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AMC Theatres beat Wall Street expectations, reporting fourth-quarter revenue of $1.10 billion, up from $990.9 million in 2022 and a net loss of $182 million, compared to a net loss of $287.7 million in 2022.
For the full year, the theater chain reported total revenue of $4.8 billion, up from $3.9 billion in 2022. Net loss improved to $396.6 million, up $577 million from a year earlier.
AMC Theater CEO Adam Aron said that “literally all” of the increase in revenue in the fourth quarter was driven by Taylor Swift and Beyoncé. Total attendance in the fourth-quarter grew to 51.9 million, up 4.7% from a year ago.
“What is particularly noteworthy is how much AMC benefited from our trailblazing industry leading efforts with our highly successful distribution of two concert movies Taylor Swift: The Eras Tour and Renaissance: A Film By Beyoncé,” Aron wrote in the press release. “Despite a diminished box office overall, in the fourth quarter compared to the same quarter a year ago, AMC’s revenue grew by 11.5 percent and AMC’s adjusted EBITDA almost tripled. Literally, all of that increase in AMC’s Revenue and EBITDA is attributable to our having shown these two movies in our theatres in the U.S. and internationally.”
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On the earnings call, AMC Theatres management said it is introducing a new version of its Nicole Kidman commercial.”
“Before every movie starts, and starting March 1, we’re going to show three different, 30-second Nicole Kidman commercials before the movie starts on a rotating basis,” Aron said.
A spokesperson later clarified that the spots are not “new ads or sequels” but “never-before-seen-in-theatres versions of the original, iconic ad.”
Aron said the company’s “phones have been ringing off the hook” with requests from musical artists and that the theater chain will have more concert movies “later in 2024 and/or 2025.”
Aside from these two films, fourth-quarter domestic industry-wide box office was down 35% versus 2019, as the industry continues to deal with lingering impact from the dual strikes. Still, Aaron said he believes the strike impacts will starts to ease up this spring.
“AMC believes that the box office will start to strengthen again as soon as this coming month of March, in some of the summer months and especially in the latter third of this year. And over the medium term, we are both bullish and optimistic. With all the caveats that no one’s crystal ball is perfect, we currently expect that the industry box office in 2025 will grow by $1 to $2 billion, or more, in size over 2024,” he said.
Due to the impact from the strikes, which Aron reiterated he believes is “temporary,” AMC has “tightened” its operating hours, cut costs, “right-sized” its theater portfolio, as in adding two new high performing theaters and closing nine underperforming locations, and “pushed the innovation envelope in merchandise and food & beverage sales,” Aaron wrote. Part of off-setting the strike impact was also establishing a new revenue stream through the distribution of concert movies.
The company also conducted several stock exchange agreements at the end of 2023 to pay down some of its debt. In the full year 2023, AMC reduced the principal balance of its debt by $448.1 million.
“Given AMC’s proven ability to thread the needle in coping with one Herculean challenge after another, we are confident in our company’s future,” Aron said.
Still, during the call, Aron addressed the pain he believes is felt by his retail shareholders noting that “it was not a good year” for them. He added that he is a shareholder in the company too and has also felt their pain, but will now be taking an added step.
Last week, Aron said he recommended to the AMC Board of Directors that for 12 months, starting now, his target compensation be reduced by 25% versus the previous year’s target.
“I am a shareholder. I am holding. I’m not selling. I ride with you,” Aron said. “So when you do well financially with AMC, I will too. But if you’re hurting from that investment, I believe that I too, should be hurting with you as well.”
At the end of the call, Aron addressed the retail investors who have helped prop up the stock, noting that “it was not a good year,” for them, and to whom he said he had promised “straight talk” on what’s happening at AMC.
He said he also wanted to address the “garbage information floating around Twitter, YouTube and other corners of the internet about AMC,” including the “hubbub and litigation” that surrounded AMC and the Delaware Courts in 2023 and further dilution of their shares by selling preferred equity units in Aug 2022 or APES. The cash from these sales was necessary to keep the cash afloat, he argued.
