State Champ Radio analysis
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Ticket fees have been called everything from “exorbitant” (Sens. Richard Blumenthal and Amy Klobuchar) to “completely bats—” (Last Week Tonight with John Oliver). And they can increase the price of a concert ticket by an average of 27-31%, according to a 2017 study by the U.S. Government Accountability Office.
Unfortunately for ticket buyers, those fees aren’t going anywhere quickly. They may change or disappear completely, but consumers won’t reap any savings in the end, Live Nation CEO Michael Rapino explained during Live Nation’s fourth quarter 2022 earnings call on Thursday.
Say, for example, a venue is prohibited from charging fees on top of a ticket’s face value. “Well, then the venue would say, ‘Okay, artists, the rent isn’t $50,000 anymore. It’s $100,000,’” Rapino said.
The ticket fee is a surcharge that helps cover a venue’s costs. Rapino’s point is that the venue needs to cover its costs, so it’s going to collect money to cover them, no matter what. In a normal scenario, the consumer helps cover those costs by paying a surcharge directly to the venue.
If fees were eliminated, artists — who are the final authority on primary ticket prices — would be forced to raise them to cover the additional cost. The surcharge may have disappeared, but that cost would still exist in the form of a higher face value. Regardless of the approach, the consumer’s expense and the venue’s revenues would be unchanged.
“The true cost of going to a show and making the show happen is the full price all-in,” said Rapino. The concept is apparent to anybody who has pondered how airlines set prices. If airlines charged an all-in fee that encompassed all its costs, ticket prices would be dramatically higher. Legislation that banned fees for checked baggage could result in higher prices for everything from flight themselves to in-flight beverages. Airlines that previously allowed free carry-on bags might start imposing fees on those. They could also charge more to change your travel plans (which used to cost the consumer nothing).
Rapino acknowledged that Live Nation, which owns and operates venues, would do the same. “If tomorrow someone said, ‘You know, you can’t charge 20% service fees on your amphitheater, you have to [charge] 10%.’ Well, then the $75,000 house rent that we charge artists would be $100,000,” he said as an example. Live Nation couldn’t simply absorb the cost, he explained. Since the company requires money to pay staff and operate the venue, it would find a way to recoup the lost fees.
While what consumers pay won’t change, they may get more transparency. In the wake of Ticketmaster’s disastrous Taylor Swift Eras Tour pre-sale, President Joe Biden unveiled an initiative to limit, among other types of fees, mandatory, back-end fees that “often hide the full price” of a good or service. The White House pointed to research that found hiding the full price encourages consumers to spend more than they would have otherwise.
Live Nation has also come out publicly — and forcefully — against hidden fees. On Thursday, Rapino called numerous times for the industry to adopt all-in pricing that show the ticket buyer a single price at the beginning of the transaction. Also on Thursday, Live Nation issued a press release that encouraged lawmakers to introduce legislation that includes, among other things, mandatory all-in pricing.
The uproar against Live Nation and Ticketmaster over ticket fees is just one of many criticisms to gain momentum in recent months. Some members of Congress have called Live Nation a monopoly that limits competition in the touring business and harms consumers by charging high prices and leaving some unable to purchase tickets for in-demand concerts like Swift’s Eras tour. Many inside and outside of Washington have called for the Department of Justice to break up the company’s concert promotion and ticketing operations. On Thursday, Sens. Klobuchar and Mike Lee sent evidence of the Jan. 24 Senate hearing on the ticketing market to the Department of Justice and encouraged its antitrust division “to take action if it finds that Ticketmaster has walled itself off from competitive pressure at the expense of the industry and fans.” Others have suggested Ticketmaster improve its security practices to deal with the bot attacks that derailed Swift’s pre-sale.
Ticketmaster may be most reviled for its fees, though. And as Rapino pointed out, those aren’t going away anytime soon.
When Bonnie Raitt‘s touching ballad “Just Like That” won the Grammy for song of the year, the singer-songwriter seemed just as shocked as the crowd. “I am just totally humbled,” she said while accepting the award.
Though she is a decorated and critically acclaimed musician, with 11 Grammys and five top 40 hits on the Hot 100 to her name, Raitt’s “Just Like That” was the least commercially successful song up for the category this year by a long shot. Despite not cracking the Hot 100 chart, “Just Like That” managed to beat out the nine other nominated songs, each of which ranked in the top 20 of the Hot 100 this year, including two No. 1 tracks (“As it Was” by Harry Styles and “About Damn Time” by Lizzo). Many see Raitt’s win as proof that the top Grammy awards do not necessarily always go to those with the most commercial or widespread success.
This particular award win is surprising for Raitt in more ways than one. Song of the year is one of four top awards given out each year by the Recording Academy, along with record of the year, album of the year and best new artist, and it is the only one of the big four that honors the craft of songwriting specifically. Raitt, as she admitted in her acceptance speech, “[doesn’t] write a lot of songs,” but she did write “Just Like That” singlehandedly.
So how much did “Just Like That” earn in publishing royalties for Raitt as its only songwriter, and how much did the Grammy win help the song commercially?
Billboard estimates that before the Grammys, “Just Like That” had earned Raitt over $6,000 in publishing royalties from its release date (April 22, 2022) to the week of the Grammys, which aired on Feb. 5, 2023, for her work as a songwriter from U.S. streaming, sales and airplay combined. In the two weeks following the show, those formats earned her another nearly $6,000. In other words, Raitt earned almost as much from the song in just two weeks as she did in the more than nine months prior to the broadcast.
