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eOne Buys Audio Network for $215M
Old 22nd April 2019
  #31
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Quote:
Originally Posted by Chuck.dallas View Post
I've never analyzed Vivendi/Universal's financial reports, but $60-100M in worldwide revenue for Unippm is surprising -- that's only about 1.4% of their total revenues. Is Uni's production music division really that small?
When EMI was sold to Universal (Recordings) and Sony (Publishing) in 2011, many of the big players had to show their cards. At that time, UPM was doing about $80M a year, and they were the top earning music library in the world. Depending on how things have gone since then, they're either doing better... or worse!

Who can really say what AN was earning per year? If they were earning $20M, which certainly isn't unreasonable, then a 10x valuation puts them in the ballpark... which to me still seems pretty crazy. They'd have to be earning $40M to even make this seem plausible. Can we at least agree that eOne is very optimistic about AN's earning potential?

The kind of shows being done by eOne absolutely have the potential to earn that kind of scratch, so eOne buying AN to essentially pay themselves isn't the worst idea ever. And if all stays as it is as far as royalties go, and if the producers of those shows agree to exclusively use AN for more than just incidental music, (some of) the composers are going to make a killing.
Old 22nd April 2019
  #32
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Quote:
Originally Posted by lornemalvo View Post
Perhaps you could give us the bullet points? Thx
Sure.

-Discovery creates music library for use in-house and free music for any show destined for airtime on Discovery networks.

-Discovery Music Source creates immense library in very few years, all of which is done at the highest level

-Discovery Music Source starts generating about $10M in royalties a year for Discovery Networks

-Discovery acquires Scripps and adopts Scripps' music department and Scripps' MO of direct license/pay per use music licensing.

-Discovery Music Source is abandoned, orphaning 110,000 tracks and the entire team that created it.

This is still all in process. The point is, I guess, that it's never a sure thing when a giant content creator like Discovery or Scripps (or eOne) buys a large music library. Once the content creator owns all the music and publishing, aren't the composers of the back catalog essentially depending on the benevolence of the owner?

In the case of eOne, the owner now has a hand in the music, the Film/TV production, and distribution. eOne has to keep the library fresh or the producers won't use it, so they can't treat the composer especially poor, but that doesn't mean they won't change their model after everybody's three year non-compete is up. At the same time, the fact that so many of eOne's shows are distributed on major networks worldwide is a big plus. Even if there aren't any syncs (won't that hurt the AN composers?), there will still be very nice performance royalties.

For now, I'm guessing it's business as usual at AN. Best of luck to all AN associated composers! I hope you all reap an insane windfall out of this deal.
Old 23rd April 2019
  #33
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Quote:
Originally Posted by VitaEtMusica View Post
Sure.

-Discovery creates music library for use in-house and free music for any show destined for airtime on Discovery networks.

-Discovery Music Source creates immense library in very few years, all of which is done at the highest level

-Discovery Music Source starts generating about $10M in royalties a year for Discovery Networks

-Discovery acquires Scripps and adopts Scripps' music department and Scripps' MO of direct license/pay per use music licensing.

-Discovery Music Source is abandoned, orphaning 110,000 tracks and the entire team that created it.
I had no idea that happened with Discovery. I did some stuff for them a couple of years ago that had a very specific brief, they were very hands on with their feedback and imo had great taste when it came to their references. I've not seen more than $30 in royalties for the tracks and Tunesat detections are maybe 20 max.
Old 23rd April 2019
  #34
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Quote:
Originally Posted by Amber View Post
I had no idea that happened with Discovery. I did some stuff for them a couple of years ago that had a very specific brief, they were very hands on with their feedback and imo had great taste when it came to their references. I've not seen more than $30 in royalties for the tracks and Tunesat detections are maybe 20 max.
It is/was a big library that was gaining a lot of momentum with really solid leadership, but was cut short. If your music was placed in a show, no doubt it will show up in reruns for years.
Old 23rd April 2019
  #35
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Quote:
Originally Posted by VitaEtMusica View Post
Sure.