“We did, in dilution, what was absolutely vital for your company to do to get through the many challenges that were thrown our way,” he said.
He also addressed a conspiracy theory about the management team at AMC.
“It’s disappointing how many people out there typing into their Twitter feeds that the management team at AMC is somehow actively working against the interests of our real retail shareholders, and standing nefariously on the side of evil,” Aron said, pointing to this quarter’s results.
“One doesn’t launch popcorn to the home, or blaze new trails with innovative concept movies that have been incredibly profitable and reputationally enhancing for AMC, if one is trying to undermine our company’s success,” he added.
Still, even after that outreach, the stock continued falling 9 percent after the call Wednesday.
This article was originally published by The Hollywood Reporter.
The Swedish company Pophouse has been a player in the rights market since 2022. Led by former Universal Music Sweden chief Per Sundin, they backed ABBA’s Voyage show in London, and acquired rights from Swedish House Mafia and Avicii.
Now the company has announced its first deal with a U.S. artist, the rainbow-haired pop icon Cyndi Lauper. The deal includes the majority share of Lauper’s publishing as well as her royalties from her recorded music. Lauper has sold more than 50 million records worldwide, with hits including “Girls Just Want to Have Fun” and “True Colors,” and she has writing credits on some of her biggest hits, including “Time After Time” and “She Bop.” (The deal does not include her Broadway music, which includes the hit show Kinky Boots.) The share acquired by Pophouse was not disclosed.
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Pophouse, which was founded in 2014 by investor Conni Jonsson and ABBA frontman Björn Ulvaeus, is known for trying to add value to its rights acquisitions with creative productions and installations, including ABBA Voyage in London, which uses virtual “ABBAtars” in a live musical show. It also operates the “Avicii Experience” museum in Stockholm, and it is working with KISS on its next avatar show.
The deal announcement says that Pophouse will “create new content and experiences to enrich Cyndi Lauper’s catalogue for fans old and new,” although it does not provide specific details. As an ‘80s icon, though, Lauper would be ideal for a show or a museum that could appeal to a broad audience worldwide. Fans just want to have fun, after all.
“Pophouse has impressed me with their commitment to maintaining and developing my professional life’s work and ensuring its legacy,” Lauper said in the press release about the deal. “Their creativity and vision, combined with my continued involvement via our unique joint venture is what is most exciting to me.”
Pophouse did not say whether the deal includes name, image and likeness rights, although it will work with Lauper on a joint venture, which presumably has the permissions it needs to create installations or experiences around the pop star’s career. “We set ourselves apart through our emphasis on artist and brand development so that we can nurture the value of our investment,” Sundin said in the press release, “and we are pleased Cyndi endorses our vision for her remarkable catalogue of work.”
Chris Young has joined the artists roster at Coran Capshaw’s Red Light Management, the company tells Billboard. At Red Light, Kailyn Finnegan will serve as Young’s manager. Finnegan worked with Young at his previous management home, The AMG. Prior to The AMG, Finnegan worked at Live Nation. “I’m excited to work with her and everybody […]
French streaming company Deezer‘s revenue grew 12.1% to 130.7 million euros ($141 million) in the fourth quarter, bringing its full-year revenue to 484.7 million euros ($524 million), up 7.4% year over year, the company announced Wednesday (Feb. 28).
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Full-year adjusted earnings before interest, taxes, depreciation and amortization (ABITDA) was roughly halved to -28.8 million euros (-$31 million) and net loss was cut by almost two-thirds to 59.6 million euros ($64 million).
This year, Deezer expects to achieve a 10% growth in revenue — to roughly 533 million euros ($575 million) — and again halve adjusted ABITDA to -15 million euros (-$16.2 million) behind improved gross margins and cost controls.
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Deezer’s subscriber count grew 11.5% to 10.5 million from 9.4 million at the end of 2022. The entire gain in subscriptions came from business-to-business partnerships, which grew by 1 million to 4.8 million. Last year, Deezer launched new partnerships with home audio company Sonos, media company RTL in Germany and e-commerce company Mercado Libre in Brazil and Mexico to power those companies’ branded music streaming services. It also renewed partnerships with mobile carrier TIM in Brazil, retailer Fnac Darty in France and mobile carrier Orange in France.