Raitt owns her publishing, and she houses her songwriting catalog under two entities, Kokomo Music and Open Secret Music. In 2018, she entered an arrangement with indie publishing house Bluewater Music to administer her publishing catalog worldwide. Because she owns her publishing and wrote “Just Like That” by herself, the vast majority of the money she earns from the song will end up in Raitt’s pocket, with deductions likely only made to pay Bluewater Music administration fees and whatever cut her manager makes.
Overall, since the release of “Just Like That,” Billboard estimates that Raitt has earned a total of about $12,000 in publishing royalties from streams and sales of the song. The majority of that came from both physical sales of the album on which the song appears — also called Just Like That — and U.S. on-demand audio streams, according to Luminate. In the two-week period after the Grammys, song downloads and streaming were the biggest source of royalties by far.
In terms of streaming alone, Raitt earned only about $975 worth of publishing royalties from U.S. on-demand audio streams in the almost 10 months that elapsed between the song’s release and the week of the Grammys. But in just the two weeks since her song of the year win, she has earned a little over $2,000 in publishing royalties for U.S. on-demand audio streams.
The week before the Grammys, dated Jan. 27-Feb. 2, “Just Like That” was racked up 44,000 on-demand audio streams in the U.S. The week after the Grammys, dated Feb. 3-9, on-demand U.S. audio streams increased by 3,028% to 1.377 million, according to Luminate. The massive spike, however, did not hold steady in the following week, dated Feb. 10-16, when the number of U.S. on-demand audio streams fell to just over 410,000.
On the physical sales side, Raitt earned over $4,000 in publishing royalties from selling copies of her albums through to the night of the Grammys. In the two weeks after the awards show, Raitt earned about $700.
Along with increased consumption in the sales and streaming categories, “Just Like That” has also sparked interest at radio. The week before the Grammys, it was played just a handful of times, but in the two weeks after her win, she received a total of 144 radio spins, according to Luminate. While still not significant enough to push her to the top of any charts, airplay could contribute solidly toward her future publishing earnings if it continues to gain traction.
So far, the big Grammy win for “Just Like That” doesn’t appear to be boosting sales and streaming activity for Raitt’s overall catalog in the U.S. While weekly catalog album consumption activity jumped to over 9,000 copies on average in each of the two weeks after the show — up from the weekly average of over 3,000 copies before the show — all of that gain is coming from the Just Like That album.
What’s TikTok without music? That’s the central question at the heart of debates between major rights holders and the Bytedance-owned social media platform negotiating rates for their content, and a group of Australian users have been pulled into the middle to try to find out.
Earlier this month, it was revealed that that TikTok is running tests in Australia that limits the amount of licensed music some users can encounter on the platform. The test impacts fewer than half of Australia-based accounts, and it doesn’t affect everyone in the same way, according to a person familiar with the situation. The test puts people into multiple cohorts and provides them with different libraries of sounds to use in video creation. So, not everybody in the test will have the same catalog to choose from. Likewise, users in the test cohorts have different encounters with audio. Some people in test cohorts will encounter muted music on other users’ videos. This allows TikTok to compare and measure the different ways people interact with the app.
The results may inform TikTok’s licensing strategy, but evidence that some Australians are unhappy members of the test cohort can be seen on Twitter. “Tiktok really ruining its own app with all this ‘sound removed’ garbage,” one Australian user tweeted last week. Another echoed the sentiment: “wtf is up with tiktok removing like half the sounds??? like i swear ive seen SO many tiktoks where the sound has been removed.”
The risk of upsetting users and creators isn’t lost on TikTok. “We appreciate it’s disappointing if a certain track is unavailable or if a sound is muted on a previous video,” the company said in a statement. “This change will not be in place for long and not all music is affected.” The test will run from a month to a month and a half, according to a source familiar with the situation, meaning it should conclude by mid-March.
Why would TikTok degrade its user experience even in a relatively small market like Australia? A source familiar with the company’s thinking said TikTok is using the experiment to study what is trending, how users are accessing the platform through different entry points and how they are enjoying it. It is not a negotiating tactic, the person said. Nonetheless, the company is gathering the data during a year when most, if not all, of TikTok’s agreements with music rights owners come up for renewal. The source said it is predictable that TikTok would gather this information ahead of high-stakes negotiations, like those ongoing with major labels and other stakeholders.
Around the music industry, there are different interpretations for TikTok’s actions. One explanation is that TikTok is doing what tech companies do all the time: run tests, collect data and analyze the results. That narrative fits with what’s known. Australia, an important yet small and isolated English-speaking market, is a popular place for tech companies — Spotify, Facebook, Google, Tinder and others — to test new products. Much like these other companies, TikTok is an engineering-led company with engineers who want to take data-driven approaches to making decisions on how much time and resources should be invested in projects, building systems and, yes, even licensing rights. Sometimes, as history has shown with most of those other companies, too, a different mindset puts them at odds with creative industries.
“I don’t think they truly understand music at these tech companies,” says a record label executive. “It just doesn’t resonate with them.”
Negotiating tool?
TikTok, of course, has numerous people from the music world on staff: Ole Obermann, global head of music, and Tracy Gardner, head of licensing and partnerships, are former Warner Music Group executives. Jordan Lowy, head of music publishing licensing and partnerships, previously worked at Universal Music Group and Disney Music Group, and dozens if not hundreds of other music industry alums work at TikTok in editorial and artist partnerships. But the company looks and acts like a social media company, not a music company.
A less benign view of the test is that TikTok is looking for a rationale to argue music is not important to the platform – or not as important as labels believe. Annabelle Herd, the CEO of ARIA, the trade body for the Australian record industry, said TikTok “seeks to rationalize cutting artists’ compensation” and “downplay the significance of music on its platform.” Another industry executive believes the test is meant to lower expectations going into discussions with rights holders. “They’re looking to anchor their negotiating position near zero,” says a music industry source.