-Discovery creates music library for use in-house and free music for any show destined for airtime on Discovery networks.

-Discovery Music Source creates immense library in very few years, all of which is done at the highest level

-Discovery Music Source starts generating about $10M in royalties a year for Discovery Networks

-Discovery acquires Scripps and adopts Scripps' music department and Scripps' MO of direct license/pay per use music licensing.

-Discovery Music Source is abandoned, orphaning 110,000 tracks and the entire team that created it.

This is still all in process. The point is, I guess, that it's never a sure thing when a giant content creator like Discovery or Scripps (or eOne) buys a large music library. Once the content creator owns all the music and publishing, aren't the composers of the back catalog essentially depending on the benevolence of the owner?

In the case of eOne, the owner now has a hand in the music, the Film/TV production, and distribution. eOne has to keep the library fresh or the producers won't use it, so they can't treat the composer especially poor, but that doesn't mean they won't change their model after everybody's three year non-compete is up. At the same time, the fact that so many of eOne's shows are distributed on major networks worldwide is a big plus. Even if there aren't any syncs (won't that hurt the AN composers?), there will still be very nice performance royalties.

For now, I'm guessing it's business as usual at AN. Best of luck to all AN associated composers! I hope you all reap an insane windfall out of this deal.
Interesting. Thanks!
Old 24th April 2019
  #36
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Quote:
Originally Posted by VitaEtMusica View Post
When EMI was sold to Universal (Recordings) and Sony (Publishing) in 2011, many of the big players had to show their cards. At that time, UPM was doing about $80M a year, and they were the top earning music library in the world. Depending on how things have gone since then, they're either doing better... or worse!

Who can really say what AN was earning per year? If they were earning $20M, which certainly isn't unreasonable, then a 10x valuation puts them in the ballpark... which to me still seems pretty crazy. They'd have to be earning $40M to even make this seem plausible. Can we at least agree that eOne is very optimistic about AN's earning potential?

The kind of shows being done by eOne absolutely have the potential to earn that kind of scratch, so eOne buying AN to essentially pay themselves isn't the worst idea ever. And if all stays as it is as far as royalties go, and if the producers of those shows agree to exclusively use AN for more than just incidental music, (some of) the composers are going to make a killing.
Thanks for clarifying. Although AN's $215M acquisition price is a little puzzling, it's probably not a huge price tag for eOne given their size and scale with $1B in revenues. Assuming AN earns $20M a year as you mentioned, that's only a 2% revenue stream to eOne. So appears to me as not an overly risky buy and likely provides a number of benefits and synergies to eOne's content portfolio.
Old 24th April 2019
  #37
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Quote:
Originally Posted by Chuck.dallas View Post
Thanks for clarifying. Although AN's $215M acquisition price is a little puzzling, it's probably not a huge price tag for eOne given their size and scale with $1B in revenues. Assuming AN earns $20M a year as you mentioned, that's only a 2% revenue stream to eOne. So appears to me as not an overly risky buy and likely provides a number of benefits and synergies to eOne's content portfolio.
I think buying a music library at 25% the worth of your existing, highly successful company is risky- especially in the murky waters of current watching trends. But eOne obviously knows something we don't.
Old 24th April 2019
  #38
Quote:
Originally Posted by Amber View Post
I had no idea that happened with Discovery. I did some stuff for them a couple of years ago that had a very specific brief, they were very hands on with their feedback and imo had great taste when it came to their references. I've not seen more than $30 in royalties for the tracks and Tunesat detections are maybe 20 max.
yeah... the woman in charge of all of that was let go by Discovery after they bought Scripps. And the show that you wrote that music for was dropped by Discovery before it ever aired... so then your tracks just went into the general library... which would have been cool because it would have started gaining momentum and getting used more and more in a wider variety of shows over the next few years.... but now that is all up in the air as Discovery and Scripps try to figure out what they are doing...

