Business Music

Kobalt Sells to Francisco Partners (Private Equity) – Loss for Independent Music Industry

It was announced a few days ago that Kobalt has sold to private equity firm – Francisco Partners.

The acquisition was price around $750 million and Francisco Partners acquired 90% of Kobalt. The remaining 10% will be split between Matt Pincus’s MUSIC, plus Dundee Partners and also Willard Ahdritz (founder of Kobalt). (Pincus will join the Board of Kobalt post the deal closing.)

Kobalt has always been the poster child of the independent music industry for music publishing rights. It’s a huge shame to see them sell to private equity instead of trying to push on further and remain an independent firm.

Over time it will be interesting to see if Francisco Partners decides to hold on to Kobalt or look to further offload the assets as they appreciate in value.

Either way… Kobalt has had amazing success over the years and its great to see them in a position where they could potentially grow even further.

p.s. Im very bullish on AMRA

Business Music

Beggars Music Group Financials for 2021 – Revenues up 29.7% Year on Year

Beggars Music Group had a strong 2021 (as they have just released their numbers in a filing on UK Companies House).

Beggars Group generated GBP 79.98 million in 2021 – which was up 29.7% year on year.

This figure includes Beggars’ share of various joint venture businesses including XL Recordings, Matador and Rough Trade, in each of which Beggars owns 50%.

Beggars is a huge player in independent music market and it’s great to see that they are still growing strong and getting a strong slice of the market.


Is TikTok deciding the future of music?

TikTok has become a very strong force in online video and become a place for youth culture to thrive.

TikTok has a great feature that allows anyone creating a TikTok to use any music they have licensed in their catalogue. This has driven great success for specific artists and it has now become a marketing strategy of the major labels to get their music used by song of the world’s largest TikTok creators.

TikTok isn’t the future of music, but it is for sure a driving force in the music industry.


Music Industry – Old Money, No Longterm Thinking, Lacks Innovation!

Now the music business sees TikTok as its tool. After being caught flat-footed by the success of “Old Town Road,” and then bringing it in-house at Sony, the labels decided they wanted some of that action. If TikTok could build the unknown Lil Nas X, imagine what it could do with a known quantity, a star?

The music business used to be first, but now it’s last. Because it is controlled by old people who did not get the memo, who believe they are indispensable and that no one can resist their money.

But isn’t it funny that not a single musical star has captured the zeitgeist of the Minneapolis/Black Lives Matter explosion in a song we all know. Illustrating that reflecting life, and opening up an audience’s eyes as to the way of life, are not part of the equation. In the music business, it’s all about collecting fans and milking them dry. When one of the biggest acts in the business, Justin Bieber, tries to manipulate the system to make his record number one, who in the hell is gonna listen to the words of a pop star?

via Bob Lefsetz

The quote above is from the most recent newsletter / article from Bob Lefsetz. Bob has been a long time music industry journalist and I thought that the above section is by far the best thing I have read about the music industry in the past 12 months.

Lefsetz is right!

The music industry has long been run by 60 year old businessman who don’t under the generations they are targeting. It’s no longer about the music and the industry runs more like buying and selling real estate than an art form at the top.

Pop music struggles to tell stories and really drive emotions. This is exactly why tracks from John Lennon, Elton John, Rolling Stones, Dolly Parton, Johnny Cash, are still getting very large numbers of plays even with the youngest audiences.

Business Finance

WMG – Warner Music Group Starts Selling Shares on the NASDAQ Today

Warner Music Group is going live on the NASDAQ today. Warner are offering 77 million class A shares at $25 a share. If Warner opens up at $25 per share that means they will have a $12.8 billion valuation.

It’s going to be very interesting to see if investors have an appetite for music companies again.

Underwriters for the new offering include Morgan Stanley, Credit Suisse, and Goldman Sachs. Ticker symbol will be WMG.

Warner Music Group has an amazing catalogue, but I’m very keen to learn more about their recent investments and what other industries they think they can enter, because doing the old record label model just isn’t going to gain enough growth over the next 20 years.