Sometimes consolidation is a good thing, and that certainly looks like the case with Sony Music folding its RED distribution into its Orchard operation. The move is being made in the name of efficiency, and no jobs will be lost in the transition, which is unusual. This is actually happening on a worldwide basis as Sony is folding all of its ancillary distribution arms into The Orchard.
The company is now the largest independent distributor in the world, with over 300 employees and offices in 30 countries around the globe. It takes in around $500 million ($350 million of that in the U.S.) and owns a full 6% of the market.
That being said, RED isn’t going away in the US market, just changing its corporate mission. It’s being rebranded as RED Music and will now be a dedicated full-service marketing and label services company that provides marketing, promotion, product management and label services support to its existing clients, regardless of their distribution partners.
Label services are increasingly important to indie artists, management and labels. Instead of signing a deal with a major label, it’s sometimes better for an artist to buy all the same services (except for the label investment) on an a la carte basis if and when they’re needed. This new strategy is especially useful for an artist who has built a career independently and wants to remain free of label involvement, yet have many of the same benefits of being on a label.
All in all, The Orchard absorption of RED doesn’t seem to have a downside, which is an unusually pleasant surprise. Labels will still have the same point person to deal deal with, and no services appear to be cut or changed. Sony has a more efficient operation that will help its bottom line, so at least for now, everybody wins.