I heard from someone at Scripps that Discovery has been telling them they wanted to switch scripps over to the Discovery music model (using an in-house library for everything) but it doesn't appear like that is actually happening from what I've been seeing (and it seems like what Vita has been seeing as well). It looks more like they are going to use Scripps model (as I suspected they would all along). But I am not 100% sure... only time will tell.
Old 24th April 2019
  #39
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Quote:
Originally Posted by Etch-A-Sketch View Post
yeah... the woman in charge of all of that was let go by Discovery after they bought Scripps. And the show that you wrote that music for was dropped by Discovery before it ever aired... so then your tracks just went into the general library... which would have been cool because it would have started gaining momentum and getting used more and more in a wider variety of shows over the next few years.... but now that is all up in the air as Discovery and Scripps try to figure out what they are doing...

I heard from someone at Scripps that Discovery has been telling them they wanted to switch scripps over to the Discovery music model (using an in-house library for everything) but it doesn't appear like that is actually happening from what I've been seeing (and it seems like what Vita has been seeing as well). It looks more like they are going to use Scripps model (as I suspected they would all along). But I am not 100% sure... only time will tell.
Interesting to know how it all panned out. I really enjoyed working on them and they're some of my favourite tracks and I loved that brief.

Discovery did a big show shortly after (similar to brief, maybe you know it?) and it almost sounds as if some of my tracks were used at temp music as the score is quite similar.

Shame the woman was dropped, she seemed to really be on the ball and had great feedback and taste I thought.
Old 24th April 2019
  #40
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Quote:
Originally Posted by Amber View Post
Interesting to know how it all panned out. I really enjoyed working on them and they're some of my favourite tracks and I loved that brief.

Discovery did a big show shortly after (similar to brief, maybe you know it?) and it almost sounds as if some of my tracks were used at temp music as the score is quite similar.

Shame the woman was dropped, she seemed to really be on the ball and had great feedback and taste I thought.
She's now in charge of all music production at WCPM, so... we're glad to have her! She certainly knows her s#!+
Old 24th April 2019
  #41
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Quote:
Originally Posted by VitaEtMusica View Post
She's now in charge of all music production at WCPM, so... we're glad to have her! She certainly knows her s#!+
That's great to hear! Over the years doing this day in day out, having a good back and forth and working relationship with people makes a world of difference, so I remember every album and who I've dealt with. It's just produces better work I think and benefits everyone.
Old 24th April 2019
  #42
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Quote:
Originally Posted by VitaEtMusica View Post
I think buying a music library at 25% the worth of your existing, highly successful company is risky- especially in the murky waters of current watching trends. But eOne obviously knows something we don't.
Out of curiosity, I looked up eOne's market cap -- it's currently about $3 Billion US. Although market cap is not a true measure of market value, it's often used as a starting point. Based on that, the AN acquisition of $215M is only about 7% of eOne ($215M/3B) in terms of overall company valuations. I was only comparing yearly revenue stream estimates ($1B vs $20M) in my earlier comments. Either way, AN doesn't look like a huge acquisition for eOne, unless I'm missing something... but 7% is notable and more than I originally thought.
Old 25th April 2019
  #43
Audio Network Annual Report for Year Ending June 2018


Total Revenue £29mil, up from £25mil the year before.

International Revenue £21mil

domestic UK Revenue £7.2mil

Cash Reserve £8.3mil

Net assets £19.2mil

total profit for the year £7.9mil

Yearly Debt Payment £8.9mil (I don't see how much their total debt is)

Overhead and Expenses £18.2mil

so yeah... i have no idea how the heck they are worth even close to £215mil when they only make £8mil in profit/£30mil gross revenue in a year, have £9mil in debt PAYMENTS (not total debt, that is just the payments they make on the debt!!!), and spend £18.2mil a year to stay in business.
Old 25th April 2019
  #44
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Quote:
Originally Posted by Etch-A-Sketch View Post
Audio Network Annual Report for Year Ending June 2018


Total Revenue £29mil, up from £25mil the year before.

