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In a bid to further grow its operation and expand its international footprint, Bresh — the brand behind the Fiesta Bresh parties — has partnered with New York based investment firm Carroll Street Capital.
The two companies will launch Bresh Global, an international media and branded live events platform. Carroll Street will provide an infusion of cash as well as strategic access and support to continue growing the Bresh brand, whose global presence has multiplied in the past two years. The terms of the deal were not disclosed.
Bresh’s leadership will remain in place, with Tomás Allande as CEO, Alejandro “Bröder” Saporiti as artistic director, and founder Jaime James involved in all operations.
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Eduardo García Fernández, co-founder and managing partner of Carroll Street Capital will now also be chairman of Bresh global.
Bresh Global will establish its headquarters in Miami, with additional offices in Los Angeles. The company currently has offices in Buenos Aires and Madrid.
“Our mission at Bresh Global is to create human connections through entertainment and collective experiences,” said Jaime James in a press release. “In a world increasingly dominated by digital interactions, live events have the unique power to bring people together and transcend cultures. With this expansion, we aim to bring moments of joy to new audiences on a global scale.”
“We are excited about the opportunity to elevate Bresh to new heights,” added Eduardo García Fernández. “This partnership brings additional resources to Bresh to accelerate its growth and introduce new verticals and formats worldwide.”
Bresh, whose slogan is “The most beautiful party in the world,” is an entertainment company known for parties targeted at Gen Zs around the world and built on the concept of inclusivity rather than exclusivity. Bresh tickets are eminently affordable — in Miami, the cheapest ticket is $25 — and there is no doorman denying entry based on gender or looks. Instead of hiring celebrity DJs for its parties, all Fiesta Bresh DJs are Bresh-trained. Perhaps because of its inclusivity DNA, the parties have become magnets for Latin celebrities, including the likes of Lionel Messi, Emilia and Tini, Rauw Alejandro and Bizarrap, who have all been spotted at Bresh parties.
Bresh, which began hosting parties in Argentina, has expanded its operations to over 20 countries, and now puts together some 500 annual events, including in the U.S. and Spain.
Sources say Bresh and Carroll have been in conversations for the past two years and share the vision that “happiness and connections are essential, regardless of who you are or where you live.”
Sean “Diddy” Combs was once again refused bail Wednesday (Sept. 18) in his sex abuse case, after a federal judge ruled that the indicted rapper and music executive would pose a flight risk and might intimidate witnesses if released, the AP reports.
At a hearing in Manhattan federal court, Combs’ lawyers renewed their request to let him await trial on sex trafficking and racketeering charges under house arrest at his Miami mansion, once again offering to pay a $50 million bond and submit to other strict requirements.
But just like a magistrate judge had ruled a day earlier, Judge Andrew L. Carter said Tuesday that Diddy must instead wait for the trial in a Brooklyn federal prison, citing concerns that the once-powerful executive could pose a danger to others or obstruct the government’s case.
Combs, also known as Puff Daddy and P. Diddy, was once one of the most powerful men in the music industry. But on Tuesday he was indicted by federal prosecutors over accusations of sex trafficking, forced labor, kidnapping, arson and bribery. If convicted on all the charges, he potentially faces a sentence of life in prison.
In Tuesday’s indictment, prosecutors accused Combs of running a sprawling criminal operation aimed at satisfying his need for “sexual gratification.” The charges detailed “freak offs” in which Combs and others would allegedly ply victims with drugs and then coerce them into having sex with male sex workers, as well as alleged acts of violence and intimidation to keep victims silent.
“For decades, Sean Combs … abused, threatened and coerced women and others around him to fulfill his sexual desires, protect his reputation and conceal his conduct,” prosecutors wrote in the indictment. “To do so, Combs relied on the employees, resources and the influence of his multi-faceted business empire that he led and controlled.”
At his initial arraignment on Tuesday, Combs’ lawyers made their arguments to Magistrate Judge Robyn F. Tarnofsky, who ultimately denied Diddy’s request for bail. She cited, among other things, her “very significant concerns” about Combs’ substance abuse and “what appears to be anger issues,” according to the Associated Press.
A day later, the rapper’s lawyers exercised their right to renew their request for bail to Judge Carter, the full federal district judge who will be overseeing the case and the eventual jury trial.
