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Two weeks into earnings reports for the second quarter of 2023, the music streaming business is showing that subscriptions — not advertising — are the dependable driving force behind the industry’s growth.
Subscriptions — which accounted for 65% of the U.S. recorded music business in 2022, up from 63% in 2021, according to the RIAA — aren’t affected by economic forces that influence how brands spend their advertising dollars. Consumers continue to pay monthly or annual fees for Spotify, Apple Music, Amazon Music, YouTube Music, Deezer and other offerings. Even faced with higher prices (see “pricing power” below), more people are opting for subscription services.
More information will be gleaned in the coming weeks from earnings results from Warner Music Group (Aug. 8), HYBE (Aug. 8), Sony Music Entertainment (Aug. 9), Tencent Music Entertainment (Aug. 15), Cloud Music (Aug. 24) and Anghami (no date set).
Based on earnings by Universal Music Group, Spotify, Deezer, Believe and Reservoir Media, here are three takeaways from reported results through Aug 4.
The subscription market is holding up well. Spotify beat expectations for both monthly active users (MAUs) and subscribers, “aided by improved retention and marketing efficiencies,” the company explained in its July 25 shareholder presentation. Spotify’s premium subscribers grew 17% year-over-year to 220 million, beating its guidance of 217 million. Spotify’s MAUs increased 27% year-over-year to 551 million compared to guidance of 530 million. Universal Music Group attributed subscription growth in its recorded music segment — 13% in the second quarter and 11.6% in the first half of the year — to “broad-based growth in subscribers across all major global platform partners.” Reservoir Media CEO Golnar Khosrowshahi cited Spotify’s “higher than expected subscriber numbers” in the company’s Aug. 2 earnings call and said its strong quarterly results “reflect increasing demand trends for streaming music globally.” Not all subscription services made gains, though. Deezer lost 100,000 subscribers from June 30, 2022, to June 30, 2023, and Pandora ended the quarter with 6.2 million subscribers, down 100,000 from 6.3 million a year earlier.
Services have pricing power. Spotify raised its individual subscription plan in the U.S. on July 24 to great fanfare. After all, the price had gone unchanged since the service launched in the United States in 2011, although the family plan price increased by $2 per month in 2021. Spotify is relatively late to the game, though. Deezer raised its price from 9.99 euros to 10.99 euros in January 2022 — a major factor in the company’s direct subscriber average revenue per user climbing 4.9% year over year. Apple Music and Amazon Music both raised their prices last year as well. And according to Deezer CEO Jeronimo Folgueira, the increase had “pretty much no impact on churn” — the number of subscribers who leave a service over a period — and “clearly demonstrated that music is highly undervalued, and that platforms like us have more pricing power than initially anticipated.” That said, Folgueira stated that Deezer’s guidance for full-year revenue growth does not include another price increase later in the year.
The advertising market continues to have challenges. At Spotify, music advertising revenue grew in the “mid-single digits” year-over-year, lower than the 12% (15% at constant currency) growth in total ad-supported revenue. That implies advertising revenue from podcasts, which was up 30% year-over-year, contributed to most of the growth. Spotify also noted “softer pricing due to the macroeconomic environment” that offset double-digit gains in impressions. Universal Music Group’s ad-supported streaming revenues were up 5% in the second quarter and 2% in the first half of the year. UMG’s CFO Boyd Muir said “it’s too early to call a positive turnaround in the market.” Believe is “still impacted by the weak ad-supported monetization,” said CFO/chief strategy officer Xavier Dumont. The advertising malaise extends to broadcast radio, too. Weak national advertising “remained the main factor driving a decline in total revenue,” Frank Lopez-Balboa, Cumulus executive vp/treasurer/CFO, said in the company’s July 28 earnings call. National brands appear likely to increase ad spending in the second half of the year, however, according to B Riley Securities analyst Daniel Day.
The clock is ticking. Two weeks ago, TikTok announced the launch of the beta for its new streaming service in three new markets – Mexico, Australia, and Singapore – just a few weeks after it shared plans to roll out the app in Brazil and Indonesia. This suggests that the social media giant might also soon bring TikTok Music to the United States – although a source close to the matter claims TikTok has “no current plans” to do so.
However, if it does, TikTok Music could push the industry into a new, second generation of music streaming fueled by social media – and make ByteDance one of the most powerful and vertically integrated companies in the modern music business.
TikTok teased in a recent press release that TikTok Music will provide a “social music streaming” experience. Though it remains to be seen what the U.S. version of the forthcoming service will look like, a move to prioritize social interaction and cross pollination between the TikTok social app and its music streaming counterpart plays on the company’s greatest asset – and arguably also targets the incumbents’ greatest weakness.
The streaming services could be more social. It’s hard to find any examples of a music influencer that grew their following primarily on Spotify, Apple or Amazon. There is no longer a direct messaging feature on Spotify. There are practically no ways to engage with music beyond adding it to your personal library or clicking a “heart” icon. Unless, of course, the user leaves the app and shares a song to an Instagram story.
