Is Private Equity Destroying Music Production?

A YouTube video by musician and creator Benn Jordan, titled "The Private Equity Buyout Of Music Production," argues that private equity ownership is damaging the music production software sector. Jordan presents his analysis as an op-ed rather than investment advice, and says he holds no positions in the companies discussed. He also notes that several parties he approached for interviews declined or did not respond.

Jordan traces the sector's consolidation through a series of transactions. Native Instruments, a major music software developer founded in the late 1990s and backed by venture capital during the tech boom, was acquired by private equity firm EMH Partners for about $50 million in 2017, according to the video. After hiring and then dismissing outside management in 2019, the company cut more than 200 employees within a year. EMH became majority owner in 2020, when Native Instruments launched a subscription service. Jordan argues that pandemic-era demand inflated valuations across the sector and that many current problems stem from that overvaluation.

The video describes a later transaction in which Francisco Partners acquired Native Instruments through a newly formed subsidiary, Music Creation Group, which Jordan says paid close to 773 million euros in additional goodwill for Native Instruments, iZotope, Plugin Alliance, Brainworx, and Sound Stacks. Jordan alleges that the buyer has been reluctant to disclose investments and filings, and he cites figures including a reported revenue of 130 million euros, a consolidated net loss of 87 million euros, roughly 105 million euros in depreciation of Francisco Partners' investment, and a loan of about 250 million euros. He describes the brand consolidation under Native Instruments as cost-cutting and bundling, and speculates that further acquisitions, including Spitfire Audio, could follow with additional layoffs.

Jordan also covers other sector deals he describes as part of the same trend, including InMusic's acquisition of Moog, Focusrite's purchase of Sequential, Image-Line's purchase of UVI and Melda Productions, and a private equity stake in Sweetwater. These are his characterizations and have not been independently verified in this summary. Publisher context from the same domain frames private equity's role in music more broadly as a shift into catalogs, rights and creator-facing businesses, while some commentators argue that the revenue decline in the music industry, rather than private equity, is the core problem.