1. STRICTLY CONFIDENTIAL
Music – An Evolving Landscape
June 2018

2. CONFIDENTIAL | 2
Shot Tower Capital
*Securities offered through Shot Tower Securities LLC, Member FINRA/SIPC.
Shot Tower* is a leading
boutique investment
bank with a dedicated
focus on the media and
entertainment industry.
Over the course of their careers,
the principals of Shot Tower have
closed over 100 media related
transactions representing in
excess of $50 billion in aggregate
value.
Since our founding in March 2012,
Shot Tower has advised on
pending and closed financings
and M&A transactions with an
aggregate value greater than
$8.0 billion.
We have a 95%+ success rate in
closing engaged transactions. This
results from assuring we are
aligned with our clients on value
and objectives prior to accepting
an assignment.
Nearly all of our banking
assignments are with existing
clients or the result of client
referrals. Long-term relationships
and client loyalty is paramount to
our success.
100+
$8.0b+ 95%+
90%+

3. MUSIC INDUSTRY:
WHERE WE ARE AND HOW WE GOT HERE

4. CONFIDENTIAL | 4
MUSIC CONSUMPTION MUSIC CONSUMPTION/SALES BY FORMAT 1
Things Look Great Right Now…
Sources: Nielsen Music U.S. Year-End Report 2017.
1. Audio streams measured as number of streams, while vinyl albums, physical albums and digital albums measured by sales.
2. Nielsen’s measurement of total consumption includes total albums, plus on-demand audio/video streaming equivalent albums, plus track equivalent albums, which are measured at the ratio of 10 tracks to one album and
streaming equivalent albums ratio of 1,500 streams to one album.
+58.7%
Audio
Streams
+9.0%
Vinyl
Albums
Physical
Albums
-19.6%
Digital
Albums
-16.5%
Total Consumption 2
1 Album = 10 Downloads = 1,500 Streams
(units in millions)
DecliningFormats
+12.5%
Overall Music
Consumption
GrowingFormats
566.1
636.6
2016 2017

5. CONFIDENTIAL | 5
40
60
80
100
120
140
160
180
200
220
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Revenue%GrowthIndexto100
Recorded Music Music Publishing
CD Era
1991 ‒ 1999
MP3 Era
1999 ‒ 2016
Streaming Era
2016 ‒ ?
…But the Return to Growth is Very Recent
Sources: RIAA; Enders Analysis; NMPA; Shot Tower estimates.
1. Revenue growth for music publishing and recorded music is projected after 2017.
RELATIVE MUSIC INDUSTRY REVENUE GROWTH (1993 – 2022) 1
The global music industry appears to be emerging from a period
of digital disruption and is poised to reach new highs.
-3.4%
-34.1%
5%-6%?
Per Annum
10%+?
Per Annum
The impact of
streaming is clear as
is the stability of
music publishing over
the last 25 years.
Recorded music’s
time has arrived once
again with double
digit growth and the
prospect of long-term
stability due to
recurring
subscriptions and a
consistent royalty
pool.

6. CONFIDENTIAL | 6
PROJECTED GLOBAL RECORDED MUSIC GROWTH RATES 1
PROJECTED GLOBAL RECORDED MUSIC GROWTH RATES BY REVENUE TYPE
Analysts are Misaligned on What the Future Holds
Sources: Goldman Sachs’ “Music in the Air: Updating our Music Industry Forecasts,” (April 2018); Enders Analysis; J.P. Morgan’s “Music Matters – Vol. 2: Is There a Risk of Disintermediation… Can Artists Go Direct? (January 2018).
1. Year-over-year growth rate / estimated amount assuming forecasted growth rates applied to an index of 100 starting in 2016.
2. Download-to-own (DTO) growth rates used as Enders’ downloads growth rates.
3. Subscription growth rates used as a proxy for J.P. Morgan’s streaming growth rates.
Growth is being
driven by
subscription music
services. We know
2017 was great and
2018 looks good too,
however, there is a
debate on how long
the growth rates will
continue.
‒ Penetration;
‒ Price point;
‒ Limitations on
Anglo/American
repertoire.
Projected Year End 12/31,
2017F 2018F 2019F 2020F 2021F
Physical
Enders Analysis (6.1%) (6.2%) (6.4%) (6.5%) (6.3%)
Goldman Sachs (7.0%) (12.0%) (12.0%) (12.0%) (15.0%)
J.P. Morgan (8.2%) (9.5%) (9.1%) (8.9%) (8.8%)
Downloads
Enders Analysis 2 (11.9%) (14.3%) (13.9%) (13.5%) (13.6%)
Goldman Sachs (20.5%) (20.0%) (20.0%) (20.0%) (20.0%)
J.P. Morgan (21.7%) (20.9%) (19.9%) (18.7%) (17.1%)
Streaming
Enders Analysis 27.6% 14.7% 10.6% 9.3% 7.4%
Goldman Sachs 41.0% 32.0% 26.0% 21.0% 18.0%
J.P. Morgan 3 47.3% 38.0% 29.8% 29.7% 28.3%
Performance
Enders Analysis 7.1% 4.6% 3.3% 2.6% 2.1%
Goldman Sachs 2.0% 4.0% 4.0% 4.0% 4.0%
Synchronization
Enders Analysis 5.2% 2.9% 2.0% 2.0% 1.7%
Goldman Sachs 9.0% 5.0% 5.0% 5.0% 5.0%
5.1% 2.3% 1.5% 1.6% 1.4%
8.0%
9.2%
8.5%
8.8%
8.1%
7.0%
8.9%
9.7%
12.4%
14.1%
80
100
120
140
160
180
2016 2017F 2018F 2019F 2020F 2021F
RecordedGrowthIndexedto100
Enders Analysis Goldman Sachs J.P. Morgan

