Universal Music’s sales arm has made a strategic investment in INgrooves, which helps artists distribute and market their music online using its automated software. UMG Distribution, which owns indie distribution arm Fontana, will also become a strategic partner of the California-based firm.
The news follows an undisclosed funding by Universal’s Interscope in music social network Buzznet, unveiled earlier this week. Founded in 2002, INgrooves offers a web-based platform – called ONE Digital – where labels and artists can market their songs and distribute them to buyers such as online music stores or videogame makers.
The principle is similar to that of online ad networks, where advertisers can choose where to place ads by selecting slots from a list of participating publishers. Although INgrooves has no rights over the music, it takes a share of revenue each time someone buys a song. This can be around 15% for basic distribution and up to 30% for full service, where the buyer agrees to promote, license and distribute the music.
UMG Distribution and Fontana say the partnership will expand their retail and marketing distribution services. INgrooves partners include iTunes, Napster and Amazon, while artists include Dolly Parton, Paul Oakenfold and Armand Van Helden.