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Warner Music Group reported on Thursday that total revenue for its fiscal year rose 6% compared to a year-ago on strong digital and streaming subscription revenue. The company reported $6.43 billion in total revenue for the twelve months ending on Sept. 30, up 6% from the roughly $6 billion the company generated in the 12-months […]
The Artist Rights Symposium returns for a fourth year on Wednesday (Nov. 20) at a new location — American University’s Kogood School of Business. This year the day-long event will feature panels like “The Trouble with Tickets,” “Overview of Current Issues in Artificial Intelligence Litigation,” and “Name, Image and Likeness Rights in the Age of AI.” Plus, the symposium will feature a keynote with Digital Media Association (DiMA) president and CEO Graham Davies.
Founded by University of Georgia professor, musician and activist Dr. David C. Lowery, the event has been held at the university in Athens, Georgia for the last three years. Now that the event has moved to Washington, D.C., the Artist Rights Symposium can take advantage of the wealth of music professionals in the city. This includes D.C.-based panelists like Davies, Stephen Parker (executive director, National Independent Venue Association), Ken Doroshow (Chief Legal Officer, Recording Industry Association of America), Jalyce E. Mangum (attorney-advisor, U.S. Copyright Office), Jen Jacobsen (executive director, Artist Rights Alliance), Jeffrey Bennett (general counsel, SAG-AFTRA) and more.
The Artist Rights Symposium is supported by the Artist Rights Institute.
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See the schedule of events below:
9:15-10:15 – THE TROUBLE WITH TICKETS: The Challenges of Ticket Resellers and Legislative SolutionsKevin Erickson, Director, Future of Music Coalition, Washington DCDr. David C. Lowery, Co-founder of Cracker and Camper Van Beethoven, University of Georgia Terry College of Business, Athens, GeorgiaStephen Parker, Executive Director, National Independent Venue Association, Washington DCMala Sharma, President, Georgia Music Partners, Atlanta, GeorgiaModerator: Christian L. Castle, Esq., Director, Artist Rights Institute, Austin, Texas
10:15-10:30: NIVA Speculative Ticketing Project Presentation by Kogod students
10:45-11:00: OVERVIEW OF CURRENT ISSUES IN ARTIFICIAL INTELLIGENCE LITIGATIONKevin Madigan, Vice President, Legal Policy and Copyright Counsel, Copyright Alliance
11:00-12 pm: SHOW ME THE CREATOR – Transparency Requirements for AI TechnologyDanielle Coffey, President & CEO, News Media Alliance, Arlington, VirginiaDahvi Cohen, Legislative Assistant, U.S. Congressman Adam Schiff, Washington DCKen Doroshow, Chief Legal Officer, Recording Industry Association of America, Washington DCModerator: Linda Bloss-Baum, Director of the Kogod School of Business’s Business & Entertainment Program
12:30-1:30: KEYNOTEGraham Davies, President and CEO of the Digital Media Association, Washington DC.
1:45-2:45: CHICKEN AND EGG SANDWICH: Bad Song Metadata, Unmatched Funds, KYC and What You Can Do About ItRichard James Burgess, MBE, President & CEO, American Association of Independent Music, New YorkHelienne Lindvall, President, European Composer & Songwriter Alliance, London, EnglandAbby North, President, North Music Group, Los AngelesAnjula Singh, Chief Financial Officer and Chief Operating Officer, SoundExchange, Washington DCModerator: Christian L. Castle, Esq, Director, Artist Rights Institute, Austin, Texas
3:15-3:30: OVERVIEW OF INTERNATIONAL ARTIFICIAL INTELLIGENCE LEGISLATIONGeorge York, Senior Vice President International Policy from RIAA.
3:30-4:30: NAME, IMAGE AND LIKENESS RIGHTS IN THE AGE OF AI: Current initiatives to protect creator rights and attributionJeffrey Bennett, General Counsel, SAG-AFTRA, Washington, DCJen Jacobsen, Executive Director, Artist Rights Alliance, Washington DCJalyce E. Mangum, Attorney-Advisor, U.S. Copyright Office, Washington DCModerator: John Simson, Program Director Emeritus, Business & Entertainment, Kogod School of Business, American University
Deadmau5 has signed with CAA for representation in all areas.
The Canadian electronic music producer will work closely with CAA on his future endeavors, including global touring, gaming and tech-focused efforts, among other opportunities.
