Townsend Music, a UK-based distributor and direct-to-consumer retailer, has been acquired by Artone, a Dutch portfolio company serving the physical music market. Terms of the deal were not disclosed.
Founder of Townsend Music Steve Bamber called the acquisition “a clear opportunity to rapidly advance its European expansion strategy, with Artone's established sales, distribution and manufacturing facilities already in place.”
Artone can quickly scale and achieve its goal of becoming a global D2C company, according to sales manager Bruce McKenzie. “Artone's suite of services from vinyl manufacturing, EU physical distribution and label services offer us perfect synergy to offer our D2C and super-fan customers a highly premium service,” he said in a statement.
Artone was created in 2022 from the merger of Bertus Distribution and Record Industry, a vinyl pressing plant based in Haarlem, Netherlands. The companies' portfolio also includes Sound Factory, which provides artists and labels with solutions to sell exclusive content directly to consumers. two labels that release music in physical formats, Music on Vinyl and Music on CD. and V2 Benelux, which provides label services in the Netherlands, Belgium, France and Germany.
“The acquisition is another welcome step in the continued expansion of Artone's service portfolio and gives us a presence in the UK market,” CEO Jan Willem Kaasschieter he said in a statement. “This acquisition strengthens our position as a global leader in physical music distribution. We are excited about the opportunities this will bring and look forward to driving the future of physical music together, further developing global reach and innovative solutions to benefit the music industry.”
Physical music sales continue to show strong growth as streaming takes more of the global market. In the UK, vinyl sales rose 13.5% and CD sales improved 3.2% in the first half of 2024, according to the Entertainment Retailers' Association.
With vinyl sales continuing to climb and streaming growth slowing, the music industry is focusing more on reaching “superfans” who are willing to pay more for premium experiences and tangible products. The untapped opportunity to monetize superfans was a key talking point at Universal Music Group's Capital Markets Day presentation on Tuesday (September 17). “We're creating and monetizing new ways to meet superfans' demand for products, experiences and access that bring them closer to the music and artists they love,” said CEO Lucian Grange.
CEO of Warner Music Group Robert Kyncl he has also made superfans a priority during his tenure. “One of the most important things is to find a direct relationship with the most valuable fans,” Kyncl said at the Morgan Stanley Technology, Media and Telecommunications Conference on March 6. “Because it's not only important to generate revenue and a new revenue stream, but it's also important to launch new music, which is the core of what we do.”
Effectively reaching superfans could be a profitable endeavor for record labels. In its latest “Music in the Air” report, Goldman Sachs analysts put the global superfan steerable market at $4.5 billion—almost 16% of the $28.6 billion recorded music market in 2023, according to the IFPI. Much of that revenue could come from the high prices and high-value offerings of music subscription services that exceed the current premium subscription level.
Physical goods are a proven way to connect with superfans. Market research firm MusicWatch found that 20% of music fans in the US are superfans for their favorite artists who go to concerts, buy merchandise and albums, and would be willing to spend more for VIP experiences from the artist. At the same time, more superfan sales come from the types of direct-to-consumer stores that Townsend offers. In the first half of 2023, direct-to-consumer US sales tracked by Luminate were up 20% year-over-year.
from our partners at https://www.billboard.com/pro/artone-acquires-townsend-music/
