The impending music business revolution

 

Over the weekend, pop superstar Billie Eilish performed at iHeartRadio Music Festival, her first live set in quite a while (see: Covid-19). Meanwhile, fellow superstar Olivia Rodrigo was actually on stage for the first time at the same event. But this article is not about those two otherwise brilliant artists — it is about their record label, Universal Music Group. The world’s biggest music corporation with a market share of about a third of all recorded music, it will be going public on the European stock market tomorrow, for a valuation estimated somewhere in-between €30bn and €50bn. Not bad for a company that was essentially considered terminal a decade ago…

The reason for that? Obviously, the rise of streaming as a genuine new source of monetization for the music industry. Which explains why artists have been selling the rights to their catalogue left and right in recent months: turns out that having material is key to being listened to. Who knew? Everybody in the biz… Still, this is great news for artists, whose livelihood can again be maintained thanks to recorded music. A major topic in these times of Covid, during which many artists had to wait it out for the better part of 2 years before they had any chance of performing on stage in front of more than a few hundred happy few. That being said, the ratio between recorded and live music revenue remains a key topic: when the situation is back to “normal” and bands are touring again, discussions about streaming profit sharing will likely resume. But, in the long run, the very fact that there is business to be made off stage is a good sign…

Obviously, that is also a great sign for Universal Music and its parent company Vivendi. The reasons for this listing taking place now actually have more to do with personal tactics from Vivendi head Vincent Bolloré, one of France’s richest men, than global music economics per se. Bolloré, who routinely triggers massive business power moves to his advantage, stands to personally make several billion euros this time around. Not a bad day, if you ask us. Same goes for Universal’s managing team: CEO Sir Lucian Grainge reportedly earned $60m last year, taking into account both salary and bonuses he got from handling the acquisition of 10% of the company’s capital by China’s Tencent. CFO Boyd Muir “only” got $3,9m for that. Again, beyond the revenue sharing discussion that is bound to arise from such astronomical numbers, it does feel somewhat refreshing to hear unicorn numbers associated with the music industry again. It had sure been a while…

In other news, Twitch is reportedly moving ahead on licensing discussions with global music publishers. Yet another revenue stream…