Business News
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Ron and Angie Roloff, owners of Madison, Wis.-based record store Strictly Discs, have sold the business after 35 years.
Stepping in as the store’s new president/owner is Rick Stoner, who takes over following an 18-year marketing agency career. The Roloffs will continue in their day-to-day roles through the end of 2023 before assuming an advisory relationship with Strictly Discs starting next year as they transition into retirement.
“Angie and I are grateful to our staff and customers, who we’ve had the privilege to work with for 35 years,” said Ron in a statement.
Stoner has served in several vp-level leadership, business development and digital and event marketing roles at prominent consumer brands. He’s a 2006 University of Wisconsin-Madison graduate and a board member at Communications Arts Partners (CAPs), an alumni organization that supports the university’s communications arts department.
“I’ve been a Strictly Discs customer since I was a student here in Madison,” said Stoner in a statement. “I view the store as everything right about the culture of the Madison community and look forward to maintaining that presence. Entrepreneurship has long been a destination for me and my family. Owning Strictly Discs is a dream come true. I can’t wait to meet our dedicated and loyal customers and get to work with our team to grow the business.”
The acquisition includes nearly half a million records, carefully curated over close to four decades. The business will maintain an e-commerce presence, which Stoner views as a key area for growth initiatives such as a subscription-based record club as well as pop-up, event-based record stores.
In June 2024, Strictly Discs is slated to open a second retail location in nearby Cambridge, Wis. in a space that hosts the majority of the store’s inventory.
Several Strictly Discs employees will remain with the business following the transition. They include 14-year employee Evan Woodward, who leads the buying team and works the front counter, as well as assistant manager Mark Chaney. Joining the team are Dru Korab, a record collector, DJ, media production professional and Stoner’s college classmate who will step into a part-time operations role in addition to his minority investment in the business. Also holding a minority investment is Stoner’s friend Kyle Nakatsuji, founder/CEO of Clearcover, principal at American Family Ventures and a graduate of the University of Wisconsin-Madison Law School.
Opened in 1988, Strictly Discs was a subject of Billboard’s “In a Pandemic” series from 2020-2021. During this time, Angie discussed the challenges she and Ron faced and the creative solutions they employed at the store during the height of the COVID-19 pandemic.
Angie tells Billboard that an evaluation of Strictly Discs’ worth, performed during the pandemic, “planted the seed” that ultimately led her and Ron to sell the business. After listing it in early May, they were approached by Stoner in June; a letter of intent was signed in July. The deal finally closed on Oct. 31.
Starting next year, Ron will continue on with the store in an outside buying capacity, while Angie will serve as the “boots on the ground” for the Milwaukee-based Stoner when he’s not in Madison, she says. “We’re invested in his success because we’ve lent him money as part of this process,” Angie continues. “So we’re definitely not leaving and we’ll be available to him really in any capacity that he needs us for.”
Angie says Stoner brought a good mixture of knowing what made the business work while proposing solid ideas about where it could grow: “He already understood that the things that have made Strictly Discs successful are the people and the product and certainly the experience. I think he respects all of that, and he knows that there are areas that he wants to grow the business but he doesn’t want to fundamentally change what we’ve already done.”
At the heart of Strictly Discs’ more than three-decade run is a love story: Angie and Ron met at Strictly Discs in 1994, when Angie was a customer and Ron was working the front counter. In the years since, says Angie, the store has become their baby.
“We don’t have kids and so it’s kind of like Strictly Discs takes that place,” Angie says, adding that with both she and Ron being “super high-strung type A personalities,” even while on vacation, they would end up talking about the store. “That’s the part of it that I’m looking forward to having go away,” she says.
An affiliate of private equity firm STG completed its acquisition of Avid Technology in an all-cash transaction valued at approximately $1.4 billion. The acquisition, previously announced on Aug. 9, was approved by Avid stockholders on Nov. 2. Under the terms of the deal, Avid stockholders will receive $27.05 per share. Avid common stock ceased trading prior to the opening of trading on Nov. 7 and will no longer be listed on the Nasdaq. Avid will operate as a privately held company and remain headquartered in Burlington, Mass. “By becoming a private company, we believe Avid will be able to achieve the speed of innovation, scale and performance required for us to continue leading the industry forward,” said Jeff Rosica, Avid’s CEO/president, in a statement. “Combined with their significant operational and financial resources, STG brings deep investment experience in the technology sector that will accelerate the achievement of Avid’s strategic vision, building on the momentum of our successful ongoing transformation achieved over the past several years.”
Global content studio The North Road Company is partnering with Two One Five Entertainment — a company co-founded by Ahmir “Questlove” Thompson and Tariq “Black Thought” Trotter of The Roots — after acquiring a significant stake in the company. The deal establishes creative coordination between the two companies, with North Road planning to finance future Two One Five film, TV and other creative projects to scale the company. “Although we’ve had success thus far, finding an investor and strategic partner like North Road will have an immediate impact on our business, as their superior production capabilities will help us significantly increase our output,” said Questlove in a statement. “Additionally, the capital they are committing provides us the flexibility to independently fund creative ideas, grow our executive team and truly scale the business.”
