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Sony Music accomplished greater than $2.5bn in track offers final yr, shopping for up huge catalogues by artists from Queen to Pink Floyd within the face of rising competitors from non-public equity-backed music funding companies.
The enterprise has emerged as probably the most acquisitive firms for music rights — an more and more mainstream funding class — notably songs by the most important “legacy” acts.
“Catalogue” music is taking over a rising share of music consumption, particularly in additional developed western markets, as youthful generations flip to older songs on streaming providers — roughly half the highest 200 tracks final yr had been older songs, in opposition to 24 per cent in 2020.
Sony Music has additionally invested in native language content material and catalogues in rising markets as a better share of hits, consumption and revenues come from quickly rising economies in Asia and Latin America, with the $2.5bn deal spree unfold over greater than 60 investments final yr.
Funding companies backed by non-public fairness have emerged lately as massive monetary consumers of track catalogues, which throw off regular earnings primarily based on performances, streaming and use in TV, gaming and movies.
Nonetheless, since Rob Stringer turned Sony Music boss in 2017 the corporate has been preventing for a number of the greatest offers, buying lately the catalogues of Michael Jackson, Bob Dylan, Bruce Springsteen and Paul Simon. Final yr, it purchased the rights to music by Queen and Pink Floyd in offers value a complete of greater than $1bn.
Speaking on Friday to buyers and analysts, Stringer confirmed the extent of the enterprise’s deal spree final yr, including that its M&A method was “on no account primarily based on random monetary speculative ways that periphery music and monetary gamers might select to make use of”.
In addition to the stable earnings stream, a label with Sony’s sources may use its groups to spice up the worth of such rights by means of use in TV, gaming and movies.
As a part of its cope with Queen, for instance, Sony acquired title, picture and likeness rights that can enable it to generate revenues in merchandising and “experiential” occasions much like Abba Voyage in London.
Stringer mentioned the label was now asking for additional value rises and new fee tiers from main music streaming teams to drive future revenues, amid slowing person progress within the mature US and UK markets.
“Music shouldn’t be ‘free’ or a ‘low cost cut price’,” he mentioned, including that “there hasn’t been an enormous enchancment in ad-supported income previously few years. We’d clearly wish to see that occur.”
Stringer mentioned Sony was “actively engaged” with greater than 800 firms on utilizing AI for actions, together with product creation, content material safety and detection of pirated copies.
“We’re going to do offers for brand new music AI merchandise this yr with people who wish to assemble the longer term with us the fitting approach,” he mentioned. “New subscription concepts with honest revenue-sharing preparations shall be additional additive.”
However he added that musicians whose work had been work used to coach AI wanted to be “pretty compensated”, with the business nonetheless working with tech platforms to seek out widespread floor.
“The coaching of those fashions . . . can not merely be laissez faire and disrespectful to the truth that mental property has clear-cut rights,” he mentioned. “These shouldn’t be abused, and shifting ahead, a transparent remuneration system ought to exist.”
