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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.
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. 4), SZA’s SOS remains in the driver’s seat on the Billboard 200 albums chart, but runs into new albums by country hitmaker HARDY, prolific rapper Trippie Redd and rock revivalists Måneskin.
HARDY, The Mockingbird & The Crow (Big Loud). Few country radio fixtures know as much about how to succeed in an era dominated by hip-hop- and streaming as Michael Wilson Hardy. The genre-blending singer-songwriter has collaborated with countless artists, released several mixtapes, and generally been as prolific as any popular rapper over the past half-decade – while remaining a steady chart presence, with Hot 100 top 40 hits in the past year alongside Breland and Dierks Bentley (“Beers on Me”) and Lainey Wilson (“Wait in the Truck.”)
The latter single can be found on HARDY’s 17-track The Mockingbird & The Crow set, released last Friday (Jan. 27), as part of the album’s country-oriented A-side – with its second half taking on a hard rock bent. The album appears to be selling well digitally, leading the iTunes albums chart for most of the week. If it does claim the Billboard 200’s No. 1 position, it would be the first country album to do so since Dangerous: The Double Album, the blockbuster 2021 chart-topper from Morgan Wallen – who, incidentally, is also featured on Mockingbird’s “Red.”
Trippie Redd, Mansion Musik (1400 Entertainment/10K Projects). One of the great volume shooters of hip-hop’s past five years, Trippie Redd returned from an unusually lengthy two-year album break last week with the 25-track Mansion Musik. The set consists entirely of previously unreleased material, and is predictably loaded with A-list guests, including Future, Lil Baby, Travis Scott, Lil Durk, and even the late Juice WRLD — who appears on “Knight Crawler,” which led Spotify’s most recent New Music Friday playlist. Each of Trippie’s past six full-length projects have reached the Billboard 200’s top five, and Mansion Musik should have a good chance to extend its streak to seven.
Måneskin, Rush (Epic/Sony). Italian fourpiece Måneskin parlayed a Eurovision win into global rock stardom in 2021 – boosted by TikTok-accelerated crossover success for a cover of The Four Seasons’ “Beggin’” and a series of incendiary live performances on U.S. television. About a year and a half later, the band has finally released its English-language debut album Rush, featuring their rock radio hit “Supermodel” and contributions from pop-rock super-writer-producers like Rami Yacoub, Mattman & Robin and Max Martin.
Måneskin are still relatively modest performers among big hitmakers when it comes to U.S. streaming, so their Billboard 200 performance will likely largely be dictated by sales. To that end, the quartet has released a variety of physical variants of Rush, with vinyl, CD and cassette versions, and a box set edition that collects all three formats, along with a poster and 64-page photobook. The group has also made old-fashioned record store promotional appearances during the album’s release week, including New York-area shops Rough Trade NYC and Looney Tunes.
IN THE MIX
Ice Spice, Like…? (10K Projects/Capitol): One of the most buzzed-about new rappers of 2022 arrives with her first EP, named after her “Like..?” mini-catchphrase. The six-track set includes Ice Spice‘s internet-conquering breakout tracks “Munch (Feelin’ U)” and “Bikini Bottom,” as well as the new, Lil Tjay-featuring “Gangsta Boo,” and the currently ascending TikTok favorite “In Ha Mood.”
Crosby, Stills, Nash & Young, Déjà Vu (Atlantic): Following the death of ‘60s rock legend David Crosby, the enduring material he was involved with as part of The Byrds and Crosby, Stills, Nash & Young have naturally surged in sales and streams. The biggest beneficiary so far appears to be CSNY’s 1970 classic Déjà Vu, featuring signature songs like “Teach Your Children,” “Our House” and “Helpless” — though the latter is one of several Déjà Vu tracks not currently available on Spotify, due to songwriter Neil Young’s continued protests of the streaming service.
Six months ago, in an email to staff, Spotify CEO Daniel Ek said that the company would “be a bit more prudent” in its hiring over the next few quarters. That came a week after Spotify’s June 8, 2022, investor day presentation on its plans to improve its margins.
The key would be podcasts, executives said, along with a new foray into audiobooks. Within three to five years, podcasts could bring in gross margins of 30-35%, which could later rise to 40-50% — far more than the company can earn from recorded music.
