State Champ Radio analysis
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A song featuring AI-generated fake vocals from Drake and The Weeknd might be a scary moment for artists and labels whose livelihoods feel threatened, but does it violate the law? It’s a complicated question.
The song “Heart on My Sleeve,” which also featured Metro Boomin’s distinctive producer tag, racked up hundreds of thousands of spins on streaming services before it was pulled down on Monday evening, powered to viral status by uncannily similar vocals over a catchy instrumental track. Millions more have viewed shorter snippets of the song that the anonymous creator posted to TikTok.
It’s unclear whether only the soundalike vocals were created with AI tools – a common trick used for years in internet parody videos and deepfakes – or if the entire song was created solely by a machine based purely on a prompt to create a Drake track, a more novel and potentially disruptive development.
For an industry already on edge about the sudden growth of artificial intelligence, the appearance of a song that convincingly replicated the work product of two of music’s biggest stars and one of its top producers and won over likely millions of listeners has set off serious alarm bells.
“The ability to create a new work this realistic and specific is disconcerting, and could pose a range of threats and challenges to rightsowners, musicians, and the businesses that invest in them,” says Jonathan Faber, the founder of Luminary Group and an attorney who specializes in protecting the likeness rights of famous individuals. “I say that without attempting to get into even thornier problems, which likely also exist as this technology demonstrates what it may be capable of.”
“Heart On My Sleeve” was quickly pulled down, disappearing from most streaming services by Monday evening. Representatives for Drake, The Weeknd and Spotify all declined to comment when asked about the song on Monday. And while the artists’ label, Universal Music Group, issued a strongly worded statement condemning “infringing content created with generative AI,” 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 removed because it used a copyrighted music sample.
Highlighted by the debacle is a monumental legal question for the music industry that will likely be at the center of legal battles for years to come: To what extent do AI-generated songs violate the law? Though “Heart on My Sleeve” was removed relatively quickly, it’s a more complicated question than it might seem.
For starters, the song appears to be an original composition that doesn’t directly copy any of Drake or the Weeknd’s songs, meaning that it could be hard to make a claim that it infringes their copyrights, like when an artist uses elements of someone else’s song without permission. While Metro Boomin’s tag may have been illegally sampled, that element likely won’t exist in future fake songs.
By mimicking their voices, however, the track represents a clearer potential violation of Drake and Weeknd’s so-called right of publicity – the legal right to control how your individual identity is commercially exploited by others. Such rights are more typically invoked when someone’s name or visual likeness is stolen, but they can extend to someone’s voice if it’s particularly well-known – think Morgan Freeman or James Earl Jones.
“The right of publicity provides recourse for rights owners who would otherwise be very vulnerable to technology like this,” Faber said. “It fits here because a song is convincingly identifiable as Drake and the Weeknd.”
Whether a right of publicity lawsuit is legally viable against this kind of voice mimicry might be tested in court soon, albeit in a case dealing with decidedly more old school tech.
Back in January, Rick Astley sued Yung Gravy over the rapper’s breakout 2022 hit that heavily borrowed from the singer’s iconic “Never Gonna Give You Up.” While Yung Gravy had licensed the underlying composition, Astley claimed Yung Gravy violated his right of publicity when he hired a singer who mimicked his distinctive voice.
That case has key differences from the situation with “Heart on My Sleeve,” like the allegation that Gravy falsely suggested to his listeners that Astley had actually endorsed his song. In the case of “Heart on My Sleeve,” the anonymous creator Ghostwriter omitted any reference to Drake and The Weeknd on streaming platforms; on TikTok, he directly stated that he, and not the two superstars, had created his song using AI.
But for Richard Busch of the law firm King & Ballow, a veteran music industry litigator who brought the lawsuit on behalf of Astley, the right of publicity and its protections for likeness still provides the most useful tool for artists and labels confronted with such a scenario in the future.
“If you are creating a song that sounds identical to, let’s say, Rihanna, regardless of what you say people are going to believe that it was Rihanna. I think there’s no way to get around that,” Busch said. “The strongest claim here would be the use of likeness.”
But do AI companies themselves break the law when they create programs that can so effectively mimic Drake and The Weeknd’s voices? That would seem to be the far larger looming crisis, and one without the same kind of relatively clear legal answers.
The fight ahead will likely be over how AI platforms are “trained” – the process whereby machines “learn” to spit out new creations by ingesting millions of existing works. From the point of view of many in the music industry, if that process is accomplished by feeding a platform copyrighted songs — in this case, presumably, recordings by Drake and The Weeknd — then those platforms and their owners are infringing copyrights on a mass scale.