“Deadmau5 has redefined the intersection of music, art, and technology, and we’re thrilled to be a part of his next chapter,” Deadmau5’s agent at CAA, Ferry Rais-Shaghagh, tells Billboard.
Given Deadmau5’s many projects across music, tech, art and beyond, his move to CAA was a function of the agency’s ability to offer opportunities with its other divisions in addition to live touring. The artist was previously represented by UTA, who he signed with in 2020.
Deadmau5 has a long list of accomplishments going back two decades. His debut album was released in 2005, and in 2011, he became the first electronic artist to play the mainstage at Lollapalooza. He’s since played major festivals including Coachella, Tomorrowland, Electric Daisy Carnival, Ultra Music Festival, Outside Lands, Creamfields UK, and Bonnaroo. In 2022, his set as Kx5 with Kaskade set a record for the biggest ticketed global headliner dance event of 2022, according to Billboard Boxscore.
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His catalog has 1.7 billion on-demand official U.S. streams where Deadmau5 billed as the primary artist, according to Luminate. Hits including “Ghosts ‘n’ Stuff,” “Strobe” and the Kaskade collaboration “I Remember” helped introduce electronic music to mainstream audiences, with his music and live performances also infusing boundary pushing technology. His 2019/20 U.S. cubev3 tour, featuring production of his own design and implementation, ranked in the Top 10 of Pollstar’s top tours globally.
Meanwhile, his label, Mau5trap, has released music since 2007.
The artist, whose real name is Joel Zimmerman, is managed by Dean Wilson at Circuit Group/Seven20. His team also includes attorney is Dina LaPolt from LaPolt Law, P.C. and publicist Alexandra Greenberg at Falcon Publicity PR.
LONDON — The United Kingdom’s music industry is at a “tipping point” due to increasing competition from other international markets and the threat posed by unregulated generative Artificial Intelligence (AI), the head of umbrella organization UK Music has warned.
In 2023, the music industry contributed £7.6 billion ($9.6 billion) to the country’s economy, up 13% from the previous year, according to the organization’s annual This Is Music study, which measures the economic impact of the U.K. music industry across all income streams including live, record sales, publishing, merch, brand endorsements and public performance revenue for UK based music creators and rights holders.
Huge grossing U.K. tours by Beyonce, Burna Boy and Harry Styles helped drive the record economic contribution, said UK Music, which bases its calculations upon the gross value estimates of money generated through music sales, concerts, recording studios, touring and music tourism — roughly equivalent to pre-tax profits and salaries.
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However, despite strong appetite for British artists and songs, the country’s music market is facing several significant challenges that threaten its continued prosperity, says UK Music. It identifies increasing competition from other international markets, tough financial conditions for grassroots artists and music venues, as well as the potential risks posed by generative AI on music creation as the biggest dangers to the sector.
According to export figures released earlier this year by U.K. labels trade body BPI, artists from the United Kingdom now cumulatively account for less than 10% of global music streams, compared to 17% in 2015. BPI says the U.K.’s declining share of the global music market is partially down to it facing tougher competition from fast-growing international markets such as Latin America and countries like South Korea.
The U.K.’s grassroots live sector is also battling a number of well-documented financial hardships with around 125 small capacity music venues closing in 2023 and more 350 currently at risk of closure, according to the Music Venue Trust (MVT) charity. Additionally, this year has seen 60 U.K. music festivals either postpone, cancel or close due to rising costs, slow ticket sales and poor weather, says the Association of Independent Festivals (AIF).
“We are now at a tipping point, and if the problems we face are not addressed then future growth cannot be guaranteed,” said UK Music chief executive Tom Kiehl in a statement on Wednesday (Nov. 20).
Kiehl said that without tougher regulation “the wild west” of generative AI could further undermine the U.K.’s long-held status as the world’s second biggest exporter of music behind the United States. Kiehl is calling for the British government to press ahead with implementing laws that protect artists and rights holders from AI developers using copyright protected works to train their systems without permission.
UK Music also wants to see ministers establish a legislative framework that will require tech companies to clearly identify AI created music and keep records of works that have they have ingested, akin to what the European Union introduce earlier this year in its AI Act.
