A concerning trend: The major labels are eating everything
Why are major labels buying indie infrastructure?
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A concerning trend …
Universal Music Group just completed its acquisition of Downtown Music Group.
It’s a big deal.
It gives Universal enormous power over the music landscape, and regulators have spent over a year trying to decide whether the takeover should even be allowed.
When you dig into the details, you can see why it’s a problem.
Downtown Music is was a powerhouse of independent music, serving 4 million independent artists via its music distribution services (CDBaby, FUGA, Soundrop) and publishing administration.
All that independent infrastructure is now controlled by the world’s biggest major label.
It’s part of a worrying trend across all three majors …
The major labels are eating independent infrastructure
We mapped out some of the major labels' biggest acquisitions and investments in recent years to see just how many independent companies they’ve swallowed up.
It’s … a lot.
The prevailing narrative is that Universal is buying these companies to identify and upstream independent artists faster.
I don’t think that’s true.
This is about Universal gaining leverage over Spotify, controlling the highway that links artists to their audience, and preparing for an AI-led future.
I’ll explain why, but first, let’s go through each major label to see what they’ve been buying.
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1. Universal Music Group
Universal’s acquisition of Downtown Music gives them control over:
CDBaby - music distribution for more than 2 million artists. At one point, CDBaby was responsible for ~35% of all music distribution in the US.
FUGA - music distribution for over 3 million tracks from independent artists and labels (including Beggars, Domino, Epitaph).
Songtrust - a publishing administrator for 445,000 independent artists and 4 million songs.
Downtown Music Publishing - representing 360,000 songwriters.
DashGo - boutique music distribution for 37,000 artists.
Soundrop - Self-serve music distribution.
AdRev - Rights monetization for YouTube.
In this one acquisition, Universal dramatically increases its control over the independent music world.
What else does Universal own?
Downtown is just the latest independent company to get swallowed by the Universal machine. In the last six years, they’ve also acquired:
PIAS - One of the largest independent label groups. [Acquired 2024]
Ingrooves - Music distribution for some of the biggest independent labels (Ninja Tune, Dirty Hit, Kitsuné) [Acquired 2019]
mtheory - Independent artist management and label services.
Outdustry - Artist services in Asia and India.
Famehouse - Direct-to-fan services and digital marketing for artists.
Even if they don’t acquire companies outright, they’ll often take part-ownership via investment. Universal’s recent portfolio includes:
Stationhead - Superfan app
Weverse - Superfan app in Asia.
PEX - AI music detection software.
Chord Music Partners - Acquires legacy music IP and catalog.
Alternatively, they’ll secure strategic partnerships with startups and infrastructure providers. Recent examples include:
EVEN - Direct-to-fan platform powering J Cole and LaRussell campaigns.
Udio - Legal agreements to license artist catalog for AI training.
Splice - To co-develop AI music generation tools.
Of course, Universal is not the only major label expanding into indie infrastructure.
2. Sony Music Group
Sony has also been aggressively going after independent music distribution:
AWAL - Serves 20,000 independent artists with distribution, marketing and artist services. [Acquired in 2022]
The Orchard - Serves 26,000 independent artists and labels. [Acquired in 2015].
Sony’s strategy appears to be consolidating the mid-large independent market. AWAL and The Orchard have served large artists like Tom Misch, Little Simz, Bombay Bicycle Club.
Sony has also been acquiring independent labels and rights admin:
Spinnin’ Records - one of the biggest independent electronic labels.
Kobalt Neighboring Rights - independent performance rights collection.
And investing in independent artist tools.
Laylo - Direct-to-fan messaging.
Beatstars - Platform for independent producers to sell and license beats.
Vermillio - AI music detection.
3. Warner Music Group
Warner is the least aggressive of the three. Rather than buying independent music distribution, Warner founded the Alternative Distribution Alliance (ADA).
ADA - Music distribution with independent partner labels (SubPop, Mute, 10K, ThreeSixZero).
They’ve also invested in global distribution via local specialists:
Sua Música Group - Brazilian distribution
JetSynthesys’ Global Music Junction - India distribution
Rotana Music - Arabic music distribution.
Why do major labels want independent distribution?
The big question is why? Why are the majors scrambling to buy up music distribution companies?
The most common answer I see floated around is that major labels want faster insight into which artists are blowing up, so they can upstream them into the major label system.
I don’t think that’s true. Major labels have access to instant, transparent data on any songs and artist already.
The big problem is this:
Major labels no longer own music consumption
You probably read Joel Gouveia’s recent essay on the “Death of Spotify.”
It’s a great read but one thing from that essay bears repeating:
“For the first time in history, we (the majors) don’t control the entire means of consumption.”
Major labels used to make vinyl and record players, CDs and CD players, minidisc players, etc. They owned the music and the end-user experience.
That’s no longer true in the streaming era. Tech companies like Spotify and Apple now own the user-experience.
And in order to dictate terms and deals, the major labels need leverage over Spotify.
So … why are major labels buying independent distribution? Because it gives them more leverage and power over the DSPs.
Major labels want to control the highway on which independent music reaches Spotify, Amazon, YouTube, TikTok, etc.
Let’s explain further.
1. Major labels want more leverage over Spotify and DSPs
Universal, Sony and Warner cut the original back-room deals that defined the streaming era. They had all the catalog, power and leverage to dictate terms when Spotify was new and trying to grow.
But that’s changing.
Spotify is now entrenched among music fans, so they own and control the listener experience. Spotify has much more leverage than 20 years ago.
Not only that but, but approximately ~30% of all streams on Spotify now come from independently distributed artists. Although Universal might control the “Billions Club” of megastars, they don’t control the long-tail.
By aggressively acquiring independent distribution channels, the major labels are gaining bargaining chips.
There’s one more theory as well …
2. Positioning to capture new revenue streams from AI
It’s no secret that streaming growth is slowing, and new monetization channels are emerging.
AI music tools will be the biggest new licensing pathway for music over the next ten years. The majors are already scrambling to sign licensing deals and dictate terms with the biggest AI players (e.g. Suno and Udio). And we know that Spotify is currently preparing AI remixing tools.
The majors need leverage over these discussions.
However, major label catalog is not sufficient in this new AI world.
If AI models are only trained on major label superstars, the outputs will fall short. The best models will need to be trained on wide context and millions of independent songs to generate the richest, most authentic outputs.
The major labels can’t quickly acquire all that independent catalog. But they can gain leverage by purchasing the underlying independent infrastructure: payment rails, publishing admin, distribution channels and, crucially, attribution and fingerprint systems.
In simple terms, this is a race to control the underlying pipes and payment rails that connects artists to their audience. Not just major label artists, but millions of independent artists, too.
It’s a worrying trend that leaves fewer and fewer independent paths to releasing music.
Nobody should be surprised by this. The simplest explanation is actually that it's all about the money.
In streaming land, the only metric that matters is the proportion of *total* plays you've accounted for, so catalogue acquisition is the only winning move. Simply releasing new stuff doesn't quite have the same kick, because it isn't guaranteed that people are going to switch from listening to someone else's music to yours - if they listen to yours in addition to whatever they were already listening to, that just increases the total number of plays and lowers how much each play is worth.
Go back to website (shop) and email (direct to fan communication). Use socials and streamers for awareness only.