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Why Major Labels Are Snapping Up Stakes In Indies At a Breakneck Clip

Major labels, particularly Sony's distribution wing The Orchard, are increasingly buying stakes in indies. What are the pros and cons of the strategy?

“Independent labels often lead in trendsetting and new business models, such as the vinyl resurgence, event-driven branding and digital community-building,” says Wez Saunders, CEO of Defected Records, a long-running bastion of dance music. All these labels have previous relationships with Sony through its distribution and services wing, The Orchard, which was born in the independent community and has spent many years nurturing connections there. Acquiring independent labels, or parts of them, is even more important for the majors today as their market share is whittled down by the increased opportunities available to unsigned artists, who can easily upload music to streaming services through distribution companies.

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