Warner Music’s IPO Enjoyed A Positive First Week
This past week, Warner Music Group finished its first week as a public company at ~20% above its initial stock price (Friday’s close was $29.94, initial stock price was $25.00). Despite current market conditions, music streaming and overall subscriptions for platforms like Spotify have held steady growth rates as discussed in our previous Bumper Bites. This statistic combined with the fact that 86% of Warner Music Group’s revenue comes from recorded music give investors confidence that Warner Music’s business model is somewhat insulated from COVID-19 and therefore a stable asset. While it’s still too early to tell if Warner Music will be able to maintain its initial stock market success, this is a good harbinger for the music streaming industry.
This past week saw global protests calling for justice for George Floyd after the 46 year old lost his life at the hands of a police officer. In the entertainment industry, music executives Jamila Thomas and Brianna Agyeman started the hashtag movements #theshowmustbepaused to call attention to racism both in the music and film industry, and #blackouttuesday to “intentionally disrupt the work week” and to hold the entertainment industry accountable for benefiting off the efforts of Black People. Entertainers, studios, and executives participated in this movement of silence to show their support for George by voicing their opinions, temporarily halting music promotion, and participating in the protests. Some music professionals have voiced confusion over the original meaning behind the hashtags and lack of actionable changes. However, both #theshowmustbepaused and #blackouttuesday showcase that the music industry continues to speak up, and artists are standing for something more.
Merge Records Signs Neighboring Rights Deal With PRO Agency
Merge Records, an independent record label that has released music for Arcade Fire, Caribou, and Neutral Milk Hotel, has signed a deal with PRO Agency, a neighboring rights agency. This will allow for Merge Records and its artists to have better control collecting radio broadcast, live setting performances, and T.V. royalties, hopefully leading to increased revenue. This deal shows that independent artists can still work with larger companies to improve their profits in the long-run without giving away their creative freedoms.
Spotify For Artists Adding More Features
Spotify is hiring for a Head of Spotify for Artists, who will create new free and paid offerings for creators. Although it has often been discussed that Spotify will begin paid-only features for artists, this development is the first major step in creating their two-sided marketplace of servicing listeners and creators. The streaming giant also added job openings for a Head of Creator Promotion and Head of Marketplace Business. Props to Spotify for utilizing their scale to help artists learn from their data. However, it is yet to be seen if independent artists will be willing and able to leverage these resources due to cost.
Amazon Pushing Into Podcasting With Audible Brand
After the monumental news of Joe Rogan’s $100 million deal with Spotify, it seems like streaming competitors are also joining the race to cultivate their podcast selections. Amazon, by way of their Audible brand, has started entering into discussion with producers and talent agencies to acquire new podcast talent. The deal’s price tags range anywhere from a couple hundred thousand to a few million dollars, a hefty price only matched by Spotify. Amazon’s larger objective however, is not only to provide listeners with exclusive podcasts, but also to give storytelling a bigger place in the world of streaming by combining these original podcasts with its Audible’s collection of audiobooks. As demand for exclusive podcasts increases, it will be interesting to see which business model is victorious.
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