Reservoir Media
Reservoir Media raised its outlook for the coming year and delivered mid-single-digit growth thanks to strong gains in digital and synchronization revenues.
The New York-based company’s revenue increased 6% to $40.7 million in the fiscal first quarter ended Sept. 30, the company announced Wednesday (organic growth that excludes the impact of acquisitions was 5%). Adjusted earnings before interest, taxes, depreciation and amortization climbed 11% to $17.6 million.
Music publishing revenue jumped 10% to $28.6 million due mainly to catalog acquisitions and price increases at digital streaming services. Digital revenue grew 22% to $15.6 million and synchronization royalties increased 30% to $5.8 million as film and TV licensing is “getting back to pre-strike levels,” said CEO Golnar Khosrowshahi during Wednesday’s earnings call. Performance revenue fell 22% to $5.1 million, due to “the timing of hits songs,” the company said. Mechanical royalties dropped 13% to $1.1 million.
Recorded music revenue fell 1% to $10.7 million. Reservoir attributed the year-over-year decline to the reissue of rap icons De La Soul’s physical catalog in the prior-year period. Recorded music physical revenue sank 21% to $1.5 million. Digital revenue fell 0.1% to $7.2 million. Neighboring rights revenue jumped 35% to $1.1 million and synchronization royalties rose 3% to $900,000.
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Last quarter, Reservoir licensed of Snoop Dogg’s publishing catalog and Snoop-owned Death Row Records, and signed deals with Canadian singer-songwriter k.d. lang, country writer-producer Travis Heidelman, songwriter Jon Decious, writer-producer Kes Kamara and writer-producer Ben Stancombe. The company also purchased the publishing catalog of Billy Strange (“A Little Less Conversation,” “Clean Up Your Own Backyard”) and acquired the royalties of Jack Douglas, who produced hits for such artists as Aerosmith and Cheap Trick.
“As we look forward to the second half of fiscal 2025 our pipeline continues to remain strong, with over $1 billion in transactions under consideration at attractive entry multiples,” said Khosrowshahi. Reservoir is looking at opportunities with “better multiples,” she added, “but I still continue to see a substantial number of transactions trading at high-teen multiples. And I think the long-term value of these assets is recognized, thus warranting these multiples.”
Reservoir slightly increased guidance for the full fiscal year. Revenue to a range of $150-153 million (from $148-152 million) and adjusted EBITDA to $59-$62 million (from $58-61 million).
Shares of Reservoir Media were up 0.3% to $8.81 by midday after jumping as high as $9.09, just shy of the stock’s 52-week high of $9.20.
Fiscal first quarter of 2025 financial metrics for Reservoir:
Revenue: up 6% to $40.7 million
Adjusted EBITDA: up 11% to $17.6 million
Net income: down 78% to $200,000
Publishing revenue: up 10% to $28.6 million
Recorded music revenue: down 1% to $10.7 million
A big year for k.d. lang is getting even bigger.
After celebrating her legacy with an induction into the Canadian Country Music Hall of Fame and a reunion with her original band The Reclines for the first time in decades, the celebrated Canadian singer has inked a new publishing deal with Reservoir Media. The deal includes her future works and partial catalogue.
“It is an absolute thrill to partner with Reservoir!” says lang in a statement. “Golnar [Khosrowshahi] is a force of nature and understands me as an artist. I am deeply inspired and have utmost confidence in this creative partnership.”
Golnar Khosrowshahi, the founder and CEO of Reservoir (and one of the leaders on Billboard Canada‘s 2024 Power Players list), is Canadian herself and understands the iconic status k.d. lang holds in the country and beyond.
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“As a Canadian, I am particularly proud to be working with k.d. and her manager, Steve Jensen, and I’d also like to thank Bruce Roberts, our very first Reservoir songwriter, who introduced us to k.d,” she says.
Golnar Khosrowshahi, k.d lang & Rell Lafargue
Reservoir
Already revered as a queer pioneer within country music and a collaborator to musical legends including Tony Bennett, Roy Orbison, Elton John, Bonnie Raitt and Loretta Lynn, lang has been embraced by a new generation in recent years.
