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Going once.
Going twice.
Julien’s Auctions is SOLD on Nashville.
Nothing has been finalized, but the California-based auction house is planning to open a Music City office in 2024, after generating closing bids estimated at nearly $9.5 million for music memorabilia during a week at the Hard Rock Café in November.
The week included Music Health Alliance’s (MHA) fourth annual Lyrics for a Cause benefit auction, with Julien’s playing middleman on Nov. 14 for the sale of 57 autographed guitars and documents featuring song lyrics. To cite three examples: A guitar featuring Keith Urban’s signature alongside the words from “Blue Ain’t Your Color” netted $7,800; a “Girl Crush” guitar autographed by The Love Junkies — songwriters Hillary Lindsey, Liz Rose and Lori McKenna — brought another $1,950; and a “wait in the truck” guitar inked by HARDY and Lainey Wilson earned $4,445.
Julien’s followed Nov. 15-17 with its Played, Worn, & Torn Rock ‘N’ Roll: Iconic Guitars and Memorabilia Auction. Among more than 1,000 sales, an Eric Clapton guitar went for $1.3 million, a pair of Kurt Cobain’s jeans scored $476,000, and a signed Elvis Presley karate certificate pulled in $5,850. That auction also included a smattering of country items: a stage-worn Dolly Parton cape, $10,160; a Hee Haw contract signed by Johnny Cash and June Carter, $2,222.50; and Jerry Lee Lewis’ cowboy boots, $1,625.
Julien’s founder/president Darren Julien and founder/executive director Martin Nolan anticipated Nashville would have a significant regional draw for in-person bidding, on top of its online activity, and it played out even better than expected.
“People came from Missouri, Georgia, Alabama and Illinois just to see [the auction],” Nolan observes. “There’s definitely a huge interest here.”
Julien’s is already planning another Nashville-based auction in May, but it’s also scouting locations for an office, believing the market is underserved for celebrity sales. The company plans initially to staff with just one or two people who would utilize strong local connections to bring sale items to the public. The employees wouldn’t be expected to know how to price prospective memorabilia at the start; Julien’s has 30-plus employees in Gardena, Calif., and some of them can offer that expertise as the new Nashville team gets its bearings and Julien’s, if its plan works, ingratiates itself in the market.
A “Girl Crush” guitar autographed by The Love Junkies — songwriters Hillary Lindsey, Liz Rose and Lori McKenna — recently brought in $1,950.
“It’s a contemporary recording community across all different genres of music,” says Nolan. “Obviously, it has a very rich musical heritage, and that sort of fits squarely into our growth plans.”
Julien’s is celebrating its 20th anniversary, having entered the auction market shortly after the largest celebrity memorabilia houses, Christie’s and Sotheby’s, paid over $550 million apiece to settle a price-fixing case. Julien’s aggressively pursued the potential of online bidding, allowing buyers from around the globe to compete with in-person customers. The technology was comparatively primitive at the time — a seven-second delay in digital bids affected the proceedings, and Nolan remembers his Blackberry ran out of juice in the inaugural sale during that pre-smartphone era.
The company also put a premium, Nolan maintains, on more personalized service with high-profile clients who come with their own set of expectations.
“Cher wants her design one way, Barbra Streisand wants it another way, and Don McLean has another idea and Janet Jackson has another idea, and Ringo Starr,” says Nolan. “The big auction houses don’t have the resources to sit down with a celebrity and hold hands and walk them through the process and make it seamless for them.”
The stars deserve that kind of treatment, Nolan suggests.
“They’ve been hugely successful marketing geniuses in their own right,” he says. “There’s a fan base worldwide that wants to own something representing their life and career.”
Julien’s has made believers of MHA through its work on the agency’s Heal the Music fundraising auctions.
“In the last four years, Julien’s Auctions has not only elevated Music Health Alliance’s Lyrics for a Cause benefit auction to unprecedented heights through their global audience, they also seamlessly fused historical accuracy, integrity, and respect into the fabric of our mission to #HealTheMusic,” says MHA auction producer Colleen Hoagland. “Julien’s commitment to the minute details coupled with a passion for our cause has turned fundraising into an art form.”
Establishing a stronger foothold in Nashville’s music community — particularly in country — would expand on Julien’s existing cultural connections. The company regularly holds auctions focused on pop music, TV and movies, sports and art.
Upcoming auctions include 1,000-plus lots of memorabilia from the collection of ZZ Top’s Dusty Hill Dec. 7-9 in Dallas; a Robots, Wizards, Heroes & Aliens event Dec. 14-15 in Hollywood featuring items associated with such franchises as Breaking Bad, Harry Potter and Batman; and a Dec. 16-17 sale of materials from The Big Lebowski.
Julien’s does get its fair share of pushback. When the company approached Parton about selling off some of her personal artifacts, she initially rebuffed the offer, reportedly telling them, “I’m not dead yet.” But there are other reasons for celebs to part with their history, Nolan insists, such as raising money for charity, downsizing and connecting with members of the fan base.
Beyond the headline-making million-dollar guitars, auctions often include smaller-priced items that are obtainable for fans of more modest means. As an example, photos, signed letters and several awards all went for less than $500 at a 2022 Kenny Rogers auction.
