Prediction: The music industry is likely to see at least $1 billion worth of distribution and service player acquisitions over the next 12 to 24 months.
surprised: The companies behind the acquisition may be: trust.
According to Believe founder and CEO: Denis Radegayerispeaking exclusively worldwide music business.
Radgayeri his consortium Radgayeri jointly own EQT and TCV – Own Now 95% ~ Of trust Through the recent stock bidding process
Radgayeri Under the new consortium’s ownership, trust plan to spend EUR 200-300 million We make acquisitions every year to grow our global business.
that It’s 2-3 times bigger He said it was more than the company’s annual acquisition budget since the IPO. (Believe has previously acquired the following companies: TuneCore in America, Centric Music In England venus music In India nuclear explosion In Germany, etc.)
“We will consider transformative [acquisition] “Goal within the next 24 months” RadgayeriThis confirms that such transactions require additional capital for current transactions. Believe’s M&A budget.
“You have a lot midsize business “The market is probably more on the publishing side than the recorded music side.”
pay attention to it trust was trying to find “The right strategic fit”, Radgayeri It praised several recorded music businesses, including artist services companies and mid-sized indies.
He also mentioned the big companies that have strong music publishing catalogs, such as: Cobalt and BMGWe will be able to forge innovative partnerships in the coming months and years.
(Among related companies in the news recently: U.S.-based Create a music group just achieved 1 billion dollars While evaluating sound cloud is seeking a financial event that could attract new investors or sell it at a similar valuation.)
“Any company can’t necessarily be sold at any given time, so you have to be pragmatic about these things,” he said. Radgayeri When discussing trust Potential “transformative goals”.
He added: We will have to feel strongly about something. [acquisition] The goal could get us there Accelerate growth and improve positioning “At the supermarket.”
Believe is particularly interested in accelerating business. USA and UKsaid Radgayeri.
“The biggest driving force behind our acquisition strategy is Top 10 Markets“He said. “We are already in the top three in four markets. France, Germany, Japan, India. However, this has not been achieved in the US and UK. [predominantly due] Because we haven’t previously invested at the level needed to do that.”
Ironically, Radgayeri And the company could face competition for a “transformative” acquisition of a US-based artist services company. Warner Music Group’s CEO is: robert Kinkle, He said he wants to grow quickly. WMG It has solidified its position in the so-called ‘middle class’ artist market.
Of course, Kyncl and Warner almost came to the table. $1.8 billion takeover bid trust (Competing with Ladegaillerie’s plans to acquire its own consortium-based company) However, WMG ultimately did not formulate an offer and withdrew from negotiations.
In the extensive discussion summarized in the following Q&A: MBW asked Radgayeri Describe your personal experience with the Warner process.
We also found out why he thinks so. tremendous growth Coming to a large company that services indie artists, trust – Under new ownership – we plan to make the most of that opportunity…
A consortium comprised of TCV and EQT now owns 95% (technically 94.99%!) of Believe. What’s happening now? At what point would you like to purchase an additional 5%?
We’re almost where we wanted to be. Our goal was to secure a new group of shareholders that would allow us to grow the business at a rapid pace. We started engaging in deeper discussions with a larger group of people. [acquisition] It’s a goal that wasn’t possible before.
If I have to upload it tomorrow [additional] Capital, we are in a position to do this in an easy and efficient manner through our shareholder base.
To answer your second question, in the grand scheme of things, the goal is to make the company completely private. We will be talking to market authorities about the best way and when to take that step, but there is no need to rush.
“We started engaging in deeper discussions with a larger group of people. [acquisition] “It’s a goal we couldn’t achieve before.”
We’re talking about financing. This means EQT and TCV are strategically partnering with you to invest heavily in the future of your music business.
totally. Our key reason and thesis for seeking new shareholders is that there is an opportunity to accelerate our profitable growth story through acquisitions in several markets.
I’m talking about larger acquisitions than we’ve done recently. we continue to EUR 100 million Number of additional acquisitions per year. Our goal now is to do two to three times that amount.
What are the characteristics of your current acquisition targets?
We match the following equality and TCV To further strengthen our existing organic growth, we will continue to invest in our organic growth strategy and make acquisitions to increase our market share.
The number one component of our acquisition strategy today is in the top 10 markets. We want to be the No. 1 player in that market. We are already the largest player in the industry. france; third largest player germany; the biggest player in India; third largest player japan. We want to do more. that much USA, UK, and japan All of these are top priorities for us.
At the same time, we will continue to make very qualitative and targeted acquisitions across the world. [smaller] Recently Viewed Markets Türkiye, Philippines, And elsewhere too.