Ahead of Wednesday’s hearing, Combs’ lawyers filed an updated “package” of bail restrictions that they said would mitigate any concerns raised by prosecutors. In addition to the $50 million bond and house arrest, they promised to submit to GPS monitoring, travel restrictions, weekly drug testing and constant monitoring of visitors. Given the nature of the allegations, they also offered to “restrict female visitors to Mr. Combs’ residence except for family, or mothers of his children.”
But the judge was once again swayed by prosecutors, who repeated their warnings that Combs was a “serial abuser” who had a history of both violence and witness intimidation, raising the prospect that he might attempt to obstruct the case against him.
Universal Music Group and Spotify are in “advanced talks” over a high-priced, superfan tier of the streaming service that offers a better user experience than the standard subscription plan. The status of the negotiations were revealed by UMG CFO Boyd Muir on Tuesday during the company’s Capital Markets Day presentation in London. That a Spotify […]
A federal judge has dismissed a lawsuit accusing Madison Square Garden executive James Dolan of pressuring a masseuse into unwanted sex while his band toured with the Eagles, though elements of the case will likely continue in state court.
Kellye Croft sued Dolan earlier this year, claiming he repeatedly coerced her into “unlawful and unwelcome sex acts” during the 2013 tour. The lawsuit also included assault allegations against disgraced film producer Harvey Weinstein, claiming Dolan facilitated the incident with the convicted rapist.
But in a ruling Tuesday, Judge Percy Anderson permanently dismissed Croft’s only federal allegation — a claim that Dolan had violated federal sex trafficking laws. The judge said Croft had failed to meet the basic requirements to sue under the statute.
The case also includes separate state-law accusations, including claims of sexual battery and aiding and abetting of sexual assault against Dolan and a claim of sexual assault against Weinstein. But without any federal claims remaining, Anderson ruled Tuesday that he no longer had jurisdiction to hear the case.
The decision means that the current case in federal court is over, but that Croft can re-file her other allegations in New York state court. In a statement Wednesday, her attorneys vowed to do so, saying that their “fight for Ms. Croft is just beginning.”
“We respectfully disagree with the district court’s decision, which we believe incorrectly interprets the federal sex trafficking law and undermines critically important protections for sex trafficking survivors,” said Kevin Mintzer and Meredith Firetog of the law firm Wigdor, adding that they would appeal that decision. “We will also continue to pursue Ms. Croft’s sexual battery claims against James Dolan and Harvey Weinstein, which remain unaffected by the decision.”
In his own statement, a spokesperson for Dolan said, “We are very pleased with the dismissal of the lawsuit, which was a malicious attempt to assert horrific allegations by an attorney who subverts the legal system for personal gain.”
Croft sued in January, claiming she had been hired to serve as a massage therapist for Glenn Frey during the 2013 tour, on which Dolan’s band (JD & The Straight Shot) opened for Eagles. She says she thought the job was the “opportunity of a lifetime,” but that she quickly realized the real reason she was there: “Dolan was extremely assertive, and pressured Ms. Croft into unwanted sexual intercourse.”
Dolan, whose company also owns Manhattan’s Radio City Music Hall, the Las Vegas Sphere and other prominent music venues, has strongly denied the allegations, calling Croft an “opportunist” who is “looking for a quick payday.”
One key legal allegation in the lawsuit was that Dolan and others violated a federal sex trafficking statute — namely, by fraudulently transporting her across state lines for purposes of providing forced sexual favors to Dolan. That claim was dismissed by Anderson earlier this year, but he then gave Croft one last chance to update her case with a viable argument.
In his ruling Tuesday, he said she had failed to do so. The federal sex trafficking law requires a “commercial sex act,” and the judge said that Croft had failed to allege that her sexual relationship with Dolan was the direct result of his promises of career advancement.
“Plaintiff [claims she] received promises from Dolan that she would be invited on the Eagles’ European tour and could potentially receive work as a massage therapist for tours at Madison Square Garden,” the judge wrote. “While the [lawsuit] alleges that plaintiff may have hoped to obtain a future career benefit from her relationship, it fails to directly allege that she went to Dolan’s room and continued to engage in a sexual relationship with him in order to receive the alleged promised benefits.”
On Sept. 4, the public learned of the first-ever U.S. criminal case addressing streaming fraud. In the indictment, federal prosecutors claim that a North Carolina-based musician named Michael “Mike” Smith stole $10 million dollars from streaming services by using bots to artificially inflate the streaming numbers for hundreds of thousands of mostly AI-generated songs. A day later, Billboard reported a link between Smith and the popular generative AI music company Boomy; Boomy’s CEO Alex Mitchell and Smith were listed on hundreds of tracks as co-writers.