Instead, the current streamers invested in company-selected editorial playlists and radio stations. This allowed them to gain control in the promotion and marketing of music in the late 2010s and early 2020s as the streaming market in the United States began to mature. Top curators and hosts employed at Spotify and Apple in particular – like Zane Lowe or Tuma Basa – became modern kingmakers, much like radio DJs, MTV VJs, journalists and bloggers had been before.
But Billboard found that by late 2022, this was no longer moving the needle quite like it did just a few years before. At the peak of this model in 2019, a few high placements on key playlists often guaranteed a drastic influx of streams and interest from record labels, but its potency has since waned considerably. “There used to be a world where an unknown artist would get the cover of the Fresh Finds playlist [on Spotify] and they would get between 60,000 and 100,000 streams a week,” said one manager who works primarily with developing acts. “Now you’re looking at more like 15,000 to 20,000 streams a week.”
Instead, listeners – particularly Gen Z – increasingly turned to TikTok to find their new favorite songs, likely for its more interactive and organic feel; and labels in turn began offering lucrative contracts to artists who fared well on TikTok in the same way that they once offered deals to talent who landed on key playlists. In the words of MIDiA Research’s Tatiana Cirisano, the streaming services “cultural capital” was giving way to the China-based company which had become the most important place to market and promote music. As Chris Anokute, an A&R rep-turned-manager, previously put it to Billboard, “The biggest game in town is TikTok.”
The move into streaming, if successful, will allow TikTok to not only wield power over the marketing and promotion of music, but also the consumption of it. This, coupled with its popular music distributor and artist services company SoundOn, has the potential to make the company the most powerful in the industry today. With distribution, promotion, marketing and consumption all vertically integrated, ByteDance becomes a one-stop shop. (To take it even further, ByteDance also recently launched a music AI tool called Ripple, also inching the company into the music production process too).
SoundOn already has certain advantages over competitors like AWAL, Virgin and The Orchard: It can leverage access to TikTok data that lets signees identify promotional opportunities within the app. It can also afford to be a loss-leader, given that music is not ByteDance’s primary source of revenue. If SoundOn could add in the promise of editorial playlisting on a popular streaming service, it would be an even more formidable challenger for its competition. Today, traditional artist services companies cannot guarantee playlisting on any platform – all they offer is that their team will try. Imagine if an artist services company could guarantee social media success and playlisting for an emerging artist.
In many ways, TikTok’s democratization of music discovery is an exciting thing in that it has allowed artists without industry connections a chance to build an audience. But this comes at a cost. Today’s gatekeeper is not a music professional, it is an elusive, ever-changing algorithm, created by a company already criticized for its lack of transparency. In January, Forbes discovered that TikTok employees have access to a private “heating button” that can be employed to induce an uptick in video plays, and in March, a coalition of lawmakers cited potential issues with data privacy as a reason to ban the app nationwide. (Since then, Congress has gone mostly quiet on the idea of a TikTok ban.)
The incumbent streamers still have the upper hand against TikTok Music given their robust user bases. Though video streamers like Netflix, Hulu, and MAX struggle with constant cord cutting as users hop from service-to-service depending on their current film and TV offerings, music streamers generally offer the same catalog. This builds user loyalty to their music services and could possibly insulate Spotify, Apple and Amazon from a shiny new opponent like TikTok Music, even if that opponent’s experience proves better in some ways.
TikTok, however, has already influenced the rollout of new features on streaming services before it entered the streaming business itself. Take, for example, Spotify’s announcement earlier this year of a new vertical, swipeable discovery feed that sparked comparisons to the short-form video app, or its prior recruitment of TikTok-based music influencers – like Ari Elkins and Dev Lemons – to help popularize its now-defunct live audio app, Spotify Live. So even if TikTok can’t launch a streaming service that clinches the top market share, it will certainly continue to influence its competition even more than it already has. At the very least, TikTok Music’s launch signals the start of “music streaming 2.0,” – if not an even more seismic shift in power in the overall business.
Republic Records jumped out to a huge lead early on in the market share rankings this year among current releases (those released within the past 18 months), and maintained a 12.46% current share across the first half of the year — more than four points higher than the next-closest label, Interscope Geffen A&M (8.08%). But […]
At the midyear mark of 2023, there’s one over-arching theme: so far, it’s the year of Morgan Wallen. The artist’s album One Thing At a Time is the most-consumed album of the year so far by far, racking up 3.312 million equivalent album units in the U.S. since its March release, while its single “Last Night” gobbled up the most U.S. on-demand audio streams of the year so far, with 588.7 million.
That helps explain a huge leap in country music market share so far this year, with the genre growing to 8.36% of the U.S. market, from 7.83% at the halfway point last year. Overall, in terms of current consumption units — those derived from albums released within the past 18 months — country music increased by 4.5 million equivalent album units over the same period in 2022, the highest among all 15 genres tracked by Luminate in 2023 so far.
