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Much has been written about Bad Bunny‘s remarkable year, but he’s not the only Latin artist who made headlines in 2022. From Karol G‘s record-setting tour to Coachella featuring the most Latin acts ever on the lineup to Daddy Yankee‘s manager going to prison, the year was chock-full of big news in Latin music. Here are the 10 stories that helped define the genre’s biggest year yet.
Year of the Bunny
With a smash-hit album and two back-to-back, record-breaking tours this year, Bad Bunny redefined success for a modern Latin artist. The Puerto Rican hitmaker had his biggest year to date, finishing out 2022 as Billboard’s top artist of the year and releasing the first all-Spanish album (Un Verano Sin Ti) to be ranked No. 1 on the Billboard 200 year-end albums chart. He also finished as the year’s top touring act — making him the first Latin act to do so — with a total gross of $373.5 million from 1.8 million tickets sold across 65 shows (the combination of El Ultimo Tour Del Mundo and World’s Hottest Tour). But the superstar wasn’t done yet, as year-end tracking ended while he was still in the middle of the Latin American leg of World’s Hottest Tour. After finally wrapping that run on Dec. 10 in Mexico City, he closed 2022 with a record-breaking $435 million in tour grosses on the Billboard Boxscore charts. Named Spotify’s most-streamed artist globally for the third consecutive year and Apple Music’s 2022 artist of the year, Bunny’s genre-hopping Un Verano Sin Ti also made history last month when it became the first Spanish-language album ever to be nominated for the Grammy Award for album of the year.
That One Time Latin Music Surpassed Country
In its first streaming week in May, Bad Bunny’s Un Verano Sin Ti (which spent 13 nonconsecutive weeks atop the Billboard 200) accounted for 18% of all U.S. Latin on-demand streams, pushing the genre’s streaming market share past country for the first time ever and resulting in its highest streaming week to date with over 1.8 billion weekly ODA streams. That’s bigger than any weekly streaming total for the country genre so far, according to Luminate.
Karol G Sets New Touring Record
This year, Colombian powerhouse Karol G made touring history with her ambitious $trip Love Tour. The trek finished its run as the highest U.S.-grossing tour ever by a female Latin act, grossing $69.9 million and selling 410,000 tickets across 33 shows in North America, according to Billboard Boxscore. With $Trip Love, the “Provenza” singer surpassed the totals earned by Jennifer Lopez‘s $50 million grossing It’s My Party World Tour in 2019 and Shakira‘s 2018 El Dorado World Tour, which grossed $28.2 million. Karol’s AEG-produced arena tour followed last year’s Bichota Tour — the superstar’s first-ever headlining trek in the U.S. — which grossed $13.4 million and sold 192,000 tickets across 26 shows in North America.
Postponed Tours
Not all Latin touring efforts ended in success stories. J Balvin, Anuel AA and Ozuna postponed their 2022 tours for a multitude of reasons, from production challenges to personal matters. In April, just seven days before his CMN-produced Jose tour was set to kick off, Balvin took to social media to deliver the news of its cancellation to his millions of followers. “COVID has caused some unforeseen production challenges, and I wouldn’t be able to keep my promise of giving you the absolute best show possible, he wrote in English and Spanish. In July, Anuel announced that he was rescheduling the Las Leyendas Nunca Mueren U.S. tour — presented by CMN and slated to kick off in August — to 2023. In a statement, the Puerto Rican artist explained that he was pushing back the tour to focus on personal matters. “I’ve been thinking that I need to take some time to recharge my batteries,” he said, noting his desire to “reorganize” his personal life and career. (New dates have already been announced for next year.) On the other hand, Ozuna — who announced dates for the U.S. leg of his OzuTochi Tour in May — postponed without giving an official explanation. His and Balvin’s tours have yet to be rescheduled.
One Latin Executive Goes to Prison, Another is Due in Court in 2023
In May, Daddy Yankee and Natti Natasha’s manager Raphy Pina was sentenced to three years in prison for illegal possession of firearms. The veteran music executive and producer, who also founded Pina Records in 1996, is currently serving his time in federal prison in Florida. Also making headlines for his legal woes in 2022 was DEL Records CEO Angel del Villar, who was arrested in June for alleged shady dealings. Currently released on bond, del Villar is charged with “conspiring to violate the Foreign Narcotics Kingpin Designation Act,” according to an official statement issued by the U.S. Attorney’s Office, and “conducting business with a Guadalajara-based concert promoter with ties to Mexican drug cartels.” DEL Records is the indie regional Mexican label that’s home to the chart-topping group Eslabon Armado, who in May made history when their album Nostalgia became the first Mexican music album ever to hit the top 10 on the Billboard 200. If convicted of violating the Kingpin Act, Del Villar — whose trial is expected to begin in October 2023 in Los Angeles — could face a statutory maximum sentence of 30 years in federal prison.
A Shakeup in Jenni Rivera’s Estate
Earlier this year, Jenni Rivera’s daughter Jacqie Rivera took over as head of her mother’s estate — replacing her aunt Rosie Rivera, who had been at the helm since the regional Mexican singer’s untimely death in December 2012. Since taking over, Jacqie tapped Izabel Nicholas as general manager for Jenni Rivera Enterprises, while Oswaldo Rossi has remained the estate’s lawyer and Entotal Agency is handling artist management. When Rivera died ten years ago, at age 43, she was the single most successful woman in regional Mexican on the Billboard charts, boasting over 26 entries on the Regional Mexican Airplay chart. Most recently, Rivera’s children (Chiquis, Jacqie, Michael, Jenicka and Johnny) released “Misión Cumplida,” a song written by their mother in 2008. The song is part of Rivera’s forthcoming album — set to be released by Sony Music U.S. Latin — that will include other unreleased songs the Rivera estate discovered after her death.
Close to That Billion-Dollar Mark
U.S. recorded music revenues were up in the first half of 2022, according to the RIAA, growing 9% in the first six months of the year — but Latin music far surpassed that percentage increase, with revenue growing 23% in the first half of the year for a total of $510 million. Latin music is now on course to generate over $1 billion in the U.S. by year’s end. According to the RIAA’s Latin-specific report, shared exclusively with Billboard Español, music streaming formats were the “fundamental growth driver,” comprising a staggering 97% of total Latin music revenues. Among total streaming revenues, paid subscriptions comprised the biggest source of sales at 71% — accounting for 69% of overall Latin revenues at $350 million.
A Very Latin Coachella
From Karol G to Anitta to Nathy Peluso to Grupo Firme, Latin artists took over Coachella this year. The 2022 edition of the festival — which returned to Indio, Calif. in April after a two-year hiatus due to the pandemic — doubled the number of Latin acts from the 2020 roster with more than 20 multi-genre Latin artists. The move reflected the overall demand for Latin artists and the success Latin acts enjoyed once live events resumed. According to data from concert discovery app Bandsintown, between Jan. 2019 and Jan. 2022, the interest of live music fans in the top 16 Latin artists on Coachella’s 2022 lineup grew by 533% on the platform. This included Grupo Firme, who alone saw a 5,294% growth in fan interest on Bandsintown during that timeframe. This year, Firme made history by becoming the first banda to ever perform at Coachella, while Anitta became the first Brazilian to perform a set on the fest’s main stage.