In its way, Nashville’s best-known export — country music — is a perfect fit for Julien’s.
“We’re all nostalgic,” says Nolan. “We’re all buying into something [from] our youth or a life stage when we got married, or first kid, or we were graduating college — whatever it is, it harks back to that time. We want to own the toys from that era. And that’s what we’re selling.”
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Team,
Over the last two years, we’ve put significant emphasis on building Spotify into a truly great and sustainable business – one designed to achieve our goal of being the world’s leading audio company and one that will consistently drive profitability and growth into the future. While we’ve made worthy strides, as I’ve shared many times, we still have work to do. Economic growth has slowed dramatically and capital has become more expensive. Spotify is not an exception to these realities.
This brings me to a decision that will mean a significant step change for our company. To align Spotify with our future goals and ensure we are right-sized for the challenges ahead, I have made the difficult decision to reduce our total headcount by approximately 17% across the company. I recognize this will impact a number of individuals who have made valuable contributions. To be blunt, many smart, talented and hard-working people will be departing us.
For those leaving, we’re a better company because of your dedication and hard work. Thank you for sharing your talents with us. I hope you know that your contributions have impacted more than half a billion people and millions of artists, creators, and authors around the world in profound ways.
I realize that for many, a reduction of this size will feel surprisingly large given the recent positive earnings report and our performance. We debated making smaller reductions throughout 2024 and 2025. Yet, considering the gap between our financial goal state and our current operational costs, I decided that a substantial action to rightsize our costs was the best option to accomplish our objectives. While I am convinced this is the right action for our company, I also understand it will be incredibly painful for our team.
To understand this decision, I think it is important to assess Spotify with a clear, objective lens. In 2020 and 2021, we took advantage of the opportunity presented by lower-cost capital and invested significantly in team expansion, content enhancement, marketing, and new verticals. These investments generally worked, contributing to Spotify’s increased output and the platform’s robust growth this past year. However, we now find ourselves in a very different environment. And despite our efforts to reduce costs this past year, our cost structure for where we need to be is still too big.
When we look back on 2022 and 2023, it has truly been impressive what we have accomplished. But, at the same time, the reality is much of this output was linked to having more resources. By most metrics, we were more productive but less efficient. We need to be both. While we have done some work to mitigate this challenge and become more efficient in 2023, we still have a ways to go before we are both productive and efficient. Today, we still have too many people dedicated to supporting work and even doing work around the work rather than contributing to opportunities with real impact. More people need to be focused on delivering for our key stakeholders – creators and consumers. In two words, we have to become relentlessly resourceful.
I know you will all be anxious to hear the next steps about how this process will work. If you are an impacted employee, you will receive a calendar invite within the next two hours from HR for a one-on-one conversation. These meetings will take place before the end of the day on Tuesday, and while Katarina will provide more detail on all of the specifics, please know the following will apply to all of these bandmates:
Severance pay: We will start with a baseline for all employees, with the average employee receiving approximately five months of severance. This will be calculated based on local notice period requirements and employee tenure.
PTO: All accrued and unused vacation will be paid out to any departing employee.
Healthcare: We will continue to cover healthcare for employees during their severance period.
Immigration support: For employees whose immigration status is connected with their employment, HRBPs are working with each impacted individual in concert with our mobility team.
Career Support: All employees will be eligible for outplacement services for two months.
For the team that will remain at Spotify, I know this decision will be difficult for many. Please know we are focused on treating our impacted colleagues with the respect and compassion they deserve.
Looking Ahead
The decision to reduce our team size is a hard but crucial step towards forging a stronger, more efficient Spotify for the future. But it also highlights that we need to change how we work. In Spotify’s early days, our success was hard won. We had limited resources and had to make the most of every asset. Our ingenuity and creativity were what set us apart. As we’ve grown, we’ve moved too far away from this core principle of resourcefulness.
The Spotify of tomorrow must be defined by being relentlessly resourceful in the ways we operate, innovate, and tackle problems. This kind of resourcefulness transcends the basic definition – it’s about preparing for our next phase, where being lean is not just an option but a necessity.
Embracing this leaner structure will also allow us to invest our profits more strategically back into the business. With a more targeted approach, every investment and initiative becomes more impactful, offering greater opportunities for success. This is not a step back; it’s a strategic reorientation. We’re still committed to investing and making bold bets, but now, with a more focused approach, ensuring Spotify’s continued profitability and ability to innovate. Lean doesn’t mean small ambitions; it means smarter, more impactful paths to achieve them.
Today is a difficult but important day for the company. To be very clear, my commitment to our mission and belief in our ability to achieve it has never been stronger. I hope you will join me on Wednesday for Unplugged to discuss how we move forward together. A reduction of this size will make it necessary to change the way we work, and we will share much more about what this will mean in the days and weeks ahead. Just as 2023 marked a new chapter for us, so will 2024 as we build an even stronger Spotify.
– Daniel
An appeals court upheld the disorderly conduct convictions Friday (Dec. 1) of actor Jussie Smollett, who was accused of staging a racist, homophobic attack against himself in 2019 and lying about it to Chicago police.
Smollett, who appeared in the TV show Empire, challenged the role of a special prosecutor, jury selection, evidence and many other aspects of the case. But all were turned aside in a 2-1 opinion from the Illinois Appellate Court.
