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Music Publishing Acquisitions Bubble Business or Sustainable Market?

Report by Zach Fuller
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The 20,000 Foot View: Music publishing mergers and acquisitions have boomed in recent years, invigorated by streaming’s user growth and the multitude of revenue options becoming available outside of music sales, such as micro syncs afford by user generated content (UGC) on YouTube and the steep growth of podcasts. The logic is sound: through the emergence of the digital economy, music publishing provided a more stable respite from the volatility of declining frontline releases. Yet as the business shifts to streaming and an engagement based model, are the assumptions on publishing’s future growth misaligned with the macro trends shaping the recorded music industry? With streaming’s emphasis on the new set to create a world of mega hits and audiences with less inclination towards looking back, the swelled valuations of publishing catalogue may begin to look ill judged. Conversely, the short-term euphoria may be used to drive its value even higher, if recorded music revenues remain strong in the coming years. This report therefore considers whether the music publishing market is in a state of inflation, or has transitioned towards an organic sustainable market with assets that were previously undervalued against music demand and/or underexploited in the piracy era.

Key Findings

  • There were        large music catalogue acquisitions in 2018 compared to the        registered in 2017
  • Multiples of Net Publishing Share (NPS) have swelled between 2010 and 2018
  • Despite the acquisitions, only the independent sector has managed to increase its market share between        from        to       
  • In 2010, BMG purchased Chrysalis’s catalogue for a        multiple. By 2018, an        stake in Bob Marley’s catalogue acquired by Primary Wave was purchased at a        multiple of NPS
  • The average annual spend of        million in 2016- 2017 represented a six-fold increase on the average of        million across the preceding six years
  • A total        million was spent catalogue acquisitions in 2018 (although this mostly came via the Sony ATV deal for the remainder of EMI)
  • Sony Corp’s original stake in Sony/ATV had an average price of        per copyright (from a catalogue of        million songs)
  • When Sony completed this acquisition two years later in 2018, the average price had gone up to       
  • The global recorded music industry revenue in 2018 was        billion in revenues, which represented an        growth
  • Artists direct represented        million, up       
  • Streaming contributed        billion and        to recorded music revenue 

Companies and brands mentioned in this report: Apple, Believe, Blue Mountain Group, BMG, Bug Music, Carlin, Conchord Bicycle Music, Downtown Music, EMI, Hipgnosis Songs Fund, Kobalt, Parlophone, Peer Music, Primary Wave, Round Hill, Royalty Exchange, Universal Music Group, Universal Music Publishing, Warner Chappel, Warner Music Group, Sony/ATV, Songs Publishing, Spotify

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