Founder, Chairman & CEO, Believe (Believe SA)
Deni Ladegaillerie (Believe) : L'entreprise va être rachetée par son fondateur
Ce jeudi 25 avril, Deni Ladegaillerie, PDG et co-fondateur de Believe, a expliqué pourquoi sa société est gagnante de l'IA, de la côte de Believe en bourse, et l'inquiétude de l'industrie de la musique vis à vis de TikTok, dans l'émission Good Morning Business, présentée par Laure Closier et Christophe Jakubyszyn. Good Morning Business est à voir ou écouter du lundi au vendredi sur BFM Business. 👋 Bienvenue sur la chaîne YouTube officielle de BFM Business, première chaîne d'information économique et financière de France.
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About Denis Ladegaillerie
Denis Ladegaillerie, founder, chairman and CEO of Believe, presented the company to investors following its IPO on 30 September 2021. He described the music market as undergoing a "revolution" driven by the shift from CD sales to streaming, which he said is now primarily fueled by paid subscriptions. Ladegaillerie projected that by 2027 streaming would represent nearly 80% of the market. He also stated that by the end of the decade the Asia-Pacific region would become the world's largest music market, followed by Europe, with the United States dropping to third. Ladegaillerie discussed Believe's competitive position, saying the company has signed artists who were early in their development and later became top sellers, giving Believe "attractiveness" to sign artists who previously worked with major labels such as Universal, Sony, and Warner. He noted that these competitors have lost market share in recent years. Ladegaillerie also commented on the Paris investment ecosystem, saying it lacks the maturity of American or British markets regarding growth and technology companies, and that investor education about the artist market is still in its early stages. He reiterated that Believe's model is based on offering artists "the best quality of service, respect, equity, and transparency."
Transcript (15 segments)
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Host0:00
Good morning, Business Plan. It's 7:45 AM. Our guest is Denis Ladegaillerie, the CEO and co-founder of Believe. Good morning. We know you well, we know Believe well, this success story in the music industry, music publishing, with a completely different, completely innovative business model. We talk about it a lot this morning. You are one of the winners of the IPO. You're going to explain to us how and why. And then this little stock market round trip, you scared us a bit at first because, in the end, the stock market wasn't so good for you. You're not really getting out of it, by the way. You're going to stay, especially. You scared us because Warner made a counter-offer to your offer to buy back shares, and maybe looked a little at what was in the accounts too. The danger is over now, so we're happy to be able to move forward towards the end of the process.
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Denis Ladegaillerie0:55
But actually, when we went public, we had three objectives: raise money, be able to provide liquidity to our historical shareholders who had been there since 2007, 2008, and be able to do more transformative operations. The stock price over the last two years was around 10 euros, so it was impossible to provide liquidity for existing shareholders, impossible to raise money for big operations. So that's what led us to think about how we could exit. And yes, we had the surprise of having a strategic player come into the process who was not expected, so Warner. They wanted to buy back shares, making a stronger offer than ours. In the end, they backed off. You're going to buy back shares, but you're going to stay listed a little bit. The conclusion of all this is, do you regret having been listed? Were you too small?
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Host1:48
So what I would say is, first, just a clarification. Actually, Warner never made an offer. They came in saying, 'I want to look,' and they sent a letter to the Board of Directors saying, 'This is not an offer, it does not illustrate an intention to make an offer,' etc. So there was always only one offer for the company, there weren't two, which was the consortium with the investors. And yes, our original objective was to exit because we want to be able to, our sector is entering a consolidation phase, we need to invest in AI and other subjects. So I absolutely wanted to be able to continue developing the company, to have a stock price that reflects the intrinsic value of the company, and shareholders who are capable of supporting and financing our development.
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Denis Ladegaillerie2:42
Before talking again about your strategy and business model, a quick word on what was said earlier. You're going to have to stay listed to please the market authorities and so that the shareholders who came in with you can benefit from your success, if there is any.
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Host2:55
Absolutely. And that was one of the discussions we had with the investors, with some of them like Siparex, who accompanied us at the time of the IPO, who invested at a price of 19.50 euros, and some of the individual shareholders. So yes, what we said was that extending the period during which we remained listed would allow this group of shareholders to have a solution. The problem is liquidity, that's the heart of the matter for mid-caps and SMEs that today look at the stock market with envy.
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Denis Ladegaillerie3:30
Well, for me, my conclusion regarding Believe is that we had levels of liquidity and capital that were very, very insufficient to have a valuation that correctly reflects the intrinsic valuation.
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Host3:44
Denis Ladegaillerie, you didn't lose too much in this operation, did you? In the end, it gave you notoriety. Now who doesn't know you? So tell us again, how are you different from other record labels?
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Denis Ladegaillerie3:53
The world of music has changed in two ways. With the advent of technology, with AI, all artists, in fact, the number of artists who have access to the market is much larger. So the result is that over the last 10 years, you've gone from a market like France, for example, where the top 200 artists captured 80% of the market's value, to a market today that only captures 30%. But you have a middle class of artists developing, new amateur artists participating in the market. So we built a model with solutions that allow us to provide solutions to a new artist or a new developing group, as well as an already developed artist or top artists in France like Jul, Louane, Vianney. So that's really the specificity, with a mix of music expertise and technological expertise that allows us to support a large number of artists.
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Host4:48
Are you capable, for example, with Jul, of saying he needs to release a new track on such a date with such a marketing strategy on such a community? Are you that precise?
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Denis Ladegaillerie4:57
Actually, the artist is a bit of a superlative. I don't know if you saw, he sold, we sold in 25 minutes, we broke the ticketing system for the Stade de France. More than a million and a half ticket requests. But actually, he's a superlative artist because he's very digital, he understood how to develop relationships on social media platforms, on YouTube, on other platforms with fans, how to use it to develop his audiences. He has a very intense production cycle that corresponds very well to the way people consume music today. So yes, our ability to support him to tell him what to do, when to do it, contributes to that success.
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Host5:45
A question about TikTok, because it's at the heart of the news. We had the streaming revolution, now the social media revolution. We saw in the report from the Snep that TikTok is the mode of consumption that progressed the most in 2023, and that today the weekly duration for young people is about 1 hour 40 minutes on TikTok. However, TikTok does not remunerate artists at a sufficient level. What do we do? What should we do? Does it threaten your model?
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Denis Ladegaillerie6:10
No, actually, the way we see it is as a complement to our model. That is, TikTok is a media. TikTok is a media that influences people. Consumers are not going to consume music on TikTok; they are going to watch short videos, and these short videos will be illustrated by music. Then, when they like the music, they will listen to it on Spotify.
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Host6:32
That's not what the Snep says. The Snep says that streaming is actually declining because people consume 1 hour 40 minutes of music on TikTok.
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Denis Ladegaillerie6:38
Well, we did fairly in-depth studies on the correlations, and that's not what we see. In fact, we see that there is a real influence. So the issue of remuneration, are we satisfied with the way our relationship with TikTok is from a financial point of view? No, absolutely not, because we think that the value of TikTok is actually outside of TikTok, and that we need to use TikTok as a media and not as a direct music monetization platform.
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Host7:05
Thank you very much, Denis Ladegaillerie, the CEO and co-founder of Believe.