7. CONFIDENTIAL | 7
34%
22%
28%
14%
2%
Investors Have Overwhelmingly Gravitated to Publishing
Sources: IFPI: Global Music Report 2017; Goldman Sachs Global Investment Research: And the beat goes on...; Shot Tower estimates.
11%
57%
19%
12% 2%
20%
43%
21%
13%
2%
2016 2019E 2022E
Physical Paid Streaming Digital Performance Synchronization
3
RECORDED MUSIC INCOME TYPES
Streaming = huge
growth driving
recorded music
positively.
Digital Advertising =
shorter, territory
specific campaigns
(challenging synch
model).
Streaming Video =
increase in multi-
national video
content (more
production music).
Publishing benefits
from diversity.
Recorded benefits
from streaming
economics + digital
performance
royalty.
Sources: Goldman Sachs Global Investment Research: Stairway to Heaven; Enders Analysis; Shot Tower estimates.
MUSIC PUBLISHING INCOME TYPES
10%
31%
38%
18%
4%
14%
21%
42%
20%
4%
18%
14%
40%
21%
6%
2016E 2019E 2022E
Mechanical Paid Streaming Performance Synchronization Other
1 2
1. Mechanical revenue includes royalties from physical formats and downloads.
2. Performance revenue includes royalties from traditional performances (e.g., radio broadcasting and live venues) and ad-supported streaming.
3. Digital revenue includes royalties from downloads, ad-supported streaming and other revenue.

8. CONFIDENTIAL | 8
The Number of Interested Investors has Grown
Pre – 2007
(Select Players)
Strategic Players
Major Publishers
Major Labels
Corporate Buyers
Bertelsmann
Sony
Vivendi
Private Equity
Boston Ventures
CarVal
Providence Equity
TH Lee
Terra Firma
Homegrown
Indies
Today
(Select Players)
Strategic Players
Major Publishers
Major Labels
Corporate Buyers
Bertelsmann (BMG)
Sony (EMI/ATV/Music)
Vivendi (Universal)
Private Equity
Boston Ventures
CarVal
Providence Equity
TH Lee
Terra Firma
Pensions Funds
ABK (Imagem)
Ontario Teachers (Ole)
RPMI Railpen (Kobalt)
State Funds (Concord)
X
Long Dated Funds
Insurance Investors
Apollo Funds (CTM)
Black Rock Funds (PW)
Blackstone Funds (SESAC/EMI)
Family Offices
Black River (Pegula)
Reservoir (Khosrowshahi)
Round Hill (Gruss)
Warner Music (Blavatnik)
Nettwerk (HBC)
Homegrown Indies
Active Lenders
Goldman
JP Morgan
SunTrust
City National/RBC
OneWest
HSBC Private Bank
BOI
RBS
Citi
UBS
Mezz Lenders
Digital Distribution
& Infrastructure
(Select Players)
Distribution
Majors (Spotify)
Apple
Amazon
Facebook
Google
TPG/TCV/Goldman, Kleiner,
Accel, Fidelity (Spotify)
Columbus Nova (Napster)
Blavatnik (Deezer)
Sprint (Tidal)
Infrastructure
ABRY (MRI)
Shamrock (INgrooves)
MSD (Kobalt)
Google Ventures (Kobalt)
Hearst Ventures (Kobalt)Everyone
CONTENT INVESTORS

