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After Spotify said it would begin to phase out service in Uruguay on Jan. 1, 2024, the streamer reversed course on Tuesday (Dec. 12). “We can say with great confidence, they transmitted it to us today: Spotify is going to continue operating in Uruguay for the benefit of all users,” Secretary of the Presidency Álvaro Delgado said in a press conference, according to El Observador.
The origin of the dispute: Uruguay’s parliament passed a bill in November that changed the country’s copyright laws and demanded “equitable remuneration” for artists. Spotify objected to the lack of “clarity” in the new bill’s language because it was unclear where that additional “remuneration” would come from. “Changes that could force Spotify to pay twice for the same music would make our business of connecting artists and fans unsustainable,” a Spotify spokesperson warned, “and regrettably leaves us no choice but to stop being available in Uruguay.”
However, as El Observador reported on Tuesday (Dec. 12), Delgado told the press that “after several days of exchange and interaction, especially with legal aspects, the President of the Republic, the Minister of Education and Culture and the Minister of Industry” have come together to “make it clear that there will be no double payment by the platforms.”
Spotify welcomed the news. “The Uruguayan government has issued much-needed clarification of the recent music copyright law changes, specifically that rightsholders are responsible for ensuring artists are fairly paid, rather than requiring Spotify to pay multiple times for the same content,” a spokesperson said in a statement.
“We are pleased that this clarification will allow Spotify to remain available in Uruguay so that we can continue giving artists the opportunity to live off their art and billions of fans the opportunity to enjoy and be inspired by it,” the spokesperson continued. “We thank President Lacalle Pou and his team for recognizing the value Spotify provides to local artists, songwriters and fans.”
It has been a tumultuous month for Spotify: Earlier in December, the company announced it was cutting around 1,500 employees in an effort to close “the gap between our financial goal state and our current operational costs,” as CEO Daniel Ek wrote to staff. This marked Spotify’s third round of layoffs in 2023.
Ek acknowledged that a “reduction of this size will feel surprisingly large given the recent positive earnings report and our performance.” But he added he was “convinced this is the right action.”
A few days later, Spotify announced that CFO Paul Vogel would leave the company at the end of March.
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: Lawyers for Michael Jackson’s estate send a legal threat letter over the recent release of a rare Jackson 5 recording; Sean “Diddy” Combs and a former Recording Academy boss are both hit with sexual assault lawsuits as music’s #MeToo wave continues; Google loses an epic antitrust battle over smartphone apps; and much more.
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THE BIG STORY: MJ’s Estate Threatens Lawsuit Over Rare Recording
“We write to put you on notice regarding several matters that expose you to liability to the Jackson Estate.”
That’s never a great thing to read, but it’s particularly problematic if you’ve just announced to the world that you’re about to digitally release a rare Jackson 5 song that holds the distinction as “Michael Jackson’s first ever studio recording.”
A day after a Swedish company called anotherblock did precisely that, attorneys for Michael’s estate sent a letter warning that they weren’t happy about the plan. They said the release “violates” the estate’s trademark and likeness rights, and that the company was potentially “misleading the public” by claiming the song was the first-ever Jackson recording.
“We have serious doubts that Michael would have ever wanted these recordings released and commercialized,” the estate’s attorneys wrote. “What you are doing is the opposite of honoring Michael Jackson.”
Go read the entire story here, including access to the full letter sent by the estate.
Other top stories this week…
DIDDY SUED YET AGAIN – Another woman — the fourth in three weeks — filed a lawsuit against Sean “Diddy” Combs over allegations of sexual assault. The unnamed Jane Doe accuser claims she was “sex trafficked” and “gang raped” by Combs, former Bad Boy Records president Harve Pierre and another man in 2003 when she was 17 years old. Combs, who had mostly stayed quiet since allegations started flying, responded that “ENOUGH IS ENOUGH” and that he “did not do any of the awful things being alleged.”