Latin Goes Global
Latin music had a banner year not only in the U.S. but in other markets including Europe, where Latin acts are finally seeing a breakthrough. Artists such as Bad Bunny, Karol G, Rosalía, Maluma, Anitta and Camilo are spearheading the globalization of Latin music on the continent, making inroads in a market that was slow to latch on to the genre just a few years ago. Global touring powerhouse Rosalía has earned $28.1 million (so far) and sold 343,000 tickets across three continents on her Motomami world tour, according to figures reported to Billboard Boxscore, landing her at No. 7 on the year-end Top Latin Tours chart. Also going global was Mexican crooner Marco Antonio Solís, who toured Europe for the first time, holding shows in Paris, Madrid and London as part of his Que Ganas De Verte world tour. Additionally, Camilo had a historic and record-breaking performance in front of the iconic Puerta de Alcalá in Madrid in September, drawing a crowd of more than 80,000 fans.
‘90s Nostalgia
Last year, Los Bukis reunited after 25 years to embark on their historic Una Historia Cantada stadium tour, presented by Live Nation — ultimately landing the group at No. 6 on Billboard’s Top Tours of 2021 with a total gross of $49,667,153. In 2022, they returned with a second leg of the tour, during which they played two back-to-back shows at the L.A. Memorial Coliseum. At that venue, the group gathered 100,000 fans over two nights, breaking their previous record at the venue set in 1995. The success of the Los Bukis reunion started something of a nostalgia-driven movement in Latin music this year. This trend included the inaugural Bésame Mucho festival, which took place at Dodger Stadium on Dec. 3 with a ’90s-’00s-inspired lineup of pop, regional Mexican, merengue, cumbia and rock-en-español artists — and sold out in just 12 minutes. This coming February, a ’90s Latin pop concert featuring Magneto, Kabah, Caló, Sentidos Opuestos and more is slated to take place at Los Angeles’ YouTube Theater.
Sameen Singh was named chief strategy officer & chief digital officer at 88rising, reporting to CEO and founder Sean Miyashiro out of Los Angeles. Singh will lead global strategy, negotiate partnerships, further digital business development and shepherd inorganic growth in the role. He will also lead the development and implementation of strategic initiatives and commercial innovation. Singh comes to 88rising from Create Music Group, where he served as chief strategy officer for two years. He can be reached at sameen@88rising.com.
Capitol Music Group (CMG) has promoted six employees in its marketing departments. They are: Jessica Eason to vp of marketing for Capitol Records; Zoe Gillespie to vp of brand partnerships and strategy for CMG; Kate Haffenden to vp of international marketing for CMG; Chris Kershaw to vp of marketing for Capitol Records; Byron Miller to vp of commercial marketing, streaming strategy (urban) for CMG; and Alex Williams to vp of gaming strategy & business development for CMG. Eason can be reached at jessica.eason@umusic.com, Gillespie can be reached at zoe.gillespie@umusic.com, Haffenden can be reached at kate.haffenden@umusic.com, Kershaw can be reached at chris.kershaw@umusic.com, Miller can be reached at byron.miller@umusic.com and Williams can be reached at alex.williams5@umusic.com.
Kurt Deutsch was named senior vp at Warner Music Entertainment & Theatrical Ventures, a newly created role. Deutsch will oversee the development of new theatrical productions and investments while continuing to be a connector with songwriters, artists and catalogs via collaborations with Warner Chappell Music and the various Warner Music Group (WMG) labels. He will continue to work closely with songwriters he has signed or re-signed to Warner Chappell, including Lynn Ahrens & Stephen Flaherty, Joe Iconis, Toby Marlow & Lucy Moss, Alan Menken, Lin-Manuel Miranda, Eddie Perfect and Shaina Taub. Deutsch, who has been with WMG since 2017, will continue to be based in New York and report to Warner Music Entertainment (WME) president Charles Cohen. The theatrical music label he founded, Sh-K-Boom/Ghostlight, will continue as part of WMG’s portfolio of labels.
Universal Music Group (UMG) hired Alvaro Galbete-Velilla as senior vp of new business, a new role that will see him develop opportunities in the Web3 and metaverse sectors as well as other emerging areas of digital development for the label. He joins the company from SoundCloud, where he was director of business development. UMG also promoted Kristen Bender to senior vp of digital innovation strategy & business development; she will continue to play an important role in implementing digital business partnerships with UMG operating units and directing UMG’s engagement with entrepreneurs worldwide. Her previous title was senior vp of business development & strategy. Both executives are based in Los Angeles.
Rachel Chernoff was named senior vp of data science & analytics at Sony Music Entertainment (SME), a newly created role; she was previously senior vp of partner development at the company. Based in New York, Chernoff will lead a newly formed team that brings together the global digital business (GDB) group’s strategic analytics and data science functions to continue growing SME’s data capabilities across the globe. Chernoff will work in partnership with the SME partner development, global product and sales & analytics teams to enhance and develop analytic- and science-based tools, techniques and expertise supporting the needs of Sony Music’s labels and businesses around the world. She will also lead the evolution of SME’s data capabilities with external partners globally. She reports to Dennis Kooker, president of global digital business at SME.
BMG appointed Pierrot Raschdorff as senior director of global diversity, equity and inclusion out of Berlin. In the role, Raschdorff will be responsible for developing and accelerating BMG’s global DE&I goals, working with international teams across the company’s 12 core music markets. He joins from Penguin Random House — also a division of BMG’s parent company Bertelsmann — in Germany.
Beau Benton was promoted to senior vp of media & operations at Republic Records. Benton, who will oversee operations for Republic in Los Angeles in the new role alongside co-president Wendy Goldstein, will continue handling media strategy and orchestrating campaigns for Republic artists. He will also serve as the liaison for internal Los Angeles team communication overall.
Karl Skoog joined Amuse as CMO, tasking him with leading the Swedish music company’s marketing and communications teams with a focus on global growth. Skoog was previously CMO at both Fotografiska and NGO The Swedish Brain Foundation. He has also worked at Tele2 and EMI Music Publishing. Skoog can be reached at karl@amuse.io.
Range Media Partners hired Jared Cotter as vp of A&R and Federico Morris as director of A&R. Both will join vp of A&R Sam Drake in supporting Range Music’s management talent, label joint venture with Capitol Music Group/Virgin Music & Artist Label Services and Range Music Publishing. Colter arrives from his multi-faceted entertainment company The Heavy Group. He will continue to manage Bazzi and co-manage clients Rose Betts, Ben Kessler, Boston & Pat, Veyah and Jay Sean with Jeremy Skaller while working to expand Range’s roster of artists on the label side. Morris most recently served as publishing A&R and manager at Electric Feel Entertainment. Cotter can be reached at jcotter@rangemp.com and Morris can be reached at fmorris@rangemp.com.
