‘We have a vision for a billion-dollar balance sheet of music rights.’

Jason Peterson is talking, with tangible wonder, about Wim Hof, aka The Iceman.

Hof, a Dutch extreme athlete, is famous for withstanding ridiculous, below-freezing temperatures – a feat he puts down to his own breathing technique, which enables him to hack his own nervous system, essentially telling it not to feel pain.

Peterson is Zooming in from a comfy-looking office in a balmy-looking Los Angeles. He is a long way from an excruciating ice bath. But he’s well-versed, business-wise at least, in diving into a potentially tortuous environment, and coming up trumps.

Just as the misery of pandemic lockdown was hitting most of us the hardest, Peterson’s GoDigital Media Group spent nearly $10 million to acquire a publicly-traded yoga studio, YogaWorks, founded in L.A in 1987.

YogaWorks’ traditional business, for obvious reasons, had been decimated by Covid. But Peterson sensed an opportunity to build on an “iconic brand in the personal wellness space” digitally – the Peloton of yoga, if you will – and made the bet.

Yogaworks is now building out an at-home fitness subscription business, taking learnings from GoDigital’s deep expertise in broadcast and video content creation.

What’s all this got to do with the music business (other than a direct appeal to the industry’s numerous stretchy-meditative types)?

Because GoDigital’s multimedia strategy is all about owning two things: (i) Networks and (ii) Music.

The networks are online and broadcast distribution channels that tap into specialised lifestyle tastes – whether that be fitness, music or otherwise; the music is content that can be pushed via these channels, driving both direct and indirect monetization for owned IP.

Peterson says his initial plan was to create a company that encompasses “what it would be like if Sony Music and MTV were under the same corporate umbrella in the ’90s – the core IP ownership and a primary demand generation function under common control”.

A few significant acquisitions in, this plan is now snowballing – as GoDigital continues to collect distribution channels, serving audiences of specialized interests with mainstream potential.

So much so, says Peterson, he’s now entertaining the idea of GoDigital’s networks as a kind of 2020s answer to Viacom – the media giant that owns and operates the likes of BET Networks, Nickelodeon, MTV Networks and Comedy Central.

The centerpiece of Peterson’s strategy at GoDigital is subsidiary Cinq Music Group, the music distributor, label and publisher run by industry veteran, Barry Daffurn. With offices in Los Angeles, New York, Orlando, Mexico City, Bogota, Medellin, Minsk, Colombo, Singapore, Taipei, and Seoul, Cinq has racked up an impressive global footprint since originally being founded in 2012.

GoDigital hasn’t spared on its investment into Cinq. In 2017, via a $20 million cash injection, it funded Cinq’s $10 million-plus acquisition of a master rights catalog recorded by hip-hop star T.I while at Atlantic Records.

Two years later, GoDigital pumped another $40 million into Cinq – money that was subsequently used to sign Janet Jackson and buy the Beluga Heights label, including its share of the Jason Derulo catalog.

Today, Cinq’s repertoire spans over 47,000 sound recordings, and includes music by the likes of Bad Bunny, Janet Jackson, Daddy Yankee, T.I., Sean Kingston, and Anuel.

If you’re detecting a Latin theme there, it’s not a coincidence.

Indeed, Peterson says with a grin, we should “watch this space” on more news concerning GoDigital and Cinq’s investment into the exploding Latin music market. (Perhaps a hint a major acquisition may be around the corner?)

The other part of GoDigital’s strategy – owned and operated media networks – has seen it take control of two key outlets that both target the Latin community.

The first, Latido Music, is a 24-hour linear music channel focusing on US Hispanic audiences. It draws an audience of nearly six million unique viewers each month.

The second of GoDigital’s properties in the Latin world, MITÚ, is described by Peterson as a “Buzzfeed for Latinx audiences in the US” – offering entertainment, news and music programming through a video-led strategy. GoDigital acquired the company in Q1 2020.

GoDigital’s media distribution business spills out from broadcast into a very significant presence on YouTube, too.

GoDigital owns VidaPrimo – “the largest Hispanic-targeted multi-channel network on YouTube for Latin music”. Its channels generate over 2.5 billion streams a month and is, obviously enough, a key distribution engine for Cinq Music’s repertoire.

Completing the GoDigital family is YouTube and SoundCloud music monetization platform AdShare, which broke 100 billion streams in 2020 representing the likes of K-Pop sensations Psy and Black Pink, Latin superstar Natti Natasha, and Indian music conglomerate Times Music.

At the core of GoDigital’s strategy, though, is music rights – namely the continued investment in them, and acquisition of them, via Cinq Music Group.

“We have a vision for a billion-dollar balance sheet worth of rights,” Peterson tells MBW of his ambition for Cinq. “Our focus is on culturally significant music IP, whether compositions or sound recordings.

“We have differentiated ourselves in the music industry, typically, by working in emerging fast-growing markets around the world. Our repertoire has a majority weighting in Latin music. But we’re also making heavy investments in English-language pop, R&B, and hip-hop that can travel.”