MORE MUSIC #METOO CLAIMS – Former Recording Academy CEO Mike Greene and the academy itself were hit with a lawsuit alleging Greene sexually assaulted an Academy employee named Terri McIntyre in the 1990s. The woman claims that during her tenure at the Academy from 1994 to 1996, she was “forced to endure pervasive, incessant and routine sexual harassment and/or sexual assault” from Greene and that the Academy enabled it by failing to take action.
GOOGLE LOSES MONOPOLY CASE – A jury found that Google violated federal antitrust laws by maintaining an illegal monopoly over the Android app market, siding with Epic Games, the maker of the hit video game Fortnite. The case had been closely watched by digital music services like Spotify because Epic’s lawsuit challenges the fees that Google and Apple require apps to pay for in-app transactions and subscriptions.
LIL DURK DOUBLE DIP? – The Chicago rapper was sued by a fintech firm called Exceed Talent Capital, which claims that Durk agreed to grant the company the recording royalties from his song “Bedtime” even though he had already signed an exclusive deal with Sony’s Alamo Records — an alleged double-dip that Exceed called a “manifest fraud.”
TYGA’S INFRINGING SNEAKERS – A federal appeals court sided with Vans and ruled that Tyga‘s “Wavy Baby” sneakers — a parody of the company’s classic Old Skool — likely violate the shoe company’s trademarks. The company that partnered with the rapper to create the sneaker (MSCHF) argued that it had been designed to criticize “sneakerhead” consumerist culture and was thus protected by the First Amendment. But the court said that the shoe was entitled to “no special First Amendment protections” and that the sneaker was likely to confuse consumers into thinking it was an authentic Vans partnership.
TWITTER SUED OVER COPYRIGHTS – SUISA, the music royalties collecting society in Switzerland, sued X Corp. (formerly Twitter) in German court over allegations that the social media site has allowed infringing content to be posted to the platform. The lawsuit mirrors a similar case filed against Twitter in U.S. court in June by dozens of music publishers who are seeking as much as $255 million in damages.
TICKETING REFORM ADVANCES – Legislation that aims to make buying concert tickets an easier, more straightforward process was voted forward by a U.S. House of Representatives committee, clearing the way for a full House vote. Among other features, the proposed STOP Act would require sellers to post final “all-in” prices that include fees, as well as ensure buyers can get refunds after cancellations. Days after the vote, a similar bill, The Fans First Act, was introduced in the Senate by a bipartisan coalition of lawmakers.
CRIP MAC FACES GUN CHARGE – YouTuber and rapper Trevor Hurd, who goes by the name Crip Mac, was arrested in Los Angeles on federal gun charges. The arrest by U.S. Marshals came moments after a California judge agreed to drop state gun charges against Mac over the same alleged wrongdoing — a not-uncommon step after state prosecutors coordinate with the U.S. Attorneys Office.
Songwriters and publishers will see a royalty bump in the new year for physical sales (including vinyl, cassettes and CDs) and digital downloads. According to a new document, published in the Federal Registrar on Tuesday (Dec. 12), the Copyright Royalty Board (CRB) upped the U.S. statutory mechanical royalty rate from the current rate of 12 cents to 12.40 cents if the song has a run time of five minutes or less. (If over five minutes, the rate is 2.39 cents per minute.)
This rate change is based on the Consumer Price Index for All Urban Consumers (U.S. City Average, all times) that was published by the Secretary of Labor.
This form of publishing royalty is paid to songwriters and publishers by record labels, which license their compositions for sound recordings that are then made into digital downloads or physical copies. This system is unlike that for U.S. mechanical royalties for streaming, which are paid to publishers and songwriters by streaming platforms like Spotify, Apple Music and Amazon Music.
Consistent Cost of Living Adjustments (COLA) have been an important (but controversial) part of the conversation around U.S. mechanical royalty rates in recent years. Prior to January 2023, the minimum statutory mechanical rate in the United States had been stuck at 9.1 cents since 2006, losing value each year as inflation climbed. January 2023’s raise represented a 32% rate increase.