9. CONFIDENTIAL | 9
MUSIC PUBLISHING – AVG. MULTIPLE OF ALL TRANSACTIONS BY YEAR
RECORDED MUSIC – AVG. MULTIPLE OF ALL TRANSACTIONS BY YEAR
Value of Publishing and Recorded (Recent Trends)
Source: Shot Tower estimates.
1. “Major” represents larger transactions with a sale price in excess of $200 million and valued on an EBITDA multiple.
2. “Independent” represents transactions with a sale price between $20 million and $200 million and valued on an NPS/NLS multiple.
3. EBITDA multiple provided per press release.
4. Spotify enterprise value measured as of June 11, 2018. Financials translated into USD at an exchange rate of 1.178 USD/EUR.
Market multiples
are up substantially
driven by the
prospects of growth
and an expansion of
well-financed
buyers with long-
term investment
horizons.
1 2
16.4x
19.1x
12.9x
10.1x
14.5x
19.9x
17.6x
16.3x 16.1x
13.5x
8.8x 9.2x 9.0x
7.4x
9.8x
11.0x
10.2x
12.0x
16.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
16.0x
18.0x
20.0x
22.0x
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
AverageTransactionMultiple
Major Independent
18.7x
8.7x
7.0x
10.8x
6.0x
7.3x 7.5x
9.6x
12.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
16.0x
18.0x
20.0x
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
AverageTransactionMultiple
Major Independent
(EBITDA Mult.) (NPS Mult.)
1 2
(EBITDA Mult.) (NPS Mult.)
N/A
N/A
N/A
(4.9x – EV/Rev.) 4
Spotify
(18.9x – EBITDA) 3
EMI

10. CONFIDENTIAL | 10
40
60
80
100
120
140
160
180
200
220
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Revenue%GrowthIndexto100
Recorded Music Music Publishing
CD Era
1991 ‒ 1999
MP3 Era
1999 ‒ 2016
Streaming Era
2016 ‒ ?
Music Publishing M&A Multiples
Recorded Music M&A Multiples
Values are Strongly Correlated to Growth Over Time
Sources: RIAA; Enders Analysis; NMPA; Shot Tower estimates.
1. Revenue growth for music publishing and recorded music is projected after 2017.
RELATIVE MUSIC INDUSTRY REVENUE GROWTH 1
The global music industry appears to be emerging from a period
of digital disruption and is poised to reach new highs.
There is a high
correlation between
growth rates and
valuation multiples.
Current Drivers:
‒ Growth
‒ Interest Rates
‒ Asset Values
‒ Stability
(Publishing)
‒ Scarcity/
Competition
Future Drivers:
‒ Growth
‒ Interest Rates
‒ Regulation???

11. KEY DRIVERS WITH THE POTENTIAL TO IMPACT INVESTMENT
AND MONETIZATION?

12. CONFIDENTIAL | 12
…Rising Interest Rates
Increasing rates
may impact
demand for music
assets in two
respects:
‒ First, higher
borrowing
costs will
impact returns;
‒ Second, the
returns for
slower growth
elements of the
business (e.g.,
publishing)
may look less
attractive
relative to
bonds.
U.S. 10 YEAR TREASURY YIELDS

13. CONFIDENTIAL | 13
Service 2015 2016 Current % Share
Spotify’s Profitability (Positive = Fingers Crossed)
Note: Subscriber metrics in millions.
Sources: Company SEC filings and press releases; MIDiA Research; The Verge.
Western – Highly
Concentrated
(Apple / Spotify).
400+ million users
all formats.
China – Highly
Concentrated
(Tencent = 76%
market share,
NetEase = 16%,
Baidu = 4%). 700+
million users all
formats.
India –
Saavn/JioMusic,
Gaana (Tencent),
Apple, Spotify,
Amazon. 50+
million users all
formats.
28.0 48.0 75.0/160 36.0%
10.0 20.9 50.0 24.0%
“Tens of Millions”  20 million / 9.6%
6.5 6.9 9.0 4.3%
3.5 4.5 4.5 2.2%
1.0 1.0 1.0 0.5%
Other 19.3 21.4 48.6 23.4%
TOTAL 68.3 102.7 208.1 100.0%
29.6 31.3 32.7 Sat. Subs.
81.1 81.0 72.3 Act. Monthly
80.0 90.0 110.0 Reg. Users
36% 24%
60%+ Combined Share

