On the latest Music Business Worldwide podcast, MBW founder Tim Ingham is joined by Emmanuel Zunz, founder of ONErpm, one of the music industry’s most interesting companies and something of a quiet giant.
When it was founded in 2010, ONErpm quickly gained ground in Brazil, where, to this day, it challenges the major record companies for market share.
Since finding success in Brazil, ONErpm has grown all over the planet, offering a range of partnerships to artists, from low-margin DIY distribution all the way up to higher-margin full-service deals.
Understood to turn over a substantial nine-figure sum each year, ONErpm is profitable – but it has to be. One of the most remarkable things about the company, over and above the fact that it runs more than 40 offices globally, is that Zunz continues to fully own the business.
He’s never taken a cent of private equity or venture capital money, and he’s rebuffed a number of acquisition approaches from major music companies and other parties.
According to Zunz, ONErpm has been on a tear these past few years. From 2021 to today, he says, the firm has more than doubled its revenues and profits.
Despite a challenging, heavily competitive marketplace, Zunz is projecting growth of another 50% to 60% over the next two years.
As he explains on this podcast, Zunz’s ambition is simple – to become the fifth-largest record company in the world while maintaining a profitable, sustainable business controlled by its founder.
Read abridged/edited highlights from Emmanuel Zunz and Ingham’s conversation below, or listen to the full podcast – either above, or on your preferred service…
OneRPM is an independently owned and run company, but it’s also something of a ‘major’ indie. You have over 40 offices worldwide, 550 people employed. What do you think, generally speaking, about the term ‘independent’ as it relates to music companies?
The concept of being an ‘independent’ company is becoming outdated. For me, what it means today, for my company, is that we’re truly independent, because we’ve never raised any capital or debt.
There’s nothing wrong with raising capital and debt, but [ONErpm’s setup] means that I still own the company, and I don’t have a boss. In that sense, we are a truly independent company that grows organically, taking our earnings and reinvesting them into the company’s growth.
“There’s been this pretty significant transformation within the music industry over the last 20 years that gives more leverage to artists to negotiate better deals, and there are no longer these gatekeepers that decide who gets to be successful or not. It’s a market that’s been democratized now.”
But if you’re an artist choosing between ONErpm or [a major record company] I don’t think it matters whether [the company is] independent or not. What matters is: What is the company offering you?
Are they giving you commercial terms that make sense? Are they providing services and/or solutions that will help you grow your career? Is it a right fit in multiple ways? If so, go work with that company.
The majors have been around for a long time. They can provide a lot of value, and they’re changing the way they work in many ways. There’s been this pretty significant transformation within the music industry over the last 20 years that gives more leverage to artists to negotiate better deals; there are no longer these gatekeepers that decide who gets to be successful or not. It’s a market that’s been democratized now.
So it doesn’t matter whether it’s a public company or a major label or an independent music company like mine. All that matters is: Are they offering good solutions and good services? Are the commercial terms reasonable?
Is there a notable difference between a ‘fully independent’ company like yours, and those that have lots of venture capital or private equity money in them?
If you are majority-owned by a private equity company, you don’t have full independence to run your business as you see fit. You have stakeholders that require certain things.
That could be beneficial if the stakeholders are providing a lot of added value – if they’re lending services and guidance and providing not only capital but a network of like-minded people that can help grow the company. But you are not 100% in control.
That brings to mind Taylor Swift. She owns her masters and has a contract with Universal and Republic, which traditionally might have been described as a distribution or services deal – as far as we know, anyway. and also she clearly is leading from the front in making artistic and business decisions about her career. Do you think that’s impacted the wider business and ‘independence’?
I don’t know the ins and outs of her deal, but she’s in control of her destiny, and that’s what it means to be independent. She’s working with a major label, but she’s still making decisions. She’s in control, so therefore she’s independent. That’s the way I see the world.
Overall, the market is heading in this direction, where whether you’re Taylor Swift or you’re Jay Z or you’re a beginning artist, you should be able to exercise control over your career. You should be able to find the right partner that understands your vision and work with them.
“Those who operate in antiquated ways won’t be here for much longer, they won’t be relevant as either executives or as record labels.”
A lot of people that I know who work at the majors understand that and work by that principle – and they’ll be successful. But those who operate in antiquated ways won’t be here for much longer; they won’t be relevant as either executives or as record labels.
This is why I say that the concept of being independent is somewhat antiquated. We’re all headed towards a world where we’re all competing for the best acts or artists, and it’s up to us to create value.
