Were Goldman Sachs’ music industry analysts celebrating last night? They should have been, having predicted in April that Universal Music Group could be worth $53bn.
At a time when 20% of UMG had been sold to a consortium led by Tencent at a valuation of around $36bn, it seemed bullish. Yet at the end of yesterday’s first day of trading for UMG as a public company, its market value was… $53.37bn.
There were signs of a tide that could rise and float other boats in the music world too. Warner Music Group’s share price rose by more than 4.7% yesterday, giving the company a market valuation of $23.15bn. Sony Music’s parent company Sony Corp saw a 3.9% bump – and the beginnings of a new round of chatter about whether it might spin off its own major-label subsidiary to follow Vivendi’s lead.
Can UMG maintain its price? Boss Sir Lucian Grainge was bullish in an interview with the Guardian, promising “so much more to come, so many opportunities”. High-potential markets are key to that, as are new listening modes and licensing opportunities.
“When you add fans’ growing listening through voice-controlled speakers, connected cars, social media, gaming, fitness and so on, you realise why we believe we’re just at the beginning of a new wave of music consumption,” said Grainge.
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