In May 2022, when the 2023 adjustment was announced, BMG made a statement criticizing the majors, saying in part, “The entire songwriter community owes a huge debt of thanks to those who fought for this increase in the face of the opposition of major record companies and indifference of music publishers. … Without their belief and commitment, the [Recording Industry Association of America] RIAA (representing record companies) and the [National Music Publishers’ Association] NMPA (representing music publishers) would not have been forced back to the negotiating table.” This is a sentiment also held by independent songwriter George Johnson, who has consistently led the fight for a COLA adjustment through his participation in the Copyright Royalty Board proceedings.
For years, the NMPA didn’t push for the rate to be raised beyond 9.1 cents, while all sides weighed how to first establish streaming models and what rates should be paid for the fast-growing income stream of the music publishing business. While dealing with those larger issues, the NMPA and the labels continued the cycle of a 9.1 cent settlement for every five-year term from 2008 through 2022, and they were ready to do so again for the 2023-2027 term, as indicated in their initial settlement.
When Johnson, followed by other songwriter advocates like the Songwriters Guild of America and Music Creators of North America, pushed against the initial settlement rate of 9.1 cents for that term, the NMPA noted that litigation is costly, running into the tens of millions of dollars — which is why the organization initially focused on adjudicating streaming rates rather than the penny rate for physical and downloads. To litigate for both streaming and the penny rate would be even more costly than the millions the NMPA was already spending.
Moreover, it was argued that spending money fighting for the rate change for digital downloads and physical sales could be a wash for publishers when weighing the legal costs against how much additional revenue a possible rate increase could achieve. While physical and downloads back in 2021 accounted for 15% of market share for labels, for publishers it was a 5% market share. Some in the publishing business were also afraid that if they pushed for a higher penny rate, they would lose the support of the major labels in their quest for better streaming rates.
The CRB judges ultimately tossed out the 9.1 cent settlement for 2023-2027, and then the publishers and major labels came together to put together a second settlement for that term featuring a 12 cent penny rate and a COLA adjustment.
In a Dec. 7 statement about the upcoming adjustment from 12 cents to 12.4 cents for 2024, NMPA president/CEO David Israelite, said: “We are pleased that the Copyright Office has approved a Consumer Price Index (CPI) increase for physical products like vinyl records and digital downloads. Last year NMPA, the Nashville Songwriters Association International (NSAI) and others worked to raise these mechanical royalties from 9.1 cents to 12 cents — a 32% increase with the added insurance of including a mandated Cost of Living Adjustment (COLA) lift each year. While these forms of consumption are not top revenue streams in the current market they still represent a meaningful piece of the music industry and it is important that they continue to grow.”
SiriusXM will merge its publicly traded stock with a Liberty Media tracking stock to create a single, streamlined public stock, the company announced Tuesday (Dec. 12). The deal — a piece of financial engineering rather than an overhaul of the companies’ organizations — will create a new public company that continues to use the SiriusXM brand.
SiriusXM and Liberty Media laid out numerous benefits of the transaction: a simplified equity structure; enhanced trading liquidity; a larger float (a larger percentage of outstanding shares on the market); the elimination of a multi-class stock structure; greater strategic flexibility; and greater potential for inclusion in stock indexes.
Investors have had two ways of investing in SiriusXM: the SiriusXM stock that trades on the Nasdaq and Liberty SiriusXM Group (LXSM), a “tracking stock” created by majority shareholder Liberty Media. (A tracking stock is a stock that depends on the financial performance of a specific business unit or division.) LXSM accounts for 84% of SiriusXM’s 3.84 billion outstanding shares; SiriusXM’s public shareholders own the remaining 16%.
On Sept. 26, with SiriusXM’s typically stable stock price down 26% year to date, Liberty Media announced a proposal to merge the two stocks. As detailed Tuesday, Liberty will separate Liberty SiriusXM Group by creating “SplitCo,” which will holds all LXSM assets and liabilities. SplitCo will immediately acquire SiriusXM in an all-stock transaction to form “New SiriusXM” with one class of common stock. New SiriusXM is expected to continue to be traded on the Nasdaq under the familiar stock ticker SIRI.