But that’s just one of the big takeaways derived from combing through the data six months into this year. Here are four other observations from the first half of 2023.
Why is Rock so big? Catalog.
Overall, rock has grown most of any genre year over year in consumption units, with 11.2 million more units in 2023 over 2022. That growth, however, is almost entirely from catalog — 10.3 million of it, compared to 900,000 units of growth from current releases. It’s the second-largest growth metric among genres in terms of catalog, just behind R&B/hip-hop in raw numbers (11.2 million), though because R&B/hip-hop actually declined in current releases (more on that later), rock saw the biggest overall growth in unit terms.
It’s a testament to the enduring value that exists in classic rock recordings — and a reason those catalogs continue to be valued, bought and sold at such high figures — and helps explain why it still represents such a large part of the market, despite rock not generally being represented in the highest echelons of the charts. Rock’s catalog share of 23.31% is behind R&B/hip-hop’s 27.15% in the rankings, but is much higher than that of pop (12.91%) and country (7.69%), the next two genres in share.
Courtesy Photo
Consider the rankings in terms of current share: rock (10.32%) slides to third place, behind pop (10.69%) and barely ahead of country (10.16%), with Latin coming in fifth at 7.84%. And its current unit growth year over year of 900,000 is significantly behind country (4.5 million), world music (3.3 million) and Latin (2.5 million), although at least it’s still growing, while R&B/hip-hop and pop is not.
R&B/Hip-Hop: The Elephant In the Room
The drumbeat has been growing louder over the past year when it comes to what, exactly, is going on with R&B/hip-hop from a market share perspective. But despite concern that the genres’ grip on the public consciousness is getting diluted, a few things have remained consistent: it remained the largest genre in consumption units, it was still growing the most in raw numbers (if not percentage-wise), and R&B and hip-hop artists were continuously topping the charts dictating the culture.
Some of that dominance, however, has begun to slip. There is the biggest one — in the first half of the year, no hip-hop album had yet topped the Billboard 200, a distinction that finally ended in the first week of the third quarter with Lil Uzi Vert’s Pink Tape this week. And in terms of year over year unit growth, R&B/hip-hop slipped to second at 13.01% of the market’s growth, behind rock (17.71%) and just ahead of country (12.35%). And as consumption overall grew by 13.4%, R&B/hip-hop remained stagnant at 6.3% — the same mark it had at the midway point of last year. Still, it’s been a weird year; R&B/hip-hop actually accumulated more growth in raw units in the first half of 2023 (8.3 million) than in the first half of 2022 (7.8 million).
Yet there are signs for concern — and not necessarily just because of gains in other genres. R&B/hip-hop’s overall market share has slipped from 27.64% halfway through 2022 to 25.92% halfway through 2023, more than a point and a half. Its share of on-demand streaming has dropped from 29.39% to 27.31% — more than two percentage points. Overall album sales growth — huge for rock (45.85%) and pop (30.99%) — was just 2.53%, though growth at all in that metric is still positive. Even more concerning are its current numbers, which we’ll get to in a second. So, with R&B/hip-hop’s market share at its lowest point since 2018, is it just a cyclical, first-half blip due to domination by the likes of Morgan Wallen and Taylor Swift so far this year? Or something deeper?
Current Share Tells the Story of the First Half
The three genres that experienced the biggest growth over the first half of 2023 also tell the story of the first six months of the year, and they’re undeniable on several metrics. In terms of overall percentage growth year over year, World Music — which encompasses ex-U.S. genres like K-Pop and Afrobeats — was up 42.5%; Latin was up 21.9%; and Country was up 21.1%. Each managed to grow their overall share of the market significantly over the same period last year: Country, the fourth-biggest genre, rose from 7.83% to 8.36%; Latin, in fifth, grew from 6.25% to 6.72%; World, in seventh, grew from 2.20% to 2.76%. In comparison, the top three genres — R&B/Hip-Hop, Rock and Pop, in that order — all ceded share of the market at least somewhat year over year.
Looking at the current share illustrates where those gains came from. The country genre came in 4.5 million units higher than at the same point in 2022, boosting its current share from 7.98% to 10.16%. world music added 3.3 million units, vaulting over dance/electronic into sixth with a 5.22% share of the current market, up from 3.29% at this time last year. And Latin added 2.5 million units over last year’s total, increasing from 6.86% to 7.84% this year.
The flip side of that is the current percentage drops from the other leading genres. Current R&B/hip-hop share fell from 27.50% halfway through 2022 to 22.62% this year, an almost 5% decline, and dropped 8.0% in consumption units year over year. Pop slid from 12.87% to 10.69% in share, dropping 7.1% in consumption units year over year. Rock’s slip in share was more modest (10.83% to 10.32%), but also still fell, though its unit count actually grew (the slide in share is due to larger gains elsewhere). It’s a reflection of how the first half of the year has gone in terms of impactful releases in the market.