She’s charted on the Billboard Hot 100 twice, with her yearning 1992 hit “Constant Craving” and a showstopping 2010 Vancouver live version of fellow Canadian Leonard Cohen‘s “Hallelujah.” Originating in the early ’80s in Alberta as part of the burgeoning “cowpunk” scene, lang has never stopped evolving, even appearing on the Billboard Dance/Electronic Albums Chart in 2021. And she’s won many accolades, including the Order of Canada, four Grammys, four awards from GLAAD and much more.
Reservoir Media is used to working with legends and amplifying their catalogues for modern audiences. Last year, the company was responsible for bringing seminal hip-hop group De La Soul’s much-missed catalogue back to streaming and back onto the charts. Reservoir also signed a publishing deal with Joni Mitchell in 2021, right before her moving comeback.
But while lang’s deal with Reservoir includes some of her past work, it’s also about the future – which shows a trust in her continued success beyond her achievements.
“It never gets old when a legendary artist like k.d. lang decides to call Reservoir her home. Her incomparable voice and music are a gift to the world,” says Khosrowshahi. “We look forward to helping her share those gifts with new audiences and supporting her as she steps into the next chapter of her career.”
This article was originally published by Billboard Canada.
Irenic Capital Management LP, a Manhattan-based hedge fund, has taken an 8.1% stake in Reservoir Media and believes the music company is “undervalued,” according to a regulatory filing dated Monday (Sept. 30).
Described as an “activist investor” by The Wall Street Journal, Irenic called on Reservoir to “undertake a full strategic review of all alternatives to maximize shareholder value and to form a special committee to the Board to oversee such a process.”
“The Reservoir Media board of directors values shareholder input and we remain focused on executing our strategy to drive value, in line with our fiduciary duty to all shareholders,” a company spokesperson said in a statement to Billboard.
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Reservoir’s stock has outperformed many of its peers in the multi-sector, record label/music publisher sector in 2024. Through Wednesday, Reservoir’s 7.7% year-to-date gain has bested Universal Music Group (down 8.3%), Warner Music Group (down 12.5%) and the four K-pop companies: HYBE, SM Entertainment, JYP Entertainment and YG Entertainment (down an average of 33.1%).
Only French music company Believe, which has gained 42.5% because it was the target of a management-led takeover, has done better than Reservoir. In explaining the move to take it private, Believe CEO Denis Ladegaillerie said the company had “outperformed its objectives” but its success “has not been reflected in the share price evolution.”
Still, Reservoir is well below its original $10.00 price when it merged with Roth CH Acquisition II Co, a special purpose acquisition company (SPAC), in 2021. Wednesday’s $7.68 closing price is well below its 52-week high of $9.20.
Irenic owns stakes in trucking company Forward Air, Canadian software company Kinaxis and industrial technology company Barnes Group Inc., where Irenic CEO Andy Katz gained a board seat in March. On its website, Irenic explains that it “invests in public companies and works collaboratively” with management for improvements in operating and financial performance “that create long-term value for the company and its owners.” Katz previously worked at Elliot Management and focused on “special situations” such as public equity activism and distressed credit.
Snoop Dogg and the label that pays him have signed new deals with Reservoir Media, covering the legendary rapper and entrepreneur’s domestic publishing for his entire catalog and future works, as well as the publishing catalog of Death Row Records, which Snoop scooped up in 2022.
Born Calvin Broadus Jr. in the LBC, Snoop glided into fame in 1992 after featuring on Dr. Dre’s debut single, “Deep Cover,” before making several star-affirming turns on Dre’s game-changing album The Chronic (“Nuthin’ but a ‘G’ Thang,” “Let Me Ride”). A year later, he released his own multi-platinum album, Doggystyle, via Death Row, featuring West Coast hip-hop classics like “Gin and Juice” and “What’s My Name?” He has released 19 solo albums, with his 20th, Missionary, currently in production with Dre. His lengthy list of hits over the years includes “Drop It Like It’s Hot” and “Beautiful” plus collabs like “The Next Episode” with Dre, “California Gurls” with Katy Perry and “Young, Wild & Free” with Wiz Khalifa, to name a few.