Former LXSM shareholders will get 8.4 shares in New SiriusXM for each share of LXSM and will own 81% of the post-merger company’s outstanding shares. Former SiriusXM shareholders will own the remaining 19%.
The new company will have a leverage ratio of 3.9 at close and a target leverage ratio of 3.0 (net debt to earnings before taxes, interest, depreciation and amortization). New SiriusXM has secured financing commitments up to $1.1 billion to fund the refinancing of a LXSM loan and an exchangeable bond. The companies told investors share buybacks will take less priority until that target leverage is reached.
“This combination will create value for all stockholders by eliminating the tracking stock structure, enhancing liquidity and allowing former LSXM stockholders to participate directly in the ongoing performance of SiriusXM,” said Greg Maffei, Liberty president/CEO, in a statement. “SiriusXM commands the largest paid share-of-ear in the car and has proven itself as an incredibly successful and profitable business. We are confident SiriusXM will continue to create value by building on its resilient business model to execute its strategic initiatives.”
“We are pleased that the Special Committee of our Board of Directors has reached this agreement with Liberty Media, which will allow SiriusXM to enter its next phase of value creation,” added Jennifer Witz, CEO of SiriusXM. “In a highly fragmented audio entertainment industry, SiriusXM has differentiated itself as the leading audio entertainment provider by creating an experience centered on our high-quality, premium, human curated radio that is more relevant than ever. In doing so, we have built a profitable business that is poised for continued success.”
The deal is expected to close in the third quarter of 2024 and is subject to regulatory approvals and a majority vote of Liberty SiriusXM Group shareholders. The transaction has been approved by Liberty Media’s board, a SiriusXM special committee and SiriusXM’s board of directors. The deal will be tax-free to Liberty SiriusXM Group and SiriusXM shareholders, except for cash received instead of fractional shares.
SiriusXM’s stock price has dramatically improved since September thanks to news of the merger plan as well as a 10% increase in its dividend in October. Shares of SiriusXM rose 5.6% to $5.30 following Tuesday’s announcement, reducing its year-to-date deficit to 9.2%.
As the son of veteran agent Dennis Arfa, whose clients include Billy Joel, Metallica, Def Leppard and Rod Stewart, Jarred Arfa felt the pull of the entertainment business early on but wanted to make his own mark. And though he joined the family business, Artist Group International (AGI) — after a stint at Robert F.X. Sillerman’s licensing and rights company, CKX — he didn’t quite follow in his father’s footsteps, choosing to focus on agency management and business strategy instead of the day-to-day work of an agent.
In June, those responsibilities doubled when Jarred, 39, was promoted to executive vp/head of global music at Independent Artist Group (IAG), the talent firm formed when billionaire Ron Burkle’s The Yucaipa Companies merged AGI and the Agency for the Performing Arts, more commonly known as APA. (Yucaipa purchased AGI in 2012 and had been financing APA since 2020.)
The combined agencies now represent approximately 400 acts — a big jump from the 270 or so on AGI’s premerger roster — now that APA’s artists — among them, 50 Cent, Mary J. Blige, Lauryn Hill, Ne-Yo, Robert Glasper, Kamasi Washington, Cypress Hill and D’Angelo — have been folded into the mix.
That said, Jarred points out that “my role isn’t just signing clients, it’s signing agents” and growing the business as a whole. He also oversees the music division’s day-to-day operations and continues to work with his father, who is now IAG’s music division chairman. (Both manage Joel.)
Jarred, who lives with his wife and son in Manhattan, spoke to Billboard about the changes he has made at the agency. He also sized up his main competition and weighed in on WME and CAA agents’ dissatisfaction with their treatment after their companies’ initial public offering (IPO) and sale, respectively.
How did the IAG deal come together?
