The French music company Believe has made the leap to the Parisian stock exchange Euronext. At 19.50 euros, the issue price was at the lower end of the previously set range. With the around 15 million new shares issued, Believe is taking in a good 300 million euros after the previously announced target of around 500 million euros was reduced. Existing investors would not have wanted to dilute their stake further, it was said to justify. The US investment company TCV remains the largest shareholder, with its stake falling from 49.6 percent to around 41 percent. A good 15 percent of the shares are now being traded, with the option of issuing additional shares, which could raise another 30 million euros. In stock exchange trading, however, the share price fell significantly, at a low of EUR 16.80.Believe is currently valued at around 1.9 billion euros.
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The 2005 run by former Vivendi manager Denis Ladegaillerie, among others, is one of the leading providers of “Artist & Label Services”.
As such, it sees itself primarily as a service provider for artists and labels.
The core business is music distribution, starting with the TuneCore basic offering.
Every musician can use this platform to offer his works on streaming services and other digital platforms for a small one-time payment.
Believe also takes over the distribution for indie labels and also offers various marketing services for artists.
The big names in the industry are entering the market
In contrast to a classic label contract, artists retain the rights to their recordings as part of a service deal and usually a significantly higher share of the income from the marketing of the music. But the artist is on board as an entrepreneur and is taking a financial risk for a campaign.
Such a model appears to be increasingly attractive for artists, since the previously great hurdles such as sales or high production costs are now only limited and more independent artists with their own team can more easily take them into their own hands.
Therefore, alongside other competitors, the three large global music companies Universal, Sony and Warner Music have long been active in the field and, for their part, are expanding pure service offerings for artists and indie labels.
Universal Music only had an alliance with the large independent music company on Wednesday
Pias announced, which further strengthens the position of the industry leader in the indie field.
The competition is therefore fierce.
Believe intends to use the proceeds from the IPO to finance further growth.
The company is currently active in more than 50 countries.
In the past few years, various takeovers have been made in different markets; in Germany, the French have taken over the rap company Groove Attack and the large metal label Nuclear Blast, among others.
Believe also includes various classic labels internationally, although the core business is pure services.
Music is increasingly attracting financial investors
With a consolidated turnover of 441.4 million euros in 2020, Believe can point to strong growth, mainly thanks to the streaming boom.
In 2019, the group came to 394.5 million.
Nevertheless, the business is cost-intensive, so that the bottom line was a loss of 26.3 million euros in 2020 after a profit of 4.6 million euros in 2019.
For some time now, music has been attracting financial investors more strongly.
This is also underscored by the purchases of catalogs of works by established musicians, in which many see a long-term stable form of investment.
The IPO also makes sense for Believe in view of the fact that the big labels in the battle for artists and market shares can not least fall back on the income from their large catalog of older works.
On the basis of the earlier contracts, the labels usually receive a significantly higher share of the royalties than is usual today and of course many of the current stars also work with the three industry giants. Universal Music alone generated sales of 7.4 billion euros in this way in 2020 and, according to the will of majority shareholder Vivendi, should also go public soon. Universal is now valued at 35 billion euros.