Other areas where UK Music said urgent action was needed to maintain the market’s growth in the face of heightened international competition was in music education and the live industry. The organization is urging the Labour government to press ahead with its previously proposed cap on secondary ticket resale prices, as well as secure a cultural touring agreement with the EU that will allow visa-free touring for musicians and crew.
In a statement, U.K. Culture Secretary Lisa Nandy called the country’s music industry “a real British success story” that is “vitally important” to driving overall economic growth. Nandy said she was committed to ensuring that the government works with the music industry to build upon its current success for years to come.
“By supporting vital grassroots venues, introducing new secondary ticketing protections for fans and ensuring all children can access high quality music education in schools, we can help the sector go from strength to strength in the future,” said Nandy.
According to figures released earlier this year by U.K. labels trade body BPI, global superstars like Styles, Adele and Ed Sheeran helped British music exports climb to a record high of £775 million ($974 million) in 2023 based upon estimated label trade revenue — the highest annual total since BPI began analyzing labels’ overseas income in 2000.
UK’s Music’s This Is Music study uses a different methodology to report on export revenues, which it says climbed to a record high of £4.6 billion ($5.8 billion) in 2023, up 15% year-on-year. That export figure is based upon gross income generated overseas by British music companies and creators, including recorded music, publishing, brand endorsements, merchandise sales, international touring by homegrown artists and foreign visitors attending U.K. gigs and festivals (so-called music tourism).
The total number of people employed in the U.K. music industry grew 3% year-on-year to a record 216,000 full-time equivalent posts, reports UK Music.
On Wednesday, Jan. 29, 2025, four days before the 67th annual Grammy Awards, the Recording Academy Producers & Engineers (P&E) Wing will honor producer, engineer and mixer Jimmy Douglass at its annual Grammy Week Celebration. The event will take place at The Preserve LA in East Hollywood.
“Our P&E Wing proudly celebrates Grammy Week each year with a special evening that unites producers, engineers and artistic professionals to honor a truly deserving creator,” Harvey Mason jr., CEO of the Recording Academy, said in a statement. “This year, we’re thrilled to pay tribute to the extraordinary Jimmy Douglass, who has led groundbreaking creative and technical efforts in the recording industry, encouraging artists to transcend genre boundaries and contributing to iconic musical projects that will resonate for generations.”
“Throughout his illustrious career spanning more than four decades, Jimmy’s visionary approach to producing, engineering and mixing has shaped some of music’s most iconic recordings,” said Maureen Droney, vp of the P&E Wing. “Jimmy consistently pushes the boundaries of sound by bringing unconventional techniques into the studio while inspiring countless artists along the way.”
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Douglass (also known as The Senator) is a five-time Grammy winner for his work on Justin Timberlake’s “SexyBack” (best dance recording, 2007); Timberlake’s “Love Stoned/I Think She Knows” (best dance recording, 2008); John Legend & The Roots’ Wake Up! (best R&B album, 2011), CeCe Winans’ Let Them Fall in Love (best gospel album, 2018) and Andra Day’s The United States vs. Billie Holiday (best compilation soundtrack for visual media, 2022).
Douglass has also received five album of the year nominations for his work on Missy Elliott’s Under Construction, Timberlake’s Justified and FutureSex/LoveSounds, Pharrell Williams’ Girl, and Jay-Z’s 4:44. He has additionally notched two record of the year nods for Timberlake’s “What Goes Around…Comes Around” and Jay-Z’s “The Story of O.J.”
In addition to paying tribute to Douglass, the event will celebrate the year-round work of the Producers & Engineers Wing and its members.
Grammy Week culminates with the 67th Annual Grammy Awards at Los Angeles’ Crypto.com Arena on Sunday, Feb. 2, 2025, broadcasting live on CBS and streaming live and on-demand on Paramount+ from 8-11:30 p.m. ET/5-8:30 p.m. PT. Prior to the telecast, the Grammy Awards Premiere Ceremony will be held at the Peacock Theater at 12:30 p.m. PT/3:30 p.m. ET and be streamed live on live.Grammy.com and the Recording Academy’s YouTube channel.
Global Citizen has made two key appointments to their executive leadership team, the company tells Billboard. Katie Hill, senior vp of music, entertainment and artist relations, has been promoted to chief music and entertainment officer, while lfeoma Chuks-Adizue has been hired as Global Citizen’s first-ever MD in Africa.