In addition to 16 Grammy nominations and a star on the Hollywood Walk of Fame, Snoop has built a broad business portfolio, acted in dozens of films, including Soul Plane and this year’s The Garfield Movie, and is a prolific signer of product endorsement deals. Recently, his commentary and enthusiasm charmed NBC viewers at the Paris 2024 Olympics, and last night (Sept. 23) he made his debut as a coach on NBC’s The Voice.
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After acquiring Death Row Records, the label that released his debut album along with early works by Dr. Dre and 2Pac, Snoop established a publishing arm for the label. The Reservoir deal includes hits like “Hail Mary” and “I Ain’t Mad At Cha” by 2Pac, ensuring that Death Row’s legacy continues under Snoop’s leadership.
Financial details of the arrangement were not disclosed.
Reservoir executives expressed excitement about working with Snoop and supporting his legacy. Golnar Khosrowshahi, Reservoir’s CEO, highlighted the significance of the partnership in preserving Death Row’s influence, adding “Snoop has come full circle with Death Row, showcasing his ongoing dedication to upholding its rich history – something Reservoir has proven as a core value and area of expertise across our business.”
Donna Caseine, Reservoir’s executive vp and global creative director, lauded Snoop’s impact on hip-hop and popular culture over the past three decades: “Legendary artists only need one name. Snoop is part of that echelon. From music, to brands, television, and film, his acumen represents excellence,” she said. “For the last three decades he has been a pillar of hip-hop music and popular culture. He helped write Death Row Records into music’s history books.”
Subscription gains and a string of acquisitions helped Reservoir Media’s fiscal year revenue grow 18% to $144.9 million, beating the company’s guidance from February of $140 million to $142 million, the company announced Thursday (May 30). Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in the period ended March 31 climbed 20% to $55.6 million, topping guidance of $53 million to $55 million.
Organic growth, which strips out the impact of acquisitions made during the year, was 14% for the full year. Among the company’s catalog purchases during the fiscal year were four members of R&B group The Spinners, Latin music artist Rudy Perez, hip-hop producer Mannie Fresh and 2Pac collaborator Big D Evans. Reservoir also invested in Egyptian company RE Media and Saudi Arabian hip-hop label Mashrex.
Among Reservoir Media’s signings during the year were songwriter Steph Carter, who shares a co-writing credit on Sabrina Carpenter’s “Espresso,” and Rob Ragosta, co-writer of “Need a Favor” by Jelly Roll. The company also landed publishing deals with rock band Kings of Leon and rock legend Joe Walsh.
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The company said it expects fiscal 2025 revenue to be between $148 million and $152 million, which would reflect 3.5% growth at the midpoint. Adjusted EBITDA is expected to be $58 million to $61 million, which implies 7.0% growth at the midpoint.
“Our financial guidance reflects our confidence in growth driving organic growth with our value enhancement efforts and capitalizing on the projected growth of the music industry,” CEO Golnar Khosrowshahi said during Thursday’s earnings call. Some of that organic growth will come from additional price increases at music subscription services, she added: “Looking forward, we are poised to benefit from what we believe will become a regular cadence of price increases across streaming platforms.”
Shares of Reservoir Media jumped 15.5% to $9.00 Thursday morning before falling to $8.26, up 6.1%, by late afternoon.
Elsewhere, full-year publishing revenue at the company rose 15% to $96.2 million. Digital revenue grew 17% to $51.6 million and performance royalties jumped 36% to $22.8 million. CFO Jim Heindlmeyer said the “improvement is largely derived from higher royalty rates and price increases at multiple music streaming services, as well as the expansion of our catalog through M&A.”