TikTok has spent years playing up music’s importance to creators, users and artists. “Music is at the heart of the TikTok experience,” Obermann stated in the opening words of the TikTok 2021 Music Report. That year, around 430 songs surpassed 1 billion views, up 200% from the previous year, and over 175 songs that trended that year charted on the Hot 100. In the company’s 2022 year-end report, Obermann reiterated TikTok’s value to artists, saying the platform “continues to unlock real-world opportunities for artists and labels, helping talent to secure record deals, brand collaborations, chart success, or be re-discovered decades later.”
And while the platform has certainly evolved beyond lip-syncing videos – book reviews and finance advice abound, for example – much of the recent news coming out of the company still involves music: StemDrop, an interactive, collaborative songwriting platform led by Max Martin, Syco Entertainment, Universal Music Group and Samsung; a Calvin Harris virtual reality concert; and welcomes to The Rolling Stones and Dolly Parton for joining the platform.
Anecdotally, exactly how important records labels’ music is to TikTok is debatable. Its top three trending songs of 2022 were independent releases, and the No. 1 song, “Sunroof” by Nicky Youre & Dazy, was originally released independently through SoundOn, TikTok’s music distribution business that’s been known to add promotion to music uploaded through its service. In all, only five of the top 10 of 2022 were signed to major labels. Major label music is arguably more important to on-demand streaming platforms and radio stations. By contrast, all the top 10 tracks of Billboard’s year-end Hot 100 and Radio Songs charts were released through major labels.
But major label music is everywhere on TikTok. Lizzo’s “About Damn Time” was the No. 4 trending song of 2022. Pharrell Williams’ “Just a Cloud Away” was No. 5. Kate Bush’s “Running Up That Hill” was No. 10. And TikTok’s ability to give unknown artists a large audience increases its need to license music from labels. “Sunroof” was so successful that Youre signed with Colombia Records and reached No. 4 on the Hot 100.
What’s past is prologue
TikTok has ample motivation to reduce what it pays music rights holders. Licensing costs eat up more than 70% of a music subscription service’s revenue with little left over after paying operating expenses. Social networks, on the other hand, generate huge sums of free cash flow. Facebook, for example, had an operating margin of 25% in 2022 and 40% in 2021.
Services that once butted heads with music rights holders decided it was wiser to build partnerships that enriched both sides. Like TikTok, YouTube began as an ad-supported platform built on user-generated content and characterized by minuscule royalties. Over time, YouTube attracted better advertisers, built a strong on-demand premium service and became a major source of revenue for labels and publishers. In the 12-month period ended June 30, 2022, YouTube paid music rights holders $6 billion through YouTube advertisements and fees from the YouTube Music subscription service.
Now, YouTube has “a phenomenal partnership” with rights owners after it “decided that music is important to us forever,” Warner Music Group CEO Robert Kyncl, YouTube’s former chief business officer, said during WMG’s Feb. 9 earnings call. It invested in music “holistically” by building a copyright management platform, Copyright ID, launching the YouTube Music subscription service and taking on TikTok with its short-form video platform, YouTube Shorts.
TikTok appears to share YouTube’s ambitions to offer a multitude of services that segment the market into ad-supported and paying customers. Parent company Bytedance already has an on-demand music service, Resso, operating in Brazil, Indonesia and India, and a separate on-demand service, Qishui Yinyue, in China. But in major markets like the U.S., TikTok users that want to listen to an entire track and explore an artist’s catalog end up going – in large numbers – to on-demand services like Spotify and Apple Music. Pairing its short-form video platform with an on-demand service would give TikTok a “significant opportunity” to leverage data and manage customers across multiple platforms, says one of the music industry sources. “Why would they not want to capture that demand themselves?”
“TikTok needs to do that [also],” Kyncl said during Warner’s earnings call. “It’s the right decision for them to evaluate.”
Additional reporting by Liz Dilts Marshall
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Keen observers noticed that last quarter Warner Music Group’s global streaming revenues were down 2.6% year over year, a rare sputter in the music industry’s main engine of growth. The company’s total revenue declined 7.8% as losses in recorded music’s physical and digital revenues couldn’t make up for publishing gains.
On its face, a year-over-year decline in streaming revenue – the driving force behind growth at labels as well as the rise in music catalog valuations – might seem alarming. Declines are routinely seen in download and physical sales. Streaming is typically the dependable bright spot of any earnings report.
The decline was more noticeable when compared to companies that released earnings for the same quarter. Sony Music Entertainment posted strong growth in the same period. SME’s streaming revenue improved 33.2% in its recorded music division and 59.8% in its publishing division. Reservoir Media didn’t show streaming softness last quarter, either. In its recorded music division, digital revenues were up 17% year-over-year. Digital revenues in its publishing division rose 29%.
So, what happened? Some of it is due to a quirk of WMG accounting, some of it is due to WMG, and some of it is due to factors that affect the entire music business.
One factor in WMG’s weak streaming revenue was a shorter quarter: WMG’s last quarter had one fewer week than the prior-year quarter, which gave the company a tough basis for comparison even before other factors could be considered. A 14-week quarter has 7.1% more days to generate income than a 13-week one and that’s a big gap to overcome. Adjusting for that, WMG streaming revenues would have been up 5% year-over-year.
The stronger dollar — WMG’s financial statements are reported in dollars, Sony reports in yen, Universal Music Group in euros — also played a part in the decline. In WMG’s recorded music division, streaming revenues declined 4% as reported but were flat on a constant currency basis (which assumes no change in foreign exchange rates). In its publishing division, streaming revenues grew 13.2% as reported and 16.8% at constant currency.