In UMG’s statement Monday, the label said clearly that it believes such training to be a “violation of copyright law,” and the company previously warned that it “will not hesitate to take steps to protect our rights and those of our artists.” The RIAA has said the same, blasting AI companies for making “unauthorized copies of our members works” to train their machines.
While the training issue is legally novel and unresolved, it could be answered in court soon. A group of visual artists has filed a class action over the use of their copyrighted images to train AI platforms, and Getty Images has filed a similar case against AI companies that allegedly “scraped” its database for training materials.
And after this week’s incident over “Heart on My Sleeve,” a similar lawsuit against AI platforms filed by artists or music companies gets more likely by the day.
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 April 22), NF remains the biggest rapper you don’t hear on radio or RapCaviar, while an ‘00s nu-metal band plans a second Meteora strike on the Billboard 200.
NF, Hope (NF Real Music/Caroline): He hasn’t had a major crossover hit since 2017’s smash “Let You Down” peaked at No. 12 on the Billboard Hot 100, but NF remains one of the world’s biggest rappers with a cult following that remains just outside of mainstream view. His last album, 2019’s The Search, snuck past Chance the Rapper’s more hyped The Big Day for the Billboard 200’s top spot (with a six-figure first week), and the title track and advance single from follow-up album Hope debuted at No. 49 on the Hot 100 in March.
Aiding Hope’s hopes to follow its predecessor to No. 1: big sales numbers, boosted by a variety of physical variants. There’s a signed CD in his online store (just $5!), a standard Target-exclusive CD with a poster packaged inside, four deluxe CD/merch box sets (with a T-shirt, hat, long sleeve T or a hoodie and a CD housed in a box, respectively) and both a white vinyl LP and a standard black version. If he cracks six figures again, NF might be in the same ballpark as Morgan Wallen’s declining One Thing at a Time — but the 167,000 units that album moved in its fifth week at No. 1 is still a higher single-week number than any NF album has posted yet.
Linkin Park, Meteora (Warner/Machine Shop): Meteora was one of the biggest albums of 2003, debuting at No. 1 with over 800,000 in first-week sales, spawning massive hit singles like “Numb” and “Faint” and finishing as the No. 6 album of the Year-End Billboard 200. Next week, the album’s 20th anniversary reissue may drive it to its highest position on the chart since its release year.
The set has already garnered considerable attention for the advance release of “Lost,” a bonus track that the group recorded for Meteora with late Linkin Park lead singer Chester Bennington, whose No. 38 debut on the Hot 100 made it the group’s biggest chart hit in a decade. It’s one of several previously unreleased tracks found on the reissue, which is available in a deluxe three-CD edition, a four-LP vinyl box set, or a five-LP / four-CD super deluxe box set, and should help Meteora make a more explosive chart impact than most new albums.
Daniel Caesar, Never Enough (Republic): Acclaimed R&B singer-songwriter Daniel Caesar has yet to hit the Billboard 200’s top 10, but he’s getting closer: No. 25 with 2017 debut Freudian, then No. 17 with 2019’s Case Study 01. This year’s long-anticipated third album Never Enough has a chance to get him in that range, though it’s lacking any chart hits near the level of his breakout late-’10s hits “Get You” or “Best Part,” and certainly none in the same stratosphere as his appearance on Justin Bieber’s 2021 Hot 100-topper “Peaches.” Caesar does have a climbing Adult R&B Airplay hit in “Let Me Go” (No. 20 this week), as well as three different box sets exclusive to his web store, three different-colored vinyl variants and both standard and signed CDs available for purchase.
In the Mix
Ellie Goulding, Higher Than Heaven (Polydor): One of the U.K.’s most reliable hitmakers of the early ‘10s is back, with what she calls, in a very un-2023 way, her “least-personal” to date. “We didn’t want to write serious songs,” Goulding has said, “we wanted to write about silly things and dancing.” The album’s approach has been well-received critically, but has yet to generate the kind hits either side of the Atlantic that she enjoyed a decade ago.
Rae Sremmurd, Sremm 4 Life (Ear Drummer/Interscope): Speaking of Goulding: Her most recent top 40 Hot 100 hit was scored alongside Swae Lee, who was also a chart fixture of the late ‘10s — both solo and with brother Slim Jxmmi, as hip-hop duo Rae Sremmurd. The Brothers Rae have since fallen somewhat out of commercial favor, but they’re hoping a return to their Sremm album series (responsible for three straight top 10 albums on the Billboard 200 from 2015-18) will bring them back to the limelight. They get additional assistance on Sremm 4 from featured stars Future and Young Thug, as well as production from longtime gold-spinner Mike Will Made-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 April 8), new albums from a wide variety of big names could make for the most debut-crowded top 10 on the Billboard 200 yet in 2023.