The company’s podcast business hasn’t come cheap, though. Spotify – which on Monday (Jan. 23) announced plays to lay off 6% of its workforce, as well as the voluntary departure of chief content officer Dawn Ostroff – spent hundreds of millions of dollars acquiring podcast start-up and programing. Ostroff spent big to get exclusive rights to The Joe Rogan Experience, as well as projects from Barack and Michelle Obama’s Higher Ground Productions; Kim Kardashian; and Prince Harry, Duke of Sussex, and Meghan Markle.
From a programming perspective, the podcasts worked. Spotify is now the most popular podcast platform in the U.S., as well as many other markets, and the exclusive programming helps attract advertisers. The company also introduced new podcast advertising formats that helped it grow its podcasting business to $200 million annually.
The podcasts didn’t solve Spotify’s financial issues, though. The company has always grown fast by any measure, including audience, subscribers, and revenue. But since it paid out a significant share of its revenue to labels and publishers, Spotify never had the profit margins of former Wall Street darlings like Facebook and Netflix. Podcasts were supposed to solve this, but they cost so much up front that they caused a $103 million drag on gross profit, CFO Paul Vogel said during the June presentation.
Last year was difficult for stocks in general, especially those of many technology companies, but Spotify has suffered more than most. Riding high on lockdown-time gains, its share price peaked at $364.59 on Feb. 19, 2021. By a year later, it had fallen 58% to $152.27, and then on Nov. 4, 2022 bottomed out at $69.29 — 81% below its all-time high closing price. Had it made more progress on improving margins, Spotify’s share price probably would have weathered the storm a bit better.
Now, the market will find out if the adage “to cut is to cure” applies to the music streaming business. The layoffs Spotify announced Monday will involve around 600 employees. Not among them is chief content officer Dawn Ostroff, who chose to depart the company. Alex Norström, currently chief freemium business officer, will be responsible for product and will share co-president title with Gustav Söderström, currently chief research & development officer.
Citi analyst Jason Bazinet believes the layoffs are about “trying to stem the losses in podcasting.” Investors aren’t convinced Spotify has a viable business model, he says. “The revenues have done well but there’s not a lot of cash flow. A lot gets paid back to the labels.”
The market’s response to the news was positive, but muted. Spotify shares closed on Monday at $99.94, up 2.1%, after spiking to $104.00 that morning.
Overall, podcasting doesn’t seem to be working as well, or as quickly, as Spotify had hoped. While Spotify beat expectations for subscribers and monthly active users in the third quarter, its gross margin and operating loss were below earlier guidance.
The podcast business is an obvious place for Spotify to start cutting. The company began paring expenses in October by eliminating some original podcasts and cutting “at least” 37 positions at its Parcast and Gimlet studios.
“I think it’s the right strategy,” says Bazinet. “It’s going to be difficult to shift the balance of power with record labels.”
Now, the goal is to make Spotify more efficient, according to CEO Daniel Ek’s open letter released on Monday. “In hindsight, I was too ambitious in investing ahead of our revenue growth,” Ek wrote – meaning investing in personnel, not companies. The layoffs, as well as an organizational restructuring, will both control costs and quicken decision-making, he explained. Ek isn’t alone in highlighting efficiency lately. Facebook CEO Mark Zuckerberg has taken a hard line on underperforming employees. New Twitter CEO Elon Musk expects whatever workers remain at the company to be “extremely hardcore.”
Spotify’s numbers suggest that the company may have room for improvement. Bazinet points out that in 2016 Spotify’s roughly 2,100 employees generated an average of 1.41 million euros per person while in 2021 its 6,600 employees’ per-head revenue was 1.46 million euros. That implies that Spotify failed to achieve the kind of operating leverage that would create additional value as it added employees.
As for Ostroff, her departure could mark the end of the first chapter of Spotify’s podcast business. Neither Spotify nor investors seem to have much appetite for writing big checks these days. And exclusive content seems to have an inherently limited life span. Obama’s Higher Ground Productions left for Amazon. Brené Brown’s two exclusive podcasts, Unlocking Us and Dare to Lead, have come to an end.
Ostroff certainly made her mark on the company, though. The Joe Rogan Experience has battled through controversies to become the platform’s most popular podcast, heard by a quarter of Spotify users; and 19% of all podcast listeners in the U.S. listen to TJRE, according to a recent Morgan Stanley survey. Kardashian’s true crime podcast got off to a great start in October by beating TJRE and Markle’s Archetypes. Spotify’s foray into spoken-word audio may have been costly, but it was effective.