Recorded music revenue grew 22% to $42.4 million in the full fiscal year largely due to price increases at subscription services and the timing of Reservoir Media’s release schedule, Heindlmeyer said. While physical revenue climbed 49% to $8.9 million, digital revenue rose 17% to $26.9 million and accounted for the majority of recorded music’s $7.6 million in revenue growth.
Fiscal fourth-quarter revenue grew 12% to $39.1 million. Operating income grew just 2%, however, to $8.8 million, while adjusted EBITDA improved 6% to $16.0 million.
Reservoir’s pipeline of potential acquisitions dropped by 50% to $1 billion, down from $2 billion at the end of December. Khosrowshahi downplayed the change, however, noting the company is seeing “ample deal flow” despite “a couple of larger deals” having moved. Liquidity at the end of the year of $132.3 million from $18.1 million of cash and $114.2 million available in a revolving credit facility “gives us the capital to fund our strategic objectives,” said Heindlmeyer. Added Khosrowshahi, “I’m generally quite optimistic about what that pipeline looks like.”
Reservoir Media plans to sell an additional $100 million of securities, according to an S-3 filing with the Securities and Exchange Commission on Monday (April 29). The funds may go toward acquisitions, debt repayment, share buybacks and other general corporate purposes, according to the filing.
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The company will often offer common stock, shares of its preferred stock, debt securities, depository shares, warrants, purchase contracts or a combination of these offerings, according to the filing. Reservoir Media currently has an authorized capital stock of 825 million shares — 750 million common shares and and 75 million shares of preferred stock. As of Feb. 5, it had 64.82 million shares of common stock outstanding. No shares of its preferred stock have been issued.
Tapping the market for additional capital now would enable Reservoir Media to benefit from a recent upswing in its share price. Its stock, which trades on the Nasdaq, reached a 52-week high of $9.20 per share on Friday (April 26) — and its highest point since May 4, 2022 — and closed at $9.03 on Monday(April 29), up 26.6% year to date. Reservoir Media went public in 2021 by merging with Roth CH Acquisition II, a special purpose acquisition corporation, or SPAC.
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The company’s pipeline of potential deals was roughly $2 billion in total value, CEO Golnar Khosrowshahi said during the company’s Feb. 7 earnings call. “We remain a highly respected and regarded partner,” she said, “and our proven reputation for being a steward for catalogs through value enhancement initiatives allows us to acquire some of the best assets in the market.”
Since its inception in 2007, Reservoir Media has invested $938 million, according to its latest investor presentation — with $770 million of that amount spent on acquisitions of catalogs and companies. It owns Chrysalis Records, Tommy Boy Music and Philly Groove Records and manages artists through Blue Raincoat Music and Big Life Management.
In February, the company reported first-quarter revenue growth of 19%, to $35.5 million, and raised its guidance for full-year revenue to $140 million to $142 million, implying 15% annual growth at the midpoint.
Gains in recorded music and improved digital royalties helped Reservoir Media’s revenue increase 19% to $35.5 million in the fiscal third quarter ended Dec. 31, the company announced Wednesday (Feb. 7).
Strong results in the quarter allowed Reservoir Media to raise its guidance for its full fiscal year ending March 31. Guidance for full-year revenue increased from a range of $133 million to $137 million to a range of $140 million to $142 million, implying 15% annual growth at the midpoint. Adjusted guidance on earnings before interest, taxes, depreciation and amortization (EBITDA) increased from a range of $50 million to $52 million to a range of $53 million to $55 million, which would be a 16.5% year-over-year improvement. Reservoir Media also raised its guidance when it released its previous earnings in November.
The results “demonstrate our ability to manage the business and deploy capital to further grow our portfolio,” CEO Golnar Khosrowshahi said during Wednesday’s earnings call. “Along those lines during the quarter, we continued to invest in our business, with an emphasis on further diversifying our portfolio across various music genres.”
Recorded music revenues grew 32%, to $10 million, inclusive of catalog acquisitions. The segment’s digital revenue grew 26% to $6.6 million while physical revenue rose 51% to $1.7 million. Synch revenue doubled to $800,000 and neighboring rights royalties gained 16% to $1 million.
