BEGGARS PROFITS UP; SPOTIFY WINDFALL

Independent British company Beggars Group enjoyed a pre-tax profit rise of 46% last year on sales of £74m. A princely sum from the sale of its Spotify stake, half of which was passed on to artists, awarded Chairman Martin Mills an £8m dividend.

For the year ending Dec. 31 2018, Beggars Group turned over £74.2m in sales from 36 releases. Gross profit (before expenses and tax) hit just under £12m—a rise of 46% from 2017’s £8.2m.

Fifty percent of proceeds from the sale of its shares in Spotify were given to Beggars signed artists, both past and present, with 44% being paid out after recoupment. The accounts note that "certain other companies apparently distributed these revenues based on the artist royalty rate, meaning they would have paid out a far lower percentage irrespective of recoupment."

Business is strong thanks to streaming and subscriber growth, with the entire Beggars catalogue benefiting. Growth in developing markets, the “enormous success” of its U.S. business, as well as strong revenues from European territories and Australasia are also a significant part of the company’s success.

Concerns going forward center on Brexit and the potential of a no-deal, which risks interrupting Beggars’ domestic physical supply chain in the short term. The company hopes that its global reach and customer base will mean that it’s mostly insulated from domestic harm.

There are concerns, however, that Britain leaving the EU will have a negative impact on the power of the independent sector at large when it comes to protecting its own IP. The statement notes: “We are gravely concerned that a longer term negative political climate, if we leave the EU, would do irreparable political, social and economic damage by association to our sector’s soft power. “Beggars Group Ltd. has always maintained strong community links with fellow EU-based independents, and we value the effectiveness of collective European regulatory influence over powerful US technology companies.

“We are concerned that the uncertainty around post-Brexit plans for adopting EU Directives and Regulations that currently serve to protect our IP rights. We continue to work hard on behalf of our artists to ensure that the independent sector is heard and represented.”