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When Luminate reported the fastest-growing music genres in the first half of 2024 (through the week of May 30), contemporary Christian music (CCM)/gospel unexpectedly placed in the top five. When analyzing overall consumption — track-equivalent albums, stream-equivalent albums and on-demand audio — the genre grew 8.9%, more than twice the overall industry growth rate of 3.9% for the same period in 2023.
CCM/gospel’s rise is even stronger on Spotify. Representatives for the platform say the genre has grown 30% in the United States and more than 30% globally in the past year. Over the past five years, the genre has grown 50% stateside and 60% globally.
“This past March alone, the Christian and gospel genre had its biggest streaming month on Spotify ever,” says Maritza “Ritz” McCain, Spotify’s senior editor, Christian and gospel.
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McCain also points to CCM/gospel’s global reach, noting that while the United States is the largest market for Christian music, global consumption is expanding in markets that include Brazil, Mexico, South Africa and the Philippines. She also cites promising growth in markets such as India, Indonesia and Germany.
According to Luminate, the top five CCM/gospel acts for 2024’s first half were Elevation Worship, Lauren Daigle, Phil Wickham, Hillsong Worship and Brandon Lake. Elevation Worship’s song “Praise,” featuring Lake, Chris Brown — a different Chris Brown from the “Run It” singer — and Chandler Moore, is the biggest CCM hit of 2024 thus far, having spent 24 weeks atop Billboard’s Hot Christian Songs chart.
Cole Flynn, head of marketing at Elevation Worship Records, attributes “six or seven” different factors that have contributed to the shift. For one, the consumption and promotion of CCM by a new generation of social media-savvy fans on those platforms is attracting new listeners.
“This whole generation has grown up with Spotify and Apple Music, and with the ability to access any kind of music they want to hear at any point in time,” says Leigh Holt of Hsquared Management, which manages Daigle and Riley Clemmons. “The barriers have been broken. There are more people who can say, ‘These are the ways I want to express my faith.’”
According to Luminate Insights, the share of listeners who are millennials and younger grew from 39% of overall genre listenership in 2022 to 45% in 2024. Additionally, the number of hours that CCM/gospel fans spent with music each month increased from 47.9 hours to 56.8 so far in 2024 — a 19% increase.
“Worship music does skew younger, agewise and listenerwise,” Flynn says. “People in their 20s and 30s are listening to Elevation Worship, whereas a typical Christian radio audience might be a little older.” He adds that this evolution has necessitated changes in marketing strategies for Elevation Worship, as it has with other CCM/gospel artists. “We’ve released music a little earlier, teased it out a little earlier, tried to get the music in people’s minds and on their phones earlier and give away a little more of the master content than we would have five years ago.”
Lauren Daigle
Jeremy Cowart
A new crop of young talent — who are also social media natives — includes 29-year-old Forrest Frank, 21-year-old Josiah Queen and 24-year-old Seph Schlueter. Frank’s “Good Day” and Schlueter’s “Counting My Blessings” each reached No. 2 on the Hot Christian Songs chart, with the former making its way into the upper echelons of Spotify’s Viral 50 chart this year. And Queen’s “The Prodigal” was in the top 15 on the Christian Airplay chart. All three are nominees for new artist of the year at the Gospel Music Association’s Dove Awards in October.
Queen’s debut album, also named The Prodigal, and Frank’s Child of God both debuted at No. 1 on the Top Christian Albums chart in July and August, respectively, and the latter ascended to No. 28 on the Billboard 200.
Like artists in other genres, many top sellers in CCM/ gospel make social media key to their marketing plans. Daigle, 32, has over 5 million monthly Spotify listeners, and videos of concert moments, shared on TikTok, earn millions of views. Elevation Worship has over 1.9 million TikTok followers, and one March TikTok post of its hit “Praise” has garnered more than 19 million views. Brandon Lake, 34, who has over 4 million monthly Spotify listeners, has attracted 4.3 million views since posting a TikTok video in July that used his song “That’s Who I Praise.” And Frank racked up over 9 million views with a video that uses his “Good Day.”
“Content is still king,” Holt says. “The artists who are winning are the artists who are the most authentic on social media. Even with Elevation Worship, their content is very ‘man on the street,’ very accessible to everyone. I feel like that has a lot to do with the growth, as well as fans having insight into artists’ lives. Forrest Frank is great on social media, and Josiah Queen is really fun — he kind of teaches a master class a bit on that. They’ve figured out social media in a very organic way.”
Unlike most genres, CCM/gospel is built around a central message rather than a particular sound, allowing for a greater range of musical styles, including the pop of for King & Country and Frank; Queen’s rustic, singer-songwriter style; Tauren Wells’ pop/R&B vibe; and Lecrae’s rap.
“The expansion of what Christian and gospel music sounds like has helped grow the listenership and, in turn, the consumption of the genre,” McCain says. “Artists like Lauren Daigle, NF and Montell Fish started with a Christian listener base and have grown to see success in broader audiences.” She adds that the inclusion of Christian/gospel artists on non-faith-based playlists such as R&B Weekly, Shine and Fresh Folk has also helped to expand the genre’s reach.