Publishing revenue dominated total revenue, though, improving 15% to $23.1 million. Publishing’s digital revenues grew 30% to $13.9 million and synch revenue gained 9% to $4 million. Performance, mechanical and other revenue fell from the prior-year quarter.
Synch revenue from both segments was affected by the writer and actor strikes in 2023, explained CFO Jim Hendlmeyer. A “very promising” ad market helped synch revenue during delays in TV and film production, he added.
The quarter was also helped by Reservoir Media’s numerous signings and acquisitions, including Theo Katzman, the founding member of Vulfpeck and a collaborator with such artists as Carly Rae Jepsen and Teddy Geiger. In December, Reservoir signed singer-songwriter grentperez, for whom it handles administration and creative aspects with its Australian sub-publisher, Mushroom Music. In October, the company signed a global publishing deal with Joe Walsh. Its last announced acquisition was the catalog of Arthur “Boogie” Smith in November.
Reservoir highlighted Grammy success for the songwriters and producers on its roster. Among the winners was best folk album winner Joni Mitchell, who signed a publishing administration deal with the company in 2021. Killer Mike, who signed with Reservoir in 2022, won in three rap categories: Best Rap Song (“Scientists & Engineers”), Best Rap Album (Michael) and Best Rap Performance (“Scientists & Engineers”). Elsewhere, Khris Riddick-Tynes’ collaboration with SZA, “Snooze,” won best R&B song and Blue Raincoat Music client Phoebe Bridgers had a hand in four awards, including best rock song, with her group boygenius.
Shares of Reservoir Media increased 6.1% to $7.26 early Wednesday morning before falling to $6.49, down 5.1%, by midday.
The Billboard Global Music Index — a diverse collection of 20 publicly traded music companies — finished 2023 up 31.3% as Spotify’s share price alone climbed 138% thanks to cost-cutting and focus on margins. Spotify is the single-largest component of the float-adjusted index and has one of the largest market capitalizations of any music company.
The music index was outperformed by the tech-heavy Nasdaq composite, which gained 43.4% with the help of triple-digit gains from chipmaker Nvidia Corp (+239%) and Meta Platforms (+194%). But the Billboard Global Music Index exceeded some other major indexes: the S&P 500 gained 24.2%, South Korea’s KOSPI composite index grew 18.7% and the FTSE 100 improved 3.8%.
Other than Spotify, a handful of major companies had double-digit gains in 2023 that drove the index’s improvement. Universal Music Group finished the year up 14.7%. Concert promoter Live Nation rode a string of record-setting quarters to a 34.2% gain. HYBE, the increasingly diversified K-pop company, rose 34.6%. SM Entertainment, in which HYBE acquired a minority stake in March, gained 20.1%.
A handful of smaller companies also finished the year with big gains. LiveOne gained 117.4%. Reservoir Media improved 19.4%. Chinese music streamer Cloud Music improved 15.8%.
The biggest loser on the Billboard Global Music Index in 2023 was radio broadcaster iHeartMedia, which fell 56.4%. Abu Dhabi-based music streamer Anghami finished 2023 down 34.8%. After a series of large fluctuations in recent months, Anghami ended the year 69% below its high mark for 2023. Hipgnosis Songs Fund, currently undergoing a strategic review after shareholders voted against continuation in October, finished the year down 16.6%.
Sphere Entertainment Co., which split from MSG Entertainment’s live entertainment business back in April, ended 2023 down 24.4%. Most of that decline came before the company opened its flagship venue, Sphere, in Las Vegas on September 29, however. Since U2 opened the venue to widespread acclaim and earned Sphere global media coverage, the stock dropped only 8.5%.
For the week, the index rose 1.1% to 1,534.07. Fourteen of the index’s 20 stocks posted gains this week, four dropped in price and one was unchanged.