[Yucaipa co-founder and managing partner] Ron Burkle made an investment in APA during the pandemic. Frankly, we were not interested in them at first. The way their music department was run was not the way we ran ours, but I also saw they had some nice pieces of business. We met with Jim Osborne, who’s now [IAG] CEO, and we were really impressed by what he did with 50 Cent and Mary J. Blige — reinvigorating their brands through film and TV and how that enhanced their touring. So we started very organically. We decided not to commingle our music departments, but we had some artists interested in film and TV and started working with projects for Jane’s Addiction and Ghost. Eventually, we became agreeable to doing something bigger with APA if they handed the reins over to us in music. We merged, and Jim and Ron bet on me as the guy to help clean up their current music business in terms of who to keep and who not to keep.
How did Yucaipa’s culture affect IAG?
Their mantra has always been to let entrepreneurs be entrepreneurs and stay hands-off in the running of the business. We have one person from Yucaipa who works with us on a day-to-day basis, and then we go direct to Ron for bigger-picture things. When we sold the business to Yucaipa in 2011, I was still in my 20s, and I never felt he judged me by age. It was simply, “Are you smart? Can you get the job done?” If you deliver for him, you continue to rack up credibility. If I email him on something work-related, I’ll usually get a response quickly. It’s incredible, honestly, to have access to someone at that level.
How many clients does the company currently oversee?
In terms of touring, we have over 400 clients. That said, there were another 400 that were cut from the roster. We scrapped APA’s territorial system — which revolved around adult contemporary [acts] — and parted with some of the people in that model that didn’t work with our culture. We shifted some of the workforce and resources to where they were needed, which was their thriving urban department.
AGI was a music-first booking agency. How has merging with an agency involved in branding, film and TV benefited your roster?
Initially, [our music focus] served us well. We got a lot of clients who were promised the world by the major agencies, and when nothing was delivered for them, they’d come to us and say, “At least we know you’ll handle our touring well.” At the same time, it made it difficult to attract younger clients who were looking for [film/TV opportunities] and hoping for a branding deal. We need those other assets now to get us in the room for touring, which the APA partnership unlocks for us. And then we show them how much of a difference we can make on the touring side.
You have said that one of your most important responsibilities at AGI is to “stay neutral.” What does that mean?
It means I’m totally neutral when it comes to how we use our resources. A lot of times when we do sign an artist and I’m involved in the signing, I’m the one deciding which agent makes the most sense for the project because I’m the most versed in our agents’ skill sets and which one’s personality type suits the artist.
Billy Joel’s Madison Square Garden residency was a huge success. How will its completion affect business?
Nothing in our strategy changes. Obviously, you can never replace a once-in-a-lifetime-caliber artist on the level of Billy Joel, but as he recently said, he plans to continue to work after his residency at MSG is complete. We also have many other arena and stadium headliners.
How does IAG stack up against a competitor like Wasserman Music?
They’ve inherited a very strong music business. I think the problem they have — and they can dismiss it all they want, but it’s the same problem we had at AGI — is that they’re attached to a sports business. They don’t have the traditional film and TV core that is so important to so many of our artists. That’s an impediment.
Both WME and CAA have come under fire for how employees were treated during WME’s second IPO and CAA’s sale to Artemis. Agents at both firms were extremely disappointed with the amount and value of the shares they received. What’s your take?
First, I want to acknowledge that CAA’s $7 billion valuation is amazing for the agency business. As far as taking care of their people, when it comes to bonuses, I’ve always believed in the split model because there’s no arguments at the end of the day. The agent knows, based on a set formula, what they’re going to earn. There’s no gray area to be worked out, and that leads to a lot less headaches come those year-end conversations.
You’ve been public about your support of Ticketmaster. What is the government doing wrong in its constant probing of the ticketing space?
They should be focusing on the secondary market. That’s where the real problem lies. But they get lobbied hard by companies like StubHub. As agents, the best we can do is get as much of the high-end revenue for our artists that otherwise would go to the secondary market while keeping enough tickets available at affordable prices. Ticketmaster tools like Dynamic and Platinum are very helpful.
Do you think programs like Verified Fan are here to stay?
As much as I like Ticketmaster programs, this is the one that I don’t think works. Look at the backlash from Taylor Swift and Bruce Springsteen fans. Ticketmaster is making people take an extra step, and in exchange, the fans believe they’ll get a ticket at a fair price — neither of which is necessarily true. Verified Fan creates this false hope for the fan, and while the intention is noble, it ends up creating a lot more frustration than reward.