Lana Del Rey, Did You Know That There’s a Tunnel Under Ocean Blvd (Polydor/Interscope): Last year’s Blue Bannisters was Lana Del Rey’s first major label album to miss the Billboard 200 top five, but she seems set to return there with the new Ocean Blvd. The album has received some of the strongest reviews of Del Rey’s career, while seven-minute advance single “A&W” is her first song to reach the Hot Rock & Alternative Songs top 10 since her Weeknd-featuring “Lust for Life” in 2017.
Also helping Ocean Blvd’s numbers: well over a dozen physical variants, including five different-colored options on both vinyl and cassette, and four CD deluxe box sets exclusive to her webstore. (Plus, a special shoutout on the year’s hottest pop tour never hurts.) All of that could create a tunnel from Ocean Blvd to the top of the charts, but it will have to contend with Morgan Wallen’s One Thing at a Time in its fourth week; that album has still been earning over 200,000 equivalent album units a week, and Del Rey has yet to post a single-week number higher than 182,000 (for Ultraviolence in 2014).
Jimin, Face (BigHit/Geffen): Another major contender this week, and the latest BTS alum poised for a major Billboard 200 impact — following J-Hope’s No. 17-debuting Jack in the Box last July and RM’s No. 3-peaking Indigo in December — is Jimin, who should be set for a big debut for his debut album Face. The set has already generated one Hot 100 hit in this week’s No. 30-debuting “Set Me Free Pt. 2,” and could score an even bigger one next week with the entrance of the best-selling “Like Crazy.” Though its six-track length may hurt its streaming totals, Face has the advantage of a simultaneous digital and physical release — where Jack in the Box and Indigo both debuted as digital-only releases — with five different collectible CD variants available (each containing a standard set of items plus randomized photo cards and postcards).
Luke Combs, Gettin’ Old (Columbia/River House): Coming just nine months after last year’s No. 2-peaking Growin’ Up, sibling set Gettin’ Old may return country superstar Luke Combs to the Billboard 200’s top five. Lead single “Love You Anyway” debuted in the Hot 100’s top 15 in February — with advance cuts “Growin’ Up and Gettin’ Old” and “Joe” also reaching the chart — and its studio version of Combs’ live-staple cover of Tracy Chapman’s late ‘80s alt-folk classic “Fast Car” should follow them onto the chart next week. The set is available in CD, cassette and record, with colored-vinyl exclusives for Amazon and Walmart.
In the Mix
Depeche Mode, Memento Mori (Columbia/Mute): Rock and Roll Hall of Famers Depeche Mode look to extend their streak of eight consecutive top 10 studio albums on the Billboard 200 with this month’s Memento Mori, their first album since the May death of founding member Andy Fletcher. The album, supported by the group’s first world tour in a half decade, was met with critical acclaim, and spawned their first top 15 hit on the Alternative Airplay chart since 2009 with lead single “Ghosts Again.”
Fall Out Boy, So Much for Stardust (Fueled by Ramen/DCD2): Fall Out Boy’s first album since 2018’s Billboard 200-topping Mania features more of a return to the emo heroes’ guitar-driven sound, albeit with more of a disco influence in tracks like third single “Hold Me Like a Grudge.” Lead cut “Love From the Other Side” became the group’s first-ever top five hit on the Rock & Alternative Airplay chart when it reached No. 2 earlier this month.
Pink Floyd, The Dark Side of the Moon (Harvest/Capitol): One of the biggest albums in rock history, Pink Floyd’s 1973 prog rock opus Dark Side of the Moon spends its 976th week on the Billboard 200 this week, ranking at No. 172. It should rank a lot higher next week following its 50th anniversary reissue, with a CD and vinyl box set that includes a newly remastered version of the classic album, a 76-page music book, surround sound and Dolby Atmos mixes, and a standalone LP of the group’s 1974 performance of the album at Wembley Arena.
It’s an uneasy time in the music industry. During a Jan. 31 call with analysts, Spotify CEO Daniel Ek emphasized the positive side of the streaming revolution — “there [are] a lot more artists that are mattering now than ever before” — while still acknowledging the anxiety that’s percolating through the business. “The big counter to that would be: Does it mean that you can sustain yourself, or does it mean we have more one-hit wonders?” Ek asked. “You’re seeing a little bit of both happening in the music industry at the present moment.”
Especially in an era when TikTok appears to run the music industry — trends on the app can send songs bounding up the charts, impacting signing decisions and marketing campaigns — it’s common to hear executives fretting about one-hit wonder overload and the lack of “artist development.” On any given day, a handful of songs flare on the app, soundtracking heaps of videos and leading to jumps in streaming. As a result, “more people are investing in songs that might not have the artist proposition attached to them,” one manager recently lamented to Billboard. “By default, if more of the people responsible for breaking acts are focused on songs, that’s how you have a landscape where there are a trillion one-hit wonders.”
