Harmony Music is in talks with digital music platform Stem for a potential acquisition, The Hollywood Reporter has discovered. Monetary phrases of the deal, which was taken to market by the Raine Group — by way of Fred Davis and Joe Puthenveetil — are as but unknown. Music Enterprise Worldwide reported $50 million, however a supply tells THR that determine “is wildly inaccurate,” including that negotiations are ongoing for what could develop into a partial sale.
Primarily based in Nashville, with workplaces in Los Angeles, New York and London, Harmony Music encompasses a label group (its imprints embrace Harmony Data, Harmony Jazz, Fantasy Data, Rounder Data and Fearless Data, amongst others), music publishing (amongst its notable catalogs are songs by REO Speedwagon, Kiss and Low cost Trick), and a theatrical arm specializing in licensing, script publishing and solid recordings.
Stem, based in 2015 by Milana Rabkin Lewis, who serves as CEO, gives distribution, fee and financing instruments to working musicians, songwriters, producers and their groups. By its providers, artists are capable of function independently, distributing their music with a direct, clear line to income streams throughout streaming providers and different consumption avenues. Stem additionally automates the calculation and distribution of royalties, guaranteeing that every one contributors are precisely compensated.
The pairing of Stem with Harmony permits the latter to amass a distribution pipeline, accessing each quantity and knowledge by way of subtle, trendy instruments.
Bidding for Stem, which in 2023 secured a $250 million credit score settlement with Victory Park Capital, was mentioned to be extremely aggressive. In response to a supply, patrons included Sony Music and Warner Music Group. Harmony is presently distributed by way of Common Music Group.
Reps for Harmony and Stem couldn’t be reached for remark.
Distribution corporations have change into a buzzy goal for deep-pocketed file corporations jockeying for market share. With fewer artists signing conventional file offers and conserving possession over their music as a substitute, a lot of the expansion comes from distribution as a substitute. The Harmony deal comes months after Common Music Group bought Downtown Music Holdings, the father or mother firm to music distributors like CD Child and FUGA.
“Nobody’s doing the type of offers anymore the place the rights proprietor owns your grasp,” says an insider. “Distribution is king within the race to be the fourth main.”
Provides one other tech government: “The labels want entry to indie artists. It’s all concerning the customers. They want their customers. Nobody needs to be within the main label system. the majors are going to evolve extra towards providers corporations.”
Nonetheless, whether or not all of the majors will attempt to purchase a distributor is unclear. Final yr Warner Music Group had indicated curiosity in buying Imagine, the french firm that owns music distributor TuneCore, however a month later, WMG determined to not put in a proposal. Final week at a Morgan Stanley convention, per Billboard, WMG CEO Robert Kyncl indicated they could construct their very own distributor as a substitute.
“What I can let you know is that we’re not prepared to develop this in any respect prices,” he mentioned.
