Welcome to Music Business Worldwide’s weekly round-up – where we make sure you caught the five biggest stories to hit our headlines over the past seven days. MBW’s round-up is supported by Centtrip, which helps over 500 of the world’s best-selling artists maximise their income and reduce their touring costs.
This week brought news of not one, but two $300m+ deals associated with entertainment giant HYBE, the company behind BTS.
On Thursday (February 9), HYBE America, led by CEO Scooter Braun, announced its acquisition of Atlanta rap powerhouse QC Media Holdings or Quality Control, home to acts such as Lil Baby, Migos, Lil Yachty and City Girls. Variety reported that the deal is valued at $320 million in stock and cash.
Today (February 10), we learned that HYBE is buying a 14.8% stake in SM Entertainment from its founder Lee Soo Man, in a deal worth 422.8 billion South Korean Won (approx. $334.5 million).
Lee Soo Man was the company’s biggest shareholder prior to the deal, with an 18.46% stake, which means that HYBE, with a 14.8% stake in the company, will become SM Entertainment’s largest shareholder.
Also this week, Warner Music Group reported its results for the three months to end of December 2022 (calendar Q4, but fiscal Q1 at WMG) and Robert Kyncl participated in his first quarterly earnings call as Warner Music Group CEO.
Elsewhere, TikTok launched its independent distribution platform SoundOn in Australia, just days after news arrived that the platform has been limiting access to major label music in the market as part of a test with a subset of users.
Here’s what happened this week…
1) HYBE HAS NOW SPENT $600M+ IN ONE WEEK, AS IT BUYS 14.8% STAKE IN K-POP RIVAL SM ENTERTAINMENT FOR $334M
There is a lot of consolidation going on amongst the giants of the K-Pop industry.
Earlier this week, we learned that South Korea-based Kakao Corp had acquired a 9.05% stake in K-Pop company SM Entertainment, which is behind stars like NCT, EXO and Aespa.
According to Reuters, Kakao is buying its stake in SM Entertainment in a deal worth 217.2 billion won ($172.8 million).
Now, another giant of the K-Pop world, HYBE, the company behind superstars BTS, is also taking a stake in SM Entertainment….”
2) TIKTOK, INDIE TRACKS, AI, AND TECH-DRIVEN ‘EFFICIENCIES’: ROBERT KYNCL’S FIRST EARNINGS CALL AT WMG WASN’T SHORT ON PUNCHINESS
Robert Kyncl could have asked for a rosier set of fiscal results to accompany his first quarterly earnings call as Warner Music Group CEO.
WMG’s investors would be hard-pressed, however, to ask for an address that was more candid and unequivocal.
Example: Within 50 seconds of his opening speech, Kyncl told analysts: “I am committed to maintaining straightforward and consistent communication within the investor community. So in that spirit, I want to immediately and clearly acknowledge that this was a tough quarter.”
Obviously, Kyncl had due cause for this acknowledgment: WMG’s recorded music streaming revenues fell 2.6% YoY at constant currency in the three months to end of December 2022 (calendar Q4, but fiscal Q1 at WMG)…
3) TIKTOK LAUNCHES DIY DISTRO SERVICE SOUNDON IN AUSTRALIA, THE SAME WEEK IT STARTED LIMITING ACCESS TO MAJOR LABEL MUSIC IN THE MARKET
The timing of TikTok’s latest news is sure to raise a few eyebrows in the global music industry.
TikTok has launched its independent distribution platform SoundOn in Australia, just days after news arrived that the platform has been limiting access to major label music in the market as part of a test with a subset of users.
SoundOn was already Live in the UK, US, Brazil and Indonesia, after launching in March last year…
4) HIPGNOSIS ACQUIRES SONG CATALOG OF TOBIAS JESSO JR., WHO WAS JUST NAMED SONGWRITER OF THE YEAR AT THE GRAMMYS
Hipgnosis Song Management has made its third acquisition in three weeks, buying a song catalog from Tobias Jesso Jr., who on Sunday (February 6) was named as the first-ever Grammy Songwriter of the Year.
Jesso’s credits include Adele’s hit When We Were Young which has been streamed on Spotify over a billion times and Boyfriends, a track on Harry’s House which won this year’s Grammy for Album of the Year.
News of the deal follows Hipgnosis’ acquisition last week of a song catalog from TMS, the British songwriting and record production trio of Tom ‘Froe’ Barnes, Benjamin Kohn and Pete ‘Merf’ Kelleher for an undisclosed fee.
It also comes two weeks after buying a song catalog and associated income streams from Justin Bieber for around $200 million… (MBW)
Los Angeles-based B2B music licensing company Songtradr has agreed to acquire 7digital, a UK-based publicly listed music technology company.
That’s according to a filing published in the UK on Wednesday (February 8), which states that the transaction is expected to close in Q1 2023 and that the deal is an all-cash offer for 7digital’s entire issued share capital, valued at approx. £19.4 million ($23.4m).
7digital provides a catalog of over 80 million licensed tracks and offers API services to power music in apps across fitness, social, radio, gaming and background music…
Music Business Worldwide