Business
Page: 140
Global investment giant Blackstone said on Monday it would pay a penny more to take over Hipgnosis Songs Fund (HSF), the London-listed company that owns Red Hot Chili Peppers’ catalog, because in a revised takeover plan disclosed Monday it is paying less in advisory fees. In a joint announcement, Blackstone and HSF’s board of directors said they approved the offer […]
The Universal Music Group announced the formation of a new division, called the Global Impact Team, that will oversee the music conglomerate’s efforts to promote positive community engagement, environmental sustainability and other related efforts, the company announced today (June 3). The team will be led by Susan Mazo, formerly executive vp of social responsibility, events and special projects, who has been promoted to executive vp/chief impact officer.
Joining the new department will be former music journalist and GreenBiz Group executive Dylan Siegler, who has been named senior vp/head of sustainability at UMG; senior vp and executive director of UMG’s Task Force for Meaningful Change Dr. Menna Demessie, who will be part of the leadership group; Markie Ruzzo, who has been promoted to vp of global impact; and Sharlotte Ritchie, former senior director of communications and head of the U.K. chapter of the Task Force for Meaningful Change, who has been named senior director of global impact and communications. In addition, the social impact marketing agency Inside Projects, founded by Kristin Jones and Arielle Vavasseur which has worked with Netflix, Spotify and the Obamas’ Higher Ground Productions, has made UMG its exclusive partner for the music industry.
“The formation of the Global Impact Team reflects our commitment not only to accelerating our work in these critical areas but to do so in a way that leverages the experience and talent of these exceptional individuals to drive positive impact across our company, our industry and in the communities in which we serve,” UMG chairman/CEO Lucian Grainge said in a statement. “With this new structure we are ensuring that these functions are not siloed, but rather positioned to meaningfully influence all aspects of our global strategy.”
Trending on Billboard
Mazo has been at the forefront of UMG’s efforts in this area since joining the company a decade ago, having co-created the music group’s Amplify Award to honor artists working towards positive change and serving as the founding chair of UMG’s All Together Now Foundation, which works to bring about meaningful change across the globe. In a statement, she said she was honored to lead the new team on behalf of UMG.
“Through our work we’ve demonstrated that sustainability, community engagement and corporate social impact go hand-in-hand with delivering positive results for our employees, artists and shareholders,” Mazo said. “With this next evolution of our team and structure, and with Sir Lucian’s constant encouragement and focus, I’m excited to create and implement a new approach that unites all of the efforts in a way that will amplify UMG’s global impact and brand resonance given our unique position to enact positive change.”
Longtime agent Lee Anderson has been named president of Wasserman Music, the company announced Monday (June 3). Anderson was a founding member of Wasserman Music’s executive team when the agency purchased Paradigm’s music division in 2021. Since playing a pivotal role in establishing Wasserman Music, Anderson has helped develop the company’s business strategy and growth […]
Spotify is asking users to take another hike, raising premium subscription prices in the United States for a second consecutive year. Starting in July, Spotify’s premium individual plan in the U.S. will increase a dollar to $11.99 a month and the duo plan will jump a buck to $16.99 a month, while the family plan will leap-frog $3 to $19.99 a month. The student plan will remain $5.99 a month.
“On Spotify, users discover and enjoy music, podcasts, and audiobooks,” the company said in its announcement on Monday (June 3). “So that we can continue to invest in and innovate on our product features and bring users the best experience, we occasionally update our prices.”
In July 2023, the company enacted similar increases though the family plan was raised just a dollar from $15.99 to $16.99. Last year’s bump in its individual subscription price was a change of pace for Spotify after holding steady at $9.99 in the U.S. for a dozen years. For most of its existence, the company focused on rapid subscription growth over profits, though the mood has since shifted, with major labels and others welcoming price hikes as streaming’s importance to their bottom lines continues to increase.
