Business News
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Los Angeles-based communications firms BB Gun Press, headed by Luke Burland, and MixedMediaWorks, helmed by Bobbie Gale, have joined forces to form 2B Entertainment.
Combined, their client roster includes Shania Twain, Josh Groban, Steve Earle, Danny Elfman, My Chemical Romance, Meghan Trainor and OK Go.
“MixedMediaWorks was founded on the principle that we only work on projects we believe in,” said Gale in a statement. “It means we can remain completely dedicated to the select group of clients we take on. We’re excited to be working with Luke and her team as they share the same values: honesty, loyalty, hard work, open and constant communication and being the best partners to our clients.”
Burland added, “Our plan is simple: keep working with clients we love, deliver incredible results and have some fun along the way.” Burland and Gale will run the company together.
Other clients include Brian Tyler, Holly Humberstone, Julian Casablancas, Justin Tranter, Maggie Lindemann and Saleka Shyamalan. Corporate accounts include CITI, +1 Records, Laylo, Dad Grass, Muserk and Cosm.
The two veteran publicists have long known each other, first collaborating more than 20 years ago on Dave Navarro when Gale was at Capitol Records and Burland at Kathryn Schenker Associates. The two briefly worked together at a previous iteration of BB Gun, owned by Brian Bumbery, in 2016-2017. Burland joined BB Gun in 2016 after leaving Warner Records where she was senior vp of publicity. Gale worked at BB Gun from 2013 to early 2017 when she left to become vp of media & strategic development at Warner Records. In 2020, she launched MixedMediaWorks. Burland has led BB Gun since 2018 when Bumbery left for Apple Music.
Jessica Keeley-Carter was promoted to executive vp of global marketing at Warner Music Group. Based in the United Kingdom, Keeley-Carter will take on a bigger global role, working closely with marketing leads in Asia, Latin America and Canada alongside her current remit in the U.K. She most recently served as senior vp of global marketing. That role will now be filled by Tony Corey, who was previously vp of global marketing. Based in New York, Corey will continue supporting campaign executions and long-term artist strategy; he was previously vp of global marketing. He has led Warner’s Global Priority System since joining the company in 2021.
The Worldwide Independent Network (WIN), which represents the global independent music sector, appointed its board of directors for 2023. Partisan Records COO Zena White will serve as chair, working closely with WIN’s newly appointed CEO Noemí Planas on delivering on the organization’s goal of growing and connecting the indie music community worldwide. Joining White on the board are three new directors: AIM’s COO Gee Davy, N.E.W.S managing director Geert De Blaere, Sub Pop Records/Hardly Art/Sub Pop Publishing president Tony Kiewel and GoDigital, Cinq Music and VidaPrimo chair Jason Peterson, who was elevated from his prior role of board observer. They will succeed outgoing directors Lisa Levy (Robbins Entertainment USA), Michael Lambot ([PIAS]) and Paul Pacifico (AIM). Elsewhere, former WIN board chair Maria Amato (AIR) is now treasurer; she will continue to sit with Mark Kitcatt (Everlasting Records), Richard Burgess (A2IM), Oliver Knust (IMICHILE) and White on the executive committee. Finally, Nerea Serrano was appointed community and projects manager at WIN; she joined the organization as communications officer in 2021.
Jamie Spinks was named head of A&R at Columbia Records UK, reporting directly to Columbia UK president Dipesh Parmar. He joined the label last year, signing and developing Venbee. He’ll be tasked with overseeing the direction of the Columbia UK A&R strategy while also running the joint venture label Room Two. Spinks was at Polydor Records for 10 years prior to his Columbia hire.
Rob Brown was hired as COO at mprs Global, the royalty tracking and collection service founded by the team behind mtheory. He joins from Kobalt Music Group, where he worked for nearly 12 years, most recently as vp of business affairs & commercial strategy. He can be reached at rob@mprs.co.
Ultra International Music Publishing opened a new creative hub in Lagos, Nigeria, where its African operations will be overseen by London-based A&R manager Harold Serero. As part of the announcement, the publisher revealed the signing of Nigerian artist Amexin to the roster.
Beville Dunkerley will step down from her role as SiriusXM/Pandora head of country music talent & industry relations to launch her own media training consultancy focusing on actors, athletes, authors and recording artists. She joined Pandora more than six years ago prior to its SiriusXM merger. Dunkerley can be reached at bevilledarden@gmail.com. (via Country Aircheck)
Four executives were promoted at Zync/Round Hill Music: Madison Norris to executive vp of creative operations, Kelly Ross to vp/head of creative licensing and publishing, Becca Luce to senior director of film & TV/creative publishing and Steve Nalbert to vp of sync licensing and digital. Norris will facilitate day-to-day management for the Zync creative licensing team, leading marketing efforts for both frontline and back catalog. Ross will lead synch licensing for the catalog and handle pitching for advertising while also signing songwriters and artists to frontline publishing and master deals. Luce will guide the co-write team with expanded A&R responsibilities along with film and TV pitching. Nalbert will build, optimize and carry out Round Hill Music’s digital strategy, collaborating with partners including Meta, Apple and TikTok.