The Anaheim Ducks and Honda Center announced a partnership with The Offspring to commemorate the 30th anniversary of both the Ducks and Honda Center as well as the band’s breakthrough album, Smash. The collaboration will encompass several crossovers during the Ducks’ 30th anniversary season and beyond, including “Come Out and Play Night with The Offspring” on Feb. 9, 2024. The night will include appearances from the band — which hails from Orange County — along with limited edition and co-branded merchandise. Fans will also receive exclusive perks and rewards during Friday night games at Honda Center throughout the Ducks’ 30th anniversary season. Additionally, the band and the Ducks have teamed up to create Puck Punks: The Offspring Powerplay Hits, a limited-edition vinyl set that will go on sale in the Ducks Team Store on Feb. 9, with a number of copies signed by members of The Offspring and Ducks players to be made available. All proceeds raised will benefit the Anaheim Ducks Foundation.
Universal Music Group India and leading Indian talent management company REPRESENT struck a strategic partnership that will give the REPRESENT roster access to Universal Music Group’s global footprint across distribution, publishing, brands and more to help boost REPRESENT artists’ growth and reach worldwide. The companies will collaborate on artist development and fan engagement, among other areas. REPRESENT artists who will be distributed and supported under the partnership include Anuv Jain, MC Stan, Zaeden, Lost Stories, Yashraj, Hanita Bhambri, Akanksha Bhandari, Kamakshi Khanna, Saahel, Savera, Kayan, OAFF and Jai Dhir.
Icelandic-Chinese artist, composer, producer and multi-instrumentalist Laufey has extended her deal with label partner AWAL following the successful release of her album Bewitched, which debuted at No. 23 on the Billboard 200 in September. Laufey is nominated for best traditional pop vocal album at next year’s Grammys and is in the middle of a sold-out North American tour.
GoldState Music, a new company launched last year by Charles Goldstuck that was formed to create a diversified portfolio of music copyrights and sound recordings, announced a “significant” investment and a new partnership with funds managed by Flexpoint Ford Asset Opportunities. The investment will help accelerate GoldState’s acquisition of music intellectual property assets, including full catalogs, influential copyrights, master recordings and publishing rights. As part of the deal, GoldState will source new catalog acquisitions and manage the licensing, synchronization and administration for the existing and acquired copyrights. According to a press release, in its first year of operation, GoldState acquired music rights from several artists and songwriters “spanning multiple genres, geographies, and asset types.”
The Daouda Leonard-founded music tech studio CreateSafe raised a $4.6 million seed funding round to launch TRINITI, a generative artificial intelligence music platform designed to make it easier for artists and rights holders to license and monetize their data in generative AI models while offering a platform to manage consent, credit and compensation. TRINITI was previously utilized by Grimes (Leonard’s management client) to distribute works using a cloned version of her voice to all major streaming services; according to a press release, more than 1,000 songs have been created since the project’s launch. TRINITI includes personalized AI tools with an attribution engine that can take the input of voice, sound, writing and imagery to communicate an artist’s musical and artistic vision. The funding round was led by cryptocurrency and blockchain tech investment firm Polychain Capital, with additional backing from Crush Ventures, Anthony Saleh, Paris Hilton (11:11 Media), MoonPay, Chaac Ventures, Unified Music Group and Dan Weisman (vp at Bernstein Private Wealth Management).
10K Projects struck a joint venture with Loaf Boyz Ventures, the record label of rapper Moneybagg Yo. The first release under the deal was YTB Fatt’s first mixtape, Who Is Fatt, which dropped in August. Other projects set for release under the deal include a Loaf Boyz compilation album and new music from Memphis-based rapper Kevo Money. Moneybagg Yo’s solo work will continue to be released through Yo Gotti’s CMG label. This marks the first deal for 10K since it became a standalone label within Warner Music Group.
Virgin Music Group signed a global agreement with Latin independent labels Machin and Equinoccio Records. Founded by Mexican singer, songwriter and producer Pepe Aguilar, both labels have a focus on the Regional Mexican genre. Machin Records is home to Angela Aguilar, Leonardo Aguilar and Irany & David, while Equinoccio is home to Pepe Aguilar.
Online design platform Canva launched a popular music library that will give users to access 60-second clips of commercially released songs for personal use in videos, social media posts and more through partnerships with Warner Music Group (including Warner Chappell Music and Warner Recorded Music), Merlin and more than a dozen other labels and publishers in deals announced earlier this year. Available songs include works by artists including Michael Buble, Vance Joy, Kenya Grace and Curtis Mayfield, all of whom will earn royalties when clips of their songs are used in Canva designs. The newly expanded music library is available to Canva Pro and Education subscribers, with access to small enterprises using Canva for Teams and Nonprofit users to follow, in Australia, the United States, the United Kingdom, Canada, Austria, Belgium, Croatia, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, Netherlands, Norway, Poland, Portugal, Spain, Sweden and Switzerland.