Hill has been at the company since 2014, leading the music, entertainment and artist relations team in securing renowned acts for Global Citizen’s festivals and campaigns to support the international education and advocacy organization’s mission to end extreme poverty. She’s worked closely with Beyoncé, Rihanna, Kendrick Lamar, Billie Eilish, Finneas, Coldplay, BTS‘ Jung Kook, BLACKPINK‘s LISA and many more artists, as well as their management teams, to ensure Global Citizen’s mission is clear and accessible. She also developed the company’s Ambassadors and Advocates for Change program, which has built long-term partnerships with Usher, Hugh Jackman and Priyanka Chopra Jonas.
“I’m thrilled to be joining Global Citizen’s executive leadership team as Chief Music and Entertainment Officer. It’s been an honor to help build such an important movement, which truly leverages the power of music and entertainment to create positive change in the world,” Hill tells Billboard in a statement. “When I reflect on the impact that has been achieved over my last 10 years at Global Citizen, I am inspired by the passion and dedication of so many incredible artists and partners across the industry that have joined us in the fight to end extreme poverty. I can’t wait to build on this collaborative impact.”
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Chuks-Adizue will spearhead Global Citizen’s activities in Africa, implementing its strategy across the continent including the next installment of Move Afrika: A Global Citizen Experience. In November 23, Lamar and his company, pgLang, teamed up with Global Citizen to create Move Afrika, a first-of-its-kind touring circuit across Africa that aims at driving economic investment, creating jobs and supporting entrepreneurship opportunities in each host country. Lamar headlined Move Afrika: Rwanda in Kigali last December, with pgLang set to serve as the curator of Move Afrika until 2028. According to a press release, that event employed more than 1,000 Rwandans and engaged 75% local crew and production staff, with a specific focus on creating opportunities for skill development and international skill training. Ghana joined Rwanda as a host country for Move Afrika earlier this year.
In her new role, Chuks-Adizue will oversee key partnerships that span business development, marketing, broadcast and event production, as well as Global Citizen’s Africa-based teams and operations. Based out of Global Citizen’s office in Lagos, Nigeria, Chuks-Adizue will also work closely with the company’s executive leadership in New York, playing an instrumental role in building relationships with private sector partners and within the philanthropic community.
“I’m honored to be joining the Global Citizen team in this newly created position to drive efforts and impact across Africa. Powered by everyday advocates, campaigns and events that span the world, Global Citizen’s efforts are critical to ending extreme poverty, and I’m humbled to bring my experience and leadership to this vital work,” says Chuks-Adizue. “I look forward to working with many fantastic partners to continue the momentum and growth of Move Afrika, the pioneering music touring circuit, and drive economic investment, job creation and entrepreneurship opportunities across the continent.”
Prior to joining Global Citizen, Chuks-Adizue served as executive director commercial at Chemical and Allied Products PLC (CAP PLC), a prominent paints manufacturer and distributor in Nigeria, and held key leadership roles at Procter & Gamble Nigeria and Cadbury Nigeria.
“Ifeoma’s extensive leadership experience, together with her passion for advocating for women and girls across Africa, perfectly aligns with Global Citizen’s mission,” adds Global Citizen president Liza Henshaw. “Her vast networks of relationships across various sectors will be instrumental in advancing our work across the African continent for years to come.”
HarbourView Equity Partners has acquired the master royalty income of renowned jazz guitarist, singer-songwriter and 10-time Grammy Award winner George Benson. Terms of the transaction were not disclosed. In the press release announcing the transaction, HarbourView Equity Partners founder and CEO Sherrese Clarke Soares said, “We maintain a commitment to be a canon for legendary culture […]
Sound Royalties has been a resource for the music industry for 10 years, advancing money to artists, songwriters, producers and other entities against their royalty income streams. And if there is one message that the company consistently emphasizes, it’s that Sound Royalties doesn’t use clients’ music rights as collateral, so it can never secure ownership of those rights.
In Sound Royalties’ parlance, instead of loans, the company primarily provides advances, and recipients of those funds are collectively referred to as “creatives.”
Sound Royalties also makes clear that it doesn’t charge interest; instead, advances come with fixed fees expressed in dollars. The company also doesn’t charge late fees, and a client’s credit rating doesn’t factor into any deals because the advance is repaid from one or more of a client’s income streams.
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Contrary to standard music industry practice, Sound Royalties doesn’t require 100% recoupment from the income streams until the advance is fully paid off.
