Strategy October 09, 2018
Warner Music To Acquire German E-Tailer
The deal signals the growing significance of branded merchandise to music industry revenue streams.
Warner Music Group (WMG), the New York City-headquartered entertainment and record label conglomerate, is paying about $180 million to acquire EMP Merchandising, a Germany-based e-tailer of music and entertainment branded merchandise. Announced recently, the deal is expected to close this October following approval from German regulators.
The Nirvana “Merch Bundle” is just one example of music-related swag available from EMP.
Promotional products distributors can view the acquisition as another bellwether of the growing opportunity that lies in the music industry. Warner Music touted the deal as another step in its plan to diversify beyond sales of recorded music. That diversification is being driven, in part, by new marketplace dynamics. Sales of recorded music – especially in the form of CDs and the like – are declining. Artist-branded merchandise, live performances and artists’ influencer partnerships with brands are becoming ever bigger drivers of revenue for the music industry. As Counselor has written about previously, that equates to ample sales potential for savvy promo distributors. So, rock ’n’ roll!
For those interested in the acquisition’s particulars, word is that EMP will become a stand-alone, direct-to-fan business unit within WEA, WMG’s global artist and label services division headed by Tony Harlow. EMP’s CEO Ernst Trapp and CFO Jan Fischer will continue to manage the company, which was founded in 1986. “In today’s streaming world, merchandise is still one of the best ways that fans can express their passions and personalities,” said Max Lousada, CEO of Recorded Music at WMG. “It’s also a big part of how music has visible and physical impact on global culture and fashion. Welcoming EMP will be our latest move to expand our relationships with influencers across the globe.”
In addition to Nirvana, EMP offers fans merchandise from musical artists such as Twenty One Pilots, Panic! At The Disco, Metallica, Motörhead, Guns N’ Roses, Pink Floyd, AC/DC, The Doors and others.
EMP is also a lifestyle e-commerce site, selling merchandise from entertainment brands that include Disney, Marvel, Star Wars and Harry Potter; gaming brands such as Nintendo and PlayStation; sporting franchises that include the NFL; and alternative fashion brands like Vans. The company operates a network of websites that serve millions of customers across 18 European countries.