2005 WRAP-UP

As we say goodbye to 2005, we'd like to extend warm post-holiday wishes to all Orchard-distributed labels and artists around the globe. We'd also like to say THANK YOU, because without you, none of this would be possible. Keep making great music, and we'll keep doing our best to get it into the ears of people in every country of the world.

To recap: Last year, we...

• Expanded our distribution network, in particular by adding hip emerging niche stores to our global digital retail platform.
• Built the largest mobile sales platform in the world for independent artists and labels. We now sell ringtones in over 200 mobile ringtone outlets throughout the world.
• Scored over 25,000 promotional placements at digital stores, which means more digital revenue in your pocket! This is a direct result of more people working in our Marketing & Merchandising department and a more sophisticated sales technology platform than anyone selling digital music today.
• Signed many of the best independent labels in the world, including Shanachie, SST, Nettwerk and Delicious Vinyl, and 2006 Grammy nominees Meshell Ndegeocello, Ray Barretto, Tiempo Libre and Third World.
• Launched Orchard Music Services, a new division offering song placement, royalty collection and other great revenue-generating services for any labels that choose to opt-in. OMS has already collected a substantial amount of revenue [six digits!] for the first ten record labels that have signed up. Contact oms@theorchard.com for more info.

Thanks to you, we're grateful for an exciting, productive '05. Working in partnership with you, we look forward to an even better '06. We will continue to advocate on your behalf, sell more of your music, and push the boundaries for independent music in the digital marketplace!

Sincerely yours,

The Orchard Team

MORE RETAIL PARTNERS

In 2005, the digital landscape continued to evolve and grow. The Orchard has stayed ahead of the curve every step of the way, successfully building the strongest retail network to sell your music. Whenever major retailers launched new stores in new territories, we made sure your music was available for sale upon launch. Whenever new ringtone opportunities arose, we acted quickly to cut tones and deliver them to mobile carriers and consumer sites. Whenever possible, we partnered with regional stores that sold more downloads locally than their international competitors.

And we haven't stopped fighting for better rates for your music. In July, we negotiated an improved rate for your music at iTunes - the market leader for downloads - increasing revenue-per-download from 65 cents to 70 cents.

Here are a few of the new partners we supplied in '05.

MAINSTREAM DIGITAL STORES NICHE DIGITAL STORES MOBILE PARTNERS MSN - US Reggae Country - US Xingtone - US Passalong - US Musica360 - US Groupietunes - US Starbucks - US Street CDs - US Verizon - US Titan Tunes - US MisRolas - US Groove Mobile - US Ruckus - US Chondo - US Summus - US iTunes - Japan Break My Ears - UK Datacorp - US Nifty - Japan Akuma - Germany Cellus - US iTunes - Australia   Mobile Streams - UK Sanity - Australia   Arvato - Germany Soundbuzz - Singapore   Hudson - US Musicload - Germany   WES - Finland Music Choice - UK   Docomo Japan Blueprint - UK     Beon - Mexico

SEE COMPLETE LISTS OF ORCHARD-SUPPLIED DIGITAL STORES AND MOBILE PARTNERS.

WORLD-CLASS MARKETING

The Orchard is not just a technology middleman that ships your music to digital stores. We actively sell your music, through creative marketing and promotional programs. Our industry-leading catalogue gives us the clout to reach major decision-makers at all of the major digital stores. The result? Over 25,000 promotional retail placements this year, including hundreds of different promotional programs that run each day.

Here are the just a few of the 25,000 "wins" we generated in '05!

1) Orchard-distributed music represented roughly 80% of iTunes' "Around the World" Chinese music promotion. Launched in October, the high-profile feature occupied prime real estate on iTunes' homepage and World Music homepage. The Orchard supplied 100% of the Jackie Chan Playlist, among other things. Read more about it here.

A few weeks later, iTunes turned its focus to Australian music. Orchard-distributed artists - including The Waifs, Black Cab, Killing Heidi, Even and The Whitlams - were featured alongside Aussie mainstays like INXS and Kylie Minogue. Read more about it here.

2) Musicmatch posted two playlists containing 100% Orchard content on its Featured Music page: Hot Indie Rock From the UK and John Peel's Picks. The playlists include tracks from Art Brut, Apartment, The Perishers, The Immediate, Puerto Muerto, This Girl, Atlantic Dash, Laura Cantrell, Cex, Coldplay, Pretty Girls Make Graves, The Wedding Present, Zion Train, Explosions In the Sky and Oxes. Our marketing team works relentlessly to promote thematic lists like this to digital stores.