Agent Dave Kaplan joined Paladin Artists, where he brings more than 20 clients including Spacey Jane, The Black Angels, Gary Numan, The Kills, Melody’s Echo Chamber and Allah-Las. He was previously at ICM Partners and has also worked at Paradigm and The Agency Group.
Keisha Perry Walker joined entertainment law firm Carter + Woodard as a new counsel. She will provide counsel to recording artists, producers, songwriters, manager, executives, independent labels and digital influencers, among others.
Linda Yaccarino was appointed group chair at YMU, a role she will occupy alongside her current position as chairman of global advertising and partnerships at NBCUniversal. She will work closely with YMU Group CEO Mary Bekhait. Also at YMU, Dani Chavez was promoted to senior marketing manager of the U.S. music division. Based in Los Angeles, Chavez will work closely with the company’s individual artist managers while reporting to YMU Music US head of marketing SuzAnn Brantner.
Country Music Hall of Fame and Museum senior vps Nina Burghard and Lisa Purcell were promoted to executive vp roles. Burghard was elevated to executive vp of finances and operations and Purcell was upped to executive vp of external affairs. Both will report to CEO Kyle Young. Burghard oversees the museum’s financial operations as well as some information and technology elements, in addition to the human resources and maintenance & operations departments. Purcell supervises the marketing and public relations departments and provides leadership in individual & planned giving, memberships & corporate partnerships, educational programming and public affairs. Purcell can be reached at lpurcell@countrymusichalloffame.org and Burghard can be reached at nburghard@countrymusichalloffame.org.
Also at the Country Music Hall of Fame and Museum, Ben Hall was promoted to vp of development, Paul Kingsbury was hired as senior director of editorial and interpretation, Luke Wiget was promoted to senior director of creative and Leigh Anne Wise was promoted to senior director of facilities, operations and sustainability. Hall oversees diverse fundraising initiatives and manages Country Music Hall of Fame member relations on behalf of the museum. Kingsbury will manage editorial staff and the development of written content for the museum’s website, exhibitions, public programs, publications, educational materials and online offerings. Wiget will guide the creative and project management teams responsible for producing the museum’s exhibitions, books, videos, education materials, marketing collateral and social media content. Wise oversees facilities maintenance, building projects, building operations including security, housekeeping and event setup, as well as sustainability initiatives.
Courtney Allen was promoted to senior director of A&R at Concord Music Publishing in Nashville. She was previously director of A&R. During her time at the publisher, she has signed Justin Wilson and Jennifer Wayne and contributed to catalog and publishing deals with Russell Dickerson and Corey Crowder. Allen can be reached at Courtney.allen@concord.com.
Jon Pikus was named vp of A&R/business development at Wixen Music Publishing. Based in the company’s Calabasas, Calif., office, Pikus will sign new artists, songwriters, producers and catalogs to Wixen’s roster, in addition to setting up collaborations and co-write sessions for the existing roster. He’ll report to Wixen president/CEO Randall Wixen, CFO/COO Andrew Wixen and chief technology officer/executive vp Jason Rys. Pikus has held A&R roles at Columbia Records, Interscope Records, MySpace Records and more. He can be reached at jpikus@wixenmusic.com.
Lydia Kanuga was promoted to vp of media relations at PR firm The Chamber Group. In her new role, Kanuga will create and implement publicity strategies for a roster that includes Usher, the Michael Jackson estate, Mass Appeal and Toni Braxton. She will also take a lead role in business development prospects for the company. Based in New York, Kanuga reports directly to Chamber Group principal/founder Chris Chambers. She can be reached at lydia@thechambergroup.com.
Alex Siciliano was appointed senior vp of communications at the National Association of Broadcasters (NAB). He will lead NAB’s communications team, and oversee the association’s outreach while spearheading messaging strategies to further NAB’s initiatives and advocacy issues before Congress and the Biden administration. He also serves as chief spokesperson for NAB and as a key advisor to senior leadership. He most recently worked as deputy chief of staff to former Sen. Cory Gardner (R-Col.).
John Moser and Ale Delgado were promoted to senior project managers at Thirty Tigers in Nashville; both were previously project managers. With their elevations, Moser and Delgado will play a bigger role in departmental operations while managing album release campaigns for the company. Elsewhere, Micki Windham was promoted to senior production manager, up from her previous role of production manager; Sydney Clancy‘s role was expanded from catalog coordinator to production coordinator, which will see her supporting all production efforts for both new releases and inventory management; and Alex Ramsay was promoted to independent retail sales & marketing manager, a bump from her previous role of independent retail sales & marketing coordinator. Thirty Tigers also announced several recent hires, including Kayla Ganz and Lauren Caudle. Ganz boarded the company in February 2022 as director of digital sales and streaming, joining from Naxos Music Group, while Caudle joined in September 2021 as project manager coordinator before being promoted to project manager in June 2022. Finally, Zack Hallcroft returned to Thirty Tigers as project management coordinator, joining the company from CDA Entertainment.
