MusicDish e-Journal - February 23, 2018
MusicDish Advertising Network
Search MusicDish e-Journal (Advanced)
Subscribe To MusicDish e-Journal
About | Contact | Advertise | RSS | Submit Article | Submit News | Artist Development | Premium PR Distribution
Mi2N | MusicDish*China | MusicDish Network | MusicDishTV | Urban Music News Network

The Orchard And Digital Music Group Agree To Merger
By Mi2N
(more articles from this author)
Comment | Email | Print | RSS

The Orchard Enterprises, Inc., a leading global digital distributor and marketer of music, and Digital Music Group, Inc., a content owner and leader in the digital distribution of music and video catalogues, today announced that the two companies have entered into a merger agreement. The combined business will retain DMGI's NASDAQ listing and change its name to The Orchard. Current Orchard President and Chief Executive Greg Scholl will lead the combined company.

The combined company will control a substantial catalogue of entertainment assets, with over one million music recordings available for sale and thousands of hours of television, film and video programming, and will be a market leader for independent distribution of digital music and video, with powerful marketing, promotion, distribution and operations capabilities throughout the world. The company will continue to serve artists, labels, music publishers, television, film and video library owners and other rights holders by developing new and inventive ways to market and sell digital content.

In addition, for digital and mobile retailers, advertisers, consumer brands and technology companies, the company will continue to provide a single point of access to one of the world's largest and highest quality digital content catalogues that spans global superstars and niche and specialty artists, together with state-of-the-art marketing, promotion and programming capabilities.

The Orchard has changed traditional notions of "distribution" by pioneering a broad suite of client services, ranging from worldwide synchronization placement, to co-marketing initiatives with leading consumer brands, to global publishing administration. With operations in 25 countries and an ability to coordinate global programs within local markets, The Orchard has pioneered new forms of entertainment marketing for the digital media era.

An impressive array of label clients take advantage of The Orchard's offering, ranging from leading North American independents like Discos Musart, Definitive Jux, Delicious Vinyl, Shanachie, Surfdog, SST, Smithsonian Folkways, Cleopatra Records, Norton Records, Park The Van/Cornerstone RAS and Dim Mak; leading European independents like Greensleeves, Fierce Panda, Sanctuary, Snapper, Proper Records and Nuclear Blast; and global non-Western powerhouses like Rotana, Saregama and Mu-Yap.

In addition to its own impressive catalogue of digital rights and master recordings, DMGI's music distribution and exclusive licensing partnerships span landmark independent labels including Kill Rock Stars, Ipecac and Barsuk Records, and leading artists ranging from hip-hop stars Daddy Yankee, Chamillionaire and Lil' Flip to classic rock and r&b including Johnny Cash, Ike and Tina Turner and The Commodores. The DMGI catalogue was significantly expanded by the acquisition of marquee digital music pioneer Digital Rights Agency (DRA) in September of 2006.

DMGI has been an early-mover and market leader in licensing video under long-term contracts for digital exploitation, ranging from classic television favorites such as “I Spy,” “The Bill Cosby Show,” “My Favorite Martian,” “Daniel Boone,” “The Super Dave Show,” and “The Mr. Bill Show”; animated children's classics such as “Gumby,” “Legend of the Dragon,” “Sonic The Hedgehog,” “Gigantor,” and “Batfink”; comedy from Sam Kinison, Andrew Dice Clay, Pauly Shore, and Jamie Foxx; to contemporary content from superstar illusionist Criss Angel and wrestling icon Hulk Hogan.

Mitchell Koulouris, who currently serves as chief executive of DMGI, will leave DMGI to pursue other interests, and Karen Davis, DMGI's chief financial officer, will serve as DMGI's interim chief executive officer until the closing of the merger.

"DMGI and The Orchard create a powerful combination in the rapidly growing digital media industry," said Greg Scholl. "There are substantial opportunities for combined revenue synergies and cost reductions. DMGI adds exciting new artists and record labels to The Orchard's already extensive music catalogue, and provides the combined company an immediate and significant leadership position in the digital distribution of independently owned TV, film and video content."

The Orchard's proprietary V.E.C.T.O.R. content delivery platform, launched in 2007, will be used to efficiently supply hundreds of digital retail and mastertone storefronts with the combined company's music catalogue and new music releases, as well as manage direct delivery of all video assets. Mr. Scholl added, "With this merger, we will provide our combined clients with an advanced global infrastructure of digital marketing, promotion and distribution resources, and we'll continue to serve as a true business partner to independent music labels, artists, music publishers and television, film and video library owners."

Mr. Scholl continued, "The combined financial resources of the two companies will be available to fuel future growth, innovation and co- investment. DMGI's owned library of digital rights and master recordings provides a natural platform for Orchard's expansion into co-production and other creative financing and development initiatives with our artist and label clients."

"The Orchard is the ideal partner to maximize the value of the extensive music and video assets that DMGI has assembled," said Clayton Trier, chairman of DMGI. "The Board of DMGI believes that this combination will create a powerful market leader that can drive value for our shareholders," added Mr. Trier.

For 2006, The Orchard had revenue of $14.9 million and gross profit of $4.2 million (according to its preliminary unaudited 2006 financial statements), and DMGI reported pro forma revenue of $10.2 million and gross profit of $2.4 million. For the first quarter of 2007, The Orchard had revenue of $5.6 million and gross profit of $1.4 million (according to its preliminary unaudited financial statements), and DMGI reported revenue of $3.4 million and gross profit of $0.8 million. Both companies operated at a net loss for the periods as they invested in people and processes to position for continued rapid growth.

