![]() ![]() Our to-date return on our Spotify holding is approximately +130%, from inception at 12 November 2018 (a 34.19% IRR). Investors in the Elevation Capital Global Shares Fund have exposure to the music industry’s resurgence in three ways: via Spotify, Universal Music Group (UMG) and Tencent. ![]() This is a democratisation of song rights, which previously were via cashed-up studios. ![]() Every time a song is used on TikTok for a seconds-long dance or meme a performance royalty is paid. The beauty of TikTok’s format is that its approach to songs is ahistorical: a Fleetwood Mac song ( Dreams) can become popular with an audience who have never been familiar with Fleetwood Mac in its original incarnation (or even knows who they are) likewise a completely unknown song can shoot to stardom - like NZ’s own Benee’s Supalonely. This reflects the success of TikTok and short-form content, where a “meme song” is integral to the content itself. These are rights stemming from using the song live or in content. The second thing of note in the graph is the increase in performance rights. It is a remarkable recovery and a testament to how an industry can reorganise around a disruption. Now the framework for a streaming-first industry has been defined and industry revenues have corrected themselves they are on the ascent. However, these two events were real disruptions which caused a sector-wide decline. We are cautious when it comes to calling something a “disruption”. The first is the dip - this is due to the music industry scrambling to reorganise after two distinct disruptions - 1), Downloaded music (iTunes, Napster, etc), and, 2) Streaming music (Spotify, Apple Music, Youtube Music, etc). There are a couple of interesting features of the graph. ![]()
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