Remajorisation
- Henry Marsden
- 5 days ago
- 6 min read
In the past month alone we’ve seen three announcements that are as fascinating individually as they are illustrative collectively:
Each headline by itself is significant, but taken together they suggest something more structural is currently at play. A re-majorisation of the music business.
The long arc: Fragmentation to Consolidation
Like many businesses throughout the last century, the music industry has consistently oscillated between expansion and contraction.
By the late 20th century the global business was dominated by a handful of powerful record companies, which by the late 1990s had been wrapped up into the “Big Six”: Warner, EMI, Sony, the “old” BMG, Universal and PolyGram.
But the seeds of consolidation had already been planted. The formation of Universal itself came from the merging of Seagram and MCA, which subsequently absorbed PolyGram in 1998. As the digital collapse rippled through the early 2000s (driven by illegal file sharing and a structural breakdown of the album economy) the industry shrank violently, necessitating mergers.
The Big Six had become the Big Four with EMI being broken up and sold. BMG’s sell off followed to Sony, eventually leaving the 3 sprawling majors we have to this day: Universal, Sony and Warner.
The streaming tide lifted more than just the Majors
Then came streaming… a decade of consistent top-line growth changed the tone of the industry- stabilising and eventually growing revenues. The three majors entered this period with deep catalogs from the consolidation era, global distribution, and subsequent optionality in capital markets. The subscription model proved durable and fuelled more growth- with public markets rewarding scale and predictability (Warner and Universal eventually able to IPO in 2020 and 2021 respectively). The Major’s recorded market share now sits around 70%. In publishing, it is closer to 80%.
But streaming also had an effect outside the Majors. The prior consolidation left a vacuum for independents when money did start to flow again. It created space for a new generation of companies to thrive and build scale.
BMG rebuilt and rejuvenated itself as a rights-management alternative to traditional majors, Kobalt entered as a tech-forward publishing administrator, Concord assembled a diversified portfolio across publishing and recordings. Downtown Music built (and acquired) infrastructure serving both rights-holders and third parties. Reservoir Media went public.
These aren’t traditional “majors”, particularly in market share terms- but at the very least are regularly considered pseudo-majors in all but name. Global offices, capital backing, catalog depth, sophisticated administration. They mean (and are) big business.
The buoyancy in streaming allowed them to grow in step, successfully filling the void left underneath the majors and above the smaller indies- the gap for upper-middle sized businesses after the “Six” became “Three”.
Now what’s fascinating is that ‘independence’ appears to be entering a new phase.
From independence to scaled aggregation
If Primary Wave were to acquire Kobalt Music Group, it would unite repertoire ownership with the largest and arguably most sophisticated independent publishing administration platform in the world.
If BMG were to combine with Concord, the result would be a diversified rights company of enormous scale across publishing and recorded music (a reported $7Bn… mystically the same number being quoted for the combined value of PW x Kobalt).
These are not the defensive consolidations in a collapsing market, but are offensive consolidations in a growing one. It is no longer about survival, but leverage. For the first time since the early 2000s we may be witnessing the creation of entities with genuinely ‘major’ weight.
One framing of the term “major” refers to having significantly outsized market share. Market Share is intriguing in itself for what it brings- the ‘hard power’ of blackbox allotment in publishing of course, but also the soft power of influencing licensing negotiations, dictating commercial frameworks and shaping global policy to boot (just look at AI for how this is playing out in real time). Today, the “Big Three” maintain that soft power because they combine content and distribution at scale, as well as being ever increasing magnets for data- a concern of EU investigators.
Vertical integration matters. No wonder I linked three previous posts in a single paragraph on the same topic!
So if we imagine a combined Primary Wave/Kobalt or BMG/Concord, can they truly rival the model of the “Big Three”? Are catalog scale, global infrastructure and access to capital the correct prerequisites to acquiring market share? Are there others? There is certainly a gravitational pull around size- more and more rights/companies/’pipes’ get pulled into their masse, creating a self-fulfilling virtuous cycle.
Will this eventually meaningfully shift market share from 70-80% toward something closer to parity? That is less clear.
Optionality for Primary Wave
Primary Wave is making a bet that combining its impressively assembled repertoire with Kobalt’s forward thinking administration infrastructure will produce a synergy that is greater than the sum of its parts. It's also worth noting that Kobalt comes with a lot under its umbrella beyond a straightforward publishing business- amra (in my opinion an incredibly forward thinking opportunity that others have not delved into), its own purchased catalogs via a Morgan Stanley backed vehicle, its global, centralised technological infrastructure as well the mid-tail ‘funnel’ of Kosign. To mix metaphors- it’s quite the buffet.
Which of these complements PW’s current holdings and operations the most? Time will tell- but it certainly gives them optionality. To bring administration in-house, to renegotiate distribution relationships and move certain flows away from incumbents like Universal Music Publishing Group.
This of course depends on control- for example the quantity of rights that are passive rather than fully administered, which limits the strategic upside. Ownership alone does not guarantee influence over exploitation- a key consideration for those freshly bringing capital to the market.
The other angle, much focussed on in the Downtown/UMG deal, is data. PW would have line of sight to a tremendous amount of ‘independent’ data and rights. This is pertinent for the number of funds that choose Kobalt as their admin partner- If a major fund owns the administration pipework used by other funds, will those other funds be comfortable?
Music publishing administration is data-intensive and commercially sensitive. Catalog performance data, registration flows, claim activity and income timing (as well as contractual rates) are not neutral information.
Will rival funds want their data sitting inside a competitor’s infrastructure? Or will we see a second-order wave of migration toward alternative collection frameworks (possibly even, back to the Majors)? Consolidation can often trigger unintended fragmentation.
This is also really only a development for the publishing business- but PW also has many recorded music catalogs too. Will there be similar headlines later this year for acquisition of an equivalent distribution/label vehicle?
The Holy Grail - Market Share.
It’s a fascinating journey. The early 2000s contraction forced consolidation down to three majors. The streaming expansion allowed independents to scale and flourish. Now, those scaled independents are consolidating again in pursuit of something that looks suspiciously like major status. This time, however, it is not through forced collapse, but pursued via ambition.
Capital structures are also different nowadays, with private equity and institutional funds playing a larger role. Digitisation and increased transparency/scrutiny have also meant data infrastructure is more critical across the board.
Ultimately, rhetoric does not define majors- market share does.
If, five years from now, the combined entities meaningfully close the gap on the “Big Three” then we will look back at this period as the beginning of a structural shift. If not, this will be remembered as just yet more capital aggregation without fundamental power redistribution.
The streaming era created stability, which in turn created confidence, which has formed the bedrock of scale. Now that scale is being reconfigured, and recombined.
Whether this ‘re-majorisation’ produces five true majors- or simply larger independents with similar constraints- will depend on how much these combined entities can convert their summed parts into market share. The playbook is well written: Control content. Control distribution. Control the data in between.
But converting that into a redistribution of market revenues is another matter, and does not automatically follow. Watching how these behemoth entities combine and create synergy will be key.
The industry has shrunk before. It has expanded before. It has consolidated and fragmented in cycles. I’ll be watching the next turn of that wheel with intrigue.
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