Music finance firm Sound Royalties announced a new “working relationship” with entertainment banker David Innes, according to a press release. Under the agreement, Innes’ new venture, On the Money Entertainment Advisory and Consulting, will support Sound Royalties “by amplifying its networking reach among music creatives and expanding its new business pipeline,” the release adds.
Spatial web technology company Cosmic Wire partnered with Creative Artists Agency (CAA) to create innovative experiences for CAA clients using spatial and immersive technology. The companies will additionally work together to innovate sponsorship opportunities for corporate brands in virtual environments.
Music rights and metadata management software platform Orfium partnered with Japanese anime music company Bandai Namco Music Live. Under the deal, Orfium will manage, optimize and monetize Bandai Namco’s repertoire using its AI-based rights management software. Bandai Namco Music Live represents more than 3,000 creators and is behind such anime titles as the Love Live! series, Violet Evergarden, One-Punch Man and The Melancholy of Haruhi Suzumiya.
SoundCloud announced a partnership with A&R executive Randall “Sickamore” Medford, who partnered with SoundCloud on IIIXL Studio, a new Brooklyn-based enterprise that will be dedicated to signing and developing New York artists for SoundCloud’s artist development program. The first IIIXL artist-in-residence is Liim. Through the collaboration, Sickamore will connect talent with SoundCloud’s artist partnerships division, which will offer white-glove creative and marketing resources to chosen artists and their teams. A monthly New York hip-hop showcase is also forthcoming.
Also at SoundCloud, the streaming platform partnered with sleep, meditation and relaxation app Calm to introduce new mental health and wellness benefits for artists. Under the deal, SoundCloud Next and Next Pro artists will have access to exclusive offers for Calm through SoundCloud’s existing member benefits program, including free trials and 50% off Calm Premium.
Bonsai, a platform that helps recording artists engage with and monetize their superfans, announced integrations with Discord, YouTube and Instagram allowing fans to directly interact with their favorite artists. Bonsai’s core feature lets artists invite their fans to participate in “asynch AMAs,” through which fans use Bonsai to ask artists questions. Artists can then record audio responses for their fans, which are then paired with visual generative art to form a “bonsai” that gets delivered to fans via text, email and — with the new deals — Discord, Instagram and YouTube.
We Are Giant — a new platform that helps artists amplify their direct-to-fan relationships by hosting licensed listening parties for new music and unreleased demos, exclusive livestreams, interactive chat rooms with the musicians and more — formally announced its launch while announcing an $8 million funding round from investment management platform Sterling Partners. We Are Giant is led by founder/CEO Andy Apple, who previously served as an investor at VC firms Sound Ventures and Wavemaker Partners in addition to a tenure at JPMorgan. Also on the leadership team is Dan McComas (previously at Reddit), who serves as vp of products & community.
Amid the offerings at the LA3C festival that took place in downtown L.A. this past weekend (Nov. 11-12), a presentation from the Saudi Arabia Music Commission put forth a broad view of the music industry currently being developed in the country.
Hosted by VIBE editor-in-chief Datwon Thomas, panelists included Paul Pacifico, CEO of the Saudi Music Commission; Ahmad Alammary, chief creative officer for the Saudi electronic music festival Soundstorm; Gigi Arabia, the founder/CEO of Saudi heavy metal organization Heavy Arabia; Mexican-American songwriter, producer and academic Fernando Garibay, who has worked in the Kingdom; and Saudi singer-songwriter Tamtam.
Saudi Arabia has seen significant social changes in the last decade, as the government has eased restrictions around formerly prohibited activities like playing music in public and co-ed gatherings. These new freedoms have helped lay the groundwork for the formation of a music industry, with the bulk of the panel discussion focused on how this industry is currently being built from scratch.
“We have huge pent-up supply of creativity and music,” said Pacifico, a Brit who joined the Music Commission as CEO in January 2023. “We have huge pent-up demand among audiences that have grown up wanting to go to festivals, concerts, events, to listen to music and enjoy themselves.”
“But we lack enablers,” Pacifico continued. “So over the next one year, three years, five years, it’s going to be all about building the structures that connect those dots that allow people to express themselves creatively and to build platforms that will enable Saudi artists to tell their stories in a way that will be heard around the world.”
“A lot of people working in the [global music] industry ask how we can fix our industry, or how we can rethink our industry,” added Garibay, “but I don’t think we’ve ever had in the history over the past 100 years a chance to think about, ‘How would you start over? How would you start from a new perspective?’”
The discussion emphasized that while Saudi Arabia does not yet have venues, a collecting society and other essential infrastructure, this clean canvas is allowing key players to, Alammary said, “shape it the way we want to learn from the lessons around the world and actually serve artists.”
Pacifico cited the major opportunities for artists in Saudi Arabia with respect to the country’s demographics, saying that “70% of the people are under 35 years old, and the country has 98% Internet penetration. So you have a young, connected, dynamic and unbelievably energized population.”
The panelists agreed that this audience and the emerging industry combined are creating huge opportunities for Saudi artists, as formerly underground scenes are coalesced and, as Alammary said, “unveiled.” These formerly underground scenes include those around genres like electronic music, the focus of the Saudi mega-festival Soundstorm that launched in 2019, along with hip-hop, heavy metal and more.
