Universal Music Group charts the future of music with IPO
The Future. Universal Music Group (UMG) proved to be the gold-standard of the music industry, notching a record-breaking public offering. UMG’s insistence of crafting streaming deals while platforms were still in their infancy proved smart. But with artists fighting for ownership over their works and the rise of NFTs threatening to change the industry once again, UMG could break out as the first to find a way for these trends to coexist with its business. It certainly has the money to experiment.
UMG — the world’s biggest music company — turned up the volume in its public debut.
- After going public in Amsterdam on Tuesday, UMG’s stock popped 40% in its first day of trading.
- That makes it the biggest IPO listing of 2021, giving the company a market cap of $55 billion.
- The company predicts that it will grow by a minimum of 10% this year… and that’s without live-music coming back in full force.
With the top ten selling artists last year signed to the label, UMG is only expected to grow in value.
Just a decade go, music sales were in the gutter thanks to torrent sites like Napster and Limewire. UMG was the first major label to transition to streaming, striking key deals with growing platforms like Apple Music, Spotify, and Facebook. That bet has paid off in dividends — 70% of the company’s revenue is from streaming alone.
But, UMG is also solidifying itself for the next wave in music — the rising value of whole catalogs. It already makes a ton of money off The Beatles’ entire catalog and recently purchased Bob Dylan’s past work for a sky-high $300 million.
As streaming consumption continues to skyrocket — and talent fights for more ownership over their masters — those back catalogs will only explode in value and passive revenue