Smollett had reported to police that he was the victim of a racist and homophobic attack by two men wearing ski masks. The search for the attackers soon turned into an investigation of Smollett himself, leading to his arrest on charges he had orchestrated the whole thing.
Authorities said he paid two men whom he knew from work on Empire, which filmed in Chicago. Prosecutors said Smollett told the men what slurs to shout, and to yell that he was in “MAGA Country,” a reference to Donald Trump’s presidential campaign slogan.
A jury convicted Smollett in 2021 on five felony counts of disorderly conduct, a charge that can be filed in Illinois when a person lies to police.
He now will have to finish a 150-day stint in jail that was part of his sentence. Smollett spent just six days in jail while his appeal was pending.
Lawyers for Smollett, who is Black and gay, have publicly claimed that he was the target of a racist justice system and people playing politics.
“We are preparing to escalate this matter to the Supreme Court,” Smollett spokeswoman Holly Baird said, referring to Illinois’ highest court and also noting that the opinion at the appellate court wasn’t unanimous.
Appellate Justice Freddrenna Lyle would have thrown out the convictions. She said it was “fundamentally unfair” to appoint a special prosecutor and charge Smollett when he had already performed community service as part of a 2019 deal with Cook County prosecutors to close the case.
“It was common sense that Smollett was bargaining for a complete resolution of the matter, not simply a temporary one,” Lyle said.
Special prosecutor Dan Webb was appointed to look into why the case was dropped. A grand jury subsequently restored charges against Smollett in 2020, and Webb concluded there were “substantial abuses of discretion” in the state’s attorney office during the earlier round.
Smollett was not immune to a fresh round of charges, appellate Justices David Navarro and Mary Ellen Coghlan said in the majority opinion.
“The record does not contain any evidence that (prosecutors) agreed Smollett would not be further prosecuted in exchange for forfeiting his bond and performing community service,” they said.
Shares of iHeartMedia got a boost from the sale of its stake in BMI, rising 7.9% to $3.00 and making the radio giant the best-performing music stock of the week.
The company announced on Monday (Nov. 27) that it expected to receive approximately $100 million from the sale of BMI to New Mountain Capital. With a current market capitalization of just $423 million, the $100 million pre-tax windfall could provide a boost to a stock that has fallen 51.1% this year. iHeartMedia’s announcement said the company plans to use the proceeds for general corporate purposes, “which may include the repayment of debt.” At the 2023 Wells Fargo TMT Summit on Wednesday, CFO Rich Bressler told investors, “You should assume that we will reduce debt with it.”
The BMI sale follows iHeartMedia’s announcement in its third-quarter earnings that it has paid off $519 million of debt since the second quarter of 2022. In the third quarter, the company retired $89 million in principal balance for $65 million cash, according to its Q3 2023 investor presentation. Debt reductions to date are expected to save the company about $43 million in annual cash interest. Additional debt redemptions aided by the BMI sale will further reduce interest expenses and help its bottom line while the advertising market recovers. “I think we’re in terrific shape from the liquidity generation and free cash flow,” Bressler said on Wednesday, “and also in terrific shape to be able to take advantage of opportunities in the marketplace to improve the capital structure.”
The Billboard Global Music Index dropped 0.2% to 1,449.08 as nine of the 20 stocks finished the week in positive territory, 10 stocks posted losses and one was unchanged. Year to date, the index has gained 24.1%.
The week was notable for the unremarkable movements — either positive or negative — in most stock prices. In the absence of earnings results or major news releases, the biggest companies on the Billboard Global Music Index were confined to a narrow band of results. Warner Music Group shares rose 3.8% to $34.59, Universal Music Group gained 1.5% to 24.60 euros ($26.80), Spotify fell 0.5% to $180.75 and Live Nation dropped 3.9% to $84.23.
Anghami, the Abu Dhabi-based music streamer, had the index’s largest drop, diving 18.1% to $2.30. Still, the company’s share price is up 44.2% year to date and has gained 129% since receiving a notification, from the Nasdaq Stock Market in October, regarding its stock’s closing price falling under the $1.00 per share threshold for 30 consecutive days. Companies whose stocks fall below $1.00 for extended periods face being de-listed from the exchange.
While music stocks dropped slightly, some major indexes finished the week at new highs. On Friday, the S&P 500 rose 0.8% to 4,594.63, its highest mark of 2023 and its best showing since March 2022. The Dow Jones Industrial Average, a collection of 30 blue-chip companies, rose 2.4% to a new all-time high of 36,245.50. The Nasdaq composite gained 0.4% to 14,305.03 — nowhere close to its all-time record of 16,057.44 set in 2021 but close to its 2023 high of 14,446.55 set on July 19. In the United Kingdom, the FTSE 100 gained 0.5% to 7,529.35. South Korea’s KOSPI composite index grew 0.3% to 2,505.01.
In 2023, Taylor Swift has towered above her musical peers on multiple fronts. And earlier this week, she racked up another major achievement when she was named Spotify‘s top-streamed artist of 2023.