“All of the events took place in super unconventional places,” Arabia said of the Saudi metal scene before music-related restrictions were lifted. “We have something in Saudi called rest houses, little houses in the middle of nowhere for people to rest in if they’re going on a road trip, where events took place.”
“We’re still growing it event by event,” Arabia added in regard to the country’s current aboveground metal scene. “With the help of the Music Commission and its leadership, now we have been able to go and represent it in the genre globally.” She foresees Saudi Arabia becoming a “hotspot for metal heads” in a fashion similar to the Nordic region.
The Music Commission exists under the Saudi Ministry of Culture, a government entity focused on expanding the country’s entertainment sector through endeavors into music, sports, film and more. These entities exist as part of Vision 2030, the Saudi government’s plan, it says, to diversify the country’s economy, society and culture. (The LA3C panel did not touch on the challenges of building an industry amid the still-existing restrictions of the Saudi government, which does not protect freedom of speech and which, despite some recent advancements, still imposes myriad restrictions on women.)
“There’s an incomplete picture. It’s like a jigsaw puzzle with pieces missing,” Pacifico said of the country’s current industry, “But we see record labels coming up, we see management companies growing. The most amazing thing is the whole music industry is going through an accelerated time of massive change, and Saudi Arabia as a country is going through a massively accelerated time of change. So nothing’s taken for granted… and we can just think again about how to do things better, quicker, more efficiently.”
The presentation also included performances from Tamtam, Saudi pop artist Mishaal Tamer — who released his debut EP in 2020 via RCA Records and opened for OneRepublic on tour this past summer — and Riyadh-based producer and songwriter NTITLED.
LA3C was built to highlight communities creating culture around the world. LA3C created a paid partnership with the Saudi Music Commission to highlight the cultural shift in the commercial entertainment sector and with regional artists that have a presence in the United States and Saudi Arabia. LA3C is owned by Penske Media Corporation which is also the parent company of Billboard.
Michael Kushner, Atlantic Records’ executive vp of business & legal affairs/general counsel, will receive the 2024 Entertainment Law Initiative (ELI) Service Award, which is given each year to an attorney who has demonstrated a commitment to advancing and supporting the music community through service.
The award will be presented at the Recording Academy Entertainment Law Initiative event at the Beverly Wilshire Hotel in Beverly Hills, Calif. on Friday, Feb. 2, 2024, two days before the 66th annual Grammy Awards. Michelle Jubelirer, Capitol Music Group chair/CEO, will deliver the keynote address.
“Michael’s dedication to the music industry and his service to the Academy’s Entertainment Law Initiative make him an exceptionally deserving recipient of the ELI Service Award,” Harvey Mason jr., CEO of the Recording Academy, said in a statement. “We look forward to celebrating his accomplishments at the 26th Annual ELI Grammy Week event, and hosting Michelle — a trailblazing woman in music — as the keynote speaker as we gather with the professionals and students making an impact in entertainment law.”
The recipient of the Service Award is selected each year by ELI’s executive committee.
Peter T. Paterno was the Service Award honoree earlier this year. Los Angeles mayor Karen Bass, then newly inaugurated, gave the keynote address.
The ELI event will also celebrate the winner and two runners-up of the Entertainment Law Initiative writing competition, co-sponsored by the American Bar Association (ABA), which challenges students in Juris Doctorate (JD) and Master of Laws (LLM) programs at U.S. law schools to research a pressing legal issue facing the modern music industry and outline a proposed solution in a 3,000-word essay. A $10,000 scholarship is awarded to the author of the winning paper, and a $2,500 scholarship is awarded to two runners-up. The winning paper will be published in the ABA’s journal, Entertainment & Sports Lawyer.
The winner will also receive travel and tickets to Los Angeles to attend the 66th Annual Grammy Awards, MusiCares Person of the Year and the ELI event. The contest is open to JD and LLM candidates at U.S. law schools. Students have until Jan. 3, 2024, to enter the contest. See official rules, detailed prize packages and deadlines at recordingacademy.com/eli.
Individual tickets and a limited number of discounted student tickets to the ELI event will go on sale later this month.
Now that the Hollywood actors’ strike is over, music supervisor Justin Kamps can afford to keep his 3-year-old daughter in daycare. “Things were getting a little bit scary these last couple months,” says Kamps, who picks songs for Bridgerton, Grey’s Anatomy and other hit TV shows. “We were going through the financials and cutting back whatever we can.”
SAG-AFTRA’s 60,000 members voted to approve a deal with studios last Friday, after halting work for nearly four months, following a screenwriters’ strike that lasted from early May to late September — both of which were devastating not just to Hollywood but the $2 billion music-synch industry. “That’s been quite a dark thing,” Stephanie Diaz Matos, head of music supervision for writer-actress Issa Rae‘s music company Raedio, told Billboard in July.