WMG also blamed the soft streaming numbers on a new release line-up that CFO Eric Levin called “a softer, largely U.S.-based release schedule” that “could roll into our fiscal Q2. But given our release schedule as second half-oriented this year,” he added, “we do feel good about our performance of releases and strength in the second half of the year.”
Another factor was not specific to WMG: a slowing ad market. Levin called it “a dislocated ad market” and warned “the decline is getting more pronounced.” The decline in ad-supported streaming revenue isn’t a surprise. The Ledger wrote about the soft advertising market in August 2022. Spotify CFO Paul Vogel warned advertising growth in the third quarter would be “slower than we might have forecast earlier in the year.” French music company Believe said “ad-funded streaming activities should be affected by rising inflation and economic uncertainties.”
The streaming market has become bifurcated. Subscription services have fared well through the pandemic and high inflation. Advertising is more closely associated with the direction of the broader economy. Consumers are generally reluctant to cancel entertainment subscriptions, but it’s easier for brands to pull back on ad spending, hurting everything from YouTube to broadcast radio companies like iHeartMedia (and music publishers to a lesser extent). At WMG, “subscription streaming grew by high single digits” but was partially offset by a drop “in the mid-teens” in ad-supported revenue, Levin said. WMG also noticed the slowdown in brands’ spending has created “a somewhat softer market for synch.”
In the fourth quarter, Spotify’s advertising revenue rose 14% compared to an 18% improvement for subscription revenue. With the growth of Spotify’s podcasting business, not all the advertising growth could be attributed to music. Advertising growth lagged subscription growth in the third quarter by three percentage points.
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 Feb. 25), as SZA’s SOS starts to approach double-digit weeks atop the Billboard 200, it faces new challengers from a pair of veteran rock bands, as well as an artist whose comeback gig was just watched by over 100 million people.
Paramore, This Is Why (Atlantic): One of the year’s most-anticipated rock releases comes from longtime hitmakers Paramore, who are finishing out their Atlantic Records tenure with its sixth album, This Is Why. The band’s first full-length in six years is led by the hit title track, which recently became its first-ever Alternative Airplay No. 1, and comes on the heels of a media blitz that includes features in NPR and The New Yorker, as well as a Billboard digital cover story. (The group’s last album, 2017’s After Laughter, peaked at No. 6 on the Billboard 200, while their 2013 self-titled album topped the chart.)
This Is Why is expected to sell a significant number of physical copies, with six different vinyl variants available, as well as deluxe boxed sets that contain a T-shirt, along with either a CD or vinyl option. It will need robust sales to make up for the streaming gap between it and SZA’s SOS, which will otherwise score its ninth week atop the Billboard 200. That would break a tie to make it the longest-running No. 1 album from a female artist this decade.
Pierce the Veil, The Jaws of Life (Fearless): Pierce the Veil were one of the most commercially successful post-hardcore bands of the 2010s, and its 2016 set, Misadventures, reached No. 4 on the Billboard 200. The Jaws of Life arrives in the wake of the 2022 lead single “Pass the Nirvana” — which tied 2015’s “The Divine Sorry” as the group’s highest-ever entry on the Hot Rock Songs chart with its No. 21 peak. (It also follows a viral moment for their decade-old Kellin Quinn collaboration “King for a Day,” which took off on TikTok last August.) Jaws‘ sales should be helped by over a dozen vinyl variants available on the band’s webstore.
Rihanna, Anti (Westbury Road/Roc Nation) & Good Girl Gone Bad (Def Jam): As you may have heard, Rihanna recently broke a five-year drought of public performances with a small gig Sunday night. Her Super Bowl Halftime performance, which included over a dozen of her biggest hits was watched by 118 million viewers, many of whom unsurprisingly took to streaming services and music retailers to re-listen to several of the classics she played – and even some she didn’t, based on the way her songs are blanketing the Spotify, Apple Music and iTunes charts.
The impact of the bump for these songs will be felt on the Billboard 200, where five of her albums look set to appear this week – most, if not all, in the chart’s top half. They will likely be led by Rihanna’s two perennial biggest albums: The 2016 Anti (from which she played parts of “Work” and “Kiss It Better”) and 2007’s Good Girl Gone Bad (“Umbrella”). The two releases rank at No. 50 and No. 137 on the current Billboard 200, having spent 354 and 103 weeks on the chart, respectively.
IN THE MIX
Post Malone, Twelve Carat Toothache (Mercury/Republic): Posty’s 2022 album has remained on the Billboard 200 since its No. 2 debut in June , and it’s now at No. 99 in its 36th week on the chart. It should see big gains next week, thanks to its debut on vinyl, which is now available in multiple variants. (Post has also been all over ads for the NBA’s upcoming All-Star Weekend, held in his current home state of Utah, and the and his visibility there could help as well.)
The Rock & Roll Hall of Fame is filled with hundreds of artists that combine commercial success with cultural influence: The Beatles (class of 1988), U2 (class of 2005), Blondie (class of 2006), The Who (class of 1990), Stevie Wonder (class of 1989), Bob Dylan (class of 1988) and Whitney Houston (class of 2020) represent dozens of No. 1 records, platinum records and Grammy Awards (and one Nobel Prize in literature).
Sometimes, as with Parliament-Funkadelic (class of 1997), importance can also be measured by the number of times their songs were sampled in hit songs. In other instances, such as the Grateful Dead (class of 1994), inclusion of the Rock & Roll Hall of Fame comes from an unmatched touring legacy more than a relatively modest sales history (In The Dark reached No. 6 on the Billboard 200 chart in 1987).
But influence alone might not be enough. In 2022, voters opted not to induct proto-punk groups New York Dolls and MC5, pioneering Afro-funk musician Fela Kuti and new wave group Devo (whose track “Whip It” reached No. 14 on the Hot 100 in 1980). They even passed on Beck, whose 180,000 album equivalents units far surpassed both Pat Benetar and The Eurythmics, although his airplay audience was far lower.
