(Bloomberg) — Apple Inc. is buying a stake in UnitedMasters, investing in a music-distribution company that is trying to undercut major record labels by offering artists full control of their music.
UnitedMasters raised $50 million in its Series B funding round, the company said Wednesday, valuing the business at $350 million. Alphabet Inc. and Andreessen Horowitz, which invested in UnitedMasters in 2017, are also participating in the round.
Former record-label executive Steve Stoute formed UnitedMasters four years ago, hoping to capitalize on growth in the independent music sector — artists who don’t have a traditional record label. The company distributes their music to all the major streaming services, taking a fee rather than commanding ownership of the underlying music.
Several companies have pursued this goal, appealing to decades of artist resentment toward record labels. The labels have thus far maintained their dominance in the record business, using their catalogs and resources to retain or sign most of the major acts.
But Stoute’s vision has now attracted backing from two of the world’s largest technology companies, both of which operate streaming services. Investments like these are rare for Apple, and this one is all the more unusual since UnitedMasters aims to take business from the three major music companies, the most important business partners for Apple’s paid music service.
“Steve Stoute and UnitedMasters provide creators with more opportunities to advance their careers and bring their music to the world,” Apple services executive Eddy Cue said in a statement. “The contributions of independent artists play a significant role in driving the continued growth and success of the music industry.”
Cue and Stoute have known each other for many years. Stoute operates the advertising agency Translation in addition to UnitedMasters. “I know it’s David and Goliath,” he said in an interview, “but artists signed to a major label shouldn’t have an advantage over artists that choose to go independent.”
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