World Music’s Growth Isn’t Slowing Down
World music now accounts for 2.76% of the overall market in the U.S., up from 2.20% at the midway point last year. It’s not huge, but by percentage, it’s far and away the fastest-growing genre (up 42.5% year over year) in the industry; by raw consumption unit growth, it’s sixth-highest, having increased by 4.4 million units over its midyear 2022 mark. And it’s up by huge percentages in just about every metric: overall album sales (71.3%), physical album sales (76.4%) and on-demand streaming (38.2%) growth all far outstrip the industry overall.
Some of this is just a function of how percentages work: a smaller number that’s growing quickly will naturally have a higher percentage growth than a larger number that, while growing at a larger volume, is growing at a slower rate. But these percentages continuing getting higher, not smaller: in 2020, it grew 8.0% over 2019; in 2021, the metric was 18.9%; in 2022, it was 26.4%. From the first half of 2019 through the first half of 2023, world music is up 131.3%.
So far this year over midway through 2022, K-pop consumption is up 154.9%, and Afrobeats consumption is up 143.8%. They’re still small in terms of actual consumption numbers — K-pop’s numbers compare most directly to those of children’s music for the first half of the year, for example — but they no longer exist in the realm of the potential. The industry has spent the past few years pouring money and resources into these areas and hoping to boost these artists in the States. The metrics are no longer about what the future may look like: it’s here now.
The Contenders is a midweek column that looks at artists aiming for the top of the Billboard charts, and the strategies behind their efforts. This week (for the upcoming charts dated July 22), Taylor Swift once again leaves the rest of the pop world in the dust with perhaps her best-performing Taylor’s Version full-album recreation yet.
Taylor Swift, Speak Now (Taylor’s Version) (Republic): When it was released in 2010 as her third album, Speak Now became Taylor Swift’s first set to sell over a million copies in its first week. Her Taylor’s Version re-recording of the fan-favorite album might not post a seven-digit debut, but it’s already come closer than any other album in 2023. Billboard reported on Tuesday (July 11) that this Speak Now had passed 575,000 equivalent album units in just its first four days — already blowing past the 501,000 moved by previous mark-setter, Morgan Wallen’s One Thing at a Time, in its first frame.
Those would be incredible numbers for any new release in 2023, let alone one where 16 of the 22 tracks included are near-soundalike re-dos of 13-year-old songs. Making the 400,000 in direct sales that the album has already accrued even more impressive is that the album is only available in a handful of physical editions – three vinyl variants (including an exclusive color for Target), a CD, a cassette, and a digital release – compared to many 2020s best-sellers (including Swift’s own 2022 blockbuster Midnights), which are released in dozens of physical editions to maximize fan purchases.
Speak Now (Taylor’s Version) has already put Swift’s peers in its rearview, but how will it compare to her own recently set standards? It’s unlikely to get close to the first-week numbers of Midnights, which scored an unthinkable-for-2022 1.578 million units. But it has a very good chance of passing 2021’s Red (Taylor’s Version), which debuted with 605,000 units, to become the biggest first week for any of her three re-recordings to date.
To pass Red (Taylor’s Version) would also be pretty staggering for this Speak Now, considering it has fewer tracks (22 to Red (TV)’s 30) and lacks a song driving as much pre-release excitement as that set’s “All Too Well (10-Minute Version),” which debuted at No. 1 on the Billboard Hot 100 the same week the new Red topped the Billboard 200. (“I Can See You,” one of the set’s six first-time recordings, did receive a music video co-starring Speak Now-era Taylorverse fixtures Joey King, Taylor Lautner and Presley Cash, and looks to be due for a major Hot 100 debut next week.)
In the Mix
Lucki, S*x M*ney Dr*gs (EMPIRE): One of the most acclaimed rappers from the current rising wave of Chicago MCs, Lucki reached a career-best No. 12 on the Billboard 200 with 2012’s Flawless Like Me set. He may do even better with this month’s S*x M*ney Dr*gs mixtape, which only features one guest (fellow cult favorite Veeze) on its 15 tracks, but is already posting career-best streaming numbers that most rappers would be, well, lucky to have in 2023.
Dominic Fike, Sunburn (Columbia): If you listened to Spotify’s New Music Friday playlist last week, you might have noticed that the lead track was not from Taylor Swift’s latest, but rather from the long-awaited second album for singer-songwriter Dominic Fike. Columbia executives still have big hopes for Fike, who greatly increased his profile last year with a big role on HBO phenomenon Euphoria, and he may have something of a breakout hit with the album’s “Mona Lisa” — written for and briefly included on the deluxe edition of Metro Boomin’s Spider-Man: Across the Spider-Verse soundtrack — which climbs to No. 36 on Billboard’s Pop Airplay chart this week.
Lana Del Rey, Did You Know That There’s a Tunnel Under Ocean Blvd (Polydor/Interscope): Lana Del Rey’s ninth album debuted at No. 3 on the Billboard 200 in April — and while it’s remained on the chart for the past 15 weeks, it’s dropped all the way to No. 184. It should rebound significantly next week, though. thanks to a recent vinyl reissue with a cover featuring a partially nude photo of Del Rey. (She had previously considered the image for the album’s original cover, before deciding to “let the songs do the talking for now.”)