Influence can trump commercial success in determining who voters induct, however. The Ramones (class of 2002) and Velvet Underground (class of 1996) had little commercial success when active. Even as their fame grew over the decades, neither band’s catalog sales matched their significant cultural importance. The Hall has purposefully set aside space to recognize the genre’s foundational musicians. Blues greats such as Robert Johnson (class of 1986), Lead Belly (class of 1988), Howlin’ Wolf (class of 1991) and Elmore James (class of 1992) were inducted as “early influences” for their incalculable impact on rock music, not their album sales figures.
None of this year’s nominees have 2022 consumption numbers nearly as low as MC5 (8,000), New York Dolls (7,000) and Kuti (37,000) had in 2021. Warren Zevon is the at the bottom of the group with 66,000 units. Last year, Carly Simon’s 91,000 units was the lowest of the inductees.
Kate Bush, also passed over for induction in 2022, could have better odds this year after her 1985 recording “Running Up That Hill” re-entered the Hot 100 — peaking at No. 3 — thanks to the Netflix series Stranger Things. Last year, that renewed interest pushed Bush’s album equivalent up 326% and her U.S. radio audience up more than 5,400%, according to Luminate.
Returning nominees Rage Against the Machine and A Tribe Called Quest have some of the highest consumption figures of this year’s batch. Both groups had about the same number of equivalent units in 2021 and 2022. Soundgarden’s 218,000 album equivalent units are in the middle of the pack but could be helped by its airplay audience that ranked second only to Bush.
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 Feb. 11), SZA’s seven-week Billboard 200 No. 1 SOS faces new competition from best-selling K-pop stars TOMORROW X TOGETHER and career-reinventing albums from Sam Smith and Lil Yachty.
TOMORROW X TOGETHER, The Name Chapter: Temptation (Big Hit/Republic): A five-song EP from a Korean pop group that’s yet to notch a Billboard Hot 100 hit might seem like an unlikely challenger to SZA’s continued Billboard 200 domination. But don’t underestimate the selling power of TOMORROW X TOGETHER, the rising quintet that’s already reached the top five of the Billboard 200 albums chart twice this decade (with 2021 LP The Chaos Chapter: Freeze and 2022 EP Minisode 2: Thursday’s Child), thanks a devoted fanbase willing to spend on physical albums – sometimes in multiple variants.
Plenty of those variants are available this week for new EP The Name Chapter: Temptation, with 14 collectible deluxe CD packages — including exclusive versions for Barnes & Noble, Target and the group’s Weverse webstore, and a signed version via its own official U.S. webstore. Interest in those physical copies appears to still be growing: TXT’s label, Big Hit, reported over 2 million pre-orders worldwide for the new EP.
Sam Smith, Gloria (Capitol): Arguably the most-anticipated major pop release of January arrived last Friday (Jan. 27) with longtime top 40 fixture Sam Smith’s Gloria. The album is Smith’s first since 2020’s Love Goes, and comes off the back of the first Hot 100 No. 1 hit of their career in the Kim Petras collab “Unholy.” With massive buzz-building on TikTok, a harder-edged sound and more sexually suggestive lyrics, the single appeared to successfully modernize Smith for the 2020s.
While the ongoing success of “Unholy” will give Gloria a helpful head start on streaming, whether it will lead the album to a greater chart finish than the No. 5-peaking Love Goes remains to be seen. By mid-week, the only Gloria tracks remaining on Spotify’s Daily Top Songs USA chart were “Unholy” and the New Music Friday-leading Calvin Harris and Jessie Reyez collab “I’m Not Here to Make Friends,” while the full set ranks fifth on the iTunes albums sales chart. The album is also available in three vinyl variants — with one a Target exclusive (also available in CD) with two bonus tracks – and in a signed CD via Smith’s webstore.
Lil Yachty, Let’s Start Here (Concrete/Quality Control/Motown): While Atlanta rap star Lil Yachty is coming off his biggest hit of the 2020s in the TikTok-powered “Poland,” the buzzing trap of that 83-second single is hardly indicative of the psychedelic space rock found on his fifth album, Let’s Start Here. The sonic left turn, featuring contributions from renowned alternative artists like Mac DeMarco, Alex G and Foushée, has drawn mixed reviews but heavy online discussion, and may challenge for Yachty’s first top 10 album on the Billboard 200 since 2018’s Lil Boat 2.
IN THE MIX
The Grateful Dead, Dave’s Picks, Vol. 45 (Rhino): The latest in the legendary jam band’s Dave’s Picks series, which features live shows selected by Grateful Dead archivist David Lemieux, features a two-date 1977 stop at the Paramount Theater in Portland, Ore. Each of the last five Dave’s Picks have charted in the Nos. 11-15 range on the Billboard 200 and the Dead are still looking for their first top 10 on the chart since In the Dark hit No. 6 in 1987.
Elle King, Come Get Your Wife (RCA): A breakout star in the mid-’10s for jaunty rock crossover hit “Ex’s and Oh’s,” singer-songwriter Elle King decamped to Nashville and embraced country with third album, Come Get Your Wife. So far, so good for King: 2021 Miranda Lambert collab “Drunk (And I Don’t Wanna Go Home),” found on Wife, topped Billboard’s Country Airplay chart and became her first Hot 100 top 40 hit since “Ex’s.”
Tyler Hubbard, Tyler Hubbard (Hubbard House/EMI): As one-half of Florida Georgia Line, Tyler Hubbard was a regular visitor to the top of Billboard’s country charts, and topped the Billboard 200 with the duo’s 2014 sophomore album, Anything Goes. He didn’t need long into his solo career to establish his own chart-topping prowess: His first unaccompanied single, “5 Foot 9,” featured on his self-titled solo debut album, bested Country Airplay last November.