Spotify returned to this theme during its recent Stream On event. Gustav Soderstrom, the platform’s co-president, took the stage to tout the power of features like Release Radar for driving streams and long-term engagement. “That’s why discoveries on Spotify, unlike many other platforms, give creators so much more than just a fleeting moment of viral fame,” he said. He didn’t name TikTok, but it was pretty clear who he was aiming at.
In a statement to Billboard, Ole Obermann, TikTok’s global head of music, hit back against the idea that the popular app prioritizes brief eruptions over long and healthy careers. “In the few years that our music teams at TikTok have been working closely with the musical creator and label community, our commitment to backing artists across the board has helped propel emerging talent and legacy acts to new points of success,” Obermann said. “Artists who broke out from TikTok such as Ice Spice, Lil Nas X, and Coi Leray have sustained multiple Billboard hits. We also see artists such as Tai Verdes, jxdn and Sara Kays who have grown substantial fan bases on TikTok and are building their music careers broadly rather than based on an individual hit song.”
Many in the music industry believe one-hit wonders are newly abundant. But do they show up on the Billboard charts?
Defining a one-hit wonder as an artist that cracks the top 40 on the Billboard Hot 100 and never makes it back to that position, the annual percentage of acts fitting this criterion remained relatively constant from 2002 to 2019, according to Billboard‘s analysis. On average, 54% of the acts who made it into the top 40 during this period failed to return with at least a second entry. Though the fraction got as high as 61% and sank as low as 39% during this time period, there was no pronounced increasing trend visible over time.
In 2020 — the most recent full year it seems fair to judge — the portion of artists who made it into the top 40 but didn’t land a second entry was higher: 70%. Of course, this number may fall in the coming years, because these artists haven’t had much time to score a second hit. Changing the definition of a one-hit wonder to match the available data for 2020 — redefining it as an artist that cracks the top 40 and doesn’t make it back in the next two years — causes the portion of one-hit wonders to jump by more than 7% each year, on average. This means it’s likely that 2020’s one-hit wonder count will end up more in line with previous years.
The opposite of a one-hit wonder is an act who enjoys a steady stream of popular singles. Say a “career artist” appears at least 10 times in the top 40 as a lead or featured collaborator: Around 10% of all acts who reached the top 40 once between 2002 and 2020 went on to achieve this goal. The frequency of career artists hasn’t changed much over the years either — roughly the same number emerged from the first half of the time period examined as from the second half.
There is one other noticeable trend in top 40 data: The number of new artists appearing on the upper reaches of the chart is gently declining over time. The fall is gradual, approximately one less new artist every two years. This mirrors a decline in new artists getting top 10 hits, but the trend is less pronounced in the top 40. That’s presumably because it’s easier to reach the top 40 than the top 10, and because there are fewer top 10s annually.
Taken together, this indicates that it is somewhat harder to get a top 40 hit than it was two decades ago, but once artists get that breakout hit, they have roughly the same odds of eventually building a catalog of big tracks. The first development is cause for concern. But the second should be reassuring — the more things change, the more they stay the same.
Welcome to The Contenders, 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 April 1), Morgan Wallen’s One Thing at a Time juggernaut faces competition from a new U2 album of old U2 songs, as well as a rising star from the Latin world and a pop icon coming to a stadium near you.
U2, Songs of Surrender (Island/Interscope). The members of U2 are no strangers to the top of the Billboard 200, having reached No. 1 eight times in their 43-year recording history, most recently in 2017 with the debut of Songs of Experience. Many of the songs from those albums can be found on Songs of Surrender — a collection of reinvented re-recordings spanning the band’s entire career.
Released on St. Patrick’s Day (March. 17), the collection is also available in 16-track standard, 20-track deluxe and 40-track super deluxe editions (with the later divided into four 10-track discs each named after a band member). Sales will also be helped by a dozen vinyl variants of the album, including exclusives for Target, Amazon and independent retailers — and even a Boston Celtics Limited Edition vinyl, with team-inspired packaging containing an exclusive poster.
Eladio Carrión, 3men2 Kbrn (Rimas). An international swimmer turned social media influencer turned Latin trap hitmaker, Eladio Carrión has become one of this decade’s breakout stars from Rimas Entertainment, home to global superstar Bad Bunny. If his name isn’t yet familiar to you, some of the A-list features on his latest album 3men2 Kbrn will be – they include 50 Cent, Future, Lil Wayne, and of course El Conejo Malo himself, who appears on the set’s lead single “Coco Chanel.”
