KKR Looks To Sell Music Catalog As Royalty Valuations Drop But Spotify Soars On Streaming Success
Portfolio Pulse from Neil Dennis
KKR & Co Inc is considering the sale of its music catalog, which includes 65,000 songs, as royalty valuations decline due to high interest rates. The catalog was acquired from Kobalt Capital for $1.1 billion in 2021. Music streaming services like Spotify are experiencing revenue growth, with Spotify's stock up 151% since the start of the year. In contrast, the MUSQ Global Music Industry ETF has fallen 2.8% since its launch in July. Sony Music's share price is up 18% this year, while Warner Music is down slightly.
December 12, 2023 | 5:55 pm
News sentiment analysis
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POSITIVE IMPACT
Apple, with its competing streaming music service, has seen its stock rise by 49% this year, benefiting from the growth in streaming.
Apple's stock increase is likely influenced by its overall business performance, including its successful streaming service, which contributes to its positive outlook.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
POSITIVE IMPACT
Amazon.com, Inc.'s stock has increased by 74% this year, which may be partially attributed to the success of its music streaming service.
Amazon's stock performance is likely due to its diverse business model, with the music streaming service being one of the growth factors.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
POSITIVE IMPACT
Sony Music's share price is up 18% this year, indicating a positive performance in the music industry despite challenges in music publishing.
Sony Music's share price growth suggests a favorable market response, likely due to its diversified portfolio and successful acquisitions.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 60
POSITIVE IMPACT
Spotify's stock has soared by 151% since the start of the year, reflecting its success in the streaming industry and potential for continued revenue growth.
Spotify's significant stock price increase indicates strong performance and investor confidence, suggesting a positive short-term impact.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 70
NEUTRAL IMPACT
KKR is exploring the sale of its music catalog due to declining royalty valuations, which could potentially affect its asset valuations and investment strategy.
The sale of KKR's music catalog could lead to a revaluation of its assets and impact investor sentiment. However, the outcome and timing are uncertain, hence a neutral score.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
The MUSQ Global Music Industry ETF has decreased by 2.8% since its launch, reflecting the mixed performance of the music industry.
MUSQ's decline since its launch may concern investors, but it could also reflect broader market trends and not just the performance of the music industry.
CONFIDENCE 70
IMPORTANCE 50
RELEVANCE 70