Welcome to Music Business Worldwide’s weekly roundup – where we make sure you catch the five biggest stories to hit our headlines over the past seven days. The MBW summary is maintained by Centripwhich helps over 500 of the world’s best-selling artists maximize their income and reduce their touring costs.
A corporate saga engulfing South Korea’s music business entered its final phase this week after music giant HYBE officially called off its bid to take over its rival, SM Entertainment.
The K-pop company said in a statement that it is suspending its bid to acquire a 40 percent stake in SM after discussions with technology firm Kakao, its rival in the SM acquisition process.
On Sunday (March 12), HYBE officially withdrew from the battle for control of SM, issuing a statement that read, “HYBE made this decision after noticing that the market was showing signs of overheating due to competition from both Kakao and Kakao Entertainment .”
Elsewhere, SM Entertainment revealed, through an investor presentation outlining its global expansion and investor strategy, that it plans to acquire a US music company to accelerate its global expansion.
SM says it is currently “reviewing companies that fit SM’s genre spectrum” in the US and is looking to expand into hip-hop and R&B.
Meanwhile, Paris-based music company and owner of TuneCore, Believe, has released its full-year 2022 financial results (the second set of full-year results since it listed on Paris Euronext in 2021). The company generates annual revenues of €760.8 million (US$800 million).
Additionally, Midia Research estimated global recorded music revenue to grow 6.7% year-over-year in 2022 to reach $31.2 billion, while SESAC Music Group acquired provider of content management technology, analytics, supply and distribution AudioSalad.
Here’s what happened this week…
1) HYBE WITHDRAWS OFFER TO ACQUIRE 40% STAKE IN SM ENTERTAINMENT: “MARKET IS SHOWING SIGNS OF OVERHEATING DUE TO OUR COMPETITION WITH KAKAO.”
HYBE, the South Korea-based music giant, has officially ended its attempt to acquire a 40% stake in rival K-pop company, SM Entertainment.
HYBE said in a statement on Sunday (March 12) that it was suspending its takeover bid after discussions with technology firm Kakao – its rival in the SM takeover process.
Last month, HYBE acquired a 14.8% stake in SM Entertainment, for about US$335 million, through the acquisition of shares from Lee Soo-man, the estranged founder of SM Entertainment.
Subsequently, HYBE publicly announced its intention to acquire an additional 25.2% of SM Entertainment’s shares – which would increase HYBE’s total stake to 40% – through a tender offer to SM’s minority shareholders.
If the move had been successful, HYBE would have spent another ≈$565 million on SM stock…
2) HYBE NOT THE ONLY K-POP GIANT LOOKING AT US: SM ENTERTAINMENT PLANS ACQUISITION IN THE COUNTRY FOR $150 MILLION TO ACCELERATE GLOBAL EXPANSION
SM Entertainment has revealed through a presentation to investors that it plans to acquire a music company in the US to accelerate its global expansion.
SM says it is currently “reviewing companies that fit SM’s genre spectrum” in the US and is looking to expand into hip-hop and R&B.
The company says it plans to spend 200 billion South Korean won on this investment strategy, which translates to about $150 million at current exchange rates.
This could mean several things, for example, that SM is willing to spend up to $150 million on a single company, or it could plan to spread that investment allocation among those three to five companies under consideration.
Either way, this news will undoubtedly fire up the music industry rumor mill as to who could be SM’s acquisition target or targets…
3) BELIVE TO GENERATE $800M ANNUAL REVENUE IN 2022, UP 31.8% YOY
Paris-based music company Believe generates annual revenue of €760.8 million in 2022.
This revenue figure translates to $800 million (at an average annual exchange rate according to the IRS).
The company’s full-year financial results (its second set of full-year results since it floated on Paris’ Euronext in 2021) were released on Wednesday (March 15)…
4) GLOBAL RECORDED MUSIC REVENUES TO REACH $31.2 BILLION IN 2022 BUT YOY GROWTH SLOWS ‘SIGNIFICANTLY’ (REPORT)
The streaming-led global music industry may be resilient in the face of macroeconomic uncertainty, but it’s certainly not immune.
That’s the key takeaway from a new report by Midia Research, which estimates a dramatic slowdown in recorded music growth last year.
According to the report published on Thursday (March 16), global recorded music revenue will grow by just 6.7% year-on-year in 2022 to reach $31.2 billion…
5) SESAC MUSIC GROUP ACQUIRES AUDIOSALAD CONTENT DISTRIBUTION AND DELIVERY PLATFORM
SESAC, the Nashville-based music licensing/collecting company, has acquired New York-based content management, analytics, delivery and distribution technology provider AudioSalad.
AudioSalad will remain headquartered in New York under the leadership of CEO Iain Catling and CTO Deane Thomas, and will continue to operate as a standalone business within SESAC Music Group.
SESAC acquired AudioSalad for an undisclosed sum…
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