Also bolstering CCM/gospel’s presence are a number of recent collaborations with secular artists, including for King & Country with Timbaland, TobyMac with Sheryl Crow, Lecrae with John Legend, Anne Wilson with Lainey Wilson, Zach Williams with Dolly Parton and CeCe Winans with Carrie Underwood.
“It’s way easier to become a fan of one person and transfer that fandom to another, especially with great collaborations,” Holt says. “For King & Country has always kind of led the way in the Christian space, and that really brings different spotlights to the genre.”
As streaming consumption and social media promotion of CCM/gospel music have increased, so has the number of contemporary Christian radio stations in the United States. According to stationratings.com, the number of U.S. stations carrying the contemporary Christian format rose by 22 from July 2023 to July 2024.
Titan Christian radio chains K-LOVE and Air1, which are owned by the non-profit Educational Media Foundation (EMF) have more than 1,000 broadcast signals. So far this year, the company has added more than a dozen signals to its fold.
“We’ve seen direct correlations of [streaming] consumption mirror the amount of audience we’re getting at radio,” Flynn says of Elevation Worship. “At the top of the radio chart, their song ‘Praise’ gets an audience of 10 million a week — that’s a massive difference. Let’s say radio doesn’t drive direct streams, which is an argument these days. It does drive massive awareness. There’s an intangible with church listeners, worship leaders, people putting it in Sunday morning [church services] set lists that exponentially grow that reach beyond radio, but that might have been the first place they heard it. So [radio]’s a huge help for us when we’re trying to get a song out there.”
“The songs coming out of our community continue to impact our audience, not only across all digital platforms but on terrestrial radio to over 30 million weekly listeners,” Gospel Music Association president Jackie Patillo said in a statement provided to Billboard. “People are hungry for a message that encourages and inspires.”
Growth in streaming, social media and radio reach ultimately impact artists’ touring. Elevation Worship sold out its spring Elevation Nights ’24 Tour before it began, averaging 11,600 tickets sold each night. Meanwhile, Holt says Daigle’s Kaleidoscope Tour has also seen growth in ticket sales.
“It’s a very different market now for ticket buying, post-pandemic, with multiple tours out. There’s a lot of competition,” Holt says. “But our ticket sales have grown this year, and we are back to our pre-pandemic numbers, which has been exciting to see.”
With just a month and a half before the 2024 edition of ADE, organizers have announced a new slew of names for the 2024 program.
Joining the lineup for the annual dance music industry conference in Amsterdam are SoundCloud CEO Eliah Seton, who will take part in a conversation with Dutch producer Mau P to talk about the producer’s success and the role SoundCloud has played in supporting him and other artists.
Representatives from Bandcamp are joining the program for a session that will focus on the company’s artist payment model, maximizing revenue in a challenging landscape and why fan engagement and diversified income streams are important for the success of artists.
Also new to the program is a conversation with German producer Ellen Allien and Dimitri Hegemann, the founder of the nightclub and record label Tresor Berlin, who will talk about the UNESCO cultural heritage designation of the Berlin techno scene. Talks from artists including Don Diablo and Laidback Luke, Smallgod, Jaguar, Miss Nine and OVO Sound’s Naomi Sharon and her manager Jasper ‘Djosa’ Cremers will also be featured at the event. Representatives from Warner Music, Hospital Records, Glastonbury, ID&T, Primary Talent, SiriusXM and more have all also been newly added to the program.
This group joins already announced participants including Empire president Tina Davis, Spotify’s head of music for Sub-Saharan Africa Phiona Okumu, Grimes’ manager Daouda Leonard, Believe’s global head of music Romain Vivien and TuneCore CEO Andreea Gleeson. Previously announced speakers include Timbaland, Martin Garrix, Laurent Garnier, music executive Grace Ladoja and representatives from fabric London, Armada Music, WME and UTA.
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Additional programming includes Australia House, an initiative from Sounds Australia, an organization that helps Australian artists develop their careers abroad. For the duration of ADE, Australia House will take over the city’s Box Sociaal cafe to host execs from around the world for morning coffee, lunch and dinner and to present events by Australian artists on Oct. 16-17.
ADE 2024 will take place at locations throughout Amsterdam and again be divided into Lab and Pro programming, with Lab content tailored for people trying to get into or just starting out in the industry and Pro programming designed for established managers, label execs, artists, streamers, marketers, promoters and more.
The conference also offers consumer-facing events, with last year’s musical offerings happening in more than 200 venues around the city.
Musicians and songwriters don’t tend to agree on much, but many of them want former president Donald Trump to stop playing their music at his political rallies and campaign events. Whether they can is a quadrennial quandary. The legal answer is yes, at least for songwriters: The big two U.S. performing rights organizations (PROs), ASCAP and BMI, require political campaigns to buy special licenses, from which rightsholders can pull specific works. (The other two, SESAC and GMR, do not issue campaign licenses but can make songs available.) But campaigns don’t always honor those requests.