The Women’s Music Business Association (WMBA) announced its 2023 board of officers, organizational chairs and board of directors. Serving on the 2023 board are president Virginia P. Brick (SESAC); vp Aura Guadagno (Varnell Enterprises); treasurer Taylor Baird (Wiles + Taylor & Co.); secretary Alyssa Hoffman (manager of Wayland); events & education co-chairs Libby Gardner (Academy of Country Music) and Megan Clemons (CSM Management); and marketing & membership co-chairs Mackenzie Adkins (Rhonda & Company) and Aya Robinson (Opry Entertainment Group). On the WMBA board of directors are newly-elected chairwoman Amery Fridenstine (Above Board Consulting) along with brand-new board members Sheree Spoltore (Global Songwriters Connection), Jensen Sussman (Sweet Talk Publicity) and Christy Walker-Watkins (The AristoMedia Group/AristoPR). Brandi Simms (MooTV, Moo Creative & The Steel Mill) will continue in an advisory role as board of directors emeritus, while Lauren Spahn (Shackelford, Bowen, McKinley, & Norton) will act as legal counsel.
Ed Thompson joined ATC Live, bringing clients Jungle, Iron & Wine, Car Seat Headrest, Zero Zero Bonito and Pigs Pigs Pigs Pigs Pigs Pigs Pigs to the agency. He joins the company from Free Trade Agency. Thompson can be reached at ed@atc-live.com.
Mallory Mason Pascal was promoted to partner at artist business management firm KFBM (previously King Business and Financial Management); she joined the company in 2020. Pascal can be reached at mallory@kbfmgmt.com.
Abi White was named head of dance and electronic promotions at Kartel Marketing Agency, the marketing and media promotions agency within Kartel Music Group. White will lead promotions for all dance and electronic agency clients as well as Kartel’s electronic label, EMK. She joins the company from For the Record PR, where she served as co-founder and co-director.
Desiree McCann was named manager of international marketing at Los Angeles-based management company Hills Artists. She will handle day-to-day management for Hills Artists clients while supporting and driving international marketing campaigns for the roster. Additionally, Brenna Rindfuss has been promoted to manager. McCann joins Hills Artists from Universal Music Australia, where she worked in artist development. She can be reached at desiree@hillsartists.com.
Alliance Entertainment’s plan to go public through a reverse merger with Adara Acquisition Corp. — a special-purpose acquisition company (SPAC) — got sideswiped by the collapse of the SPAC market.
While the deal was finalized Monday (Feb. 13) and Alliance Entertainment is now a publicly traded company, it leaves the media wholesaler without the initial intended benefit of reaping tens of millions of dollars in new funding to continue making acquisitions to fuel growth and to modernize its warehouse equipment.
That’s because only Adara shareholders owning 167,00 shares (out of 10 million total) have chosen to participate as stockholders in the merged entity. As a result, Alliance Entertainment only received about $1.67 million, which likely isn’t enough to cover the legal and investment banking fees for the transaction.
Alliance Entertainment Holding
The company’s light stock float also leaves it ineligible to be listed by the New York Stock Exchange as originally planned, so now Alliance is being carried on the OTC pink-sheet marketplace.
Alliance Entertainment — which carried a $480 million valuation going into the deal — remains a formidable powerhouse as a one-stop rack jobber and independent distributor and overall entertainment software wholesaler, however. While the company brought in $28.62 million in net income on revenue of $1.42 billion for its fiscal year ended June 30, 2022, it lost $8.34 million on sales of $238.7 million for the three-month period spanning from July to September.
Alliance Entertainment announced its plans to go public via a SPAC reverse merger in June 2022. At that point, investor excitement over the SPAC route to public listings had already cooled from its high in 2021, but by the end of the year, it had totally tanked. And even if Alliance Entertainment didn’t raise as much money as it had hoped by going public, there are other benefits. As a publicly traded company with audited financial statements that need to surpass the scrutiny of the Securities and Exchange Commission, it should now be able access capital and options to raise funding through debt beyond its previous reliance on bank loans.
“We believe that today’s milestone combined with our strong revenue growth, expanding customer base and product offering, and several successful acquisitions, will help accelerate our future expansion initiatives,” said Alliance Entertainment CEO Jeff Walker in a statement. “Alliance Entertainment today is well positioned to continue to capitalize on shifts towards eCommerce and Omni-Channel strategies, especially with retailers and manufacturers’ vastly increased reliance on their DTC (Direct to Consumer) fulfillment and distribution partners. We are at an inflection point that now positions us to execute a multi-prong growth strategy that we expect will deliver a double-digit revenue growth rate with strong cash generation to the bottom line.”
