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Artone

LONDON — Proper Music Group, the U.K.’s leading physical distributor for independent labels and artists, has been acquired by Netherlands-based Artone, bringing an end to a tumultuous three-year period during which the firm was owned by Swiss fintech company Utopia Music.   
Completion of Artone’s acquisition of Proper Music Group was announced by the company Friday (Feb. 28), one day after Proper was placed in administration (roughly equivalent to Chapter 11 bankruptcy protection).  

The new ownership structure sees Proper’s longstanding managing director, Drew Hill, take a minority stake in the British firm, which handles physical distribution for more than 5,000 indie labels, as well as provide a range of digital distribution, publishing and artist and label services for artists and music companies.  

Trending on Billboard

Proper’s clients include Absolute Label Services, Believe, Cherry Red, Concord, Epitaph, FUGA, The Orchard in addition to Warner Music Group-owned ADA and Sony Music Group-owned AWAL. The company says its clients collectively make up around 13% of the United Kingdom’s physical music market, which totaled £330 million ($412 million) in 2024, up 6.2% on the previous year, and accounting for nearly 14% of music revenues, according to figures from the Digital Entertainment and Retail Association (ERA).  

Announcing the acquisition of Proper, Artone CEO Jan Willem Kaasschieter said the company plays “a vital role in the supporting independent labels and artists in the U.K. By bringing Proper Music Distribution into the Artone family, we ensure its continued success and provide stability for its partners.”

“We now have some certainty about the future,” a relieved Hill tells Billboard. He describes the past three years of Proper being owned by Swiss fintech firm Utopia as being like a “pantomime rollercoaster” that has seen the company often existing “under a cloud” of negativity. “I’m glad it’s finally over,” says Hill, who continues as managing director of Proper Music Distribution.

Got records? A wide view of the Proper warehouse in Dartford.

Proper Music Group

Utopia Music had originally acquired Proper for an undisclosed sum in January 2022 as part of a frenetic buying spree that saw the Swiss fintech firm rapidly acquire 15 companies spanning music tech, finance, publishing, marketing and distribution over a two-year period.  

A just-as-quick downsizing followed, encompassing multiple rounds of job cuts, company divestments, numerous legal actions and successive executive departures, including the exit of co-founder Mattias Hjelmstedt.  

Early last year, Utopia rebranded as Proper Group AG, named after its core physical music distribution business, but the widespread changes failed to turn the company around. In September, the firm was placed into bankruptcy by a Swiss court over an unpaid debt of 23,000 Swiss Francs ($25,000). 

As a result of the court action, Utopia’s two main U.K. physical distribution businesses were placed up for sale with both attracting multiple bidders. Utopia Distribution Services, which was formerly known as Cinram Novum and whose clients include Universal Music Group, Sony Music Entertainment and [PIAS], was acquired by DP World Logistics for an undisclosed sum in December.  

Artone and Hill’s subsequent joint acquisition of Proper Music Group is “fantastic news for the independent community,” says Gee Davy, CEO at U.K. trade body the Association of Independent Music (AIM).

“Drew’s 18 years’ experience at the helm of Proper Music Distribution combined with Artone’s pan-European expertise will no doubt ensure that the U.K.’s physical music sector continues to thrive,” says Davy in a statement.

“It’s an ownership structure absolutely rooted in what is our core business,” Hill tells Billboard, pointing to Artone’s range of physical music solutions, which includes its own vinyl pressing plant, the Netherlands’-based Record Industry, capable of pressing 40,000 to 60,000 records per day, as well as Bertus Distribution, one of Europe’s largest independent distributors. Artone additionally operates several indie labels, including Music On Vinyl and V2 Benelux, and last year acquired U.K. D2C e-commerce music retailer and distributor Townsend Music. 

The production line at the Proper warehouse in Dartford.

Proper Music Group

“Utopia never really understood what Proper was or what we did or maybe even why they bought us,” says Hill. “Day-to-day, operationally nothing really changed under their control but what was always difficult was the negative association. It just became a PR disaster and I was constantly having to reassure labels that whatever they were reading about the parent company, their money and their stock was safe. It’s great that I no longer have to do that.”  