The use of pop music in campaigns goes back at least a century: Franklin D. Roosevelt used “Happy Days Are Here Again” in his 1932 campaign, and Louisiana governor Jimmie Davis, also a singer, used “You Are My Sunshine,” to which he owned the copyright but did not write. Over the last decade, though, as politics has become more polarizing and pop culture has taken over life in the U.S., this has gone from a subject of occasional interest to one that gets considerable mainstream attention.
In most cases, the unauthorized use of music at a campaign event follows a sort of script: A candidate uses a song and musicians or writers have their lawyers send a cease and desist letter, partly because some campaigns will respect it but often because it’s just a good way to communicate their disapproval in public. How much do I dislike Trump? Enough to have my lawyer write a letter! Some musicians have these letters written, even though a public performance license for an event is only required for a composition, not a recording. Approval is only needed from musicians if the use of music implies an endorsement or involves video, which requires a separate synch license from a song’s publisher.
Now a few recent cases are making this issue more complicated. In mid-August, the estate of Isaac Hayes filed a lawsuit against Trump and his campaign for regularly using “Hold On, I’m Coming” as “outro” music at campaign events. (The estate is suing for copyright infringement, as well as under the Lanham Act, which would cover an implied endorsement, and there will be an emergency hearing in the case on Sept. 3.) Beyoncé has warned the Trump campaign about its use of her song “Freedom,” which has become a theme song for vice president Kamala Harris. And the Foo Fighters objected to the Trump campaign’s use of their song “My Hero” as Robert F. Kennedy Jr. took the stage to endorse Trump. (They have not sued.)
It seems like an accident of legal history that those three examples fall under the same law as playing a song during an hourlong wait for a candidate to take the stage. In the latter case, no involvement or endorsement is implied — the songs are just used as background music. These cases are different, though. The Hayes estate’s lawsuit claims Trump has used “Hold On, I’m Comin’” 134 times, often as “outro” music, which arguably makes it something of a theme. Beyoncé’s “Freedom” has become identified with the Harris campaign, which uses it with permission. And the Trump campaign used the Foo Fighters song to soundtrack a particular moment, knowing that it would spread widely on video, even though the campaign didn’t have a license for that.
These songs haven’t just been played in public — they have arguably been drafted into service for a cause the writers don’t agree with. “Hold On, I’m Comin’” has been played at Trump events both often and purposefully. Beyoncé should have the right to be identified with the candidate she wants to win. And the Foo Fighters song shows up in news coverage and online video, with the implication that Kennedy is some kind of hero for endorsing Trump.
Although we think of the use of music as a copyright issue involving a public performance, there’s more going on in all three of these cases. The current license system seems to work fine for the way campaigns use music at events in the background. But it would be nice if campaigns could agree with rightsholders, or even with one another, to get permission if a song is used in a way that will identify it with the candidate — and especially if it’s used for a moment that will be widely shared on video. This doesn’t necessarily follow legal logic, but it seems like common sense: If a campaign deliberately selects a song like “My Hero” to soundtrack a moment that is essentially designed to spread on video, doesn’t it make sense to get a video license? Who are we kidding?
Until the situation changes, creators will just keep objecting to the unauthorized use of their work — and they are starting to do so in more creative ways. The Foo Fighters have said they will donate the royalties from Trump’s use of “My Hero” to the Harris campaign. While the Hayes estate’s lawsuit goes forward, it might point out that although “Hold On, I’m Comin’” is played regularly at rallies — it was even rewritten as “Hold On! Edwin’s Coming” for the campaign of Louisiana governor Edwin Edwards — the song gets its name from what co-writer David Porter said to Hayes from the Stax Studios bathroom. If Trump isn’t using the restroom, perhaps another song might work better.
Politicians who use songs with permission also have some bragging rights. Tim Walz can say that Neil Young allowed him to use “Rockin’ in the Free Word” at the Democratic National Convention — an odd choice given the song’s sarcastic lyrics, but still great cred from a music icon. Harris can say the real “Freedom” is hers — and Beyoncé’s support with it. And we can all wait to see who Taylor Swift will endorse.
The U.S. recorded music market grew a little bigger in the first half of 2024 — but not by much. The retail value of total industry revenue reached $8.65 billion, according to RIAA figures released Thursday (Aug. 29), thanks mainly to a modest gain in streaming revenue and a jump in vinyl sales.
While the period’s revenue is a record for the first half of a year, it marked just a 3.9% gain from the prior year’s period. The U.S. market has returned to a more workmanlike trajectory, putting high-single digit and double-digit gains in the rear-view mirror. By contrast, revenue was up 8.8% and 9.0% in the first half of 2022 and 2023, respectively. In the first half of 2021, as paid and ad-supported streaming benefitted from pandemic-era lockdowns that drove consumers to their devices, revenue rocketed 27.0%.