With Hollywood going back to work, TV shows and movies have already resumed sending out briefs to publishers and record labels requesting songs for key dramatic moments and soundtracks. “It’s definitely a relief,” says Alison Dannenberg Frost, vp of film and TV creative for music publisher peermusic. “We saw a slowdown on the creative side and licenses coming in the door. We really just started seeing it affecting our monthly numbers.” The synch business makes up 50% of Spirit Music Group’s publishing revenue, according to Amy Hartman, the company’s senior vp of creative services, film and TV music, who adds, “It’s incredibly important.”
Had the strikes continued much longer, Spirit would have had to consider cutbacks and “do some reevaluating,” Hartman says. “Thankfully, we’re pretty lean and mean, so we weren’t forced to face that question.”
By contrast, music supervisors for films and TV shows are generally freelance contractors and had to scramble to stay afloat financially during the strikes. Laura Webb, a supervisor for Love at First Sight, Monster High and other shows, spent the first month of the strikes on post-production for existing shows, but one of them wound up getting canceled and cut the pay for that job in half. “We have no protections. We were expecting to get that money, and we just lost it,” she says. “The last week has been slower, for sure — the slowest it’s been. But hopefully good timing for things to turn around.”
Webb and her colleagues faced a separate setback over the summer, when the National Labor Relations Board ruled against part-time freelance Netflix music supervisors who’d requested a union certification election in October 2022. After Netflix refused to recognize the union, the supervisors argued they needed collective-bargaining power to improve their financial conditions: “Their responsibilities have expanded, their conditions have deteriorated, and their pay has stagnated,” the International Alliance of Theatrical Stage Employees, which collaborated with the Netflix employees, declared at the time. But Danielle M. Pierce, the NLRB’s acting regional director, wrote in August that “music supervisors are independent contractors who are not employees of Netflix.”
“We’re regrouping and trying to figure out next steps,” Webb says. “It’s not over, but really a big blow.”
Throughout the strikes, music companies pivoted to an increased focus on pitching for synchs in video games and TV commercials — continuing to take music supervisors to lunch to maintain relationships and help out their struggling freelance colleagues. Peermusic donated $100 grocery-store gift cards to out-of-work members of the Guild of Music Supervisors, a non-profit organization.
Although Spirit’s Hartman is ready for the synch faucet to turn back on and “all the beautiful amount of licensing and briefs to come our way,” peermusic’s Frost expects a lag, possibly extending into early 2024. Movie and show projects are likely to restart at the “script and filming stage,” she says, while synch work generally begins during post-production at the end: “I’m predicting it’s going to be a slow pickup, especially now we’re going into the holidays.”
Because Netflix, Disney and other top studios have said they would pull back on new content, the synch business may also begin to flatten after years of growth. Frost predicts a post-strike boom in synchs in early 2024, followed by a longer-term drop-off: “I think it’s going to slow down as streamers adjust to this new world, and they’re picking up less content.” Heather Guibert, a music supervisor working on a documentary about songwriter Diane Warren, adds: “Disney used to make, let’s hypothesize, 100 projects a year; suddenly, that goes down to 50. That’s 50 fewer projects for the music supervisor to work on. It’s rough.”
During the strikes, Amanda Krieg Thomas, a music supervisor for American Horror Story and Monster: The Jeffrey Dahmer Story, had to slash the hours for the three employees of her company, Yay Team — forcing one of them to quit for another job. She’s hopeful — and “still a little cautious” — that the post-strike era will restore her company to maximum financial health. “What’s the new normal? Is there actually going to be less content, and what does that look like for music supervisors?” she asks. “But everybody’s excited to really get going again.”
South Korean music company HYBE, home of K-pop giants BTS and Seventeen, has made its first entry into the Latin music sector with the acquisition of Exile Music, the music division of Spanish-language studio Exile Content. HYBE said HYBE Latin America will incorporate K-pop business methods and focus on artist management and talent discovery across […]
Over the past few years, we have been living in a music business in which, it’s often said, hits can come from anywhere around the world. Often, however, the hits we’re talking about have musical and production elements of pop, hip-hop and R&B — only with a twist or in another language. This is great. Unless you want the world to sound a little weirder, in which case it’s still great but you might wonder what else is out there.
As it happens, there’s a country that often seems to specialize in arty, off-kilter music — Iceland. Ever since the Sugarcubes emerged as what we used to call “college rock” darlings in the late 1980s, the Nordic country has exported more than its share of adventurous music: Björk, who emerged from the Sugarcubes as a solo act; Sigur Rós; Gus Gus, and more recently Laufey and Daði Freyr. (I originally heard this as “Daddy Feyr,” which says something about how our musical world is shrinking — but it’s actually his given name.)
The challenges of exporting acts from Iceland are significant: Few international music companies have offices there, the language isn’t spoken much outside the island, and there isn’t exactly much of a touring market in a country of 372,000 — far fewer people than saw Taylor Swift in Los Angeles this year. One of the important investors in the music business there is actually the government.
Last week, at the Iceland Airwaves festival and conference in Reykjavík, I got some sense of how that works and saw some a handful of Icelandic acts that could build solid global careers. (The festival flew me to Reykjavík to moderate a panel, with no expectation that I would cover the event, and I didn’t plan to do so.) None of them sound like they’re chasing the next streaming hit, which I found refreshing.
