News June 1, 2016

Warner Music Group acquires leading Indonesian record label

Warner Music Group acquires leading Indonesian record label

As part of its global expansion and deeper footprint in the Asian market, Warner Music Group is acquiring the catalogue of leading Indonesian independent recorded music group PT Indo Semar Sakti (ISS).

Founded in 1974, its labels include Aruna, Billboard, Bulletin and Granada Records. Their combined rosters cover thousands of songs and include more than 40 local superstars from the 1970s, 1980s and 1990s.

They include 2D, Kris Biantoro, 3 Dara, Rien Djamain, Chris Kaihatu, Ermy Kullit, Utha Likumahua, Ita Purnamasari, Paramitha Rusady, Margi Segers, Yuni Shara, Cici Sumiati, Lilis Suryani, Bob Tutupoly and Johan Untung.

Their music will be digitised for the first time.

“Digital technology is opening up incredible opportunities in Indonesia, where previously piracy hindered our ability to invest in local music,” said Simon Robson, President of Warner Music Asia. “This deal strengthens our position there, enabling us to help preserve Indonesia’s strong musical heritage by bringing this incredible repertoire to new generations of music fans.”

In Warner Music Group’s postings for the quarter ending March 31, CEO Stephen Cooper noted that Asia had grown 17% (along with Latin America, also up 17%, while Europe grew 12%) and said at the time, “We continue to believe these regions have huge potential, and we are exploring other growth opportunities.”

Indonesia has the fourth largest population in the world with 240 million, and a fast growing music market. Last year its recorded music revenue was up by 24.2% (making it the 38th largest music market in the world), with a digital growth of almost 70%.

In April 2014, Warner bought the 600,000-strong catalogue of one of China’s largest independent music company, Gold Typhoon Group, which has a 3.5% share of the Chinese market.

Last year, Warner Music Group’s global market share increased from 16.7% to 17.1%. It was still behind Universal Music (33.5%, from 34.1%), and Sony Music Entertainment (22.6%) with the independent claiming 26.8% share. 

Earlier this year, Music Business Worldwide calculated Warner Music Group’s A&R spend on A&R within 12 months at US$1 billion – its biggest such outlay in seven years. It included $300 million in publishing and recordings in Q4 2015 and $245 million in Q1 2016. It is expected to spend $1 billion by the end of September.

Yesterday, TMN reported that the group’s publishing arm Warner/Chappell extended its deal with India’s Times Music to also cover Bangladesh, Nepal, Pakistan and Sri Lanka for the first time to drive publishing and sync deals.

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