Trending on Billboard
How important? In the U.S, subscriptions accounted for 59.3% of total recorded music revenues in 2023, up from 57.8% in 2022. Globally, subs accounted for 48.9% of recorded music revenue in 2023, according to the IFPI, up from 48.3% in 2022.
Label leaders are open about wanting higher subscription prices. In early May, Warner Music Group CEO Robert Kyncl called for “further increases” to subscription prices to “ensure that the value that music provides to these platforms is properly recognized,” and Sony Music Entertainment CEO Rob Stringer recently called on streaming services with ad-supported tiers — ie, Spotify — to start charging a “modest fee.”
In April, Bloomberg reported that Spotify would raise its prices in select markets, including the U.K. and Australia, and that the U.S. would soon follow. Spotify’s willingness to raise prices in consecutive years pleased investors, and shares jumped 17.6% that week. Today’s announcement that it would again raise fees in its largest market has Spotify’s stock up nearly 6% in pre-market trading.
The price increase comes at the end of a “period of relative peace” between Spotify and music publishers following the former’s decision to pay the latter — and songwriters — a discounted rate for streams on several tiers. Spotify reasoned that by adding audiobooks to premium offerings like individual, duo and family plans, these subscriptions are now “bundles,” a type of plan that qualifies for a discounted rate on U.S. mechanical royalties given that multiple products are offered under one price. According to Billboard estimates, that change will mean publishers and writers will earn about $150 million less in royalties over the course of its first bundled year.
In response, the NMPA sent the company a cease and desist for alleged unlicensed content and the Mechanical Licensing Collective (MLC) filed a lawsuit explicitly about the bundling. In addition, the Recording Academy, Association of Independent Music Publishers (AIMP), Nashville Songwriters’ Association International (NSAI) and more have made statements against the change.
Earlier this week, hackers on a “dark web” site claimed to have stolen data from hundreds of millions of Ticketmaster user accounts — but a source with knowledge of the investigation into the attack says there is no evidence that Ticketmaster fan accounts were compromised or that private user data was stolen.
Officials at Ticketmaster’s parent company, Live Nation, acknowledged a breach Friday (May 31) in a Securities and Exchange Commission (SEC) filing, noting it had identified “unauthorized activity within a third-party cloud database environment containing Company data (primarily from its Ticketmaster L.L.C. subsidiary) and launched an investigation with industry-leading forensic investigators to understand what happened.”
The statement noted that the company was “cooperating with law enforcement” and that “as of the date of this filing, the incident has not had, and we do not believe it is reasonably likely to have, a material impact on our overall business operations or on our financial condition or results of operations.”
Trending on Billboard
According to the source, federal authorities are currently working to understand how a “dark web” site seized by the federal government was recaptured on Monday (May 27) by hackers with the group ShinyHunters and used to ransom 1.3 terabytes of private data allegedly stolen from Ticketmaster for $500,000. Investigators aren’t sure what, if any, Ticketmaster files are being held in the 1.3 terabyte file, the source adds.
The hack, the source tells Billboard, did not involve a breach of the core Ticketmaster system. Rather, company officials are looking at cloud hosting service Snowflake as a possible site of the hack. A hacker claiming to be involved in the attack told the website Bleeping Computer that they had breached Santander Bank and Ticketmaster after hacking into an employee’s account at Snowflake, which provides cloud hosting services for major companies. According to that report, Snowflake is disputing the claim. Billboard independently confirmed that Ticketmaster uses Snowflake’s cloud hosting service.
When reached for comment, Live Nation directed Billboard back to the SEC filing. Snowflake did not respond to a request for comment by press time.
Australian ticketing firm Ticketek also reported Friday that it had fallen victim to hackers, notifying customers that the names of some of its users, as well as their dates of birth and email addresses, may have been accessed in a data breach. In a statement on its site, Ticketet said the user information had been stored in a cloud-based platform hosted by a “reputable, global third-party supplier”.
