Warner Music Group (WMG) and Universal Music Group (UMG) are making money moves. Both entertainment groups announced last week that they would like to go public, with WMG announcing they had filed IPO paperwork with the Securities Exchange Commission (SEC) on Thursday.
This comes as huge news, as they represent 2 out of the big 3 corporations in the music industry, with Sony Music being the final piece of the puzzle. Here’s a quick glance at some of what each company owns:
|Sony Music||Ultra Music, STMPD, Ministry of Sound||Garrix, Flosstradamus, Steve Aoki, Lost Frequencies|
|Universal Music Group||Def Jam, Interscope, Capitol Records||Bieber, Kanye, Post Malone|
|Warner Music Group||Atlantic, Spinnin Records||KSHMR, Timmy Trumpet, Oliver Heldens|
This indicates a shift to the size and reach of these major conglomerates – as IPOs are often expensive and risky, but going public provides a financial boon for future growth projects. The bullish outlook is backed by recent strong revenue performance from the sector as a whole.
This is not WMG’s first time going public though – they were public under Time Warner until 2004, and continued to trade stock as an independent company until 2011. Billionaire Leonard Blavatnik of Access Industries, then purchased WMG for US$3.3b in 2011, and hopes to captain WMG’s return to the market by 2023.
On the other hand, UMG’s parent company is a French conglomerate, Vivendi. They own other media outlets including Dailymotion and Telecom Italia. Vivendi has recently relinquished 10% of UMG to a consortium led by China’s Tencent, for US$3b last month.
UMG published a 14% increase in revenue to $7.7 billion in 2019. This included an increase of 11% from recorded music earnings, 9% from publishing income, and streaming revenue jumped by an astounding 21%.
What does this all mean?
As Sony is already listed on the Tokyo Stock Exchange, this marks a new beginning as UMG AND WMG hope to be publicly funded by around 2023.
For the average enthusiast of the music scene, not much will change. However, it’s a welcome injection of cash for artists and festivals. This in turn will hopefully boost the creativity and success of good music!