Explore Issue 01 of LOOP Magazine

Featuring Sam Tompkins and Victor Ray as our cover stars, as well as internal spreads from Girli, Jords, Mysie, Finn Askew, Kara Marni and Master Peace

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Universal Music’s IPO Goes Platinum

The share price was down just over 1.6% at time of writing on the second day of trading, but after such a surge on the opening day this is not unusual.

The flotation valued the group at around £40bn (€47bn), over two and a half times that of fellow record label giant, Warner Music Group, which is valued at roughly £15bn (or $20.7bn). Sony Music Group, the third member of ‘the big three’ record labels, is privately owned so an accurate valuation is hard to come by, however given its operating revenue of £5.7bn ($7.8bn) in the 2019 year – it can safely be assumed to be worth a similar amount to Universal, whose revenues came in at £6bn (€7.4bn) for the same year.

The surge in the value of the share price should be reassuring to musicians everywhere as it clearly highlights the ever growing demand for new music, and reminds us that the traditional record labels are rapidly adapting their business models to meet the requirements of the modern day consumer. Focus on increased streaming is likely to be high on the list of Universal’s priorities as well as the revival of live music events after the lockdown. 

Universal is affiliated in some way or other with *checks notes* just about everyone, from Billie Eilish to The Weeknd, Lil Baby, King & Prince, Juice WRLD, Pop Smoke and BTS; as well as some of the old names such as The Beatles, Radiohead and Pink Floyd.

Billie Eilish, The Beatles, Pop Smoke and BTS have all been affiliated with Universal

In addition to the traditional monetisation of music catalogues, Universal has also been making deals with social media companies such as Tik Tok and Youtube, to compensate artists whose music is featured on the sites, as well as licensing agreements with streaming services such as Spotify and Apple Music. 

Interestingly, Universal also took part in Spotify’s IPO back in 2018, and as recently as December 2020 owned 6.487 million shares in the company. Given Spotify’s closing price yesterday at $234.51, Universal’s position is therefore worth some $1.5bn, or 3.3% of the company. 

Crash Course:

  • Flotation: the process whereby a company lists its shares on a stock exchange, making them available for the public to buy and sell. 
  • IPO: ‘Initial public offering’, the first time a companies’ shares are listed on a stock exchange

Words by Lawrence Jones

Posted On 3 October, 2022