What Warner & Universal's IPOs mean for the music industry

Apparently, the biggest industry grumble ahead of this year’s BRITs concerns the lack of room for tables on the revamped O2 Arena floor, after the ceremony revamp took up more space for staging. Proof, surely, that the revived biz is awash with cash, and many companies are in the mood to spend it. But they’re also in the mood to make it. So much so, even Len Blavatnik, multi-billionaire owner of Warner Music Group parent Access Industries, fancies getting his hands on even more of it. The news that WMG is pursuing an IPO blindsided much of the biz, but actually makes perfect sense. Warner may have struggled during its previous time as a public company (which ended in 2011 when Blavatnik bought in), but the climate is completely different now. Stock that was once in the toilet is now being treated as a blue chip investment by the huge banks brokering the float. Stock that was once in the toilet is now being treated as a blue chip investment Music Week The only question now is how big the valuation will be. Warner declined to comment on any aspect of the IPO, but you can guarantee it will come in higher than the $3.3 billion Blavatnik shelled out. The $30bn valuation of Universal Music – which announced its own IPO plans at the end of last week – is based on what Tencent is paying for its 10% stake, and while that is considered a tad over-priced by many, it’s likely they paid a premium to buy into the market-leader. The picture around Universal's IPO, due by 2023, is complicated by that Tencent deal but Warner looks simple enough. According to most analyses, Warner has a global market share of around 18%, more than half Universal’s estimated 31%, suggesting a mark of $15bn could be achievable. That kind of money – assuming Blavatnik, who will likely maintain a controlling interest, makes funds available to WMG – would mean Steve Cooper and co could compete for any acquisition they fancy, while not being intimidated by Spotify's own IPO-fuelled wealth. Don’t expect them to hang around either – with a US election this year, and the effect that could have on the markets, Access will surely want to move sooner rather than later. Either way, after Spotify and numerous other smaller companies took the plunge to go public, coupled with the feverish atmosphere around industry mergers and acquisitions, these proposed major label IPOs are further confirmation of just how many people out there want to give the music business their money right now. With BRITs tables ruled out, the biz’s biggest challenge will be working out how to spend it wisely...

Viewpoint: Sammy Andrews on the future of the BBC

In January, Tony Hall announced he would be stepping down as the BBC’s director general after seven years in the role. In her latest no-holds-barred digital column for Music Week, Deviate Digital CEO Sammy Andrews weighs in on the future of the national broadcaster, and why it’s so important to the music business... There’s no doubt about it, the BBC has made some awful decisions over the years, but I want to discuss why the UK music industry should be wary of anyone welcoming the BBC’s demise. Despite all its failings, the BBC has been an undeniably valuable vehicle to promote not just our national treasures, but also our regional talent and national exports. It is still a crucial path on the route to market for most successful UK acts, in some capacity. The BBC proudly states on its official website that, by 2017, more than 190,000 artists had registered onto the BBC Introducing website, uploading over 470,000 tracks in the process. Between them, they amassed 14 UK No.1 singles, 68 UK Top 10 singles, 28 UK No.1 albums and 54 UK Top 10 albums. Some 58% of the acts that performed at Reading and Leeds Festival in 2017 had initially uploaded their music to the BBC Introducing Uploader. Regardless, January’s news that Tony Hall is set to leave the BBC as director general – and rumours that the Government has discussed dismantling it entirely – ushered in a flurry of questions over who will be at the helm for the next phase of the BBC’s much needed evolution, along with a heap of criticism over where it is right now. Even I, as a critical observer of the BBC’s slow progression to digital, was slightly alarmed to see so many music industry execs take to their socials to damn it without so much as a thought of just how reliant we are on it as an industry, and how reliant it is on us. You can be sure of one thing: what happens over the coming years will, without a doubt, be important to the UK music industry as we know it. The future of the BBC depends on its ability to operate properly and profitably in an increasingly competitive digital world but, unlike its global powerhouse rivals, it has faced limitations. I’ve been more privy than most to the BBC’s attempt to modernise and digitise. In 2014, I had discussions with the BBC on data collection, analysis and the potential to use that for personalisations. The BBC eventually rolled out required log-ins allowing personalisations in 2017. Throughout those conversations it became clear to me that the benefits and the burdens of being a public service can sometimes balance out in many scenarios when it comes to innovation, transformation and survival. The same can be said for any public service, sadly. Though the BBC continues to grow its corporate arm it is, in my opinion, yet to fully realise its potential. But they are also the ones taking a chance on our artists before they’re signed without guaranteed commercial gain, and I would hazard a guess that there’s not one of you reading this in the UK – label, distributor or management company – that doesn’t hope for a playlist inclusion on a BBC show for every track you release. We all know the power that it still yields despite the unstoppable success of streaming services and social networks. We also know this activity on BBC platforms informs and influences everyone from streaming services to wider press and industry globally, but the Beeb is also heavily reliant on our content across its entire business. You’ve all prayed for a music show slot, chat show, those hellish early morning starts for a breakfast news slot, interviews and sessions or one of their numerous live events and broadcasts. Then there are the producers, presenters and journalists that tirelessly promote our acts to their own social audiences as well as on the air, or their championing of independent venues, plus the many ex-BBC employees who have climbed to become some of the most successful streaming service execs in the world today. That’s also not to mention the weight it carries globally, and the support and exposure it offers our artists locally. One of the areas seriously lacking on all global streaming services for me is investment, time and exposure in the regions. And speaking of streaming services, there are also increasingly uncomfortable questions over what constitutes an interactive stream across the BBC, as it continues to try and expand its digital footprint and figure out its funding. It’s a debate that will no doubt ignite again this year and could create seismic shifts given changes in consumption and technology. When uproar over all of this erupts, what the music industry should actually be asking itself is not just how it can help reshape the future of the BBC in an ever-changing world to guarantee fair income for our artists. In my opinion, it should also ask how itself how we can help preserve a national treasure for UK music in an increasingly globalised, content clusterfuck.