3) iTunes featured Meshell Ndegeocello's excellent new album "The Spirit Music Jamia: Dance of the Infidel" in its weekly New Music Tuesday newsletter. This is considered prime digital real estate, read by over a million music-lovers each week.

4) The Yards and Art Brut were featured on Real Rhapsody's "Ones to Watch" page. This marked the second time in a row that Orchard-distributed artists took two of the five available slots on this monthly feature.

5) Napster published a 26-track Bollywood playlist that contained 100% Orchard-distributed music, collected from 10 different albums on the excellent Saregama label.

MORE GREAT MUSIC

Music: It's what makes us get out of bed every morning. We distribute the best music in the world - from hip-shaking boogie to hypnotic sitar'n'tabla masterpieces to crushing Scandinavian death metal to French hip-hop to uplifting Southern Gospel music to sultry tango from Argentina...oh, we could go on and on.

Here's just a tiny sliver of the great clients that signed or renewed contracts for Orchard distribution in '05:

Labels: Shanachie, SST, In the Red, Nettwerk, Analekta, Peter Pan Records / Inspired Corporation, Go-Kart, Times Music, Snapper, Cinevox, Delicious Vinyl, Track Records, Musikvertrieb AG, Plug Research, Babel, Fire Records, O+ Music, Time, Gern Blandsten, Banshee Worx, Decon, Duck Records, Bronx Science Records, Cedille Records, Day By Day Entertainment, Signum, Next Big Thing, Candlelight, Proper, M.O.D.A., Synergy Entertainment, Black Point Music, Acrobat, Splash Point Music, Open Records.

Artists: Art Brut, The Turtles, Black Flag, Ween, John Denver, Simply Red, Lewis Black, Don McLean, Young MC, Billy Bob Thornton, Seu Jorge, Brand New Heavies, Dntel, Motley Crue, The Minutemen, Ted Nugent, Dion, Fleetwood Mac, Lenny Bruce, Cass McCombs, Meshell Ndegeocello, Tone-Loc, Radio 4, Ennio Morricone, King Sunny Ade, MF Doom, The Monteverdi Choir, Ministry, Polar Bear, Skip James, Twisted Sister, The Ponys, Luomo, Swing Out Sister, Deep Purple, The Hold Steady, Acoustic Ladyland, Bad Brains, The Three Stooges, Asha Bhosle, The Fall, Augustus Pablo, Soundgarden, The Orb, Sabahat Akkiraz, Townes Van Zandt, The Deadly Snakes, Mathematics, Fito Paez, The Pharcyde, The Clancy Brothers, Ofra Haza, The Kingsmen ["Louie Louie"], Afu-Ra, Dalek, Fairport Convention, The Wedding Present, The Dirtbombs, Seth Lakeman, Kim Waters, Explosions in the Sky, Rye Coalition, The Descendents, The Highwaymen, The Skatalites, Francis Dunnery.

NEW DION ALBUM: BRONX IN BLUE

On January 10, The Orchard will release Bronx In Blue, the latest album from Dion, a 50s doo-wopper ["A Teenager in Love"] turned 60s pop-rocker ["The Wanderer"] turned 70s folkie ["Abraham, Martin and John"]. As No Depression puts it: "It's hard to conjure a less likely career arc - that a singer who competed with the Bobbys, Frankies and Fabians within the Top 40 of the early 1960s should release the best traditional blues album of 2005." Dion's January 09 record release party at Joe's Pub in NYC - featuring opener Howard Emerson - is already sold out. But you can see Dion perform at a January 10 benefit at the Housing Works Used Book Cafe. Also: Keep your eyes peeled for an article about Dion and Bronx In Blue in this Sunday's edition of the New York Times (January 08, 2006). Until then, check out the great press we've secured for the record!