(The AI company and its CEO that supplied songs to Smith were not charged with any crime and were left unnamed in the indictment. Mitchell replied to Billboard’s request for comment, saying, “We were shocked by the details in the recently filed indictment of Michael Smith, which we are reviewing. Michael Smith consistently represented himself as legitimate.”)
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This case marks the end of generative AI music’s honeymoon phase (or “hype” phase) with the music industry establishment. Though there have always been naysayers about AI in the music business, the industry’s top leaders have been largely optimistic about it, provided AI tools were used ethically and responsibly. “If we strike the right balance, I believe AI will amplify human imagination and enrich musical creativity in extraordinary new ways,” said Lucian Grainge, Universal Music Group’s chairman/CEO, in a statement about UMG’s partnership with YouTube for its AI Music Incubator. “You have to embrace technology [like AI], because it’s not like you can put technology in a bottle,” WMG CEO Robert Kyncl said during an onstage interview at the Code Conference last September.
Each major music label group has established its own partnerships to get in on the AI gold rush since late 2022. UMG coupled with YouTube for an AI incubator program and SoundLabs for “responsible” AI plug-ins. Sony Music started collaborating with Vermillio for an AI remix project around David Gilmour and The Orb’s latest album. Warner Music Group’s ADA struck a deal with Boomy, which was previously distributing its tracks with Downtown, and invested in dynamic music company Lifescore.
Artists and producers jumped in, too — from Lauv’s collaboration with Hooky to create an AI-assisted Korean-language translation of his newest single to 3LAU’s investment in Suno. Songwriters reportedly used AI voices on pitch records. Artists like Drake and Timbaland used unauthorized AI voices to resurrect stars like Tupac Shakur and Notorious B.I.G. in songs they posted to social media. Metro Boomin sampled an AI song from Udio to create his viral “BBL Drizzy” remix. (Drake later sampled “BBL Drizzy” himself in his feature on the song “U My Everything” by Sexyy Red.) The estate of “La Vie En Rose” singer Edith Piaf, in partnership with WMG, developed an animated documentary of her life, using AI voices and images. The list goes on.
While these industry leaders haven’t spoken publicly about the overall state of AI music in a few months, I can’t imagine their tone is now as sunny as it once was, given the events of the summer. It all started with Sony Music releasing a statement that warned over 700 AI companies to not scrape the label group’s copyrighted data in May. Then Billboard broke the news that the majors were filing a sweeping copyright infringement lawsuit against Suno and Udio in June. In July, WMG issued a similar warning to AI companies as Sony had. In August, Billboard reported that AI music adoption has been much slower than was anticipated, the NO FAKES Act was introduced to the Senate, and Donald Trump deepfaked a false Taylor Swift endorsement of his presidential run on Truth Social — an event that Swift herself referenced as a driving factor in her social media post endorsing Kamala Harris for president.
And finally, the AI music streaming fraud case dropped. It proved what many had feared: AI music flooding onto streaming services is diverting significant sums of royalties away from human artists, while also making streaming fraud harder to detect. I imagine Grainge is particularly interested in this case, given that its findings support his recent crusade to change the way streaming services pay out royalties to benefit “professional artists” over hobbyists, white noise makers and AI content generators.
When I posted my follow up reporting on LinkedIn, Declan McGlynn, director of communications for Voice-Swap, an “ethical” AI voice company, summed up people’s feelings well in his comment: “Can yall stop stealing shit for like, five seconds[?] Makes it so much harder for the rest of us.”
One AI music executive told me that the majors have said that they would use a “carrot and stick” approach to this growing field, providing opportunities to the good guys and meting out punishment for the bad guys. Some of those carrots were handed out early while the hype was still fresh around AI because music companies wanted to appear innovative — and because they were desperate to prove to shareholders and artists that they learned from the mistakes of Napster, iTunes, early YouTube and TikTok. Now that they’ve made their point and the initial shock of these models has worn off, the majors have started using those sticks.
This summer, then, has represented a serious vibe shift, to borrow New York magazine’s memeable term. All this recent bad press for generative AI music, including the reports about slow adoption, seems destined to result in far fewer new partnerships announced between generative AI music companies and the music business establishment, at least for the time being. Investment could be harder to come by, too. Some players who benefitted from early hype but never amassed an audience or formed a strong business will start to fall.
