In the early aughts, the music industry was embattled by the rise of services like Napster, which allowed consumers to download music for free, causing a sharp decline in CD sales that hampered record labels.Īccording to the Recording Industry Association of America, CD album sales in the US dropped 97 percent to nearly 32 million CDs sold in 2020 since peaking at 939 billion sold in 2000.Īfter a 15-year decline amid widespread online piracy, the music industry’s fortunes began to change in 2016 when the growth of streaming services began to outweigh slumping CD and digital download sales. Universal’s road to a booming valuation and a public listing has been a long time coming. What’s more, in recent years, the company has focused its strategy on the booming music streaming sector, which it expects to boost royalty revenue and profits for years to come. The label, which boasts of contemporary artists like Ariana Grande and Drake, as well as a back catalogue from iconic musicians like The Beatles and Bob Dylan, has a blockbuster portfolio that is attractive to investors. Lady Gaga performing during AT&T TV Super Saturday Night at Island Gardens in Miami in 2020. Universal, which is the largest music company in the world, dominating rivals Warner Music Group and Sony Music, owns and runs businesses in more than 60 countries. Universal chairman and CEO Lucian Grainge will also get bonuses linked to the listing that, according to Reuters, could add up to as much as $400 million. Other big winners from the Amsterdam listing include hedge fund billionaire Bill Ackman, whose fund Pershing Square owns a 10 percent stake, and China’s Tencent, which owns a 20 percent stake in Universal. Taylor Swift, one of Universal Music Group’s top artists, performing at the American Music Awards in 2019. As a result, 60 percent of Universal’s shares will go to Vivendi shareholders- with Vivendi boss and controlling shareholder Vincent Bolloré nabbing a stake worth roughly $6.9 billion. In June, the company’s parent, French media group Vivendi, won the backing of shareholders to spin off Universal, which is considered its crown jewel. The rally gives Universal, which listed on the Euronext Amsterdam stock exchange, a valuation of nearly $55 billion. The world’s biggest record label, which represents musicians like Lady Gaga, Taylor Swift and Billie Eilish, traded around $29.32 a share Tuesday morning, which was more than 35 percent above the reference price of $21.70 per share. Shares of Universal Music Group soared more than 35 percent in the company’s stock market debut in Europe’s largest listing of the year to date. Universal Music Group acquires Frank Zappa’s catalog of music Woke employee who refused to work while ‘mourning’ Roe v. trade’s $12.2 billion accounted for more than half of the $21.6 billion global revenue reported by the International Federation of the Phonographic Industry, so the RIAA report sets the stage nicely for the world’s largest music company to step out from Vivendi, its parent since 2001, a move that allows investors a pure-play opportunity to capitalize on music’s momentum.Universal Music CEO calls for new streaming model after strong Q4Ĭapitol Records severs ties with ‘virtual rapper’ When you look at Universal, Warner Music and overall streaming with Apple Music and Spotify, it’s been a massive turnaround that very few predicted would happen.” “Many had left the industry for dead a decade ago, especially with piracy and a lot of the issues facing the music industry,” says Daniel Ives, managing director of equity research at Wedbush Securities. of America, which reported 27% improvement over revenue in the first six months of 2021 - a year-over-year number strongly influenced by the pandemic - which essentially promises a seventh straight year of global growth. While the stage for the IPO was set with industry rumblings in 2018 and continued with Chinese media giant Tencent’s acquisition of 20% of the company (and billionaire Bill Ackman’s acquisition of 10% last month), the company’s spinoff from parent Vivendi could not have asked for a more inviting welcome mat than this week’s robust mid-year report from the Recording Industry Assn.
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