Since 2006, in fact, former Sugarcubes drummer Sigtryggur Baldursson has played a significant role in the international marketing of Icelandic music — first as part of Iceland Music Export, then since 2012 as managing director for its successor organization, Iceland Music. The organization coordinates grants and provides support for acts “to help people market music from here on their own terms,” Baldursson says. “We help labels and independent artists market their music better, but also to create better support for it.”
The direct results have been encouraging. But music has also helped brand Iceland, drawing tourists to a country with a vital culture as well as beautiful landscapes and hot springs. Björk is the most famous person in the country — by a kilometer.
Starting in January, Iceland is amping up its efforts. During the pandemic lockdown, the music business created a coalition to lobby the government for support, which eventually resulted in the creation of a new office that will fold two smaller organizations into the existing Iceland Music. As part of that change, Baldursson will step down as CEO in favor of María Rut Reynisdóttir. “The establishment of the new office,” Reynisdóttir says, “is a major milestone for the Icelandic music scene.”
All of the Nordic countries have “music export” organizations, and the ones in Finland and Norway are bigger because there’re less private investment in music than in Denmark and Sweden. “Formally opening the music center is an important milestone for music and musicians in this country,” says Lilja Dögg Alfreðsdóttir, Minister of Culture and Business Affairs. (Iceland, uniquely as far as I can tell, has one combined ministry for both business and culture.) “The music center can become one of the cornerstones of music life and industry.”
It’s hard to imagine this kind of government investment in music in the U.S., where it would quickly become a political clusterf—, with the disciples of Kid Rock facing off against those of Maren Morris. European countries are also more accustomed to public funding of the arts, including television and high culture institutions like opera. This isn’t necessarily the best solution overall — the U.S. still drives pop culture. But it works for them. One reason the U.S. drives pop culture is that it’s a big enough, rich enough country that private investment can pay off.
That’s one reason smaller countries subsidize their culture businesses — so they don’t get overwhelmed. France, famously, protects its film business, and many countries have radio airplay regulations that reserve a certain amount of time for local artists. Iceland even funds its book business to prevent local-language literature from being swamped by English authors.
That kind of thinking puts Iceland in an interesting situation. On one hand, most of the country’s pop music isn’t in Icelandic — it limits the potential audience. But much of it still has a certain spare kind of artiness — what’s Icelandic for je ne sais quoi? It’s often pop but not poppy, arty but not inaccessible. It’s too diverse to be considered a definable style but much of it has a certain aesthetic.
Iceland Airwaves is also a music festival, so I was able to check out some artists as well. Along with some acts from elsewhere, I enjoyed the off-kilter pop of local star Briet, the haunting electronic soundscapes of Kónguló, and, especially, the furiously arty punk of Gróa, which reminded me of the Raincoats.
Realistically, their combined potential to go viral seems pretty low, but that’s fine — Baldursson points out that most Icelandic acts depend more on playing live, anyway. These kinds of acts, Baldursson says, “they shoot from here out into the stratosphere.”
iHeartMedia shares dropped 19.6% to $2.01 this week as the company warned investors of continued softness in radio advertising dollars. Fourth quarter results “will be weaker than we originally anticipated,” said CEO Bob Pittman during Thursday’s earnings call. In October, consolidated revenue was down 8% from the prior-year period. For the fourth quarter, iHeartMedia expects consolidated revenue excluding political ad revenue to decline in the low single digits.
Still, iHeartMedia’s third-quarter results were in line with previous guidance. Revenue of $953 million was down 3.6% from the prior-year period, a bit better than the guidance of a low single-digit decrease. Adjusted earnings before interest, taxes, depreciation and amortization of $204 million was within the guidance of $195 million to $205 million.
The week’s sharp decline brought iHeartMedia’s year-to-date loss to 67.2%, far deeper than the declines of broadcast radio company Cumulus Media (-21.9%) and satellite radio company SiriusXM (-20.7%). Not only has broadcast radio suffered from weak national advertising, it lacks the high growth rates of music streaming and podcasting. PwC’s latest forecasts call for U.S. radio advertising revenues to rise just 4% from 2023 to 2027 while U.S. podcast advertising — where iHeartMedia has a large footprint — will grow 41% to $2 billion.
Next year’s elections should provide a shot in the arm, though. “As we look forward to 2024, we expect to generate significantly better free cash flow driven in part by an improving macro environment, as well as the impact of political dollars,” said CFO Rich Bressler. In 2020, the company generated $167 million in political revenues, he noted.
The Billboard Global Music Index mostly held steady this week, dropping just 0.3% to 1,390.68. Of the index’s 20 stocks, seven gained this while while 13 finished in negative territory. Most stocks had low-single-digit gains or losses and iHeartMedia was the only stock with a double-digit move in either direction.