As part of its annual year-end Wrapped rundown on Wednesday (Nov. 29), Spotify announced that Swift had racked up 26.1 billion streams globally on the service since Jan. 1, topping the likes of three-time champ Bad Bunny as well as The Weeknd, Drake and Peso Pluma. This didn’t exactly come as a surprise considering the ongoing success of her late-2022 album, Midnights, as well as two chart-topping re-recordings: Speak Now (Taylor’s Version) and 1989 (Taylor’s Version), the latter of which racked up a whopping 375.49 million on-demand official streams in its first week.
Swift’s year on Spotify tops any artist ever on the platform, which — now 15 years since launching — keeps expanding its user base annually. For comparison, when Bad Bunny was announced as the top Wrapped artist in the prior three years, he had 18.5 billion streams in 2022, 9.1 billion in 2021 and 8.3 billion streams in 2020.
According to Billboard‘s royalty calculator, Swift’s 26.1 billion streams amount to about $97 million in recorded music royalties. And the year’s not even done yet. When estimating her total streams through December, that number would swell to 27.2 billion, amounting to recorded music royalties of $101 million through the end of the year from Spotify alone. Add in publishing revenue, and Swift’s music will have earned about $131 million on Spotify by the end of the year.
Of course, that only accounts for Swift’s performance on Spotify, which remains the streaming market leader. When tallying on-demand streams across all platforms — including such heavy-hitters as Apple Music, YouTube Music and Amazon Music — Billboard estimates that her catalog racked up a total of 38.3 billion streams through the end of the year, amounting to a total of about $160 million in recorded royalties, by Billboard’s estimates. With publishing, Swift’s total on-demand streaming revenue gets close to $200 million.
It’s worth noting that Swift likely takes the lion’s share of this money. In her contract with Universal Music Group and Republic Records, signed in 2018, she retained master rights to all of her music going forward. That includes all four of her re-recorded Taylor’s Version albums so far: Fearless, Red, Speak Now and 1989. That re-recording project — which she famously embarked upon after her previous label, Big Machine Records, was acquired by Scooter’s Braun‘s Ithaca Holdings in 2019, much to Swift’s chagrin — has performed beyond likely even Swift’s wildest dreams. And it’s proven a lucrative gambit for the superstar, whose Taylor’s Versions have consistently outperformed the originals on streaming since their respective releases.
Not bad for someone who famously pulled her catalog from Spotify less than a decade ago, calling it a “grand experiment.”
Additional reporting from Glenn Peoples.
Edgar Cutino, manager for Grammy-nominated R&B singer Fridayy, has launched a new management company called To The World Soon. In addition to Fridayy, Cutino’s new company is working with artists Rome Flynn, Elliot Trent, BaeRose, June3rd, Fortune and Landon Moss.
Fridayy has been one of the breakout in-demand featured stars of the past year, making his chart debut in August 2022 as a featured guest on the DJ Khaled track “God Did” alongside JAY-Z, Lil Wayne, Rick Ross and John Legend, which peaked at No. 17 on the Hot 100 and earned three Grammy nominations, for best rap song, best rap performance and a surprise Big Four nod for song of the year. In October 2022, he appeared on the Lil Baby song “Forever,” which reached No. 8 on the Hot 100. Fridayy has been working with Cutino for three years, after the two first connected over Instagram.
“[Cutino] introduced me to writing and a different way to get into the industry,” Fridayy said in a statement to Billboard. “We really built what we have from the ground up. We figured it out together and we both were hungry for success. I tell artists it’s never about the name; when two people come together who believe in each other and are hungry, there’s no telling what can happen.”
Getting his start as a party promoter, Cutino launched a collective of engineers, producers and photographers for local acts in the San Antonio area, helping establish artists in the local scene. In addition to Fridayy and his roster at TTWS, he’s worked on projects by Drake, Chris Brown, Lil Baby, Swedish House Mafia and more, according to a press release.
Fridayy himself got his start as a producer and songwriter, working on tracks by Rae Sremmurd, Chris Brown and Wiz Khalifa, and also co-produced “God Did.” He signed a deal with Def Jam, which released his self-titled debut this past August.
“Edgar is the rare kind of young executive with the taste level, hunger, drive and vision needed to become one of the greats,” Def Jam CEO Tunji Balogun said in a statement. “As an A&R, Edgar has contributed across the entire roster at Def Jam, while also spearheading one of the most exciting new artist campaigns evolving in music right now. I’m excited and inspired to play a small role in their journey as it continues to blossom.”
Artists who decided to sell their catalogs in 2023 did a little better, on average, than the year before, according to a new report by Shot Tower Capital, a Baltimore-based investment banking firm that focuses on media and entertainment.
The average multiple of private music publishing catalogs — excluding a small number of iconic catalogs that fetch a premium — increased to 17.2 times net publisher’s share (or gross profit after paying writer royalties) in 2023 from 16.7 times NPS in 2022. Including iconic catalogs, the average multiple decreased slightly in 2023 to 19.2 times net publishers share from 19.4 times NPS in 2022.
While the average multiple improved this year, the 17.2 times NPS average was well below the peak of 20.1 times NPS in 2019, as well as below the 17.9 NPS average for the period spanning 2019 to 2023.