14. CONFIDENTIAL | 14
…Scarcity Value of Both Content and Distribution (Positive)
1. Private company values are estimates of Shot Tower Capital.
2. Public company values reflect market capitalization as of June 22, 2018.
95%+ Streaming
reach controlled by
5 companies.
65%+ Global
content controlled
by 4 companies.
Digital streaming
platforms are more
highly valued given
their growth rates
and the expectation
of huge scale and
some level of
profitability.
CONTENT DISTRIBUTION
Global Revenue = $25 billion Global Revenue = +$1 trillion
Music Revenue = $5-7 billion
Estimated Value = $4.0+ trillion 1,2
Estimated Value Music = $100+ billion 1,2
Sony
(Music)
$10.0B
EMI
$4.8B
Warner
Music
$8.0B
Universal
Music
$20.0B
BMG
$1.5B
Kobalt
$700M
Other
Pub.
$3.0B
Other
Rec.
$3.0B
ASCAP,
BMI,
SESAC
$5.0B
Other
Ex-U.S.
$10.0B
Estimated Value = $70 billion 1
Apple
$909.1B
Amazon
$832.5B
Alphabet
(Google)
$807.3B
U.S.
Radio
$10.0B
SiriusXM
$32.8B
Pandora
$2.2B
Ex-U.S.
$1.0T+
(14x larger than
music industry)
Other
Digital
$4.0B
Target
$41.4B
Best
Buy
$21.3B
Spotify
$32.2B
Tencent
TBD

15. CONFIDENTIAL | 15
U.S. MUSIC ECOSYSTEM CIRCA 2018
…Technology Finishing the Job (Positive, but Uneven)
Source: Shot Tower research.
Technology has changed the industry revenue model and relationship with the consumer.
As distribution moves entirely to digital formats, tracking, payments and licensing will
become automated. After regulatory changes, fewer intermediaries will be necessary.
Label Publisher
Download
Advertisers
Service
ASCAP / BMI / SESAC
Artist Writer
iRadio / Radio
Store
File
CD / Record
Song
Manufacturer
Distributor
Performance Rights
Organizations
Ad-Supported
Stream
Distributor
Song
$$
Manager
Sound
Exchange
Consumer
SESAC/HFA
File
Song
$$
Label Publisher /
Administrator
Consumer
Advertisers
Service
Artist Writer
Song / License
Manager
Data
iRadio
FUTURE

16. CONFIDENTIAL | 16
…Changes in Regulation (Positive)
What we expect:
▪ U.S. Consent Decrees – In the next 12 months, a five-year sunset period will
commence. CRB ruling was a nice win, but this would be transformative.
▪ Music Modernization Act – Will not sail through the legislative process and will
be refined to adjust the oversight process and judicial procedures resulting from
the dispute.
▪ Global Changes – Regulation will be forced to evolve as technology continues to
change the global delivery and licensing channels. Governments and PROs will
get out in front of it with progressive changes or risk an “Uber” effect.

17. CONFIDENTIAL | 17
What the Future Holds
▪ 2019 will be a key year on the growth front and should be a good indicator of the
duration of the current growth cycle (i.e., adoption, price point, churn, impact of
Amazon, etc.).
▪ Technology’s impact on distribution will start to creep into licensing, collection
and payment (blockchain?).
▪ Fewer PROs will become necessary on a global basis with changes in technology
and regulation.
▪ We continue to believe large technology players will not get into the label or
publishing businesses on a large scale (in short, labels will continue to be very
relevant in developing and marketing new talent).
▪ Writers and artists should benefit from lower distribution and royalty collections
costs with more money finding its way back home.

18. CONFIDENTIAL | 18
Disclaimer
The principals of Shot Tower Capital LLC are registered
representatives of Shot Tower Securities LLC, Member FINRA/SIPC.
This communication does not represent a solicitation of an offer to
sell securities. Securities offered through Shot Tower Securities
LLC, Member FINRA/SIPC. Licensed to sell securities in Maryland,
New York, and California.
Shot Tower Capital LLC
621 East Pratt Street
Suite 600
Baltimore, Maryland 21202
+1 (410) 376-7900
info@shotcap.com
www.shotcap.com