Peterson adds that, via Adshare, GoDigital claims a significant presence in the South Korean music market; he estimates that the platform services around 60% of the local K-pop market in the territory.

One obvious question: So far, GoDigital’s acquisition strategy in music has largely centered on master rights, rather than publishing rights. That’s quite an unfashionable strategy in an industry where the likes of Hipgnosis Songs Fund and Primary Wave seem to snap up song rights every week that flies by.

“We have differentiated ourselves in the music industry, typically, by working in emerging fast-growing markets around the world.”

Jason Peterson, GoDigital

“First of all, let me say that we think that what Hipgnosis and the other players in the compositional space are doing is healthy for the industry,” says Peterson. “It’s healthy that music companies are going public, and providing access to this asset class to public markets investors. In my opinion, there’s no better asset class to invest in right now than music.”

He adds: “It’s true that the conversation in the business [regarding copyright M&A] has largely focused on the publishing side of things, which is a portfolio business, with a diversity of revenue streams proving attractive to investors.

“That said, in the current climate, due to the pandemic, there are a lot of components in that [music publishing] portfolio business that are potentially impacted. Also, there’s the obvious fact that, from a licensing standpoint, master recordings typically receive the lion’s share of value from digital music platforms.”

Peterson says that, through his multimedia lens, the record industry is now undergoing what he calls “the cable TV revolution of music”, with a consumer acceptance of an ongoing subscription model hitting a critical mass.

He suggests that the music industry should therefore primarily concern itself with driving up the total number of paying subscribers, before worrying about who gets paid what from what kind of consumption.

“we’re incredibly bullish on music, and incredibly bullish on masters, which are going to derive the majority of the value from this cable TV-type revolution.”

Jason Peterson, GoDigital

“The pie is going to grow so much,” says Peterson. “Today there are 5 billion people with a smartphone worldwide; 68% have 4G LTE or faster connectivity. And in emerging markets, where Cinq specializes, you’re seeing drastically increasing rates of banking participation by consumers.

“Latin America, for example, has historically low banking participation rates: people didn’t carry debit cards, credit cards; It was a cash economy. They couldn’t participate in any kind of e-commerce, let alone digital music. But now, everything has changed.”

He adds: “As a company, we’re incredibly bullish on music, and incredibly bullish on masters, which are going to derive the majority of the value from this cable TV-type revolution.”

Peterson started his career in the movie business. His big break came while studying as a Film & Business School student at the University of Southern California, when he co-produced indie movie The Beat [2003], which earned a spot at Sundance.

From there, a couple of other movie projects followed, before a lightbulb moment went off about the potential for digital music distribution in what was then the early-noughties iTunes age.

Peterson’s friend Ryan Seashore – a fellow co-producer on The Beat – made an introduction to music mogul Master P, who decided to trust Peterson to represent his digital rights, handing over a five-year worldwide exclusive license.

Peterson quickly struck a deal with Apple to license Master P’s music direct, before pivoting his efforts into YouTube monetization. These were the beginnings of what would become GoDigital.

“I first met Master P at Jerry’s Famous Deli in Westwood near UCLA in Los Angeles,” recalls Peterson. “He walked in looking nothing like his archetype – no grill, no chains, no entourage. Just a normal business person. Although Suge Knight did call him as he walked to the table!”

GoDigital’s business has rather kicked on a few gears since then, of course, with its multimedia strategy – from Peterson’s perspective – set to explode amongst Latin audiences both in the US and LATAM in the years ahead.

Returning to GoDigital’s central thesis, he says: “If you’ve got the ownership of the IP, and the primary demand-generation and marketing mechanism, you have everything you need to generate value all under the same corporate umbrella.

“There’s nobody that can reach the scale of audiences that we can: we have 300 major brands a year coming to us to do advertising campaigns around this content for this [Latin] audience. Who else out there can generate that opportunity for an artist or label?”

Peterson, a Merlin board member, says that Cinq Music Group is now “well beyond” exhausting the $40 million that GoDigital pumped into its coffers in 2019.

“We are raising tremendous amounts of money right now.”

“We have a tremendous pipeline [of acquisitions] out there,” he continues. “There will be more news from us in the months ahead about deals and new financing. We are raising tremendous amounts of money right now.

“Our company has grown [revenues] 10X in the past four years. That, combined with our interest and ambition in the music industry – which is such a hot asset class today – gets folks in the banking and finance world very excited.”

With its ability to tap into GoDigital’s media networks, says Peterson, Cinq Music is becoming “like a major for independents”.

“I started [GoDigital] with $25,000 in my living room, January 3, 2006. We have built this business organically, brick-by-brick, to the point where today we have over 450 people in more than a dozen countries.

“Now, we want this platform that we’ve built – this community and culture that we’ve built – to flourish and grow by inspiring happiness through sharing creativity the world over.”Music Business Worldwide