Even so, catalog valuations have held up well amid recent higher inflation rates, Shot Tower explains, even as interest rates — which began to climb in 2021 after falling to historic lows at the onset of the COVID-19 pandemic in 2020 — have tamped down valuations. That’s because buyers’ future growth expectations have increased, due in part to increased upcoming distributions from the Music Licensing Collective — thanks to favorable Copyright Royalty Board rate determinations this year — and the development of new digital sources such as TikTok.
A shift amongst buyers in the catalog market has also brought catalog valuations down from their 2019 peak.
Hipgnosis Songs Fund, the publicly traded investment trust founded by Merck Mercuriadis, was the price-setter from 2018 to 2021. In the latter year, Hipgnosis Songs Fund bought stakes in such catalogs as Neil Young, Shakira and Red Hot Chili Peppers. Before Hipgnosis Songs Fund’s IPO in 2018, the average publishing catalog multiple was 16.2 times NPS in 2017. That jumped to 18.8 times NPS in 2018 and 20.1 times NPS in 2019 and 18.8 times NPS in 2020. In 2022, though, when Hipgnosis Songs Fund was unable to raise more money through additional equity offerings and stopped buying catalogs, the average publishing multiple dropped to 16.9 times NPS. Since 2022, Hipgnosis Songs Management has been employing a more disciplined approach for its privately held fund, Hipgnosis Songs Capital, which is backed by Blackstone, sources tell Billboard.
Shot Tower believes catalog buyers like Hipgnosis Songs Fund and Round Hill Music Royalty Fund — another publicly listed investment trust that Concord acquired in October — now have less influence in current transaction valuations. Instead, large companies are showing their willingness to pay a premium to control rights such as licensing. As interest rates increase, the Shot Tower report states, “yield-focused financial investors have pulled back” and strategic buyers — major labels and publishers — “continue their focus on acquiring quality assets with control where they can impact long-term growth.”
New capital investment will favor the approach taken by these strategic buyers, according to the report. Publishing and recorded music catalogs that provide full control — such as owning 100% of the publisher’s and songwriter’s shares — will continue to be highly valued by strategic buyers. Rights of “marginal quality” catalogs and passive income “are finding less demand.” There’s are good reasons for placing a premium on control: Shot Tower estimates the ability to eliminate third-party distribution and administration costs is equal to an immediate increase in a valuation multiple of 2.0 times NPS or NLS. In addition, having control over a catalog provides opportunities for licensing and new projects with “potential to drive growth far in excess of industry averages.”
While the typical publishing catalog transaction value has leveled off since the 2019 peak, a few iconic catalogs — Shot Tower defines them as exceeding $200 million — approached 30 times NPS in 2023, a level matched in 2021 but higher than amounts paid in 2022. These catalogs go “primarily to an existing label/publisher with highly strategic (and sometimes defensive) reasons for purchasing at above-market prices,” the report explains.
One such iconic recorded music catalog sold for nearly 30 times net label share in 2023, according to the report — a much higher multiple than recorded music deals in previous years. (The report does not name the iconic catalog sold in 2023, but the only recorded music transaction exceeding $200 million that was made public this year was Litmus Music’s purchase of Katy Perry’s catalog for $225 million.) In previous years, iconic recorded music catalogs sold for between 22 times and 26 times net label share, or profit after royalty payments; and distribution, manufacturing, warehousing and shipment costs, but before marketing expenses.
Recorded music multiples — for both iconic and non-iconic catalogs — have risen over time while publishing multiples are consistent with levels seen in the late ‘90s, according to Shot Tower. That’s because the record business’s shift from physical to digital has helped improve record labels’ margins. Shot Tower points to Warner Music Group as an example: In 2010, when physical sales exceeded digital revenues, WMG’s adjusted earnings before taxes, interest, depreciation and amortization margin was 13.4%. By 2023, WMG’s adjusted EBITDA margin had improved to 23.8%. Shot Tower estimates that every 1% shift in revenue from physical to digital and streaming has increased WMG’s EBITDA and cash flow margins by about 25 basis points (a basis point is one-hundredth of a percentage point). If digital sources eventually account for 95% of recorded music sales, margins have the potential to improve another 5%.
Expect similar multiples in the coming years, says Shot Tower. Although its crystal ball is “a bit hazy” — uncertain interest rate and macroeconomic environments make predictions difficult — the firm expects interests to “moderate” in the first half of 2024 and multiples “to remain steady for the foreseeable future with higher-than-projected industry growth being offset by the continued drag of higher interest rates.”
Based on current growth projections, and adjusting for the current interest rate environment, ex-icon publishing multiples will range from 15.9 to 16.7 times NPS over the next four years. That’s in line with prior periods but a slip from the most recent years and well below the peaks from 2018 to 2020. Multiples averaged 16.4 times NPS from 2014 to 2022 but exceeded 18.0 times NPS from 2018 and 2020 and peaked at 20.1 times NPS in 2019.
As for recorded music, Shot Tower expects an average ex-icon multiple of 12.9 to 13.4 times net label share over the next four years. That’s in line with post-2020 trends that saw multiples jump as investors became convinced streaming would be a financial boon to recorded music revenues. Historically, the larger marketing spending associated with master recordings and a lower diversity of revenue streams has caused recorded music to trade at lower multiples to publishing assets. Shot Tower believes recorded music will continue to trade at a discount to publishing multiples despite margins improving as streaming accounts for a higher percentage of recorded music’s revenue mix.