How often do you communicate with your father on agency business?
We speak a couple of times a day about what’s going on in his artist world and what his needs are. I would say we spend at least one phone call a day talking about Billy Joel and strategy. It is always a lot of fun.
When you two get together for family events, do you talk business?
It’s a blend. We could be talking about my son for one minute, then it goes back to the business. Then we talk about sports, and it’s back to business again.
The National Independent Talent Organization (NITO) has hired its first MD: Nathaniel Marro from New York’s Entourage Talent Associates. Having worked closely with Entourage founder Wayne Forte for over a decade, during which he worked on the management team for Tedeschi Trucks Band, Marro is now tasked with expanding NITO membership and advocating for policy […]
True to its title, Brenda Lee‘s “Rockin’ Around the Christmas Tree” — which just notched its second straight week at No. 1 on the Billboard Hot 100 — brings in some serious green over the holiday season.
Billboard estimates that in 2022, the enduring holiday hit racked up $2.7 million in master recording revenue for Lee and her label, Universal Music Group, and $1.274 million in publishing revenue, totaling nearly $4 million, on the strength of 464 million on-demand streams and 25,000 track downloads.
So far this year, Billboard estimates the master recording has garnered $1.6 million in revenue and about $700,000 in publishing revenue, or $2.3 million total, on the strength of 301 million on-demand global streams and 16,000 track downloads.
In the United States last year, “Rockin’ Around The Christmas Tree” generated nearly 1.75 million song consumption units (track downloads and on-demand streaming), while it has so far accumulated 967,000 song consumption units (and, within that, 301 million on-demand streams) in 2023.
But there’s still plenty of holiday season left — and when you compare the 49-week period that has elapsed so far this year with the same period in 2022, it’s clear that “Rockin’” is on track to surpass last year’s total. The song’s 967,000 song consumption units to date in 2023 is far ahead of last year’s 807,000 song consumption units (and 195 million streams) at the same point. (Luminate doesn’t compile global song consumption units).
“Rockin’ Around the Christmas Tree” was solely written by the late Johnny Marks, whose publishing company, St. Nicholas Music, would get the publishing revenue. Marks wrote a number of other holiday favorites including “Rudolph the Red-Nosed Reindeer,” “A Holly Jolly Christmas,” “Silver and Gold” and “I Heard the Bells on Christmas Day.”
The above estimates don’t include whatever royalties come in from licensing the song to Christmas compilation albums; while the publishing total doesn’t include whatever revenue is generated from cover versions.
After splitting with her original record label in October, Megan Thee Stallion is entering a new era: A source at Warner Music Group confirmed to Billboard that the artist has signed a distribution agreement with the company that includes services from a select global team.
For years, Megan Thee Stallion was embroiled in a legal battle over the deal she signed early in her career with 1501 Certified Entertainment, which released her music in partnership with 300 Entertainment. (300 was acquired by Warner Music Group in 2021.) In October, the rapper and 1501 “reached a confidential settlement to resolve their legal differences,” making Megan Thee Stallion — who is managed by Roc Nation — a free agent. “I’m so excited to be doing something for the first time independent since it was just me and my mama,” she said during an Instagram Live session.
Artists prize distribution deals because they typically get to retain ownership of their recordings. At the same time, Megan Thee Stallion will still benefit from WMG’s global infrastructure, marketing muscle and longstanding relationships at radio and television. Her team will include some staffers from 300 Entertainment as well as others across the company. (A rep for Megan Thee Stallion did not respond to requests for comment.)
These types of distribution agreements within major label systems have become more common in the modern music industry once artists gain a certain amount of leverage. Some young acts that have fast-climbing viral hits are even able to negotiate similarly favorable agreements right at the start of their careers, which would have been unthinkable a decade ago.
There is a potential downside to these arrangements: Because labels stand to earn less revenue from distribution deals, they may be less incentivized to throw their full weight behind these artists. Still, this is a dream scenario for many artists because it inverts the traditional music industry power dynamic.
