Sean Parker, the co-founder of Napster and Spotify investor, says that now is the time to invest in music. He's particularly interested in the record labels and publishing companies. “In the last 10 years we have presided over the greatest destruction in value in the history of the music industry,” Parker said during e-G8 conference this week Paris.
The $45 billion recorded music industry has been “brought to its knees” to today's value of $12 billion, according to Parker. “Assuming we can stabilize things and restore growth, it shouldn’t be that difficult to preside over the greatest increase in value in the history of the recorded music industry.”
Parker sees particular value in back catalog, which motivated his role in a recent unsuccessful bid for Warner Music. People are building playlists and on services like Spotify, in which Parker is an early stage investor, its catalog that is driving consumption.
“I think that there is a pretty dramatic change in the way music is monetised that is on the cusp of happening. Back catalogues of record labels are going to become extremely valuable,” he said adding that music publisher catalogues are increasing in value as well. “If you believe this transformation is occurring, if you believe the broken distribution systems are on the verge of being fixed, those recordings are dramatically undervalued.”