Indie labels concerned as major labels intervene in vinyl and CD distribution

Independent record labels have expressed worries after a large vinyl distribution company, Utopia Music, has started to involve major labels in its finances.

• READ MORE: Vinyl sales up nearly 15 per cent in 2023

Utopia Music is a company which physically distributes vinyls and CDs to retailers. In September 2022, the company acquired what was formerly the biggest music distribution company in the UK, Cinram Novum. Earlier that January, it also acquired fellow distributor Proper Music Group. Due to these acquisitions, Utopia now has an estimated 70% share, making it the leading company for getting records to shops in the UK.

However, issues involving a warehouse move gone wrong have negatively impacted acts at indie labels. The Guardian reported that one British indie label said one of its biggest acts missed a Top 20 chart position. Additionally, stock for a September release was “temporarily unable to be located”, meaning nine months of work and thousands of pounds were wasted.

“It put a crack through the middle of the campaign. It could mean a knock of 50% off sales,” a senior executive from the label said.

The company is based in Switzerland, and has run into further financial problems this year. In the summer, Utopia called in liquidators for its Utopia UK (R&D) operation. It also requested financial help from major labels Universal Music Group and Sony Music Entertainment for its separate distribution arm, UDS, in order to fund the warehouse move from Aylesbury to Bicester.

There are now worries that major labels are gaining an unhealthy level of influence on an independent sector. This echoed by the comments of Utopia VP of distribution services Drew Hill: “Part of me wishes now I hadn’t gone to [the majors] to say: ‘Do you want to come along for the ride?’”

Hill also spoke about the warehouse operation, which he says was a 12-16 month process that had to be cut down to 6 months due to the lease end date for the Aylesbury site. “Nothing went missing or got lost,” he said. According to Hill, 27 trailers of stock “were loaded without being properly manifested”, resulting in an unloading backlog. Furthermore, he reportedly stressed that major labels were not given preferential treatment during the move, calling the incident “a very unfortunate situation”.

Those fears may increase if Utopia has to divest its distribution arm. The company has already divested publishing tech company Sentric, Absolute Label Services, and music analytics platform ROSTR thanks to an acquisition frenzy in 2021 and 2022.

If Utopia divests UDS, then the most likely candidates to buy it out would be major labels. Hill claims this wouldn’t be the case: “Sony and UMG have no control over operational workflow on site,” Hill said. “I don’t think they’ve got any desire to get back into something” – physical distribution – “they spent years trying to get out of.”

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