“Ticketek has secure encryption methods in place for all passwords and no Ticketek customer account has been compromised,” company officials said in a statement. “Additionally, Ticketek utilises secure encryption methods for online payments and uses a separate system to process online payments, which has not been impacted. Ticketek does not hold identity documents for its customers.”
Live Nation’s share price has proven to be resilient following the U.S. Department of Justice’s lawsuit and effort to break up the company’s concert promotion and ticketing operations. Eight days into what is likely to be a multi-year journey through the court system, shares of Live Nation dropped 2.3% to $93.74 and have held steady after an initial drop the day of the DOJ’s announcement.
Live Nation shares closed at $101.40 on May 22, the day before the DOJ announced its lawsuit, and dropped 7.8% to $93.48 when the news broke the following day. Since the announcement, however, Live Nation shares are up 0.3%. Still, amidst the uncertainty surrounding the outcome of the lawsuit, Live Nation’s year-to-date gain has been pared to just 0.1%, while its 52-week gain has been reduced to 13.2%.
Regardless of the outcome, the mere existence of a protracted legal battle is enough to exert a drag on the stock. In lowering their price target for Live Nation to $116 from $126 this week, J.P. Morgan analysts said in a Wednesday (May 29) note to investors they doubt the DOJ will succeed in breaking up the company and its Ticketmaster ticketing arm, but noted the effect of a “sentiment overhang.” J.P. Morgan maintains its “overweight” rating on Live Nation and analysts “believe that continued execution on [adjusted operating income] growth should drive shares higher, with significant valuation upside should developments in the lawsuit break positive.”
Trending on Billboard
Music stocks were broadly down this week as the biggest companies in the Billboard Global Music Index lost ground. The index fell 2.3% to 1,799.07 as Spotify fell 3.8% to $296.53, Universal Music Group dropped 0.9% to 28.58 euros ($31.03), Warner Music Group sank 2.2% to $29.78 and HYBE dipped 0.2% to 200,000 won ($144.60). Ten of the 20 companies in the index were losers this week, nine gained ground and one was unchanged.
The index has gained 17.9% year-to-date on the strength of music streaming companies. Tencent Music Entertainment and Spotify lead all stocks with gains of 60.4% and 57.8%, respectively, through the end of May. Elsewhere, Hipgnosis Songs Fund has gained 39.7% due to the company’s pending sale to Blackstone, German concert promoter CTS Eventim is up 26.8% and Chinese music streamer Cloud Music has gained 22.7%.
Radio company iHeartMedia has the distinction of being the top-performing music stock of the week while carrying the worst year-to-date performance. Shares of the radio giant rose 6.4% to $0.926, marking a respite from a month-long free fall during which the stock has traded below $1.00 per share over the last seven trading days. Even after this week’s gain, iHeartMedia finished the month of May down 56% and has lost 65.3% year to date.
Reservoir Media shares gained 2.4% to $8.04 this week following the company’s fiscal fourth-quarter earnings release on Thursday (May 30). The company beat guidance for both revenue and adjusted EBITDA and its share price rose as much as 15.5% in the wake of the news. Following the earnings results, B Riley raised its price target for Reservoir to $11.50.
Music streaming company LiveOne fell 6.3% to $1.65 this week after fiscal year results on Thursday showed the company’s revenue grew 19% to $118.4 million. LiveOne shares are up 17.9% year to date.
Overall stocks were broadly down this week but performed better than the Billboard Global Music Index. In the United States, the S&P 500 dropped 0.5% to 5,277.51 and the Nasdaq composite fell 1.1% to 16,735.02. In the United Kingdom, the FTSE 100 fell 0.5% to 8,275.38. South Korea’s KOSPI composite index sank 1.9% to 2,636.52. China’s Shanghai Composite Index declined just 0.1% to 3,086.81.
This week, Sony Music Entertainment CEO Rob Stringer called on streaming companies to charge a “modest fee” for ad-supported streaming. “This would help develop this segment of the streaming business to be more than just a marketing funnel for paid subscription and still be a tremendous value for users,” he said during parent company Sony’s business segment presentations on Thursday.
