Sony buys controlling stake in EMI for $2.3B to become world's largest music publisher

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Sony has announced it will be buying a controlling stake in EMI Music Publishing as part of the company's plan to increase its revenue from streaming media services like Apple Music.

EMI logo


Revealed at a news conference in Tokyo on Tuesday, Sony will be buying a 60-percent stake in the music publisher from Mubadala Investment Company, reports Reuters,, bringing its total ownership of EMI from approximately 30 percent to 90 percent. According to the BBC, the remaining 10 percent is held by the estate of Michael Jackson.

The purchase gives EMI Music Publishing a value of around $4.75 billion, including debt, more than double its value in 2011, at a time when a Sony-led consortium won bidding rights for the label. Since that time, Sony has operated the company on behalf of all stockholders.

A spokesperson advised EMI has a 15-percent share of the music publishing market, but the acquisition effectively turns Sony into the biggest music publisher with a 26-percent market share. The purchase also expands Sony's catalog by more than two million songs, including tracks from artists including Kanye West, Sam Smith, and Sia.

The EMI acquisition is part of a strategy by Sony CEO Kenichiro Yoshida to stabilize the company's revenue by acquiring entertainment content rights. This is largely a continuation of the existing corporate strategy that shifts Sony's focus away from consumer electronics production, which offered relatively low margins.

"This investment in content intellectual property is a key stepping stone for our long-term growth," declared Yoshida. The CEO noted the shrinking of the music market from 1999 until 2014, with streaming music services credited with turning the industry's fortunes around.

According to figures released in April, the streaming music sector grew 39 percent year-on-year to $7.4 billion, accounting for 43 percent of all industry revenues. Apple Music is the second-largest streaming service, which was recently confirmed to have passed 50 million users including 40 million subscribers, while market leader Spotify boasts 75 million premium subscribers and 170 million active users.

Sony also revealed its three-year business plan during Tuesday's announcement, with the aim of stabilizing cash flow while at the same time minimizing the effects of more volatile sales cycles from the electronics and gaming markets. The company aims to generate 2 trillion yen ($18 billion) in cash flow over the next three years.

Plans include extending its successful imaging sensor business from smartphones, including camera modules for Apple's iPhone, into the automotive industry and other areas.

Comments

  • Reply 1 of 12
    MacProMacPro Posts: 17,291member
    Wow.  Go Sony!  Great company, love their products.  I am drooling over an a7iii at this very moment.
    adm1watto_cobra
  • Reply 2 of 12
    I consider "EMI" the ultimate Sex Pistols song. I also love the orchestral version with Steve Jones speaking the lyrics.
  • Reply 4 of 12
    eightzeroeightzero Posts: 1,998member
    Is this good or bad for Apple? 
    watto_cobra
  • Reply 5 of 12
    zoetmbzoetmb Posts: 2,280member
    eightzero said:
    Is this good or bad for Apple? 
    Since most publishing royalties are statutory, it won't make any difference.   For those that aren't, Sony will be in a position to negotiate a better deal.

    Having said that, the U.S. Copyright Office has made recommendations to Congress that the whole system be changed to a "willing buyer - willing seller" free-market system (although Congress has shown no interest in acting on this), which means that instead of statutory rates, everything would be negotiated.   In that case, I would say Sony would have the upper hand because Apple could not take down all Sony Publishing owned tracks and still survive as a viable streaming/downloading service.   

    Other countries vary depending upon their copyright laws.  

    Note that "publishing" has nothing to do with the actual recording and payments to performers .  It only has to do with royalties to composers (and their publishers).  
    edited May 22 watto_cobra
  • Reply 6 of 12
    nunzynunzy Posts: 332member
    Sony makes nothing as good as iPhone.

    They better be careful or Apple won't sell their "content". Apple should take this opportunity to demand lower royalty payments.
  • Reply 7 of 12
    foggyhillfoggyhill Posts: 4,665member
    zoetmb said:
    eightzero said:
    Is this good or bad for Apple? 
    Since most publishing royalties are statutory, it won't make any difference.   For those that aren't, Sony will be in a position to negotiate a better deal.

