July 15, 2017 2:00 am JST

Sony to buy French music company Believe Digital

Indie-label distribution to get a boost

Sony has homed in on the earning potential of increasingly popular indie music.

TOKYO -- Sony is in the final stages of talks to acquire French music distribution and label services provider Believe Digital, aiming to bolster its own strong-performing music operations.

Sony Music Entertainment will obtain a majority stake from current shareholders, including an information technology investment fund, for an estimated 40 billion yen to 50 billion yen ($355 million to $444 million). The transaction is expected to close as early as this year.

Founded in 2005, Believe Digital operates out of roughly 30 countries. It owns American company TuneCore -- which provides indie music to such major online distributors as Apple -- as well as a French label that produces compact discs. The company works with 150,000 artists around the world, mainly independent ones, and has annual sales of roughly $250 million.

Indie music is gaining in popularity as technology makes it easy to post content online. SME works with many famous names, such as British singer Adele, but also offers indie music through existing sales channels. Sony will incorporate Believe Digital's expertise in viewing and listening data analysis to support artists.

The Believe Digital deal will mark the latest phase of Sony's music shopping spree. The Japanese conglomerate made the world's largest music publisher, Sony/ATV Music Publishing, a wholly owned subsidiary last year by purchasing the remaining 50% interest for $750 million. In 2015, it turned indie-music distributor Orchard Media into a wholly owned subsidiary.

Sony's music segment generated a 75.8 billion yen operating profit in fiscal 2016, accounting for 26% of overall group profit. The company is sharpening focus on steadily earning profits from a stable customer base, and the broader music content and distribution operations are seen contributing a significant chunk of earnings going forward.

(Nikkei)

Sony Corp.

Japan

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