Stringer’s comments didn’t come as a surprise. In March, after the RIAA released a report on the U.S. recorded music market in 2023, Billboard asked if record labels had become too reliant on subscription services for their revenues. With consumers proving willing to pay for rising prices, free streaming options aren’t producing the royalties to match their popularity.
Now, there’s evidence that subscriptions could become even more important for record labels, music publishers and creators.
Trending on Billboard
This month, Spotify levied additional price increases in the United Kingdom and Australia on top of a global price hike in July 2023. An individual plan now costs 11.99 pounds in the United Kingdom, up from 10.99 pounds, while a family plan was raised to 19.99 pounds from 17.99 pounds. Spotify has not announced a second wave of price increases in the United States and other major markets, but it’s reasonable to assume the United Kingdom and Australia won’t be alone.
The major labels have welcomed these price hikes as streaming’s importance to their bottom lines continues to increase. In the United States, subscriptions accounted for 59.3% of total recorded music revenues in 2023, up from 57.8% in 2022. Globally, subscriptions accounted for 48.9% of recorded music revenue in 2023, according to the IFPI, up from 48.3% in 2022.
Spotify and other platforms could soon offer a high-priced tier for superfans that would make subscriptions an even more valuable component of the music industry. Spotify first mentioned the possibility of “superfan clubs” in an online post in January. The next month, CEO Daniel Ek listed “superfan things” — as well as audiobook sales — among the products Spotify could offer if Apple did not take a 30% cut of in-app purchases.
In April, Michael Nash, Universal Music Group (UMG) executive vp of digital strategy, said during the company’s earnings call that internal research suggests 10% to 20% of subscribers would be willing to pay extra for a “super premium” tier. Nash wasn’t just thinking out loud: Given how carefully public companies choose their words, it stands to reason that he and other UMG executives are encouraging streaming companies to explore ways to offer an elevated service at a higher price.
Recent subscription price increases could be just the beginning of the sort of regular, ongoing price appreciation already seen in the video streaming market. Warner Music Group CEO Robert Kyncl said on the company’s May 9 earnings that call that it “will continue to advocate for further increases” and “ensure that the value that music provides to these platforms is properly recognized.” Reservoir Media CEO Golnar Khosrowshahi said during the company’s earnings call on Thursday (May 30) the company expects “a regular cadence of price increases” from streaming services.
Subscription price appreciation has put free streaming in a poor light, however. As streaming services have been raising prices, a weak advertising market has made free streaming even less valuable. Free streaming isn’t without value — it provides an opportunity to convert listeners into paid subscribers, just as marketing campaigns do. But labels clearly aren’t content with free streaming acting as a means to attract subscribers.
Goldman Sachs actually beat Stringer to the idea of charging for ad-supported music streaming. In the latest Music in the Air report released in early May, its analysts recommended an “advertising light tier for a small charge” as one way of evolving the ad-supported marketplace and floated the idea of using “content or feature restrictions” to make free, ad-supported streaming tiers a less attractive option, thereby pushing free users to a paid tier.
Concerns about free streaming carry over to short-form video platforms such as TikTok. While TikTok is a powerful promotional vehicle, the royalties it generates for rights holders and creators isn’t commensurate with the time people spend on the app. As Stringer said this week, short-form video platforms “are primary consumption sources and they need to be valued accordingly.”
Free options have their place in the marketplace. After all, not everybody is willing or able to pay for a premium service. Mass market products like broadcast radio exist because they are free to the end user. But free music could come under pressure in the coming years. And between additional price increases and possible superfan tiers, combined with overall weakness in ad-supported streaming, subscriptions are poised to command an even larger share of the industry.
Tucker Wetmore has inked a record deal with UMG Nashville, in partnership with Back Blocks Music. Wetmore is managed by Back Blocks Music and is signed to WME for global booking representation.