Depending on the deal, the company may only take some of the royalties of an assigned income stream from one of the creative’s music companies — labels, distributors, publishers or collection rights organizations, which are collectively known as “payors,” according to Sound Royalties — and it will pass through the remainder of income to the client.
Since 2021, Sound Royalties has been owned by GoDigital Media Group and the investment firm MEP Capital.
Alex Heiche, with a background in software for high tech and in special finance firms, founded the company in 2014. As he explains, Sound Royalties is not “a label, publisher or distributor. We don’t replace them; we work in concert with them.
“So when creatives come to us, we provide the financing, but they stay with these excellent companies that they’ve chosen to work with,” he says. “And we’re not taking a percentage of future income. The advance is a fixed dollar amount for a fixed period of time. We’re obsessed with transparency.”
Company executives also emphasize their pursuit of a relationship-based business.
“Part of Alex’s original vision is we really try hard to create relationships,” says Sound Royalties president Michael Bizenov, who joined the company in 2018 after a career in consumer banking and mortgages. “We’re not here just to do transactions. They are important to us, yes, because it’s a way to grow a business. But we want to do it in a very healthy way.”
That’s also why in times of industry turmoil, like during the pandemic, Sound Royalties set up funding pools for cost-free advances to creatives in need.
Also, the company believes in helping creatives beyond financing deals.
“We [meet] with all levels of creative people, including those who may be starting their career,” Bizenov says. “So we’re very committed to doing financial-literacy seminars. We also are talking to the most sophisticated creatives and their business teams and helping them meet their financial goals.”
Clients of Sound Royalties include (clockwise from top left) Tank, DJ Khaled, Rich Robinson, Alejandra Guzmán, Brent Faiyaz, Sonia Leigh and Dylan LeBlanc.
Illustration by Andrei Cojocaru
In the beginning, how did industry companies react to the advances you were proposing?
Alex Heiche: Sound Royalties was launched with the vision to provide artist-friendly funding using creative-friendly funding solutions. So initially, we did advances from [income streams from performing rights organizations] ASCAP and BMI, and then we slowly evolved from there, adding SESAC, and then we started adding publisher, label and distributor transactions. In 2018, we did our first international transaction with PRS [for Music].
Michael Bizenov: Today, we’ve expanded to working in 18 countries and on three continents with over 160 payors around the globe that are sending payments to us to service their clients, and we’re onboarding new [payors] every month.
Did music companies first see you as adversarial to their relationships with their artists and songwriters?
Heiche: Payors see that we’re not taking their clients. We’re not getting in the way of their business. We don’t do distribution, nor publishing; we’re not a label or a collection society. We stay in our lane, providing financing. We’re there to facilitate something and ease the process, so we have good relationships on the payor side and on the creative side.
What’s the source of your funding?
Bizenov: We have bank lines [of credit]. Since early last year, we have more than doubled our access to bank financing. We also self-fund some things out of our profits. And we have access to two additional lines of private capital if we need it.
Did you have bank lines when you started out?
Heiche: No, it started off with funding [from] the balance sheet and growing from there. We pioneered this type of financing and advances. So it took time to build a track record to be able to walk banks through it.
What kind of income streams do you like to focus on when making advances?
Heiche: Creatives are earning a lot of different income streams, and we work with most of them. As the industry continues to evolve, we expanded beyond sound recording and composition [income] and started doing YouTube [income] financing for advances.
We are now even in entertainment production financing. We do tour financing. We even offer bridge financing for creatives looking for a very short-term solution as they’re maybe selling a catalog.
Do you put together custom deals for each client or offer a menu with options?
Heiche: The beauty of our model is it’s a bespoke, white glove customer service. Every creative and every company entity that comes to us for financing gets to speak with a live person that understands what their needs are and develops options for them to review.
You don’t require documentation like tax returns or W2 forms with an application. How else are your advances different from a bank loan?
Heiche: The advance is based strictly on their royalties and projections of those royalties. We provide a one-page summary sheet so they can see the fixed cost in a fixed dollar amount for a fixed period of time. If it takes longer, there are no late fees or penalties. The same if payment comes in sooner.
What are the minimum income streams and maximum advances that you work with?
Heiche: We try to help as much of the industry as we can, and that’s why the bar is as low as it is. Right now, the baseline for both is $5,000 per year per royalty stream. But we go over $10 million for advances.
