Sony Music Entertainment and its RED Distribution unit are now structuring a digital distribution deal with San Francisco-based IODA, according to information shared with Digital Music News.
The partnership is expected to revolve around the IODA sales, marketing, and digital distribution platform known as the Rightsholder Dashboard. RED Distribution serves a substantial number of independent label partners.
Aspects of the deal were first tipped last week, and colored in by various executives over the past few days. According to those close to the partnership, the deal will loosely resemble the pair-up between Universal Music Group and INgrooves, developer of the ONE Digital distribution platform.
Fontana Distribution is an important touch point in the UMG deal, and Universal is understood to carry a substantial equity stake in INgrooves. Whether equity is part of the upcoming Sony arrangement remains unclear, though Reuters is expected to disclose additional information as part of an official unveiling.
Sony Music Entertainment president of Global Digital Business, US Sales and Corporate Strategy Thomas Hesse is also understood to be closely involved in the tie-up. The partnership will allow RED to better distribute and track the digital details for their label partners, based on an unsatisfactory in-house competency. “They never built it in-house successfully, perhaps they never wanted that level of transparency,” one source relayed.
But transparency remains a concern for various RED-distributed labels, and another possible motivator for the partnership, according to another source. A representative from Sony Music could not respond to an inquiry Tuesday evening, and an IODA representative declined to offer any comment.