Music Publishing A Full-Stack Revolution

The 20,000 Foot View:  Tencent’s bid for            of Universal Music Group has set a new high-water mark for what risks becoming an overheated music rights mergers and acquisitions (M&A) sector. However, investment appetite remains strong and catalogue supply constrained, so there will be plenty more activity before the inevitable contraction. This inflow of capital has far wider implications for the music business however, not least the way in which newly-enriched music publishing companies are using it to reverse into the recordings business and expand across value chains. The renaissance of music publishing catalogue is now funding a full-stack music company revolution.

Key Findings

• Between January            and August 2019 the number            publicly announced music catalogue transactions            recordings and publishing totalled            billion
• Catalogue M&A            accelerating – by August 2019            were already as many publicly            transactions as in the whole            2018
• The growth            transactions is driven by a)            of publishing rights, b) availability            capital for transactions, and c)            of publishers to sell
• Artist catalogue            are growing too: by August            Hipgnosis Songs Fund had invested            while Royalty Exchange had generated            (2016- 2019)
• Music publishers,            Downtown, are using readily available            to build recordings businesses, expand            across the music value chain            become full- stack music companies
• Kobalt’s combination            Kobalt Publishing, Kobalt Capital, AWAL            AMRA make it a full-stack           
• Independent artists            recorded music’s growth sector, increasing            2018 to reach            billion while            rest of the market grew                      
• Publishing-led full-stack            companies are targeting the top            the recordings funnel, as illustrated            Downtown’s acquisition of CD Baby            AVL

Companies and brands mentioned in this report:             Alarm Music, Anthem, AdRev, AVL, AWAL, Big Machine, BMG Music Rights, Bosshouse Music, CDbaby, the Church of England, Compact Media, Concord, Create Music Group, DashGo, Domino, Downtown Music Publishing, Fintage House, Glassnote, Hipgnosis Songs Fund, Hitco, Imagem Music,            Music, Jingle Punks, Kobalt, the Jackson Estate, Level, Ninja Tune, ole, the Orchard, Pandora, Peer Music Primary Wave, Q+A, Reservoir Media, Round Hill, Royalty Exchange, SiriusXM, Songtrust, Sony/ATV, Sony Music Entertainment, Sony Music Group, Soundrop, Spotify, Tencent Music Entertainment, TikTok, Universal Music, Universal Music Publishing, Vivendi, Warner Music, Warner Chappell, WARP, Zync