French company Believe was the index’s greatest gainer of the week after improving 7.4% to 9.93 euros ($10.64). German concert promoter CTS Eventim, which will release third-quarter earnings on Nov. 21, gained 5.5% to 62.75 euros ($67.24). Music streaming company LiveOne gained 4.7% to $1.12. Chinese music streamer Cloud Music, which has not yet announced the date of its third-quarter earnings release, gained 3.3% to 99.50 HKD ($12.74).
Shares of Sphere Entertainment Co. dropped 1.5% to $35.95 after a roller-coaster week. Following the company’s Nov. 3 announcement that CFO Gautum Ranji had left the company, Sphere Entertainment shares dropped 9.6% to $32.97 on Monday. The share price fell an additional 4.5% to $31.87 on Wednesday following the quarterly earnings release. But Sphere Entertainment picked up momentum in the latter half of the week, gaining 12.8% over Thursday and Friday to close at $35.95.
U.S. stocks were broadly up this week despite news that consumer sentiment declined in November and expectations for future inflation reached their highest level since 2011. The Nasdaq composite rose 2.4% while the S&P 500 improved 1.3%. Many major U.S. tech stocks posted big gains. Microsoft hit an all-time high of $370.09 on Friday and finished the week at $369.67, up 4.8%. Apple rose 5.5% to $186.40. Amazon improved 3.6% to $143.56. Meta jumped 4.5% to $32.8.77. In the United Kingdom, the FTSE 100 fell 0.8%. South Korea’s KOSPI composite index gained 1.7%.
Music companies’ third-quarter earnings reports have so far been full of good news and positive trends. Subscription and streaming growth continue to drive revenues for record labels and publishers. Live entertainment continues its post-pandemic expansion. Margins are healthy. Overall, these have been solid report cards for the state of the music business.
Among the companies to report thus far are Universal Music Group, Sony Music, Spotify, Believe, Sphere Entertainment Co., MSG Entertainment, HYBE and SiriusXM. Next week’s earnings reports will come from Warner Music Group (Nov. 16) and Tencent Music Entertainment (Nov. 14). German concert promoter CTS Eventim will report on Nov. 21.
Here are seven items from the earnings releases to date that stood out and deserve more attention.
Universal Music Group struck out against “merchants of garbage.” During Universal Music Group’s Oct. 26 earnings call, chairman and CEO Lucian Grainge got a lot of attention when he bemoaned the “merchants of garbage” — creators of low-value functional music such as generic mood music and nature sounds — that want to be on equal royalty terms at streaming platforms as such UMG artists as Taylor Swift, The Beatles and The Rolling Stones. Grainge’s memorable turn of phrase came in defense of UMG’s artist-centric royalty scheme crafted in partnership with French music streaming service Deezer. “Sorry, I can’t really think of another word for content that no one really actually wants to listen to,” Grainge said.
Spotify’s price increase gave a much-needed uplift to subscription revenues. The price for an individual Spotify subscription in the U.S. was $9.99 from 2011 to July 2023. The price hike to $10.99 in roughly 50 markets may have arrived later than its competitors, but it came just when Spotify needed a boost. Spotify’s premium average revenue per user dropped 6% year over year (1% at constant currency) mainly because the company had a larger share of family plans compared to the prior-year, CFO Paul Vogel said during the July 25 earnings call. Early returns from the price increase in the U.S., U.K. and dozens of other markets helped offset those losses. Because Spotify’s number of subscribers increased 16% year over year to 226 million, subscription revenue grew 10% year over year (16% at constant currency) to 2.9 billion euros ($3.1 billion). With three full months of a price increase in the fourth quarter and considering the price increase covered about 75% of Spotify’s revenue base, the company expects the price increase to provide “a positive, mid-single digit” benefit (excluding foreign exchange) in the fourth quarter, said Vogel.
No company lowered guidance, and some have raised guidance. Sony Music raised guidance for revenue and adjusted operating income before depreciation and amortization by 5% and 4%, respectively. Reservoir Media raised guidance for fiscal 2024 revenue and adjusted EBITDA by 10% each. It’s one thing for a company to meet expectations it had previously laid out to investors. But raising previously released expectations is something else altogether — a sign the future will be better than expected. It’s usually a benefit to the stock price, too. The share price is the present value of future cash flows. When an estimate for future cash flows takes a sudden jump, that changes the financial model used to calculate the share price.
Consumers aren’t slowing their spending on live music. In August, concerns arose that a resumption of student loan payments, paused to help people struggling during the pandemic, would take a bite out of pocketbooks and cause music fans to pull back on the record amounts they were spending on live entertainment. Three months later, there is no indication that consumers are slowing down, according to Live Nation. “We’re seeing no sign of weaknesses,” said president and CFO Joe Berchtold, noting that Ticketmaster’s October sales in North American were up double-digits year over year. “We’re not seeing any pullback in any way from a club to a stadium tour from Milan to Argentina right now,” added president and CEO Michael Rapino.
SM Entertainment has big plans for its new publishing subsidiary, Kreation Music Rights. The K-pop stalwart has been “aggressively recruiting global writers” and plans to have 80 of them under contract this year, CEO Jang Cheol Hyuk said during the Nov. 8 earnings call. SM Entertainment is pursuing collaborations with both domestic and international publishers and plans to recruit foreign writers “who wish to advance into K-pop by establishing overseas subsidiaries,” Jiang said.