As consideration for the acquisition of The Orchard, DMGI has agreed to issue 9,064,941 shares of common stock and 4,488,330 shares of convertible preferred stock to the shareholders of The Orchard, including its principal shareholder Dimensional Associates, LLC. Each share of preferred stock will be convertible into, and has voting rights equivalent to, one share of common stock, with a liquidation preference of $5.57. After five years, subject to certain conditions, the company can redeem all the preferred stock for $25 million.

The shareholders of The Orchard will own approximately 60% of the voting shares outstanding (without considering shares reserved for stock options and warrants) upon closing of the merger. The Board of Directors of the combined company will consist of seven persons - three current DMGI board members including Clayton Trier, who will continue as chairman, three new directors chosen by Dimensional, and Greg Scholl.

Closing of the merger, which the parties anticipate will occur in the fourth quarter of 2007, is subject to normal and customary conditions, including an affirmative vote in favor of the merger by shareholders of DMGI holding at least 50% of the shares outstanding. A proxy statement containing full details of the transaction and pro forma combined financial information will be sent to DMGI shareholders following its submission to the Securities and Exchange Commission.

Related News from Mi2N:
» The Orchard And Digital Music Group Agree To Merger

Home » News Beat » The Orchard And Digital Music Group Agree To Merger
Email |Print |Comment |RSS

back | top

MusicDish Advertising Network

News Beat

» ICE and Facebook Reach Multi-Territory Music Licensing Agreement

» B-Reel Named Top 10 Most Innovative Company in Music by Fast Company

» VNUE Inc. To Acquire Music Rights Startup Soundstr

» Viberate & Imogen Heap Strive To Give Equal Opportunity To Every Artist

» Mixcloud Taps Gracenote for Advanced Music Recognition

News Beat Directory

» [2018-02-21] Briony Turner And Alec Boateng Promoted To Co-Heads Of A&R, Atlantic Records UK; Turner And Boateng Will Oversee The Atlantic A&R Team, Joint Projects, As Well As Maintaining Their Own Artist Rosters

» [2018-02-21] ICE And Facebook Reach Multi-Territory Music Licensing Agreement; New Deal Will See Songwriters And Composers Remunerated

» [2018-02-20] B-Reel Named Top 10 Most Innovative Company In Music By Fast Company; Global Creative Agency Receives Honor For Its Award-Winning Gorillaz Campaign

» [2018-02-18] YG PLUS And Gracenote To Bring K-POP To Fans Around The World; Gracenote And YG PLUS To Make All K-POP Music More Searchable And Discoverable On Global And Regional Streaming Music Platforms And Services

» [2018-02-17] VNUE Inc. To Acquire Music Rights Startup Soundstr; VNUE Acquisition Aims To Ensure A Fairer Royalty System

» [2018-02-17] Is Podcasting The New Radio?; 25% Of Surveyed Americans Say They've Listened To A Podcast In The Past Month, Up From Less Than 10% In 2008

» [2018-02-01] Insomniac Announces Inaugural Electric Daisy Carnival China Set To Debut In Shanghai; China Marks EDC's Second Location On The Asian Continent

» [2018-02-01] Viberate & Imogen Heap Strive To Give Equal Opportunity To Every Artist; Heap's Main Role In Viberate's Advisory Team Will Be To Help Further Guide Us Toward A Second To None Service For The Live Music Segment

» [2018-01-22] Italian Independent Music Collective Fil1993 Group Signs With MusicDish*China; MusicDish*China Will Be Developing Their Online Presence And Social Media In China As Well As Releasing Their Catalogue To Chinese Streaming Music Services

» [2017-12-25] MusicDish*China Presents 'Savage Guitarist' Todd Clouser In Beijing; As Part Of His #YouTheBrave Asia Tour That Includes 8 Shows Across Japan, Todd Will Be Giving Solo Shows At Laifu Livehouse On 12/27 And Temple Bar On 12/28

» [2017-12-20] Mixcloud Taps Gracenote For Advanced Music Recognition; Next-generation Audio Fingerprinting Helps Mixcloud Identify And Catalog Copyrighted Music Within User-generated Content

» [2017-12-18] Copyright Royalty Board Increases Sirius XM Royalty Rate; Judges Announce Royalty Rates And Terms For Satellite Audio Radio Services (SDARS) And Preexisting Subscription Services
MusicDish Advertising Network

follow MusicDish on
Follow MusicDish on Twitter

Mi2N Music PR

Hybrid Studios Hosts Annual NAMM Afterparty

High Definition Music Card - The New Way To Experience Music!

DEATH BY MISADVENTURE, New True Mystery Podcast Launches 31st January 2018

Music And Kids Joins Forces With Carnie Wilson, With Plans To Provide One-on-One After-School Music Education To Thousands Of Middle And High School Students

Don Dawil's Valentine's Day Debut Latin Single "Necesito Verte"

Taking Applications - The 23rd Annual USA Songwriting Competition

The International Music Consulting Firm GINGIO Hosts Events At NAMM And Grammy Weeks

Websites: Mi2N | MusicDish*China | MusicDish Network | MusicDishTV | Urban Music News Network
Services: Submit Article | Submit News | Submit Video | Artist Development | Premium PR Distribution

Copyright © 1997-2018 MusicDish LLC., all rights reserved.
About MusicDish e-Journal | Contact Us | Advertise | RSS | Internships