This doesn’t mean that generative AI music-related companies won’t find their place in the industry eventually — some certainly will. This is just a common phase in the life cycle of new tech. Investors will probably increasingly turn their attention to other AI music companies, those largely not of the generative variety, that promise to solve the problems created by generative AI music. Metadata management and attribution, fingerprinting, AI music detection, music discovery — it’s a lot less sexy than a consumer-facing product making songs at the click of a button, but it’s a lot safer, and is solving real problems in practical ways.
There’s still time to continue to set the guardrails for generative AI music before it is adopted en masse. The music business has already started working toward protecting artists’ names, images, likenesses and voices and has fought back against unauthorized AI training on their copyrights. Now it’s time for the streaming services to join in and finally set some rules for how AI generated music is treated on its platforms.
This story was published as part of Billboard’s new music technology newsletter ‘Machine Learnings.’ Sign up for ‘Machine Learnings,’ and Billboard’s other newsletters, here.
If you have any tips about the AI music streaming fraud case, Billboard is continuing to report on it. Please reach out to krobinson@billboard.com.
Randy Goodman, who has been chairman and CEO of Sony Music Nashville since 2015, will retire at the end of 2024.
“Thank you to Randy for leading our Nashville company through the last nine years and providing some of the biggest new superstars in the genre of country music,” Sony Music Group Chairman Rob Stringer said in a statement announcing the news. “These artists are part of his legacy, and he should be proud of that. We look forward to building on the strong base he and his team have set up for the future.”
“Thank you to Rob for his leadership and support throughout my entire time at the company,” said Goodman, who has also overseen Sony Music’s Christian music enterprise, Provident Entertainment, during that period. “The Sony Music Nashville and Provident Entertainment teams are some of the finest executives I’ve had the privilege of working with over my many years in this business.
“There are too many people to thank specifically who helped and supported me along the way: my family foremost for their support and grace in letting me stay with it all these years,” he continued. “Looking back over my career’s arc, I am humbled and honored to have had the privilege to work with the artist legends I have; and as importantly, the teams I’ve been privileged to work with and lead. As excited as I am for what’s next no doubt it is bittersweet. It’s all been a gift.”
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At Sony Music, Goodman and his team have shepherd the careers of stars Luke Combs, Kane Brown, Maren Morris, Megan Moroney and Nate Smith, as well as key breaking artists including Mitchell Tenpenny, Kameron Marlowe, Corey Kent and Morgan Wade among others.
Goodman, a perennial on Billboard’s Country Power Players list, spent more than 35 years as a pillar in the Nashville music community.
Goodman’s extensive career includes 16 years at RCA Records, where he spent five years as senior vp, global marketing for RCA in New York prior to returning to Nashville. He also served as executive vp and GM of the RCA Label Group in Nashville, which would later become known as Sony Music Nashville. While at RCA, he worked with such artists as Waylon Jennings, Charley Pride, Alabama, Kenny Chesney, Dave Matthews Band, Wu-Tang Clan, Dolly Parton, Clint Black, Keith Whitley and The Judds.
In 1997, Goodman opened Lyric Street Records for the Walt Disney Co., where he stayed until 2010, working with Rascal Flatts, Aaron Tippin and American Idol finalist Josh Gracin.
Goodman is a former president and chairman of the CMA Board and a current member. He also co-chaired the Music City Music Council with former Nashville Mayor Karl Dean and is a board member of the Country Music Hall of Fame and Museum. In 2019, he was named the Presidential Award recipient for outstanding executive achievement by Music Biz.
No word yet on a succession plan.
This is The Legal Beat, a weekly newsletter about music law from Billboard Pro, offering you a one-stop cheat sheet of big new cases, important rulings and all the fun stuff in between.
This week: Diddy faces a sweeping criminal indictment that accuses him of decades of sexual abuse; Miley Cyrus gets hit with a copyright lawsuit over allegations that her chart-topping “Flowers” infringed a Bruno Mars track; Eddy Grant wins his case against Donald Trump over the use of “Electric Avenue” in a campaign video; and much more.
THE BIG STORY: Diddy’s Downfall
Less than a year after news broke about a civil lawsuit containing brutal accusations of sexual abuse against Sean “Diddy” Combs, the other shoe has finally dropped.