International Revenue £21mil

domestic UK Revenue £7.2mil

Cash Reserve £8.3mil

Net assets £19.2mil

total profit for the year £7.9mil

Yearly Debt Payment £8.9mil (I don't see how much their total debt is)

Overhead and Expenses £18.2mil

so yeah... i have no idea how the heck they are worth even close to £215mil when they only make £8mil in profit/£30mil gross revenue in a year, have £9mil in debt PAYMENTS (not total debt, that is just the payments they make on the debt!!!), and spend £18.2mil a year to stay in business.
Youch
Old 26th April 2019
  #45
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Quote:
Originally Posted by Etch-A-Sketch View Post
Audio Network Annual Report for Year Ending June 2018


Total Revenue £29mil, up from £25mil the year before.

International Revenue £21mil

domestic UK Revenue £7.2mil

Cash Reserve £8.3mil

Net assets £19.2mil

total profit for the year £7.9mil

Yearly Debt Payment £8.9mil (I don't see how much their total debt is)

Overhead and Expenses £18.2mil

so yeah... i have no idea how the heck they are worth even close to £215mil when they only make £8mil in profit/£30mil gross revenue in a year, have £9mil in debt PAYMENTS (not total debt, that is just the payments they make on the debt!!!), and spend £18.2mil a year to stay in business.
You really don't like them do you.
Old 26th April 2019
  #47
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Before I click on that ^ what is it ?
Old 26th April 2019
  #48
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Quote:
Originally Posted by Jeff Hayat View Post
Before I click on that ^ what is it ?
A screen grab of their P&L
Old 4 weeks ago
  #49
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and then... this happened:

https://www.musicbusinessworldwide.c...h-transaction/

This article states music revenue is $78.7m for the most recent year.
Old 4 weeks ago
  #50
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Quote:
Originally Posted by VitaEtMusica View Post
and then... this happened:

https://www.musicbusinessworldwide.c...h-transaction/

This article states music revenue is $78.7m for the most recent year.
I am not sure I like this trend of big companies buying smaller ones...we are going to be left with only a handful of major players, similar to how we practically only have Disney and Sony in the film world. I understand that's good for business, but for authors? Hardly.

Last edited by implant; 4 weeks ago at 09:27 AM..
Old 4 weeks ago
  #51
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https://www.musicbusinessworldwide.c...oney-sell-off/

Another bit of info. Audio Network's sale was at 17x operating income (insane). I'm guessing Death Row accounts for a very large chunk of eOne music's revenue and seems like the only good music buy eOne has ever made.
Old 4 weeks ago
  #52
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Quote:
Originally Posted by VitaEtMusica View Post
https://www.musicbusinessworldwide.c...oney-sell-off/

Another bit of info. Audio Network's sale was at 17x operating income (insane). I'm guessing Death Row accounts for a very large chunk of eOne music's revenue and seems like the only good music buy eOne has ever made.
A 17x multiple?!
Old 4 weeks ago
  #53
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Quote:
Originally Posted by JohnFulford View Post
A 17x multiple?!
Yeah. I don't think anyone does that without something going on in the background... like say a $4billion buyout by Hasbro. Hasbro obviously has serious plans to go hard at exploiting their assets in the streaming and broadcast space. If you get to keep making money via Audio Network's traditional customers, plus have a giant pool of music to draw from for your original content, and get all the backend associated with the performance of that music... 17x doesn't end up sounding completely ridiculous. There are very few libraries of that scope who actually own all their music. I still think they could have bought it for much less. I'm sure if we could connect all the dots as far as stakeholders and whatnot it would make sense. Somebody made a lot of money on this deal.
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