RHM.L Regulatory News (RHM)

 31 October 2022

ROUND HILL MUSIC ROYALTY FUND LIMITED

("RHM" or the "Company")

Supportive Streaming Market Update

The Board of Round Hill Music Royalty Fund Limited notes the ongoing supportive market environment for streaming revenues demonstrated by a number of recent industry updates that are anticipated to have a positive impact on Company revenues.

The Company's exposure to positive revenue trends in streaming services is significant, with approximately 50% of RHM's revenues derived from digital service providers such as Spotify and Apple Music across master, mechanical and performance royalties.

Streaming subscriber growth continues to be the fastest growing area of the music business, and this week alone Spotify grew its premium subscriber base by an extra 7 million in Q3 2022, 1 million above its target. Spotify, the largest of the streaming services, now boasts 433 million active users, including 188 million subscribers (an increase of 15 million so far in 2022), across 183 markets.

The Company also notes the recent news by Apple Music to increase its monthly subscription price for its streaming platform in the UK and the US by £1 and $1, respectively. As the number of subscribers, songs and subscription prices on the streaming platforms increase, it is anticipated there will be a net positive impact on RHM's revenues.

These updates follow the positive news announced on 1 July 2022 where the US Copyright Royalty Board upheld the 44% staggered increase in streaming mechanical royalty fees dating back to January 2018 which accordingly is also expected to result in increased fees payable to the Company.

Josh Gruss, CEO of Round Hill Music, the Company's investment manager, commented:

"We are pleased by the latest news from Apple Music and Spotify, which will enable artists and songwriters to earn more for the streaming of their music. This positive step shows the growing financial recognition of music on streaming services, and the growing impact these services have on the value of artists and songwriters. Once again, as we saw in the Covid-19 pandemic, the lack of correlation of music consumption to other asset classes and the financial market is being proven.

"The growth of streaming platforms has been phenomenal, growing from a subscriber base of 11 million in 2015, to 88 million in 2021, for Apple Music. Both platforms, along with many other digital service providers, have revolutionised the way people consume music and we expect the streaming market to continue to grow and positively impact the Company's revenues."

FOR FURTHER INFORMATION

Notes: 

Terms defined in the prospectus published by the Company on 19 October 2020 and the supplementary prospectus published on 3 November 2020 (together the "Prospectus") shall have the same meaning when used in this announcement.

The Company is a non-cellular Guernsey company. The Company's Investment Objective is to provide investors with an attractive level of regular and growing income and capital returns from investment primarily in high quality, music intellectual property. In order to achieve its Investment Objective the Company will invest in a songwriter's copyright interest in a musical composition or song (being their writer's share, their publisher's share and their performance rights) together with the rights in the recording of the musical composition or song (known as the master recording rights) together with all such rights and assets considered by its investment manager, Round Hill Music LP, to be ancillary thereto. 

Founded in 2010, Round Hill is a fully integrated owner and operator of music copyright properties. With offices in Nashville, Los Angeles and London, Round Hill has an experienced management and investment team with an established reputation and extensive experience in the music and finance industries.