Vinyl EP and LP sales totaled 24.3 million units, up 10.7%, and were valued at $739.9 million, up 17%. Other physical formats gained, too, but the distance between them and vinyl grew larger. CD sales improved just 0.3% to $236.7 million. The other category—encompassing cassettes, CD singles, vinyl singles, DVD audio and SACD—improved 66.6% to $13.2 million.
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Physical sales increased its percentage of total revenue to 11.4% from 10.5% in the prior-year period and 10.2% in the first half of 2022. Vinyl has doubled its share of the market in five years, reaching 8.5% of total U.S. revenue — up from 4.2% in the first half of 2020.
Streaming still dominates industry revenue and provided the single-biggest dollar gain of all the categories. Total streaming revenue grew 3.8% to $7.3 billion and accounted for 84.1% of total revenue, equal to the year-ago period. Paid subscription revenue hit $5.23 billion, up 5.1%, leading all streaming categories by a wide margin. The average number of subscribers reached 99 million, up just 2.6%, suggesting record labels benefitted from price increases by Spotify and other services.
Other streaming segments had a smaller impact or lost ground over the past year. Limited-tier paid subscription revenue dropped 4.1% to $503 million. (Limited-tier services have limited catalogs, interactivity restrictions or other factors that differ from premium subscription plans.) Ad-supported, on-demand revenue rose 2.5% to $899 million. SoundExchange distributions were $517 million, up 3.9%. Other ad-supported streaming—statutory streaming services not distributed by SoundExchange—fell 2.7% to $159.1 million.
Download sales, once the cornerstone of the U.S. market, declined in share for the 14th straight year and amounted to just 2% of industry revenue. Total download sales fell 15.8% to $189.7 million. Track and digital album sales fell 16.1% and 18.5%, respectively. Ringtones and ringbacks dropped 51.1% to $2.9 million. The other digital category, which includes kiosks and music video downloads, grew 22.0% to $17.1 million.
Synchronization royalties dropped 9.8% to $200.9 million, a sharp contrast to sizable gains of 25.3% and 29.9% in the first half of 2022 and 2023, respectively.
In a statement, RIAA chairman/CEO Mitch Glazier highlighted revenue reaching a record $8.7 million and the evolving music ecosystem. “Spanning multiple licensing avenues from fitness apps to short-form video, artists and labels are embracing innovation with responsible partners so more Americans can engage with their favorite music however, whenever and wherever they choose,” he said. “This sustained growth fuels innovation and reflects music’s incredible value, laying the foundation for a healthy creative ecosystem where artists’ and songwriters’ visions can flourish over generations.”
At least half a dozen independent music distributors are fundraising or exploring selling their businesses as investors and major music companies, including Warner Music Group, vie for a piece of the business sector serving DIY artists.
Stem, the indie distribution darling that started as a fintech platform offering royalty splits, is in the early stages of a fundraising round that will be its largest to date, while Larry Jackson’s gamma. concluded its second round of fundraising. Downtown’s board of directors is exploring a sale and has held talks with Believe after an earlier dialogue with WMG fizzled. (Sources say WMG continues to eye acquisition targets.) ONErpm aims to put together around $40 million next year for its own mergers and acquisitions (M&A) fund, and indie streamer/distributor SoundCloud is expected to move into the final stages of either a sale or fundraising round later in 2024 to replace some of its existing shareholders.
Already this year, Believe founder and CEO Denis Ladegaillerie bought 95% of the outstanding shares of the French music company with roughly $1.7 billion in backing from investors that include TCV and Swedish private equity firm EQT in order to take the company private. And the Chicago-based firm Flexpoint Ford bought a stake in Create Music Group for $165 million. Last year, Exceleration Music bought indie distributor Redeye for an undisclosed sum, and gamma. launched with a $1 billion war chest.
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Indie executives say there are numerous factors pushing them to seek funding; among them are the growing influence of artificial intelligence in music-making and next-gen creators’ evolving feelings about independence. Some would rather take a big check from a major if it comes with guaranteed autonomy — which means indie distributors must achieve scale to survive.
Meanwhile, these indies’ collective share of the market is growing, prompting major music companies to make acquisitions and investments as a defensive play. And backers outside the music industry, such as private equity funds and institutional investors, see opportunity in betting on these companies that purport to have the pole position serving the music-makers of tomorrow. Non-major labels and self-releasing artists’ share of the global recorded-music market was 36.7% in 2023, up from 28.6% in 2015, according to MIDiA Research.
“The amount of money being thrown around right now is more than I’ve ever seen,” Stem co-founder and CEO Milana Rabkin Lewis says. “If you’re not out there fundraising right now, you’re not doing your job.”
Another reason to invest: Indie distribution companies are handling an increasing share of the songs that do best on streaming services. In the first half of 2024 in the United States, such companies were responsible for 13.6% of tracks played between 100 million and 500 million times and 22.1% of those played between 50 million and 100 million, according to Luminate.