Bob Dylan, Fragments – Time Out of Mind Sessions (1996-1997) (Legacy Records): The Bootleg Series Vol. 17: With the 25th anniversary approaching of Bob Dylan’s album of the year win for Time Out of Mind at the ’98 Grammys, his latest Bootleg Series installment revisits that comeback effort with a remix of the original set and bonus outtakes, alternate versions and live cuts. The set, which originally peaked at No. 10 on the Billboard 200 in 1997, comes in two-CD and five-CD editions, as well as four-LP and 10-LP box sets.
The music business, historically speaking, has not been great at consensus. But there does seem to be growing agreement from many quarters now that the existing payment structure for streaming royalties isn’t working for everyone and that a different approach is required.
This isn’t a new idea, but it’s one that’s quickly gathering steam in the wake of Universal Music Group chairman/CEO Lucian Grainge’s internal staff memo/open letter to the industry earlier this month, in which he called for an “updated model” for the music industry — one that will be “an innovative, ‘artist-centric’ model that values all subscribers and rewards the music they love.”
It wasn’t clear what, exactly, Grainge meant in the letter. And on Tuesday (Jan. 31), it became a little bit clearer that, as of yet, there isn’t much clarity on what it will mean — though UMG is hoping to find it. To that end, Universal has announced a partnership with TIDAL to “research how, by harnessing fan engagement, digital music services and platforms can generate greater commercial value for every type of artist,” according to a press release. Essentially, there are a lot of unknowns here other than that something needs to change.
That was more or less what UMG’s executive vp/chief digital officer Michael Nash said in a statement accompanying the release. “As the digital landscape continues to evolve, it’s become increasingly clear that music streaming’s economic model needs innovation to ensure a vibrant and sustainable future,” he said. “Tidal’s embrace of this transformational opportunity is especially exciting because the music ecosystem can work better — for every type of artist and fan — but only through dedicated, thoughtful collaboration. Built on deeply held, shared principles about the value of artistry and the importance of the artist-fan relationship, this strategic initiative will explore how to enhance and advance the model in keeping with our collective objectives.”
This is not TIDAL’s first attempt at stepping out of the traditional streaming royalties model, in which streaming income is collected and divvied up among rights holders according to their share of total streams. In November 2021, the streamer announced a new three-tier membership structure and a step into a user-centric royalty model for its premium tier, which endeavored to pay rights holders based on the streaming activity of each individual user — with the additional element that 10% of each user’s subscription fee would go directly to their most-streamed artist.
That, in itself, is a twist on the “fan-powered royalties” that SoundCloud first rolled out in March 2021, which allocated streaming revenue to artists based on which acts a given user listened to, and which Warner Music Group opted into last year. (Deezer has also publicly supported a user-centric model.) SoundCloud says that artists using FPR generate 60% more streaming revenue than those who use the more traditional model, though it’s currently only being offered to indie artists and WMG artists on the SoundCloud platform; a MiDiA study said that 56% of artists were better off with FPR. Access to the data on who the fans are who are streaming that music the most, SoundCloud has said, is the true game-changer for the model.
There has, however, been some hesitance around that user-centric idea, mainly due to studies conducted in the last few years surrounding who would benefit, and at the expense of whom, by the switch. One study found that for 99.4% of artists, the switch would equate to less than a 5% bump in royalties — for many, effectively just a few euros per year — which could be offset by the administrative costs of the switch itself for the platform. That could disproportionately affect R&B/hip-hop artists, given that the genres have thrived in the streaming era, to the benefit of other, smaller or more niche genres. And it would definitely take away from top earners’ revenue — i.e., artists who wield an outsized voice in the business. A general view became that the switch would equate to moving money from one bucket to another, without really moving the needle for most artists at all.
TIDAL, in today’s announcement, effectively conceded the point and said they are stepping away from the user-centric model they were pursuing in order to take a step back and join in this new research project with UMG. “We are setting aside our current fan-centered royalties investigation to focus on this opportunity for more impact,” TIDAL’s Jesse Dorogusker said in a statement. “This partnership will enable us to rethink how we can sustainably improve royalties’ distribution for the breadth of artists on our platform.”
What they’re saying is, essentially, it’s time for a new study to see if there are better, perhaps more nuanced, ways to change up a model that pretty much everyone is beginning to agree is no longer functioning the way it was originally intended. “At TIDAL, we learned from [fan-centered royalties] there is an opportunity to build a royalties distribution model that could be better at compensating the breadth of genres and artists that contribute to streaming catalogs,” TIDAL’s global head of communications Sade Ayodele tells Billboard. “Many of the alternative models explored, however well intended that they are, unfortunately create a new set of winners and losers. With this partnership, we’re hoping to find a fairer and more equitable distribution approach that benefits a broader set of genres and artists contributing to the culture of music.”
Which brings us, again, to the original question: What will that look like? The answer could be varied, and it could be different for each streaming service. There have been some conversations in some sectors of the industry about weighting music streams higher than background sounds, for instance, or more heavily weighting intentional listening (searching for or clicking on a song or artist) over background listening (a playlist, or an algorithmically-chosen next song). There are already different models around ad-supported vs. paid subscription payouts, and there is a conversation to be had about how fan engagement should or could influence where money is directed. What UMG and TIDAL are trying to say with Tuesday’s announcement is, let’s go try some things and see what works, and let everyone else know what we’re doing so that maybe they can try to find an innovative answer, too.