Average revenue per user (ARPU) from B2B subscribers rose from 2.6 euros ($2.81) to 2.8 euros ($3.03) per month. “Our partnership strategy is bearing fruit, driving our overall growth and helping us win market share outside France,” CEO Jeronimo Folgueira said in a statement.
Deezer’s direct subscribers remained flat at 5.6 million but those user’s ARPU increased from 4.7 euros ($5.09) to 4.9 ($5.31) euros per month. Last year, the company raised monthly subscription fees in France, Spain, Italy and the Netherlands from 10.99 euros to 11.99 euros with “minimal churn” on its subscriber case, according to the earnings release.
The company also announced Wednesday that Folgueira is stepping down “to pursue personal projects.” Folgueira joined Deezer as CEO in 2021. During his tenure, Deezer went public through a merger with a special purpose acquisition company, I2PO, in 2022, and forged a partnership with Universal Music Group in 2023 to introduce an artist-centric model for royalty calculations.
Shares of Deezer rose 0.5% to 2.18 euros ($2.36) Wednesday before the company released earnings results. The stock has almost doubled its 52-week low of 1.19 euros ($1.29) on April, 2023, 13 but is well below its 52-week high of 3.19 euros ($3.46) set on Nov. 2, 2023.
Universal Music Group chairman/CEO Lucian Grainge addressed the company’s ongoing licensing dispute with TikTok in its latest earnings call on Wednesday (Feb. 28), saying: “there must not be free rides for massive global platforms such as TikTok that refuse to meaningfully address issues around AI platform safety or pay their fair share for our artists’ and songwriters’ work.”
Boyd Muir, UMG’s CFO and executive vp, also revealed during the earnings call that UMG would “focus on accelerating [its] partnerships” with Meta, Snap, YouTube and more competing social platforms and that it would make more announcements about this “in the coming weeks.”
At the end of January, UMG, the world’s largest music company, opted to let its licensing agreement with TikTok expire, citing that the short-form video app refused to pay the “fair value” for music. It also cited other concerns around artificial intelligence. “TikTok proposed paying our artists and songwriters at a rate that is a fraction of the rate that similarly situated major social platforms pay,” UMG wrote in a letter to its artists. Within hours, TikTok fired back at UMG in reply, saying that the major music company “has put their own greed above the interests of their artists and songwriters.”
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Since then, the companies’ negotiations have been seemingly stuck at a standstill and millions of UMG-controlled recordings have been removed from the platform. Starting Tuesday (Feb. 27), the takedowns went even further, including the removal of any recording that features one or more Universal Music Publishing Group-signed songwriters for the first time. This impacts such major recording artists as Beyoncé, Harry Styles and Bad Bunny, even though they don’t record for UMG.
In response to the publishing takedowns, TikTok said in a statement on Wednesday, “[UMG’s] actions not only affect the songwriters and artists that they represent, but now also impact many artists and songwriters not signed to Universal. We remain committed to reaching an equitable agreement with Universal Music Group.”
UMG’s earnings call on Wednesday focused largely on TikTok during the the question and answer portion, as well as other core development for the company like its new deal with Chord Music Partners.
While UMG has previously said TikTok only makes up about 1% of the company’s total revenue, chief digital officer and executive vp Michael Nash said he believes that’s not necessarily all a loss amid the negotiation standoff. “In general, if consumption shifts from TikTok to other short video platforms like Reels or YouTube Shorts, we believe we can, in fact, recapture some lost revenue,” he said during the call. “Keep in mind, over half of TikTok monthly active users already also use other short video services. In some markets, that percentage is as high as 70%. These are services that monetize engagement at a much higher rate, so revenue positive consumer migration is easily foreseeable.”