If Helen Grant, the daughter of late Led Zeppelin manager Peter Grant, is selling a 10% share of the band’s music assets, as reported by Music Week and The Times, she’s in for a very nice payout.
According to that article, Grant owns not only an interest in the band’s record catalog and song publishing catalog but also a 10% share in other rights including trademarks, merchandising and other business ventures. When he died in 1995, Peter Grant, who owned a 20% stake in the band’s music assets, appears to have split that stake evenly between Helen and her brother Warren, leaving each of them a 10% share.
While Led Zeppelin originally signed to Atlantic Records back in 1968, in 1975 the band started its own record label, Swan Song, and began issuing its music under that logo beginning with its fifth album, Physical Graffiti. Like other superstar acts of its day, the band later negotiated to obtain ownership of its entire recorded masters catalog, not just the Swan Song records, according to sources.
It’s unclear if Led Zeppelin still owns the rest of the Swan Song catalog, which includes albums by Bad Company, the Pretty Things and Maggie Bell — and, if it does, whether Helen Grant has a stake in that and is offering it up for sale, too. At the very least, according to the most recent filing containing a list of shareholders for Bad Company Entertainment, the Peter Grant estate has a 20% stake in that company as well. It’s unclear if that interest is a part of any contemplated sale.
The Music Week article reports that Helen Grant has hired Ian Penman of New Media Law to shop her share of the Zeppelin assets. Penmen didn’t respond to an e-mail request seeking to confirm the potential asset sale. Warner Music Group declined to comment, while queries to other possible press representatives for the band went unanswered.
According to a list of shareholders included in the last filing from Superhype Tapes Ltd — one of the dozen or so companies affiliated with the Led Zeppelin principals that have filings in Companies House (the U.K. equivalent of the U.S. SEC) — dated July 30, 2014, Led Zeppelin guitarist Jimmy Page owns 80% of the shares of Led Zeppelin music assets, while Helen and Warren Grant own 10% each. However, in the company’s July 25, 2000, filing, Page and the estate of Peter Grant were each listed as having a 50% stake in the company, while Page and fellow Led Zeppelin members Robert Plant and John Baldwin [aka John Paul Jones], as well as Joan Hudson of the band’s accounting firm, were listed as directors of the company. It’s unclear how or when the percentages changed and if it occurred through a negotiation or an earlier buyout of a portion of the Grant estate’s share in the company.
It’s also unclear which Led Zeppelin assets fall under this company, although its incorporation document, filed in October 1969, states that it was established to manufacture, produce, buy, sell, exploit and deal in gramophone records, tapes, sound recordings and other sound bearing devices and musical instruments, among other possible business lines. On the other hand, as noted, Superhype Tapes appears to be one of about a dozen companies incorporated for Led Zeppelin that have listings in Companies House, although some of those listed companies are dormant. Consequently, it’s unclear which Led Zeppelin music assets fall under the control of Superhype Tapes.
Another Led Zeppelin-affiliated company, United Blag Productions, shows Helen Grant with a 10% stake, while the other three living Led Zeppelin members each have 22.5%, as do the Bonham heirs, collectively.
According to what appears to be incorporation papers for United Blag — filed under its previous name of Langwest on Aug. 16, 1974 — around the time of the formation of Swan Song, the purpose of the company was to act as managers for singers, musicians and other creative entertainers as well as to produce and distribute sound recordings of all kinds as well as handling pictures, films and TV show appearances of all kinds.
Regardless of the incongruent ownership stakes listed for the Led Zeppelin members for Superhype Tapes and United Blag Productions, it looks like Helen Grant is selling a 10% stake in the band’s assets controlled by those two companies, which would mean she is selling a passive royalty income stream.
Still, the iconic Led Zeppelin catalog remains a considerable economic driver — averaging just over 1 million album consumption units annually in the United States alone over the last three years. As such, Billboard estimates that the band’s master recordings catalog generates about $24 million in revenue annually and that after deducting for production and distribution, the band likely reaped about $21 million of that amount. If the recordings carried a 20 times multiple, that would give the Led Zeppelin recorded masters catalog a nearly $420 million valuation — 10% of which would be $42 million.
Meanwhile, Billboard estimates that the publishing catalog averaged about $10.4 million annually over the last three years. After deducting a 10% administration fee, that would leave $9.4 million in revenue for the band, which at a 25 times multiple would be worth about $235 million.
While that valuation uses a high multiple, which some music asset traders might question, that concern would likely be offset by the upside potential for generating additional revenue through synch licensing. While synch typically can comprise about 25% of a publishing portfolio’s revenue base, Led Zeppelin has been very selective in granting licensing opportunities, which likely has depressed the band’s overall publishing revenue. Billboard’s valuation model uses a much smaller percentage than 25% of revenue for synch royalties in extrapolating overall publishing revenue.
