Announcements involving hundreds of millions of dollars are now commonplace in the music industry. But this time, Downtown Music Holdings is corralling the funds for the burgeoning indie music sector.
Details of the impressively-large $200 million fund were detailed to Digital Music News by Downtown Music Holdings this afternoon. The fund will be powered by a credit facility supplied by Bank of America, which is suddenly interested in indie artists — or more likely, the money indies are likely to generate in the coming years via Downtown.
Downtown says the funds will be deployed across its distribution, publishing administration, and artist and label services divisions. After divesting a catalog of more than 145,000 works to Concord in a deal valued north of $300 million (with some reports pegging the deal at a higher price tag), Downtown has steered its company towards the indie sector.
While the exact definition of ‘indie’ is often debated, the sector has indisputably witnessed substantial growth in recent years.
While most of streaming’s riches go to a painfully small cadre of artists, broader indie revenues have increased. On that note, Downtown trotted out a number of positive stats to demonstrate indie’s upward arc. In terms of actual streams, Downtown cited a research report from Midia that estimated that indies account for 31% of all Spotify plays.
Unfortunately, indie artists are releasing enormous volumes of music, often without amassing sizable audiences. On that note, Downtown cited data from former Spotify economist Will Page, who calculated that indie artists released eight times more music than major label artists in 2020.
And it’s difficult to write an article about surging indie sector valuations without mentioning high-flying indie distributor Distrokid. While Philip Kaplan’s brainchild isn’t tied to this deal, Distrokid recently reached a nosebleed valuation of $1.3 billion. And Distrokid isn’t the only indie player amassing a sizable war chest.
Clearly, the music industry gold rush isn’t just reserved for the majors, Boomer rocker catalogs, and NFTs.
“Downtown Music Holdings has built a company that is well positioned to serve the fast-growing independent sector of the music industry,” said Bank of America Head of Entertainment Industries Group Randy Hua. “Downtown’s new fund is a powerful resource, empowering music creators all over the world. Bank of America is pleased to help finance this innovative sector of the artistic economy.”
“We are immensely gratified that Bank of America shares our vision of building financial solutions for creators in our industry,” said Downtown chief investment officer Alan Goodstadt. “This credit facility enables us to empower the thousands of artists who use our services.”
Written while listening to ‘Humble’ by Diplo feat. Lil Yachty.