PPL named Titania Altius as head of member services and Dan Millington as senior vp/head of client services. Altius will oversee the delivery of the member services team’s operational activity and build and foster productive working relationships with PPL’s key stakeholders and industry partners around the world to develop the organization’s neighboring rights collections and distribution service. Millington will lead PPL’s member relationship management and recruitment to its international collections service. Both Altius and Millington will report to chief membership & people officer Kate Reilly. Altius can be reached at titania.altius@ppluk.com and Millington can be reached at daniel.millington@ppluk.com.
Naomi Asher was named vp of songwriter services and neighbouring rights at Sony Music Publishing UK. In her new role, Asher will be the go-to contact for SMP UK’s catalog songwriters and clients and will be tasked with expanding opportunities and driving success for their songs both locally and internationally. She will also continue overseeing the company’s neighbouring rights division. She will remain in the company’s London office, reporting to SMP UK co-managing directors David Ventura and Tim Major.
Rhea Ghosh was promoted to chief marketing officer at copyright protection service Cosynd, where she will lead all marketing and communications initiatives and consumer brand strategy. She will also head up Cosynd’s advocacy efforts with its partner network, which includes CD Baby, A2IM, the Mechanical Licensing Collective, Repost by SoundCloud, Symphonic Distribution, BookBaby, DiscMakers, AdRev, Soundrop and BeatStars. She joined the company in 2020. Ghosh can be reached at rhea.ghosh@cosynd.com.
Artist manager Keith Hagan joined MNRK Music Group, bringing his clients The Afghan Whigs, Robert Finley, Cymande, Ondara, The Whitmore Sisters and The Mastersons to the company. Hagan will be based in New York, reporting to MNRK president & CEO Chris Taylor. He most recently founded and led Skylark Artist Management. Hagan can be reached at khagan@mnrk.com.
Kate Loesch was named senior director of creative at Kobalt. The Los Angeles-based executive will sign artists and writers and with the global creative roster at Kobalt. She arrives at the company from Capitol Records, where she served as director of A&R.
CAA promoted Kate Arenson and Ron Jordan to agents in the music touring department. Jordan will continue working with ARDN, Jean Deaux and tobi lou, among others. (via THR)
Glenn Briffa was named CFO of the Los Angeles Philharmonic Association, effective immediately; he’s served as interim CFO since July. His responsibilities include overseeing the organization’s financial, information technology and office administration functions.
Arno Van Berkel was appointed managing director at Fruits Music, a music and tech company specializing in music playlist promotion. He started his new role on Jan. 23. Van Berkel — who joins Fruits Music from Warner Chappell Music, Benelux, where he served as managing director for 15 years — will be based at the company’s headquarters in Oosterhout, Netherlands and report to Fruits Music founder & CEO Stef Van Vugt.
Centricity Music hired three new employees: Tyler Osswald as digital marketing manager, Sarah Shinn as marketing manager of radio and Camy McCardle as senior manager of finance/business affairs.
Violinist/composer Curtis Stewart has been named artistic director at the American Composers Orchestra (ACO), effective immediately. Stewart will overlap with outgoing artistic director Derek Bermel, who is concluding his 10-year tenure but will remain on ACO’s board of directors. In the position, Stewart will be tasked with conceiving, curating, selecting and programming ACO performances, readings, recordings and other programs. He is also responsible for creating programming that expresses the ACO vision, developing and maintaining relationships with individual and institutional artistic partners and setting the artistic strategy for the organization in partnership with ACO president Melissa Ngan. He will additionally work with ACO director of artist equity Garrett McQueen to offer artistic oversight to the organization’s EarShot composer advancement initiatives. Stewart can be reached at curtis@americancomposers.org.
Full Coverage Communications named Melissa O’Toole as director and Avery Robinson as senior publicist in Los Angeles. O’Toole has worked at companies including 42West, Scoop Marketing and ID PR along with several talent agencies and record labels. Robinson joins from BECK Media & Marketing. The company also announced the signing of several new clients, including Adam Lambert, Alicia Keys, Kid Harpoon, The Kid LAROI, Little big Town, Michael Buble, Ozuna and TXT.
The Recording Academy is celebrating a “major global victory” for music as the PEACE For Music Diplomacy Act passes through the House and the Senate as part of the 2023 National Defense Authorization Act (NDAA).
The Senate voted Thursday (Dec. 15) to approve the massive defense bill, which includes The PEACE (Promoting Peace, Education, and Cultural Exchange) Act. This follows the House’s bipartisan passage of the paperwork last week.
The Recording Academy has thrown its advocacy efforts behind the bill since it was first introduced January in the House by 2022 Grammys on the Hill honorees Rep. Michael McCaul and former Rep. Ted Deutch.
The act, it has been said, would use music and music-related global exchange programs as a tool to build cross-cultural understanding.
Specifically, the Recording Academy notes, the bill leverages partnerships with the private sector when designing and implementing its music-related exchange programs, and authorizes music-related exchanges that “advance peace abroad.”
At October’s District Advocate Day, almost 2,000 Recording Academy members met with Congressional reps to discuss pending legislation affecting creators, including the PEACE Through Music Diplomacy Act.
The behind-the-scenes advocacy work and passage of the bipartisan $858 billion defense bill is a reminder of “the power of music and its capacity to increase understanding between diverse cultures and people around the world,” comments Recording Academy CEO Harvey Mason jr.
The legislation is now on President Joe Biden’s desk awaiting his signature.
“The Recording Academy is grateful to Rep. McCaul, former Rep. Deutch, and Senators Leahy and Tillis for their support of this important legislation, and we look forward to championing future cross-sector partnerships that will allow music creators to promote peace across the globe.”
Read more here on the NDAA.
Warner Music Group signed a multi-year partnership with blockchain companies LGND.io and Polygon Companies to launch LGND Music, a new collaborative project set to debut in January 2023. Through the partnership, select WMG artists will launch digital collectibles on LGND Music’s app and desktop platform, which will be built on Polygon, a blockchain development network. WMG’s Spinnin’ Records is one of the first label collaborations under the deal.
The Bojangles restaurant franchise signed a franchise development agreement with Melanbo, a group partly owned by music execs Mel Carter and Kevin “Coach K” Lee. Melanbo will develop 14 new Bojangles locations in greater Atlanta, building upon their acquisition of 18 existing Bojangles restaurants in Georgia, North Carolina and South Carolina — making Melanbo the largest Black-controlled Bojangles franchise. In the music sphere, Carter recently signed a joint venture deal with Warner Music for his label, Second Estate Records. Lee currently serves as COO at Quality Control Music, which he co-founded in 2013.