Regardless of the publishing catalog’s valuation, it’s unclear how Grant would be paid from that considering that the principal songwriters in the band likely each own their publishing, as well as their songwriter share.
On the other hand, it’s conceivable that the band, along with Grant, collectively owns its publishing, which would divide 50% among the four band members and the Grant heirs, leaving the other 50%, or $6.35 million, for the songwriters to split; or that Grant owned 20% of the publishing and the band members owned the remaining publishing stakes in each of the songs they composed. Either way, that could leave Helen Grant with a 10% stake in the publishing, or a 5% stake in the publishing revenue, resulting in a $15 million-$16 million valuation, if the Grant estate indeed does own a stake in the band’s publishing.
But Billboard could find no mention of a Grant ownership stake in the sole Led Zeppelin publishing company that appears to be an ongoing operation, Flames of Albion Music, listed at Companies House.
The last document for that company, filed on May 11, 2016, listed Page, Plant, Baldwin and the Bonham heirs — Patricia Bonham, Jason Bonham and Zoe Bonham — as shareholders, while neither of the Grant heirs are listed.
But there is still merch revenue, trademarks and likeness and image to consider. Billboard estimates that Led Zeppelin averages about $2 million in merch each year. At a 10-times multiple, that would arrive at a $20 million valuation, with a 10% stake translating to $2 million. (Collectively, Billboard‘s valuation for Led Zeppelin’s recorded music, publishing and merch is about $670 million.)
When Madonna was forced to reschedule her 84-date Celebration Tour on Wednesday after she was stricken with a bacterial infection and hospitalized in the ICU, concern immediately turned to the pop superstar’s health (luckily, she’s expected to make a full recovery). But for industry watchers, the postponement also raises an interesting question: Just how much does it cost to reschedule a tour of that magnitude?
It’s impossible to come up with a solid number given all of the moving parts involved in a tour of this scale, particularly without having access to any insurance policies or contracts with venues and vendors. But postponing that large of a tour just over two weeks short of the July 15 opener at the Rogers Arena in Vancouver, Canada — and then rescheduling it — will nonetheless amount to a huge endeavor requiring hours of phone calls, disruptions to people’s lives and plenty of sunk costs for venues, show crew members, ticket buyers and Madonna herself.
Live Nation and Madonna’s touring team have already spent millions on equipment and infrastructure. While much of the show is custom-built and designed, there are plenty of production pieces — from speakers to staging — that are rented from major backline companies. The tour has also chartered buses and trucks and rented venues, which are expenditures that require deposits with varying costs depending on demand and availability.
Live Nation and the Madonna tour will have to pay some of these deposits, especially for those high-demand items that can’t be redirected toward other tours. In some cases, they will also be on the hook for venue deposits for canceled shows, although most venues will waive the cost to maintain a good relationship with Live Nation, which brings many arenas most of their touring content.
The largest group impacted by the postponement will be the approximately 1.2 million fans who purchased tickets for the tour, representing hundreds of millions of dollars in revenue. Some fans booked airline tickets, hotel rooms and rental properties around the tour, and some of those purchases will be deemed non-refundable. Those fans will have to make new plans after the rescheduled Madonna dates are announced, likely sometime in the next few weeks. Those who can’t attend might be able to get a refund, depending on what Madonna’s team decides, or sell their tickets on either a fan-to-fan exchange for face value or on a ticket resale site like StubHub or Vivid Seats.
The largest human costs will be borne by a much smaller group: the men and women working as roadies, touring professionals and support staff for the tour. With just over two weeks to go before opening, most positions on the tour have been filled, and many have started work building sets, editing content and rehearsing. As independent contractors, rescheduling the tour means their pay will be interrupted too, potentially leaving hundreds of people unemployed when they had planned to be working. While many, depending on the state, will receive a small severance and qualify for limited unemployment benefits, the disruption caused by the postponement will almost certainly mean that many touring professionals will not generate the income they had budgeted for this year and will now have to spend the months they thought they had secure employment looking for new work.
Fortunately, because the concert business is currently so strong at the highest level, there are more work opportunities in touring now than ever before, and some crew members will be able to immediately find replacement gigs. Others, however, will have to wait months until the rescheduled Madonna tour launches.
For the touring operation itself, the costs of the postponement could easily add up to millions of dollars. But the Celebration Tour has been so successful — more than 600,000 tickets were sold the first day tickets went on sale — that it will still amount to a huge financial windfall for Live Nation and Madonna when the tour eventually hits the road. That doesn’t mean it’ll be easy for everyone getting there
The Contenders is a midweek column that looks at artists aiming for the top of the Billboard charts, and the strategies behind their efforts. This week (for the upcoming charts dated July 1), a star rapper looks to continue his hot streak, while hard rock veterans and K-poppers also put the top spot in their sights.