Alliance Entertainment serves as a physical music, movies and video games wholesaler to retailers including Amazon, Best Buy, Target, Kohls and Gamestop, as well as independent stores; it’s also a rack jobber to chains like Walmart and Barnes and Noble. It additionally provides e-commerce fulfillment to many of those retailers and runs its own online websites including Deepdiscount.com, Popmarket.com, Importcds.com, Critic’s Choice Video, Collectors Choice Music and Movies Unlimited, while fielding its own brands on eBay, Amazon Marketplace and Discogs as well. In total, nearly $540 million, or 38% of Alliance’s revenue, is generated through the above online sales.
In total, Alliance says it stocks over 485,000 unique entertainment products from Microsoft, Nintendo, Activision, Electronic Arts, Sega, Funko, Disney, Warner Home Video, Universal Video, Sony Pictures, Fox, Lionsgate, Paramount, Warner Music, Sony Music, Universal Music, Mattel, Lego, Hasbro, Arcade1Up and another roughly 500 entertainment product manufacturers. Within that, the company also fields independent distribution companies like music distributor AMPED, video distributor Solutions and video game distributor Cokem that exclusively carry over 57,000 vinyl, CD, DVD and video games titles combined.
“This business combination [with Adara] will further enable our significant focus on a strategic roll-up strategy of acquiring and integrating competitors and complementary businesses which we believe will drive an accelerated competitive position and value creation,” said Alliance Entertainment chairman Bruce Ogilvie in a statement. Being a publicly traded company will allow for further investment, he added, in automating facilities and upgrading proprietary software, which he said makes management “confident we can grow revenue and expand margins.”
Ogilvie continued, “We will also continue to expand into new consumer product segments, growing our product offering and providing more to our existing customer base while attracting new customers in the process.”
Walker and Ogilvie retain nearly 95% ownership in Alliance Entertainment and their shares are subject to an extended lock-up period.
Sean “Diddy” Combs has rebranded his parent company from Combs Enterprises to Combs Global as the top rapper and record producer continues to diversify his portfolio of music, fashion, drinks and TV ventures internationally.
“Combs Global represents the next chapter in my journey as a business leader and a bigger vision to build the largest portfolio of leading Black-owned brands in the world,” Combs said in a statement on Tuesday.
The Bad Boy Entertainment Group founder, who is credited with carving out a new niche within the hip-hop genre, has in recent years expanded with new businesses like Empower Global formally Shop Circulate, Our Fair Share, Love Records and cannabis distribution by acquiring Cresco Labs.
Combs with the rebrand is looking to project continued expansion, and globally. “I’ve enlisted world-class teams of top executives, specialists and strategic partners to bring this new dream to life and put us in the best position to keep making history while leading another 30 years of dominance across industries,” he said.
Combs bought back his Sean John fashion line in 2020 and also forged a partnership with Diageo for his Ciroc Vodka label and later acquired tequila brand DeLeón. He also launched the fitness and wellness water brand AQUAhydrate.
In 2013, Combs launched REVOLT Media & TV, the first Black-owned multiplatform cable music network, which now reaches more 80 million homes and 20 million monthly viewers digitally.
More recently, Combs acquired The Nile List, invested in the creator platform REC Philly and expanded his Capital Preparatory charter school network to now include campuses in the Bronx, New York and Hartford, Connecticut.
The corporate rebrand includes a new website and logo unveiled as part of a Uber One Super Bowl commercial that starred Combs as he dreamed up a hit song for Uber One.
This article originally appeared on THR.com.
50 Cent and Fox Entertainment have agreed on a non-exclusive multi-project broadcast direct deal.
Announced Tuesday (Feb. 14) by Fox Entertainment’s president of scripted programming Michael Thorn, 50 Cent (born Curtis Jackson) will “develop scripted dramas, live-action comedies and animated series that would air on FOX. Any series created under the deal will be owned by FOX Entertainment and produced by its in-house unit, FOX Entertainment Studios, in collaboration with G-Unit Film & Television.”
“Whether it’s music, film, or television, Curtis always delivers premium entertainment that captivates millions of fans across the globe,” said Thorn in a press release. “He is the rare multi-hyphenate with a deft hand at storytelling, no matter the format or medium, and we’re looking forward to developing new and exciting series for FOX with him and his team.”
Adds 50: “I am excited to formalize a partnership with Michael Thorn and FOX that will allow G-Unit Film & Television to focus on putting multiple series on FOX, a perfect broadcast destination for G-Unit Film & Television content while our premium, streaming, scripted and non-scripted slates continue to grow in all directions.”
Last week, 50 graced Billboard’s digital cover issue that celebrated the 20th anniversary of Get Rich or Die Tryin’ and his formidable multi-media empire.