Consensus is a hard thing to come by. There likely won’t be a consensus around what the end solution is, and several options could eventually emerge. But streaming has been around for more than a decade now, and if there’s any consensus at all, it’s that something needs to change.
In retrospect, 2022 will be remembered as the year of Bad Bunny. And while his album Un Verano Sin Ti dominated much of the year after its May 6 release, the boost that it gave to Latin music’s share of the overall market — with the highest growth in percentage year over year of any genre, going from 5.39% in 2021 to 6.33% in 2022, an increase of 28.8% — is not simply a one album, or even one year, phenomenon.
Between 2020 and 2022, Latin music grew 55.29% in album consumption in the U.S., according to Luminate, far outstripping the overall industry’s 21.61%, as well as the growth of the four biggest genres in the U.S. over that time: R&B/hip-hop (12.17%), rock (22.28%), pop (20.64%) and country (19.22%). And Latin isn’t alone: World Music has also made tremendous strides over that time period, growing 47.67% from 2020 through 2022 on the Stateside growth of K-Pop and Afrobeats, among other ex-U.S. genres, and up 25.8% in 2022 over 2021. Both genres have seen over 20% growth in on-demand audio streams dating back to 2019, while the overall industry has grown in that sector in the mid-teens each year during that time.
Those are two of just four genres (of the 15 tracked by Luminate) that grew at a faster rate than the overall music industry in 2022, which increased consumption 9.2% year over year. (The other two were children’s music, at 30.0%, and dance/electronic, at 11.7%; new age grew essentially in line with the business). And it speaks to how significant that growth has been, and could continue to be moving forward as the business becomes increasingly more global.
With 2023 fully underway, here are four more trends to watch this year:
How Big Is a Hit?
Children’s music (1.38%) overtook holiday music (1.26%) as the ninth-biggest genre in the U.S. this year due to the runaway success of Encanto, which helped boost the genre by 30% in consumption year over year (35.5% in on-demand streams). How significant was the effect of that hit? Growth for the genre year over year was 6.7% in 2020, and actually declined -3.7% in 2021, with on-demand streaming dropping 2.8% in each of those years. The growth is almost certainly unsustainable, but it shows the value of a surprise mainstream hit. For a related analog, comedy was the only genre to actually decline year over year, due to the sector coming back down to earth after the huge gains from Bo Burnham’s Inside (The Songs) album in 2021. From 2020 to 2021, overall comedy consumption ballooned 27.3%, with total on-demand streams growing 28.4%; those numbers fell to -11.3% and -5.0% in 2022, as the effect of the album receded.
Major Genres Shrinking in Share
As a statement of fact, year over year the four biggest, most dominant genres in the U.S. all declined in terms of their share of the overall market: R&B/hip-hop (from 27.72% in 2021 to 26.82% in 2022), rock (20.01% in 2021 to 19.95% in 2022), pop (13.05% in 2021 to 12.68% in 2022) and country (8.09% in 2021 to 7.76% in 2022). But there are a few ways of looking at that.
The first is that, when a genre is as dominant as R&B/hip-hop, for example, maintaining the same percentage growth gets harder every year. And the growth is still huge: the top four genres accounted for 67.21% of the market in 2022, even if down slightly from the 68.87% they held in 2021, and just shy of 50% of the gains year over year. And rock and R&B/hip-hop saw the two biggest increases in raw consumption numbers over 2021, with the former claiming 19.37% of the growth in 2022 over the year prior and the latter 17.13% of it.
The other way to look at it is that the market is, slowly but steadily, diversifying. Latin, the fifth-biggest genre in the country, was third in percentage of growth in the market, up 16.38% year over year; less than 1 million units separated its increase from R&B/hip-hop’s in 2022. Pop was fourth (8.67% of industry growth), but world music — the seventh-biggest genre overall — claimed the fifth-highest share of the market’s growth, at 5.53% year over year. And country, which claimed 4.17% of the growth, was run a close race by Dance/Electronic, at 4.14%. Just three years ago, in 2020, Latin made up 4.95% of the overall market and World Music 1.88%. That doesn’t seem like regular fluctuation, but a true growth trend.
R&B/Hip-Hop Report
Over the last few years, there has been an accepted fact of the marketplace: In a streaming world that reflects not just what people are buying, but what people are continuing to stream and listen to, R&B/hip-hop dominates. That is still, unquestionably, the case. But lately there has been some hand-wringing about the slowing growth of the genre and what that could mean for the broader marketplace, a fair question for others to answer.
Here are some facts: R&B/hip-hop is now 26.82% of consumption. It’s been growing consistently — up around 6% per year the last few years — though not as much as the marketplace overall for several years now percentage-wise. And its share of total on-demand streams dropped from 30.11% in 2021 to 28.61% in 2022. In raw numbers it’s still growing massively, though, second only to rock in share of the industry’s total unit growth in 2022. And compared to 2017 — the year that Luminate predecessor Nielsen first declared that R&B/hip-hop had become the biggest genre in the industry — it still claims a higher share of the market. So while it displays a higher variance year to year than some other genres, the sky isn’t falling just yet.
R&B/Hip-Hop Share of Consumption By Year:2017: 24.52%2018: 25.94%2019: 28.62%2020: 29.07%2021: 27.72%2022: 26.82%
Country Streaming Sputters, Rock’s Resilience
Country’s streaming growth is slowing down. After big gains in audio on-demand streaming the past two years (22.1% in 2020 and 16.5% in 2021) as more of its audience began to embrace the format, that figure slipped below the audio streaming growth of the overall industry in 2022, 11.1% vs. 12.2%, respectively. And total on-demand Country streaming (audio plus video) grew at 9.8%, compared to 12.2% for the overall industry. (Yes, overall and audio on-demand streaming grew at the same rate.) That isn’t the end of the world — R&B/hip-hop on-demand audio streaming has grown less than the overall market percentage-wise in the past few years, though its raw numbers are still massive — but it’s worth noting that the growth is slowing year over year after outpacing the market recently, and its percentage of the growth in on-demand streaming in 2022 was just 6.01%, by far the lowest of the five biggest genres. In total consumption, country grew just 4.8%, slightly over half the rate of growth of the overall industry (9.2%), with its share of the market slipping from 8.09% in 2021 to 7.76% in 2022.