Nash also said that UMG has been “providing notices to effectuate the muting of million of videos every day for the last two weeks” on TikTok to aid in the takedown process, which started earlier this month. “And that’s the recorded music content. Keep in mind that our publishing copyrights are just now starting to be enforced on the platform.” He noted that the company has seen “no discernible negative impact” on its “broader digital business’ by leaving TikTok to date but added that “that’s qualified by the fact that we’re very early on in the process… In fact, we’ve seen a slight uptick in terms of frontline consumption and catalog consumption over this short period of time.”
In response to one question about TikTok, Grainge responded, “I’m also not prepared to compromise the future of social category by doing something that completely undermines the economics for us and for everybody else.” One of UMG’s key concerns among the licensing discussions has been that if it were to accept a diminished royalty from TikTok, then other social media platforms could request the same.
But Grainge vowed that UMG likes “to be friendly.” He said, “We are friendly. My phone is open, unfortunately, 24 hours a day. We hope that we can find a solution… we like win-win situations. We’ve laid out what’s important to us, and I believe important to our industry.”
When an investor asked if this remark indicated that UMG was waiting for TikTok to call them and reengage on a deal structure [UMG has] previously presented,” Nash said “we’re not going to comment on the status of discussions with TikTok for obvious reasons.”
At the end of the call, Grainge downplayed TikTok’s impact on music marketing: “I mean, let’s put this into perspective,” he said. “Apple, Amazon, Spotify, YouTube, all the social categories, the fitness categories, digital radio, Sirius, Pandora, iHeart… [TikTok is] one, it’s not a material part of the multidisciplinary jigsaw, where we promote and market our music globally”
Jeronimo Folgueira is resigning from his position as CEO of the streaming service Deezer, the company announced Wednesday (Feb. 28). Folgueira previously held the role of CEO and director of the board at Spark Networks — an online dating company — before he joined Deezer in 2021. ”I am extremely proud of what we have […]
As part of its fourth-quarter earnings call, Universal Music Group (UMG) said that a “strategic organizational redesign” it announced Wednesday (Feb. 28) would result in 250 million euros ($271 million) in annual savings by 2026, with a first phase of 75 million euros ($81.3 million) in 2024 and 125 million euros ($135.5 million) in 2025. The redesign is expected to include the long-awaited layoffs that have been signaled by the company for months, though the specifics of how many employees would be affected and what percentage of the overall workforce it would amount to was not disclosed.
The “plan is designed to achieve efficiencies in targeted cost areas while strengthening labels’ capabilities to deepen artist and fan connections,” according to a press release. The first phase will involve a general headcount reduction, while the second phase, which is scheduled to begin next year, will be “a combination of further ex-U.S. headcount reduction and other operational efficiencies,” according to the company’s investor presentation.
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A representative for UMG declined to comment on the specifics of the reductions.
“To put it simply, we’re creating the blueprint to the music company and the labels of the future,” chairman/CEO Lucian Grainge said on the earnings call, adding that labels will have “even greater flexibility and speed” in supporting artists, as well as “access to our highest performing internal teams and resources to bring artists to even higher levels of success.” The redesign “carefully preserves what we’re best at: creative A&R, marketing independence, unique label brand identities” and an entrepreneurial and competitive spirit, Grainge continued. The efficiencies, he said, will “generate more impactful support for promotion, distribution, audience monetization, D2C, e-commerce and other areas.”
In its fiscal year 2023, UMG earned a net profit of 1.26 billion euros ($1.37 billion) on revenues of 11.11 billion euros ($12 billion), the company said.
Layoffs at UMG have been telegraphed for months, ever since Grainge said in a third-quarter earnings call last October that UMG would need to “cut to grow.” Rumors further began to circulate in early January, when Grainge noted in his New Year’s memo to staff that despite UMG being the “most successful company in the history of the music industry,” the company would “further evolve our organizational structure to create efficiencies in other areas of the business, so we can remain nimble and responsive to opportunities as they arise, while also taking advantage of the benefits of our scale.”
The impending layoffs were more explicitly acknowledged on Jan. 12, after Bloomberg reported that UMG would be cutting hundreds of jobs sometime in the quarter. In response, a UMG spokesperson released a statement that echoed Grainge’s note, including that the company would “maintain our industry-leading investments in A&R and artist development,” while also promising to continue “investing in future growth — building our e-commerce and D2C operations, expanding geographically, and leveraging new technologies.”