You’ve said that building relationships is an important part of the Sound Royalties business plan. How does that help grow your business?
Bizenov: A big part of our business comes from referrals, and that’s something that we work hard on. “Customer service” is a mantra in our company because it’s the right thing to do and it also grows the business.
We love the referrals that we get from the managers, business managers, attorneys and companies that are out there. It’s very flattering to us and very reinforcing.
In making advances, how do you calculate risk?
Bizenov: There are probably about 12 or 14 inputs that go into our [analysis]. It’s the things that you would imagine: What is the depth of the catalog? Is 85% of the income coming from two songs — [which] is pretty risky — or is it something that’s more spread out? Is [a work] evergreen and out there for a lot of years so you can trace the performance, or is it something that’s relatively fresh? Based on that, we then come up with a risk analysis and a price.
Does your recoupment come from all streams, or do you choose to be paid back from one or two streams? And do you take 100% recoupment or only a portion?
Heiche: We can focus on specific streams that make the most sense and help a client achieve what they’re trying to accomplish [in terms of cash flow]. Does the client want to pay us back in one year or five years? If it’s five years, for example, we may take less of their income stream per year, or it’s one year we may take more. Either way, the rest [of the income] we pass through to the creative.
What is the average type of advance deal in terms of timeline and recoupment?
Bizenov: We’d rather see somebody do [deals] more conservatively and make sure they get a chance to get their cash flow. That is why we have a very high return rate of customers who come back to us for more than one deal.
As for deal terms, the average is three to five years. We can go longer and we can go shorter, but that’s where the median would lie.
What is the value of advances that Sound Royalties made last year?
Heiche: As a private company, there are some limitations on some data that we can give out.
Can you talk about growth?
Bizenov: Our monthly volume is growing by 50%. We’re pretty proud of our level of growth.
You have also alerted artists and the industry about royalties that weren’t paid to them. How does that play into your business model?
Heiche: When a creative comes through our door, our royalty specialists say, “OK, so you’re a songwriter. Who do you collect your writer’s share from? Who does your publishing or administration?” We just start to have that conversation.
And quite often we find that creatives aren’t collecting on all the income streams that they should be, so then we point them in the right direction. We’re constantly working with creatives ensuring that they understand the various income streams that they’re entitled to receive.
Bizenov: There are nuances. It’s fractionalized, for lack of a better term, because the incomes come from all different directions. So it’s easy for things to fall through the cracks sometimes.
You have said that providing clients with transparency is very important. How else do you show this?
Bizenov: The day before the funding is scheduled to take place, we have a separate department that gets on the phone with the end user and walks through the mechanics of the deal. That team is trained so that if they sense hesitation or lack of understanding, they stop the process to make sure that the creative understands every aspect of how it works, what’s coming, what’s owed.
Our biggest nightmare isn’t not getting a deal; it’s somebody out there saying, “Hey, [Sound Royalties] didn’t tell me everything.”
Are you saying your reputation is more important than doing deals?
Heiche: We’ve developed a reputation through the years of being the good guys, and that’s from things like this independent compliance department having a call with the creative walking through everything to ensure that there’s transparency. If people have great things to say about us, that’s because of our transparency.
This story appears in the Nov. 16, 2024, issue of Billboard.
Spotify is on such a hot streak that the streaming company nearly reached a $100 billion market capitalization this week. After the company’s third-quarter earnings showed cost-cutting has led to record profitability, shares peaked at a new all-time high of $489.69 on Thursday (Nov. 14), briefly putting its market capitalization above $98 billion. However, the stock fell on Friday (Nov. 15) to a final closing price of $458.32, valuing the company at $92.04 billion. While the stock was still up 14.5%, that marked a bit of a letdown from its previous high.
During the height of the pandemic, Spotify benefitted from a rush into streaming stocks as consumers spent more time with audio and visual media. Investors were also attracted to its push into podcasts, which provided an opportunity to improve upon the margins of its core music service. But investors eventually grew tired of Spotify’s growth-over-profitability mantra, sending the company’s share price from $387 in February 2021 to under $70 in November 2021. But a focus on cost-cutting and expansion into audiobooks helped bring investors back; Spotify shares gained 138% in 2023 and have already increased 144% in 2024.
