opinion

Relocation, relocation, relocation: Why new offices can help music companies move on up

Location, location, location is a familiar maxim for house-buyers, but hasn’t always been top of mind for music businesses. But now, as the money flows back into the industry after years of decline, resurgent labels, publishers and streaming companies everywhere ...

You better, you bet: Why the wider biz needs to back the high-risk festival business

Fancy a flutter? We have reached that stage in the Hyundai Mercury Prize campaign where everyone in the biz has a hot tip as to who’s going to win the gong come September. The field still seems pretty open, so it’s almost as if the industry needs an outlet for a gamble these days, with recorded music looking like an increasingly safe bet. Indeed, with last week’s half-year ERA figures showing a near-10% increase in music’s retail value, and streaming lessening the sector’s reliance on big new releases, there’s a predictability around music business finances that hasn’t existed since the days of the CD boom. With one exception: the festival circuit. The cancellation of Boardmasters (pictured), due to adverse weather forecasts, shows just how much of a punt anyone brave enough to put on an outdoor, multi-day event is taking. Glastonbury aside – which would surely sell out even if I was its Saturday night headliner (I am available for 2020, should Emily Eavis be reading this) – every modern festival promoter is at the mercy of so many unpredictable elements that anyone taking on the task in 2019 must have nerves of titanium. Competition for headliners is fiercer than ever and, even when they’re booked, accidents, illness and ill-advised social media outbursts can remove them at one fell swoop. With so many events happening over the summer, brand loyalty is scarce, and even well-established festivals can be just one slightly-iffy line-up away from failure. And even if you book the best bill in festival history, Carol Kirkwood/God could still come along and wreck everything anyway. So, with the end of the traditional festival season – Reading & Leeds – in sight, everyone in the biz should pay tribute to the brave people still prepared to roll the dice. Reading has long-since sold out and such payouts should be celebrated by all, while other sectors of the biz might consider helping out those less fortunate where possible. Because, with live music in general feeling the squeeze – top execs from Live Nation's Phil Bowdery to Paradigm's Alex Hardee have admitted 2019 has not been a vintage year for the sector – the temptation for everyone, from artists and managers to promoters and agents, may be to hedge their bets in the coming months and years. But let’s not. Recorded music may have got what Rob Stringer likes to refer to as its jackpot economy back but, with the right support, there’s still room to win big in live music as well. And with festivals still a vital part of the wider music ecosystem, it's time for everyone to put their money where their mouth is…

Sale of the Tencentury: What UMG's proposed stake deal means for the music biz

Sir Lucian Grainge is excited. Investors certainly seem happy, with Vivendi's share price up in Paris after the announcement. Those who were starting to believe the slow-moving Universal Music Group stake sale might never happen will be thrilled. And the rest of the music industry? Well, for now, they’d probably be filed under ‘intrigued’. Because the announcement that Vivendi is in negotiations to sell a 10% stake in UMG to China’s Tencent Holdings will kick off a wave of speculation about multiple aspects of the proposed deal. Is the deal’s valuation of UMG at €30 billion (£27.6bn) realistic? Does the limiting of Tencent’s stake to a pleasingly symmetrical 10% (with an option to buy a further 10%) rule out the notion that they might buy the major in its entirety one day? And, with Vivendi declaring its intention to still seek out other partners, will they now have to be compatible with Tencent’s interests and expectations? But perhaps the main area of interest will be around the implications of Tencent owning a stake in the world’s biggest recorded music company. Because, while Tencent Holdings has interests in everything from online gaming to social media, it’s probably best known outside China for its multiple music streaming services. The advantages for Universal are obvious UMG and Tencent already work happily together, of course, as do the other majors. And, once upon a time, labels, retailers and everything in between would operate under the same corporate umbrella. And, indeed, Universal still holds shares in Spotify. But it’s difficult to imagine, say, Apple, Amazon or Spotify (which actually owns a slice of Tencent Holdings and vice versa, making this a very tangled web indeed) taking a direct stake in a major in 2019 without it causing raised eyebrows amongst other services, let alone other record companies. And, while China represents a very different music landscape to the west, Tencent Music’s ambitions – as illustrated by its successful 2018 IPO in the US – do not appear to stop at Hong Kong. The advantages for Universal are obvious. Sir Lucian says the deal will help “accelerate and broaden our strategy”, and it will certainly help the major crack what’s likely to be a hugely important global market over the next few years. And while UMG’s huge current success means it’s not exactly cash-strapped, a further injection of capital isn’t going to hurt as it looks to continue its domination. What Tencent will want for its €3bn-€6bn outlay is less clear, but few people lay down that sort of money and plan on being an entirely silent partner, however much cash UMG’s business is currently throwing off. And the deal would strengthen Tencent's Chinese domination and could help fend off a surging TikTok, while giving it access to many of the world's biggest artists. Whatever they do, you can bet the music industry will be watching closely...

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