We haven’t traditionally overinvested in the United States, so why is it so interesting? And what is your game plan? Achieving success in the world’s largest market isn’t easy!
we are american market began to change towards independence [services companies].
We are considering a variant [acquisition] The next goal is 24 months. There are a lot midsize business The market is probably more on the publishing side than the recorded music side.
“We are considering innovation. [acquisition] The next goal is 24 months.”
Not every company necessarily needs to be sold at any given time, so you have to be pragmatic about these things.
We will have to feel strongly about something. [acquisition] The goal may bring us Accelerate growth and improve positioning At the supermarket.
That’s big news and speaks volumes about your ambitions. Would we need more than 300 million euros per year to achieve that goal?
while warner [discussions] Someone actually asked me this: ‘Hey, Dennis. ‘Do you really want to buy Warner rather than Warner buy Believe?!’ [laughs]. This shows us how big we are thinking.
that much 300 million euros The full year figures are for ‘business as usual’ acquisitions. The discussion here is separate. We won’t stop you from looking at any company.
“What you see now is a very dynamic market with a lot of mid-tier companies. $1 billion to $2 billion “This is a scope that takes into account strategic options.”
What you see here is a very dynamic market with a lot of mid-sized companies. $1 billion to $2 billion Scope considering strategic options.
I think it’s possible that something massively transformative and very important will happen in the next year. 12~24 months Very high.
We want to operate as a trusted and better alternative to the major labels in the world’s largest markets.
Believe and BMG have similar annual revenues. Has it caught your attention that at the very moment you hear the Believe/Warner/acquisition noise, Thomas Rabe, CEO of BMG parent company Bertelsmann, has suggested that BMG might consider a merger with a rival music company?
[Laughs] Sure! As I said, we are looking for businesses that have the ability to: [combine] It can actually accelerate your business.
we There is a synergy effect with BMG But we are very different in terms of geography, etc. But this is one of the more interesting discussions we have to have in the market!
Now everything is sorted out. What do you think about what happened to Warner? At one point it looked like their hostile takeover attempt would take Believe away from you, but it was all over.
Some positive results emerged from the process.
that Very strong validation of our model Our position as a modern, innovative, well-structured and technologically strong music company.
“I’m looking at Warner [negotiations] Made me appreciate that.t believe We have a really smart team. “I have a lot of experience in music.”
great robert; I am Warner team. They are very smart people and we had a good discussion. me I was personally opposed to being hostile. [takeover] Because I believe that the opportunities given to us in the future are very important. I didn’t want to be dragged into integration for the next two years. big opportunity ahead of us [as an independent company].
Final Lesson: Watch Warner [negotiations] Made me appreciate that.don’t believe We have a really smart team. I have a lot of music experience.
Trust the IPO Summer 2021, it was a really exciting time. It seems like we are now heading down the path of privatization. What do you think about the listing experience? What did you learn from it?
It’s usually expensive. Being public means paying a lot of lawyers and bankers! – But it has also been very positive in terms of raising the level of requirements we have to run our business.
It also helped me understand how investors view the music market. Even as [potentially] Even though we are a private company, we will continue to be held to the same standards that we have been held to as a public company.
A few quick questions about recent industry topics/headlines: What do you think about major music companies suing Suno and Udio for alleged massive copyright infringement?
Tech companies are using copyrighted music to: Raw materials for machine learning Then create a product that has value. If that’s the case, you need to get consent. [from the copyright owners] And reward them. Defending it is part of our duty to artists.
“these [lawsuits] “It’s a logical result.”
like other companies google, meta, When using music, etc. [for gen AI], we need to compensate artists and collaborate with the industry. For companies that don’t have that conversation and are stealing content to build their models: [lawsuits] It’s a logical result.
Have constructive conversations with companies that take a reasonable approach while pursuing those that aren’t doing the right thing. That’s the right way.
Sony boss Rob Stringer recently suggested that in some mature markets, particularly the US, it is time for Spotify to charge a fee for its free tier, effectively ending ‘free’ interactive audio streaming. What do you think about it?
I think Rob is asking the right questions. When should you strike a balance between free and paid? This is an ongoing conversation with Spotify.
in IndiaFor example, we talked to Spotify about the fact that there are still a few players locally that have a very generous free tier. [adoption] Number of subscriptions in that market.
“Rob is asking the right questions.”
My views on this have always been the same. Sony or believe it, we match spotify In the sense that we all benefit by maximizing the value of music listeners.
If the [changing] The free tier generates more revenue by encouraging: [currently free] Have the user subscribe and then spotifyThey have a vested interest in doing it, just like we do.worldwide music business
