Sony Group Corp.'s music arm, Sony Music Group, together with Singapore's state investment firm GIC Pte, are establishing a joint venture to procure music copyrights and intend to allocate $2 billion to $3 billion to the initiative.
Sony Music, a major global record company, will oversee the procured song collections, disseminating them to streaming platforms and authorizing the utilization of older tracks in films and commercials, the entities revealed on Wednesday. GIC will contribute funds and investment proficiency.
“As a lasting investor, GIC aspires to serve as an innovative and versatile capital collaborator for key industry frontrunners like Sony,” stated Jirish Karira, head of integrated strategies at the sovereign wealth organization, in a public statement.
The joint undertaking will furnish the Japanese entertainment enterprise with added resources to expand its music rights holdings. Through this arrangement, all three of the globe’s preeminent music corporations have forged alliances with financial backers to broaden their song libraries without needing to completely fund the acquisitions from their own capital.
Universal Music Group NV revealed a comparable agreement with Dundee Partners in the early part of 2024, and Warner Music Group Corp. entered into a collaboration with Bain Capital the prior year. “The alliance with GIC unites Sony Music Group’s enduring capital and operational skills to secure and administer top-tier catalogs, forging fresh prospects for music from performers and composers globally,” expressed Kevin Kelleher, chief operating officer at Sony Music.
Sony is already actively purchasing well-known music collections, frequently utilizing external funding. The firm has obtained the rights to compositions by Bruce Springsteen, as well as Queen and Pink Floyd.
The worth of music copyrights has escalated dramatically over the last ten years, fueled by the growth of subscription-based streaming services. Investors are also attracted to music as a comparatively steady asset during periods of economic instability.
Sony and GIC intend to pursue premium, renowned music assets across various genres. GIC has been involved in investing in the music sector for close to a decade. The investment collaboration also encompasses Sony Bank, a subdivision of the Japanese consumer electronics giant.
Sony possesses the second-largest assembly of record labels and is the foremost music publisher worldwide. The company's labels distribute music from notable figures such as Harry Styles, Adele, and Beyoncé. Sony also disseminates music from numerous artists via its platform, The Orchard.
Source: Bloomberg