MBW Views is a series of op-eds from eminent music industry people… with something to say. The following MBW op/ed comes from Samantha Moore, President of Rostrum Pacific-owned distributor SpaceHeater.
Here, Moore argues that the recent wave of consolidation has left too few genuinely independent, full-service distributors, and that the labels and catalogs relying on them are running short of the kind of partner they need.
Between December 2024 and July 2026, five transactions were announced that reveal a larger pattern emerging in the relationship between the content holders and those that distribute it.
Universal Music Group‘s Virgin Music Group announced the acquisition of Downtown Music Holdings, including its FUGA distribution arm, in December 2024.
Concord agreed to acquire Stem Distribution in March 2025. Warner Music Group announced the acquisition of Revelator in April 2026.
Weeks later, BMG and Concord announced a merger to create a combined entity valued at [around $15 billion], positioning itself as “the leading independent music company in the world.”
Adjacent to this cluster, CVC Capital Partners announced a majority stake in DistroKid in July 2026.
The aftermath is an indie distribution landscape that looks a lot smaller than it did before. Operators with their own platforms, no major-adjacent ownership or vendor agreements, and a service layer built to actually protect the catalog they serve has narrowed to a handful of options.
I am going on my 12th year across major-owned and indie distribution companies. I’ve seen all sides of this argument.
Now I’m running SpaceHeater, one of the operators in the non-major owned independent tier. So, I’m not writing from a completely neutral point of view; I have a stake in the argument I’m making.
But that background comes with a specific vantage point: thousands of hours across operations, tech development, data analysis, commercial, and executive management.
I’ve seen how decisions get made on both sides and how the conversations differ. Those decisions have real operational impact on clients, and it compounds over time.
So, what happens to the mid-tier of content when scale becomes the operating assumption across the market?
Service layer and scale are in structural tension for the vast majority of catalogs that exist outside of major-label artists, and consolidation is magnifying the problem. I want to explore that tension and what it means for the artists, catalogs, and infrastructure the industry claims to be serving.
To understand why this tension exists, we have to look at how digital distribution actually evolved. The story started long before Spotify.
In order to understand how we got here, let’s take a look at where we’ve been:
- 1997-2008: The early digital era — Napster infiltrates the consumer mindset, iTunes launches in 2003, and legal players like eMusic, Mp3.com, and PressPlay try to establish a paid model. Spotify launches in 2008 in Europe but won’t reach the US until 2011.
- 2008-2013: Majors start paying attention to independent distribution. WMG combines ILG and ADA and starts offering digital distribution. Sony acquires a majority stake in the Orchard. Ingrooves buys Universal-owned Fontana. This partnership led UMG to acquire Ingrooves in 2019.
At this point, what were these distributors actually selling? The value proposition was twofold: They offered distribution to content previously gatekept from these channels. Now, music could be live on 100s of DSPs, and this was in the time that the market was much more diversified and local stores still ruled many territories. You could call this commercial access.
Secondly, they offered expertise access. The digital distribution world was new, metadata became more important, and digital marketing was still a mystery to many.
What you got for 15-20% of your gross receipts was a label manager who knew your business, a marketing team who would help you understand and execute on the shifting attitudes toward music consumption, and a commercial team that would ensure fair representation within the DSPs digital storefronts.
Distribution was seen primarily as paying for access and service. This definition held for a few years, before beginning to fracture:
- 2013-2020: Streaming gains steam and recorded music revenues start increasing rapidly, pushing double digit YoY growth by 2020. Distrokid launches in 2013 and DIY services start reshaping the picture. Developing artists get a chance to break outside the traditional system (Billie Eilish and Lil Nas X both break in this era), and established artists realize they no longer have to give away 50-80% of their proceeds to a major. Instead of trying to kill the indies, the majors focus on the upside: it’s a relatively cheap way to build market share, and it’s a huge growth driver. But one thing is clear: the era of gatekeepers is over. Distributors now have to prove they can add value for their cut, rather than talent handing over rights at a mere chance at success.
- 2020-present: The explosion of distributors. Companies like FUGA, OpenPlay, and AudioSalad have success with whitelabel and pipes-only integrations. Now, it’s gone from, anyone can be an artist, to anyone can have a label, to anyone can be a distributor. New companies get to skip the foundational work of building pipes and acquiring deals and start providing only the expertise access I previously mentioned. This proliferation of distributors operating on top of licensed pipes, deals, and often analytics and royalty processing platforms, on top of the DIY cohort, had the unintended effect of reducing the perceived value of distribution.
The value collapse accelerated at this point, as distributors investing in real service on top of their owned pipes and platforms had to operate under significant margin compression.
Distribution is more complex now than 15 years ago, between short-form and video delivery, complex claiming strategies, real-time analytics, and the continued specter of AI.
At the same time, margins have gotten squeezed to the point that they’ve had to take on more clients than they can service properly in order to remain profitable.
This makes acquisition more attractive, whether by majors or large equity-backed companies.
Labels have been trained by the commoditization narrative to pay “pipes only” prices for a hybrid product.
When the pipes are cheaper but the expertise is still, if not more, expensive, and the whole thing gets priced at a discount, service gets compressed.
There’s a second structural reason this mismatch has persisted so long: One aspect of the service layer is invisible, and another is hard to sell.
When a distributor’s ops team catches a metadata problem before it hits DSPs, no one notices. When they miss it, everyone notices, but a material amount of work goes into preventing those errors.