The once-powerful rapper was arrested in New York City on Monday night on federal racketeering and sex trafficking charges. When prosecutors unsealed the indictment on Tuesday, they detailed allegations of a sprawling criminal operation with a single aim: “fulfilling the personal desires of Combs, particularly those related to sexual gratification.”
“For decades, Sean Combs … abused, threatened and coerced women and others around him to fulfill his sexual desires, protect his reputation and conceal his conduct,” the indictment reads. If convicted of the charges, Combs is facing a minimum sentence of 15 years in prison and a maximum of life behind bars.
Later on Tuesday, Combs was arraigned in federal court and denied bail, leaving him in jail until an eventual trial. The judge said Diddy posed a flight risk and was potentially a danger to others, swayed by arguments from prosecutors that he was a “serial abuser” who had a history of both violence and witness intimidation.
In many ways, the charges against Diddy mirror those against R. Kelly, who was sentenced to 30 years in prison in 2022 over a decades-long scheme to abuse underage women.
Like Kelly, prosecutors are targeting Combs under the Racketeer Influenced and Corrupt Organizations Act, a federal statute that bans criminal enterprises composed of multiple people. While RICO is best known as a tool to fight mobsters and drug cartels, the Kelly case proved that it can be equally effective at targeting a superstar musician who used his fame and money to build what amounts to a criminal organization – only one aimed at facilitating sexual abuse.
And like the Kelly case, the indictment of Combs has led to tough questions about why it took so long for law enforcement to act. When asked directly at Tuesday’s press conference, Manhattan U.S. Attorney Damian Williams demurred: “I can’t tell you why it took so long. I think the better focus is on the fact that we are here today and we are committed to making sure that justice is done.”
For more on the case, go read our full story on Combs’ indictment, including access to the charging documents and statements from prosecutors, as well as our coverage on the bail hearing. And stay tuned as the case unfolds, because Billboard will be keeping you updated with every development.
THE OTHER BIG STORY: I Can Write My Own Songs?
Nearly two years after fans speculated that Miley Cyrus’ chart-topping “Flowers” was making pointed references to Bruno Mars’ “When I Was Your Man,” a company that owns part of the Mars song is suing her for copyright infringement. The complaint was filed not by Mars himself but by an entity called Tempo Music Investments that bought a share of the copyright to his song from one of its co-writers. In it, lawyers for that group claim the two songs have “striking similarities.” Whether or not they’re “striking,” the songs have clear connections. In the time-honored tradition of an “answer song,” Cyrus inverted Mars’ lyrics and seemed to repeatedly rebut them – in one instance telling fans “I can buy myself flowers” when Mars said “I should’ve bought you flowers.” The reason for the references? Mars’ song was apparently a favorite of Cyrus’ ex-husband Liam Hemsworth, and the theory goes that her repeated allusions were a reference to their split. At the time, legal experts told Billboard that Cyrus was likely not violating copyrights simply by using similar lyrics to fire back at the earlier song. This week’s lawsuit says the similarities go well beyond the lyrics, including “melodic and harmonic material,” “pitch ending pattern,” and “bass-line structure.” But experts remain skeptical. To understand why, go read our full story, including comments from copyright lawyers and access to the full complaint filed against Cyrus.