Earlier this year, Wetmore broke through with the hits “Wine into Whiskey” and “Wind Up Missin’ You.” “Wine Into Whiskey” earned Wetmore his Billboard Hot 100 debut in March, while both songs reached the top 20 on Billboard‘s Hot Country Songs chart.
He follows with his latest release “What Would You Do?” while “Wind Up Missin’ You” will go to country radio with an impact date of June 10, via EMI Records Nashville.
Trending on Billboard
“Before I moved to Nashville, I sat down and made a list of goals for myself,” Wetmore said in a statement. “And for the last four years, I have been working toward them every single day. Today I have checked off one of the biggest I set for myself… signing a record deal. My new family at UMG Nashville checked all of my boxes. The drive, dedication, love and respect we all have for each other outside of music is the real reason why I’m so proud to now call them partners, along with my team at Back Blocks Music. With the fire that has already been started, I couldn’t pick better people to pour gasoline on it. I couldn’t be more excited and confident about this next chapter in my career. I love you all, thank you for continuing to make my dreams come true. God is so good.”
“The world has only seen a glimpse of what Tucker is going to do for country music,” UMG Nashville Chair & CEO, Cindy Mabe, said in a statement. “His strong connection to his purpose shines a light on what has helped build him: his family, his faith, his team and his fans. Representing country music from the Pacific Northwest, Tucker’s distinctive sound, soulful lyrics and his instantly likable personality bring the perfect ingredients to nurture and grow a lasting career. UMG Nashville is so honored to work with Tucker, Rakiyah and Back Blocks Music in building the next era of country music history.”“I’m honored to continue working with Tucker as he expands his team with the brilliant minds at UMG,” shared Back Blocks Music founder/CEO Rakiyah Marshall. “What Tucker and our Back Blocks team have built together in less than three years has been incredible, but it’s just the beginning. I am blown away by the character, talent and work ethic that make up who Tucker is as an artist and human, and am so thankful to be on this ride with the newest UMG Nashville artist.”
Wetmore, who was named Billboard‘s Country Rookie of the Month for May, recently opened shows for Kameron Marlowe‘s Strangers Tour and is set to join Luke Bryan‘s Farm Tour in September. Wetmore also has two songs featured on the soundtrack to the movie Twisters, including “Already Had It” and “Steal My Thunder” (with Conner Smith).
AEG CEO Jay Marciano says Live Nation acts like a monopoly and agrees with the U.S. Department of Justice’s effort to break the concert giant and Ticketmaster up, according to an email Marciano sent out to employees on Friday (May 31). In the memo, the executive accuses the company of “preventing other businesses from competing” and “leaving consumers to suffer the consequences.”
In the two-page email, Marciano said the lawsuit was an important milestone for addressing alleged monopolistic behavior in the concert business, noting “the entire ecosystem of our industry” is at stake as the case winds its way through the U.S. legal system.
“Notwithstanding its claims about its profit margins or its market share, it is a monopoly, and it uses its monopoly power to impose its will on the live entertainment business,” wrote Marciano of Live Nation, later writing, “We strongly believe that DOJ’s lawsuit will succeed and ultimately bring sweeping changes.”
Trending on Billboard
Billboard obtained a copy of the email, which can be read in full below. An AEG spokesman did not respond to a request for comment regarding the letter. Live Nation had not responded to a request for comment at press time.
From: Office of Jay Marciano
No doubt all of you are closely following the ongoing media coverage in the wake of the Department of Justice lawsuit against Live Nation and Ticketmaster. As I mentioned in my note from last week, we spent the last few days carefully reviewing the DOJ filing, as well as Live Nation’s subsequent response to the complaint.
AEG has long maintained that Ticketmaster has a monopoly in the U.S. ticketing marketplace and uses that monopoly power to subsidize Live Nation’s content businesses, preventing other businesses from competing in those areas and leaving consumers to suffer the consequences. This lawsuit is not simply DOJ suing to break up a monopoly; at stake is the entire ecosystem of our industry, one that has long suffered from a badly broken ticketing model. As you know, the cornerstone of Live Nation’s monopoly is Ticketmaster’s exclusive ticketing contracts with the vast majority of major concert venues in the United States. These agreements block competition and innovation and result in higher ticketing fees, denying artists the ability to choose who will ticket their shows and how much their fans should pay.
