BIS Records announced on Monday (September 5, 2023) that they have been acquired by Apple after 50 years in the music business as a classical music label. Apple acquired the Swedish classical music label and has filed it into Apple Music offering.
BIS Records label was founded in 1973 by Robert von Bahr, focusing on more underrecorded music.
The move comes as Apple Music plans to become a dominant player in classical music industry, after they launch Apple Music Classical app, in March. The app is available to Apple Music subscribers no additional cost.
BIS will still operate as a full-service label, including releasing new music. “The entire personnel of BIS, including me, have been retained,” said Bahr in a statement. “We all look forward to a future filled with new music and artists in golden sound from this increased force in classical music.
Apple’s latest purchase put a spin on the catalog acquisition race that got kickstarted during the pandemic as Wallstreet became interested in music as an asset class.
Billboard reported Niche-focused funds are the next logical steps in music largely due to the rising cost of capital. These funds specialize in acquiring rights to specific genres within the music industry, such as Latin, dance, film and TV, and even niche areas like Nickelodeon TV shows. Unlike major deals that make headlines, these funds offer more approachable investment opportunities at lower prices.
Several funds have launched in the past 18 months, including Armada Music’s BEAT (focused on dance), Jamar Chess’ Wahoo Music Fund One (Latin), Singapore’s blackx (Asian music market), and Multimedia Music (film and TV music). They have raised significant amounts of capital, ranging from $100 million to $200 million, from banks and investment firms. These funds differentiate themselves from institutional-backed funds like Primary Wave and Hipgnosis by providing a lower cost of entry and therefore reduced risk
Song Funds For Catalogs
Last October the Financial Times reported that Hipgnosis Songs Fund, the London-listed trust which also owns catalogues by Justin Bieber and Neil Young, launched a debt-funded share buyback program after its stock fell 30 per cent in six weeks.
The fund, which has caused a wave of catalog acquisitions over the last two years, made the move after the tumbling share price left its market value at half of what Hipgnosis had said its music catalogues were worth.
Already backed by private equity company Blackstone, Hipgnosis financed the share buybacks using new debt from a refinancing at the beginning of this month. The company would not disclose how many shares it intends to buy according to the Financial Times.
Hipgnosis Songs Fund has raised £1.052 billion to fund acquisitions since it was established in 2018 and within their current portfolio are top acts and producers like 50 cent, Timbaland, Rick James, RZA, LA Ried, Pusha T, Neil Young, and Red Hot Chilli Peppers.
Mercuriadis has been preaching the gospel to investors saying “songs are better that oil and gold” even since he listed the Hipgnosis Songs Fund on the London Stock Exchange in 2018. However as soon as Hipgnosis raise new money, they buy more catalogues at head turning prices.
Shaggy had explained to WMV in an interview that the main reason catalogues were being acquired at astronomical prices was largely due to the interests rates being low up to two years ago.
Now that interest rates are rising and Hipgnosis comes under pressure to monetize their existing catalogue they seem to be doubling down on purchasing new ones.
One analyst at investment bank Stifel told FT that “This is a surprising announcement to us,” regarding Hipgnosis share but back announcement. “Effectively the fund will be borrowing at just under 6 per cent to buy back stock . . . the market is essentially indicating a lack of credibility over valuations.”
The Church Of England Fund Managers is one of the largest shareholders of Hipgnosis.
Blackstone bought a majority stake in Hipgnosis Song Management, which advises Hipgnosis Songs Fund. Blackstone also has a separate $1bn fund, Hipgnosis Songs Capital, which is privately held and advised by HSM.
In Hip Hop younger musicians and rappers like Lil Wayne cashed out his entire Young Money catalogue including Drake and Nicki Minaj for $100 million to Universal Music Group.
Future sold his publishing in a deal said to be worth $65 million to Influence Media Partners. The sale includes 612 titles from 2004 to 2020.
John Legend and Iggy Azaelia also sold theirs from 8 figures and Universal Music Group also dropped a cool $300 Million in the same period to purchase the entire songwriting catalog of Bob Dillon in one of the biggest acquisitions ever of a single act’s publishing rights, per New York Times.
Tina Turner, before she died sold the rights to her music catalogue for $50 million dollars, including hits like The Best and Nutbush City Limits, to music publishing company BMG.
