1/ @WarnerMusic, one of the few pure music companies, is going public next week

(Others like @sonymusic/ @BMG/ @UMG are parts of conglomerates)

If you believe the future involves many more people paying for music streaming services, the WMG IPO is for you

Here& #39;s some more infohttps://abs.twimg.com/emoji/v2/... draggable="false" alt="👇🏽" title="Down pointing backhand index (medium skin tone)" aria-label="Emoji: Down pointing backhand index (medium skin tone)">
2/ WMG ( @warnermusic) plans to raise as much as $1.8B next week, in what could be the biggest IPO of 2020

WMG is owned by Ukraine-born billionaire Len Blavatnik, one of the world& #39;s top 100 wealthiest people ( #7f16143a56f3">https://forbes.com/profile/len-blavatnik/ #7f16143a56f3),">https://forbes.com/profile/l... via his diversified holdco, Access Industries
4/ WMG will sell just 14% of its common stock in the IPO (set for June 3) & Blavatnik/Access will continue to own 86%

Post-IPO, WMG is expected to be worth $12B-$13B

So, it& #39;s a ~4x deal for Blavatnik ($3B ⇒ $12B) w/ upside & this visual needs an update: https://www.bloomberg.com/news/features/2019-04-26/the-meteoric-rise-of-billionaire-len-blavatnik">https://www.bloomberg.com/news/feat...
5/ And that doesn’t include the $1.35B in dividends WMG has paid out since 2011
6/ Music, a $20B industry, is likely now the largest chunk of Blavatnik’s wealth

- It& #39;s growing at 9% CAGR

- Streaming now generates 56% of industry revenues, up from just 19% in 2015

- Streaming is taking share from physical (i.e. CD sales) & digital (i.e. downloads)
7/ A key argument for WMG is that global adoption & penetration of streaming is inevitable, so there& #39;s lots of room to grow

Today& #39;s challenges are tomorrow& #39;s opportunities:

- Only 11% of smartphone users pay for music streaming

- Emerging market smartphone penetration is low
8/ There& #39;s also a tech angle: New devices, wearables, digital dashboards, games, AR/VR, smart speakers, etc. need music.

See, for example, how music has contributed & is contributing to TikTok& #39;s growth
10/ WMG is "the vital connective tissue between artists, music services, & fans," according to CEO Stephen Cooper

The WMG structure:

• Warner Music Group (the corporate arm)

• Warner Recorded Music (the label business)

• Warner Chappell Music (the publishing arm)
11/ By the way, WMG is home to your favorite artists’ favorite artists

Recorded Music:

@iamcardib
@prince
@lizzo
@pinkfloyd
@ArtistHBTL

Publishing:
@katyperry
@GreenDay
@ToveLo
@manuelmedrano
@drdrew

Just to name a few.
12/ @WMG’s Recorded Music unit is the cash cow, generating 85% of rev. in & #39;19: $3.8B (16% mkt share)

It& #39;s run by @MaxLousada who, in a bit of hip-hop trivia, was a Rawkus Records MD from & #39;00-& #39;02 (Shout out to the mighty @MosDefOfficial, @TalibKweli, @JarretMyer & @BrianBrater)
13/ WMG’s Recorded Music is structured into 3 pillars:

• A bunch of labels, driven by Atlantic & Warner Records

• Ops in 60+ countries, &

• Complementary assets such as @ada_music, @WarnerMusicAS, @songkick, & @UPROXX

"We drive culture to drive consumption" - @MaxLousada
14/ WMG Recorded Music has enjoyed success, w/ its labels receiving the most gold & platinum certifications for debut albums since & #39;17

It also tells a compelling story to independent artists: "40K new songs are added to Spotify every day, go major, we& #39;ll help you punch through"
15/ Guy Moot ( @GMootster) runs the publishing arm, @WarnerChappell

It& #39;s a ~$650M business for WMG

Globally, publishing revenues come from four main royalty sources: mechanical, performance, synchronization and digital

For WMG, the ~$650M publishing revenue is still only 15%
16/ In keeping with recent trends, Africa& #39;s music scene (particularly Nigeria & SA) is important to WMG

• They signed a 2019 strategic partnership with @Audu& #39;s record label @choccitymusic

• And just in April & #39;20, ahead of the IPO, they invested in music distributor @Africori
18/ Recommended reading for more info:

• the S1: https://investors.wmg.com/node/12361/html 

•">https://investors.wmg.com/node/1236... this article: https://www.rollingstone.com/pro/features/warner-music-group-ipo-ar-costs-952821/

•">https://www.rollingstone.com/pro/featu... this article: https://www.billboard.com/articles/business/9390895/warner-music-ipo-analysis-investors-business-wall-street">https://www.billboard.com/articles/...
You can follow @eajene.
Tip: mention @twtextapp on a Twitter thread with the keyword “unroll” to get a link to it.

Latest Threads Unrolled: