State Champ Radio analysis
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As 2023 heads into summer, multiple signs point to a healthy and growing live music business for the rest of the year. In recent weeks, executives from the publicly traded concert promotion and ticketing companies have signaled that surging consumer demand won’t slow down, and there will be enough tours to satiate music fans’ appetite for live events.
Demand has been strong “and is showing no signs of letting up,” said Live Nation CEO Michael Rapino during the company’s May 4 earnings call. Live Nation expects to sell more than 600 million tickets in 2023, up from 550 million in 2022. To date, the concert promoter has sold more than 100 million tickets to Live Nation events, a 20% increase from the prior-year period, and expects to host a record number of fans in 2023.
Vivid Seats, the publicly traded secondary ticketing marketplace, shares Live Nation’s sentiment. “Consumers continued to crave live experiences in the first quarter,” said CEO Stan Chia during a May 9 earnings call, “and we believe this trend will continue for many years.” Vivid Seats does business primarily in the U.S. while German promoter and ticketing provider CTS Eventim focuses on Europe. “Both in Germany and internationally, we are pursuing organic growth and anticipate that our business performance will continue on its successful course,” said CTS Eventim CEO Klaus-Peter Schulenberg in the quarterly results released May 24 that reiterated the positive outlook in its 2022 annual report of “moderately higher earnings” for the live entertainment segment 2023.
The concert business is meeting — and perhaps surpassing — some lofty expectations. In 2022, as the concert business exited the pandemic, the widespread belief was that pent-up demand for in-person experiences would drive the concert business beyond pre-pandemic levels. That turned out to be true. Concert promoter Live Nation posted record revenue of $6.2 billion in the third quarter that was 67% above the same period in 2019. What’s more, the volume of fans returning to concert venues was augmented by an unmatched willingness to absorb higher prices. Frenzied demand — and sky-high prices on the secondary market — for tours by Taylor Swift, Beyonce and Bruce Springsteen have showed A-list artists have yet to find their ceiling on prices.
Concert promoters have posted strong quarterly earnings that fit their narratives. Live Nation’s first-quarter revenue was up 71% to $3.1 billion. CTS Eventim’s online ticket sales increased 58% to 18 million as consolidated revenue improved 163% to 366.2 million euros ($393 million). At Vivid Seats, which also does business in major sports such as baseball and basketball, first quarter revenue grew 23.2% to $161 million and adjusted earnings before interest, taxes, depreciation and amortization doubled to $42.4 million.
Investors absorb past earnings history while figuring out what to expect in the future, and according to JP Morgan analyst David Karnovky they often ask two questions about Live Nation: First, is there enough supply to meet growing, healthy demand? Yes, Live Nation president and CFO Joe Berchtold said at JP Morgan’s Global Technology, Media and Communications conference on Tuesday. That’s because global streaming platforms such as Spotify and social media apps like Instagram and TikTok allow artists to build global followings in ways that weren’t previously possible, he explained. K-pop and other up-and-coming genres of music “that maybe once were regional are now going global,” he said, and artists that used to sell out mid-sized venues are now selling out stadiums. “So, you’re seeing that supply continue to build.”
The second thing investors want to know is how demand will respond during a softer economy. Live Nation closely follows the indicators — such as on-sales show closings — Berchtold said, “but we’re not seeing anything that gives us pause.” Separately, Berchtold noted that Live Nation’s research indicates getting back to concerts are one of fans’ top priorities after the pandemic and will be “one of the last things they’re going to cut back on.”
Vivid Seats CFO Lawrence Fey also addressed the possibility of an economic downturn — a scenario becoming increasingly likely in the U.S. should Congress fail to find a compromise to raise the debt ceiling by early June. “[T]here’s a lot of chatter and concern out there” that demand will weaken “in the not-too-distant future,” said Fey, “but it continues to be the case that we’re seeing very robust demand across our event categories [and] across price points.” Beyond the consistently strong demand, Vivid Seats has “been pleasantly surprised by the supply calendar,” particularly a concert schedule that includes recently announced tours by Drake and Aerosmith, he added, “and [that] gives us optimism.”
Now that the pandemic is over, “it is anything but ‘business as usual’” at CISAC, the international trade organization for copyright collecting societies, according to director general Gadi Oron in its 2023 annual report.
In a time of change for collecting societies, which bring in a combined 9.6 billion euros a year, CISAC’s priorities include lobbying governments in support of member societies, continuing its campaign to support the ISWC code system to identify works, and navigating the challenges of AI, which Oron calls “our biggest priority now in terms of policy.”
The biggest news in the report about a particular market is the success of Autodia, the Greek collecting society that has become prominent since the 2018 dissolution of AEPI. “In 2018, I gave a presentation to the board [of CISAC and said we must do something,” Oron remembers. AEPI’s collapse was epic, complete with a 2017 police raid and a failure to pay out 42.5 million euros (more than the total amount it distributed some years), according to an audit ordered by the Greek Ministry of Culture. Oron feared the potential collapse of a market that had been worth about 50 million euros a year in the late 1990s, so he asked the CISAC’s board to support a plan to fund and help Autodia, which was then a small nonprofit society that in 2018 collected less than a million euros.
In 2022, Autodia collected 16.2 million euros, and it now collects for all three major publishers, BMG, and many of its sister societies, according to CEO Margarita Panagiotopoulou. “We are growing fast and gaining market share,” Panagiotopoulou says, “and that is on track to continue.”
Autodia now faces competition from EDEM, which mostly represents Greek repertoire and took in about 8 million euros last year.
The first phase of CISAC’s plan was to get Autodia loans from its member societies and send to Athens consultant Declan Rudden, who became interim CEO of Autodia to get the society running. He helped make reciprocal agreements with international societies and court publishers, as well as compete with EYED, a government-controlled entity that was designated as the temporary successor to AEPI. (Some major publishers originally signed with EYED but most of them are now with Autodia.) One day, as Rudden and team were putting together desks in the Autodia office, it was raided by the Greek department of labor and fined for keeping employees after 5pm without notifying them in advance. (This is illegal in Greece, but raids are uncommon.) “They did everything to make our life difficult,” remembers Rudden, who runs the consultancy SaorServices.
Gradually, the local team took over, and Autodia took in more than 4 million euros by 2019, then more than 12 million euros by 2022, as the pandemic subsided. “The contribution of CISAC was very important,” Panagiotopoulou says, in terms of funding, legitimacy and lobbying both the Greek government and songwriters themselves.
Greece is still a contested market. “Market share is a matter of disagreement,” says EDEM COO George Myzalis. (Panagiotopoulou says Autodia has more than 85% market share, but the respective royalty collection numbers imply a lower number.) Along the way, the technology company Orfium, which has some operations based in Athens, almost entered the market as well, but it ultimately withdrew. (The company operates in other sectors and did not respond to a request for comment.) Right now, venues and broadcasters in Greece need licenses from both Autodia and EDEM, especially if they want to play both the international repertoire that Autodia dominates as well as the Greek compositions that EDEM tends to have.
Some big publishers believe that the growing success of Autodia limits the possibilities for the kind of direct licensing model that they see as more efficient. One idea that at least some of them favored was to establsh EDEM as an organization that would offer more optionality by requiring less exclusive grants of rights – and a model for what they believe could be a more efficient future for the publishing business. As Autodia grows, that is becoming less likely – which some publishers see as a wasted opoortunity and other societies and some other publishers and songwriters see as a win for the current structure, which for all of its complexity offers more of a balance of power between big players and small ones.
The only things most executives seem to agree on is that the situation in Greece is far better than it was under AEPI and that it is getting better, even if it’s not where it should be. “AEPI was a disaster,” says Peermusic European president Nigel Elderton. “Autodia have their act together and they’re paying royalties through and they’re starting to grow.”
At a time when the traditional collecting society model is being challenged by direct licensing and a growing number of for-profit royalty organizations, both the other societies that supported Autodia and the publishers that favored another model agree that the implications of the society’s success go beyond Greece. Now that CISAC has showed it can help turn around a society in a market that’s perceived to be dysfunctional, it could potentially do so again.
“This was 10 times harder than I could have imagined,” Oron says. “But we’ve proven to ourselves that we can do it. Whether we can do it in other countries depends, but we have proof that we can do it.”
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 June 4), a veteran rock group looks to score its first Billboard 200 No. 1 of the 2020s, with competition from a U.K. singer-songwriter, a couple hard rock outfits, and – of course – Morgan Wallen.
Dave Matthews Band, Walk Around the Moon (RCA): It might not be the first group that comes to mind when naming the biggest acts of the past 30 years, but few rock bands have ever enjoyed as consistent success as the Dave Matthews Band on the Billboard 200. The group has reached No. 1 with each of their last seven studio albums — a streak dating back to 1998’s Before These Crowded Streets – and hopes to make it eight with the release of last Friday’s (May 19) Walk Around the Moon, its first album of the 2020s.
However, the DMB’s chances to unseat Morgan Wallen (11 weeks and counting with his One Thing at a Time) will be impacted by a change in Billboard’s charts since the last time it released an album: the 2020 elimination of ticket bundles from Billboard 200 calculations, which previously provided a big boost to the exceedingly popular live outfit. (Recent rule changes have reintroduced “fan pack” bundles to Billboard chart calculations, but through merch rather than tickets, and with much stricter rules about eligibility.) Instead, the band will have to rely largely on physical sales — to which end, it has released multiple vinyl variants, including exclusive color variants for the band’s fan club, Barnes & Noble, independent record stores and Target.
Lewis Capaldi, Broken by Desire to Be Heavenly Sent (Vertigo/Universal/Capitol): Though Scottish singer-songwriter Lewis Capaldi reached the apex of the Billboard Hot 100 with his late-’10s breakthrough hit “Someone You Loved,” he topped out at No. 20 on the Billboard 200 with debut album Divinely Uninspired to a Hellish Extent. After a few years of steady fanbase building, he may fare a little better with sophomore set Broken by Desire to Be Heavenly Sent — which features a more modest Hot 100 success with lead single “Forget Me” (No. 58) but has multiple vinyl LPs, four CD editions and even five cassette variants available for purchase.
Summer Walker, Clear 2: Soft Life (LVRN/Interscope): R&B star Summer Walker is on her way to being one of the most consistent LP artists of her generation — 2019 debut set Over It hit No. 2 on the Billboard 200 and its 2021 sequel, Still Over It, made it to No. 1, both also drawing considerable critical acclaim – but her EP success has been less resounding, with 2020’s Life on Earth tapping out at No. 8, with no real breakout hits. Her latest EP is Clear 2: Soft Life, a nine-track offering with a pair of big-name guests in J. Cole and Childish Gambino — but again, the set’s songs have not performed on the streaming charts the way Still Over It’s tracks did in their first week, suggesting fans still want to enjoy a longer Summer.
In the Mix
Ghost, Phantomine (Loma Vista) / Sleep Token, Take Me Back to Eden (Spinefarm): The streaming era has not been particularly generous to hard rock and heavy metal, but two bands from those genres that have found real success are Ghost and Sleep Token. Both will impact the charts next week with new releases: Ghost with a covers EP (featuring takes on Genesis, Iron Maiden and Tina Turner) and Sleep Token with their first LP since going viral with advance track “The Summoning” earlier this year. Those built-in streaming numbers will boost Eden, while Phantomine is aided by multiple vinyl LP variants and (somewhat ironically) a Spotify-exclusive cassette.
Beyoncé, Renaissance (Parkwood/Columbia): Whether it can spark the kind of extended catalog-wide gains that Taylor Swift’s Eras Tour has in its first couple months remains to be seen, but the launch of Beyoncé’s Renaissance Tour has already given its titular album a nice bump on the Billboard 200, lifting it 49-34 on this week’s chart. It may rise even higher next week with the Friday release of her new “America Has a Problem” remix, featuring rap superstar Kendrick Lamar, which is off to a good start on streaming and whose metrics will be rolled in with the original Renaissance album cut.
A couple of years after the COVID-19 pandemic took radio listeners out of their vehicles and a recession caused an advertising slowdown, the radio industry is experiencing another decline. That has complicated the financial position of Audacy, the second-largest radio company in the United States and a major player in the podcast market.
Warning lights appeared again last week when the company revealed in its May 10th 10-Q filing that “current macroeconomic conditions” such as rising inflation and interest rates and lower advertising revenue “have created, and may continue to create, significant uncertainty in operations.” Those factors “have had, and are expected to continue to have, a material adverse effect” on Audacy’s forecasted revenue, which is “unlikely to be sufficient” to maintain compliance of the financial debt covenants its lenders impose to ensure it can make its interest payments. As a result, Audacy explained, the company could default on its debt — which could then cause that debt to become immediately payable.
On Tuesday (May 16), a week after the March 10 filing, the New York Stock Exchange (NYSE) decided to halt trading of Audacy’s shares in order to delist the company. It was an expected move. Audacy, which changed its name from Entercom in March 2021, last traded at $0.09 per share — down nearly 63% year-to-date — before trading on the NYSE was halted. The NYSE, which has rules to maintain minimum share prices, issued a warning to Audacy on July 31 because its average closing price over a consecutive-day trading period was below $1. Audacy last closed above $1 per share on July 5, 2022 — meaning it remained below $1 for 218 consecutive trading days.
Investors have lost some faith in radio companies’ stocks as advertising growth weakened in 2022. Year-to-date, shares of iHeartMedia, the nation’s largest radio company, have fallen 55.3%. Likewise, shares of Cumulus Media, the third-largest radio company, are down 47.5%. Market conditions appear to be improving, however. iHeartMedia expects its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to improve throughout 2023, CEO Bob Pittman said during the company’s May 2 earnings call. “And if this advertising market recovery trend continues in 2024,” Pittman added, “we expect to resume our growth trajectory that was interrupted by this period of advertising softness.”
The advertising market is part of Audacy’s problem, but it’s not the entire problem, according to Craig Huber, media analyst at Huber Research Partners. “The number one issue is too much debt in a secular declining industry,” says Huber. Audacy acquired most of its $1.9 billion of long-term debt from its 2017 merger with CBS Radio. That deal increased Audacy’s revenue more than four-fold, from $367 million in 2016 to $1.7 billion in 2018, but also increased its debt from $468 million at the end of 2016 to $1.86 billion at the end of 2017.
The debt has been a drag on Audacy’s cash flow. In 2022, Audacy’s net interest expense was $107.5 million — about 8.6% of the company’s annual revenue of $1.25 billion. After paying interest to service its debt, Audacy’s free cash flow in 2022 was -$31.8 million. “They haven’t done enough to take out costs” to achieve positive free cash flow, says Huber, and revenue hasn’t met the company’s own expectations.
When the merger with CBS Radio was announced in 2017, the combined companies had adjusted EBITDA of $500 million, including “expected transaction synergies,” according to the press release. In 2022, adjusted EBITDA was just $138 million. Even though Audacy was in compliance with its debt covenants on March 31, the company has expressed concern about its ability “to continue as a going concern” over the next 12 months.
Audacy operates in a difficult business that’s losing listening time as people change their listening habits and migrate to streaming platforms. Although Audacy, like iHeartMedia and Cumulus, has invested in digital platforms — it acquired podcasting companies Pineapple Street and Cadence13 in 2019 and was the No. 8 podcasting network in Q3 and Q4, according to Edison Research — revenue fell about 14% between 2018, the first full year after the CBS Radio merger, and 2022.
With no way around the soft advertising market, Audacy has started cutting costs and selling non-core assets. The company expects its costs will decline 4%, or $35 million, in the last three quarters of 2023, chairman/president/CEO David Field said during the May 10 earnings call. He also said the company raised $17 million in the first quarter from sales of broadcast towers and expects to close on the sale of two stations for $15.5 million in the second or third quarter.
As for Audacy’s stock, trading volume will decrease now that it’s been delisted. Since it started selling only over the counter (through a broker-deal, not on an exchange), the share price has fallen: On Wednesday, Audacy shares declined nearly 24% to $0.04, and they ended the week at $0.06.
The company will now take steps to get back to the NYSE. “While we are disappointed by the NYSE’s decision, we are hopeful we will find our way back to the exchange later this year as we execute our action plans which include a reverse stock split to satisfy NYSE rules, the continued execution of our liability management plans and working with our financial advisors to refinance our debt,” Field said in a May 16 press release. Shareholders will vote on the reverse stock split at the annual meeting on May 24. By working with the factors it can control, Audacy can soften the impact of the broader market conditions it cannot control.
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 May 20), new albums from big names in the worlds of pop, hip-hop and country look to impact the Billboard 200’s top tier — along with a reissued dance chart-topper from a decade ago.
Jonas Brothers, The Album (Republic): The brothers band already had one of the century’s most successful comebacks after a decade-long hiatus in 2019, topping both the Billboard 200 and the Billboard Hot 100 with their Happiness Begins album and its single “Sucker.” Now the trio looks to do it again with The Album — a set heavily influenced by ‘70s and ‘80s top 40, as well as by their lives as family men.
The Album lacks a lead single as popular as “Sucker,” but the addictive “Waffle House” has started to scale the Hot 100, climbing to No. 82 this week. The group has also been extremely visible in its promotional lead-up to the album, performing two songs from it on Saturday Night Live in April, and kicking off its Five Albums, One Night Tour at Yankee Stadium, playing all of not only The Album, but also their other four albums before it.
YoungBoy Never Broke Again, Richest Opp (Never Broke Again/Motown): Surprise: Three weeks after his second full-length of 2023, April’s Don’t Try This at Home, YoungBoy is back with the new mixtape Richest Opp. At just 17 tracks, it’s about half the running time of Home, and with none of its big-name features. But it does come with some drama: Opp, announced just days before its release, was set to drop the same day as a (later delayed) new album from fellow star rapper Lil Durk, who YoungBoy has been taking shots at over social media, and who is one of the rappers YoungBoy calls out in the new set’s antagonistic “F–k the Industry Pt. 2.”
Bailey Zimmerman, Religiously. The Album (Warner Nashville/Elektra): As Morgan Wallen continues his still-uninterrupted reign atop the Billboard 200 — now at 10 weeks and counting for his One Thing at a Time — he faces a challenge from a breakout artist whose sound and ascent both mirror his own. Bailey Zimmerman has become one of the most consistently viral artists in country music — with radio success now to match, now that Hot 100 top 10 hit “Rock and a Hard Place” also topped the Country Airplay chart for six weeks — thanks to a delivery that similarly mixes power and vulnerability and lyrics that feel both personal and clever.
Whether the student can depose the master depends on if the rest of his debut album Religiously. The Album streams as well as its advance singles, “Rock” and fellow Hot 100 hits “Fall in Love” and “Fix’n to Break,” all of which are included among the set’s 16 tracks. Zimmerman will also get a boost from several sales variants, including a signed CD (available via his web store), as well as digital and cassette releases.
In the Mix
Daft Punk, Random Access Memories (Columbia): Though the duo of Thomas Bangalter and Guy-Manuel de Homem-Christo officially went their separate ways two years ago, the robots are back this week with a 10th anniversary edition of their Billboard 200-topping, album of the year Grammy-winning 2013 album Random Access Memories. The set features a new disk of bonus cuts — including demos, alternate versions and even sequels to some of the original’s tracks – and can be purchased digitally, or as a triple-LP vinyl or double-disc CD set.
Lauren Daigle, Lauren Daigle (Centricity/Atlantic): It’s been five years since CCM breakthrough artist Lauren Daigle crashed the charts with her No. 3-peaking Look Up Child LP and its surprise No. 29 Hot 100 hit “You Say,” but the powerhouse artist often referred to as “the Christian Adele” is now back with her self-titled third album. Lauren Daigle has yet to spawn a crossover hit like “You Say,” but lead single “Thank God I Do” topped Billboard’s Hot Christian Songs listing, and is available for sale in three CD versions and a whopping six vinyl variants, as well as digitally.
Is there another $1 billion in global publishing royalties that rights holders can gain by using better technology? That’s what Kobalt CEO Laurent Hubert says.
When Kobalt was bought by Francisco Partners last September, the disruptive innovator known for its publishing administration clients like Karol G, Phoebe Bridgers and Max Martin said that a primary goal of this next chapter would be growing its little known and even less understood global digital rights collections society for compositions, the American Music Rights Association.
In the months since, Kobalt and its new owners have refined their strategy for scaling this “unpolished gem,” as Francisco Partners and Kobalt board director Matt Spetzler calls AMRA. Their first hurdle? Explaining what exactly the global mechanical and performance rights society focused on collecting digital-specific income can accomplish. “Too few people know what AMRA does,” says Hubert.
In an industry where, according to CISAC’s 2021 annual report, over 36% of global music publishing revenue royalties come from digital sources — a figure AMRA says will grow to 80% within five years — Kobalt believes AMRA can better leverage its technology and its direct agreements with digital service providers to streamline digital royalty collection across 212 countries, cutting out the friction or delays of a traditional performing rights organization (PRO). Their biggest licensees include some of the largest DSPs, like Spotify and Apple Music, but they are also working with promising new brands like China-based TikTok rival Kuaishou and others.
AMRA says it is a one-of-a-kind service, providing clients faster turnarounds for royalty collection (in six to nine months), more precise accounting for digital royalties and audit rights, and greater transparency that its executives say make AMRA clients and the wider industry a lot more money.
How much? AMRA CEO Tomas Ericsson estimates that clients can gain “as much as 30%” more royalties in certain regions. Hubert contends that if his companies can reduce the percentage of money that leaks from the $8 billion to $9 billion of royalties collected by the global music industry on the publishing side, excluding writer’s share — “leakage” that stems from high intermediary costs, poor matching, undercollection and underlicensing — AMRA and other players in the industry could grow the pie by another $1 billion for collection and distribution. AMRA could be a tool to help accomplish that, Hubert says.
Ericsson explains that AMRA can go to streaming services and “offer the entire catalog for Kobalt music publishing and an additional three publishers and an additional 180 writers to these streaming services, and we can give them those rights globally under one license. [The streaming services] report to us directly, and they pay us directly.
“In doing so, we can avoid a lot of noise, high fees, inefficiencies, poor technology and local issues,” Ericsson says.
Since its acquisition by Kobalt in 2015, AMRA has distributed almost $500 million in digital royalties on behalf of songwriters and rights holders. Managed as a separate entity under the Kobalt umbrella, AMRA generated $117.3 million in revenue in the fiscal year ending June 30, 2022, and the company currently expects AMRA will generate $150 million in revenue during this fiscal year. Hubert declines to provide specific financial targets but says he expects double-digit revenue growth this year from AMRA, and that its growth rate will substantially exceed Kobalt’s.
Apart from its DSP licensees, AMRA works with songwriters such as Julia Michaels, Lindsey Buckingham, Sam Hollander and independent publishers like Sundae Music Publishing, Anthem and Spirit. It’s also partnering with functional or mood-music companies, such as Strange Fruits, Vanity Snare Music, Lullify Music and Acrylic Records, whose music is popular on passive-listening playlists. Kobalt remains AMRA’s largest licensee, Ericsson says.
Kobalt, AMRA and its new owners are aligned on their aim to massively scale AMRA. Those owners are Francisco Partners, a California-based private equity firm that favors tech-forward music companies; MUSIC, the firm of music industry veteran and investor Matt Pincus; and Dundee Partners, the quietly influential family office of Stephen and Sam Hendel whose investments range from The Knitting Factory to the Fela! musical to music investing platform JKBX. Kobalt founder and chairman Willard Ahdritz and Hubert also have equity stakes in the company and have signed long-term contracts to remain in their roles.
Through interviews with all those stakeholders, AMRA’s emerging growth strategy has three prongs. The first is to expand its list of publishing clients, looking for small, medium and large indie publishers.
At a faster and larger clip, AMRA also aims to exploit opportunities with other niche music genres in the Latin and African markets in a bid to replicate the success it had partnering with mood-music companies. It also aims to take on more clients on the “long-tail end of the business” — songwriters who may not be published or affiliated but have steady streaming income.
This last prong of the strategy reflects the influence of Francisco Partners. In the past two years or so, the firm has invested $2 billion in six music companies, five of which are geared toward music creators, ranging from audio production and DJ’ing software and hardware to a plugin platform with marketing, distribution and authorization services. Managed under the umbrella of SoundWide, Francisco Partners says these companies have a combined 7 million users.
“We have seen the marketplace has shifted and grown around the creator community,” Hubert says. “We have the capabilities from a scaling and tech stack perspective to go after that market.”
AMRA faces hurdles if it’s to maintain formidable growth. Tracking digital royalties is challenging, given metadata errors and fast-growing use cases. The association is also held back when it comes to nondigital royalties, where existing laws and collection societies prevent it from operating as swiftly or accurately as it can with digital revenue. Songwriters in particular are the most restricted: They can use AMRA to collect their digital performance and mechanical royalties, as well as offline royalties, but the offline royalties still pass through a traditional PRO before reaching AMRA, meaning the writer will be charged two fees: one from the traditional organization, then a “significantly lower” fee from AMRA. Also, although AMRA collects in 212 countries, two of the world’s most royalty-rich nations, China and the United States, are not part of their offering due to local laws.
Still, AMRA will bring all of its promised efficiencies to the digital side, which is what the company anticipates will far outweigh offline royalties soon. The company believes it to be uniquely positioned to collect those royalties. As it likes to say: “AMRA is a category of one.”
On April 16 at Coachella, finally, after years of postponements, and an hour late that night, Frank Ocean performed his first concert in six years, closing the country’s most-watched music festival with a set that left many fans confused and even disgruntled. Transforming the event’s main stage with a giant screen spanning nearly the full width, Ocean and his band gave the impression they were bringing fans into the recording studio — the kind in which he has presumably been working on his much-anticipated third studio album. Tinkering with remixed versions of his beloved songs, creative camera shots often directed fans’ attention away from the reclusive singer on stage and towards his image on screen.
It was not the kind of fan-friendly hit parade some had surely been hoping for, and after Ocean abruptly ended early (albeit 20 minutes past curfew), the negative reviews started flowing. Days later, he canceled his performance for the festival’s second weekend due to an ankle injury and retreated into the private life he’s built for himself away from the limelight. When he’ll come back — either onstage or with new music — is anyone’s guess.
Since the 2011 release of his debut mixtape, Nostalgia Ultra, Ocean has spent more time out of the industry than in it, releasing only two albums and performing live just 25 to 30 times in the last decade, almost exclusively at festivals. So far, that has worked out pretty well for him, creating pent-up demand that led to his booking atop last month’s Coachella, the world’s largest multi-genre festival. The last time Ocean performed in the United States was in 2017 at the Panorama festival in New York — produced by Goldenvoice, the Los Angeles-based company behind Coachella — about a year after releasing his last album, Blonde. There, Ocean ended on a high note, with New York Times reporter Jon Caramanica calling it a “a grand-scale meditation on feelings and politics” that “proved you can translate intimacy on a giant scale.”
Ahead of Ocean’s Coachella set last month, anticipation was at fever pitch. The singer had originally been booked to headline the 2020 festival before the coronavirus pandemic postponed the event for two years. Then, in 2022, it was announced that Ocean would hold off on his festival performance until 2023. All the while, fans have been waiting for a new album that still has not come, satiated only slightly by occasional features, new songs shared on his Blonded Radio show on Apple Music, miscellaneous creative and fashion projects and appearances at the Met Gala. By withholding from fans in an era where so much revolves around the “attention economy,” Ocean’s passionate fans have only become hungrier for new material from the enigmatic superstar whose long absences are viewed as a product of the singer’s meticulous pursuit of perfection.
“He’d rather do nothing than do something that’s not quite right,” Caramanica wrote in his review of Ocean’s Panorama performance. “And doing nothing has also become, in this era of blithe ubiquity, a daring and quite perversely loud kind of performance.”
If being quiet made Ocean’s stock rise, might his widely panned, self-admittedly “chaotic” comeback performance at Coachella — and his decision to pull out of the second weekend — have pushed his stock back down?
“He flopped,” said one prominent booking agent who spoke on the condition of anonymity. “Is that a career-ender — being a fallible, over-confident 35-year-old young man with one public blemish in an otherwise brilliant career? Of course not…. After more than a decade of brilliant songwriting and performance, he is entitled to make a mistake or two.”
Whether Ocean’s Coachella set was bad or misunderstood is a point of debate, but the widely negative reception was seemingly enough to make him back out of the festival’s second weekend. For many acts, a show like this would be a major reputational hit, causing fans to second-guess attending a future festival he’s booked on — or promoters to think twice about booking him at all.
“When he releases [new] music, am I gonna give it a listen? Yes. [But] if he announces a tour date, am I going to be hesitant to go see him? … It’s a risk,” says Adrian Romo, 29, who traveled from Houston to see Ocean perform at Coachella’s second weekend. “Your fans have been waiting for however many years, you have the biggest stage in the world, and then you do that? It’s like, what can I expect from you in the future? It makes you look at it a little bit differently.”
“I’m not excited [about him] anymore. He lost a fan,” adds Romo’s boyfriend, Oren Rosenbaum, 27.
“If I am a promoter, who is considering him or a comparable artist for my festival, I’m probably going to go with the comparable artist because my trust has been shaken,” says booking agent Malachai Johns with the Allive talent agency.
Ocean’s profile has thrived out of the limelight, however, and it’s not a stretch to imagine his Coachella set driving further fan interest in what he does next, or to even witness another performance of this supposedly bad set — which was not livestreamed on the festival’s YouTube feed, as originally planned — for themselves. Streams for the singer’s music increased 94% in the days following the festival, and much to fans’ excitement he teased a brief mention of a “new album” during his performance.
“[Ocean] wasn’t planning to replicate Coachella at other festivals this summer and cash in — he doesn’t have any other concerts on his calendar for the entire year,” says a source close to the artist. As for the $4 million per set Ocean was to receive, much of that money was spent on the production of an elaborate set that was not used due to Ocean’s ankle injury. While Ocean is interested in making money, the source tells Billboard, he is not interested in going on tour and or being a festival headliner right now, noting that the Coachella performance was an effort to fulfill a commitment he made to Goldenvoice president and CEO Paul Tollett in 2020 and was never meant to serve as a launching point for a tour.
In the United States, Ocean exclusively works with Tollett and Goldenvoice for festival bookings — a relationship he’s developed in part through his friendship with rapper Tyler, the Creator. Sources say that even after all the negative attention Ocean’s Coachella set received, and the hassle of reorganizing the second weekend when he pulled out, there’s no bad blood between Ocean, his agent Brent Smith and Tollett, and they’re all open to working together again in the future.
If or when Ocean decides he wants to tour, however, he’ll assume far more liability for his shows. Unlike festivals, where fans are buying tickets to a larger event and scheduling is subject to change, canceling touring concerts usually requires refunding fans unless the show is rescheduled. The cost of trying to reschedule a tour can eat into profits and make the entire effort unsustainable if not carefully managed.
It’s also hard to determine Ocean’s drawing power, since he’s basically only performed at festivals for the last decade. His career skyrocketed soon after the release of Nostalgia Ultra, just as the U.S. festival business was taking off and many artists at the time opted to forgo the traditional touring model for the less risky festival circuit where artists are guaranteed a performance fee no matter how well tickets sold.
The downside is that artists who spent the early part of their careers performing at festivals have a challenging time building a live fan base as headliners later in their career. Ocean would certainly attract ticket buyers for a traditional venue tour, but it’s totally untested whether he could draw the kind of regular audience that would earn him $4 million a night, like his Coachella billing. Whether he wants it at all is a different question altogether.
A representative for Ocean did not respond to request for comment at time of publishing.
Sens. Amy Klobuchar and Richard Blumenthal’s new legislation aims to take on Ticketmaster by clamping down on the use of long-term contracts to lock up the exclusive ticketing rights of U.S. venues and festivals. But it could backfire in a way that would negatively affect venues and fans.
