iWorld
Apple commits $4.2 bn for original content
MUMBAI: Apple can’t get enough of taking more bites. The Cupertino-based company is reportedly spending a whopping $4.2 billion a year on coming up with original content by 2022.
According to a report in Variety, this amount is much higher than the original commitment of $1 billion in 2018. Despite the effort, Apple will still lag the budgets set by video on demand giants Amazon and Netflix. Amazon’s pocket will turn up $8.3 billion for original video content, the highest for any tech giant. This will also shadow Netflix’s $6.8 billion margin.
Much of Apple’s current programming has been music-based but the company is looking at looking eye-to-eye with contemporaries – Amazon, Netflix and Hulu. This will involve beating them where are best – shows and movies. Apple Music will be rebranded in the next 2-3 years which will also give it a headstart with its 30 million subscriber base. They will get video content access at just $10 a month.
The idea behind focussing on a new territory is to give a boost to its services vertical, which is expected to make up 14 per cent of the revenue in 2017.
For now the company has planned two offerings, Amazing Stories reboot from Steven Spielberg and a news-business comedy with Jennifer Aniston and Reese Witherspoon.
iWorld
Bill Ackman’s Pershing Square makes $64 billion bid to acquire Universal Music Group
Ackman pitches NYSE relisting plan as UMG board weighs unsolicited offer
The hedge fund has proposed a business combination that values UMG at €30.40 per share, representing a hefty 78 per cent premium to its current trading price. The offer includes €9.4 billion in cash alongside stock in a newly formed entity, with shareholders set to receive €5.05 per share in cash and 0.77 shares in the new company for each UMG share they hold.
Under the proposal, UMG would merge with Pershing Square SPARC Holdings Ltd and re-emerge as a Nevada-based entity listed on the New York Stock Exchange. The move is designed to boost investor visibility and potentially secure inclusion in major indices such as the S&P 500.
Pershing Square Capital Management ceo Bill Ackman argued that while UMG’s operational performance remains strong, its market valuation has lagged due to external factors. “UMG’s stock price has languished due to a combination of issues that are unrelated to the performance of its music business,” Ackman said, pointing to concerns ranging from shareholder overhang to delayed US listing plans.
Ackman also flagged what he sees as untapped potential in UMG’s balance sheet and a lack of clear capital allocation strategy. He added that the market has not fully recognised the value of UMG’s €2.7 billion stake in Spotify, alongside gaps in investor communication.
The proposed transaction would also result in the cancellation of around 17 per cent of UMG’s outstanding shares, while maintaining its investment-grade balance sheet. Pershing Square has said it will fully backstop the equity financing, with debt commitments secured at signing. The deal is targeted for completion by the end of the year.
UMG, however, has struck a measured tone. The company confirmed that its board has received the non-binding proposal and will review it with advisers. It reiterated confidence in its current strategy and leadership under Lucian Grainge, signalling no immediate shift in stance.
The proposal comes at a time when global music companies are navigating evolving investor expectations, streaming economics and capital allocation pressures. For Pershing Square, the bet is clear: sharpen the financial story, relist in the US, and let the music play louder in the markets.
Whether UMG’s board is ready to change the tune remains to be seen, but the spotlight on its valuation just got a lot brighter.
