Welcome to Music Business Worldwide’s weekly round-up – where we make sure you catch the five biggest stories to hit the headlines over the past seven days. MBW collection is supported Centriphelping over 500 of the world’s best-selling artists grow their income and reduce their touring costs.
After more than a year of rumors and reports that sales of Queen’s catalog would break the billion-dollar mark, we got word this week that the recording and publishing rights to the legendary Freddie Mercury-led band have been sold to Sony Music for an even higher price. price than expected: $1.27 billion.
Beyond this hot deal (which has yet to be officially confirmed), most of the music news this week has focused on a company that is “affiliated with the music industry”: TikTok.
This week, MBW broke the news that the ByteDance-owned social media company is forming an investment team to buy music rights and companies, meaning it could soon become a “smaller next to music” and more, a real music company.
We also learned this week that Kobalt subsidiary Amra, which bills itself as “the world’s first digital collection community”, has invested more than $50 million in its technology so far.
Meanwhile, ByteDance plans to spend $2.1 billion to build an AI center in Malaysia, making the China-headquartered company just the latest tech giant to invest heavily in the country’s burgeoning AI industry.
Finally, this week, we asked the question: What if Spotify took the advice of Sony Music Group Chairman Rob Stringer, and started charging for its free, ad-supported tier? The short answer is “it depends,” but there’s a good chance that Spotify will make more money.
Here’s what happened this week…
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1) QUEEN’S CATALOG TO BE ACQUIRED BY SONY MUSIC FOR 1.27BN DEAL (REPORT)
Sony Music Entertainment is set to acquire the catalog of legendary rock band Queen in a historic deal worth GBP £1 billion (USD $1.27 billion at current exchange rates).
This is according to Hits, which reported on Wednesday (June 19), citing sources, that Sony Music has emerged as the winning buyer of Queen’s recording and publishing rights, as well as the benefit of previous agreements with Disney Music Group and Universal Music Group.
Queen’s catalog has megahits like Bohemian Rhapsody, Another Bites the Dust, We Will Rock You, and many more.
UMG, as Disney’s distributor, will reportedly retain North American distribution rights, although Sony will receive the benefits. UMG’s worldwide distribution rights will then be transferred to Sony in 2026 or 2027, making Sony Music the sole distributor and owner of all Queen content worldwide…
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2) TIKTOK IS BUILDING AN INVESTMENT TEAM FOR MUSIC CONTENT ACQUISITION AND COMPANIES.
Two years ago, we asked if TikTok was slowly turning into a recording company.
The ByteDance-owned platform had recently entered the music distribution market with its SoundOn service, and was hiring A&R executives with record label experience.
On June 18, MBW revealed that TikTok is taking this transition to the next stage – with a plan to acquire and invest in music rights.
We’ve learned that TikTok is building an in-house Music Content Investment Team based in Los Angeles, New York, and San Jose, focused on “partnership or acquisition opportunities for music content on a global scale”.
In other words, TikTok is entering the competitive music M&A market…
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3) TIKTOK PARENT BYTEDANCE TO SPEND $2.1BN TO DEVELOP AI HUB IN MALAYSIA
Malaysia has become a focal point for AI-related investment from global social media.
ByteDance, the China-headquartered parent company of social video app TikTok, is the latest in a string of tech companies to bet on Malaysia with big investments focused on the booming AI business.
As reported by Reuters, a press release last week from the Minister of Investment, Trade and Industry, Tengku Zafrul Aziz, revealed that ByteDance “plans to invest in AI and make Malaysia the center of AI in the region with a proposed investment of RM10. billion”, which converts to USD $2.1 billion…
4) Amra has invested over $50m in its technology to date – most of which was spent in the last 3 years.
Amra has grown into a large company since it was acquired/launched by Kobalt in 2015. In the year to June 2022, the latest FY for which public financial numbers are available, Amra posted revenue of USD $117.3 million.
Not surprisingly, Francisco Partners, the company that acquired a majority stake in Kobalt in 2022, highlighted Amra as a priority for growth. (FP’s Matt Spetzler reiterated Amra’s status at the time as “the world’s only digital licensing platform”.)
Today (June 20), Amra announced figures that tell its story of how deep Kobalt/FP sees the opportunity ahead: Amra has confirmed that it has exceeded USD $50 million in technology investments to date, as well as a significant share of capital. that figure was used three years ago…
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5) WHAT IF SPOTIFY STARTS CHARGING A ‘MUCH MORE FAIR FEE’ FOR THEIR PRICE… OR DOES IT CLOSE IT ALL?
The current model of ad-supported ‘free’ music streaming could be headed for reform.
Last month, Sony Music Group Chairman Rob Stringer took aim at the freemium services offered by Spotify during a presentation to Sony Group investors on May 30.
A Sony executive suggested that DSPs should close what he called the growing “price gap” between paid and free users, especially in mature broadcast markets.
Stringer’s solution: charging current free users a “small fee” to listen to music and other content through ad-supported services.
So, what would happen if Spotify, as Stringer suggested, now started charging a small fee for access to its ad-supported section…?
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