SAN FRANCISCO (Hypebot) – Digital music distributor INgrooves has acquired physical music distributor Fontana from Universal Music Group. Fontana has served as the U.S. distributor for such independent labels as Dangerbird, ECMD, Filter, Ministry Of Sound, NastBoy, Vagrant and VP. The combined company will be renamed INgrooves Fontana.
UMG holds a minority equity stake in INgrooves, but may have been motivated to sell Fontana to raise cash, as well as to satisfy regulators eyeing Universal's $1.2 billion purchase of EMI. While divesting itself of Fontana will only reduce UMG's marketshare marginally, the company could use the sale to blunt criticism from the independent music community upset over the world's largest music group's purchase of EMI. No financial terms of the deal were announced.
By offering both digital and physical distribution, INgrooves joins The Orchard, which purchased TVT in part for its physical distribution arm, Sony's RED and others who offer independent labels combined distribution services. IODA, which in 2009 Sony took a strategic stake in, Tunecore, IRIS and several smaller distributors remain digital only.
INgrooves Fontana will continue to work with UMG’s sales force in connection for physical sales. The new company will be run by Dave Zierler, President of INgrooves and Ron Spaulding, President of Fontana. Both will report to CEO and INgrooves founder Robb McDaniels.