London, the new enterprise will take The Orchard name and be led by Red Essential co-managing directors Ian Dutt and Mike Chadwick.

Offering independent clients a range of services including physical and digital sales, marketing, promotion, synch licensing and neighbouring rights in more than 30 international markets, the company counts Run The Jewels, Joey BadA$$, Anderson .Paak and British grime stars Skepta and Giggs among its current roster of clients. Label partners number Cooking Vinyl, Cherry Red, Snapper, Red Bull Records, Demon, Thirty Tigers and the London Symphony Orchestra.

According to figures from labels trade body BPI and Official Charts Company data, Sony Music accounted for 11.4 percent market share of the U.K. albums distribution market in 2016, with The Orchard taking 1.9 percent. Market leader Sony DADC, which handles Universal and Sony's physical product, distributed eight of the year's top 10 biggest-selling albums, accounting for 35.2 percent of the market.

"Separately, Red Essential and The Orchard have shown they are two great, innovative artist-focused companies," said Sony Music U.K. and Ireland chairman and CEO Jason Iley in a statement. "By partnering, and with the backing of Sony Music globally, the merged business will continue to provide support and benefits to independent artists and labels alike that is unparalleled in the U.K."

"There is no other company that comes close to what we offer," added managing directors Dutt and Chadwick, who said that their "team's expertise and first-class business relationships, combined with the global sales and marketing network and cutting-edge technology, gives our clients everything they need to maximize their success."

"Combining forces in the U.K. with Red Essential to create a single company with an incredible roster of independent artists and labels allows all of our clients to benefit from market strength and a strong competitive advantage, both at home and abroad," agreed Colleen Theis, chief operating officer at The Orchard, which was founded in 1997 by Richard Gottehrer and Scott Cohen and wholly acquired by Sony Music Entertainment in 2015.

Red Essential, based in Acton, West London, was formed just over a year ago, when Sony Music U.K.'s artist and label services division Red acquired Essential Music and Marketing from The Cooking Vinyl Group.

Last month, The Orchard -- which this year celebrates its 20th birthday -- acquired two of Europe's leading independent distributors, Germany-based Finetunes and Norway's Phonofile, to significantly expand its global footprint.

While The Orchard called the deal a 'win-win' for all parties, Merlin CEO Charles Caldas called it "not positive news for the indie labels and artists affected" and expressed concern about "majors, via their faux-indie imprints… land-grabbing independents rights in order to bolster their market shares."

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