Historically, artists handed their recordings over to a label in perpetuity in exchange for an advance and the chance to become a household name. Now it’s possible to have the best of both worlds. “That’s an amazing position to be in, to keep your copyright and still be famous,” says Tab Nkhereanye, a senior vp of A&R at BMG. (BMG has long offered artists licensing deals; in these agreements, ownership of recordings typically reverts back to an artist after a set period, conditional upon recouping the costs of the deal.)
As a result of these shifts in the industry, though, the term “independent” has become so roomy as to be nearly meaningless. It now stretches from an act self-releasing homemade recordings on TuneCore for a handful of fans all the way to Bad Bunny, who fills stadiums and tops charts around the world while enjoying lavish funding from The Orchard, which is owned by Sony Music. Most basketball players probably wouldn’t group together Giannis Antetokounmpo and a decent guy in a local pickup game, but that’s sort of what happens on a daily basis in the music industry. Adding to the confusion — “indie” is now often used to describe a specific style of rock music, regardless of whether it’s released by a major or independent label.
In many cases, “I don’t know that [independent] is really an applicable phrase anymore,” says Lulu Pantin, founder of Loop Legal. “The big distinction is self-funding versus receiving funding from an outside source.” “Now it seems like you’re either an unsigned artist or an independent artist,” adds Todd Rubenstein, founder of Todd Rubenstein Law.
Artists once required a hefty amount of financial support to record, manufacture, distribute, and market their music. Signing with a major record company meant acts had more resources at their disposal, while remaining independent signified a scrappier, bootstrapping approach, usually with a select group of labels — 4AD, for example, or Secretly Canadian. “Releasing on XL at one point was the height of independence,” says Ben Blackburn, who manages girl in red.
The initial outlay required to get a successful artist project off the ground plummeted with the rise of production programs accessible on laptops, digital distribution companies, streaming services, and social media platforms. Artists had a “newfound ability to compete on the same level without [the major labels], and in doing so, the ability to claim more control and literal ownership,” says Nabil Ayers, president of Beggars Group US.
“With digital distribution, artists weren’t going to keep doing perpetuity deals on the master side for five albums and an 18 point royalty,” adds Nick Stern, a longtime artist manager. “It was just a matter of time.”
In the second half of the 2010s, especially during the SoundCloud rap era, it became more common to hear about major labels chasing artists who were already amassing streams by the million. This meant that record companies had to give up a lot for the privilege of being associated with the artists, rather than the other way around.
Today many rising artists and their managers are intent on giving away as little as possible. This means that the major labels have all beefed up their distribution-and-services offerings, making attractive deals like the one obtained by Megan Thee Stallion more prevalent. “All of these major players with power and money decided to head into the [distribution] fray,” says Blackburn.
Sony Music has had the most success with the distribution-and-services model: It runs these deals through The Orchard, which enjoyed a bigger current market share in 2023 than any frontline label other than Republic and Interscope. The Orchard is hardly a loner, though; every major label group has at least one, if not more, distribution companies. (Warner has the Alternative Distribution Alliance, though Megan’s deal doesn’t run through ADA, according to a source with knowledge of the arrangement.)
“There are a lot of options out there for people to find those kinds of deals now that there weren’t even two years ago, and certainly weren’t five years ago when we started,” says J. Erving, a manager and founder of the artist services and distribution company Human Resources (which was acquired by Sony Music in 2020). “Initially a lot of artist managers and executives thought that type of deal was subpar in terms of your ability to have success. Now it’s something that’s sought after.”
A side effect of this new desirability, though, is “there really is no clear delineation of what it means to be truly independent,” Pantin says. “Independence now is a flexible term,” Blackburn adds. “It’s also a commodified term.”
This means the music industry would probably benefit from developing a new vocabulary to distinguish between artists with wildly different levels of financial support. “The record industry is currently lumped into two sectors: the majors and the independents, or ‘the rest,’” Ayers says. “‘The rest’ is actually a very disparate group of interests that don’t belong in a single bucket. We need a better way to describe the growing number of entities out there.”
