As other entertainment moguls invest in the latest streaming or social media platforms, Haim Saban is looking to a more traditional entertainment business: recorded music.
The 75-year-old, who places his net worth at $4.7 billion, announced last month he would put $500 million into a new record label, Saban Music Group.
The label will fold in 2-year-old Talento Uno Music, a Century City-based record label acquired by Saban in May 2018. Talento Uno was started in 2017 by Gustavo Lopez, former executive vice president for Latin music at Universal Music Group Inc.
Lopez will be chief executive of Saban Music Group, which will build out from Talento Uno’s offices, and the label plans to focus on Latin music, global music of all kinds and developing young talent.
The label has announced an initial slate of artists including Colombian reggaeton artist Reykon and Israeli pop duo Static and Ben El.
Saban’s plan to start a record label, while perhaps old-fashioned, carries some promise due to the label’s focus.
“Latin Music is where the action is today in music,” said Lloyd Greif, an analyst of Saban's investments and founder of downtown investment banking firm Greif & Co.
The genre was the fifth most popular in the United States in 2018, based on streams, album sales and radio plays, according to Statista Inc., outpacing genres such as country and electronic.
Latin America is a growing market for music consumption. The region saw 16.8% growth in 2018 recorded music revenue, according to a report from the International Federation of the Phonographic Industry, a London-based trade group.
Saban can succeed, Greif added, if he “lets his operating partner Gustavo Lopez do what he does best: Identify and commercialize up-and-coming Latin music acts.”
Saban declined to answer specific questions on Saban Music Group but provided a statement acknowledging the industry’s transition.
“I know that the main driver of growth in music has been on-demand audio song streams,” the statement read in part. “This is what gets me excited about the music business at the moment as I have embraced the digital age.”
Three companies — Universal, Sony Music Entertainment Inc. and Warner Music Group — control 88% of global recorded music, according to the Phonographic Industry. But outside observers downplayed the need for artists to align with a major label in 2019.
“Historically, it had been for investment and clout in terms of marketing and radio airplay as well as global distribution,” said Gigi Louisa Johnson, a business professor at UCLA.
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