UMG-owned rock label Spinefarm Records (Bullet for My Valentine, Atreyu, Killing Joke) joins the [PIAS] Group‘s roster, effective Jan. 1; Spinefarm will be distributed on a global basis through the [PIAS] services division [Integral]. The deal marks the first significant repertoire partnership following UMG’s purchase of a 49% stake in [PIAS] last month. Spinefarm will continue to operate as a standalone label from its New York headquarters under the leadership of GM Jonas Nachsin. Existing Spinefarm teams across the world will continue to handle all A&R, marketing and promotion activities for the label.
TSX Entertainment — owner of a 74,000 square foot space in New York that includes recording studios, a supper club, galleries, restaurants, bars, rooftop terraces and immersive experiences integrated with the TSX Metaverse — signed a long-term partnership with Roc Nation. Under the deal, the companies will collaborate on tentpole performances and annual events out of the TSX space — which also includes a massive digital billboard connected to the TSX app — spanning music, fashion, film, sports, gaming and lifestyle.
Warner Music Group’s WMX is launching three FAST channels exclusively on The Roku Channel: WMX Pop, XMW Rock and WMX Hip-Hop. All three will feature music videos and concerts from WMG’s global catalog, as well as original programming from WMG media brands including UPROXX, HipHopDX, Songkick, Cover Nation, The Pit and Lasso Nation.
Warner Music India (WMI) signed popular Indian singer King. The label recently released King’s third studio album, Champagne Talk.
Connect Music, which provides distribution and publishing administration services, acquired London-based artist and label services provider MTX Music. Connect co-founder Askia Fountain will lead MTX Music’s operations as managing director, focusing its services on the hip-hop and R&B community in the U.K. Under the agreement, Connect is granting MTX Music access to its $10 million credit facility (backed by Preserver Partners) to support the development of emerging U.K. talent, with up to $1 million available per artist. Fountain will look to grow MTX Music’s A&R and marketing teams over the coming months. MTX Music’s roster includes Judith Owen, Lost Society and Jonathan Antoine.
Downtown Music Services signed several new artists out of Los Angeles: Colbie Caillat, Francis Karel, Lily Meola, Loren Gray, Rebecca Black and Yung Bae. All will utilize Downtown’s suite of services including global distribution, creative marketing and synch licensing.
B2B distributor FUGA partnered with U.S. indie label Polyvinyl Record Co. (Alvvays, of Montreal, American Football). Through the deal, Polyvinyl will utilize FUGA’s suite of distribution and marketing services. Polyvinyl is also entering a partnership with Downtown Neighbouring Rights, a recently-launched division of Downtown Music that brings Downtown Music Services,Downtown Neighbouring Rights and FUGA together into a single offering that aligns, tech solutions, label & artist services and distribution.
Merlin signed two new partnerships: one with Supernatural, a VR fitness app for Meta Quest headsets, and the second with STYNGR, a B2B technology platform that offers a turnkey music licensing solution for video games and the metaverse. Under the deals, both Supernatural and STYNGR will be provided with music released by Merlin members.
NOFX founding member Fat Mike launched a new record label, Bottles To The Ground. According to a press release, the label will serve as a “halfway house” for Fat Mike’s new band, Codefendants, and a home for British punk duo The Meffs and Melvinator, the EDM project from NOFX’s Eric Melvin. The label, a collective owned by all members of NOFX, is an imprint of Fat Wreck Chords and will house bands that don’t fit the traditional Fat sound.
Indie label Dirty Hit (The 1975, Wolf Alice, Rina Sawayama) extended its worldwide distribution deal with Ingrooves Music Group.
British-Nigerian rapper, MC, producer and label owner Skepta signed with Los Angeles-based Wasserman Music agent Brent Smith for global representation. Skepta launched his own label and creative agency, Big Smoke, in October.
Session, the developer behind music collaboration app Session Studio, signed a one-year partnership with Brazil’s largest collection society, the Brazilian Union of Composers (UBC). Under the deal, Session will offer UBC members free access to the Session Studio app, which allows creators to capture song and recording data at the point of creation and deliver it downstream to managers, labels, publishers, CMOs and digital service providers while ensuring all participants are properly credited.
B2B streaming company Tuned Global announced two MedTech clients, MediMusic and Nue Life Health, who will use Tuned’s music APIs to provide streaming music to patients in a variety of settings. MediMusic customizes therapeutic playlists for patients to reduce resting heart rate, anxiety and stress responses via biofeedback and machine learning. Nue Life Health offers ketamine therapy to people with PTSD and treatment-resistant depression; music is one component of an app-supported therapeutic experience that guides Nue Life patients through the ketamine sessions. Tuned Global will provide the companies with metadata, music content and streaming service functionality.
Oliver Sim, Romy and Jamie xx — collectively The xx — signed with Huxley‘s brand partnerships division. The company will represent the members of the band and support on-brand relationships for their individual and creative projects. Also signing with the division is Alastair McKimm — creative director, design consultant, i-D editor-in-chief and founder of creative agency MCKIMMCORP.
In the 1970s, Louis Messina visited the Houston Astrodome to check out the events his new business partner, Allen J. Becker, was putting on. “He’s doing boat shows and having Evel Knievel jump over 150 cars and thrill shows and demolition derbies,” Messina recalls. “I went, ‘Holy crap, there are 60,000 people here!’ A guy jumped from the top of the Astrodome into the air bag.”
Becker, 90, who died Monday (Dec. 12) at his Houston home, first approached Messina, then a New Orleans rock promoter, in 1975 to form a concert-promotion partnership. Their company, PACE Concerts, went on to dominate Texas and much of the South for more than 20 years, booking stars from The Who to Bruce Springsteen to Rush.
“Allen had an old saying: ‘I’d rather lose money with you than you make a dime without me’ — meaning that if you had a good idea and you truly believed in it, he’ll be there with you,” says Messina, today an Austin-based promoter who has represented acts from George Strait to Taylor Swift. “He saw something in me that no one else in my whole life saw in me.”
Becker had been a life insurance agent in 1965 when a banker friend suggested they promote a consumer boat show at the new Astrodome. The show was a success and led to years of monster-truck rallies and tractor pulls. In 1975, the New Orleans Superdome approached Becker about producing entertainment events for acts such as Bob Hope and The Temptations, which is where he met Messina. A Glenn Miller fan, Becker recognized he had a blind spot in rock acts and reached out to Messina to partner on shows throughout the South.
It was Messina who suggested moving to Houston to create the partnership that became PACE Concerts: “We’ll make a go of it and we’ll see what happens,” he told Becker.
Like other promoters in the U.S., Becker and his son, Brian, soon recognized the money in the concert business wasn’t in ticket sales but in beer, hot dogs and popcorn. They steered PACE into building amphitheaters for $8 million to $10 million apiece — “They were affordable,” Messina says — in Nashville, Atlanta and elsewhere. “The concert promoters who have really prospered have been the ones that stepped out and got involved in facilities,” Becker told Billboard in 1998, about controlling sheds and their revenue streams. “You need those other revenue streams.”