Other top stories this week…
‘ELECTRIC’ INFRINGEMENT – A federal judge ruled that Donald Trump infringed copyrights by using Eddy Grant’s iconic “Electric Avenue” in a 2020 campaign video without permission. Trump claimed that he made legal fair use of the song by using it in a video attacking Joe Biden, but the judge called it something else: “wholesale copying of music to accompany a political campaign ad.” Up next: A ruling on how much Grant is owed in damages. MORE DIDDY -Tuesday’s indictment overshadowed everything else, but it wasn’t the only Diddy Law story from the past week. The rapper was hit with a new civil lawsuit from Dawn Richard, a winner of MTV’s Making the Band who says he subjected her to years of “abuse and exploitation.” He also moved to set aside a $100 million default judgment won by a Michigan inmate, arguing he was never served with the “frivolous” sexual assault allegations and would have easily defeated them if he had been. DOLAN DEPOSITION – A federal judge ruled that Madison Square Garden owner James Dolan must sit for a deposition over the infamous 2017 ejection of ex-NBA player Charles Oakley from the Manhattan arena, ruling that the CEO “had a courtside seat” for the incident. Defense lawyers argued that Dolan, who also controls the Las Vegas Sphere and Radio City Music Hall, shouldn’t be personally dragged into a deposition, but a judge said the exec “likely possesses relevant knowledge that cannot be obtained from other witnesses.”RATE DEBATE – BMI filed a rate-setting case against SiriusXM in federal court after they failed to reach a deal during more than two years of negotiations, arguing the radio company is “no longer a startup” and must pay more to songwriters. Among other things, BMI pointed to SiriusXM’s increasing reliance on internet streaming rather than old-school satellite radio. “Digital music services pay higher rates to BMI than satellite radio, and the new SiriusXM rate should reflect this expansion of digital performances.”TAYLOR ENDORSEMENT – When Taylor Swift endorsed Kamala Harris for president, the singer said she was spurred to action by her fears about artificial intelligence — namely, an incident last month in which Donald Trump posted AI-generated images that falsely claimed the superstar’s support. Experts told Billboard at the time that Swift could have sued Trump, but they predicted (accurately, it turns out) that the star would probably just fight Trump’s fakery with a legitimate endorsement of her own.PHARMA FIGHT – Johnson & Johnson was hit with a copyright lawsuit accusing the pharma giant of “rampant infringement” of instrumental music in YouTube and Facebook videos. Associated Production Music (APM) – a joint venture of Sony Music Publishing and Universal Music Publishing — claimed J&J released nearly 80 different internet videos featuring unlicensed music from its catalog.
Universal Music Group opened up about how the company plans to keep growing in amid an evolving streaming landscape on Tuesday at the company’s capital markets day. Held in the storied Abbey Road studios in London, UMG’s c-suite and various executives from Republic, Interscope, Virgin Music Group and more described how they build a world around superstars like Taylor Swift, The Weeknd and Olivia Rodrigo, and how they’ve launched new acts like the Afrobeats star Rema.
The crowd of mostly financial industry analysts and investors also got an overview of the collectibles UMG hopes superfans will open their wallets for, its talks with Spotify about higher-priced premium subscription plans, and it’s new strategy to keep streaming revenues growing by an 8-10% compound average growth rate until fiscal year 2028.
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Streaming 2.0
Despite industry reports that new streaming subscribers are hard to find in developed markets and that streaming growth rates in smaller music markets like Brazil, Italy and Germany are besting major markets like the U.S., UMG Chairman and Chief Executive Officer Lucian Grainge gave an overview of UMG’s new strategy — dubbed Streaming 2.0 — to get more revenue out of streaming.
“The addressable market — in both established markets and fast-growing high potential music markets — is massive,” Grainge said, referring to streaming subscriptions. “We expect more than a billion subscribers by the end of the decade, and we constantly ask ourselves, ‘How long could it take us to get to 2 billion?’”
“While streaming has delivered robust growth to UMG for over a decade, Streaming 2.0 will deliver a new age of innovation, consumer segmentation, geographic expansion and greater value through both subscriber and [average revenue per user] growth,” Grainge said.
The strategy relies in part on increasing the number of streaming subscriptions in developing markets where UMG says subscribers meaningfully contribute to monthly trade average revenue per user. Less than half of people in established markets have streaming subscriptions, with less than 25% of the population in Japan holding subscriptions, UMG chief financial officer Boyd Muir said.
UMG said it also expects a new wave of subscribers in these markets to come from a second cohort of older listeners starting up subscriptions and younger, digitally native music fans getting older and spending more on their streaming subscriptions. They also expect to target audiobook listeners and satellite radio subscribers for music streaming subscriptions.
Super premium streaming subscriptions
UMG’s Streaming 2.0 strategy also relies on innovation in streaming, possibly like the development of high definition streaming plans like the one Spotify‘sDanielEk hinted in June is on the horizon. Ek said that “delux” subscription could cost around $17-$18 per month for a single account.
UMG is in advanced talks to partner with Spotify on the development of that higher-priced subscription plan, Muir said Tuesday. During his presentation, UMG chief digital officer Michael Nash compared it to “another exciting” example of higher priced subscription plans — Tencent Music Entertainment’s super VIP tier, which costs five times as much as the standard tier.
Muir said “a double digit percentage” of TME’s subscriber base signed up for the super VIP plan. UMG’s own research tells it that 23% of current streaming subscribers would pay more for a “better music experience.”
Monetizing superfans
UMG execs spoke admiringly of the good old days when superfans lined up outside stores to spend gobs of money on Michael Jackson and Shania Twain CDs. The reason why? Devotees of artists in prior decades spent more per capita on music, merchandise, concert tickets and collectibles than streaming-era fans.