Things then came into clearer focus on Feb. 1, when Grainge announced in an internal memo that Universal would be restructuring its label operations, adopting a loose East Coast-West Coast operation wherein Republic Records co-founder/CEO Monte Lipman would begin to oversee Republic, Def Jam, Island and Mercury, and Interscope Geffen A&M chairman/CEO John Janick would take responsibility for Interscope, Geffen, Capitol, Motown, Priority, Verve and Blue Note. Days later, Capitol Music Group chair/CEO Michelle Jubelirer announced she was stepping down from her post and was replaced by Geffen president Tom March as chairman/CEO of Capitol and Universal Music Publishing Group veteran Lillia Parsa joining as co-president alongside Arjun Pulijal.
Still, the threat of layoffs continued to loom, with many staffers unsure of their positions and unclear as to when the cuts would arrive. The first phase of the redesign announced today will be “execute[d] on immediately,” according to a press release, though the scale in terms of people remains unclear.
UMG is not alone in instituting layoffs in recent months. On Feb. 7, Warner Music Group (WMG) announced simultaneously that it had just recorded its best quarter in its history and would also be laying off 10% of its staff, or some 600 people, and offloading its owned and operated media properties in an effort to save around $200 million that it said it would reinvest in the company. That itself came less than a year after then-new WMG CEO Robert Kyncl announced a 4% staff reduction, affecting some 270 people, “in order to set us up for long-term success.” Cuts at other large record companies are also expected, sources say.
The broader music and media industry is also in the midst of a brutal run of layoffs: Atlantic Music Group, SiriusXM, Amazon Music, TikTok Music, CAA, Discord, Meta, Downtown, YouTube, TIDAL and Spotify have all undergone layoffs in just the last year alone, to name just a few, some of them more than once.
Universal Music Group’s revenue reached 3.21 billion euros ($3.45 billion) in the final period of 2023, up 9% year-over-year (up 15.6% in constant currency) as the company’s non-subscription streaming growth slowed again and its record labels got a boost from strong physical sales and licensing.
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Spotify’s price increase helped drive the recorded music division’s subscription revenue up 8.9% (up 15% at constant currency, which removes the effects of foreign exchange rates) to 1.14 billion euros ($1.22 billion). As a percent of recorded music revenue, subscription revenue increased to 47% from 46.7% in the prior-year quarter.
Non-subscription streaming revenue declined 1.3% as reported (increased 5.6% at constant currency) in the quarter, however. That followed a 1.4% decline (a 5% gain at constant currency) in ad-supported streaming revenue in the third quarter. Ad-supported streaming “remains strong” but the ad market recovery “has not been uniform” and UMG is “cautious” about near-term growth, CFO Boyd Muir said during Wednesday’s earnings call. The soft streaming revenue was not affected by UMG’s decision in early February to pull its catalog from TikTok, which accounts for 1% of UMG’s annual revenue.
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Sales were strong elsewhere in the recorded music division, though. Physical revenue of 447 million euros ($481 million) was up 10.6% (up 17.0% at constant currency). Licensing and other revenue of 410 million euros ($441 million) was up 26.5% (up 34.0% at constant currency). Downloads and other digital revenue declined by 49.2% (45.8% at constant currency), but at 32 million euros ($34) accounted for just 1.3% of recorded music revenue in the quarter.
Universal Music Publishing Group’s fourth-quarter revenue of 576 million euros ($620 million) was up 8.7% (up 15.4% at constant currency). Digital revenue of 339 million euros ($365 million) was up 26.0% (36.1% at constant currency). Sync revenue of 70 million euros ($75 million) was up 18.6% (up 25.0% at constant currency). Mechanical revenue of 31 million euros ($33 million) was up 24.0% (up 29.2%). Performance revenue fell 19.1% (15.8%) to 123 million euros ($132 million).
Top sellers in the quarter were Taylor Swift, The Rolling Stones, Drake, Jung Kook and Stray Kids.