Now, Spotify enters a new phase of cost conscientiousness. With the layoffs and reorganization, it has given investors a tangible commitment to deliver on the aggressive goals it laid out in June. That heightens expectations, though. If Spotify can’t maintain its growth with a slightly smaller headcount, it will be hard for it to deliver better margins – and the market is unlikely to be forgiving.
With Tuesday’s flurry of festival lineups — including Boston Calling, Bonnaroo, Sonic Temple Festival, and, finally, Coachella — the 2023 North American festival season formally kicked off, and music fans can expect more announcements to follow.
This figurative ringing of the bell is typically reserved for Coachella (and Coachella alone), which usually announces its lineup the first week of January. But when Los Angeles-based concert promoter Goldenvoice didn’t deliver on time — for unexplained reasons — it left some executives wondering what to expect from potential ripple effects throughout the festival circuit.
That’s due to Coachella’s contracts and stature in the business. Coachella’s artist contracts come with radius clauses that give the Southern California festival first right to announce its artist lineup in the region. As such, festivals have worked out a largely unspoken schedule for announcing their lineups after Coachella goes first, and then navigating similar first-announce and radius clauses other major festivals may have.
In this case, Live Nation-owned festivals Boston Calling and Bonnaroo booked 070 Shake, Sofi Tukker and Knocked Out, who were playing Coachella as well. Both lineups were slated to drop on Jan. 10 — but with the morning of the 10th approaching and no Coachella lineup announced, agents for the acts had to check in with Goldenvoice to let them know about the Bonnaroo and Boston Calling announcements.
Making things more complicated was that both Live Nation-owned festivals, along with the Danny Wimmer Presents-owned Sonic Temple Festival in Columbus, Ohio, had coordinated their lineup announcements to take place hours apart on Jan. 10 at the request of the Foo Fighters, who wanted a somber announcement surrounding their return to the stage following longtime drummer Taylor Hawkins’ death last March.
Goldenvoice president/CEO Paul Tollett told the agencies there was no problem with the lineup announcements happening before Coachella, and a small dustup was easily avoided. The episode, however, is illustrative of how a small group of concert promoters, powerful booking agents and contract attorneys regulate and protect the music festival industry.
At the top of that system is Coachella, a cultural and economic juggernaut that sells more than $100 million worth of tickets each year over two weekends in mid-April, making it the first major festival to take place each year. In order to protect the massive investment in artist fees it pays each year, AEG-owned Goldenvoice requires artists to sign radius clauses agreeing not to announce their participation in festivals that take place in California, or in states neighboring California, until after their performance at Coachella. Artists participating in festivals in states not neighboring California generally only have to wait until after the Coachella lineup announcement before publicizing their involvement in other events.
Today, most major festivals use radius clauses to restrict participating artists from performing at competing events that fall too close geographically or chronologically. Managing this complex web of obligations and radius clauses typically falls on an artist’s booking agent, who negotiates the agreements between festivals and artists while managing their client’s radius clause obligations throughout the touring cycle.
In order to avoid violating each other’s radius clauses, since 2014, festivals that take place in the first part of the year have worked on a schedule starting in the first week of January for announcing their lineups. From 2014 to 2020, the lineup for Coachella was announced during the first week of January. But for the last two years, following the pandemic and the cancellation of the 2020 and 2021 festivals, Coachella’s lineup announcement hasn’t taken place until the second week of January, causing minor delays to festival lineup announcements that have traditionally followed Coachella.
While some of Coachella’s critics say the festival’s pole position in the lineup announcement hierarchy affords Goldenvoice far too much power over smaller festivals, one booking agent told Billboard that Tollett is “exactly the type of person you want in that position.”
“He wants to protect his event, which he spends tens of millions of dollars on each year. He’s first in line because his event is the major festival each year,” says the agent. “But if he needs a little more time to announce his festival, he’s going to accommodate the requests of any festival he impacts. He’s fair and always does the right thing.”
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 Billboard 200 albums chart dated Jan. 14): SZA’s SOS continues to dominate, while YoungBoy Never Broke Again makes a quick return after a busy 2022 and a half-decade-old BTS album debuts on vinyl.
YoungBoy Never Broke Again, I Rest My Case (Motown/Never Broke Again): After an absurdly prolific 2022 that included seven full-length releases – two collaborative albums, four mixtapes and one official album – star rapper YoungBoy Never Broke Again returns, just two weeks into 2023, with his fifth solo studio album, I Rest My Case. The 19-track set is his first release on his new Motown label, after completing his deal with Atlantic in 2022.