LiveOne shares rose 15.7% to $1.40 after the company announced on Friday (Dec. 29) it added 63,000 new paid memberships in December and surpassed 3.5 million total memberships, an increase of 29% year over year. iHeartMedia shares climbed 14.6% to $2.67. Anghami continued its ping-pong trajectory by finishing the week up 16.9%.
Music companies’ third-quarter earnings reports have so far been full of good news and positive trends. Subscription and streaming growth continue to drive revenues for record labels and publishers. Live entertainment continues its post-pandemic expansion. Margins are healthy. Overall, these have been solid report cards for the state of the music business.
Among the companies to report thus far are Universal Music Group, Sony Music, Spotify, Believe, Sphere Entertainment Co., MSG Entertainment, HYBE and SiriusXM. Next week’s earnings reports will come from Warner Music Group (Nov. 16) and Tencent Music Entertainment (Nov. 14). German concert promoter CTS Eventim will report on Nov. 21.
Here are seven items from the earnings releases to date that stood out and deserve more attention.
Universal Music Group struck out against “merchants of garbage.” During Universal Music Group’s Oct. 26 earnings call, chairman and CEO Lucian Grainge got a lot of attention when he bemoaned the “merchants of garbage” — creators of low-value functional music such as generic mood music and nature sounds — that want to be on equal royalty terms at streaming platforms as such UMG artists as Taylor Swift, The Beatles and The Rolling Stones. Grainge’s memorable turn of phrase came in defense of UMG’s artist-centric royalty scheme crafted in partnership with French music streaming service Deezer. “Sorry, I can’t really think of another word for content that no one really actually wants to listen to,” Grainge said.
Spotify’s price increase gave a much-needed uplift to subscription revenues. The price for an individual Spotify subscription in the U.S. was $9.99 from 2011 to July 2023. The price hike to $10.99 in roughly 50 markets may have arrived later than its competitors, but it came just when Spotify needed a boost. Spotify’s premium average revenue per user dropped 6% year over year (1% at constant currency) mainly because the company had a larger share of family plans compared to the prior-year, CFO Paul Vogel said during the July 25 earnings call. Early returns from the price increase in the U.S., U.K. and dozens of other markets helped offset those losses. Because Spotify’s number of subscribers increased 16% year over year to 226 million, subscription revenue grew 10% year over year (16% at constant currency) to 2.9 billion euros ($3.1 billion). With three full months of a price increase in the fourth quarter and considering the price increase covered about 75% of Spotify’s revenue base, the company expects the price increase to provide “a positive, mid-single digit” benefit (excluding foreign exchange) in the fourth quarter, said Vogel.
No company lowered guidance, and some have raised guidance. Sony Music raised guidance for revenue and adjusted operating income before depreciation and amortization by 5% and 4%, respectively. Reservoir Media raised guidance for fiscal 2024 revenue and adjusted EBITDA by 10% each. It’s one thing for a company to meet expectations it had previously laid out to investors. But raising previously released expectations is something else altogether — a sign the future will be better than expected. It’s usually a benefit to the stock price, too. The share price is the present value of future cash flows. When an estimate for future cash flows takes a sudden jump, that changes the financial model used to calculate the share price.
Consumers aren’t slowing their spending on live music. In August, concerns arose that a resumption of student loan payments, paused to help people struggling during the pandemic, would take a bite out of pocketbooks and cause music fans to pull back on the record amounts they were spending on live entertainment. Three months later, there is no indication that consumers are slowing down, according to Live Nation. “We’re seeing no sign of weaknesses,” said president and CFO Joe Berchtold, noting that Ticketmaster’s October sales in North American were up double-digits year over year. “We’re not seeing any pullback in any way from a club to a stadium tour from Milan to Argentina right now,” added president and CEO Michael Rapino.
SM Entertainment has big plans for its new publishing subsidiary, Kreation Music Rights. The K-pop stalwart has been “aggressively recruiting global writers” and plans to have 80 of them under contract this year, CEO Jang Cheol Hyuk said during the Nov. 8 earnings call. SM Entertainment is pursuing collaborations with both domestic and international publishers and plans to recruit foreign writers “who wish to advance into K-pop by establishing overseas subsidiaries,” Jiang said.