“Superfans, the most avid 20-30% of all music listeners, once drove over 70% of recorded music spending,” Muir said. “Streaming monetizes them, but not nearly as well in the past. This is an enormous opportunity. We are seeing dramatic growth in revenues that are complimentary to spending.”
He was referring to premium music — vinyl, collectible CDs and cassettes — and merchandise collectibles. UMG has seen its revenues from products sold directly to consumers through some 1,300 odd online stores grow at a 33% compound annual growth rate in recent years.
When something like a $55-Olivia Rodrigo Stanley Cup gets sold, UMG collects as much information as it can, and the purchaser becomes one of the 100 million fans in what Muir referred to as “our owned audience.”
Kaz Kobayashi is stepping down as president and CEO of Warner Music Japan after a decade in the role, the company announced on Wednesday (Sept. 18). His successor will be announced soon, and he is currently working with Dr. Kenji Kitatani, the newly appointed chairman of Warner Music Japan, on a transition plan. Kobayashi, who […]
Townsend Music, a U.K.-based distributor and direct-to-consumer retailer, has been acquired by Artone, a Dutch business with a portfolio of companies that caters to the physical music marketplace. Terms of the deal were not disclosed.
Townsend Music founder Steve Bamber called the acquisition “a clear opportunity to push its European expansion strategy forward quickly, with Artone’s well established sales, distribution and manufacturing facilities already in place.”
Artone can quickly scale up and meets its goal of becoming a global D2C company, according to sales director Bruce McKenzie. “Artone’s suite of services from vinyl manufacturing, EU physical distribution, and label services gives us perfect synergy to offer both our D2C clients and super-fan customers a super charged service,” he said in a statement.
Artone was formed in 2022 from the merger of Bertus Distribution and Record Industry, a vinyl pressing plant based in Haarlem, Netherlands. The portfolio of companies also includes Sound Factory, which provides artists and labels with solutions to sell exclusive content directly to consumers; two labels that release music in physical formats, Music on Vinyl and Music on CD; and V2 Benelux, which provides label services in the Netherlands, Belgium, France and Germany.
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“The acquisition is another welcome step for Artone’s continued expansion of its service portfolio and gives us presence in the UK market,” CEO Jan Willem Kaasschieter said in a statement. “This acquisition strengthens our position as a global leader in physical music distribution. We’re excited about the opportunities this will bring and look forward to driving the future of physical music together, developing further global reach and innovative solutions for the benefit of the music industry.”
Physical music sales continue to show strong growth as streaming takes a larger portion of the global market. In the United Kingdom, vinyl sales grew 13.5% and CD sales improved 3.2% in the first half of 2024, according to the Entertainment Retailers’ Association.
With vinyl sales continuing to rise and streaming growth slowing, the music industry is putting increased focused on reaching “superfans” willing to pay more for premium experiences and tangible products. The unmet opportunity to monetize superfans was a key talking point in Universal Music Group’s Capital Markets Day presentation on Tuesday (Sept. 17). “We’re creating and monetizing new ways to meet the superfans pent up demand for products, experiences and access that brings them closer to the music and to the artists that they love,” said CEO Lucian Grainge.
Warner Music Group CEO Robert Kyncl has also made superfans a priority during his tenure. “One of the most important things is to figure out a direct relationship with the most valuable fans,” Kyncl said at the Morgan Stanley Technology, Media and Telecom Conference on March 6. “Because it’s not only important to monetization and new revenue stream, but it’s also important to launching new music, which is the core of what we do.”
Effectively reaching superfans could be a lucrative endeavor for record labels. In its latest “Music in the Air” report, Goldman Sachs analysts put the global superfan addressable market at $4.5 billion—nearly 16% of the $28.6 billion recorded music market in 2023, according to the IFPI. Much of that revenue could come from music subscription services’ high-priced, high-value offerings that go beyond the current premium subscription tier.
Physical goods are a proven way to connect with superfans. Market research firm MusicWatch found that 20% of U.S. music fans are superfans for their favorite artists who go to concerts, buy merchandise and albums and would be wiling to spend more for VIP experiences from the artist. At the same time, more superfan sales are coming from the types of direct-to-consumer stores offered by Townsend. In the first half of 2023, U.S. direct-to-consumer sales tracked by Luminate increased 20% year-over-year.