Taylor Swift, Lover (Republic). As you may have heard, Taylor Swift recently launched her first U.S. tour in six years – and It’s not just the more than 100,000 fans in attendance at the first two dates in Glendale, Ariz. over the weekend who are psyched to see her, Swift’s sales and streams have spiked across her catalog, but the album poised to benefit most on the Billboard 200 is her 2019 set Lover. It’s appropriate, given how it’s the Swift album fans have waited the longest to see on tour, as she was forced to cancel immediate support plans during the 2020 COVID-19 pandemic.
IN THE MIX
EST Gee, Mad (CMG/Interscope). Louisville rapper EST Gee has long seemed to be on the verge of a mainstream breakthrough, in the wake of high-profile early-decade guest appearances on Billboard Hot 100 hits like Lil Baby’s “Real as It Gets” and Jack Harlow’s “Backstage Passes.” He’s reached the Billboard 200’s top 10 three times already, most recently with official debut LP I Never Felt Nun in Sept. 2022, and looks to go for four with last Friday’s Mad mixtape – though outside of southern rap stalwart Boosie Badazz, the set is light on big-name guests.
100 Gecs, 10,000 Gecs (Dog Show/Atlantic): The hyperpop paragons lean more into thick guitar riffs while maintaining their absurdist sense of humor on second album 10,000 Gecs, their first since making the jump to Atlantic. The critically acclaimed set — supported by their first Alternative Airplay-charting hit single, “Hollywood Baby” — is likely to give the duo its highest-charting entry yet on the Billboard 200, following the No. 92 peak of its debut album, appropriately titled 1,000 Gecs.
In the last 25 years, the music industry has evolved in huge leaps: the arrival of Napster in 1999, the launch of the iTunes music store in 2003 and YouTube’s debut in 2005 are notable, epoch-defining events. But progress often comes in a series of small steps forward.
One such small step is Spotify’s Loud & Clear, an annual report that provides some transparency into the amounts of royalties the company pays each year. The third Loud & Clear report was released March 8 to coincide with Stream On, Spotify’s live-streamed media event where a parade of executives introduced new product features and discussed the future of the world’s largest music subscription service.
Loud & Clear is helpful because it puts artist royalties in context. Any artist knows how much they earned on a streaming platform. But Loud & Clear will tell an artist how they stack up to others. It’s one thing to make $100,000 in annual royalties but another thing to know how many other artists are also making at least $100,000.
“I think it’s very important for ecosystems to have an understanding of the shape and size of how results are going for different participants so that people can understand where they are, where they stand and how the ecosystem is evolving,” says Charlie Hellman, Spotify vp, global head of music product.
And how well is the ecosystem evolving? Spotify wants to give “a million creators the opportunity” to making a living from their art — which could include both musicians and podcasters. That goal goes back to a statement by CEO Daniel Ek at its 2017 Investor Day. At the time, Spotify counted 22,000 artists as “top-tier” earners (it didn’t specify exactly how much they earned, however). Today, thanks to Loud & Clear, we can see a million creators are probably not making a living from their art. But as Spotify, and streaming in general, has grown in popularity, the number of artists making a sustainable amount — define that as you may — is slowly increasing.
There are 27,000 established artists defined as being in Spotify’s top 50,000 artists three straight years but outside of the top 500. In 2022, they earned an average of $224,000 from Spotify and averaged 1.45 million monthly listeners in 2022. So, they’re not superstars but they’re far from hobbyists. They’re also likely signed to record labels and receive only a fraction of those royalties.
In 2022, there were nearly 3,000 “catalog-heavy” artists that earned more than $100,000 on Spotify. Those artists earned over 80% of their streams from tracks five years old or older. Given that Spotify estimates other streaming sources account for 75% of an artists’ revenue, those artists probably earn around $400,000 a year in streaming royalties.
If streaming is going to provide a living for many musicians, the economics need to work for the independent musicians that make up a large portion of the working class. In 2022, a quarter of the 57,000 artists who earned $10,000 or more in royalties from Spotify in 2022 are self-distributed through the likes of DistroKid, TuneCore and CD Baby. That works out to nearly 15,000 artists, a 200% increase since 2017. That’s a far cry from one million. But as streaming platforms continue to grow, the number of self-distributed artists earning that amount will grow, too.
Increasingly, streaming platforms will facilitate other parts of artists’ careers, such as ticket sales and merchandise sales. Spotify lists some merchandise sales through third-party providers such as Shoptify and Merchbar. And although it hasn’t included merch sales in Loud & Clear, Hellman says, “I can imagine in future years doing more data share about that in particular. We didn’t do that this year, but it is a big strategic focus for us.”
