TWO VIRGINS: Virgin’s new co-CEOs,
Nat Pastor and
JT Myers, are in the process of wrapping their arms around a new global business that encompasses various distribution platforms and services, and in the interim are having success with various
UMG labels via the
Ingrooves platform, which is the back end for some projects released in conjunction with
Republic and
Interscope. The old Virgin model, which was part of
Capitol Music Group, saw little to no action from either House
Lipman or House
Janick because of the ultracompetitive nature of the three major UMG labels.
Capitol retains an ongoing financial and marketshare interest in those acts that were signed to Virgin when it was a component of CMG.
Republic and IGA have seen some real successes with Ingrooves, including
Geffen’s
BTS,
Jimin,
Agust D (BIGHIT) and
Seventeen (
Pledis) and
JYP/
Imperial/Republic’s
TOMORROW X TOGETHER,
Twice and
Stray Kids. Now that Virgin is agnostic, it should be a smooth transition for both the East Coast and West Coast powerhouses.
Now
Virgin Music has what looks like a rocket with singer-songwriter
David Kushner. His “Daylight” is #1 on Spotify’s U.K. chart and Top 5 in Germany, Poland, Belgium, The Netherlands and Scandinavia. The song is #6 on the Spot’s global chart as of this writing. It appears to have broken in Europe behind the artist’s tour in early April. He’s repped for live by
Wasserman. Virgin Music Label & Services President
Jacqueline Saturn’s hands are on the controls here.
CAROLINE GOES WEST: Label services at Universal had hitherto gone through
Fontana, which was sold to Ingrooves in 2012. In the wake of the
EMI acquisition, then-
Capitol Music Group boss
Steve Barnett consolidated indie operations under the
Caroline banner. Its leaders reported to
Michelle Jubelirer. In 2013 both
Caroline International and an indie Nashville wing were launched. Two years later, Caroline was relocated from NYC to the Tower.
CMG’s indie wing enjoyed partnerships with
ATO,
Quality Control,
10K,
Photo Finish and
Fader, among others, and did good business with the likes of
NF,
Alabama Shakes,
Five Finger Death Punch,
NCT 127 and
SuperM.
When the new
Virgin Music Group was announced, Ingrooves (acquired by Uni in 2019), Pastor and Myers’
Mtheory, Caroline and the existing Virgin Music were all subsumed into the new indie superstructure, over which Pastor and Myers preside.
BOLT-ON FROM THE BLUE: Having worked effectively with erstwhile
Sony indie hub
RED during his years at
Epic and
Columbia, Barnett was memorably accused of “bolting on” marketshare when he used Caroline in an attempt to surpass Columbia in overall share by picking up between a half point and a point and a half back in the day. It looks to have had the unintended consequence of igniting a fire at Sony's
The Orchard, which made that
Brad Navin-led distribution unit one of the most successful endeavors of Sony’s global business.
Sony became a majority owner in 2012. The Orchard was merged with RED in 2019. It has grown in marketshare from 2.2 in 2015 to a powerhouse 7.3 YTD, led by the juggernaut known as
Bad Bunny (whose new single has quickly flown to #2 on
Spotify's global chart), streaming monster
Bizarrap and new breakout
Peso Pluma. The Orchard also had big success with early releases by BTS. The company continues to capture breakout acts from around the world—notably South Korea, Mexico, Puerto Rico, Argentina and Germany—by successfully mining the data. It now holds a giant share of the Latin music business.
Sony completed its acquisition of The Orchard in 2015. It was, of course, founded by industry veteran
Richard Gottehrer, whose impressive CV includes co-founding
Sire with the late, great
Seymour Stein, and
Scott Cohen. The company got into digital distro in 2003 as
iTunes was taking hold and was one of
YouTube’s first monetization partners.
A PIECE OF THE ACTION: Not so long ago, the distribution deals (with various additional charges for services) that now figure prominently in the major-label playbook weren’t considered to be the best business practice, given their smaller profit margins. But the current conventional wisdom holds that it’s better to get a smaller piece of something with a modest investment—and if that something gets really big, potential service charges to go along with that piece can add significant cash to the bottom line. Naturally, this is all in the context of the global streaming market, which has thrown off record revenue for the majors. But it certainly underscores how independent companies and DIY artists have reshaped the business once again.
