Home Topics Business Weekly recap from MBW: Michael Gudinski, SoundCloud, Universal, TIDAL, Anghami

Weekly recap from MBW: Michael Gudinski, SoundCloud, Universal, TIDAL, Anghami

Welcome to Music Business Worldwide’s weekly recap we make sure you got the top five stories of the past seven days in our headlines. MBW Roundup is backed by Centtrip, which helps over 500 of the world’s best-selling artists maximize their income and reduce their tour costs.

This week the music industry was shocked and saddened by the death of Michael Gudinski, the globally respected music entrepreneur and founder of the Mushroom Group, who died peacefully in his sleep at home on Monday (March 1st) at the age of 68. The Music The Legend is honored at a state funeral in Melbourne, Australia.

In an industry-wide first step, SoundCloud is introducing what it calls “fan-based license fees” – its own branding of the user-centric model – which it claims means “each” [SoundCloud] The listener’s subscription or advertising revenue is distributed among the artists who listen to them rather than having their pieces aggregated. “

Elsewhere, Universal Music Group grossed $ 8.4 billion in 2020 and, according to parent company Vivendi’s latest financial results, spent over $ 1.7 billion on catalog acquisitions and artist advancement.

In addition, Jack Dorsey-led financial services company Square, Inc. is acquiring a majority stake in the music streaming platform TIDAL for $ 297 million. Jay-Z is expected to join Square’s board of directors upon completion of the transaction.

In addition, Middle Eastern Spotify rival Anghami has signed a merger agreement with the publicly traded SPAC Vistas Media Acquisition Company. The deal will result in Anghami being listed on NASDAQ in New York under the new symbol ANGH.

1) MICHAEL GUDINSKI, FOUNDER OF THE AUSTRALIAN MUSHROOM GROUP, DIES AT THE AGE OF 68

Michael Gudinski, the world-renowned music entrepreneur and founder of the Mushroom Group, has passed away at the age of 68.

The shock news was confirmed by the media in Gudinski’s native Australia on Monday.

Gudinski is survived by his wife Sue and children Kate and Matt and grandchildren Nine-Rose and Lulu.

“It is with deep sadness that we announce the death of Michael Gudinski AM overnight,” said the Mushroom Group in a statement.

“The popular Australian music legend died peacefully in his sleep at his home in Melbourne, Australia.”

Gudinski is honored at the state funeral in Melbourne, Australia.

2) SOUNDCLOUD HAS TO REVOLUTIONIZE STREAMING PAYOUTS AND START USER-CENTRIC ROYALTIES FOR 100,000 INDIE ARTISTS

One of the most hotly debated concepts in the modern music legal business is user-centered licensing. This model pays streaming license fees based on the behavior of each subscriber. A percentage of each subscriber’s subscription fee is distributed only to the artists / labels they individually listened to that month.

This model is in contrast to the current “prorated” streaming payout system, where all license fees for a service like Spotify are aggregated at the end of each pay period. Thereafter, the music rights holders are paid according to their market share in the total amount played through the platform.

The latter model obviously benefits most global pop superstars the most. It is believed that the earlier model would bring more benefit to indie artists and niche genres like classical and jazz.

Critics of the “pro rata” model point out that it regularly results in a portion of a person’s subscription fee being paid to artists whose music they have not even played.

SoundCloud is in the process of resolving this debate once and for all.

3) UNIVERSAL MUSIC GROUP generated $ 8.4 billion in 2020 … and spent over $ 1.7 billion on catalog purchases and artistic advancement

Universal Music Group started 2020 with a slight, albeit significant, increase in sales: total annual sales across all businesses (including publishing and music recording) increased 4.7% year-over-year.

But the really standout story for UMG last year – maybe music for those who hope it will get a gigantic rating in the months to come – was their earnings development.

In 2020 UMG achieved total sales of EUR 7.43 billion (USD 8.40 billion) with an EBITDA of EUR 1.49 billion (USD 1.68 billion). This corresponds to an impressive annual EBITDA margin of 20%.

As a result, Universal was nearly $ 250 million more profitable in 2020 on an EBITDA basis than in 2019 …

4) Square to buy Jay-Z’s TIDAL for $ 297 million

Jack Dorsey-led financial services company Square, Inc. has reached a definitive agreement to acquire a majority stake in the music streaming platform TIDAL.

Square expects to pay a $ 297 million mix of cash and stock for a “significant majority” stake. Existing artist shareholders will be the remaining stakeholders.

TIDAL will operate independently within Square alongside the seller and cash app ecosystems.

According to the company, the acquisition “expands Square’s economic strengthening purpose into a new industry: musicians.”

The media release added, “Artists are entrepreneurs with a dream and deserve access to the systems, tools and financial freedom to achieve those dreams at every stage of their careers.”

5) SPOTIFY RIVAL ANGHAMI TO PERFORM ON NASDAQ VIA MERGER WITH VISTAS MEDIA ACQUISITION COMPANY

Well-known Middle Eastern Spotify rival Anghami has entered into a definitive merger agreement with Vistas Media Acquisition Company Inc., a publicly traded special purpose vehicle (SPAC).

The deal will result in Anghami’s listing on NASDAQ in New York, with the combined company operating under the name Anghami and trading under the new symbol ANGH.

The transaction implies an initial pro forma company valuation of approximately $ 220 million, or 2.5x estimated 2022 revenue. The transaction is expected to close in the second quarter of 2021.

Welcome to Music Business Worldwide’s weekly recap we make sure you got the top five stories of the past seven days in our headlines. MBW Roundup is backed by Centtrip, which helps over 500 of the world’s best-selling artists maximize their income and reduce their tour costs.

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