Utopia Music acquires leading British physical distributor Cinram Novum

LONDON — Swiss technology company Utopia Music is making further inroads into the record industry with the acquisition of UK brick-and-mortar distributor Cinram Novum, which provides warehousing, delivery and distribution services to a range of labels including Universal Music Group, Sony Music Entertainment and PIAS.

Terms were not disclosed for the deal, which was made through Utopia’s UK subsidiary Utopia Distribution Services Limited. The acquisition marks a significant expansion of the company’s fast-growing music distribution business.

In January, Utopia acquired Proper Music Group, the UK’s leading independent physical music distributor, providing distribution services to more than 1,000 indie labels and service companies and counting Rough Trade, HMV and supermarkets Tesco, Morrisons and Sainsbury’s among its retail clients. Proper also handles “dropship fulfillment” — meaning it stocks and ships vinyl records and CDs directly to customers — on behalf of Believe, The Orchard and Amazon.

In line with the acquisition of Proper, Utopia launched its own dedicated Distribution Services unit at the beginning of the year, providing independent and major labels with a large suite of physical and digital services, including distribution, sales, production and marketing.

Utopia followed the real deal in February with the acquisition of Absolute Label Services, a UK-based distribution and service provider for independent artists and record labels, also for an undisclosed sum.

Based in Aylesbury, Buckinghamshire (approx. 60 miles outside central London), Cinram Novum is one of the UK’s leading physical home entertainment suppliers, operating a 350,000 sq ft warehouse and distribution facility. However, the business has been hit hard by the decline in physical music and film DVD sales and went into administration in 2017, after which it was acquired by Patriot Group Investments.

Recent years have seen a continued decline in the popularity of physical music purchases in the UK, although this trend reversed in 2021 when sales of physical formats grew by 14.6% year-on-year to just under £241m (£277m dollars), according to data from the British brand trade body BPI.

The BPI credited the ongoing resurgence in vinyl sales and the continued popularity of the CD – fueled by blockbuster releases by ABBA, Ed Sheeran and Adele — in driving the increase in physical format revenue. Vinyl sales last year grew 34% year-on-year to £116 million ($133 million) and CD sales rose 1.4% to £117 million ($134 million), the first growth for the format in four years.

Despite stronger-than-expected sales, Cinram Novum continued to struggle financially, with Utopia’s buyout saving the 40-year-old company from insolvency and securing around 300 jobs.

“The loss of Cinram Novum would have been damaging to the entire UK music industry, resulting in financial loss and disruption to labels, retailers, artists and their fans,” says Roberto NeriUtopia Music’s operations manager.

“Through this acquisition,” says Neri, “our intention is that Utopia can secure Cinram’s future.”

Founded in 2016 and headquartered in the Swiss city of Zug, Utopia Music has embarked on a busy multi-million dollar acquisition spree over the past 18 months as it grows its global music footprint.

In addition to buying Proper and Absolute Label Services, recent deals include buying music technology company Musimap last September and Lyric Financial, a Nashville-based provider of royalty-backed cash advances, in November.

In December, Utopia added US music industry directory ROSTR and Austrian-based music data analytics platform ForTunes. At the same time, Utopia launched a new creative services business unit. Other acquisitions the company has completed this year include a deal for Liverpool-based independent publisher Sentric Music Group.


amritabazar.com

Related Posts