Rubenstein agrees: “A deal with a major — or major independent label — is different than using a larger distributor that provides limited services, which is different than being your own ‘label’ and just loading your music up via DistroKid and jumping on TikTok,” he notes.
For now, as Blackburn puts it, “independence in the eye of the beholder.”
Last week, during Spanish Broadcasting System’s third quarter earnings call, Albert Rodriguez, the company’s president and COO, announced that he was leaving his post. While the announcement came as a surprise, Rodríguez says that, after 25 years at SBS, he is leaving in good terms.
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“I’m going to stay on as a consultant during the transitioning period,” he told Billboard in his only interview following his announcement. “We’re leaving in excellent terms and I’m very appreciative to Raul [Alarcón],” he added, referring to the chairman and CEO of the company, to whom Rodríguez directly reported to.
Rodriguez is still evaluating his future plans, but will likely launch his own consulting company.
SBS is the formidable Latin media company whose suite of radio stations in the top markets in the U.S. include La Mega in New York, the most-listened to Spanish language radio station in the country, according to Nielsen. SBS also operates the AIRE Radio Networks, a national radio platform of over 300 affiliated stations.
Rodríguez joined the company 25 years ago, initially as a general salesperson, and climbed the ranks. In June, 2021, he was named president, making it the first time in 36 years that the company named a new president, and first time it was led by a non-family member.
Working with Raúl Alarcón, who he calls a “beacon” of the Hispanic community, was a major highlight during his long tenure at SBS.
“The team we built is like family [to me]. We have performed better than all our industry peers,” says Rodríguez. A point of major pride, he says, was the launch of the Aire network, “which has grown immensely in terms of revenue and content and distribution.”
“We served very passionately the Hispanic voice in America,” adds Rodríguez of SBS, noting that despite Hispanics making up 20% of the total U.S. population, they represent only 6% of the U.S. market’s total advertising budget for 2022, according to the Hispanic Marketing Council. Moving forward, he says, “I want to be a leader in developing and increasing share to the multicultural space.”
Datwon Thomas has been named to the newly created role of executive producer, talent, for Dick Clark Productions (DCP). In his role, which takes effect immediately, Thomas will be part of DCP’s in-house talent team, collaborating on talent strategy, relations, bookings and creative, leveraging his experience from his 13-year stewardship of VIBE. Thomas will work out of both the New York and Los Angeles offices.
Thomas will also assume the role of editor-at-large of VIBE, supporting big-picture strategy for the brand. In addition, he will maintain his role as PMC’s vice president, culture and media, building diversity initiatives and programs for the company.
“I am thrilled to start this new chapter in my media and entertainment career,” Thomas said in a statement. “My time as editor-in-chief of VIBE has been incredibly rewarding. I would like to thank my staff of all eras for their hard work and support. Entering this new role is a valued achievement and one I take as an honor. I have been consulting with the DCP team for years, and during that time, my love of the rush of live television has grown. I look forward to getting even more involved in all aspects of great projects with amazing talent.”
“We’re very excited to have Datwon bring his experience and unmatched expertise in hip-hop and R&B to DCP,” Jay Penske, chairman, founder and CEO, Penske Media, and CEO, Dick Clark Productions, said in a statement. “His deep relationships and innate creative sensibilities will be instrumental in shaping the future vision of DCP’s world class portfolio of shows.”
Most recently, Thomas served as VIBE’s editor-in-chief. During this time, he pioneered new initiatives for hip-hop and R&B media and created platforms to showcase and discover emerging and established artists.
Since 2019, Thomas has worked closely with the DCP team as a consulting producer for flagship programs including the American Music Awards, Billboard Music Awards, Academy of Country Music Awards and Dick Clark’s New Year’s Rockin’ Eve with Ryan Seacrest.
Prior to VIBE and PMC, Thomas held positions as the editor-in-chief of hip-hop’s street authority, XXL Magazine, and founder/editorial director of XXL Presents Hip-Hop Soul, among other posts.