Gunna, A Gift and a Curse (YSL/300): Though Gunna has been under attack on social media since last December for his supposed “snitching” in accepting an Alford plea — a formal admission of guilt while also maintaining innocence — for his part in the YSL RICO trial, it appears that he remains a prolific performer on streaming. (He denied any cooperation with the prosecution.) His new album A Gift and a Curse has littered the Spotify and Apple Music real-time charts since its release last Friday (June 16), with the shout-along “fukumean” already seeming like a breakout hit from the set.
The rapper born Sergio Giavanni Kitchens has been a regular visitor to the top spot of the Billboard 200 since his late-’10s rise to stardom. And he’s already been there three times this decade – with his own Wunna (2020) and DS4Ever (2022) albums, and as a co-lead on the YSL showcase compilation Slime Language 2 (2021). DS4Ever, Gunna’s most recent set, was also his most popular, moving 150,000 first-week units and topping even The Weeknd’s new Dawn FM to claim the top spot.
To unseat Morgan Wallen – who returns to No. 1 for a 13th frame with his One Thing at a Time blockbuster this chart week – he’ll need to do it almost entirely with streaming (with help from digital sales), as the album is not yet for sale in any physical format. Wallen posted 115,000 units in its most recent week, so if Gunna can approach his DS4ever debut performance with his new set, he should have a pretty good shot of becoming the latest act to interrupt the country star’s months-long reign.
Ateez, The World Ep.2: Outlaw (KQ/RCA/Legacy): It’s going to be a classic case of sales vs. streams in next week’s competition for top debut on the Billboard 200. Eight-piece Korean boy band Ateez has yet to establish a big stateside presence on streaming services, but like many popular K-pop acts, the act sells physical copies by the truckload – which has already helped their Spin Off: From the Witness set hit No. 7 earlier this year, and their The World Ep.1: Movement EP get all the way to No. 3 on the Billboard 200 last August.
The sequel to that latter EP, The World Ep. 2: Outlaw is also expected to make a pretty big chart splash next week, again thanks to robust physical sales. To maximize that opportunity, the octet has released 21 different collectible CD editions of Outlaw, including some signed variants, all containing branded merchandise and randomized items (action cards, partner cards, photo cards) — as well as a Target-exclusive edition.
Queens of the Stone Age, In Times New Roman… (Matador): Queens of the Stone Age albums are becoming increasingly infrequent – it’s been six years since the band’s Villains – but the veteran hard rock band has historically been a strong performer on the Billboard 200, and it even topped the chart two albums ago with 2013’s …Like Clockwork. This month’s In Times New Roman… will be helped by a series of different-colored vinyl variants, though thus far the album lacks a hit single to match Villains’ top 10-charting Rock Airplay hit “The Way You Used to Do.”
In the Mix
J. Cole, Born Sinner (ByStorm/Columbia/Dreamville/Roc Nation): As fans eagerly await a new album from Cole — and as he sticks around the top five on the BillboardHot 100 with his appearance on Lil Durk’s smash “All My Life” — fans also have new goodies to tide them over with the vinyl reissue of his 2013 chart-topper Born Sinner. The LP is available in a trio of color variants, including a translucent red exclusive to Target.
Asake, Work of Art (YNBL/Empire): Asake’s debut album Mr. Money With the Vibe was one of the most-acclaimed and best-received Afrobeats albums of 2022, reaching the top half of the Billboard 200. The Nigerian singer/songwriter looks to do even better than that set’s No. 66 bow with this month’s Work of Art, which has already scored a pair of top 10 hits on the Billboard U.S. Afrobeats Songs chart with advance tracks “Amapiano” (with Olamide) and “2:30.”
After a fan struck Bebe Rexha in the face with a cellphone during a June 18 show in New York, should the music industry consider banning mobile devices at concerts? For years, touring stars such as Bob Dylan, Jack White and Dave Chappelle have said video-recording on phones have detracted from the live experience — and that was before the airborne cellphone assault went viral on social media. But, experts say, change won’t happen immediately.
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While celebrities and musicians including Demi Lovato, John Stamos, Hayley Kiyoko and Lauren Jauregui all expressed concern for Rexha after she was rushed to a hospital and shared a photo of a black eye after the incident, Steven Adelman, vice president of the Event Safety Alliance, says, “This is not going to change anything — yet.”
“But,” he adds, “it’s the first crack in a wall that eventually is going to fall.”
Whether cellphones take away from the concert-going experience is not a new debate — but Rexha’s attack is the first major case of the devices being used for a violent act. Just last year, Silk Sonic‘s Bruno Mars griped, “With the cameras, you’re like, ‘I don’t know if I want to try out this dance move tonight.’”
“I’ve always thought, at some point, there would be a ban on cellphones because it violates an important piece of intellectual property for the artist — their live performance,” Adelman says. The challenge, he continues, is fans carry mobile tickets on phones and pay for merch and concessions via online-billing apps such as Apple Pay: “There are obviously very strong competing interests here.”