From the early returns, YoungBoy’s previous productivity may be working against him, since the album’s tracks have not taken over the daily DSP charts like past YoungBoy solo albums, the last three of which hit the Billboard 200’s top two. Case will also not be helped by any big-name guests, since the album has no features on its 11 tracks. It will have its work cut out for it getting YoungBoy back to the chart’s top five, let alone threatening the four-week reign of SZA’s SOS blockbuster, which shows little sign of slowing down in its fifth week.
BTS, Love Yourself: Her (Big Hit/Universal): The Love Yourself: Her EP release marked a big U.S. breakthrough for K-Pop superstars BTS back in 2017, reaching the Billboard 200’s top 10 and spawning their first two Billboard Hot 100 hits in “DNA” and “Mic Drop.” The EP is likely to return to the chart’s top tier after making its physical debut on vinyl — the septet’s first-ever release on the format — along with a package that includes seven photo cards (one for each member), two posters, a sticker and a bookmark.
French Montana & DJ Drama, Coke Boys 6 (Coke Boys): Outside of YoungBoy, few hip-hop artists were as prolific on the 2022 charts as DJ Drama, who notched hit albums alongside Jeezy, Snoop Dogg and several other big-name rappers. He’s back this week with veteran New York hitmaker French Montana, for the latest installment in the latter’s signature Coke Boys series. CB6 boasts 20 tracks and a wide variety of big-name guests, including fellow rap stars Kodak Black, Nav and A$AP Rocky, and the set already has its own Money Heist Edition deluxe reissue, adding an extra nine tracks to the total.
Mariah Carey may have had the most popular song of the 2022 holiday season, but Pentatonix was its most-listened-to act. The five-person vocal group had 92 recordings in the top 10,000 holiday tracks and total consumption of 2.58 million song units, based on sales and streams from Nov. 4 to Dec. 22, according to Luminate — more than any other artist.
While Pentatonix doesn’t have the same kinds of smash singles as Christmas-time mainstays like Carey, Andy Williams and Burl Ives, the group uses a combination of quantity and popularity to drive its seasonal success. Pentatonix’s top holiday track, a cover of Leonard Cohen’s “Hallelujah,” ranked No. 43 and accounted for about 10.5% of its total track consumption. Its cover of the David Foster-Jennifer Thompson-Jenner song “Grown Up Christmas List” ranked No. 187 and its rendition of the traditional songs “O Come All Ye Faithful” and “Deck the Halls” were Nos. 189 and 191, respectively. Additionally, Pentatonix’s collaboration with Maren Morris, “When You Believe,” from the 1998 animated feature The Price of Egypt, ranked No. 188.
While most artists are content with the occasional holiday release, Pentatonix has released four studio albums comprised mostly or entirely of holiday music since Oct. 2018: Christmas Is Here! In 2018, We Need a Little Christmas in 2020, Evergreen in 2021 and Holidays Around the World in 2022. In addition, the group released a compilation album, The Best of Pentatonix Christmas, in 2019. Some recordings from its 2012 EP PTXmas and its 2014 album That’s Christmas to Me remain popular to this day. In addition, each November and December, the group tours U.S. arenas to perform holiday music.
Carey’s “All I Want for Christmas is You” was once again the most popular holiday track with 1.29 million song units, narrowly beating the 1.24 million song units of Brenda Lee’s “Rockin’ Around the Christmas Tree.” But Carey, the self-described “Queen of Christmas,” doesn’t have Pentatonix’s depth of holiday catalog. She ranked fifth in total consumption with 1.96 million units from 36 tracks within the top 10,000. Her second-most popular holiday recording, a cover of Darlene Love’s 1963 standard “Christmas (Baby Please Come Home),” ranked only No. 68. Her 2010 original recording “Oh! Santa” ranked No. 110 and her version of the traditional Christmas carol “Hark! The Herald Angels Sing” was No. 130.
The No. 2 holiday artist was Bing Crosby with 2.43 million song units from 61 tracks in the top 10,000. Crosby’s top recording, “White Christmas,” was No. 13. “Hawaiian Christmas Song” at No. 38, “Winter Wonderland” at No. 63, “Silent Night” at No. 72, “I’ll Be Home for Christmas” at No. 83, “The Little Drummer Boy” at No. 86 and “Do You Hear What I Hear?” at No. 95.
