Welcome to Music Business Worldwide’s weekly roundup – where we make sure you’ve caught the five biggest stories that have grabbed our headlines over the past seven days. The MBW summary is supported by Centripwhich helps over 500 of the world’s best-selling artists maximize their income and reduce their touring costs.
MBW broke the news this week that Kobalt Music Group is currently in advanced talks to sell a majority stake to US-based Francisco Partners.
Senior MBW sources tell us there is a chance a deal could be signed in the next week or two.
With offices in San Francisco, London and New York, Francisco Partners has raised over $24 billion in committed capital since its inception over two decades ago.
It has invested in more than 300 technology companies, including the music creation platform native instruments, in which firm acquired the majority of shares last year, for an undisclosed fee.
Other music-related investments made by Francisco Partners have included Eventbritewhich secured funding from the investment firm of up to $225 million in 2020.
Another big story reported in our pages this week was that the US music publishing industry generated $4.7 billion last year, but the recording industry grew twice as fast.
Music publishers saw their revenue grow the most in the US 700 million dollars to 4.70 billion dollars in calendar year 2021, according to industry data (NMPA).
Meanwhile, record companies (and distributors) saw Theirs wholesale revenue in the US grows by more than double that figure. Their revenue increased by $1.8 billion, to $9.8 billion for 2021.
Elsewhere this week, South Korea-based K-Pop company SM Entertainment expanded into Saudi Arabia with plans to promote S-Pop (Saudi Pop) through the discovery and production of local artists.
The company also plans to create “a metaverse platform to share Korean and Saudi culture,” as well as a music venue along the Red Sea, which it says will be “capable of holding a year-round music festival.”
Also this week, MBW reported that Sony Music Entertainment (Japan) is working on two major virtual talent projects, while ‘virtual artist’ FN Meka was dropped from Capitol Records.
Here’s what happened this week…
1) KOBALT MUSIC GROUP IN TALKS TO SELL MAJORITY STAKE TO FRANCISCO PARTNERS, MBW SOURCES SAY
Last year was a big year for Kobalt Music Group. The company celebrated its 20th anniversary in 2021 as it sold AWAL to Sony Music – a deal that made it clear for Kobalt to focus on its core music publishing business, plus digital collections company AMRA.
However, 2022 could be an even bigger year in the company’s history.
Senior MBW sources tell us that US-based Francisco Partners is currently in advanced talks to acquire a majority stake in Kobalt Music Group, with a deal likely to be signed in the next week or two…
2) THE US MUSIC PUBLISHING INDUSTRY GENERATED $4.7 BILLION LAST YEAR – BUT THE RECORD INDUSTRY GROWN TWICE AS FAST
There are financial statistics in the music business that at first glance don’t tell us much.
They may be big and impressive, but they say little about the trends affecting the wider business.
Here’s one of those numbers: According to the National Association of Music Publishers, the US music publishing industry generated $4.70 billion in calendar year 2021.
That figure, revealed by NMPA chief David Israelite at the trade body’s annual meeting in New York in June, was up just under $700 million from the equivalent figure from 2020 ($4.08 billion)…
3) SONY MUSIC JAPAN IS BUILDING “THE LARGEST VIRTUAL TALENT DEVELOPMENT AND MANAGEMENT PROJECT IN HISTORY”
Sony Music Entertainment (Japan) recently launched a global talent audition for real-life creators to work as virtual characters through the Tokyo-based ‘PRISM Project,’ described in a press release as “a member of Sony Music Entertainment ( Japan) Inc. Family of Virtual Talent Brands”.
On the PRISM Project website, it is referred to as “a multinational VTuber agency from the future”.
According to SMEJ, Project PRISM is “backed by Sony Music’s industry-leading expertise in talent management, voice acting, music production, event production and digital technology” and aims to “push the boundaries of the virtual talent space by delivering growth and development opportunities unmatched in the industry today…”
4) K-pop giant SM Entertainment expands to Middle East, plans to discover and produce local artists in Saudi Arabia
South Korea-based K-Pop company SM Entertainment is expanding into Saudi Arabia.
Soo-Man Lee, Chief Producer of the firm, signed a memorandum of understanding (MOU) with the Ministry of Investment of Saudi Arabia (MISA) to enter the domestic market and promote joint projects.
Through this business deal, SM says it will actively promote S-Pop (Saudi Pop) through the discovery and production of local artists.
The company also plans to create “a metaverse platform to share Korean and Saudi culture…”
5) CAPITOL REMOVES ‘ROBOT RAPPER’ FN MEKA, AS THE PROJECT IS ACCUSED AS ‘INSULTING THE BLACK COMMUNITY’
‘Virtual Artist’ FN Meka has been dropped from Capitol Records less than two weeks after the label announced his signing.
The move comes after a backlash revolving around stereotyping and appropriation and a strongly worded statement from activist group Industry Blackout.
Capitol Records confirmed on Tuesday (August 23): “CMG has severed ties with the FN Meka project, effective immediately. We deeply apologize to the Black community for our insensitivity in signing off on this project without asking enough questions about equality and the creative process behind it.
“Thank you to those who have reached out to us with constructive feedback over the last couple of days – your input was invaluable as we reached the decision to end our association with the project…”
MBW’s weekly roundup is powered by Centtrip, which helps over 500 of the world’s best-selling artists maximize their income and reduce their touring costs.
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