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After delivering solid results and showing investors a pathway to greater profitability, Guggenheim increased its price target for Spotify to $500 from $420 and raised its estimate for 2025 operating profit to 2.5 billion euros ($2.63 billion) from 2.1 billion euros ($2.21 billion). Analysts cited management’s confidence in usage growth and ability to raise prices and further improve margins. Morgan Stanley raised Spotify to $460 from $430, also citing the company’s ability to further raise prices and management’s “commitment to financial discipline and driving profitability.” At JPMorgan, analysts upped Spotify to $530 from $425 for the aforementioned reasons, in addition to the stock’s coming inclusion in the MSCI World Index on Nov. 25.
A bevy of analysts also increased their price targets for Live Nation following the company’s earnings report on Monday (Nov. 11), which showed that the promoter achieved a record adjusted operating income in the third quarter. Among them: Rosenblatt Securities ($146 from $123), Goldman Sachs ($148 from $132), Benchmark ($145 from $108), Evercore ISI ($150 from $110), Oppenheimer ($155 from $120) and Wolfe Research ($152 from $125). Live Nation shares finished the week at $129.00, up 4.9%, and reached a new intraday high of $130.83 on Friday.
Spotify’s big gain was the primary reason the Billboard Global Music Index grew 5.8% to 2,162.50 despite just six of its 20 stocks finishing the week in positive territory. The float-adjusted, unweighted index measures the aggregate market values of the 20 member companies; Spotify is the most valuable company on the index and is more than twice as valuable as the next company, Universal Music Group (UMG). The week’s other five gainers are among the index’s largest companies: Live Nation, CTS Eventim, JYP Entertainment, HYBE and SM Entertainment all have market capitalizations exceeding $1 billion.
Stock markets hit a post-election hangover this week that stalled the gains seen after Donald Trump won the presidential election on Nov. 5. In the United States, the Nasdaq fell 3.1% and the S&P 500 dropped 2.1%. The United Kingdom’s FTSE 100 lost just 0.1%. South Korea’s KOSPI composite index fell 5.6%. China’s Shanghai Composite Index lost 3.5%.
Despite the KOSPI’s decline, K-pop stocks — which have recovered ground in the second half of the year and now have a collective year-to-date deficit of 20.2% — were up across the board. JYP Entertainment gained 8.2%, HYBE improved 3.2%, SM Entertainment added 2.8% and YG Entertainment rose 2.7%.
On the live front, Sphere Entertainment Co. fell 8.6% after its latest earnings showed a slowdown in revenue at its Sphere division, with Macquarie lowering the company’s price target to $45 from $47. And at MSG Entertainment (MSGE), shares dropped 6.8% to $40.00 after Bernstein reduced its MSGE price target to $44 from $45 earlier in the week.
Over at radio, Cumulus Media fell 19.3% to $0.71 after it reportedly conducted layoffs at stations in Central Pennsylvania, Indianapolis, Detroit and San Francisco as part of broader job cuts ahead of the holiday season — all on the heels of recent layoffs at competitor iHeartRadio. Elsewhere music streamer LiveOne dropped 12.4% to $0.78 this week.
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With all apologies to Charli XCX, the 2024 concert season should have been dubbed “VIP summer” for the amount of upselling done by U.S. amphitheaters.
At Live Nation amphitheaters, revenue from VIP clubs was up 19% and VIP ticket premium revenue for major festivals was up more than 20% in the third quarter. Earlier this year, VIP/premium offerings represented 9% of Live Nation’s overall amphitheater business but “should be 30% to 35%,” CEO Michael Rapino told investors in February.
Amphitheaters where Live Nation controls the food and beverage experiences have the potential to deliver more fan spending. Converting an area of grass into a VIP club provides 20% to 30% returns on investment, Rapino explained. At Northwell at Jones Beach Theater, for example, Live Nation took the 15,000-seat venue from no premium offerings to three premium tiers. Of the 40 U.S. amphitheaters in its portfolio, the company could “Jonesify” half of them, Rapino said during an investor call on Wednesday (Nov. 13).
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Diving headfirst into VIP pricing is sure to help Live Nation’s bottom line. The company believes premium offerings can add $200 million in adjusted operating income per year, according to its investor presentation. This year, VIP net per-fan spending will have grown at 20% annually since 2019, well ahead of overall net fan spending growth of 8% annually.