That said, the indie digital distribution sector remains highly fragmented, and executives say they expect significant consolidation as the roughly 25-year-old segment of the music industry matures.
“You’ll see a lot of DIY distributors sell over the next six months,” says Greg Hirschhorn, CEO of Too Lost, an indie distributor that Hirschhorn says distributes music for over 300,000 artists and labels. “It’s a good time to run an indie distributor.”
Earlier this year, French securities regulators forced WMG to disclose it was considering making a $1.8 billion bid for Paris-based Believe. Warner CEO Robert Kyncl has said the company backed out before making a formal offer because of the brief amount of time it had to undertake due diligence for the deal, among other reasons.
The consortium of investors led by Ladegaillerie ultimately succeeded in taking Believe effectively private this summer, leaving WMG and others that bid on the company, like BMG, hunting elsewhere for acquisitions. Sources say WMG’s decision not to submit an offer for Believe may lead to more deals in this space.
Downtown has been a beneficiary of that fallout. Its chief investor, the family of late New Zealand beer baron Douglas Myers, has been mulling an exit for months. The company’s board has held exploratory talks with WMG and Believe, among others, according to sources.
Downtown declined to comment about any deal talks, but executive chairman Justin Kalifowitz says the current spate of deals is a natural next step resulting from the significant amount of investment dollars that flowed into music-related businesses between 2018 and 2022.
“A lot of cool ideas were born out of that. Some of them have grown up to be real companies, achieving scale but not profitability,” Kalifowitz says. “There is an efficiency that these businesses in the services sector are providing that is frankly not available at the majors.”
A significant portion of outside investment that flowed into music in recent years went to acquire song catalogs, which indie executives point out provide more stable, though lower, returns than active companies. Private equity funds controlled by banks like Goldman Sachs are warming to music companies, one executive says. “You could buy an asset and forecast it 20 years into the future. But in a music world, that’s really hard,” the executive says. “They realize that music acts like an annuity.”
ONErpm CEO Emmanuel Zunz says the indie distribution space is facing an inflection point in its maturation driven by more than investment and deal-making. Moments like this put pressure on companies that may have loads of debt or aren’t profitable to prove their business makes sense. Zunz estimates the company he founded roughly 15 years ago now ranks third, behind Believe and Downtown, among the largest full-service independent music companies. ONErpm, which has no debt and operates off its own earnings, is planning to put together a $40 million M&A fund next year to buy smaller companies around the world.
“It’s going to be interesting to see how it plays out over the next two to three years,” Zunz says. “Some folks are going to crash and burn. There’s going to be consolidation. But the ones that stay are going to have a compelling offer that provides a lot of value for artists.”
Additional reporting by Elias Leight.
BMG CEO Thomas Coesfeld says taking his company’s digital distribution in-house and operational changes — two initiatives launched during his first year at the helm — are paying off.
The Berlin-based music company reported on Wednesday (Aug. 28) that it generated 459 million euros ($491.7 million) in revenue in the first half of 2024, marking an 11.1% increase from the year-ago period thanks to strong growth in digital income streams. Digital revenue, which contributed nearly 70% of BMG’s overall revenue for the period, rose 20.3% in the first half 2024 compared to 2023, as BMG exited a contract with Warner Music Group (WMG) and moved oversight of its digital distribution business in-house.
“This move is paying off,” Coesfeld tells Billboard of taking control of BMG’s 80-billion stream digital business. BMG now has greater insight into its streaming data, which enables it to provide “better marketing insights, more timely campaigning and iterations of that campaign [and] better tools around fandom” to its artists, who include Jelly Roll, Kylie Minogue and Mustard, Coesfeld says. Also, BMG saves money not paying fees to WMG’s ADA.
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“One or two years ago we had this plan, we said this is what will happen,” Coesfeld adds. “And [these earnings] show it works.”
BMG’s first-half organic revenues grew by 12.5% while operating earnings before interest, taxes, depreciation and amortization (EBITDA) — a closely watched measure of growth — rose by 35.5% to 122 million euros ($130.7 million). EBITDA margin was 26.5%, up from 21.7% in the first six months of 2023. BMG’s catalogs again underpinned that margin figure, as the company acquired 10 catalogs during the first half of the year. Details of those deals were not disclosed.
The close of the first six months of 2024 coincided with the end of Coesfeld’s first year as CEO. After taking the reins of BMG from longtime CEO Hartwig Masuch on July 1, 2023, Coesfeld has set a tone that communicates BMG is open to change, even if it means taking advantage of artificial intelligence and collaboration with historic rivals.
“We figured only if we anticipate trends a little earlier do we have a chance to win in this very competitive market,” Coesfeld says. “We are looking at a fundamentally attractive market that is growing. It is driven by tech and if we adopt it and don’t fight it there is huge opportunity for BMG and artists.”
One example of this approach is BMG’s partnership with a generative AI lab at Munich’s Technical University, through which they have successfully launched a pilot program that uses gen-AI to market BMG’s deep catalog. Students at the lab generated short videos that have proven to be more cost efficient and effective at getting the audience to engage with the music.