Titled the Unlocking Ticketing Markets Act, the legislation — introduced on the same day as a second bill from Sens. Maria Cantwell (D-Wash.) and Ted Cruz (R-Texas) that would ban hidden ticket fees — is a clear attempt to break Ticketmaster’s grip on the ticketing industry, although it never actually mentions the Live Nation-owned company by name. (A press release announcing the Unlocking Ticket Markets Act says today’s concert marketplace is dominated “by one company” with a “70-80 percent market share” thanks in part to the long-term contracts its clients sign for its services.) But while Klobuchar and Blumental believe shortening ticketing contracts will promote competition, the proposal doesn’t seem to consider the benefits these contracts offer the venue clients.
Ever since Ticketmaster dethroned Ticketron as the top ticket seller in the 1980s, the company has built its dominance by offering large upfront cash payments in exchange for exclusive deals. This practice has become commonplace from ticketing companies in live entertainment, and venues and sports teams have come to rely on these advances — which can equal hundreds of thousands of dollars for smaller venues and millions of dollars for arenas and stadiums, increasing in value based on the length of the term — that are paid off over the term of the deal through fees added to the face value of each ticket.
This is a bargaining tool the ticketing companies use to acquire more venue customers, but within that, it’s at the venues’ discretion what kind of deal to take, passing the cost of that loan onto their customers as ticketing fees. If venues haven’t repaid the advance at the end of the contract term, they typically have two options: cut a check to the ticketing company to cover the difference or re-up their deal and borrow more money.
Klobuchar and Blumenthal’s bill would essentially shorten the length of the exclusive ticketing contracts by ordering the Federal Trade Commission to “prevent the use of excessively long multi-year exclusive contracts,” according to a press release announcing the proposed legislation. (The text of the Unlocking Ticketing Markets Act is not public, so it’s not clear how “excessively long” is defined, though average ticketing contracts are about five to six years.) If the FTC opted to limit ticketing to half of the average terms, Ticketmaster’s competitors would have twice as many opportunities to bid for those contracts the company holds.
Shorter contracts would either mean less money for venues, or greater risk that they would fail to repay the advances — in which case venues would either need to repay the remaining balance or negotiate that debt into a contract renewal. For example, a temporary four-month downturn in business is going to have a greater impact on a two-year, $2 million loan than it would on a four-year, $4 million loan. To protect themselves, ticketing companies would likely increase the fees added to tickets to recoup faster, thereby reducing the heightened risk of default — likely meaning higher costs to consumers.
A bill focused on contract length also fails to address long-standing complaints that venues often work with Ticketmaster because of a perception that it means parent company Live Nation will bring more events to their building. This sort of business practice is prohibited under the consent decree that has governed Live Nation and Ticketmaster’s operations since merging in 2010, but that hasn’t stopped accusations of anticompetitive behavior. While Live Nation has long denied this charge, during a January Senate Judiciary hearing probing Ticketmaster’s botched sale for Taylor Swift’s Eras Tour, Sens. Klobuchar and Blumenthal indicated they believed that Ticketmaster’s relationship with Live Nation was the main reason Ticketmaster held a such a large market share of the ticketing business. Term lengths of the company’s contracts, however, were rarely mentioned.
In response to the introduction of the Unlocking Ticketing Markets Act, a Ticketmaster spokesperson told Billboard, “The ticketing industry is more competitive than ever. Ticketmaster wins business because it offers the best product available for venues, and the length of contracts is generally decided by venues and the guaranteed payments they want to help support their expenses. We do not expect any of the proposed changes to have a material impact on our business as we historically add clients in competitive marketplaces.”
Changing the terms of those loans, as Klobuchar and Blumenthal seek to do by limiting exclusive ticketing deals, could either cause venues to earn less money on the ticketing deals or increase the fees they charge consumers to repay those loans — making ticket prices even more expensive in a climate where most Americans already feel they’re paying too much.
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 May 5), it’s the sales of Agust D’s debut LP vs. the streams for Morgan Wallen’s 36-track juggernaut in a race for the Billboard 200 crown.
Agust D, D Day (Big Hit): Just a few weeks ago, the top debut on the Billboard 200 came from a BTS alum: Jimin, who debuted atop the Billboard Hot 100 with his single “Like Crazy” and came one spot from doing the same on the Billboard 200 with the album FACE. This week, the biggest new release may again come from the K-pop superstars’ ranks, as Suga releases his much-anticipated first LP, D-Day, under his Agust D alias.
The album is expected to sell well – helped by a variety of physical releases, which like FACE, came out the same day as the album’s digital release. (Recent album releases from BTS groupmates RM and J-Hope initially arrived as digital-only.) D-Day is available as multiple different collectible CDs (including exclusive editions for Target, Walmart and the Weverse store) — once again with both standard elements (including a sticker, postcard and poster) and randomized photo cards — plus four digital albums (one standard, plus three alternative cover editions sold in Agust D’s official webstore).
The 10-track album will have to sell very well to compete with the continued streaming dominance of Morgan Wallen’s One Thing at a Time – which posted 166,000 equivalent album units in its seventh week at No. 1, boosted by sales of a new vinyl edition of the 36-track album. But if D-Day can get in range of FACE’s first-week numbers (164,000 units), it could be Wallen’s Time to vacate the top spot.
YoungBoy Never Broke Again, Don’t Try This at Home (Never Broke Again/Motown/UMG): He’s back. Three months after his first album of 2022, January’s I Rest My Case, YoungBoy returns with his second full-length release for Motown, Don’t Try This at Home. There’s no physical release yet for the 33-track set, but the tracklist is his longest yet, and features big-name features from Nicki Minaj, Post Malone, The Kid LAROI and Mariah the Scientist — which may help the new album pass the somewhat underwhelming No. 9 Billboard 200 peak for I Rest My Case earlier this year.