For the full year, UMG’s revenue of 11.1 billion euros ($12 billion at the average exchange rate for the year), up 7.4% as reported and a 11.1% increase at constant currency that removes the effects of foreign exchange rates. That’s similar to the 13.6% revenue growth at constant currency reported in 2022, but well below the as-reported growth of 21.6% that includes foreign currency exchange.
Adjusted EBITDA of 2.37 billion euros ($2.6 billion) was up 11% (up 14.6% at constant currency). Unadjusted EBITDA of 1.81 billion euros ($2 billion) was down 10.8% (down 7.8% at constant currency.) Unadjusted EBITDA eliminates the effects of the Copyright Royalty Board’s Phonorecords III ruling and a 15-million euro ($16 million) legal provision.
In the recorded music division, full-year revenue of 5.7 billion euros ($6.2 billion) was up 6.6% (up 10.2% at constant currency) and physical revenue of 1.38 billion euros ($1.49 billion) was up 14.3% (up 19.4% at constant currency). Licensing revenue of 1.17 billion euros ($1.27 billion) was up 9.5% (up 13.6% at constant currency).
Full-year publishing revenue of 1.96 billion euros ($2.12 billion) was up 8.7% (up 12.3% at constant currency). Digital revenue of 1.13 billion euros ($1.22 billion) was up 8.5% (up 12.5% at constant currency). Mechanical revenue of 108 million euros ($117 million) was up 11.3% (up 14.9% at constant currency). Performance revenue of 416 million euros ($450 million) was up 12.1% (up 15.9% at constant currency).
At constant currency, UMG’s fourth quarter improvement was similar to the other two major music groups. Warner Music Group was up 17.5% to $1.75 billion and Sony Music was up 16% to 358.2 billion yen ($2.5 billion). Smaller companies have also posted similar growth rates.
AEG Presents announced the appointment of Jay Belin as vp of international touring. A prolific talent booker with over 17 years of live music experience, Belin will be responsible for executing major concerts across Europe with the AEG Presents Global Touring division, utilizing his strong history and relationships built in his previous roles. Directly reporting […]
BMG has promoted Los Angeles-based executive Marian Wolf to lead its North American publishing operations. With the official title of senior vp of music publishing, North America, Wolf now heads the company’s single largest business unit, leading employees in Los Angeles, New York, Nashville, and Canada.
He will report to Thomas Scherer, the newly appointed president of global catalog recordings and music publishing, North America.
Wolf is a longtime member of the BMG team. He started at the company in Berlin in 2011 before relocating to Los Angeles in 2014 and has worked his way up through various roles, including vp of global writer services and China and senior vp of publishing and chief of staff. During his tenure, the company has added a number of key songwriters to its publishing roster including George Harrison, Jennifer Lopez, Pitbull, Riot Games, Jessie J, and Dave Gibson, among others.
Wolf has also played a key role in BMG partnerships. In 2016, Wolf developed the BMG SoundLab, its songwriting camp, which has collaborated with parters like American Idol, She Is The Music and major U.S. labels. The writing camp even once partnered with the United Nations and Holocaust survivor Ben Lesser. Wolf also has spearheaded opportunities between BMG and its parent company Bertelsmann, including a partnership with European broadcast and content leader RTL.
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The news of Wolf’s promotion arrives after significant restructuring at BMG. In October, the company terminated about 40 employees, including those in its international marketing, film and theatrical divisions, to reconfigure the company. Thomas Coesfeld, the company’s recently appointed chief executive, said this was part of its new strategy, called BMG Next, to better position the company for the future.
“With Marian’s expertise and success in the US and globally, he is the ideal leader for our North American music publishing business,” says Scherer. “We are confident he will continue to grow and transform the opportunities and digital services for our music publishing catalog clients, as well as frontline songwriter signings.“
“I am excited to lead our North American publishing teams into this next chapter,” says Wolf. “Publishing continues to be a corner stone of BMG’s business and I am thrilled to continuously innovate the way we serve our songwriters and publishing clients as creative partners.”