Downtown Music Holdings, the parent company of Downtown Music Publishing and Songtrust, is buying distributor and music/tech services company FUGA, for an undisclosed amount.
The deal comes just 10 months after Downtown made a splash with the acquisition of AVL Digital Group, whose subsidiaries included CD Baby, AdRev, DashGo and Soundrop.
AVL is the entity making the acquisition of FUGA, which means that the latter will now be a sister company of CD Baby under the AVL umbrella. Downtown says that FUGA will “continue to function as a standalone business” within the group.
Downtown is also promising “expanded resources, infrastructure and global scale” for FUGA and its clients, who number more than 500 labels, distributors, artist platforms and other rightsholders.
“Following our acquisition of AVL, integrating FUGA is a natural next step for Downtown in developing businesses that support a more equitable and innovative music ecosystem,” said Downtown Music Holdings CEO Justin Kalifowitz in a statement.
“This acquisition will give FUGA the backing to achieve our global ambitions in this space so we can continue serving the independent music community, developing our service offering and improving our technology,” added FUGA CEO Pieter van Rijn.
The backdrop to this deal is continued consolidation of the music distribution sector. Much of that activity has come from major labels building their own in-house distributors to work with independent labels and artists, or buying existing companies (Universal Music and Ingrooves, Sony Music and The Orchard for example).
Buying CD Baby and FUGA within the space of 10 months is a powerful statement of intent by Downtown Music Holdings that it intends to play in that space against the major music companies, as part of its wider “full-stack” strategy.
FUGA and CD Baby certainly have some overlap in their businesses, but also key points of difference – note Spotify’s classification of CD Baby as one of its ‘preferred’ artist distributors, while FUGA is one of its ‘preferred’ label distributors – and also a recommended delivery platform.
Songtrust, CD Baby and FUGA have been partners in the past too. For example, in 2017 they teamed up (also with Canadian collecting society SOCAN and its MediaNet subsidiary) to work on the pilot of blockchain startup Dot Blockchain (since renamed as Verifi Media).
FUGA’s independent-label clients include Domino, Ultra, Tommy Boy Entertainment, Epitaph Records, Mom + Pop, mtheory, Monstercat and Curb, as well as popular esports game League of Legends’ publisher Riot Games. The company’s ‘FUGA platform’ manages 5.5m tracks for clients.
In July 2019, FUGA also acquired rights-management company Songspace, with its technology for managing songwriting and publishing metadata and assets. Downtown Music Publishing was one of that company’s clients.