By Emmanuel Legrand
In an internal note sent to staff (see below), Downtown Founder and CEO Justin Kalifowitz said the decision to sell the publishing assets was "bittersweet" but made sense if Downtown wanted to "achieve our mission of building a more equitable global music industry."
The catalogue was developed or acquired by Downtown over the past 14 years and includes songs such as 'Green Onions', 'Dancing In the Streets', 'Runaway', 'Change the World', 'Moves Like Jagger', among others. As part of the transaction, Downtown will "continue to manage global royalty collection for the copyrights included in the sale through the end of 2021," according to a statement.
The transaction does not include Downtown's publishing administration clients, including the Estate of George Gershwin, John Lennon & Yoko Ono, Miles Davis, John Prine, Wu-Tang Clan, Ryan Tedder/OneRepublic and others.
With the addition of Downtown's catalogue, Concord now claims to control the rights to over 600,000 music works. This is Concord's second largest acquisition after Imagem, which was bought in 2017. Concord said this acquisition underscores the company's "longtime leadership position in the acquisition of music and theater assets."
“Concord is an excellent home for this extraordinary catalogue that we’ve had the unique privilege to build over the past 14 years. Not only does Concord recognise the value of these works, but this transaction further demonstrates the true strength of the modern independent music sector,” said Kalifowitz.
“The incredible catalogue of songs is an excellent complement to the timeless and valuable copyrights upon which Concord has built a successful business,” added Concord’s Chief Publishing Executive Jim Selby. “Our global publishing team is honored to now represent these songwriters and their works to the world.”
Downtown said its decision to divest its owned copyright portfolio follows a strategic review of its business interests initiated in Q4 2020. "As a result of that process, Downtown has decided to focus exclusively on the fast-growing music services sector to support the extraordinary growth of the independent music economy, as well as the creators and entrepreneurial businesses that rely on its platforms and services," said the company in a statement.
Selling the publishing catalogue will allow Downtown to operate as a "truly neutral provider to meet the changing needs of creators and their partners," according to Kalifowitz. He explained: “The idea of serving creators has been core to Downtown’s ethos since our founding in 2007. Divesting our owned IP enables us to advance our position as the world’s leading music service provider, empower a rapidly expanding global creative class and, ultimately, is the most expedient way to help realise our vision of a more equitable music industry.”
Downtown owns and operates a variety of affiliates such as rights management platform Songtrust, which represents over three million songs and more than 350,000 songwriters; distribution companies CD Baby and FUGA; advertising optimisation service AdRev; music rights management service for indie artists Soundrop; music data analytics firm Simbals; and digital marketing platform Found.ee.
The company also established in 2020 Downtown Neighbouring Rights, a stand-alone business unit dedicated to the collection of performance royalties on sound recordings that represents clients such as the Estate of Ella Fitzgerald and Justin Bieber. Additionally, its music publishing administration platform, Songtrust has expanded its royalty collections to cover 145 countries, and now represents more than 3 million songs and more than 350,000 songwriters.
Downtown Music Publishing will from now on be aligned with with the distribution and marketing capabilities of DashGo, specialised in maximising the value of music catalogues, to form a new division named Downtown Music Services. The new division will offer bespoke distribution, copyright management, creative marketing and financing solutions for songwriters and artists.
Downtown Music Services will be led by Mike Smith, who joined Downtown last year as Global President of the company’s music publishing business. DashGo Founder and President Ben Patterson will assume the role of Chief Operating Officer with continued oversight over distribution, marketing and promotion.
Downtown said it manages more than 23 million music assets on behalf of more than 1 million creators and 2,500 enterprise clients around the world. With the sale of its publishing assets, Downtown will be able to "focus on its core music publishing service offerings, including all global creative and sync licensing capabilities, as well as Songtrust, its underlying technology and assets, which are unaffected by this transaction."
US independent music company Downtown Holdings has realigned its business to focus on services to artists, songwriters and labels. Collectively, Downtown is projecting to generate over $600 million from its music services businesses in 2021.
The strategic review also involves a divestment from its original music publishing operations, with Concord buying Downtown's portfolio of 145,000 owned and co-published music copyrights. Terms of the transaction were not disclosed but Reuters puts it in the $400 million range.