Radio advertising continues to struggle — but the clouds may be starting to part. iHeartMedia’s October revenues were down 8% and the company expects its fourth-quarter revenue excluding political revenue to be down in the mid-single digit percent year over year. The fourth quarter will be iHeartMedia’s strongest quarter of the year “but will be weaker than we originally anticipated due to some dampening of advertising demand which coincided with the uncertainty caused by the recent geopolitical events,” CEO Bob Pittman said during Thursday’s earnings call. That said, iHeartMedia’s digital business “is sort of in recovery mode,” said Pittman, and the company is “seeing the pieces falling into place” for radio’s recovery as most advertisers expect to be “back in growth mode…and spending to support that” in 2024.
The market for catalog acquisitions isn’t slowing down. Reservoir Media CEO Golnar Khosrowshahi said catalog prices aren’t contracting despite higher interest rates. “We’re still seeing a lot of demand for assets and continued infusion of new capital within the competitive set,” she said during Tuesday’s earnings call. “And that is certainly fueling the demand. The pipeline is robust. And it ranges in size from large to a lot of smaller deals.” Reservoir Media hasn’t been suffering from sticker shock, though. Acquisitions in the Middle East-North Africa market — such as some catalog of Saudi Arabian label Mashrex in June — provide the company with good value, Khosrowshahi added. “If we’re looking at a market here that is somewhat saturated with a lot of capital in the marketplace, and we’re able to execute [deals in MENA] at these lower multiples, that makes it just that much more attractive to us.”
No matter how you Style it, Taylor Swift‘s 1989 (Taylor’s Version) is a juggernaut. The re-recorded set debuted with 1.653 million equivalent album units (EAUs) in the United States in the week ending Nov. 2, according to Luminate, making it far and away the biggest debut for an album so far in 2023. To give a sense of just how phenomenal its performance is, we’ve stacked it up against every other No. 1 album on the Billboard 200 so far this year — a list comprising 15 additional titles in all.
It bears reiterating that first-week EAUs for 1989 (Taylor’s Version) dwarfed those of all other No. 1 albums released this year, topping every other debut week by more than double. That includes her own Speak Now (Taylor’s Version), which had the second biggest debut week of the year with 716,000 EAUs in July, as well as the third-place finisher, Morgan Wallen‘s One Thing at a Time, which racked up 501,000 EAUs in its first week. Swift’s top-two placement on the list is a remarkable feat, underlining the fact that in some ways, the megastar’s only real competition these days is herself.
Case in point: In its first week, 1989 (Taylor’s Version)‘s 1.359 million in traditional album sales — a metric that encompasses physical sales (vinyl, CD, cassette) and digital downloads — quickly surpassed 2023’s previous best-seller, Swift’s own Midnights, which dropped in October 2022 and had racked up 791,000 in sales so far this year. Swift also has the third most-sold album of the year with Speak Now (Taylor’s Version), which has racked up sales of 755,000 since its July release. All three got to those numbers due to Swift’s strategy of offering multiple collectible physical formats; in the case of 1989 (Taylor Version), that includes five color vinyl variants, eight CD editions and two cassette editions — not to mention two digital download editions (standard and deluxe).
The strategy of offering multiple physical variants is one that’s also successfully employed by many of today’s top K-pop acts, including three who enjoyed No. 1 albums on the Billboard 200 this year: TOMORROW X TOGETHER, Stray Kids and NewJeans. As a result, like Swift, the majority of those acts’ first-week EAUs consist of traditional album sales. The first-week sales of 1989 (Taylor’s Version) comprise a whopping 82.2% of total EAUs — more than any other No. 1 debut album this year aside from TOMORROW X TOGETHER’s The Name Chapter: Temptation EP (94.41%) and Stray Kids’ 5-Star (94.38%). NewJeans’ Get Up EP had nearly as high of a sales percentage at 80.6%. The only other non-K-pop act to boast a similar first-week sales-to-streams ratio was blink-182‘s One More Time…, whose first-week sales made up 81% of total EAUs thanks to the band’s offering of 11 vinyl variants, as well as a CD, cassette and deluxe boxed set.
In fact, the first-week sales of 1989 (Taylor’s Version) were larger than the next five biggest first-week sales tallies of 2023 combined: Speak Now (Taylor’s Version) (507,000), Travis Scott’s Utopia (252,000), Stray Kids’ 5-Star (235,000), TOMORROW X TOGETHER’s The Name Chapter: Temptation EP (152,000) and Olivia Rodrigo’s Guts (150,000).
Unlike these top-selling K-pop acts, whose first-week streaming units tend to hover in the low-five-digit range, Swift’s streaming game stacks up well against the heaviest hitters on that metric. 1989 (Taylor’s Version) racked up 294,000 streaming units in its first week, third only to Drake’s For All the Dogs and Wallen’s One Thing at a Time, which drew 392,000 and 390,000 streaming units, respectively.