“That created 10, 12, 13 amphitheaters,” says Gary Becker, Allen’s son, a former top PACE exec who was 16 when his father employed him to shuttle bus and truck drivers to their hotels and purchase batteries and guitar strings for touring artists. “You go to an Elton John and book him 13 times around those amphitheaters and it was a win for everybody, including the bands.”
In 1998, PACE was on track to gross nearly $250 million in revenue when Robert Sillerman‘s company SFX bought it for $130 million. Two years later, Silllerman then sold SFX to radio giant Clear Channel Entertainment for $3.3 billion in stock — Brian Becker, Allen’s son, served as CEO of that company for the next five years. “It was definitely emotional,” Gary Becker recalls. “It was time for my dad. Things can’t stay the same. It gets too big, I guess.”
Born in Houston, Becker was the son of a shoe salesman and a homemaker. He graduated from the University of Texas at Austin with a marketing degree. He served in the Air Force, then started his career in 1957 with Kansas City Life Insurance Company. When he began working in entertainment, he told Texas Monthly in 1996, it was a “real street business.”
After the SFX sale, Becker continued to be active in that business. He oversaw the ACE Theatrical Group, whose holdings included the Kings Theatre in Brooklyn and the Mahalia Jackson Theater for the Performing Arts in New Orleans, before selling them in 2018.
“He liked to compete, and he liked to win, but he liked to do it in the best way possible,” Gary Becker recalls. “You don’t need to go for the jugular. You don’t need to press real hard. You want the people you do business with to know you are honest and fair.” In 1998, Allen Becker told Billboard: “I’m proud of what we’ve accomplished. We have a reputation in the marketplace, and people trust us. It has been a hell of a career.”
Becker’s survivors include his sons, Brian and Gary; daughter, Sunni Markowitz; 11 grandchildren; and one great grandchild. His wife of 54 years, Shirley, died in 2008.
South Korean investment and management firm Beyond Music made its first acquisition of a North American music catalog by purchasing the rights to the music of Greg Wells, a Grammy-winning Canadian songwriter-producer whose credits includes music recorded by Adele, Taylor Swift, Dua Lipa, Katy Perry and Quincy Jones.
Wells’ career spans genres and decades. As a songwriter, Wells has credits on Aerosmith’s Nine Lives, Celine Dion’s Let’s Talk About Love, Adele’s 21 and John Legend’s Bigger Love. His production credits include The Greatest Showman: Original Motion Picture Soundtrack, Twenty One Pilots’ Vessel and the In The Heights soundtrack. The rights vary by title and include publishing rights, producing income rights, and master performance rights, according to a company spokesperson.
With the Wells acquisition, Beyond Music’s assets under management are 300 billion won ($230 million). Before this deal, Beyond Music – which claims to be “largest music IP management company in Asia” – spent more than $200 million on acquisitions in Asia, including the catalogs of FNC Investment, KNC Music and Interpark, to build a catalog of more than 26,000 songs. The company received funding from institutional investors including KB Securities, Base Investment, Maven Growth Partners and Dreamus Company.
The Wells acquisition was made by a newly established U.S.-based subsidiary, Beyond Music US, because domestic transactions are simpler for tax and legal purposes, and the company wants to pursue additional international opportunities in the future, according to the spokesperson. That said, Wells’ catalog covers many Western artists who are also popular in South Korea and throughout Asia. This company believes this acquisition is a “unique opportunity” and “a stepping stone for Beyond to become a global music rights management company,” the spokesperson added.
“Now is the time to become a global music rights management company by securing not only Asian, but also international music rights,” Beyond Music CEO Jangwon Lee said in a statement. Jangwon is also the CEO of Content Technologies and CT Investments, which debuted a K-pop focused exchange-traded fund, using the ticker KPOP, on the NYSE Arca Exchange in September. Beyond Music is a subsidiary of Contents Technology.
In a statement, Wells called it “an honor to be the first major music catalog acquisition for Beyond outside the Korean market. I am impressed with their commitment to creative freedom as well as maximizing the impact of my songs. I feel my work is in good hands with them.”
Wells won a Grammy in 2019 for Best Compilation Soundtrack for Visual Media for his production and engineering work on The Greatest Showman: Original Motion Picture Soundtrack (he spoke with Billboard’s Pop Shop podcast about the soundtrack in 2018). He also received Grammy nominations for his work on In the Heights, Katy Perry’s Teenage Dream and Andrew Lloyd Webber’s Cinderella.
SoundCloud Holdings GmbH and its subsidiaries reported revenue in 2021 of 230.7 million euros ($273 million at the average exchange rate in 2021 of 1.18308), up 19% from the prior year, according to audited financial statements published by the privately held company in Germany on Tuesday (Dec. 13).
SoundCloud, which originally gained popularity for its embeddable streaming widget, has a unique business model that mixes tools for music creators and listening for fans. Fan revenue — from advertising and subscriptions — improved 16.6% to 143.3 million euros ($170 million), or 62.2% of total revenue, down from 63.5% in 2020. Revenue from subscribers grew 20% year over year and exceeded internal expectations, according to the financial statements. Advertising revenue was in line with expectations, with 12% year-over-year growth.
Revenues from creator tools grew 23.7% to 87.3 million euros ($103 million) and increased to 37.8% of total revenue, up from 36.5% in 2020. The company attributed the improvement to the number of artists that chose to self-release music through the platform to take advantage of organic growth at major DSPs such as Spotify, as well as improving monetization of platforms such as Meta, TikTok and Twitch.
Founded in 2007, SoundCloud originally gained popularity through its ubiquitous, embeddable music player. It eventually launched a subscription streaming service, SoundCloud Go, in 2016, but did not rank in the top eight music subscriptions in the second quarter of 2022, according to figures released on Dec. 7 by MIDiA Research. Deezer was the eighth-largest subscription service with 9.5 million subscribers and a 1.5% global share. Spotify had the largest share with 30.5%, equal to 187.8 million subscribers. SoundCloud’s financial statements did not reveal the number of subscribers to its streaming service.
Unlike its peers, though, SoundCloud has always been a unique destination for artists to connect with listeners. The platform offers SoundCloud Next Pro, a service that allows artists to upload tracks to the platform and distribute them to other streaming services as well as pitch music to SiriusXM, which owns a minority stake in SoundCloud following a $75 million investment in 2020. A 2019 acquisition of Repost Network, an artist rights management and distribution platform, provides SoundCloud with a subscription product that offers creative services such as promotion and marketing.
In January 2022, SoundCloud added a third business segment, called roster, to connect fans and artists. Roster provides support services for emerging and developing artists. Its launch coincided with the announcement of a joint venture with artist management firm Solid Foundation Management to “identify, invest in, and foster the careers of artists featured.”
Gross profit margin — defined as gross profit as a percent of revenue — improved 12% to 35.4% on the strength of growth in subscriptions. Content costs — mainly royalties paid to record labels, publishers and independent artists — totaled 120.8 million euros ($143 million), up 14.1% from 105.9 million euros ($125 million) in 2020. As a percent of fan revenue, content costs declined to 84.2% from 86.1% in the prior year.
