In today’s CMU Daily: Universal is buying Downtown Music for a whopping $775 million, via its Virgin Music Group stalking horse. The transaction will greatly boost the major’s distribution market share, and is almost certain to get mired in regulatory scrutiny with opposition already being voiced by AIM and other indies

Also today: Physical distribution business UDS has collapsed after its Swiss parent Utopia Music was forced into bankruptcy. UDS apparently owed millions to landlord DP World - which is now taking ownership of the company’s assets. But why?

Plus: Two Congress members have now told Apple and Google to prepare to remove TikTok from their respective app stores; a new coalition of organisations from across the wider creative and copyright industries says that the UK must maintain a “robust copyright framework” in the AI era

Releases & Tours: Each week CMU rounds up standout releases and tour announcements from the last seven days. This week: Big piig, Röyksopp, Shygirl, Saint Etienne + more, while tour announcements include Mustafa, Turnover and others

Universal continues its plan to eat the entire world, buys Downtown Music

Universal Music has announced a deal to buy Downtown Music Holdings, which owns FUGA, CD Baby, Songtrust and Downtown Artist & Label Services, among other things.

The deal, instigated by Universal’s distribution and label services business Virgin Music Group, is worth $775 million and is subject to regulator approval. It will definitely be a cause of concern for the independent label community, as it makes the dominant player in music rights even more dominant, and comes just two months after the major confirmed it had bought European distributor [PIAS] outright.

Indeed, the CEO of the UK’s Association Of Independent Music, Gee Davy, has already formally voiced that concern. Noting how this deal closely follows on from the recent [PIAS] announcement, she says the Downtown transaction “plays into a continuing trend towards over-consolidation and reduction of independent routes to market”.

“It is vital to uphold a true choice of partners for artists and labels and ensure that negotiating power does not become unbalanced”, she adds. “Only in this way can homegrown artists and businesses access fair deals, investment and growth”.

It’s possibly because Universal is aware of the opposition this deal is likely to face that it is keen to push Virgin Music forward as the deal-maker on its side - rather than the parent company - issuing a statement without the customary self-aggrandising “win-win” waffle from UMG boss Lucian Grainge.

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Majors labels' primary physical distributor Utopia Distribution Services collapses

Utopia Distribution Services Limited, the UK entity established by the ill-fated Swiss music company Utopia Music, filed papers with the High Court in London on Friday appointing an administrator. UDS is a major player in the UK music industry's physical supply chain, with a significant percentage of physical music products in the UK going through its warehousing and logistics operation.

UDS landlord DP World has now confirmed that it is acquiring the assets of the company in what is believed to be a so-called 'pre-pack' administration deal.

In a conversation with Utopia Switzerland's defacto CEO John Mitchell, boss of Australian investment company Mitchell Asset Management, Mitchell told CMU earlier this year that the Swiss company had been pumping enormous amounts of money into Utopia Distribution Services each month since it acquired the business.

One of the biggest creditors, according to Mitchell, was UDS "landlord" DP World, which he said had been "forgiving" and was "allowing us to stretch our credit terms with them". As a result of Utopia's bankruptcy in Switzerland, those cash injections to keep UDS afloat dried up, and with debts mounting it was only a matter of time before the business collapsed.

Sources close to the deal have told CMU that a "major stakeholder" in UDS had "applied influence" in the time leading up to the company's insolvency, working with DP World to ensure that UDS ended up "with the best possible outcome".

That outcome appears to be that the ownership of a major part of the UK music industry has been effectively offshored to a Dubai-controlled company for pennies in the pound.

Congress warns Apple and Google: get ready to boot TikTok from US app stores

Apple and Google have been warned that it will soon be unlawful to “provide services to distribute, maintain or update” TikTok in their US app stores, in a letter sent by two members of US Congress.

Distribution of the TikTok app will be banned within the USA on 19 Jan 2025, pending any intervention by the US Supreme Court or the White House, or current owner ByteDance somehow engineering a very sudden sale.

In their letter to Apple chief Tim Cook and Google boss Sundar Pichai, Congress members John Moolenaar and Raja Krishnamoorthi stressed that the ban would affect any marketplace “through which users within the land or maritime borders of the United States may access, maintain or update such application”, unless an intervention or sale occurs before the 19 Jan deadline.

Moolenaar and Krishnamoorthi sent their letter after a Washington DC court rejected a bid by TikTok to block the law passed by Congress earlier this year, which gave China-based ByteDance 270 days to sell the app or face a country-wide ban.

TikTok argues that the law is unconstitutional on free speech grounds, but judges at the DC Court Of Appeal did not agree. On Friday, the same court rejected TikTok’s request to postpone the 19 Jan deadline pending its Supreme Court appeal.

The Congress members also wrote to TikTok CEO Shou Chew last week, arguing that law-makers had given ByteDance “ample time” to sell TikTok after passing the sell-or-be-banned law, which seeks to allay concerns that the Chinese government has access to TikTok user-data via ByteDance.

Creative industries demand copyright control as UK plans AI shake-up

A powerful new coalition of creative organisations says that the UK is “in a unique position to set a global standard” for how the creative and tech sectors can “innovate together and continue to provide high quality services”. The group, representing the music, movie, media, literature, journalism, photography and visual arts sectors, has called on the government to maintain a “robust copyright framework” for controlling creative works in the AI era.

That big ask comes as the government prepares to announce another consultation on copyright and AI, which is expected to propose a new copyright exception for AI companies, while also considering the introduction of a new publicity right for creators and performers.

With “world-leading” creative and tech sectors, the new Creative Rights In AI Coalition says that the UK must ensure that it is “protecting copyright and building a dynamic licensing market for the use of creative content in building generative AI”, insisting that that approach is “the only way that both sectors will flourish and grow”.

“The UK creative industries generate well over £100 billion annually”, the coalition states. Therefore, “we have, quite literally, earned the right to have our voice heard”.

But just in case that voice isn’t quite loud enough, the coalition has also commissioned a survey of the Great British public, in which 72% of respondents said that AI companies should pay creators if they make use of their works when training their models.

The government’s consultation, which will reportedly be launched tomorrow, will cover very familiar territory.

We know that the copyright industries - including the music industry - will insist that tech companies using existing content to train generative AI models must get permission from the relevant copyright owners, while being fully transparent about what content has been used.

⏩ Releases & Tours: Dec 2024 (Week 50)

Each week CMU rounds up standout releases and tour announcements from the last seven days. This week: Big piig, Röyksopp, Shygirl, Saint Etienne + more, while tour announcements include Mustafa, Turnover and others

Tours