Merlin Calls Out Orchard

Global independent label rights organisation Merlin has lashed out at The Orchard following its acquisition of two independent distributors.

Germany’s Finetunes and Norweigan Company Phonofile will become wholly owned subsidiaries of The Orchard, which is in turn owned by major label Sony.

Labels distributed by the companies will receive access to The Orchard’s services in over 25 territories worldwide, including physical sales and distribution, global digital marketing, playlist promotion, digital advertising, synch licensing, video services and more.

CEO of The Orchard Brad Navin said: “We’re honored to welcome Finetunes and Phonofile to The Orchard family. Their addition greatly enhances our local representation in two of Europe’s key digital entertainment markets. Both teams are extremely knowledgeable and passionate, and they do an excellent job representing some of the most prestigious and important independent labels in Germany and the Nordics respectively. In joining together, we believe we have an exciting opportunity to provide even greater levels of service and global reach to our local clients”.

However, Merlin CEO Charles Caldas spoke out swiftly and incisively against the acquisitions and the potential negative impact on the market of so-called “faux indie imprints”, saying: “This 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. That value flows only one way, and it is not to the indie labels and their artists who actually create that value”.

Of course, major labels providing distribution and marketing services to indie labels and artists is nothing new- we need only look to Sony Red Essential or Universal’s Caroline, label service offshoots that perform this exact function. For some labels, it’s a mechanism for benefiting from a major’s global reach while retaining creative control.

The concerns of Caldas are far from unfounded, particularly when considering the negotiating position that majors hold with streaming services and how much market share plays into this.
Essentially, the problem is the majors counting the recordings they distribute on behalf of other rights holders as also being their part of the pie, effectively distorting their market position to get more favourable terms.