MORE EXCITING MUSIC NEWS FROM '05

THE ORCHARD ANNOUNCES SIGNIFICANT EUROPEAN AND AMERICAN LABEL SIGNINGS
http://www.theorchard.com/news/tomembers_012505.php

BLAZIN' SQUAD AND PEDRO TO RELEASE DIGITAL EPs THROUGH THE ORCHARD
http://www.theorchard.com/news/tomembers_032205.php

THE ORCHARD ANNOUNCES EXCLUSIVE WORLDWIDE DIGITAL DISTRIBUTION FOR LEGENDARY INDEPENDENT LABEL SHANACHIE
http://www.theorchard.com/news/tomembers_052005.php

THE ORCHARD JOINS AMERICAN ASSOCIATION OF INDEPENDENT MUSIC (A2IM) AS A FOUNDING ASSOCIATE AND ITS FIRST DIGITAL DISTRIBUTOR
http://www.theorchard.com/news/tomembers_083105.php

THE GODFATHER OF LO-FI GOES DIGITAL [GLOBAL AND MOBILE]: DANIEL JOHNSTON'S RARE EARLY RECORDINGS TO BE MADE AVAILABLE ONLINE
http://www.theorchard.com/news/tomembers_053105.php

THE ORCHARD TO MAKE MOTLEY CRUE & CHESTER BENNINGTON "HOME SWEET HOME" HURRICANE RELIEF SINGLE AVAILABLE FIRST EXCLUSIVELY ON ITUNES
http://www.theorchard.com/news/tomembers_092705.php

THE ORCHARD AND SAREGAMA LAUNCH ASHA BHOSLE'S LANDMARK NEW ALBUM WITH UNPRECEDENTED DIGITAL PROMOTION
http://www.theorchard.com/news/tomembers_092905.php

MORE INTERNATIONAL GROWTH

In 2005, The Orchard achieved great success in expanding operations into major markets all around the world. Here's a recap of this past year's victories in...

MIDDLE EAST + CHINA http://www.theorchard.com/news/tomembers_012705.php   UK AND EUROPE http://www.theorchard.com/news/tomembers_060705.php   CHINA http://www.theorchard.com/news/tomembers_060605.php   SOUTH AMERICA http://www.theorchard.com/news/tomembers_060305.php    RUSSIA http://www.theorchard.com/news/tomembers_063005.php   CANADA http://www.theorchard.com/news/tomembers_081505.php   KENYA http://www.theorchard.com/news/tomembers_082905.php   SOUTH AFRICA http://www.theorchard.com/news/tomembers_090805.php

SEE A COMPLETE OVERVIEW OF THE ORCHARD'S NETWORK OF GLOBAL OPERATIONS.

2006 AND BEYOND

The Orchard has many exciting things in store for you in '06. Here's a sneak preview:

• A soon-to-be-announced partnership with one of the world's largest mobile carriers. The Orchard will be the preferred independent music provider and a close promotional partner for the launch of this major service's upcoming over-the-air [OTA] full-track download service. The Orchard's catalogue will represent fully one-third of the music that will be available for sale upon its launch. And they're looking to us for guidance on how to promote your music directly to their customers. Visit our website this Friday for the official announcement!
• More global expansion, including new distribution partners in more countries and another office in Asia. We now have staffed offices in 18 territories, with regional music industry leaders working exclusively on your behalf. Everywhere digital music is sold, we have a connected, savvy team that is engaged with local digital and mobile retailers and bringing exciting new labels into The Orchard's growing catalogue. No one in the industry has a network this strong and diverse.
• A truly landmark initiative to transfer and re-master analog recordings - originally released on vinyl-only format - to a digital file format that we will distribute and promote through our worldwide network. The greatest living audio designers [literally!...this elite group has redefined what is possible in two-channel audio - artists like Kondo-san and Simon Yorke] are handcrafting a custom system that will convert your vinyl masters to the highest possible quality digital archives. You will own these archival files [they're your masters, after all!] at no extra cost, because you are our clients and have entrusted us with your music.
• Digital video distribution - from independent films to music videos to short clips for mobile phones - to emerging digital video stores, including Google, iTunes, MusicNet and more. We are committed to our position at the forefront of digital distribution. As the digital video market develops, The Orchard will lead the charge every step of the way, just as we've led the digital music market. We will work closely with existing and emerging services to help them determine the best way to sell video content - music or otherwise. We will announce several pilot programs during the first half of '06.
• ...and much more! Stay tuned - we look forward to keeping you up-to-date in future editions of Inside The Orchard, our client newsletter!

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The Orchard :: 133 Fifth Avenue :: Floor 7 :: New York, NY 10003