Olga Juverdeanu, Global Records: This year we are focusing on Netherlands and Turkey – Business Review

Global Records group of companies announced over 16 mil euro turnover with an increase of over 60% versus 2020 and 25% versus 2019. The company is the largest independent music label in CEE and operates as a 360 integrator of artist services, publishing, publicity, endorsement services and booking for concerts. The COVID pandemic has strongly affected the industry by cutting over 4 mil euros out of the 2019 group Turnover which were coming from live shows. However, the company is proud to show that it managed to counterpart the pandemic effect and not only compensate but also significantly exceed the pre pandemic figures.

By Romanita Oprea

 

 

Olga Juverdeanu, General Manager of Global Records, sat down with Business Review to talk about the financial results as well as the development plans of the company.

How did the company manage to go through the crisis in a good shape?

The performance of last year was achieved by focusing our attention on what we do best and this is music but also a wide range of production and services in connection with music and with the entertainment industry. We have shifted our teams focus and attention to the digital exploitation of our music catalogue. The pandemic accelerated the digital trend that was already visible simultaneous with the growth of subscription-based music platforms. The change that platforms such as Spotify, YouTube premium and Apple music brought to the market makes the current times to be extraordinary for the music business. Entertainment becomes a commodity while paying for music subscription is just as simple and common as paying for any utility bill. This gives a true new meaning to the way the audience is “consuming” content as well as to music catalogues which are more and more valuable as they are much easier to be discovered by new generations of audience.

The pandemic caught us all by surprise and forced us to scrutinize and reassess our priorities, our ways of doing things and to find extraordinary solutions for extraordinary problems. It also gave us time to research and develop new areas of expertise. We have created and produced two original shows that have been recently released by HBO Max – “One true singer” a new and fresh talent show format that delivered the promise of making the winner a true star and a documentary about the development path of the artist Irina Rimes. They are both related to music because as simple as it sounds our motto is “In music it is all about music” and they gave us the opportunity to develop in a new content market.

What are the business performance indicators you are scrutinizing in your business?

As any company in full and accelerated growth we have focused our attention on cash flow and market share for the first years of development but as we entered a more mature stage we are closely monitoring EBITDA rate which is steadily at a healthy 24% and reached 3,8 mil euros in 2021 as well as the value of our catalogue which is the most important asset and represents the “wealth” of any music company. We also continuously evaluate our market share that is constant at over 22% of the Top 100 Radio Airplay. This translates in a market share equal and occasionally higher than the one of the majors (Universal, Warner Music, Sony) which control huge catalogues of music and over 80% of the local music.

We are content to see the growing trust we are receiving from our business partners and the proficiency of our team developing together with the business. Our financial statements are audited and also the company went through a full fiscal review for the last 5 years.

What are your future development plans?

Global Records is currently a regional music label having its area of main focus in CEE countries. It is the largest independent label in CEE but also one of the youngest with the fastest development. In less than 1 year we have established ourselves as the largest independent label based on radio market share in Poland, Bulgaria, Ukraine and Russia. Unfortunately, the political events have put our development on hold for Russia and Ukraine but for this year we are focusing on Netherlands and Turkey. We are in the process of incorporation of Global Records Netherlands with permanent music studios and promo department. Although very mature and highly provocative territory Netherlands is our target because of the match of our music with the audience while Turkey is a very attractive market due to its dimension and accelerated growth in music consumption and digital adoption.

What are the investment plans for 2022?

As in the previous years the largest stake of our investment budget is going to the music catalogue as it represents our most valuable asset. We have an investment budget of 3 mil Euros in 2022 to be spent on music production as well as writing sessions to be organized both in our studios but also abroad in collaboration with international songwriters and producers. Another important project for the end of this year is the organization of the largest European artist casting having the plan to invest over 5 million euros in next 3 years for the artists selected in this casting.

What are your plans for medium and long term?

Goldman Sachs has just released their annual “Music in the air report” which comes to confirm their market growth estimation and even exceed the previous projections. They suggest that the music rights industry is going to grow to epic proportions over the next decade to more than double by 2030 vs the level of last year. This is mainly the effect of digital penetration creating a growth potential that never existed in the music industry before. More than that the Central and Eastern Europe territories including Turkey are the so called “emerging markets” with a more accelerated growth versus the more mature markets in the western Europe and US. In this context the value of our music catalogue increases and there are many options for investment and transactions. Our medium-term plans include an evaluation of our catalogue at 100 million Euros in the next 4 years.