GMM Music partners with Warner Music Asia in massive deal
GMM Music announced a strategic investment partnership with Warner Music Asia (WMA), one of the world’s leading music industry giants.
WMA will invest 370 million baht in cash and provide a minimum guarantee payment of 315 million baht to accelerate GMM Music’s growth and expand the Thai music industry, the largest in Southeast Asia, to a global market. Chief Executive Officer of GMM Music Phawit Chitrakorn expressed his enthusiasm.
“Over the past one or two years, GMM Music has continuously formed partnerships with leading global entities from China, Korea, and Japan. We are now thrilled to welcome Warner Music Asia, a major player in the global music industry from the United States, as our fourth strategic investment partner. This collaboration underscores the interest in the Thai music industry, which boasts the largest music market in Southeast Asia.”
The partnership aims to unlock GMM Music’s company value, estimated at over 25 billion baht, and elevate the quality of Thai music production while expanding its market reach globally. The global music industry has seen over 100% growth from 2015 to 2023, reaching record-high revenues.
Projections indicate that the industry will double again in the next six years, by 2030. Last year, the music market in Asia grew by 15%, outpacing the global growth rate of 10%, according to Goldman Sachs’ Music in the Air research.
GMM Music, with its extensive music IP assets accumulated over more than 40 years and the largest comprehensive music infrastructure in Thailand, reported revenues of 3.914 billion baht in 2023, marking a 27% increase. The company achieved a net profit of 402 million baht, up by 32%.
Digital streaming
The growth was driven by the digital business, which manages revenue through video and audio music streaming, a strategic strength for the company. In 2023, GMM Music’s digital streaming surpassed 100 billion streams, contributing to a significant revenue increase.
Phawit emphasised that WMA’s strategic investment will significantly boost the growth of GMM Music’s digital business and its music IP revenue.
Fahmai Damrongchaitham, Chief Marketing Officer of GMM Music, stated, that this strategic investment reaffirms confidence in the Thai music industry’s upward trajectory, aligning with the global music industry’s trends.
“The strategic investment by WMA aims to expand the Thai music market globally, leveraging WMA’s capabilities as a global music industry leader to increase awareness of Thai music and artists to a larger international audience through digital streaming platforms like Spotify and Apple Music, which grew by 86% and 54% respectively last year.”
The collaboration will benefit from Warner’s advanced global distribution system (ADA), which will enhance global market revenue and maintain a steady income. Additionally, there will be joint expansion efforts in artist management and the development of new music projects from both parties, utilising Warner’s worldwide artist management network.
Besides the strategic investment, both companies will engage in a joint-venture operation to establish a music label, increasing production capacity and developing new artists and music. This will involve sharing expertise and accessing world-class production resources to add value to Thai music, said Phawit.
“WMA has also agreed to pay a minimum guarantee of 315 million baht to enhance the value of GMM Music’s music IP assets, ensuring continuous revenue growth over the next three years.
“This strategic partnership between GMM Music and WMA will elevate Thailand’s music infrastructure to a New Music Economy, an inclusive system that allows everyone to participate in development and mutual benefits, aligning with GMM Music’s planned Spin-off IPO.”
GMM Music is confident that WMA will be a significant growth accelerator for the company, with a target to double net profits by 2030, in line with the global music industry’s projected doubling of growth by the same year, reported KhaoSod.