“My run was so uncomfortable that everyone would like to forget that it happened,” 50 ruminated about his fiery ’00s run. “That’s just the way it is with the artist community. I didn’t come in being friendly because I had to find a way into it — not find a way to be good enough to work in the community. The biggest compliment in the early stages was that artists felt like they’d made it when they got the deal. You had to earn the right to have the deal.”
You can read the story in full here.
Hipgnosis Song Management announced a deal on Tuesday that gives Beatclub producers access to some of Hipgnosis’ iconic hit songs and boosts its own access to more synch opportunities, the companies said in a joint statement.
Launched in 2021 by four-time Grammy winner Timbaland and his longtime manager, the head of Mono Music Group Gary Marella, Beatclub is an online marketplace built to help creators and producers monetize their beats and music.
Beatclub users can already use beats by Timbaland and others, like Justin Timberlake, Tainy, J. Cole and Mike Dean, in their own mixes. Hipgnosis, which also invested in Beatclub’s recent series A-2 funding round, will now also offer a hand-picked collection of songs from its catalog approved for sampling by Beatclub’s elite tier of producers. Any other rights that artists need to have cleared for usage are handled by Beatclub’s licensing team.
The deal could also help place more of Hipgnosis’ songs in films, TV, ads and games because Beatclub’s portal helps connect artists on its platform to synch opportunities with major brand, label, gaming and production companies. Similar strategies have been deployed by other catalog companies, like Primary Wave.
Timbaland has worked with Hipgnosis and its founder Merck Mercuriadis before, having sold his catalog to the music investment in 2019.
“At a time when interpolation and sampling has never been a more important part of creation and success, I want the greatest creators in the world to have access to our incomparable songs to make them the hits not only of the past but the future,” Mercuriadis, founder and head of Hipgnosis Song Management, said in a statement.
Calling Mercuriadis a “disruptor,” Timbaland said Mercuriadis’ “vision of the future of the music creator economy aligns closely with Beatclub’s.”
Marella, Beatclub’s co-founder, said Hipgnosis’ mission to promote songwriters and producers’ rights aligns with Beatclub’s values. “Beatclub … was built for creators by creators,” Marella said in a statement. “Our mission has always been to empower artists, song writers and producers however we can.”
Spanish Broadcasting System (SBS) has sold its Spanish-language network Mega TV to Voz Media for $64 million, the company announced Monday (Feb. 13). The sale, which includes associated real estate, preserves the Hispanic ownership of Mega TV, which targets Spanish-speaking Latinos in the U.S. and Puerto Rico.
The purchase must still be approved by the Federal Communications Commission (FCC).
Founded in 1983, SBS is a Spanish-language media company that owns and operates radio stations in the Tropical, Regional Mexican, Spanish Adult Contemporary, Top 40 and Urbano formats. It also operates AIRE Radio Networks, a national radio platform that boasts more than 290 affiliated stations reaching 95% of the U.S. Hispanic audience, according to the company. SBS went public in 1999.
Miami-based Mega TV — a staple in Hispanic television that boasts over-the-air, cable and satellite distribution in Puerto Rico and multiple affiliates throughout the mainland U.S. — airs around three dozen original programs, including Bayly, Dante Night Show, Mega Noticiero, La Corte del Pueblo, Latin Angels and Mega Kids.
“I am very proud of the nearly two decades of award-winning programming, community dedication and industry accomplishments achieved by Mega TV, a network operation that succeeded in forging its own unique position among Hispanic viewers in the U.S. and Puerto Rico,” said SBS chairman/CEO Raúl Alarcón in a statement.
Alarcón continued: “I am especially pleased to leave this unique asset in the hands of a dedicated Hispanic owner, Orlando Salazar, the founder of Voz Media, who will continue the expansion of Mega TV and honor its unwavering commitment to faithfully serve our nation’s burgeoning Latino population. Minority ownership of the media, and the opportunities it affords to our nation’s fastest-growing constituency, is a critical component in guaranteeing a stable, profitable and promising future for America.”
Voz Media was founded in 2022 by CEO Orlando Salazar in Dallas, with headquarters in Las Colinas, Tex. The company, which provides “alternative news and content for Latinos,” is planning a slate of original series and films “that reflect the core Hispanic values of hard work, faith and commitment to family” for its streaming platform targeted at the U.S. Spanish-speaking market and Latin America, according to a press release. The company also has offices in Miami and Madrid.
“It is an honor for Voz Media to be selected to continue the work and tradition started by Raúl Alarcón and Mega TV in the Spanish language television media market,” added Salazar. “We take seriously the challenge of moving Mega TV forward in both reach and content, as we continue to serve Spanish speakers across the United States.”
SBS president/COO Albert Rodriguez added, “We couldn’t be more proud of the fact that the legacy of Mega TV will continue under the leadership of another Hispanic-owned media company. Orlando and the Voz Media team have our unqualified support and we look forward to working with them throughout this transition and beyond.”