HYBE founder and chairman Bang Si-hyuk said his company is only getting started in its bid to grow into a global music powerhouse that can rival the three major labels.
The South Korean company’s two U.S. acquisitions — Scooter Braun’s Ithaca Holdings and QC Media Holdings, parent company of hip-hop label Quality Control Music — are “just the beginning,” Bang said Wednesday at Gwanhun Forum in Seoul. The executive behind supergroup BTS insisted HYBE must have a “sense of urgency” and look outside of Korea to continue to grow.
“We are living in an era where everything we do in the content industry resonates beyond geographical boundaries,” Bang said. “At the same time, K-pop has become a global industry that can only continue to grow by targeting both domestic and international markets.”
At home, Bang said HYBE and its Korean rivals can’t do it alone. In his speech, he called on the South Korean government to support the K-pop companies in their bid to take on the global majors – Universal Music Group, Sony Music Entertainment and Warner Music Group — by helping them become national champions in the way that electronics companies Samsung and LG have become global powerhouses with government support.
While K-pop built HYBE into a powerhouse, the company might have only a brief window to capitalize on its global success. “K-pop is in crisis,” the HYBE chief said, asserting that by most measures the genre is in decline in Southeast Asia, other than growth in China and spending per consumer. In the United States, 53% fewer K-pop tracks charted on the Billboard Hot 100 in 2022 than the previous year, according to Bang. He attributed the K-pop slowdown to BTS’ hiatus as a group in 2022 and said he doesn’t believe the group’s eventual comeback will bring back the lost revenue.
When Bang talks about exporting K-pop around the world, he isn’t referring to just a genre of music. To him, K-pop is “a culture that encompasses music-oriented systems such as music and content production, distribution, marketing, communication with fans, and other systems of music.” In HYBE’s “multi-label” structure, he added, the Korean headquarters provides guidance to its labels and disperses the risk so its subsidiaries can operate “in a healthy competition that drives each other to improve.”
For HYBE to make inroads in the United States, the world’s largest music market, it needs “a strong network and infrastructure … to minimize the cost of trial and error” involved in exploring an unfamiliar landscape, Bang added. In the U.S., Braun leads HYBE America, the umbrella organization for SB Projects’ management clients, Big Machine Music Group and Quality Control. HYBE also has a joint venture in the U.S. with Universal’s Geffen Records to develop a girl pop group for the domestic market.
While Bang didn’t say which companies HYBE is targeting for further acquisitions, in a press conference after his speech he noted HYBE’s interest in Latin labels. The company certainly has the resources to buy additional record labels, artist management firms or tech platforms to further fuel its expansion: HYBE had cash and cash equivalents of 903 billion won ($689 million) as of Sept. 30, 2022, the latest date for which data is available. The goal, said Bang, is to achieve scale “that can’t be ignored.”
Even though HYBE dominates K-pop and generated revenue of $1.4 billion in 2022, Bang described his company in biblical terms: He is David, the three major labels are Goliath. Major K-pop companies account for less than 2% of the global music market, he said, while the majors own 67.4%.
Looking around the world, Bang sees “alarming trends,” including K-pop commanding fewer chart positions in 2022 than in the previous year. “In this context, the existence of global K-pop artists without a dominant global entertainment company inevitably leads to concerns about the industry’s ability to be on the lookout for future uncertainties,” he said.
What will it take for HYBE to turn from David into a sustainable Goliath? Bang wants more scale and stronger distribution partners to give K-pop additional bargaining power to negotiate more favorable distribution rates. In that way, he said, HYBE can improve its financial performance “and enable the company and our artists to grow.”
Further entering the U.S. market will require building “a strong network and infrastructure,” Bang said. “Through this, we need to minimize the cost of trial and error caused by situations that are difficult for us to change, or due to our unfamiliarity with the local conditions, and secure an equal level of presence and influence in the mainstream market equivalent to local companies.”
Breaking artists isn’t a matter of “luck or sheer intuition,” the HYBE founder added. Rather, success is the result of a management process that can be systemized and replicated in other markets. HYBE’s multi-label structure demonstrates this approach, Bang said: “It is a system that has been meticulously established based on experience, trial and error, and contemplation to enable the company’s success.”
Additional reporting by Jeyup S. Kwaak
Welcome to The Contenders, 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 March 25), a longtime stateside household name and a growing global force will compete against Morgan Wallen’s blockbuster in its second week.
Miley Cyrus, Endless Summer Vacation (Columbia): You might expect Miley Cyrus’ new album to debut at No. 1 on the Billboard 200. Cyrus has been a household name for a decade and a half, and she’s coming off her biggest Billboard Hot 100 hit with the six-week No. 1 “Flowers” — and her new album has largely been met with critical acclaim and positive fan response since its Friday release.
