Sony Merges RED Into The Orchard: What the Music Giant's Latest Consolidation Means for Indie Labels

Brad Navin, CEO of The Orchard on March 26, 2015 at The Orchard's New York ofiice.

Guerin Blask

CEO Brad Navin will continue to helm the super-charged Orchard.

Sony Music Entertainment, which owns The Orchard and RED, two of the three largest independent distributors in the U.S., will merge the two into one global company operating under the Orchard brand. This move comes on the heels of the announcement last week that Essential, the U.K. distributor Sony bought last year, had been merged into The Orchard, along with an earlier announcement that two other acquired indie distributors, Germany-based Finetunes and Norway's Phonofile, had been merged into The Orchard.

The super-charged Orchard, which will continue to be helmed by CEO Brad Navin, will have over 300 employees in 30 offices around the world. It'll also have about $500 million in revenue, which would make it the largest indie distributor in the world. In the U.S., the company's market share now will reach about 6 percent and have about $350 million in revenue. Its distributed labels will number a few thousand, including Thirty Tigers, Metal Blade, Som Livre, Red Bull Records, Mom and Pop, Nuclear Blast, Frontiers Music Srl, Cosmos Music, Frenchkiss Records, Relapse Records, Sugar Music, Gerencia 360, Tropisounds, and Premium Latin. 

The artists it distributes include Joey BadA$$, Slayer, Daya, Kelsea Ballerini, Flume, Skepta, Diet Cig, OMD, J Alvarez, Negramaro, Jorge & Mateus and Allman Brown.

"Our newly merged company is unique in structure, scale and reach," Navin said in a statement. "Coming together as one company that is both truly global and locally-focused will allow us to take the service we provide to our artist and label partners to the next level. The Orchard is the only global comprehensive digital and physical distribution platform with its own delivery, sales, distribution and reporting systems built specifically for independent clients. With a single deal clients have the ability to deliver their music to every leading global and local digital and physical retailer and reach music fans around the world."

While such mergers generally occur to yield cost savings, Sony Music executives say this union will not reduce headcount, and is all about pursuing growth. Among the RED senior staff moving over to The Orchard will be Alan Becker, senior VP of product development and A&R, who will report to senior VP of content and operations Scott Ambrose Reilly; Mary Ashely Johnson, VP of sales, reporting to senior VP of global account management Cat Kredich; and Liz Snair, VP of label management reporting to senior VP of global label management Jaclyn Bertsch. The corresponding team for each area will also be moving over from RED to The Orchard, with the RED staffers mainly concentrating on the company's U.S. business. 

Some RED labels told Billboard they welcome the change, especially since familiar faces like long-time RED staffer Becker will now be a part of The Orchard team.

In Europe, key senior staffers include MDs Ian Dutt and Mike Chadwick, who head up The Orchard's U.K. office and MD Manlio Celotti, with all three reporting to Orchard COO Colleen Theis.

Meanwhile, RED president Bob Morelli will slide over to head up RED MUSIC, which will be a newly established stand-alone, separate entity consisting of departments spun off from RED's distribution operation, including  RAL, RED Affiliated Labels, and 'Stache Media. RED MUSIC will offer  label services, including marketing and radio promotion, to indie labels as well as shepherd Sony joint ventures with artist-owned labels and indie labels.

Both Navin and Morelli will continue to report to Sony Music Entertainment president of global digital business & U.S. sales Dennis Kooker. The RED distribution staff will move into The Orchard office while RED MUSIC will stay in the Red offices in New York.

In uniting its indie distribution companies and acquisitions under The Orchard brand, Sony is creating a "comprehensive global and physical value proposition" for its indie label partners, and can provide the full range of label and artist marketing, sales and distribution services across all formats, platforms and territories, Sony executives say. They add that they are giving indie labels a single point of entry into a global distribution system with an end-to-end solution through the entire supply chain to digital services and retailers around the world.

As part of the offering, The Orchard, celebrating its 20th anniversary, also provides corresponding reporting capabilities of all transactions delivered through the company's integrated reporting system, dubbed The Orchard Workstation, that will help indie labels track all aspects of their business, all the way through to providing royalty reporting and payments to artists and songwriters. The Orchard's systems and tools allow labels "to drive efficiency and revenue" Sony executives say, by providing  source of stream analysis, physical and digital catalogue management, and integrated data feeds to the RoyaltyShare artist royalty accounting platform, which The Orchard acquired in 2015. It allows labels to view activity by project, territory, service, and source of stream over any period of time.

Beyond royalty services and real-time data analytics on sales and streaming activities, the system also provides automated UGC claiming, interactive marketing, brand development, digital advertising, synch licensing and performance rights collections. Further, The Orchard Workstation is available in 10 languages and issues payment in local currencies.

Over at RED MUSIC, Morelli says he will aggressively grow that operation's business, including looking to create more joint ventures. Among the current joint-venture imprints it provides with  and provides with release planning, marketing and radio promotion are Disruptor Records, which is a joint venture between Sony and Chainsmokers manager Adam Alpert; Triple Tigers, a joint venture between Sony, Thirty Tigers and Triple 8 Management. Furthermore, RED Music will offer its marketing and promotion services to The Orchard indie label roster, the same way it had been providing those services to some of the RED label roster.

Besides Morelli, the RED senior staff includes Tony Bruno, GM; Danny Buch, senior VP of promotion; Richard Nash, senior VP of Urban promotion; Allison Moore, VP of marketing; and Mike Kahn, VP of finance.

"For our label and artist partners in the U.S., we are significantly multiplying the levels of quality service we provide with these exciting new changes," Morelli said in a statement. "Not only will distribution clients now enjoy unmatched global reach as part of The Orchard under Brad Navin, but also our marketing and label services clients in the U.S. will now receive dedicated attention from the new RED MUSIC to make sure their releases are receiving highly customized solutions for the best possible profile in the marketplace. Taken all together we think this is a win-win for clients."

Tagged