Following the DOJ filing, Live Nation issued several public comments in service of its ongoing strategy to maintain its dominance – unfairly blaming others for industry problems they have created, making false and misleading statements, and dismissing the significance of the case. Artists, venues, and brokers are not responsible for the broken live entertainment business model in this country – that responsibility lies with Live Nation. Notwithstanding its claims about its profit margins or its market share, it is a monopoly, and it uses its monopoly power to impose its will on the live entertainment business. Live Nation may claim that its margins on promotion are low, but that’s only because it deploys the excessive profits of its ticketing monopoly to outspend what the concert market can profitably sustain. Live Nation does this with the goal of removing competitors from the business and in turn using its continued control of content to preserve a stranglehold on ticketing through venue exclusives.
The DOJ’s case is serious and reflects widespread sentiment among 30 attorneys general from across the country, numerous media outlets, industry commentators, consumer groups, and antitrust experts that Live Nation’s conduct violates the law and harms competition and consumers. While it may take some time, we strongly believe that DOJ’s lawsuit will succeed and ultimately bring sweeping changes resulting in increased competition and more innovation and choice that benefits fans, artists, and ourentire industry. DOJ’s lawsuit means that artists will have a choice in who tickets their concerts, that the ticketing fees consumers pay will be lower, and ultimately that artists and fans will have access to what we all want: more and higher quality live entertainment experiences at a price that fans can afford. We look forward to each and every one of you helping us lay the groundwork now for the future of the industry.
Let’s not get distracted by Live Nation spin. Instead, let’s stay focused on continuing to execute at the highest level, and preparing for a future state of the industry: a world with more competition, more innovation, artist and consumer choice, lower ticketing fees, and more music.Jay
Day After Day Productions (DADP) founder/CEO Seth Shomes announced the hire of respected music industry veteran Melanie Davis as head of touring, along with promotions for Marc Ertel to head of creative and Erin Patterson to head of marketing at the agency.
Davis brings a wealth of experience to DADP, having previously served as head of marketing for ICM Partners’ concert division (2013-2022). He held similar leadership roles at Azoff Music, Nederlander Concerts, Live Nation and Bill Graham Presents.
“One of the things I’m most proud of in my career is that I’ve had the opportunity to work with some really wonderful and groundbreaking members of the touring industry,” said Davis in a statement. “When I first started talking to Day After Day Productions, I knew right away that this was the best next opportunity for me, and I’m thrilled to join a growing, efficient, and hard-working team as part of one of the hottest new companies in the touring space.”
Trending on Billboard
Patterson and Ertel’s promotions help solidify DADP’s marketing prowess. Patterson’s expertise within the department will be crucial in overseeing all marketing initiatives while Ertel’s proven talent in cutting-edge web design, development, social media and digital marketing further strengthens DADP’s creative capabilities.
“Melanie’s experience and strategic vision will be invaluable as we continue to elevate the marketing efforts for our artists and live events,” said Shomes. “Additionally, Erin and Marc’s well-deserved promotions recognize their exceptional contributions to our clients and agency and ensure a cohesive and powerful marketing force.”
DADP’s client roster boasts Rock & Roll Hall of Famer Missy Elliott, Ludacris, Flo Rida, Bow Wow, The Queens of R&B featuring Xscape, An Evening of Icons featuring The Commodores, The Pointer Sisters, El DeBarge and The Spinners, Staind, Aaron Lewis, “Hollywood medium” Tyler Henry, 98 Degrees, Rob Thomas’ Sidewalk Angels Foundation, Wayne Newton, Engelbert Humperdinck and more.
Davis, Ertel, and Patterson will be supported by marketing coordinator Justin Scott-Young and DADP’s central services division.