Despite the improved gross margin, operating loss deepened to 21.1 million euros (-$25 million) from 15.4 million euros (-$18 million) in 2020. SoundCloud increased its marketing spending 69.7% and made “significant investments” in headcount to help “propel the company into its next phase of growth.” Although Russia’s invasion of Ukraine has created uncertainties and disrupted supply chains, it has had a limited impact on SoundCloud’s financials, as direct business with partners in Russia accounted for only 0.5% of its annual revenues.
Since the end of the period covered by these financial statements, SoundCloud announced in August its plans to lay off 20% of its workforce due to “a significant company transformation and the challenging and economic and financial environment,” a spokesperson told Billboard at the time. The company had an average of 451 employees in 2021, up from 392 in 2020, with growth spread across its technology, business and operations segments.
SoundCloud expects slower growth in 2022 due to inflation and other macroeconomic trends that could stifle consumer spending levels. It expects gross profit “to grow slightly” with a similar or higher gross margin as in 2021. Free cash flow from operations is expected to be “slightly negative” in 2022.
It also believes it has opportunities to find acquisition targets. In April, it acquired Musiio, an artificial intelligence and machine learning company, for approximately $7 million cash and an undisclosed amount of equity, according to the financial release. SoundCloud believes Musiio allows it to “further leverage its vast data to identify what’s next in music trends and talent” and create playlisting tools for the music industry.
As 2022 comes to a close, the music business can look back on another hectic year: turnover at the top levels of several big companies; record-breaking successes in several sectors of the industry; and some major headlines coming from sometimes unexpected places, all of which captured the attention of the music business over the past nearly 12 months. Here are 10 big stories and trends that helped define the year in the industry.
The Executive Turntable
The end of the year is always time for turnover, and the final stretch of 2022 has seen more of that than usual. The biggest story of all, however, is a change atop the Warner Music Group, with Stephen Cooper exiting after a successful 11-year run that saw the major double its revenue and boost its market share while taking the company public once again. He’ll be replaced by YouTube’s Robert Kyncl in February, in a move that has been widely seen as a nod toward the tech-based present and future of the music biz, particularly at WMG. Though changes atop the major groups are relatively rare, that was far from the only transition this year: Def Jam, Island and Capitol all welcomed new chairmen/CEOs, with Tunji Balogun, the duo of Justin Eshak and Imran Majid and Michelle Jubelirer taking over the trio of UMG companies, respectively. John Esposito also is transitioning into a new chairman emeritus role at Warner Music Nashville, handing the day-to-day reins to his longtime heirs apparent Ben Kline and Cris Lacy, who will take over in January. Warner also integrated 300 Entertainment into the 300 Elektra Entertainment Group, with Kevin Liles in charge, then placed it under the umbrella of the newly-formed Atlantic Music Group, with Julie Greenwald at the helm. And just recently, Motown chairman/CEO Ethiopia Habtemariam surprised many in the industry by announcing her intention to step down, at a time when the label is in its best shape in years, with a successor yet to be named. The C-Suites have been spinning much more than usual this year.
The Ticketmaster-Taylor Swift Meltdown
Cross Taylor Swift, and her fans, at your peril. The biggest artist in the world, whose latest album Midnights easily cleared the biggest streaming week globally of 2022, had set a presale for her first tour in five years, with tickets slated to become available on Nov. 15 through Ticketmaster. But the company badly, and somewhat inexplicably, misjudged the level of demand that existed for Swift’s tour. Long wait times, astronomical prices and service outages tanked the pre-sale, with billions of bots, according to the company, flooding the site and resulting in 3.5 billion requests to access it — four times the previous high water mark. That resulted in millions of frustrated, ticket-less fans. Which would have been bad enough, if it didn’t spark a firestorm that has yet to abate and is showing no signs of doing so. (As Billboard’s Glenn Peoples wrote, “Ticketmaster is one of the few non-partisan issues in America in 2022.”) There is now a Justice Department investigation into whether Live Nation has abused its market share in the live business (which was said to pre-date the Taylor tour, though it came to light in the wake of the problem) and a Senate antitrust panel hearing on the docket, as well as several state-level probes, and a lawsuit from more than two dozen fans accusing the company of fraud and “anticompetitive conduct.” It’s unclear if changes are on the horizon, but it has proven a headache of massive proportions.
Top-Level Touring Success
The headlines have never been rosier: Live Nation and Ticketmaster reported record-breaking quarters. Bad Bunny’s World’s Hottest Tour became the first ever to average a $10 million gross per show. Elton John’s Farewell Yellow Brick Road Tour closed in on the record for highest-grossing tour of all time. In short, it was a great year to be in the live music business — if you’re one of the biggest artists or promoters in the world. For a lot of others, the outlook was much less rosy: a “nightmare” of supply chain issues, COVID-related cancellations and postponements, rising costs and routing difficulties all combined to make it much more difficult for a lot of artists to get back out on the road this year. It is, and will continue to be, a process to get back to normal.
Synchs On Fire
A well-placed synch has always been a big revenue driver, particularly for legacy acts, but this past year the combination of prestige television and the TikTok algorithm combined to super-charge some of the biggest synchs to not just big bucks, but new chart highs, too. This past year, the biggest story on this front was Kate Bush’s 1985 track “Running Up That Hill,” which received a high-profile synch in Stranger Things and simply took off, surging into the top five of the Hot 100, becoming the oldest song to reach No. 1 on the Streaming Songs chart and returning to the top 10 of the Alternative Airplay chart after a record 28-year absence, while doubling its label revenue in the first two weeks after the series aired. And that wasn’t even the only Stranger Things-related synch to blow up: Metallica’s “Master of Puppets” ballooned 400% in streams in the days after its synch in the season finale. Songs featured in Euphoria, The Batman and Thor exploded in value, while the RIAA’s midyear report saw synch revenue growing faster than ever. Most recently, The Cramps’ “Goo Goo Muck,” with a placement in Netflix’s Wednesday, saw its revenue grow more than 8,000% in a single week.
Ebbs and Flows of Catalog Market
The red-hot catalog market has been the talk of the business for almost half a decade at this point, but over the past year things started to change in some unexpected ways due to rising interest rates, the dwindling number of truly elite catalogs available and the faltering of some of the sector’s most prominent players. And still there were big wins, including Sting’s deal with UMPG that Billboard estimated could be worth well north of $300 million, Stephen Stills’ sale of a controlling interest in over 1,000 songs to Irving Azoff’s Iconic Artists Group and UMG’s purchase of Frank Zappa’s catalog in the region of $30 million. Meanwhile, Brookfield dropped $2 billion into Primary Wave, which promptly acquired the catalogs of Joey Ramone ($10 million) and Huey Lewis & the News ($20 million). Concord swung a package deal for the Genesis catalog as well as those of its individual members for somewhere around $350 million, and new players like Litmus Music came into the market with $500 million to spread around (some of which just went towards Keith Urban’s master recordings). So despite a “challenging environment” and an end to the catalog “feeding frenzy,” there’s still a lot of juice left in those old songs (and a big Pink Floyd-sized catalog potentially in the offing).