Whether they’re independent companies, wholly owned by their founder or owned by private equity or VC-backed, or if they’re owned by the public markets… it’s the companies that provide the best services, create the most value at the appropriate price, that will succeed.
Which territories have you been investing most heavily in over the past few years, and why?
We’ve had some success in Africa; we want to double down on our investment in Africa.
Emerging markets are volatile, which makes them interesting but also slightly riskier.
When I started operating in Brazil in 2010, the exchange rate was two Brazilian real to one US dollar. Right now it’s five to one, and so I’ve lost over [half] my money in terms of currency. If it had remained at two-to-one, ONErpm would be more than double the size it is today [in Brazil] in terms of revenue. So that’s the risk of going into emerging markets.
We’ve also been investing more in the Caribbean. The Dominican Republic has been a really great market for us because [artists from that market] have a lot of consumption in the United States. It’s more of an export market; Jamaica is also mostly an export market.
“We’re in it for the long haul in these markets, we don’t give up. I’ve never walked away from a market. I’ve never shut down an office that I’ve opened.”
Nigeria is also mostly an export market. Most of the consumption [of] Nigerian music occurs in Europe, the UK, and the US. We’ve had great success in Nigeria. I think that Africa will continue to be a focal point for us.
We’re starting to get some traction [in the Middle East], specifically in Egypt and Saudi Arabia, where we have people on the ground.
We’ve invested in Asia. We need to do a lot more work there to gain real traction, but we’re finally seeing some traction.
I also think there’s a lot of opportunity in Eastern Europe: My next investment will be in those markets.
Because we’re self-funded, we’re not going out there and buying market share. It takes two to three years to see traction in a market [once you’ve invested], so we’re in it for the long haul in these markets; we don’t give up. I’ve never walked away from a market, and I’ve never shut down an office that I’ve opened.
The foothold of the majors isn’t as strong in emerging markets as it is in developed markets. Is that part of the reason for moving into those markets?
I don’t think that’s the reason why we’re going in there. I have a master’s degree in economics, and the focus [of that study] was on emerging markets, so I’ve always really liked emerging markets. I also think that the unknown to me is appealing.
I feel like, because of the unknown, anything is possible there, in some ways, because – and this comes down to psychology – ignorance is bliss in many cases.
I remember when I launched in Brazil, I didn’t really know what I was getting into. All I knew was that Brazil, at the time, was the fifth-largest economy in the world. I knew it had huge amounts of music production and a huge musical culture. And I suspected that the DSPs… were going to eventually open [in Brazil]. And so I made a bet.
“[When] we open in a market, we know it’s going to be hard, we know there’s going to be hurdles, but… we just do it and we figure out a way to make it work.”
Then if you fast forward, I think Brazil is [now] the eighth or ninth largest music market in the world, [and we have] 17%-18% market share in that market.
I don’t know if any other truly independent music company has gotten to that level of market share in such a prominent market.
The last time we spoke, IN 2022, you said the majors had been making acquisitive noises around ONErpm, and you told them to go away. Has your phone rung since the potential Warner–Believe deal fell through?
The first time somebody tried to acquire ONErpm was 2013. I got offered $4.6 million for the company and then a month later I got offered, from a different company, $8 million. I said, ‘You know what? Maybe I’m on to something here.’
I’m not trying to sell the company. If somebody knocks on my door and offers me an unbelievable opportunity, then I’ll consider it. It has to be a good fit.
What I’m most interested in is I want ONErpm to last a long time. I don’t want it to go away. I don’t want to sell it and then it doesn’t exist anymore. I want it to be a long-standing brand that’s around for 40, 50 years to come.
What’s your number-one ambition for one RPM over the next, say, five years?
I have a three-year trajectory right now that I’m working towards, and that is to maybe grow the company by – not double it, but maybe grow by 50% or 60% by the end of 2026.
If I hit those goals, the company will be very, very profitable.
This market that we’re in today is one of the most challenging markets I’ve ever been in. There are some macroeconomic challenges; there’s diminishing returns on the value per stream. Facebook and TikTok aren’t paying their fair share.
In my opinion, we need new revenue sources. There’s not a lot of new innovation on the consumption side. We need another innovator in the market, and we don’t have that right now.
There’s so much money flooding the ecosystem that the market is crowded, making it harder to do good business. I think this is temporary for the next two to three years.
Despite these challenges, I think the goals that I’ve set out for the company are feasible, and if we hit those goals in two to three years, we’ll be the fifth-largest music company in the world.