Radio advertising continues to struggle — but the clouds may be starting to part. iHeartMedia’s October revenues were down 8% and the company expects its fourth-quarter revenue excluding political revenue to be down in the mid-single digit percent year over year. The fourth quarter will be iHeartMedia’s strongest quarter of the year “but will be weaker than we originally anticipated due to some dampening of advertising demand which coincided with the uncertainty caused by the recent geopolitical events,” CEO Bob Pittman said during Thursday’s earnings call. That said, iHeartMedia’s digital business “is sort of in recovery mode,” said Pittman, and the company is “seeing the pieces falling into place” for radio’s recovery as most advertisers expect to be “back in growth mode…and spending to support that” in 2024.
The market for catalog acquisitions isn’t slowing down. Reservoir Media CEO Golnar Khosrowshahi said catalog prices aren’t contracting despite higher interest rates. “We’re still seeing a lot of demand for assets and continued infusion of new capital within the competitive set,” she said during Tuesday’s earnings call. “And that is certainly fueling the demand. The pipeline is robust. And it ranges in size from large to a lot of smaller deals.” Reservoir Media hasn’t been suffering from sticker shock, though. Acquisitions in the Middle East-North Africa market — such as some catalog of Saudi Arabian label Mashrex in June — provide the company with good value, Khosrowshahi added. “If we’re looking at a market here that is somewhat saturated with a lot of capital in the marketplace, and we’re able to execute [deals in MENA] at these lower multiples, that makes it just that much more attractive to us.”
Reservoir Media said on Thursday it signed publishing deals for the catalogs and future works of Indian rappers MC Altaf and D’Evil and the producer Stunnah Beatz.
The deals are the result of a 2020 joint venture launched by Reservoir and Gully Gang, the label and entertainment group founded by Indian hip-hop star DIVINE. Established to sign and develop talented new songwriters in India, Altaf, D’Evil and Stunnah Beatz’s songs have racked up more than half a billion streams, including on collaborations with DIVINE like “Mirchi” and “Disco Rap” and Gunehgar, an album released late last year.
Investments by music companies based in the United States in artists, publishers and distributors based in Asia and other emerging markets has been growing at a rapid clip in recent years, with the trend expected to grow in 2023 particularly in the area of catalog investment. Luminate cited the opportunities in emerging markets, driven by the continued growth of streaming subscriptions there, as one of the main reasons investor appetite for song catalogs is growing.
India is the 17th-ranked music market globally, and it generated revenues of $219 million in 2021, up 20% from 2020, with streaming revenue jumping 87%, according to IFPI’s Global Music Report.
Founded in 2007, Reservoir has made investing in emerging markets a key prong of its diversification strategy. With its partner PopArabia, an independent music company headquartered in the United Arab Emirates, Reservoir acquired stakes in the Egyptian label 100COPIES, the Lebanese label and music publisher Voice of Beirut and signed publishing deals with Egypt’s Mohamed Ramadan, Lebanon’s Zeid Hamdan and Moroccan hip-hop star 7liwa.
Reservoir Founder and Chief Executive Officer Golnar Khosrowshahi said in a statement, “We’re proud to be ushering in these deals, which demonstrate Reservoir’s steadfast commitment to our ongoing emerging markets strategy. As we invest in these local acts and share them with global audiences, we are well-positioned to not only tap into their potential growth, but also help facilitate the flow of culture from East to West.”
Spek, Reservoir’s executive vice president of international and emerging markets and founder of PopArabia, described MC Altaf, D’Evil, and Stunnah Beatz as three artists “at the heart of some of India’s biggest rap music today.”
Chaitanya Kataria, Gully Gang chief executive officer, said he was “excited that (MC Altaf, D’Evil and Stunnah Beatz) will gain access to new global opportunities with support from Spek and Reservoir.”