The Rush Toward Services
While one sector of the business is running with arms wide open toward catalog ownership, another sector is running just as firmly in the opposite direction: toward services, or partnering with artists and labels to provide a backbone of support to help them achieve their goals without giving up ownership through distribution, marketing, publicity, promotions, royalty claiming and other services. The independent distribution space has generally been a viable business model for decades, but the rush into services ramped up in the past year. Companies like SoundCloud, TikTok, Tencent and Downtown embraced the shift with realigned business models, joining relatively new entrants to the space like UnitedMasters, Stem and Utopia. Many of the major labels (Interscope, Republic, 300) also launched their own distro subsidiaries in an attempt to grow their market share in an increasingly indie world. For some, however, the shift was less of a slam dunk than they may have envisioned, with a tough business model that relies on scale colliding with the increasingly-murky corners of the digital music industry –resulting in fraud, financial challenges and lukewarm responses from the market.
The Onset of Crypto Winter
Early in the year, Web3 projects exploded in what seemed like every sector of the music business, including all three major labels along with companies like Spotify, Coachella, Ticketmaster, Gibson, the Grammys and Death Row Records — not to mention artists like Snoop Dogg, Steve Aoki, Pharrell and Keith Richards. Universal launched an NFT band, Warner partnered with a slew of web3 companies, Snoop promised to buy Death Row and make it into an NFT record label; the possibilities seemed endless. But the seas proved to be much choppier than many had expected, and a series of selloffs and financial failures (as well as recession and inflation fears) brought in what many called the Crypto Winter, with sales and enthusiasm beginning to ebb as the year went on. By the time the second-biggest crypto exchange, FTX, spectacularly failed in November, there had been a 70%-80% cool-off in the market, to the point where the once-ubiquitous format seemed ready for another hibernation while the industry tries to figure out how best to take advantage of the new-ish technology. Expect the ebbs and flows to continue until we’re all in an acronym haze.
BTS Break Rattles Biz — And HYBE Stock
By just about any metric, BTS has been one of the biggest and most formidable acts of any genre in the past several years, racking up No. 1 hits, big-name collaborations, massive box office grosses and accounting for nearly one-third of the entire K-pop market in the U.S. since 2021, according to Luminate. So the group’s decision to take some time off for solo projects was a blow to the group’s management company, label and agency HYBE, which saw its stock, already down 45% for the year at that point, sink 27% in the week after the announcement. (Shares recovered a bit after closing at 145,000 won following the announcement, hitting a low of 107,000 on Oct. 13 and rebounding to 157,000 as of Dec. 12.) With the group members facing the prospect of mandatory service in the South Korean military, HYBE is facing an uncertain outlook for 2023, despite third-quarter growth and the possibility of positive returns from BTS members’ solo projects. For K-pop fans, however, there is room for other companies to step in: JYP Entertainment has had chart success with TWICE and Stray Kids multiple times this year, SM Entertainment’s BLACKPINK scored a No. 1 album in October and Big Hit Entertainment has generated success with Tomorrow X Together. While there’s plenty of opportunity in the K-pop market, the road ahead is uncertain for HYBE, a company that not too long again was a slam dunk.
Despite Complications, the Business is Thriving
It’s been a complicated year for the business overall, as the return from COVID has been trickier than expected, breaking new artists has become harder than ever and overarching financial issues like inflation and the possibility of a recession have cooled what had been a white-hot market. But despite those challenges, the music business has been growing on almost all fronts for another year. The touring business has already been covered here, but the U.S. recorded music business also saw on-demand audio streams surpass 1 trillion for the first time ever — representing a 611% increase from 2015, according to Luminate. Despite supply chain issues that continue to bedevil labels and manufacturers, vinyl sales passed $1 billion in revenue for the first time since the mid-1980s. At the midyear mark, they were up more than 22% — well before Taylor Swift’s Midnights set the record for largest vinyl sales week since Luminate began tracking data in 1991. Overall consumption is up another 9.2% year over year so far in 2022, with no signs of slowing down and with record companies increasing their guidance for investors in 2023. Amid cutbacks and hiring freezes in tech and media, the music business stil appears to be on strong footing.
It’s Still a TikTok World
Love it, hate it, rue its influence or spend hours scrolling it, the industry was as obsessed with TikTok in 2022 as it’s ever been, and the ByteDance-owned social streaming behemoth has leaned further than ever into its connections to the music biz — for better or worse, depending on whom you ask. The service has been behind the massive success of hits both old (Kate Bush’s “Running Up that Hill,” Frank Ocean’s “Lost”) and new (Lizzo’s “About Damn Time,” Bebe Rexha and David Guetta’s “I’m Good”) while helping break new artists like Em Beihold and Cafuné. But the labels’ love affair with TikTok has, over the past year, cooled down, as breaking a hit has become more complicated and the marketing pluses that it offered have fizzled. A distribution play from the platform called SoundOn was met with a lukewarm response, while a ByteDance streaming service, Resso, has rolled out in select markets, with rumors that it could come to the U.S. soon — if TikTok can ease the concerns of U.S. officials. And that comes as the frustration over low payouts and song leaks have some executives warning of a repeat of the early days of MTV and YouTube, when music content was regularly used to promote a fledgling service without commensurate compensation. Still, the biggest song on the platform in 2022 — a nine-year-old track from Swedish sad boy Yung Lean — grew its stream count by over 1,000%, and TikTok is still the single biggest proving ground for singles in the current digital climate. What to make of TikTok in 2022? How about…everything?
BERLIN — Austrian collecting society AKM, which manages and licenses rights for songwriters and publishers, has joined ICE Core for online licensing. That means ICE, the online licensing hub created by collecting societies in Germany (GEMA), the U.K. (PRS for Music) and Sweden (STIM), will now represent and collect for AKM compositions for online services in much of the world, excluding the U.S. and some Asian markets. The deal includes AKM mechanical rights subsidiary, Austro Mechana.
“The ICE Core reflects the best licensing solution for online music services, with the best value, for our members,” said AKM CEO Gernot Graninger in a statement. “In these times more than ever, societies need to find the right services at the right value.”
ICE was created in response to a change in European Union regulation that allows the societies that take in money for public performing rights in their local territories to compete in the online world. Inevitably, the larger societies, including France’s SACEM and the partnership behind ICE have emerged to dominate that business, since they can make the investments needed to manage the vast amounts of data generated by streaming services. Gradually, this model is spreading to other territories.
AKM had been managing its rights under a partnership with GEMA.
