As traditional entertainment companies grapple with the upheaval and uncertainty of COVID-19, tech giants Apple and Amazon are profiting handsomely during the pandemic. The tech giants on Thursday reported blockbuster results for the second quarter, the same April-to-June period that paralyzed legacy media companies.
Spotify’s user and subscriber growth came in at the top end of expectations for the second quarter of 2020, but the company’s bottom line was hit by a 48% increase in operating costs from stock-related compensation charges. In addition, ad revenue fell 21% — which Spotify blamed on the coronavirus pandemic — but the drop wasn’t quite as bad as forecast.
For more than 20 years, the business of owning cable TV channels was seemingly too good to be true. But in short order, investors began to see channels that don’t own their own shows as merely renters of programming — middleman distributors destined to be outmoded by streaming platforms.
Shamrock raised $250m in 2016 to spend on IP across movies, TV, music publishing, recorded music, video games and more. Today (July 21), Shamrock has announced that it has raised a further $400m in committed capital for a fresh fund which it will use to “continue investing in entertainment intellectual property rights”.
Given the historical ubiquity of piracy in China, formal licensing deals weren’t an easy win, and getting royalty reports isn’t a given (the exclusive arrangements signed between the major labels and Tencent, which are said to be expiring in 2020/2021, pay out ‘minimum guarantee’ advances instead of royalties). Still, it’s a marked improvement for labels from the past situation in China – no income and no licenses.
Netflix’s stock sank 10% in after-hours trading following a second-quarter earnings report that revealed it beat revenue and subscriber projections, but fell short of expected earnings per share. The company’s letter to shareholders unsurprisingly attributed the higher-than-expected subscriber gain to pandemic lockdowns, but noted that the boom is petering out “as consumers get through the initial shock of Covid and social restrictions.”
E.W. Scripps Co. clinched a deal with SiriusXM to sell podcast network and producer Stitcher, which includes Scripps’ other podcast-related businesses, for up to $325 million. Scripps bought Stitcher for $4.5 million in 2016 and combined it with Midroll Media, which it bought for $55 million the year prior. According to E.W. Scripps, the $325 million price tag represents a return of more than 100% in its investment in podcasting over the last five years.
Recent valuations of Epic put the company’s current worth at approximately $17bn, suggesting that Sony may have acquired somewhere in the region of 1.5% of the firm. Sony added in press release: “The investment allows Sony and Epic to aim to broaden their collaboration across Sony’s leading portfolio of entertainment assets and technology, and Epic’s social entertainment platform and digital ecosystem to create unique experiences for consumers and creators.”
Having originally announced last week that it was looking to raise £200m ($249m) via the share sale, Hipgnosis was oversubscribed, and has confirmed today (July 10) that the C share placing actually ended up creating gross proceeds of £236.4m ($299m). That qualifies as Hipgnosis’ biggest equity raise to date.
The venture, which is called Worldwired Music IP Fund and will have resources in the $300-$500 million range, is not being led by the group or Burnstein, although they are among the parties involved in it, which sources said also include former Fender president/COO Matt Janopaul and former Sony/ATV co-president Rick Krim.