Last fall, BMG also began a structural reorganization that included letting go of around 40 employees. It was a “tough period… but a business necessity” and part of a broader strategy meant to help the company respond quickly to industry trends, Coesfeld says.
“The operational changes, which we enacted — digital distribution, better able to monetize our repertoire and catalogs and our reorg, which is complete, is making us way more agile and faster in delivering our service and making decisions,” he adds. “We are much more agile on a day-to-day.”
While biking across Iowa this summer, Mark Michaels enjoyed a rare moment of reflection. “You’re riding about 80 miles a day among cornfields, and it gives you a lot of time to think,” the United Record Pressing chairman/CEO says. “I spent a lot of time while I was peddling thinking about United,” he adds of the oldest and largest American-owned, U.S.-based vinyl pressing plant in the world, which will celebrate its 75th anniversary this fall.
Michaels is speaking from his Nashville office, where he’s surrounded by signed records from Buddy Guy, Jack White and more of his icons, all expressing their thanks to him and his manufacturing team. (In 2014, White made history by recording, pressing and releasing a 7-inch of his single “Lazaretto” in under four hours, thanks to URP.) “It’s easy to forget those moments of euphoria and gratitude because you’re so focused on ‘How many records of this did we ship?’ or ‘What’s going on with that press?’ ” Michaels says. “But you don’t want too much life to pass by where you don’t stop and reflect.”
URP was founded as Bullet Plastics in Nashville in 1949, becoming Southern Plastics in the ’50s before landing on United Record Pressing in 1971. By the ’60s, a deal was signed for the plant to handle singles pressings for Motown, and in 1963, the first Beatles 7-inch, “Please Please Me”/“From Me to You,” was pressed, with a typo that spelled the band’s name as The Beattles.
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In 2007, a year before Record Store Day officially launched and just before the format was beginning its first-wave resurgence, Michaels bought the company — and helped sustain it through a particularly rough patch. As he recalls, half of URP’s output at the time was 12-inch singles created as promo records for DJs. “That was a lot of what we did, and shortly after I bought the company, the labels stopped doing that,” he says. “The DJs all got [music production software] Seratos, and the labels figured out that was a better business model. So all of a sudden, the health of the company was in serious jeopardy … We were doing everything to keep the lights on.”
By the summer of 2009, a career-changing order came in: a 50th-anniversary pressing of Miles Davis’ Kind of Blue (a favorite of Michaels) — the plant’s biggest order to date. Michaels himself oversaw quality control, checking a record at random every 30 minutes. “I remember one night, it was two in the morning and I’m in my office listening to these records, and I thought, ‘This is crazy, but goddamn, I’m lucky.’ And it just gave me this boost of energy. The next month, we got another order of that size.” Since, URP has manufactured vinyl for every major artist, from Adele to Taylor Swift.
In the early 2020s, URP faced another challenging period: the coronavirus pandemic. “Demand for vinyl exploded” during lockdown, Michaels says, but the orders put an unprecedented pressure on pressing plants to keep up. He says that was the catalyst for URP to expand, resulting in an $11 million project that built new infrastructure and supporting equipment and added 26 new presses. “The challenge is you can’t do that overnight,” he says. And now, not only can URP meet demand, but “the plant runs better than ever.”
He and his team of approximately 130 employees — all of whom have been sporting anniversary T-shirts that detail the plant’s various logos over the years — are now ready to toast such a feat and storied history, with Michaels saying the energy “is palpable” at the plant these days. A forthcoming celebration will bring together partners, customers, vendors and “people who support the format … There’s a renewed sense of pride and interest in what we do.”
Already, Michaels is focused on how to maintain it for the next 75 years, doubling down on the honor he has in keeping the process — and workforce — in Music City. “Seventy-five-plus years of history gives you a lot of gas in your tank in terms of pride,” he says. “You don’t make the first Beatles record in America, you don’t make all these Motown records, you don’t accumulate all this history and know-how and not have something special. And I never want to lose that.”
This story appears in the Aug. 24, 2024 issue of Billboard.
The merger between entertainment giant Paramount and media company Skydance is set to go ahead after Edgar Bronfman Jr. withdrew a competing offer.
Bronfman, executive chairman of streaming service Fubo, told Paramount’s special committee of directors Monday night that he would not proceed with his bid.
“While there may have been differences, we believe that everyone involved in the sale process is united in the belief that Paramount’s best days are ahead,” he said.
Bronfman, the former chairman and CEO of Warner Music, had intitially offered $4.3 billion for Shari Redstone’s National Amusements, the controlling shareholder of Paramount, according to multiple media reports. He then upped that bid to $6 billion.
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Paramount agreed last month to a merger deal with Skydance that will inject desperately needed cash into a legacy studio that has struggled to adapt to a shifting entertainment landscape.