Despite her continued stardom, however, Cyrus has not scored a No. 1 album since 2013’s Bangerz, with her most recent effort (2021’s Plastic Hearts) debuting at No. 2 with 60,000 equivalent album units. A number anywhere near that range would probably not be enough to dethrone Morgan Wallen’s One Thing at a Time, which debuted at No. 1 with 501,000 units on last week’s Billboard 200 (dated March 18). Even if One Thing posts only 40% of that in its second week, that would still be over three times Plastic Hearts’ first-week tally.
Vacation is expected to do better than Hearts, though – helped not only by the continued success of “Flowers” (which holds at No. 2 on the Hot 100 this week) and strong early returns for follow-up single “River,” but also by a variety of physical releases. That includes four vinyl variants (including one exclusive to Target, and two exclusive to her web store) and two deluxe box sets exclusive to her web store — one with a puzzle and a CD, the other with a beach towel and a CD.
TWICE, Ready to Be (JYP/Republic): Though they might not have name recognition as wide as Miley Cyrus in the United States, Korean girl group TWICE might be just as big a threat to Wallen’s place at the top of the Billboard 200 this week. TWICE have reached the chart’s No. 3 spot, well, twice: with 2021 LP Formula of Love: O+T=
The U.S. recorded music business posted its seventh consecutive year of growth in 2022 as the industry continues to benefit from streaming services such as Spotify, Apple Music and YouTube. After spending most of the last two decades in a painful freefall — piracy devastated CD sales and the download-driven unbundling of the album didn’t make up for it — the recorded music business has enjoyed a great run. Last year, paid subscription revenues surpassed $10 billion for the first time, according to the RIAA, and overall revenues reached $15.9 billion.
Here’s the bad news: Last year’s growth, in terms of both dollar and percentage increases, was the lowest since 2016, when the recorded music business started to recover from a 15-year downturn. Happy days may be here again, but they’re not getting happier like they were.
Total recorded music revenues grew 6.1%, but that’s about a quarter of 2021’s 23.2% gain. Paid streaming revenues improved 7.2% in 2022, a third of the 22.2% growth in 2021. It was the first time that this segment’s growth rate fell into the single digits since 2010. That year paid streaming revenues rose just 2.9% to $212 million. Over the next decade, as annual paid streaming grew to 57.8% of total recorded music revenue in 2022, the segment’s annual growth often exceeded 50% and fell below 20% only twice.
Ad-supported streaming’s revenue growth rate also fell into the single digits, also for the first time in more than a decade. Slowed by an advertising malaise that has also affected companies ranging from Alphabet to iHeartMedia, streaming services’ advertising royalties to record labels grew 5.6% compared to 44.4% in 2021 and 16.8% in 2020. In dollar terms, last year’s revenue growth was the lowest since 2015.
The slowdown shouldn’t catch anybody by surprise given the industry’s reliance on streaming, subscription services’ unwillingness — until recently — to raise prices and a finite number of potential customers. The problem comes down to basic math: Fees from subscription services accounted for 57.9% of recorded music revenues in 2022. At just 2.4% of total revenues, a high-growth segment like synchronization barely moves the needle despite rising 24.8% in 2022. Vinyl sales were strong once again — up 17.2% — but accounted for just 7.7% of total recorded music revenues.
Up-and-coming revenue streams such as TikTok, Facebook and Instagram are just that — not yet ready to deliver meaningful royalties despite their popularity. Their revenues are included in the ad-supported streaming bucket that increased just 5.5% in 2022. TikTok faces high expectations but large uncertainty, too, as it faces pressure from politicians at the state and federal level that could reduce its importance. In addition, the company has installed parental controls that are likely to reduce engagement and further reduce its potential value to artists and labels.
A positive trend is subscription services’ decisions to raise prices on individual and family plan tiers. In 2022, Apple Music, Amazon Music and Deezer raised prices in the U.S. Spotify has not yet announced a price hike for standard subscription plans but has hinted it will follow suit in 2023. Labels are eagerly awaiting Spotify’s move. “We are the lowest (cost) form of entertainment,” Warner Music Group CEO Robert Kyncl said Thursday. “We have the highest …engagement, highest form of affinity and lowest per-hour price. That doesn’t seem right.”
Globally, the situation looks better. The industry in China, the world’s most populous country, is flourishing thanks to streaming companies such as Tencent Music Entertainment and Cloud Music. In Japan, the world’s second-largest recorded music market, streaming revenues increased 125% in 2022, according to the RIAJ. At Spotify, which operates in 184 markets, revenue increased 21.3% in 2022 to 11.7 billion euros ($12.4 billion), with about equal growth rates from paid and ad-supported streaming. Annual revenues of two smaller streaming companies, Europe-focused Deezer and MENA-focused Anghami, grew 13% and 36%, respectively.