    Having said that, the U.S. Copyright Office has made recommendations to Congress that the whole system be changed to a "willing buyer - willing seller" free-market system (although Congress has shown no interest in acting on this), which means that instead of statutory rates, everything would be negotiated.   In that case, I would say Sony would have the upper hand because Apple could not take down all Sony Publishing owned tracks and still survive as a viable streaming/downloading service.   

    Other countries vary depending upon their copyright laws.  

    Note that "publishing" has nothing to do with the actual recording and payments to performers .  It only has to do with royalties to composers (and their publishers).  
    Considering Spotify is in such bad shape and can't raise rates and Apple doesn't depend on the money from streams, I'm not sure Sony would be in that good a negotiation position.
    watto_cobra
  • Reply 8 of 12
    Insert obligatory reference to the Sex Pistols song of the same name [HERE].
  • Reply 9 of 12
    What has happened to Sony since Akio Morita is so sad. The company once stood for forward thinking, innovation, quality and now they are just another conglomerate trying to squeeze out a steady profit. Steve Jobs long admired Sony under Morita and the company used to supply Apple with displays back in CRT days.

    Sony long strived to keep fresh eyes and intentionally avoided hiring the same type of grads as the other Japanese companies- looking not for Tokyo University conformists, but the bright young minds that were just as smart but far less conformist. Morita famously asked a Conductor to evaluate the sound quality of a new product and when he savaged it, he was invited into Sony to work with the engineers to improve the musicality of the sound.

    That was a long time ago and I sometimes wonder if Apple is on the same glide path under Cook.
    dysamoria
  • Reply 10 of 12
    nunzynunzy Posts: 332member
    What has happened to Sony since Akio Morita is so sad. The company once stood for forward thinking, innovation, quality and now they are just another conglomerate trying to squeeze out a steady profit. Steve Jobs long admired Sony under Morita and the company used to supply Apple with displays back in CRT days.

    Sony long strived to keep fresh eyes and intentionally avoided hiring the same type of grads as the other Japanese companies- looking not for Tokyo University conformists, but the bright young minds that were just as smart but far less conformist. Morita famously asked a Conductor to evaluate the sound quality of a new product and when he savaged it, he was invited into Sony to work with the engineers to improve the musicality of the sound.

    That was a long time ago and I sometimes wonder if Apple is on the same glide path under Cook.
    Under Cook, Apple could buy EMI ten times over using pure cash. Or, now that Sony owns it, Apple could simply buy Sony.
  • Reply 11 of 12
    dysamoriadysamoria Posts: 1,712member
    nunzy said:
    Sony makes nothing as good as iPhone.

    They better be careful or Apple won't sell their "content". Apple should take this opportunity to demand lower royalty payments.
    Because the least money we give to music creators, the better for everyone?? You know that reduced royalties won't come out of the recording industry profits. It would come out of what is supposed to go to the actual artists.
    nunzyspheric
  • Reply 12 of 12
    dysamoriadysamoria Posts: 1,712member
    nunzy said:
    What has happened to Sony since Akio Morita is so sad. The company once stood for forward thinking, innovation, quality and now they are just another conglomerate trying to squeeze out a steady profit. Steve Jobs long admired Sony under Morita and the company used to supply Apple with displays back in CRT days.

    Sony long strived to keep fresh eyes and intentionally avoided hiring the same type of grads as the other Japanese companies- looking not for Tokyo University conformists, but the bright young minds that were just as smart but far less conformist. Morita famously asked a Conductor to evaluate the sound quality of a new product and when he savaged it, he was invited into Sony to work with the engineers to improve the musicality of the sound.

    That was a long time ago and I sometimes wonder if Apple is on the same glide path under Cook.
    Under Cook, Apple could buy EMI ten times over using pure cash. Or, now that Sony owns it, Apple could simply buy Sony.
    And who cares about the behavior or products of a company as long as they have enough money to buy other companies...
    nunzywilliamlondon
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