(This article has been revised.)
Audio distribution company Cinq Music is looking to take advantage of an ongoing boom in fundraising for music rights and sales of catalogs.
The Marina del Rey-based company recently received a $250 million investment from its parent company, Santa Monica-based GoDigital Media Group, to expand its artist roster and make acquisitions in the music publishing and label industry in the next year. The goal, according to Cinq Music co-founder and Chief Executive Barry Daffurn, is to capitalize on the growing hold that non-English music has over consumers.
“English music has less dominance in the global music market than it has historically, and this trend will only continue,” Daffurn said. “Expect to see more of the big music companies placing more emphasis on non-English music over the coming decade.”
A portion of the funding will be used to acquire a “marquee catalog,” but neither company would disclose further details. A press release called the asset a “legendary repertoire of some of the industry’s most influential hitmakers” and claimed it was an “eight-figure deal.”
GoDigital’s growing global focus
A 2023 report from the International Federation of the Phonographic Industry found that 57% of people surveyed (more than 43,000 people across 26 countries) said that it was important to them to be able to access music from anywhere in the world. And younger age groups tend to be more diverse about where their music comes from, as that number climbed to 65% for ages 16 to 24.
“The coveted market is (ages) 18 to 30,” said Don Franzen, entertainment attorney at Beverly Hills-based Funsten & Franzen and adjunct professor at the UCLA Herb Alpert School of Music. Franzen said that he could see why Cinq Music opted to focus on these markets, noting, “there’s a very good chance that those sectors, Latin and Asian, especially Korean, are perhaps relatively undervalued in relation to the other market sectors.”
Franzen added, “it might well be true that Latin and Asian (music) has not been focused on as much” in the market. That said, Franzen noted Korean music continues to be popular, and that it’s “not a secret anymore” that K-Pop has a massive global fanbase.
More people than ever want to listen to local genres of music, according to the IFPI. Daffurn said Cinq is also looking to focus on more regional content.
“The big shift right now is localized content dominating local markets,” Daffurn said. “Although we’re technically genre agnostic, we’re not looking to chase every opportunity. It’s a bit of a balancing act; we need to maintain focus on the genres which have been most successful for us.”
Daffurn has built his catalog on feature artists with overseas pull, especially in markets including Latin America and Asia. While the majority aren’t top-charting artists in the U.S., several are – including Bad Bunny, Daddy Yankee, Jason Derulo, Sean Kingston and T.I. And the remainder of Cinq’s music roster isn’t geared towards American audiences, anyway: It’s for fans of genres including reggaeton, non-English hip hop, or Música Mexicana.
“Cinq is open to any culturally significant repertoire but is focused on large and fast-growing emerging markets outside the English language mainstream such as Latin and Korean music,” said GoDigital Media Group Chief Executive Jason Peterson.
Acquisitions abound for company
Following this investment from GoDigital, Cinq Music has raised $410 million to date. In addition to using the new funding to acquire music properties and catalogs, Cinq will also use it to establish a new office in Nashville, where the company plans to invest in more country music as well.
While country has been “pretty vibrant all along,” UCLA professor Franzen said, it still remains a valuable market. While Beyoncé’s recent foray into the genre has attracted more users to it, more traditional country artists have been growing their fanbases.
Cinq Music recently bought the catalogs of country songwriters Jimmy Robbins and Ryan Hurd, and plans to acquire more.
“Even though it’s having a moment right now, I still think country music has a lot more room for growth,” Daffurn said. He added that the genre has “exploded over the last two years.” The move to Nashville and push to acquire more country catalogs “speaks more to my lifelong love of country music,” Daffurn said.
GoDigital’s investment in Cinq is one of several recent deals in the sector – Rod Stewart sold his catalog to Iconic Artists Group for $100 million on Feb. 15, and catalog buyer Duetti raised $90 million to finance acquisitions the same day. And Gamma, a Santa Monica-based music management company founded by former Apple Music executive Larry Jackson, raised $100 million on Feb. 2, bringing its post-deal fundraising total to $410 million, Daffurn said.
Franzen said that the recent flurry of investments into the music-rights business, including Cinq’s, is likely the result of “the perception that these assets are undervalued in terms of the potential income stream by expanded markets and the success in monetizing not only foreign but also domestic (artists).”
Digital angle is an important factor
The music industry today is hyper-focused on streaming.
“From talking to A&R (artists and repertoire) people at labels now, it’s all about streaming,” Franzen said.
This is a good thing for Cinq, as Apple Music, Amazon, Spotify and YouTube make up the majority of its artists’ income. Cinq delivers directly to the platforms, and owning its distribution does save some money.
“With all the new capital flowing into music, our advantage is that we are an operating music company,” Daffurn said. He said that Cinq is also targeting expansion into video and claimed to own one of YouTube’s largest multi-channel networks.
Currently, the Cinq Music channel has just over 300,000 subscribers.
Cinq also wants to produce or acquire biopics, documentaries and original episodic content about its artists, Daffurn said. But, he noted the company isn’t currently producing anything original.
GoDigital chief executive Peterson explained further that the company currently distributes and monetizes music videos and user-generated videos that it integrates into Cinq content, and it wants to go bigger by creating movies, television or video podcast content.
TikTok remains an accelerant for a musician’s career taking off, but it isn’t the end-all metric of success. That said, Cinq is placing more focus on social media.
“TikTok and YouTube are the lowest-paying platforms of all the different streaming platforms, notoriously so,” said Franzen.
He noted that Universal Music Group recently revoked a licensing deal for its artists’ content on TikTok, citing the social network’s low payouts. YouTube “has licensing agreements in place with many of the publishers and record labels, but it pays a fraction per watch,” Franzen said.
“The fact is, even though they pay very little, the runaway viral song on TikTok or YouTube, you can still make some significant money,” Franzen said. “There is money to be made even if they don’t pay as well as the other platforms.”
Cinq Music’s focus on social media and video content might not immediately be lucrative, but it could launch a regional star towards global recognition.
“I’ve always believed most in great music, so we never chased TikTok stars for their numbers alone, but we do place a bigger emphasis on analyzing how good a given artist is at managing their socials,” Daffurn said.