Since then, during what’s known as a “go shop” period, a special committee of Paramount’s board had reached out to more than 50 third parties to determine whether they were interested in making offers. The go shop period was extended for Bronfman, but has now closed.
Shari Redstone’s National Amusements has owned more than three-quarters of Paramount’s Class A voting shares through the estate of her late father, Sumner Redstone. She had battled to maintain control of the company that owns CBS, which is behind blockbuster films such as “Top Gun” and “The Godfather.”
The deal signals the rise of a new power player, Skydance founder David Ellison, the son of billionaire Larry Ellison, who founded the software company Oracle.
Skydance, based in Santa Monica, California, has helped produce some major Paramount hits in recent years, including Tom Cruise films like “Top Gun: Maverick” and installments of the “Mission Impossible” series.
The proposed combined company of Paramount and Skydance is valued at around $28 billion. The deal is expected to close in September 2025, pending regulatory approval.
Paramount, founded in 1914 as a distributor, is one of Hollywood’s oldest studios and has had a hand in releasing numerous films — from “Sunset Boulevard” and “The Godfather,” to “Raiders of the Lost Ark” and “Titanic.”
After more than a decade out of circulation, SPIN is returning to print as a quarterly magazine, the media brand announced Tuesday (Aug. 27) — the same day its first new issue featuring cover star Lainey Wilson hits newsstands. The revived magazine will again be run by SPIN founder and editor-in-chief Bob Guccione Jr., who […]
The Schulhof surname first became associated with the music business when former Sony America vice chairman Mickey Schulhof led the negotiations to acquire CBS Records in the late 1980s. But his son David staked out his own territory in 2006, when, backed by Trilantic Capital Partners, he used institutional money to buy music publishing assets from songwriters as a co-founder of Evergreen Copyrights — an early player in the song catalog gold rush that would extend into the 2020s. Schulhof and his partners later sold Evergreen to BMG for $80 million in 2010. Now, after spending about a dozen years as a publishing and business development executive for various film studios — as well as a two-year stint as a managing director of G2 Investment Group, a spinoff focusing on media assets for private equity firm Guggenheim Partners — the 53-year-old Georgetown University graduate is touting music industry stocks to retail investors through his latest undertaking, MUSQ Global Music Industry ETF.
ETFs, or exchange-traded funds, are essentially hybrids of mutual and index funds that enable investors to participate in the performance of publicly traded companies without buying individual stocks. ETFs tend to focus on a specific industry or investment theme. MUSQ (pronounced “music”) is an industry index fund that lets retail investors participate in the music industry’s growth through investments in 40 to 50 mainstream company stocks, including the three major-label groups, the major digital service providers (Spotify, Amazon, Apple and Alphabet), Live Nation, SiriusXM, LiveOne and Sonos. It also includes international music companies HYBE, Alex, CTS, Believe and HIM International Music.
Trending on Billboard
Schulhof, who designed the parameters of the index — which is a passive investment vehicle — and serves as its sponsor, launched MUSQ on July 7, 2023, with $2 million in seeding from Goldman Sachs. That investment enabled the creation of about 100,000 shares in the ETF. On that first day of trading, it closed at $24.95. Today, the fund has grown to about 900,000 shares and is backed by the stocks of music companies that carry a net asset value of about $22.8 million.
On Aug. 6, MUSQ closed at $22.17 a share, a week after Schulhof talked to Billboard about his reasons for creating the fund, as well as its performance since its launch.
The MUSQ website lists you as CEO of the fund. If you are the creator and the chief executive, why doesn’t your name appear on any of the financial filings with the U.S. Securities and Exchange Commission? Jay Garrett Stevens is listed as the CEO in the annual report.
Once I owned the index, I licensed it. There are maybe a half a dozen white-label, turnkey service providers that manage and work with ETF investment trusts. In order to be listed on any of the stock exchanges, the fund has to be a trust. So I identified what I believe to be the best ETF service provider out there, Exchange Traded Concepts. If you go to their website, you’ll see they manage several billion dollars and something like 60 ETFs across all kinds of other thematic funds. Garrett is the CEO of ETC, and he is listed in all those filings like that, as are the names of [ETC’s] portfolio advisers.
Promotional materials that Schulhof handed out during MUSQ’s first day of trading.
Nina Westervelt
In that case, what is your role with the MUSQ fund?
I am the founder, sponsor, owner and CEO. I handle all marketing. I am the face for this fund. I’ve done tons of podcast interviews and things like Fintech.tv. When reporters call, I am the one talking about the results from Luminate’s midyear report, Goldman Sachs’ Music in the Air report or something Billboard may have written about. I’m also out there talking to investors, evangelizing about how the music industry is undermonetized, and cheap when it’s compared to streaming services like Netflix or Hulu.
How do your service providers work with MUSQ?
ETC is doing all the back-office work for me. They are the adviser and the trading subadviser. Here’s an analogy: If I buy a publishing catalog and outsource it to Kobalt to handle the collections, accounting and to deal with all the other back-office stuff, it’s basically the same thing. Meanwhile, VettaFi does the rebalancing of the index fund every quarter, aligning it with the eligibility requirements for the companies’ shares in the fund. I give those results to ETC.