Hill says the financial losses suffered by Proper Music Group, which was a profitable company prior to 2022, over the past several years are spun out of Utopia’s kamikaze approach to business, which prioritized turnover over profit. According to its most recent Companies House figures, Proper made a loss of £1.9 million in the year ending Dec. 31, 2022. There will be further losses to be reported in 2023, says Hill.

“Now we can go back to making sure we’re growing as a sustainable business rather than just growing for growth’s sake,” he states. “The physical music business is in a very healthy place right now and Proper will continue to be right at the heart of it.”

Townsend Music, a U.K.-based distributor and direct-to-consumer retailer, has been acquired by Artone, a Dutch business with a portfolio of companies that caters to the physical music marketplace. Terms of the deal were not disclosed.
Townsend Music founder Steve Bamber called the acquisition “a clear opportunity to push its European expansion strategy forward quickly, with Artone’s well established sales, distribution and manufacturing facilities already in place.” 

Artone can quickly scale up and meets its goal of becoming a global D2C company, according to sales director Bruce McKenzie. “Artone’s suite of services from vinyl manufacturing, EU physical distribution, and label services gives us perfect synergy to offer both our D2C clients and super-fan customers a super charged service,” he said in a statement.

Artone was formed in 2022 from the merger of Bertus Distribution and Record Industry, a vinyl pressing plant based in Haarlem, Netherlands. The portfolio of companies also includes Sound Factory, which provides artists and labels with solutions to sell exclusive content directly to consumers; two labels that release music in physical formats, Music on Vinyl and Music on CD; and V2 Benelux, which provides label services in the Netherlands, Belgium, France and Germany.

Trending on Billboard

“The acquisition is another welcome step for Artone’s continued expansion of its service portfolio and gives us presence in the UK market,” CEO Jan Willem Kaasschieter said in a statement. “This acquisition strengthens our position as a global leader in physical music distribution. We’re excited about the opportunities this will bring and look forward to driving the future of physical music together, developing further global reach and innovative solutions for the benefit of the music industry.”

Physical music sales continue to show strong growth as streaming takes a larger portion of the global market. In the United Kingdom, vinyl sales grew 13.5% and CD sales improved 3.2% in the first half of 2024, according to the Entertainment Retailers’ Association. 

With vinyl sales continuing to rise and streaming growth slowing, the music industry is putting increased focused on reaching “superfans” willing to pay more for premium experiences and tangible products. The unmet opportunity to monetize superfans was a key talking point in Universal Music Group’s Capital Markets Day presentation on Tuesday (Sept. 17). “We’re creating and monetizing new ways to meet the superfans pent up demand for products, experiences and access that brings them closer to the music and to the artists that they love,” said CEO Lucian Grainge. 

Warner Music Group CEO Robert Kyncl has also made superfans a priority during his tenure. “One of the most important things is to figure out a direct relationship with the most valuable fans,” Kyncl said at the Morgan Stanley Technology, Media and Telecom Conference on March 6. “Because it’s not only important to monetization and new revenue stream, but it’s also important to launching new music, which is the core of what we do.”

Effectively reaching superfans could be a lucrative endeavor for record labels. In its latest “Music in the Air” report, Goldman Sachs analysts put the global superfan addressable market at $4.5 billion—nearly 16% of the $28.6 billion recorded music market in 2023, according to the IFPI. Much of that revenue could come from music subscription services’ high-priced, high-value offerings that go beyond the current premium subscription tier.

Physical goods are a proven way to connect with superfans. Market research firm MusicWatch found that 20% of U.S. music fans are superfans for their favorite artists who go to concerts, buy merchandise and albums and would be wiling to spend more for VIP experiences from the artist. At the same time, more superfan sales are coming from the types of direct-to-consumer stores offered by Townsend. In the first half of 2023, U.S. direct-to-consumer sales tracked by Luminate increased 20% year-over-year.


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