Artone Acquires Townsend Music for D2C, Superfan Potential

Townsend Music, a U.Okay.-based distributor and direct-to-consumer retailer, has been acquired by Artone, a Dutch enterprise with a portfolio of corporations that caters to the bodily music market. Phrases of the deal weren’t disclosed.

Townsend Music founder Steve Bamber referred to as the acquisition “a transparent alternative to push its European growth technique ahead rapidly, with Artone’s effectively established gross sales, distribution and manufacturing amenities already in place.” 

Artone can rapidly scale up and meets its objective of changing into a worldwide D2C firm, in keeping with gross sales director Bruce McKenzie. “Artone’s suite of providers from vinyl manufacturing, EU bodily distribution, and label providers offers us excellent synergy to supply each our D2C shoppers and super-fan prospects an excellent charged service,” he mentioned in a press release.

Artone was shaped in 2022 from the merger of Bertus Distribution and File Business, a vinyl urgent plant based mostly in Haarlem, Netherlands. The portfolio of corporations additionally contains Sound Manufacturing unit, which offers artists and labels with options to promote unique content material on to shoppers; two labels that launch music in bodily codecs, Music on Vinyl and Music on CD; and V2 Benelux, which offers label providers within the Netherlands, Belgium, France and Germany.

“The acquisition is one other welcome step for Artone’s continued growth of its service portfolio and provides us presence within the UK market,” CEO Jan Willem Kaasschieter mentioned in a press release. “This acquisition strengthens our place as a worldwide chief in bodily music distribution. We’re excited in regards to the alternatives this may deliver and stay up for driving the way forward for bodily music collectively, growing additional world attain and progressive options for the advantage of the music business.”

Bodily music gross sales proceed to point out sturdy development as streaming takes a bigger portion of the worldwide market. In the UK, vinyl gross sales grew 13.5% and CD gross sales improved 3.2% within the first half of 2024, in keeping with the Leisure Retailers’ Affiliation. 

With vinyl gross sales persevering with to rise and streaming development slowing, the music business is placing elevated centered on reaching “superfans” keen to pay extra for premium experiences and tangible merchandise. The unmet alternative to monetize superfans was a key speaking level in Common Music Group’s Capital Markets Day presentation on Tuesday (Sept. 17). “We’re creating and monetizing new methods to fulfill the superfans pent up demand for merchandise, experiences and entry that brings them nearer to the music and to the artists that they love,” mentioned CEO Lucian Grainge. 

Warner Music Group CEO Robert Kyncl has additionally made superfans a precedence throughout his tenure. “One of the essential issues is to determine a direct relationship with probably the most useful followers,” Kyncl mentioned on the Morgan Stanley Know-how, Media and Telecom Convention on March 6. “As a result of it’s not solely essential to monetization and new income stream, but it surely’s additionally essential to launching new music, which is the core of what we do.”

Successfully reaching superfans could possibly be a profitable endeavor for report labels. In its newest “Music within the Air” report, Goldman Sachs analysts put the worldwide superfan addressable market at $4.5 billion—practically 16% of the $28.6 billion recorded music market in 2023, in keeping with the IFPI. A lot of that income might come from music subscription providers’ high-priced, high-value choices that transcend the present premium subscription tier.

Bodily items are a confirmed option to join with superfans. Market analysis agency MusicWatch discovered that 20% of U.S. music followers are superfans for his or her favourite artists who go to live shows, purchase merchandise and albums and could be wiling to spend extra for VIP experiences from the artist. On the identical time, extra superfan gross sales are coming from the forms of direct-to-consumer shops supplied by Townsend. Within the first half of 2023, U.S. direct-to-consumer gross sales tracked by Luminate elevated 20% year-over-year.