At No. 3 was Michael Bublé, whose 25 recordings in the top 10,000 amassed 2.39 million song units. Bublé had numerous songs in the top 100, including “It’s Beginning to Look a Lot Like Christmas” at No. 16, “Have Yourself a Merry Little Christmas” at No. 31, “I’ll Be Home for Christmas” at No. 45 and “Holly Jolly Christmas” at No. 46. Bublé also stands out for having numerous recordings in the top 100 that are the second-most popular versions of the songs. (Burl Ives’ version of “Holly Jolly Christmas,” ranked No. 4 while Perry Como’s “It’s Beginning to Look a Lot Like Christmas” ranked No. 10.) But Bublé is also notable for knocking off some holiday legends. His 19-year-old version of “I’ll Be Home for Christmas” ranks 38 slots above Bing Crosby’s historic recording from 1943.
Nat King Cole ranked fourth in holiday music consumption with 2.1 million song units from 33 recordings in the top 10,000. Cole’s top recordings were his now-standard versions of “The Christmas Song” at No. 12 and “Deck the Halls” at No. 15. “O Come All Ye Faithful” and “Joy to the World” were also in the top 100, at Nos. 51 and 82, respectively.
After Carey at No. 5, artists in the top 10 were Andy Williams (1.84 million), Frank Sinatra (1.71 million), Perry Como (1.38 million), Burl Ives (1.37 million) and Brenda Lee (1.31 million).
This year, a handful of new recordings beat long odds and were among the 50 most popular holiday tracks: Lizzo’s cover of Stevie Wonder’s “Someday at Christmas” and Lauren Spencer-Smith’s version of “Last Christmas” by Wham! ranked Nos. 39 and 47, respectively, in consumption – measuring track sales and streams – from Nov. 4 to Dec. 22, according to Luminate. Kane Brown’s version of “Blue Christmas,” made famous by Elvis Presley, ranked No. 48.
If historical trends persist, though, many of this year’s new holiday recordings won’t even survive the summer. Creating a holiday standard is one of the most difficult, unlikely tasks in all of songwriting.
Looking back over the last five years shows the slim odds a new recording faces in becoming an annual favorite. In 2017, 72 newly released tracks made the top 1,000 holiday recordings of the last two months of the year. Three of them — Sia’s “Santa’s Coming for Us” (No. 37), Pentatonix’s “Let It Snow! Let It Snow! Let It Snow!” (No. 68) and Us the Duo’s “Have Yourself a Merry Little Christmas” (No. 98) — made the top 100. Gwen Stefani had eight of the 72 new recordings in the top 1,000. Hanson’s “Finally, It’s Christmas,” at No. 610, was an original song competing against new recordings of well-worn favorites like “Wonderful Christmastime” and “The Christmas Song.”
Five years later, only 30 recordings released in 2017 remained in the top 1,000. Sia’s “Santa’s Coming for Us” dropped from No. 37 to No. 171, while her song “Snowman” has risen to No. 53 to become the most popular recording of the class of 2017. Stefani had only three recordings from 2017 in the top 1,000, and her top-ranked holiday song, “You Make It Feel Like Christmas,” released in 2011, slipped to No. 42 from No. 18 five years earlier. Hanson was in the top 1,000 — with “What Christmas Means to Me,” originally recorded by Stevie Wonder in 1967, not its original song from five years earlier.
To become a holiday favorite, a new recording must prove itself by competing against popular holiday songs that have withstood decades-long wars of attrition. Mariah Carey’s “All I Want for Christmas Is You” is a relatively young holiday standard at 28 years old. “Last Christmas” by Wham!, ranked No. 5 this holiday season, is 36. Ariana Grande’s “Santa Tell Me” (No. 7) and Kelly Clarkson’s “Underneath the Tree” (No. 8), just 8 and 12 years old, respectively, have beaten the odds to challenge established recordings like Andy Williams’ “It’s the Most Wonderful Time of the Year” (No. 6), released in 1963 and often heard in advertisements and movie soundtracks.
That weeding-out process isn’t enough to deter songwriters from trying to create the next holiday hit and collect royalty checks year after year, though. This year, Chris Isaak, Backstreet Boys and Thomas Rhett released albums or EPs of Christmas songs. Sam Smith, Alanis Morissette, Dan + Shay, Joss Stone, Lukas Graham and Remi Wolf released individual tracks.
Even though the odds of writing a holiday standard are slim, the payoff is a lure, says Rhett Miller, singer for the alt-country band The Old 97’s. Miller and his musician friends have told “a probably apocryphal story” amongst themselves about musician Nick Lowe walking to his mailbox one day in a bath robe and finding a check for a million dollars not knowing that Curtis Stigers’ cover of his song “Peace, Love and Understanding” was featured on the soundtrack to the movie The Bodyguard that would go on to sell 44 million copies worldwide.
