ORCHARD REAPS MASSIVE HARVEST

Little Indie Becomes The First Of The “Internet Distributors” To Be Traded On The NASDAQ

By Moses Avalon

Forget TVT, Razor & Tie or Koch, a little Indie called The Orchard, who up until earlier this year was competing with other garage-band distributors like CD Baby, has pulled way ahead of their competitors with a merger to the publicly traded company, Digital Music Group. (symbol: DMGI)

The Orchard has had a rocky history. While they were of the first to offer “on-line CD distribution” to unsigned acts, the model was fraught with growing pains and speed bumps. For years, The Orchard wracked up many complaints by member artists and labels, developing a reputation for not paying their royalties and backpedaling on promises of obtaining distribution alliances.

When The Orchard was purchased and restructured in the past year, its new CEO, Greg Scholl, then stated to me in email, ”We have invested a lot of time and money in building the infrastructure and improving business disciplines and financial transparency… [And have] dramatically changed the nature of how we relate to the artist and label clients we serve.”

The Orchard hopes its new philosophy will resonate with its members as it has with Wall Street, where double talk and elusive claims of profits and losses are business as usual.

Despite revenues of about $15 Million and a gross profit of $4.2 million during 2006, Orchard states they have still lost money during that period and for the first quarter of 2007. The reason, according to Scholl are investments in, “building out operations, marketing services, and other initiatives that we believe will help our artists and labels sell more music and build bigger audiences.”

This merger signals a new “hopes up” era for the world of Internet based distribution which as been besieged with doom & gloomers in the blog-o-sphere who claim the business is in the doldrums. News that a company with confessed losses can still find partners, investors and even go public will be a bitter pill for them but relief for their knackered readers and Orchard’s clients.

The new entity will trade on Nasdaq as “DMGI,” but will still be The Orchard in name and brand.

The Moses Avalon Company wishes The Orchard much success in their new incarnation and hopes that it will stay true to its mission statements of good service to the thousands of artists and labels they distribute.

Because if not… now that The Orchard will be a public company, they trade watchdogs from The Moses Avalon Company, to The US Securities and Exchange Commission and their perpetual budget to investigate complaints.

Ever onward,

Moses Avalon

One response to “ORCHARD REAPS MASSIVE HARVEST”

  1. Jordan says:

    “Despite revenues of about $15 Million and a gross profit of $4.2 million during 2006, Orchard states they have still lost money during that period and for the first quarter of 2007. ”

    That is hugely weird. Hmmm, doesn’t seem like their operations or biz is working well. just my 2 cent.

    thanks
    jordan
    webmaster, Smoke Assist

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