Startups

Warner Music acquires IMGN, a social media publishing platform, for under $100M

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Image Credits: IMGN

It’s a whole new playing field these days for music labels and publishers, and today one of the biggies made an acquisition to help it sharpen up its strategy to better understand what people want to see and hear online today.

Warner Music — with a market cap of $15.4 billion, one of the big three recording giants (alongside Universal and Sony) and which owns labels like Atlantic, Elektra and others and has a huge roster of artists that includes the likes of Madonna, Ed Sheeran and Linkin Park — is acquiring IMGN Media, a Tel Aviv and New York-based startup that builds and tracks viral social media content in categories like esports and gaming, ASMR and entertainment.

IMGN used to be called Comedy.com. It widened its remit from simply funny stuff and rebranded in 2017, and according to its site has about 3 billion views per month and has some 40 million subscribers to its content, with some 85% of that classified as “Gen Z and millennials.”

The news caps off several weeks of speculation about the startup. In July, reports in the Israeli press emerged that said IMGN was being circled by Snap for about $180 million; and further to that, a source told us that TikTok was also in the frame, looking at the company at a price tag of around $150 million. In the end, the terms of the acquisition were not disclosed, but we understand the deal was done for just under $100 million.

IMGN was founded in 2015 and had raised about $6 million from a long list of angels and firms, including Rhodium, Dot Capital and Prism Venture Management.

The plan will be to keep IMGN independent of Warner, continuing to develop and analyse viral content across a range of platforms, with founder Barak Shragai staying on to lead the team.

Warner, meanwhile, does not plan to use the platform to simply market Warner artists, but to tap it for more insights into where people are going online these days, and what they want to see, so that it can better target its own marketing efforts accordingly.

That’s not to say that the two will not work together at all. Warner became acquainted with the startup because it had been a customer of IMGN’s.

Warner has a history both of investing and acquiring startups, depending on its strategic interests. In July, for example, it took part in a Series B round for Canadian audio mastering startup Landr. Further back, it has acquired the likes of music concert listings platform Songkick and pop culture site Uproxx — which it also uses to help track trends in the world of music and among its target demographics.

IMGN will continue working with other third-party brands under its new owner. Past customers have included Electronic Arts, Burger King and Microsoft. The Microsoft deal was by way of its Mixer live game streaming platform, and the fact that this Twitch competitor was shut down last month says a lot about the state of the market and how precarious an audience can be.

Not just consumer tastes, but companies’ business strategies, shift all the time. Microsoft pulling the plug on Mixer underscores how IMGN itself can quickly lose a customer, pointing to why ownership by WMG can feel more secure. As for Warner — which is traded publicly these days but still majority owned by Access Industries, the holding company controlled by Len Blavatnik — the fact that Mixer is tracking and building content for a range of platforms gives it more of a bird’s-eye view on that bigger picture, rather than simply relying on data from the platforms themselves, or its own research, to figure out what the world wants to see and hear.

“WMG not only offers us greater investment and support, but an entrepreneurial environment to continue growing our business, with the people running our accounts having editorial independence,” said Shragai. “We’re excited to partner with them as we take our company into the future.”

The bigger picture here is that the music industry has evolved well beyond the traditional, analogue world of publishing and selling physical media, where consumers learned about and listened to new artists and songs over the radio and TV (and read about their favorite musicians or genres in magazines).

With the shift to mobile and digital platforms, there’s now a much wider, and quickly shifting, plethora of places where people discover and listen to music.

And digital platforms themselves — from those focused specifically on audio and music, like Spotify, through to those where music is a side-hustle to continue to capture audience, like Facebook, through to those that are neither but are still huge music destinations, like TikTok — are also getting deeply involved in tracking how tastes are evolving, and where people are going to get their music fix.

So it’s only natural to see labels looking for ways to have more direct access to those insights themselves, bypassing all those platforms — even as they also work with them (and indeed, to help them negotiate better with those platforms, at the end of the day).

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