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 maximize their income and reduce their touring costs.
The ongoing battle between Concord and Blackstone for Hipgnosis Songs Fund‘s assets has been a breathtakingly fast-moving story ever since Concord made a $1.4 billion all-cash offer for Hipgnosis last week.
Within days, investment giant Blackstone made a $1.5 billion offer of its own, and Concord fired back with an updated $1.51 billion offer. On Thursday (April 25), Blackstone responded with a comment to the markets and HSF shareholders.
Another fast-moving story this week involved the US’s new divest-or-ban law aimed at TikTok, which could have a major impact on the music business.
President Joe Biden signed the bill into law a day after the Senate voted to approve it. Since then, news reports have tried to predict how parent company ByteDance will respond, with one report saying it may sell TikTok’s US operations, but without the algorithm, while another stated the company would rather shut down its US operations than sell.
We also got a fair bit of data on the state of the music industry this week, not the least of which was the RIAA‘s Latin Music Report, showing Latin recorded music revenues clocking a 16% YoY jump in the US, to $1.4 billion.
Spotify, meanwhile, reported its highest-ever quarterly operating profit in Q1, coming in at $168 million, as paying subscriber numbers increased by 3 million quarter-on-quarter, to 239 million. The resulting (though short-lived) spike in Spotify’s stock price gave CEO Daniel Ek the perfect opportunity to sell 400,000 units of stock.
Finally, France-headquartered Believe reported a 15.9% YoY jump in quarterly revenue, to $250 million. The company noted some of that growth came from price hikes at music streaming services.
Here’s what happened this week…
1) AFTER CONCORD BIDS $1.511BN FOR HIPGNOSIS SONGS FUND, BLACKSTONE TELLS HSF SHAREHOLDERS: DON’T MOVE A MUSCLE, WE’LL BE RIGHT BACK
On Wednesday (April 24), we learned of the latest chapter in the takeover saga surrounding UK-listed Hipgnosis Songs Fund.
Concord launched a USD $1.511 billion bid for the company’s assets, at $1.25 per share. That bid very slightly topped a recent $1.50 billion takeover proposal from Blackstone, which valued HSF at $1.24 per share.
Concord, then, is back in the driving seat of the battle to buy Hipgnosis Songs Fund… for now.
On Thursday (April 25), Blackstone issued a terse-but-fascinating comment to the markets, and specifically to HSF shareholders, in the wake of Concord’s new offer.
It reads in part: “Blackstone strongly advises Hipgnosis shareholders to take no action and is considering its options. A further announcement will be made in due course…”
2) BYTEDANCE WOULD RATHER SHUT TIKTOK IN THE US THAN SELL IF LEGAL CHALLENGE AGAINST BAN LAW FAILS (REPORT)
On Wednesday (April 24), President Joe Biden signed into law a bill that requires TikTok’s parent – China-headquartered tech giant ByteDance – to divest the app’s business in the US, or face a ban in the market, where it counts around 170 million users.
Citing sources, The Information reported on Thursday (April 25) that TikTok’s parent company “is internally exploring scenarios” to sell the app’s US business without its powerful recommendation algorithm, which powers its ‘For You’ feed.
ByteDance denied The Information’s report via a statement published on media platform Toutiao.
Later in the day on Thursday, Reuters reported that TikTok’s parent “would prefer” to shut the app down in the US if it’s unable to successfully challenge the legislation in the courts…
3) SPOTIFY SUBSCRIBER BASE GREW BY 3M TO 239M IN Q1, AS COMPANY POSTS BIGGEST EVER QUARTERLY PROFIT
Spotify saw its global Premium Subscriber base grow to 239 million paying users in Q1 – and achieved its biggest-ever quarterly profit in the three months to end of March.
In Q1, Spotify’s Premium / subscriber revenues grew 21% YoY at constant currency to €3.247 billion ($3.525bn) and was driven, according to SPOT, by its subscriber growth and a Premium ARPU increase to €4.55 ($4.94) – up 7% YoY at constant currency.
In terms of profitability, Spotify posted an operating income of €168 million ($182.41m), which it noted in its investor presentation was “a new quarterly high” and reflected “lower personnel and related costs and marketing spend”.
During the company’s investor call this week, CEO Daniel Ek confirmed that Spotify will be further stratifying and diversifying its subscription plans, including ‘music-only’ and ‘audiobook-only’ options.
Spotify saw its shares soar following its earnings report, giving Ek the perfect opportunity to sell 400,000 units of Spotify stock, which he did this week, for $118.8 million…
4) LATIN MUSIC GENERATED $1.4 BILLION IN US RECORDED MUSIC REVENUES LAST YEAR – UP 16% YOY
Latin music continues to be one of the record industry’s biggest success stories.
Gross revenues generated by Latin music in the United States surpassed $1 billion for the second consecutive year in 2023, reaching $1.4 billion.
That’s according to the Recording Industry Association of America (RIAA), which published its year-end Latin Music Report on Tuesday (April 23) for the world’s largest recorded music market.
The report shows that on a retail basis (money spent on streaming subscriptions, as well as physical and digital music), Latin music revenues grew 16% YoY in the US in 2023, outpacing the overall market…
5) BELIEVE GENERATED $250 MILLION IN Q1, UP 15.9% YOY
Paris-headquartered music company Believe has published its financial results for Q1 2024 (three months to end of March).
The company generated revenues of €230.3 million in Q1, which converts to USD $250 million at the average quarterly exchange rate published by the European Central Bank.
According to Believe‘s filing, issued on Wednesday (April 24), the company’s quarterly revenues grew by €31.7 million, from €198.6 million in Q1 2023, reflecting an increase of 15.9% YoY.
Believe said on Wednesday that “healthy paid streaming growth continued” in Q1, “uplifted by several DSPs’ price increases…”
MBW’s Weekly 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.Music Business Worldwide
