Music Publishing Acquisitions Bubble Business or Sustainable Market?

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