ICE provides several services, including licensing and online processing, and it operates a copyright database. But the core of its operation is licensing – which is why it goes by the name ICE Core. In addition to its founding partner societies, ICE also represents IMRO, the Irish collecting society; SABAM, the Belgian society, and BMI. Concord Music Publishing, Songtrust and peermusic, all based in the U.S., are also direct members.
In November, ICE Core distributed €102 million, breaking its own record for monthly distribution.
“We’re very happy to welcome AKM into the Core,” said ICE chief commercial officer Ben McEwen in a statement. “The collaboration to make this happen reflects all parties working together in the interests of rightsholders, the very DNA of everyone who is part of the ICE hub.”
The Ledger is a weekly newsletter about the economics of the music business sent to Billboard Pro subscribers. An abbreviated version of the newsletter is published online.
If the 2010s were the decade that established streaming as the de facto way that most people enjoy music, the 2020s will be the decade the platforms’ royalty rates took a leap forward.
For much of streaming services’ existence, the industry has tried to gently balance the need to foster growth with the need to generate something close to subsistence-level income for creators and rights holders. If rights holders squeeze too tight, they could strangle the life out of the companies they depend on to carry them in a post-CD, post-download world. Too loose a grasp on streaming platforms would mean the spoils of technological disruption would remain with tech companies.
The process requires patience. With social media apps, licensing deals start small, with lump-sum payments rather than percent-of-revenue royalties while the fledgling platform builds a sustainable business model. Because licensing deals are renewed every three years, rights owners endure long waits to secure better terms that will result in more royalties. It will take a few cycles for a platform to generate meaningful royalty income for its label partners.
This year, there were numerous developments that point to better royalty rates in 2023 and beyond. They have different degrees of certainty, however. Higher subscription prices are sure to move the needle and result in higher payouts to artists and labels. Whether artists and labels will finally get paid for terrestrial radio play in 2023 is less certain, although the mood in Washington D.C. seems favorable. And with the authors of Chokepoint Capitalism, Cory Doctorow and Rebecca Giblin, currently making the media rounds, and the Federal Trade Commission cracking down on companies that take advantage of gig workers, the plight of creators in today’s digital economy is getting mainstream attention (my colleague Rob Levine brought attention to tech companies’ value destruction in his book, Free Ride, a decade ago).
Congressional Bill to Get Artists & Labels Paid for Radio Airplay Clears Critical House Vote
12/09/2022
Music subscription price increases
Artists have wanted a raise from streaming services for years. Part of the problem is how royalties are calculated — a pool of money is split according to the number of times the tracks were played. That puts album-oriented artists at a mathematical disadvantage to mainstream artists in popular genres like pop and hip-hop. Another common complaint is that streaming services have barely raised their subscription prices for more than a decade. With prices flat, the best way to improve streaming royalties is to attract more subscribers. Keeping subscription fees relatively affordable, especially when Netflix and other video streaming services routinely hiked their prices, ensured customer acquisition would continue. Affordable family plans, which cover up to six people for 50% more than an individual plan, helped attract customers and reduced churn — but didn’t help artist payouts. Finally, this year Amazon, Deezer, YouTube Premium (which includes YouTube Music) and Apple Music announced broad price increases to individual and family plans. Spotify has hinted it will follow with price hikes of its own in 2023. The financial impact could be massive: A modest increase of $1 per month for individual plans and $2 per month for family plans in mature markets — less in developing markets with lower prices — would easily generate many hundreds of millions of incremental subscription royalties, which totaled $12.3 billion in 2021, according to the IFPI.
A TikTok subscription service
TikTok doesn’t pay much in royalties, but it plays an outsized role in cultural trends — the app has over 1 billion active users and is especially popular with Gen Z consumers. That has changed the balance of power in music streaming. “The major streaming platforms are reacting to culture now rather than driving it,” Tatiana Cirisano, music industry analyst and consultant for MIDiA Research, recently told Billboard. In that light, news that TikTok is working to expand its Resso subscription service (it’s available only in Indonesia, Brazil and India) is a big deal. Currently, TikTok creates impressions and demand for music that has downstream effects on other platforms — see a TikTok video, listen to the entire track at Spotify, YouTube Music or Apple Music. But if TikTok owned both the short-form video platform and the subscription platform, it could better convert that initial interest into downstream listening while eroding the influence of the Spotifys and Apple Musics of the world. More importantly, a TikTok subscription service would help change TikTok’s status as a royalty underperformer.
Subscription streaming rates
Publishers and songwriters will get a slight raise in subscription streaming royalty rates over the next five years due to a settlement reached in August by the National Music Publishers’ Association, the Nashville Songwriters Association International and the Digital Media Association. The headline royalty rate will go from 15.1% of revenue in 2023 to 15.35% in 2027. That’s not a huge gain, but it’s an improvement. The settlement could help in other ways, too. Streaming services were able to get favorable terms for bundles and free trials that allow them to get more subscribers into the ecosystem. That would help songwriters and publishers by increasing the number of subscribers — the major driver in streaming royalty growth — as they enjoy modest annual increases in royalty rates.
Inflation adjustments to noninteractive streaming rates
Each year, the rate paid by noninteractive streaming platforms in the U.S. is adjusted to account for inflation over the previous year. In 2023, artists and labels will get a raise due to inflation rates that reached a 40-year high in 2022. (The rates increased 7.1% for subscription plays and 9.1% for ad-supported plays.) In years past, noninteractive streaming services such as Pandora were a more significant part of artists’ and labels’ incomes. That gave extra weight to the decisions of the Copyright Royalty Board and changes in the per-play streaming rates. Now, on-demand services like Spotify and YouTube dominate the streaming landscape and noninteractive webcasting has diminished in value and relevance. Still, Pandora’s ad-supported listening hours fell only 5% year over year in the third quarter of 2022 — to 2.75 billion — and it paid out $921 million in royalties in the first nine months of the year. Above all, a raise is a raise.
Terrestrial radio royalties
Legislation that would pay artists and labels for airplay on U.S. terrestrial radio was passed by the House Judiciary Committee on Wednesday (Dec. 7). With only a month left in the current Congress, Rep. Jim Jordan, ranking member of the House Judiciary Committee, said he’s confident the bill could make it through the next Congress (that could be 2023 or 2024). While this isn’t the first legislation to address the lack of a performance right, the AMFA arrives at a time when lawmakers — in D.C. and elsewhere — have taken an interest in creators’ ability to make a living in the streaming age. Outgoing House Judiciary Committee chair Jerry Nadler has shown concern about a “race to the bottom” in streaming royalties, for example, and U.K. lawmakers examined the equitableness of streaming royalties paid to artists in that market. Passage of an AMFA-like law, or a settlement with radio broadcasters, would be a huge coup for artists and labels who get only promotion from radio airplay while radio stations are obligated to pay songwriters and publishers. In fact, U.S. radio royalties would be two — not one — new stacks of money. That’s because the lack of a performance right for broadcast radio in the U.S. means European countries withhold royalty payments from American artists for performances on their soil, SoundExchange CEO Michael Huppe explained in a recent Billboard op-ed.