“In the olden days, landing a song on a soundtrack like that was sort of the end all be all,” says Miller. “But, really, the Christmas song is the biggest dream of any songwriter — to have a song that connects and becomes a standard.” Miller acknowledges the long odds a holiday recording faces in becoming a recurring hit. Writing a holiday standard is like winning the lottery: A jackpot is exceedingly unlikely, but, as the saying goes, you can’t win if you don’t play. “I did have an idea that if we contributed an album of holiday songs to the conversation, we would at least be in the running for one of those songs that connected,” says Miller.
Miller has the benefit of having an influential company in his corner: Disney. James Gunn, writer and director of Marvel Comics’ Guardians of the Galaxy movie franchise, cast the Old 97’s for the Guardians of the Galaxy Holiday Special that premiered on Disney+ video on-demand streaming service in November. The Old 97’s re-recorded their original song, “Here It Is Christmastime,” with actor-singer Kevin Bacon, and performed the song wearing prosthetic makeup. That helped “Here It Is Christmastime” debut at No. 7 on the Holiday Digital Song Sales and No. 27 on the all-genre Digital Song Sales charts for Dec. 10. Although the recording ranks only at No. 865 this holiday season, it will likely benefit from Marvel Comics fans viewing the special in the coming years.
In the streaming age, nothing helps posterity like a partnership with a giant multi-national entertainment platform. Lizzo, Spencer-Smith and Brown, the top of the Class of 2022, recorded their holiday tracks under exclusive partnership with Amazon Music. In earlier years, Amazon Music has released original holiday recordings by Katy Perry (“Cozy Little Christmas” in 2018), Carrie Underwood (an original song, “Favorite Time of the Year,” in 2020), John Legend (“Happy Christmas [War Is Over]” in 2019), Taylor Swift (“Christmas Tree Farm [Old Timey Version]” in 2019) and Camila Cabello (“I’ll Be Home for Christmas” in 2021).
“Each year, we really look to work with artists that we know our customers love and who we think are going to be a good fit for our holiday listeners and really work with them to find the right track,” says Stephen Brower, global co-lead, artist relations at Amazon Music, “whether that’s a cover in the case of Lizzo doing Stevie Wonder’s ‘Someday at Christmas’ or in Katy and Carrie’s cases, having brand new songs.”
What holiday listeners seem to want every November and December is comfort music that harkens back to eras bygone. Even an original holiday song must have a classic, throwback sound that takes from late ’50s and early ’60s pop and rock. The rockabilly in Bobby Helms’ “Jingle Bell Rock” and Phil Spector’s “wall of sound” production in The Ronettes “Sleigh Ride” set a template that’s been closely followed by later artists. “Ever since Mariah, only songs that had that ’60s Spector feel seem to be getting any traction,” says Sean Ross, author of the Ross on Radio newsletter.
Christmas is no time to reinvent the wheel. Recreating the sounds of Christmas past gives Lizzo, Spencer-Smith and Brown the best chance at capturing an audience and maintaining momentum for the next five years. “Because the Christmas music season is typically only about six weeks, people don’t get tired of them,” Tom Poleman, chief programming officer for iHeartMedia, says in an email to Billboard. “As a result, there’s a huge supply of great songs to play, making it hard for new ones to cut through. The ones that do break through are usually well-made remakes of holiday classics by a big star like Kelly Clarkson.”
This holiday season, Clarkson’s covers of Chuck Berry’s “Run Run Rudolph” (No. 103) and Mariah Carey’s “All I Want for Christmas Is You” (No. 238) were the first and second most popular versions of those songs after the originals. She also has popular versions of “My Favorite Things” (No. 282), “Please Come Home for Christmas” (No. 317) and “Silent Night” (No. 382). But Clarkson is the rare contemporary artist whose original songs are more popular than her covers. In a few years, “Under the Mistletoe” (No. 105) from 2020 and “Christmas Isn’t Canceled (You Are)” (No. 168) from 2021 could become the next “Underneath the Tree” (No. 8).
Miller is aware of the long odds that “Here It Is Christmastime” faces in the coming years – but he’s hopeful he can have a Clarkson-level hit one day. “It’s going to be something,” he says. “But will it be my Nick Lowe-in-a-bath robe moment? I don’t know. It would be great if something broke through.”