It’s notable compared to the fortunes of rock music. For all the “Rock Is Dead” talk, the format is essentially keeping pace with industry trends overall (up 9.0% in consumption, 14.3% in on-demand streams) and actually grew its share of overall on-demand streaming year over year, from 16.30% in 2021 to 16.62% in 2022, while continuing to flat-out dominate in sales (43% of the market). Again, rock was the genre that showed the most growth in 2022 over 2021: at 19.37%, it outpaced R&B/hip-hop (17.13%) and Latin (16.38%) for the biggest share of growth year over year.
With all the many fan theories bouncing around the internet in the weeks since Miley Cyrus released her Billboard Hot 100-topping new single “Flowers,” a particular amount of attention has been paid to its relationship to Bruno Mars‘ own No. 1 hit from a decade earlier, the torch song ballad “When I Was Your Man.”
Countless fans have pointed out the lyrical similarities between the two songs — particularly their respective choruses — with “Flowers” echoing many of Mars’ regretful sentiments from an opposing, unmoved perspective. (For example, Mars laments on “Your Man,” “I should’ve bought you flowers… take you to every party, ’cause all you wanted to dance,” while Cyrus protests on “Flowers,” “I can buy myself flowers… I can take myself dancing.”) Speculation behind the extended reference has centered around the song being a favorite of Liam Hemsworth’s, furthering the idea of the song as a kiss-off to Cyrus’ real-life ex. The buzz over the two songs was even enough to give “Your Man” a nearly 20% bump in weekly streams in the frame following the release of Cyrus’ new single.
With the relationship between the two songs appearing obvious to fans, many have wondered over social media whether Mars or “Your Man” co-writers Andrew Wyatt, Philip Lawrence and Ari Levine deserve writing credits on “Flowers.” To a degree, this sort of thing — offering writing credits to obvious sources of musical inspiration — has become common practice in new songs by popular artists, even if a direct sample is not present and the use of an interpolation is an arguable matter of interpretation. Well-publicized cases of that phenomenon include Olivia Rodrigo adding Paramore’s Hayley Williams and Josh Farro to the credits of her “Good 4 U” due to the song’s musical similarities to their “Misery Business,” and Beyoncé including “Show Me Love” scribes Fred McFarlane and Allen George in the credits to her “Break My Soul” due to some overlapping sonic elements with the Robin S. smash.
The case of “Flowers” and “When I Was Your Man” is a little different, though. Those previously mentioned examples were mostly based around sonic similarities — melodic, rhythmic and textural — which were close enough in nature that a case could have been made that the original’s copyright was infringed upon. However, not only are there no direct samples or obvious interpolations between “Flowers” and “Your Man,” there are no major sonic overlaps either — no obvious shared melodies or rhythms, no major similarities in production textures. When Cyrus sings “I can buy myself flowers,” for instance, she does so in a cadence and melody of her own, without any significant similarity to how Mars sang “I should’ve bought you flowers.”
The only obvious similarities, then, are in the songs’ lyrics — which are not identical, but do share elements and ideas — and merely using some of the same words as an older song is not considered grounds for infringement.
“This is great fodder for fan theories, but lawyers should have nothing to do with it,” says Joseph Fishman, a professor at Vanderbilt Law School in Nashville and an expert in music law. “There are no songwriter credits for the ‘When I Was Your Man’ writers because no license should be necessary.”
Cyrus’ arguable use of Mars’ lyrics as a reference point for her own expression is certainly not without precedent, with the “answer song” serving as a longtime staple of popular music. Famous examples include any number of responses (The Miracles’ “I Got a Job,” The Heartbeats’ “I Found a Job”) to The Silhouettes’ ’50s doo-wop staple “Get a Job,” Lynyrd Skynyrd’s rejoinder to Neil Young’s “Southern Man” in their ’70s southern rock classic “Sweet Home Alabama” (“I hope Neil Young will remember/ Southern man don’t need him around anyhow”) and countless rap diss records dating back to the ongoing “Roxanne Wars” of the mid-’80s, when male rap group U.T.F.O. and female rappers Roxanne Shanté and The Real Roxanne (among others) all traded barbs with new singles. While many of these singles included lyrical references to their predecessors, most did not include additional writing credits for those songs’ performers.
“Lyrically, sure, there’s enough similarity to make listeners think that ‘Flowers’ is deliberately responding to the earlier song,” Fishman offers. “But even if we assume that’s true, so what? Using one song to issue a retort to an earlier song is not, by itself, infringement. John Mayer and Taylor Swift don’t need to cross-license anything when they write songs at each other.”
Does all this mean that there’s no chance of Mars and his co-writers eventually being added as co-writers to the “Flowers” credits? Not necessarily: Whether or not Cyrus is protected legally from legal recourse from the “Your Man” writers, she may ultimately decide to add them anyway as an act of goodwill and out of a desire to avoid further conflict, particularly with all the media attention the similarity between the songs has received. It’s not uncommon for additional songwriting credits to be added to a song after its initial release — as was the case with “Good 4 U” in 2021 — often following a period of negotiations between the concerned parties. But if the names of Mars and his co-writers stay absent in the credits, Cyrus is not likely to have any legal responsibility to give them their “Flowers” there.
