Perhaps it’s a somewhat unusual musical act that the Universal Music label brought with them when they went public. It was dazzling, definitely. It thundered on the floor, too. Musicologists would probably classify him in the category of idiophones. Which is ultimately nothing more than a bell for the simple declaration that when Universal Music went public, neither Lady Gaga, Taylor Swift nor Helene Fischer danced – but only the thundering and golden gong of the stock market. ‘Amsterdam was struck at nine o’clock sharp.
This alone may be surprising, since the music industry was not known to ring cash registers for a long time: records were only interested in amateurs, CDs did not even have cracks and crackles, but after a while and many scratches just stammered pieces of music. But with the rise of internet streaming services, tunes for millions of people can be used to earn billions again. Universal Music has now shown it in a special way: the reference price of the shares was set at 18.50 euros on Monday, and on Tuesday the first free trade price was significantly higher at 25.25 euros.
This is the largest IPO in Europe this year to date
After all, industry statistics are music to investors’ ears: in 2014, the entire recording industry had just achieved $ 14.5 billion in revenue, in 2020 it was new of 21 billion. During the same period, the enterprise value of Universal Music has increased sevenfold. And since today there is still a label attached to the label: the largest IPO in Europe this year.
Many music managers no longer want to do without the business of streaming services like Spotify. The tedious pressing of CDs, their transport to stores and ultimately only being able to offer the latest discs is no longer the core business. Instead, streaming service users can even have hit titles from 50 years ago on their mobile phones in no time. And music companies have box office revenues.
In the first half of the year, at least subscriptions and streaming at Universal made up almost two-thirds of its own sales. While a total of 3.1 billion euros was raised, 2.1 billion euros came from the streaming business – just under 500 million CDs and records.
While the success of streaming seems almost exhausted in some Western markets, major music labels are hoping for more subscriptions from emerging countries like India, Indonesia or China, where people could soon unlock ten dollars for a subscription. . In any case, the Chinese Internet giant Tencent already took a stake in Universal Music last year. After all, the Chinese should also hear the Beatles singing “Let It Be”, Helene Fischer singing “Magic Moon” and André Rieu pulling out his violin.
But it could also be a red flag, as the banker Carl Mayer von Rothschild was able to say in the last century: “Sell when the violins play”.