In the U.S., a maturing streaming business alone cannot maintain the breakneck pace of the last seven years. Labels will need more than the status quo to return to double-digit growth.
Welcome to The Contenders, 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 March 11), a number of new releases challenge SZA’s ongoing Billboard 200 supremacy — led by the latest from a Latin pop star looking to accomplish the unprecedented.
Karol G, Mañana Será Bonito (Universal Latino): Karol G might not be a household name among mainstream U.S. audiences, but that could change with the debut of her fourth album. The Latin pop star reached a higher peak on the Billboard 200 with each of her first three albums — 2017’s Unstoppable (No. 192), 2019’s Ocean (No. 54) and 2021’s KG0516 (No. 20) — and last year scored her first two top 25 hits on the Billboard Hot 100, with “Provenza” and her Becky G collaboration “Mamiii.” Now, with last Friday’s (Feb. 24) Mañana Será Bonito, she should be in the mix for the chart’s top spot.
Mañana is currently available on CD and as a digital album — it topped the iTunes albums chart on its day of release — and is helped by the inclusion of streaming smash “Provenza,” as well as Hot 100 hits “Gatúbela’ (with Maldy) and “X Si Volvemos” (with Romeo Santos). But the album’s biggest hit might be brand new: the much-hyped Shakira collaboration “TDQ,” which has been in the top 10 of the daily charts on Spotify, Apple Music, YouTube and iTunes since its release.
If the album does debut at No. 1, it would make history as the first all-Spanish-language album by a female artist to reach the top spot — joining only Bad Bunny (who’s done it twice, with 2020’s El Último Tour del Mundo and 2022’s Un Verano Sin Ti) among all artists. She’d also be only the third woman with a mostly non-English language No. 1 album, following Selena (Dreaming of You, 1995) and The Singing Nun (The Singing Nun, 1963). Dreaming of You blended Spanish and English, while The Singing Nun was recorded entirely in French.
Gorillaz, Cracker Island (Parlaphone/Warner): Gorillaz fans have been waiting to take the trip to Cracker Island since the album’s title track came out last June — followed by a steady stream of singles, including the top 20 Hot Rock & Alternative Songs hit “New Gold,” featuring Tame Impala and Bootie Brown. Now, the full 10-track album is finally out, available for sale in over a dozen vinyl variants, box sets, as well as four cassette options. Speaking of Bad Bunny: He graces the album’s “Tormenta,” which should provide a nice boon to the album’s streaming numbers.
Yeat, AfterLyfë (Geffen/Field Trip/Twizzy Rich): One of the most-hyped rappers of the last few years, enigmatic hip-hop sensation Yeat released his third album in three years last week with AfterLyfë. Yeat’s streaming prowess sent 2022’s 2 Alive to No. 6 on the Billboard 200, and the 21-track AfterLyfë seems likely to join it in the chart’s top 10. The album’s lone high-profile guest is the YoungBoy Never Broke Again guest spot on “Shmunk,” however, and it has no physical release currently available for sale.
IN THE MIX
Don Toliver, Love Sick (Cactus Jack/Atlantic): Rapper-singer Don Toliver has been a ubiquitous supporting actor in hip-hop over the past year, showing up on Hot 100 hits from Billboard 200-topping albums by Pusha T (“Scrape It Off” from It’s Almost Dry), Metro Boomin (“Too Many Nights” from Heroes and Villains) and SZA (“Used” from SOS). Now he gets his own shot with Love Sick, which follows 2021’s No. 2-peaking Life of a Don and boasts guest appearances from Justin Bieber, Future, Lil Durk, Brent Faiyaz and other big names.
Godsmack, Lighting Up the Sky (BMG): It’s been two decades since the Massachusetts hard rock band was at its commercial peak, but Godsmack remains a reliable performer on the Billboard 200, sending each of its past six albums to the chart’s top 10. Lighting Up the Sky is the group’s first release since 2018’s No. 8-peaking When Legends Rise – the longest gap between albums in Godsmack’s career — and contains their 12th No. 1 on Billboard’s Mainstream Rock Airplay chart with lead single “I Surrender.”
Gracie Abrams, Good Riddance (Interscope): Gracie Abrams has long cultivated a reputation as your favorite singer-songwriter’s favorite singer-songwriter, and this February she finally put out her debut album, Good Riddance. The album does not yet have any major chart hits to its credit, but it comes with chart-topping pedigree in its primary artistic partner, writer-producer Aaron Dessner – whose frequent collaborator Taylor Swift is taking Abrams out on her impossibly anticipated The Eras Tour this spring.