But the value gap has become closer between music publishing and recorded music assets. In 2020, recorded music transactions carried an average NLS multiple of 10.4 times while music publishing transactions averaged an 18.8 NPS multiple that year — with a gap of 8.4 times between them. In 2022, that gap narrowed to 4.3 times, with a 12.4 times NLS multiple for recorded music and a 16.7 NPS for music publishing.
Shot Tower Capital has closed financings and M&A transactions in excess of $16 billion since its founding in 2012. Those have included such deals as the sale of Imagem to Concord, the sales of Phil Collins and Genesis catalogs also to Concord, and Michael Jackson’s estate share of Sony/ATV to Sony. If the Shot Tower principals David Dunn and Rob Law’s entertainment deals from the prior employment at the firms Alex. Brown and and Bear Stearns, respectively, are included, they have closed over 125 media, entertainment and consumer related transactions representing aggregate value exceeding $70 billion, according to the report.
Since Danny Nozell started managing Dolly Parton in 2005, her already legendary career has soared to new heights. But even Nozell, CEO of CTK Enterprises, couldn’t have predicted that Parton would be inducted into the 2022 Rock & Roll Hall of Fame and, one year later, that her 30-track set, Rockstar — inspired by the honor — would become the highest-charting album of her nearly 60-year career.
Parton is joined by such artists as Elton John on “Don’t Let the Sun Go Down on Me,” surviving Beatles Paul McCartney and Ringo Starr on “Let It Be,” and John Fogerty on Creedence Clearwater Revival’s “Long As I Can See the Light,” among others, on the Nov. 17 release, which also contains six originals. Rockstar debuted at a career-high No. 3 on the all-genre Billboard 200, surpassing Parton’s previous high of No. 6 for 2014’s Blue Smoke. With 128,000 equivalent album units, Rockstar also blasted in at No. 1 on Billboard’s Top Country Albums, Top Rock & Alternative Albums, Top Rock Albums and Top Album Sales charts.
Parton recorded much of the album in secret, not even telling Nozell. “[She] did not tell me until she had finished it and called myself and my staff in to listen to the album,” he says. “I said, ‘What album?’ She said, ‘The rock album.’ She didn’t want to tell me because she was afraid I would start cutting deals before it was done. She knows me well.”
The high numbers are a result of Parton’s inimitable talent, but also, to Nozell’s point, a global marketing plan that began rolling out months before the album’s release and included debuting the first single, “World On Fire,” on the Academy of Country Music Awards, which she hosted with Garth Brooks. The voluminous marketing efforts also included making a music video for Queen‘s “We Are the Champions/We Will Rock You” that tied in with NBC’s promotion of the 2024 Olympics, a London press junket with journalists from all over the world, a SiriusXM interview with Howard Stern, an HSN merchandise drop and a slot on Robin Roberts’ ABC special. The promotional slate was an endurance marathon that the 77-year-old Parton ran like a gold medalist, and devising and executing it helps earn Nozell the title of Billboard’s Executive of the Week.
Here, Nozell talks about the different facets of the campaign and how, even after almost 20 years together, Parton still managed to surprise him in a major way.
There were literally dozens of promotional efforts for Rockstar. Was there one single campaign or interview that you felt pushed the album over the edge?
[No.] It was the long setup time, the combination of the entire global marketing plan and the way we executed it like a military operation. We researched everything, we planned everything and we strategized everything. When we felt like we had the right game plan, we executed and followed through. We have been following this protocol for two decades and it has always served us well. There’s no “I” in team. We manifest our own success and my team — CTK Enterprises/Butterfly Records — deserves all the recognition in the world. Kyle McClain, Steve Ross, John Zarling, Kelly Ridgway, Olly Rowland, Marcel Pariseau and my entire staff, as well as Big Machine’s Scott Borchetta, Mike Rittberg and everyone at [the label] deserve enormous credit. Dolly delivered an incredible album that will go down in history as one of her greatest.
Rockstar tops Billboard’s Top Album Sales chart and, at 118,500 physical copies sold, she more than double her previous biggest week 30 years ago with 50,000 for Slow Dancing With the Moon. You did four different CD configurations and 10 vinyl variants. Like Taylor Swift, does she have fans who will collect every version?
Our original goal was to be in the top five of the Billboard 200 and to do 70,000 in the first week. We definitely crushed that. Dolly’s fans are extremely loyal and I’ve gotten to know many of them over the years. They definitely like to collect every single version of the vinyls, CDs and even cassette tapes. In true Dolly form, we defied the norm of the current marketplace and sold a lot of physical product. While we were still focused on streaming, we wanted to give Dolly’s fans and consumers a memorable product that you could see, feel and read, just like I, and many fans, grew up doing. With streaming, you leave out a lot of the artistic element of the product.
You also went into non-traditional retailers, including Cracker Barrel, Dollar General and HSN. Were any of those new for Dolly and how important is it for you to meet Dolly’s audiences where they are, which might not be the traditional music outlets?