Taylor Swift, Folklore: The Long Pond Studio Sessions (Republic): Taylor Swift already has two albums in the top 10 of the Billboard 200 this week with 2022’s Midnights and 2019’s Lover, and she may add another next week with the Record Store Day-only Folklore: The Long Pond Studio Sessions. The vinyl RSD release of the 17-track set — consisting of acoustic live performances of the tracks from Swift’s Grammy-winning Folklore album, previously featured in Swift’s Disney+ special of the same name and available to purchase digitally as part of the Folklore deluxe edition — is limited to 75,000 copies, but that alone would likely be enough to secure a debut in the top 10 if it to sells out, as anything Swift-related seems to do in 2023. (Other titles by the big-name likes of Pearl Jam, Elton John and The 1975 may also factor on the chart next week.)
In the Mix
Mac DeMarco, One Wayne G (Mac’s Record Label): There aren’t many albums on the Billboard 200 you could fall asleep listening to and still be hearing when you wake up the next morning – but Mac DeMarco’s nine-and-a-half hour (!!) new collection is certainly one. The epic set, mostly consisting of instrumentals and demos, is unsurprisingly unavailable for physical release and is probably unlikely to produce a breakout hit. But with 199 tracks, its streaming numbers should still be enough to make it a factor on the Billboard 200 next week.
Twenty One Pilots, MTV Unplugged (Fueled by Ramen): Alt-pop duo Twenty One Pilots are no stranger to the top of the Billboard 200, which they topped with 2015’s Blurryface and revisiting the top three with follow-ups Trench (2018) and Scaled and Icy (2021). The outfit might not get quite so high with MTV Unplugged, but the duo has maintained a devout fanbase since their mid-’10s breakthrough and may see good sales for the CD and LP-released set.
Everything But the Girl, Fuse (Buzzin’ Fly/Virgin): It’s been nearly a quarter-century since the last album from genre-bending U.K. duo Everything But the Girl, who notched a trio of acclaimed albums in the top half of the Billboard 200 in the ‘90s — most recently 1999’s No. 65-peaking Temperamental. This month’s Fuse looks to make it four in a row, with a variety of vinyl and CD options for purchase, and reviews as strong as the pair received at their commercial peak three decades ago.
Over the weekend, a track called “Heart on My Sleeve,” allegedly created with artificial intelligence to sound like it was by Drake and The Weeknd, became the hottest thing in music. By Monday evening, it was all but gone after most streaming platforms pulled it. But in that short time online, it earned thousands of dollars.
“Fake Drake” has a nice ring to it, but the music industry was less than charmed by the fact that a TikToker with just 131,000 followers (as of Tuesday evening) operating under the name Ghostwriter could rack up millions of streams with such a track in only a few days. Even though the legal issues around these kinds of AI-generated soundalikes are still murky, streaming services quickly pulled the track, largely without explanation. Universal Music Group, which reps both Drake and The Weeknd, issued a statement Monday in response, claiming these kinds of songs violate both copyright law its agreements with the streaming services and “demonstrate why platforms have a fundamental legal and ethical responsibility to prevent the use of their services in ways that harm artists.” While a spokesperson would not say whether the company had sent formal takedown requests over the song, a rep for YouTube said on Tuesday that the platform “removed the video in question after receiving a valid takedown notice,” noting that the track was pulled because it used a copyrighted music sample. As of Wednesday, the song had also been removed from TikTok.
What sets “Heart on My Sleeve” apart from other AI-generated deepfakes — including one that had Drake covering Ice Spice‘s “Munch,” which the rapper himself called “the last straw” on Instagram — is that it was actually uploaded to streaming services, rather than just living on social media like so many others. It also was a hit — or could have been one — as the track drew rave reviews online. Once the song caught fire, daily U.S. streams increased exponentially, from about 2,000 on Friday to 362,000 on Saturday to 407,000 on Sunday and 652,000 on Monday before it was taken down, according to Luminate. Globally, the song started taking off too, racking up 1,140,000 streams worldwide on Monday alone.
Those streams are worth real money, too. And since streaming royalties are distributed on a pro-rata basis — meaning an overall revenue pool is divided based on the total popularity of tracks — the royalties earned by “Heart on My Sleeve” is revenue that is then not going to other artists. That’s how streaming works for any song— or sleep sound — but in this case it’s an AI-generated song pulling potential revenue from actual living beings creating music.
Aside from the rights issues at play, that money underlines one of rights holders’ key concerns around AI-generated music: That It threatens to take money away from them. For “Heart on My Sleeve,” the 1,423,000 U.S. streams it received over four days were worth about $7,500, Billboard estimates, while the 2,125,000 total global streams were worth closer to $9,400.
However, streaming royalties are typically paid out on a monthly basis, which allows time for platforms to detect copyright infringement and other attempts to game the system. In a case such as “Heart on My Sleeve,” a source at a streaming company says that might mean Ghostwriter’s royalties will be withheld.
“Heart on My Sleeve” was a wake-up call to the music business and music fans alike, who until now may not have taken the threat, or promise, of AI-generated music seriously. But as this technology becomes increasingly accessible — coupled with the ease of music distribution in the streaming era — concern around the issue is growing quickly. As Ghostwriter — who did not respond to a request for comment — promises on his TiKTok profile, “I’m just getting started.”