The Rexha concert incident at The Rooftop at Pier 17 is unlikely to spread, though: The alleged assailant, Nicolas Malvagna, said in a criminal complaint that he thought “it would be funny” to throw the phone. He was arraigned June 19 on harassment and assault charges, both misdemeanors. “The key here is that person was arrested and will be prosecuted, and that sends a great message: ‘You can’t do this,’” says David Yorio, who co-owns Citadel Security Agency, which works with concerts and festivals in New York. “There’s no impunity from this.” (The man who slapped Ava Max during a concert Tuesday night in Los Angeles, in contrast, was hauled away but has not been criminally charged.)
Promoters can continue to ban phones at certain events, “just another layer” of security and logistics, Yorio adds, but for larger events, like festivals, “Logistically, it’s a nightmare.”
Certain artists’ anti-phone sentiment is so robust that a startup, Yondr, has spent the last nine years providing pouches for fans to store their phones before attending concerts. Adelman is sympathetic to this approach because artists make most of their money off touring these days, and exclusive concert footage shouldn’t have to turn into free social media content against their will. “People who can just raise their cellphone and hit record are essentially violating a contract with the artist, which is [to] be part of the show-going experience,” he says.
But he adds: “People should not throw phones. And you can quote me on that.”
This is The Legal Beat, a weekly newsletter about music law from Billboard Pro, offering you a one-stop cheat sheet of big new cases, important rulings and all the fun stuff in between.
This week: Twitter is facing a lawsuit from dozens of music publishers over copyright infringement; Bad Bunny, Daddy Yankee and other reggaeton stars fight back against a massive lawsuit; unsealed documents offer key details on the gun charges against Boosie BadAzz; and much more.
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THE BIG STORY: Twitter’s $250 Million Music Problem
In last week’s least surprising development, the music publishers sued Twitter. After years of warnings from National Music Publishers’ Association — David Israelite called Elon Musk’s website his “top legal focus” earlier this year — dozens of the group’s members filed a sweeping copyright lawsuit in federal court.
Surprise or not, the case is a big deal. The publishers claim that Twitter has infringed over 1,700 different songs from writers like Taylor Swift and Beyoncé — a claim that, if proven, could put the social media giant on the hook for as much as $255 million in damages.
Damages aren’t likely the end goal for the publishers. Licensing deals outside the realm of plain ole music streaming, ranging from social media sites like Instagram to gaming platforms like Roblox to fitness services like Peloton, have become an increasingly large slice of the revenue pie for publishers and songwriters in recent years. But many of those deals only came as settlements to lawsuits — just ask Roblox and Peloton. Twitter, the publishers say, is one of the last holdouts refusing to sign such a deal.
To read more about the lawsuit, including the actual complaint itself, go read our entire story here.
If it doesn’t end in a quick settlement, the case will also be a fascinating look at the Digital Millenium Copyright Act, a federal law that limits how websites like Twitter can be sued over copyright infringement by their users — and one that has long frustrated content owners. The DMCA provides sites like Twitter with immunity from litigation over material uploaded by their users, so long as they promptly remove infringing content and ban repeated violators from the platform. The new lawsuit claims Twitter failed to do either of those things, meaning the site has legally forfeited the DMCA’s protections.
In that sense, the lawsuit against Twitter is something of spiritual sequel to a series of cases filed against internet service providers like Cox, which pioneered the argument that providers had waived the DMCA’s safe harbor by failing to crack down on subscribers who repeatedly infringed. After a federal judge ruled that Cox had lost the DMCA’s protections, a jury later ordered the company to pay $1 billion in damages to the three major music companies. Yes, billion, with a “B.”
Will those same arguments work against Twitter? Stay tuned.
Other top stories this week…
MASSIVE REGGAETON CASE – Bad Bunny, Daddy Yankee, Karol G and dozens of other artists asked a federal judge to toss out a sprawling copyright lawsuit that claims hundreds of reggaeton tracks infringed a single 1989 song. In their motion to end the case, Daddy Yankee and many other stars argued that the accusers are “effectively claiming ownership of an entire genre of music.” Bad Bunny, in his own filing, said the case aims to “stake monopolistic control over the reggaeton genre.”
BOOSIE BADAZZ GUN CHARGE – Newly-unsealed charging documents against rapper Boosie Badazz revealed that his recent federal gun charge came after San Diego police tracked his Instagram account and even used a helicopter to locate him in an allegedly gang-affiliated neighborhood.
BAD SERVICE? A judge ruled that Sony Music Entertainment could serve a copyright lawsuit on a TikTok rapper by sending him a message through his DMs. The ruling detailed how the label’s lawyers had spent months unsuccessfully trying to do so in-person — including showing up to his mom’s house on Mother’s Day “in hopes that he would be there to celebrate with her.”
50 CENT ENDS BOOZE BATTLE – The rapper reached a settlement with Rémy Martin to resolve a lawsuit that claimed his Branson brand of cognac copied the design of the company’s bottles. The confidential deal will end litigation that 50 Cent’s company had called “meritless” and designed to “destroy a competitor.”