Being that we’ve had so much success with Cracker Barrel and HSN [before], but had not tested out Dollar General, we decided to take a chance and [have] Dollar General be an official retailer for chart-eligible sales. I was also the one who did the same for Cracker Barrel when Dolly did her first project with them years ago. This was one of the deal points I made sure was included. We’re not afraid to take chances because Dolly doesn’t go on everyone’s highway, she creates her own path. We wanted to stick to that mentality. We made sure that wherever there was a Dolly fan, we needed to reach them.
The vast majority of her consumption came from sales as opposed to streaming. Were there efforts to up her streaming numbers from the past or was the plan to focus on album sales, given her older audience demographic?
We met with the DSPs early on and played them the entire album. They were just as blown away as we were and wanted to partner. We gave them exclusive content and time with Dolly.
We thought that out of the starting gates we should go for Dolly’s core fan base and deliver them a high-quality product. This is why we offered 10 different vinyl variants and did expensive photoshoots, with top pop photographers like Vijat Mohindra, who Miley Cyrus introduced to Dolly. (Parton is Cyrus’s godmother.) Dolly’s never been a huge streaming artist but we have continually increased her footprint year over year.
Dolly sang “Rocky Top” at the University of Tennessee’s football game the day after Rockstar’s release and then performed during halftime at the Dallas Cowboys’ game on Thanksgiving. You even created special CD packages for each team. How did those appearances bring in a different Dolly audience?
During the week of release, we wanted to create a marketing explosion. At the University of Tennessee, Dolly performed in front of 100,000 people and over 6 million TV viewers. Then the Dallas Cowboys on CBS had over 44 million TV viewers and 100,000 people live at the sold-out stadium. We could not have asked for a bigger look for the week of release. I can’t even put a price on this exposure.
However, there were a couple of caveats that I didn’t expect. The first was Dolly’s huge heart and generosity when she donated $1 million to the Red Kettle campaign with the Salvation Army, [which kicked off at the Cowboys’ halftime]. The second being that Dolly didn’t tell or show anyone that she was going to dress as a Dallas Cowboys cheerleader until it was time to go to the stage. When she came out of the dressing room, myself, the security, and my staff fainted. I couldn’t tell the difference between Dolly and the cheerleaders. That is the genius of Dolly and people are still talking about it.
Rockstar is her highest-charting album ever on the Billboard 200. How do you top this?
Even though we’re really proud of everything, we still fell short of the No. 1 spot on the Billboard 200 and we have our sights set on this goalpost for the future. We are highly competitive and just want to win for Dolly. She deserves the very best, always. We feel that this global push has raised Dolly’s profile and gained her a lot of new fans. She gained 500,000 new followers on social media in the past seven days alone. We’re excited for the future.
Dolly’s work ethic is second to none. What could younger artists learn from her?
Dolly’s 77 and I’ve been chasing her for the last 20 years. She has no plans of slowing down. A younger artist could definitely look at her work ethic and see that the hard work pays off. They can also look at her huge heart: the more you give, the more you receive, and that’s worked really well for Dolly. Also, she doesn’t judge anyone. She tries to find positivity in everybody. They can also learn that dreams really do come true. Dolly keeps on dreaming and we have to help her execute them.
Exactly 65 years ago, Ross Bagdasarian‘s “The Chipmunk Song (Christmas Don’t Be Late)” — a novelty song featuring weird, high-pitched voices augmented in a recording studio — kicked off what would become the multimillion-dollar Alvin and the Chipmunks brand. Three weeks after its Dec. 1, 1958, release, the track topped the Billboard Hot 100, then went on to win three Grammy Awards and sell millions of records.
“They were born from a No. 1 song, which is unusual for most cartoon characters,” says Ross Bagdasarian Jr., whose father — the creator of Alvin, Theodore, Simon and their long-suffering host, David Seville — died in 1972.
The potent holiday-season earworm evolved over the decades into a cartoon empire, encompassing blockbuster films and their soundtracks, animated TV series, Taylor Swift-style re-recordings, one platinum-selling album (the Alvin and the Chipmunks movie soundtrack), one gold-selling album (the Alvin and the Chipmunks: The Squeakquel soundtrack), concerts, musicals and dozens of branded toys, blankets, party favors and video games. Beginning with 2007’s Alvin and the Chipmunks, the four theatrical live-action Chipmunks films have grossed a combined $656 million, according to Box Office Mojo. “It wasn’t just that it was a song,” says Bagdasarian, who, with his wife, Janice Karman, produced the films and voiced some of the chipmunks. “It created characters and personality.”
The senior Bagdasarian had been shrewd enough to initially retain all the rights to the shockingly lucrative holiday tune: master recording, publishing and product licensing. (He relinquished the master rights in the late ‘60s.) Billboard estimates the holiday track that started it all brings in $300,000 in annual revenue for the master recording and publishing. It has racked up 112.4 million total on-demand U.S. streams, more than half of which have come in November-December of the last five years, according to Luminate. Last December alone, the track streamed 10.4 million times. Plus, “The Chipmunk Song” has sold nearly 665,000 digital tracks, according to Luminate, and Bagdasarian says the Chipmunks have sold 50 million albums in their history, from 1965’s Chipmunks A Go-Go to 1980’s Chipmunk Punk.
