The Country’s Second Largest Music Wholesaler Is Shutting Down

Ingram Entertainment, the second largest U.S. music wholesaler, has begun telling its accounts that it will begin shutting down its music operation, with plans to close by the end of this year, sources tell Billboard.

Sources suggest that Ingram’s music operation generates about $200 million a year in revenue. Beyond music, there are indications that the company is also closing down its video wholesaling operation.

As news of the announcement began to spread Wednesday among brick-and-mortar merchants, retailers were initially worried about how the closure would impact the supply of music titles — as the shuttering will leave just two major one-stops in the United States: Alliance Entertainment and All Media Supply. Merchants were worried that if Ingram closed suddenly, it could cause disruption in the marketplace. However, a phased closing plan will allow labels and stores to adapt to the changing marketplace, those sources suggest.

Replenishment of catalog titles is particularly important to brick-and-mortar retailers, who are enjoying a physical renaissance yet again this year. Physical sales saw a slowdown in 2022 following several years of overall escalating physical sales, especially from vinyl.

In 2021, CD sales were up 1.1% to nearly 40.6 million copies, but that was after years of dramatic decreases for the format. Meanwhile, in 2021 vinyl sales were up 51.4% to 41.7 million copies, according to Luminate. But physical sales slowed in 2022, with CDs down 11.6% to 35.9 million copies and vinyl down 4.21% to 43.5 million copies. However, so far this year, CDs are back in the swing of things, up 1.8% to nearly 23.3 million copies, while vinyl is on its way to galloping growth once again — up 20.4% to 31.14 million copies, as of the week ending Aug. 31, 2023.

Ingram music executives didn’t respond to Billboard’s repeated requests for comment.