Do you have any fiduciary responsibility for the fund?
No. What I do on a daily basis besides marketing is deal with all the compliance. I get everything cleared and [Financial Industry Regulatory Authority-approved]. And I need to get my appearances on podcasts and other media approved by compliance if I want to put them on our website.
What are the eligibility requirements for a company’s shares to be considered for inclusion in the MUSQ index?
Companies eligible for the MUSQ index either have to generate more than 50% of their revenue from music or they have to be a top five player in [music] streaming or content, live music, ticketing, technology or radio. If you look in our fund, we do have Apple, Amazon and Google, and clearly those names don’t generate more than 50% of their revenue from music, but they are among the top five players in the streaming category.
A plaque that the New York Stock Exchange presented to him on July 13, 2023, when he rang the closing bell.
Nina Westervelt
What other requirements or restrictions does MUSQ have?
No single stock can be greater than 5% of the fund’s overall holdings. It used to be 7%, but I lowered it. If a company has a good year and its stock comprises 8% of the index, it would be rebalanced at the end of the quarter. Other rules: No company can have less than a $100 million market capitalization or a daily trading liquidity of less than $500,000 per day. So those rules help give the index a good crosssection of small-cap, midcap and large-capitalization companies with liquidity. And I added a small buffer: If a company drops below $100 million in market cap, then their capitalization weight is cut in half. If the stock price continues to drop in the next quarter, it comes off the index.
Have any mainstream music industry stocks not met the requirements to be included in the index?
You may notice Deezer is not in our index. Even though it has over a $200 million market cap, it does not meet the daily trading liquidity requirement.
Have any companies been removed from the index?
IHeart was once in our fund but the stock is down 70%, so it is no longer in the index. The reverse is true if a small [music-related] company grows and now has a market cap greater than $100 million and it also has the required daily trading level of liquidity. Then it can become eligible. It has to have both ingredients.
When a big company in the index releases its financials, does it have much of an impact on the index’s share price?
Yes. The share price is based on the net asset value, but earnings do have an impact. Spotify right now has an average weight of about 3.4% in our fund, so it’s a top 10 holding. The stock crushed earnings in July, and year to date it’s up almost 70%, so that’s going to have a greater weight this quarter because it delivered stellar results. Other stocks like Believe and Tencent are posting positive returns that will have an impact on the weighting. But no single name can be greater than 5% of the fund. MUSQ pricing has been pretty stable during the past year [ranging from a high of $25.82 on July 31, 2023, to a low of $22.17 on Aug. 5, 2024].
This signed copy of Dr. Dre’s The Chronic is a souvenir from Schulhof’s first music industry internship with Jimmy Iovine at Interscope. Dre’s inscription: “Join the Chronic Patrol and take the hit of the bomb shit! Stay up.”
Nina Westervelt
What happens when the stocks in the index aren’t doing well?
MUSQ is a highly diversified, uncorrelated fund. So when the markets are tanking, MUSQ is not tanking. Also, we’re not a meme play in any way. This is really designed to capture the growth and accurately track the global music industry. We view this as a long-term growth investment for investors.
Does MUSQ consist entirely of equity investments, or do you buy fixed-income instruments from these companies too?
They are all equities.
You say your fund is diversified by music industry sector, geography and genre.
The index has labels and music publishers that supply content, it has companies in the concert business, it has technology stocks, and those companies are diversified by genre. Also, the index is diversified across many countries. Today, it looks like 49% is U.S., 21% is Korean, 11% is Japan. If you go to the index page on our website, it will give you a breakdown. Internationally, we’ve got some exciting companies: Tencent in China, CTS Eventim in Germany, Hipgnosis in the U.K., Believe in France. And then we’ve got 10 or 11 K-pop stocks like Genie Music Corp and Cocoa, [and] the two biggest streaming companies in South Korea, HYBE and YG Entertainment. We have companies like Cloud Music and Avex in Japan and Amuse, one of the biggest content companies in Taiwan.
Does having international companies make the index more attractive to investors?
All the international companies in this fund trade in local currencies. You would have to open up local accounts to trade them, and that costs fees. MUSQ creates a very liquid, convenient and portable way for investors to have access to all these exciting companies.
Guitar that Bruce Springsteen autographed for Schulhof when they met after a show on the 1996 Ghost of Tom Joad tour.
Nina Westervelt
How did you do on Hipgnosis?
Hipgnosis was 2.3% weight in our fund and because Blackstone is taking it private, it is up 42%, so we made money on it.
Your fund has grown from $2 million in assets to over $20 million in assets. What’s the next goal?
To reach $25 million. A lot of financial firms have that as a minimum before they offer it to their customer. Beyond that, it’s $50 million. If the MUSQ fund gets to that point, it would have hundreds of thousands of financial advisers offering it as an investment option.