Virgin Music Group, based in Beverly Hills, announced on Monday that it will acquire Downtown Music Holdings for $775 million, expanding its influence in the independent music sector.
As the independent music division of Universal Music Group, Virgin Music Group highlighted that this acquisition of the New York-based publishing and royalties company will enhance its service offerings to clients. These include improvements in physical and digital distribution, business intelligence, and royalties and rights management.
“Justin Kalifowitz, Andrew Bergman and Pieter Van Rijn have built Downtown Music into one of the most diversified and respected operations in the world,” said JT Myers, Co-CEO, Virgin Music Group. His fellow co-CEO Nat Pastor added, “We aren’t just making an acquisition; this is an investment into the global independent music ecosystem and a commitment to nurture current and future creators and entrepreneurs with world-class support, services, and capabilities they require at any phase of their careers.”
Downtown Music represents over 50 million songs and 4 million creators across at least 145 countries. With approximately 600 employees worldwide, the company’s core divisions include publishing, distribution, artist and label services, and royalties and financial services.
Downtown Music Holdings founder Justin Kalifowitz said, “On behalf of Andrew, Pieter and myself, it is very exciting for Downtown to be joining forces with Virgin Music,”. “This is a tremendous recognition of the importance and vitality of independent music, and the value that our company brings to its clients every day. Downtown was established with the belief that artists and entrepreneurs everywhere and at every stage are entitled to the same tools and opportunities to succeed. We have no doubt that the breadth and high level of service Downtown provides to its clients will be strengthened working with Nat, JT and the whole Virgin Music team.”
While Downtown Music, particularly through its distribution arm FUGA and CDBaby, has long been one of the largest independent players in the music industry, the acquisition raises concerns. It’s unsettling to witness what was once an independent entity becoming part of the major label ecosystem.