NEW YORK (Hypebot) – BANKRUPT INDIE SOLD TO DISTRIBUTOR
UPDATED: TVT Records, home to Lil Jon and other rappers, has entered into an agreement to be acquired by The Orchard. Financial terms are not yet public, but if the court approves, the deal will close July 3rd. The Orchard will acquire the TVT's catalog and artist contracts but not its music publishing division, TVT Music Enterprises, which will operate as a standalone enterprise.
Is the Orchard expanding from distributor to label and competing with its own clients? Orchard President Greg Scholl sent a mixed message. "We are committed to supporting the artists on the current roster," he told the NY Post. "But we are not anticipating expanding the roster and signing new artists."
ANALYSIS: It's hard to be be sure until we see the numbers, but unless they bought TVT very cheaply, The Orchard is taking a huge risk. TVT is one of America's largest indies, but its catalog is filled with rap and hip hop titles – genres whose artists have very short shelf lives. And the artists who remain under contract are madder than hell and already suing for their freedom. Unless The Orchard finances expensive label staffing, it's hard to see how they will keep these acts for long or have success with them if they do.
And then there are the hundreds of Orchard distributed labels and artists who find themselves doing business with a competing label…
Scholl and The Orchard know well that digital distributors are being squeezed by shrinking margins and new competitors like TuneCore. But unless they paid pennies on the dollar, buying a bankrupt rap label won't not do much to help the bottom line. Stay tuned…