Jangwon Lee‘s life in music began in typical Korean fashion. “All the kids in my generation grew up with the piano at some point in their lives,” Lee says over the phone from Seoul. His love of the instrument continued beyond childhood with a piano duo, The Serendipity, but has taken a back seat to serial entrepreneurism.
While studying business administration at Seoul National University, Lee co-founded Campusdal, a food delivery app. Then, after two years in the Korean air force, he founded Mapiacompany, a technology firm that operates three online platforms for independent musicians to sell digital sheet music. The experience set the stage for Lee’s remaking of Korea’s music intellectual property (IP) business.
“It gave me the legal knowledge that was necessary to start my new business — the publishing, the copyright laws, how to monetize, how to distribute the royalties,” Lee says.
Now, Lee is the CEO of two-year-old Beyond Music, a music investment firm with 26,000 copyrights and about $250 million under management. In 2021, Beyond Music created Asia’s first song fund with support from institutional investors including KB Securities, Base Investment and Maven Growth Partners. Last year, it added funding from the electronics and entertainment company Dreamus.
In 2022, Lee doubled down on Korean content by launching an exchange-traded fund focused on Korean entertainment companies, the KPOP and Korean Entertainment ETF. Prominent Korean music companies HYBE, SM Entertainment and JYP Entertainment are in its portfolio, but it also includes Studio Dragon, a TV studio; Naver, owner of messaging app Line; and Kakao, owner of Korea’s largest music subscription service, Melon.
In the West, investment money has been flowing heavily into music IP for more than a decade, especially in the last five years. It seems like the practice took root in Korea much later. Why do you think that is?
In 2017-18, when Hipgnosis started, there were very few precedents for Korean capital markets. You’ve got to understand the market, the nomenclature, the industry network. You have to know the nooks and crannies of the IP business. And also, you need to have a financial grasp, the understanding of capital markets, how to raise capital, how to structure the company, how to build, how to do tax-efficient modeling, IRR [internal rate of return] predictions, quantitative valuations. This is very much a quantitative business, whereas the understanding of the IP business is a relatively qualitative business. So, these are polar opposites in terms of business characteristics. In the past, I don’t think in Korea there was a team that really embodied these polar opposites.
We have people from PwC, KPMG, KKR and Morgan Stanley on our team. We have producers and someone who used to be a top-level executive of the largest music value chain company in Korea. I think that was why we were first to scale, to be able to build and raise funds from the very conservative institutional capital of Korean or Asian private equity and limited partner network.
Streaming is driving growth in global recorded music and publishing revenue, and that growth has helped attract new investors and more investment in general. Is streaming also the main factor behind increased investor interest in music IP in Korea?
Yes. I think it’s twofold. No. 1: streaming in the domestic market. Korea ranked [at] No. 6 in terms of market size for music globally. Japan is No. 2. Add Japan and Korea together, it almost equals the European Union. So it is a big market on its own, and local growth here is definitely driving part of it. Another part is Korean content’s market share in the global music industry. In the past, Korean music rights’ primary source of revenue was domestic usage, and therefore domestic growth was the only tailwind. But now we see the market share of Korean music growing exponentially year over year in other parts of Asia and moreover in Latin America, the Middle East and North Africa regions, Europe, North America. Not just BTS and BLACKPINK, but more midtier artists. You become fans of Korean music through those more hallmark artists, but you end up trickling down to other more long-tail or indie artists as well. And all the markets have been benefiting.
You have a large catalog. Do some of your less popular songs have commercial potential outside of Korea?
We have a mix of more global, more well-received catalogs and older, Korean-focused catalogs. The former obviously is a direct beneficiary of such a market growth trend. The latter, to a lesser degree, is also benefiting. It’s surprising that songs on Spotify that are not as famous as BTS at all are getting relative hype from other parts of Asia, and we see it for some of our older catalog as well. I don’t know how they were discovered, but on YouTube playlists, on YouTube comments, we see Spanish, we see French, we see it with Southeast Asian languages for songs we own that are 10 to 15 years old.
Multiples and valuations have risen a lot over the last few years. What’s the Korean market like right now? Is it as heated as other markets?
It is more heated than before, but to my knowledge, the blended multiple acquisition average used to be between 20 and 30 times. Now with the higher interest rate, multiples are still within the high teens, like 17, 18, 19, or at least like 15. But in Korea, or at least for us, our acquisition multiple, the blended average, is still below 10. So, we have been able to acquire very good assets. We think they are not lesser than their U.S. or U.K. counterparts at all. So, from a quantitative viewpoint, these don’t necessarily have to be valued at such a discrepancy. But I think it’s a newer market here, and therefore there’s less competition.
Is it safe to assume that you’ll encounter more competition in the coming years?
I’m hoping not. But from a reasonable standpoint, I do see that may be unavoidable. But it’s a good thing for us, because it will also help with our existing catalog valuing up.
