Spotify, Apple Music and Amazon Music could soon hike prices. This company is betting on it
Posted February 7, 2020 8:59 a.m. EST
CNN — Streaming music services are relatively cheap. But they'll eventually hike their prices, one of the world's biggest record labels says. When they do, Warner Music Group is ready to cash in.
Warner Music, an entertainment conglomerate that represents top artists like Coldplay and Lizzo, announced it was going public Thursday.
Unlike other companies that recently went public, the company is profitable and it predicts that it will make even more money as streaming services like Spotify and Apple Music increase their subscription bases and prices.
A "small fraction" of people around the world pay for music services, with lots of room to grow the company said in a regulatory filing. The company believes that "streaming revenues will increase due to pricing increases." As a result, Warner Music says it's in for a windfall because of the publishing deals it has in place with the streaming services.
Warner is right: These services are growing rapidly. Spotify said this week that it has 124 million paid subscribers, a jump of 30% over last year. The number of Amazon Music subscribers soared 50% year over year to 55 million worldwide. Apple has around 60 million Music subscribers, Apple executive Eddy Cue told a French website last year.
Warner Music boasts in its filing that it "adapted to streaming faster than other major music entertainment companies" and was the first among its rivals to report that "streaming was the largest source of our recorded music revenue."
The company didn't yet reveal its ticker symbol or what exchange it's trading on. The IPO filing comes after it recently announced that it raked in its highest quarterly revenue in its 16 year history as an independent company.
Time Warner, CNN's former parent company, spun Warner Music off in 2004. (Warner Music and AT&T's WarnerMedia are not related.) The company went public then went private again in 2011 after Access Industries bought Warner Music Group for $3.3 billion .