From exclusive lounges to fan meet-and-greets with artists, the concert business has been better than other music industry segments at filtering customers according to their willingness to pay. VIP status became standard practice at music festivals to separate the people who can afford a $400 ticket to camp in a grass field and those who can afford deluxe accommodations, food and beverage, and transportation. The year-old Sphere in Las Vegas takes customer segmentation to a new level: Tickets are relatively expensive for a single concert without considering travel and accommodation — which Live Nation bundles with Sphere tickets through Vibee, a destination experience company it founded in 2023.
It may be ahead of other music companies, but Live Nation is merely following practices familiar to companies such as airlines, which charge more for early boarding, and theme parks, where paying a premium allows you to spend less time standing in line for rides. Insurance companies offer multiple tiers of services that include add-ons such as “accident forgiveness.” Everywhere you look, there’s an expensive option that’s out of reach for most consumers but well worth the value to others.
The wave of upselling now extends to VIP tiers in music streaming. Last week, Tencent Music Entertainment (TME) announced it has 10 million Super VIP subscribers accounting for 8.4% of its 119 million subscribers. Super VIP, launched in the first quarter of 2022, provides such perks as better sound quality, priority access to music content and live event tickets. With a cost five times the normal subscription tier, Super VIP subscriptions helped TME’s average revenue per user increase 5% from the prior-year period. That success with VIP pricing is likely a harbinger of things to come. A single tier may not deliver the kind of profitability investors now demand.
“I think Spotify and the labels, long ago, realized this ‘one price for everybody’ thing gets these companies off the ground, but ultimately it’s not sustainable,” says pricing strategy consultant Rafi Mohammed, who espouses a strategy he calls “good-better-best” and encourages companies to create more valuable tiers of products and services for subsets of customers who are willing to pay extra. “If you’re a company and you’re not doing it, you’re making a mistake,” he says. “There are always going to be higher-end people who are willing to pay more for a more enhanced experience.”
With the current music streaming model relatively unchanged for two decades, music companies are increasingly engaging in the kind of customer segmentation taught in business schools. Companies that want to deliver strong, sustained growth are looking at ways to provide more valuable — and more expensive — experiences to those customers willing to pay for them.
Record labels are itching for a high-priced streaming subscription tier that would produce greater royalties. Spotify’s VIP tier — for lack of a better term — seems all but inevitable at this point. In September, Universal Music Group (UMG) COO (then CFO) Boyd Muir said the company was in “advanced talks” with the streamer for a high-priced tier that offers a better user experience than standard subscription plans. Spotify CEO Daniel Ek lifted the veil on a pending VIP plan in July, saying it would “probably” be priced at $17 or $18 per month and provide subscribers with “a lot more control, a lot higher quality across the board, and some other things that I’m not ready to talk about yet.”
UMG has said that internal market research shows 23% of subscribers would be willing to pay more for a VIP experience. But Will Page, Spotify’s former chief economist, isn’t sure Spotify is ready for a VIP tier. “It needs to walk before it can run towards a VIP platform,” he says.
Since the days of pre-Spotify subscription services such as Rhapsody, the basis $9.99 (in the U.S.) price was raised only recently but hasn’t kept pace with inflation. Spotify launched in the U.S. in 2011 and didn’t raise the individual premium price to $10.99 until 2023. Had the price kept pace with inflation, that $9.99 tier would have cost $13.50 by the time the price hike took effect. While video-on-demand streaming platforms such as Netflix have consistently raised prices over the years, music platforms like Spotify refrained, keeping their prices unchanged for fear higher prices would stunt their growth. “I would love to see the industry earn its stripes in showing pricing power before it goes to base two, which is market screening power,” says Page.
In the meantime, the music business has other ways to cater to VIPs, including a new slate of “superfan” platforms and vinyl records. Vinyl mimics a VIP strategy by upselling fans to an expensive physical item over low-value online streaming. And just as film studios use a so-called “windowing” strategy by releasing movies to theaters before streaming platforms, artists and labels are increasingly selling vinyl LPs ahead of their streaming street dates — a strategy that’s been largely absent in music since 2016. To Page, artists and labels are missing a big opportunity by not using vinyl to create a VIP release window.
“In America alone, vinyl is going to be a billion-dollar business,” says Page, “and the people who can sell it are the types of artists who would appeal to a VIP strategy.”