What do you do to create additional value for the IP you purchase? Do you actively manage, market and promote the catalog — what Hipgnosis calls “song management”?
Whatever Hipgnosis is doing, we’re doing it essentially, whether it be synch, remixes, copyright, better revenue collection techniques. We put our methodologies into two main categories: active management and passive management. We define passive as collecting what was already ours but was somehow being lost due to Content ID not being perfectly managed by YouTube itself. So we employ additional music-pattern recognition — tech companies around the world — to do better collection for our existing catalog, which I know Hipgnosis is also doing. We try to find and mix a better lineup of distribution companies — intermediary publishers, etc. — to maximize our revenue while minimizing the middleman fee. For active, we’re doing remakes. We’ve already done a dozen remakes of our songs. I think two are now in the top 100 charts for Korean music. These are songs that were published 16 years ago, so after acquisition, we made remakes of the songs with new, up-and-rising artists in Korea. By remaking the songs, we hold the new assets as well as our existing assets. We’ve also worked with media channels in Korea to do music-related shows.
You recently purchased your first major U.S. acquisition: the catalog of producer-songwriter Greg Wells. To do this, you set up a U.S. subsidiary. Do you plan on creating subsidiaries in other countries to pursue acquisitions elsewhere?
Yes, for sure. The U.S. was a symbolic move for us. Our targets, however, lie toward lower-multiple opportunities. So, basically, Asia. We might set up subsidiaries. We might get direct acquisition from our Korean entity. But positioning ourselves as a more Asia-focused, Asia-Pacific music aggregator is our next step.
What might surprise people about the Korean music market?
The market size. For starters, it’s larger than most European countries — larger than Canada, Mexico or most Latin American countries, or even countries with more population like Indonesia. I think it’s bigger than Italy. Korea is really an advanced country. I can say that with more certainty now than I would have been able to seven or eight years ago.
How much of South Korea’s music market depends on the ability of K-pop to keep growing as much as it has in recent years?
That is a topic of interest for Korean media and Korean industry specialists as well — whether this is a one-hit wonder, a short-lived irregularity or a trend. People have been internally questioning, or doubting, the longevity of the trend. This issue has been raised for five, six years. Every year, there’s someone who says, “OK, you know, this cannot sustain. Maybe this is the peak. The next year, it might be difficult.” But the last five or six years have seen more growth every year, surpassing everyone’s expectation. This does have a kind of faith component, and I do have faith. I’m biased. But I think my bias stands with multiple consecutive years of a proven record. There’s no other country, outside of the U.S., that spends and reinvests as much money for better-quality music production as Korea. I’m very, very optimistic that this is not a one-time thing, but is a trend that will stick around at least for the next 10 years.
ValueAct Capital Management, a hedge fund with a history of being an activist investor, now holds a stake in Spotify. Mason Morfit, the San Francisco-based company’s chief executive officer and chief investment officer, revealed the firm’s ownership in Spotify shares at an event at Columbia University on Friday (Feb. 10), according to reports.
Spotify shares rose 3.6% to $125.16 on Friday following the news.
ValueAct, which did not reveal the timing of the investment, enters the picture as Spotify appears determined to improve its margins and reign in costs. Two weeks ago, Spotify announced a reorganization and layoff of 6% of its staff. Chief content officer Dawn Ostroff, who used lucrative licensing and original content deals to build Spotify’s podcast business, departed the company. The New York-based executive’s duties were absorbed by chief business officer Alex Norström out of Spotify’s Swedish headquarters. In the fourth quarter, Spotify showed a willingness to pare costs by laying off staff in its original podcasts and some of its live programming.
“During the boom, it applied these powers to new markets like podcasts, audiobooks and live chat rooms,” ValueAct’s Morfit said according to The Financial Times. “Its operating expenses and funding for content exploded. It is now sorting out what was built to last and what was built for the bubble.”
ValueAct owns shares in dozens of companies including Twenty-First Century Fox, Nintendo, The New York Times Company, Microsoft and Adobe Systems.
Exactly what this means for Spotify’s decision-making isn’t immediately clear. Like Meta, Alphabet and some other prominent tech companies, Spotify has a dual-class share system that grants its founders with enough voting power to control corporate governance. In a single-class structure, shareholders’ voting power is proportional to the number of shares they own. In a dual-class system, ordinary shares have far less voting power than a second type of shares.
Spotify’s co-founders own only 38% of outstanding common shares but own 100% of the company’s “beneficiary certificates,” each of which has 10 times the voting power of an ordinary share but no economic rights. The arrangement gives CEO Daniel Ek and co-founder Martin Lorentzon 74.3% of voting power, according to Spotify’s 2022 annual report, and ensures the duo can choose the board of directors despite owning a minority of the company’s economic interest.