In an internal note sent to staff (see below), Downtown Founder and CEO Justin Kalifowitz said the decision to sell the publishing assets was "bittersweet" but made sense if Downtown wanted to "achieve our mission of building a more equitable global music industry."
A leadership in music assets acquisition
The catalogue was developed or acquired by Downtown over the past 14 years and includes songs such as 'Green Onions', 'Dancing In the Streets', 'Runaway', 'Change the World', 'Moves Like Jagger', among others. As part of the transaction, Downtown will "continue to manage global royalty collection for the copyrights included in the sale through the end of 2021," according to a statement.
The transaction does not include Downtown's publishing administration clients, including the Estate of George Gershwin, John Lennon & Yoko Ono, Miles Davis, John Prine, Wu-Tang Clan, Ryan Tedder/OneRepublic and others.
With the addition of Downtown's catalogue, Concord now claims to control the rights to over 600,000 music works. This is Concord's second largest acquisition after Imagem, which was bought in 2017. Concord said this acquisition underscores the company's "longtime leadership position in the acquisition of music and theater assets."
Focus on music services sector
“Concord is an excellent home for this extraordinary catalogue that we’ve had the unique privilege to build over the past 14 years. Not only does Concord recognise the value of these works, but this transaction further demonstrates the true strength of the modern independent music sector,” said Kalifowitz.
“The incredible catalogue of songs is an excellent complement to the timeless and valuable copyrights upon which Concord has built a successful business,” added Concord’s Chief Publishing Executive Jim Selby. “Our global publishing team is honored to now represent these songwriters and their works to the world.”
Downtown said its decision to divest its owned copyright portfolio follows a strategic review of its business interests initiated in Q4 2020. "As a result of that process, Downtown has decided to focus exclusively on the fast-growing music services sector to support the extraordinary growth of the independent music economy, as well as the creators and entrepreneurial businesses that rely on its platforms and services," said the company in a statement.
A neutral provider
Selling the publishing catalogue will allow Downtown to operate as a "truly neutral provider to meet the changing needs of creators and their partners," according to Kalifowitz. He explained: “The idea of serving creators has been core to Downtown’s ethos since our founding in 2007. Divesting our owned IP enables us to advance our position as the world’s leading music service provider, empower a rapidly expanding global creative class and, ultimately, is the most expedient way to help realise our vision of a more equitable music industry.”
Downtown owns and operates a variety of affiliates such as rights management platform Songtrust, which represents over three million songs and more than 350,000 songwriters; distribution companies CD Baby and FUGA; advertising optimisation service AdRev; music rights management service for indie artists Soundrop; music data analytics firm Simbals; and digital marketing platform Found.ee.
The company also established in 2020 Downtown Neighbouring Rights, a stand-alone business unit dedicated to the collection of performance royalties on sound recordings that represents clients such as the Estate of Ella Fitzgerald and Justin Bieber. Additionally, its music publishing administration platform, Songtrust has expanded its royalty collections to cover 145 countries, and now represents more than 3 million songs and more than 350,000 songwriters.
Offer bespoke solutions
Downtown Music Publishing will from now on be aligned with with the distribution and marketing capabilities of DashGo, specialised in maximising the value of music catalogues, to form a new division named Downtown Music Services. The new division will offer bespoke distribution, copyright management, creative marketing and financing solutions for songwriters and artists.
Downtown Music Services will be led by Mike Smith, who joined Downtown last year as Global President of the company’s music publishing business. DashGo Founder and President Ben Patterson will assume the role of Chief Operating Officer with continued oversight over distribution, marketing and promotion.
Downtown said it manages more than 23 million music assets on behalf of more than 1 million creators and 2,500 enterprise clients around the world. With the sale of its publishing assets, Downtown will be able to "focus on its core music publishing service offerings, including all global creative and sync licensing capabilities, as well as Songtrust, its underlying technology and assets, which are unaffected by this transaction."
Justin Kalifowitz: 'Building a more equitable music industry'
The concept of being a service provider is something that’s deeply personal to me. Growing up in New York, my very best days were spent waking up early to work with my dad at a coffee shop he operated off Wall Street. To anyone who knew Henry Kalifowitz, he defined the New York to-go cup slogan “It’s our pleasure to serve you.” Burger deluxe and a milkshake for one? Catering for 500? Everyone should feel like they are getting the best experience.