Labels evaluating distributors before signing have almost no way to see the service layer working – they can only see it not working, after a release has been messed up.
Another aspect is time-on-client: thinking about them when they aren’t in the room, picking up the phone, giving them recommendations they didn’t explicitly ask for.
It’s hard to put that on a menu of services, even though it’s what separates a great client experience from a “fine” one.
Labels rationally optimize their decisions on the things they can see: fee, tools, dashboards. The market is punishing operators who invest in what can’t be evaluated at the point of sale.
Two groups make up most of the full-service indie sector’s client base: independent labels and catalogs owned by private equity firms.
Labels care deeply about the work they represent, often having built it themselves over the last 20-30 years. They want to keep it culturally relevant and profitable for the benefit of themselves and artists.
PE firms see catalogs as an asset class and buy them on the assumption that they can improve profitability over what they paid. They don’t need to care about indie ‘spirit’; they care about maximum visibility and revenue on the assets they own, which turns out to require the same operational fluency. Structurally, these couldn’t be more different, but what they need from a distributor mostly overlaps.
“The first requirement is service-layer investment: actual people, time, and capacity, supported by tech built for specific work rather than stitched together from various vendor agreements.”
The first requirement is service-layer investment: actual people, time, and capacity, supported by purpose-built tech rather than stitched together from various vendor agreements. Labels need agile teams who can control the end to end pipeline, develop tools that actually accelerate their business, and can action requests as fast as possible.
Beyond tech, catalog development is an underserved part of the market as a ratio to how much it generates and its perceived value.
There is a difference between simply collecting royalties and maximizing them through new revenue streams and recovery, capitalizing on organic trending moments, and expanding and enhancing what the assets have to offer. There are typically many opportunities in your average catalog, but it takes work to identify, ideate, and execute on them.
That’s where a good distribution-level catalog marketing team can be invaluable.
The second requirement is strategic fluency in the indie sector.
What are the benefits, leverage points, and advantages? What risks need to be mitigated? How can speed, artist friendly ethos, and lack of competing incentives be used to best give these catalogs a leg up?
Companies free of these pressures can move more quickly and be more flexible with pilot programs and innovation opportunities. All of these things require a distributor actually positioned to take advantage of and protect the catalogs they serve.
Being fluent in this ecosystem, its players, and serving as a navigation partner is crucial to preserving success and autonomy in the sector. But none of this is available at scale from a commodity-optimized distributor, regardless of what it’s called. The tier of operators who can deliver both service-layer investment and ecosystem expertise has narrowed, while the need for it has only grown.
The shrinking supply and growing demand shapes the opportunity for the operators still in the truly independent tier.
“If service is half of what separates a good distributor from a great one, then the math between hours in the day and number of clients has to work. Distributors don’t need to try to be labels. This is a finished-goods business, not artist development.”
With movement and consolidation in any industry, opportunities arise for disruption, correction, and innovation. I wouldn’t have a strong critique without an optimistic payoff. I see two opportunities in the path forward:
The first is for the service layer to truly honor and protect the content, instead of using it as a stepping stone to the next point of market share. Operators who show discretion and limit their rosters to what their teams can reasonably service will start to gain ground on those who operate mostly on scale.
If service is half of what separates a good distributor from a great one, then the math between hours in the day and number of clients has to work.
Distributors don’t need to try to be labels. This is a finished-goods business, not artist development.
Where they should lean in is on the things they can do best: insights, analysis and jumping on trends quickly using private data benchmarked against the wider market, making sure content is optimized to collect maximum revenue, continuing to find new audiences and re-engage dormant ones, and iterating in real time on a platform and product based on client feedback.
There is something magic that happens when you are truly working side by side with other small business owners to create something greater than your size would dictate.
The second opportunity is for true indies to hold the line on what real distribution actually costs to deliver. The dismantling of distribution into a list of SaaS services and licenses to acquire has trained the market to see it as a commodity, when it has always been a hybrid product.
If true indies follow that pricing logic to its conclusion, margins will keep compressing, and the same acquisition and consolidation cycle will repeat in another five years. Some labels will want to do it all themselves and should engage commodity-priced platforms built exactly for that use case.
But for labels seeking a more cooperative model, there should be options built specifically to serve that sector, priced accordingly, rather than platforms trying to serve both cohorts at once and under-serving them both.
“For labels seeking a more cooperative model, there should be options built specifically to serve that sector, priced accordingly, rather than platforms trying to serve both cohorts at once and under-serving them both.”
So, where does this leave us?
There’s a need (arguably an obligation) for true independents to exist at the distribution level in order to maintain competitive health. There’s also a supply and demand issue: what’s available on the market now doesn’t serve the whole spectrum of clients.
With the team at [Spaceheater owner] Rostrum Pacific, we’ve built a platform that targets this underserved sector. The conversations I’ve had since taking this role a year ago point to a sentiment that’s fairly widely held but rarely discussed publicly.
There need to be viable options for every type of content holder, and right now that’s only true on paper. This will be my third distribution company, and I keep coming back and pushing forward because it’s so clear to me that things could be better for both distributors and clients.
The decisions that content holders make over the next 18-24 months will materially shape whether the truly independent tier rebuilds or narrows further.
My bet is that true independents will become more rare and more valuable going into the next decade.
Music Business Worldwide
