EMI to hand Sony ~2.0 million songs
Sony (SNE) is paying $2.3 billion to take control of music publisher EMI. Once the transaction closes, Sony is set to own 90% of EMI, making it the world’s largest music publisher. The acquisition of EMI would give Sony a catalog of more than 2.0 million songs, including acts by musicians such as Sam Smith and Kanye West.
Sony is buying EMI at a time when digital music demand is soaring, as evidenced by the growth of music streaming services. Spotify (SPOT), a leading streamed music provider, grew its paying customer base to 75 million subscribers in the first quarter, from 52 million subscribers a year earlier.
Pandora’s (P) paying music subscribers increased 19% year-over-year to 5.6 million in the first quarter. Apple now boasts more than 40 million premium subscribers on its Apple Music service, up from 10 million premium music subscribers at the beginning of 2016.
Amazon vying for music revenue in India
Digital music consumption is rising globally. Deloitte predicts India will have more than 270 million online music consumers by 2020, up from 27 million online music consumers at the end of 2015. Amazon (AMZN) launched its streaming music service in India earlier this year to take advantage of the country’s expanding music market.
Sony moves to strengthen its position
Sony is one of the leading sellers of music licenses. The company has struck entertainment content licensing deals with Apple, Alphabet’s (GOOGL) Google, and Spotify. With Warner Music Group and Universal Music Group also aggressively chasing online music licensing revenue, buying EMI could bolster Sony’s competition in the market.