I’m proud to say that Downtown has adopted a similar culture across all of our operating companies. Whether we’re working with an emerging creator about to release their first song or a multinational business entrusting us to manage millions of copyrights, service is front and center.
This view — that we have clients to serve, not just a catalog to monetise — goes back to our very first days where every business opportunity was won from scratch and every client renewal was secured on the merits. Representing the works of icons from Gershwin and Lennon to Miles Davis and Wu Tang teaches you a thing or two about client experience.
Thinking of how our service mentality could be applied to address a broader audience, we developed Songtrust in 2011 to help democratise global royalty collection. We acquired and integrated some of the world’s leading artist and label services platforms, including CD Baby, DashGo, and FUGA. We purchased AdRev and Simbals to better monetise social video. We built out a Neighbouring Rights division that counts the Ella Fitzgerald Foundation and Justin Bieber as clients. We expanded into Africa through the acquisition of Sheer in Johannesburg, and, most recently, acquired Found.ee to expand our promotional capabilities at scale.
Along the way, we also acquired and developed a portfolio of owned songs, including hits like 'Green Onions', 'Dancing In the Streets', 'Runaway', 'Home Sweet Home', 'Change the World', 'Moves Like Jagger', 'Halo', 'Stay With Me', and 'Shallow'. Songs that will stand the test of time.
While I love the story behind every song we own, being the world’s leading service provider to the music industry has simply become incongruous with continuing to be copyright owners ourselves. Considering the scale of our services today — that more than 23 million works flow through Downtown, that we’re trusted by more than 1 million creators and more than 2,500 enterprise clients — however bittersweet it might be divest this iconic catalogue, it was the best way to ensure our focus, values, and business practices are in alignment.
Like most things worth doing, it requires effort, sacrifice, patience, and dedication.
Downtown Founder and CEO Justin Kalifowitz sent the following note internally to explain the latest developments taking place at the company.
The concept of being a service provider is something that’s deeply personal to me. Growing up in New York, my very best days were spent waking up early to work with my dad at a coffee shop he operated off Wall Street. To anyone who knew Henry Kalifowitz, he defined the New York to-go cup slogan “It’s our pleasure to serve you.” Burger deluxe and a milkshake for one? Catering for 500? Everyone should feel like they are getting the best experience.
I’m proud to say that Downtown has adopted a similar culture across all of our operating companies. Whether we’re working with an emerging creator about to release their first song or a multinational business entrusting us to manage millions of copyrights, service is front and center.
This view — that we have clients to serve, not just a catalog to monetise — goes back to our very first days where every business opportunity was won from scratch and every client renewal was secured on the merits. Representing the works of icons from Gershwin and Lennon to Miles Davis and Wu Tang teaches you a thing or two about client experience.
Thinking of how our service mentality could be applied to address a broader audience, we developed Songtrust in 2011 to help democratise global royalty collection. We acquired and integrated some of the world’s leading artist and label services platforms, including CD Baby, DashGo, and FUGA. We purchased AdRev and Simbals to better monetise social video. We built out a Neighbouring Rights division that counts the Ella Fitzgerald Foundation and Justin Bieber as clients. We expanded into Africa through the acquisition of Sheer in Johannesburg, and, most recently, acquired Found.ee to expand our promotional capabilities at scale.
Along the way, we also acquired and developed a portfolio of owned songs, including hits like 'Green Onions', 'Dancing In the Streets', 'Runaway', 'Home Sweet Home', 'Change the World', 'Moves Like Jagger', 'Halo', 'Stay With Me', and 'Shallow'. Songs that will stand the test of time.
While I love the story behind every song we own, being the world’s leading service provider to the music industry has simply become incongruous with continuing to be copyright owners ourselves. Considering the scale of our services today — that more than 23 million works flow through Downtown, that we’re trusted by more than 1 million creators and more than 2,500 enterprise clients — however bittersweet it might be divest this iconic catalogue, it was the best way to ensure our focus, values, and business practices are in alignment.
As we celebrate our 14th anniversary this month, we’re excited about this new chapter and its transformative ability to help achieve our mission of building a more equitable global music industry.
Like most things worth doing, it requires effort, sacrifice, patience, and dedication.
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