As of Dec. 31, 2022, Ek has 16.5% of outstanding common shares and 31.7% of total voting power while Lorentzon owns 11.1% of ordinary shares and 42.6% of total voting power. The next-largest shareholder, Baille Gifford & Co, owns 14.5% of ordinary shares and 5.1% of voting power. Chinese tech giant Tencent Holdings owns 8.6% of ordinary shares, but Ek exercises those shares’ voting rights.
Uber Eats’ commercial featuring Diddy, Montell Jordan, “The Fox (What Does the Fox Say?),” the guy who sings “What Is Love,” an oddly-timed haircut and two pineapples may be the first clue that Super Bowl ads are going lighter in 2023 — a pattern reflected in the music synchs for the big game.
After three years of the pandemic, Jordan’s 1995 smash “This Is How We Do It” and Kelis’ 2003 hit “Milkshake,” both Universal Music Publishing Group synchs used in the Uber Eats spot, represent a shift from apocalyptic and inspirational Super Bowl commercials and soundtracks starring old-timey crooners and string sections to familiar, upbeat hits and plentiful comedy.
“Humor remains the dominant theme this year,” says Tom Eaton, senior vp of music for advertising for UMPG, which represents the Jordan and Kelis tracks and suggested them to the brand’s music supervisors. “There have been a few sentimental commercials, but the vast majority have trended towards humor — and music can be such an important aspect of creating that mood.”
“I haven’t seen that heightened seriousness, which I think is a good thing,” adds Keith D’Arcy, senior vp of sync and creative services for Warner Chappell Music, whose synchs at this year’s Super Bowl include DMX‘s “What’s My Name,” for a Downy spot starring Danny McBride. “The country is in a good place where we’re more inclined to want to laugh and celebrate.”
That means lots of feel-good tracks, many of which were released in the ‘90s – from “What’s My Name” and “This is How We Do It” to a Clueless throwback ad for Rakuten starring Alicia Silverstone and Supergrass‘ 1995 U.K. hit “Alright.” The ’90s trend may have begun last year with Doja Cat‘s cover of Hole‘s “Celebrity Skin” for Taco Bell, says Rob Christensen, executive vp and head of global synch for Kobalt, whose lone synch this year is soul singer Lee Fields’ “Forever” for pet-food brand The Farmer’s Dog. “The ’90s are back,” he says. “That seems to be around pop culture everywhere right now.”
“It’s cyclical,” adds Scott Cresto, executive vp of synchronization and marketing for Reservoir Media, which has three synchs, including a Pringles spot with Meghan Trainor singing Tina Turner‘s “The Best.” “Most folks’ favorite music is from [ages] 13 to 30. They’re down the line in their careers and making the decisions and picking their favorite songs.”
Although not all final synch tallies for nationally televised spots were available at press time — publishing execs say permissions and requests for songs were unusually late this year, including a rush job that came in from an agency this past Monday — Sony Music Publishing (SMP) scored the most with 15, UMPG had seven, Warner Chappell Music had six or seven, BMG landed five, Primary Wave and Reservoir had three apiece and Kobalt had one.
Despite inflation, layoffs, high interest rates and sporadic recession talk, synch rates were stable this year, according to publishers. “It’s in line with past Super Bowl campaigns,” says Marty Silverstone, partner/senior vp creative/head of synch for Primary Wave, whose synchs include Missy Elliott‘s “We Run This” for Google Pixel. Adds Dan Rosenbaum, vp of licensing and advertising, for BMG, whose synchs include Supergrass’ “Alright” and co-writes for Turner’s “The Best” and Elliott’s “We Run This”: “Recognizability is so important in commercial usage. If that song is going to work for them, they’ll pay the price.”
Super Bowl LVII is the first since Kate Bush‘s “Running Up That Hill (A Deal with God)” landed on Stranger Things in May 2022, became a No. 1 hit and unexpectedly dominated the synch business. Do publishers believe the big game, for which 30-second ads cost a reported $7 million, will have a similar impact for their songs? Yes and no.
“That Kate Bush song wasn’t well-known and the show blew it up. On the Super Bowl, they play it a little more safe by using more tried-and-true hits,” says Brian Monaco, president/global chief marketing officer for SMP, which represents Len‘s “Steal My Sunshine” (for a Sam Adams spot), Sarah McLachlan‘s “Angel” (Busch) and Olivia Rodrigo‘s “Good 4 U” (Pepsi). “On a TV show, it’s a little easier, because the fees are lower. If it doesn’t work, you’re on to the next one.”
Despite SMP’s success at landing Super Bowl synchs this year, Monaco’s staff was unable to successfully pitch one key artist: Bruce Springsteen, who sold his music rights to the company for a reported $550 million in 2021. “It just didn’t fit,” he says, while noting that even for a superstar like Springsteen, getting a Super Bowl synch is a coveted career highlight: “Everyone’s hope — every writer, every artist — is the Super Bowl platform. We need more big events like this to get more music played.”