Along with Karman, Bagdasarian — who has a law degree from Southwestern Law School — runs Santa Barbara, Calif.-based Bagdasarian Productions, which they started in 1981. Early on, the couple intended to make original films and shows, but they moved in the Chipmunks direction with Chipmunk Punk.
“And here we are, almost 50 years later, trying to come up with the next new idea for Alvin and the Chipmunks, from TV shows to movies to another TV series that we just finished last year,” says Bagdasarian, 74, in a phone interview marking the song’s 65th anniversary.
What do you hear in “The Chipmunk Song” that nobody else does?
I am pulled back to 1958, with my brother and sister and I being called into my dad’s den, where he would record these demos before he went into the studio to do a more polished version. We would hear not only the charm of the song but the personality of Alvin, talking back to him, as only a four-or-five-inch tiny chipmunk could do to a large man. Parents understand how frustrated and exasperated Dave would be with Alvin, and kids love identifying with Alvin because he’s got that spunk and that sass and he’s not afraid to go, “Hold on a second.” Just that little rebellious, mischievous nature.
Ross Bagdasarian, Sr., creator of Alvin and the Chipmunks.
CBS via Getty Images
How much did Alvin empower you to be more rebellious as a kid?
I was more of the Simon character. Very dutiful. I was the one [who] really wanted my dad to be proud of me. So if there was a chore to do, let me wash his car or something. My younger brother Adam was the rebellious one. But I think he might have been rebellious on his own. I don’t know if he needed any prompting from Alvin.
Your family owns the entirety of the rights to the song — publishing, recording, licensing, etc. Right?
Yeah. True.
How did that come to be?
My dad was one of the first folks — you’re talking about in the ’50s — that not only owned the publishing rights to the song but he also owned the master itself. That was something that no artist was really doing back then. And Berry Gordy [Jr.], when he founded Motown, he had mentioned over the years [in private], “Well, when I found out that Ross Bagdasarian could own his own masters, I went from writing songs for people to developing a record label so I could own those masters, as Ross Bagdasarian had done.”
I didn’t realize the connection between your dad and Gordy.
Yeah. In the late ’60s, when he had decided he had done everything with the Chipmunks he wanted to do, he gave back [to] then Liberty Records, now Capitol-EMI, the phonograph rights to those masters. But he retained for himself — obviously, we still own these master-recording rights for movies, television, toys, commercials. The one area that we don’t control the master recording is simply in the phonograph-recording area. Which obviously is not what it was 10, 15 years ago, when you could actually really sell a lot of albums. “The Chipmunk Song” is still a wonderfully valuable song.
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So if anyone streams “The Chipmunk Song,” the master royalty goes to Capitol-EMI, now owned by Universal Music Group, not to your family?
That’s right. Fortunately or unfortunately, these days, 8 billion [plays] on Spotify would still amount to 17 cents. So it’s not a payment we actually miss. [Editor’s note: 8 billion Spotify plays would amount to about $38 million, according to Billboard’s royalty calculator.]
The most important revenue is in licensing songs for movies, the movies you make as part of the franchise, and publishing — right?
As far as the song is concerned, that is fair to say. The song has probably sold 20 million records, maybe more, because it sold 4.5 million records in the first seven weeks back in 1958.
Does your family own all the publishing — publisher share and artist share?
Yeah. My wife and I.
What do you remember about what your dad taught you about the music business?
It wasn’t as much about the music business as it was just life lessons. The most important thing that my dad ever said [was], “Listen, your word is all you will ever really have.” Had he lived a little longer, he would have added a caveat: “Your word is your bond, but don’t expect that from everybody else that you meet.” We’ve had times when we’ve made what we thought were various deals with record companies, only to have them say, “If you don’t have it in writing, you don’t have it.” They didn’t get that part of the story that my dad told me, evidently.
Want to give examples?
No! [Laughs.] I don’t think I want to. But they know who they are.
Any final thoughts about what it’s like to hear “The Chipmunk Song” everywhere this time of year?
Honestly, I am so thrilled every time, because it brings back my dad. I get to hear his voice.
Ed Christman contributed to this report.
Montana’s first-in-the-nation law banning the video-sharing app TikTok in the state was blocked Thursday, one month before it was set to take effect, by a federal judge who called the measure unconstitutional.
The ruling delivered a temporary win for the social media company that has argued Montana’s Republican-controlled Legislature went “completely overboard” in trying to regulate the app. A final ruling will come at a later date after the legal challenge moves through the courts.
U.S. District Judge Donald Molloy said the ban “oversteps state power and infringes on the Constitutional right of users and businesses” while singling out the state for its fixation on purported Chinese influence.
“Despite the state’s attempt to defend (the law) as a consumer protection bill, the current record leaves little doubt that Montana’s legislature and Attorney General were more interested in targeting China’s ostensible role in TikTok than with protecting Montana consumers,” Molloy wrote Thursday in granting the preliminary injunction. “This is especially apparent in that the same legislature enacted an entirely separate law that purports to broadly protect consumers’ digital data and privacy.”
Montana lawmakers in May made the state the first in the U.S. to pass a complete ban on the app based on the argument that the Chinese government could gain access to user information from TikTok, whose parent company, ByteDance, is based in Beijing.
The ban, which was scheduled to take effect Jan. 1, was first brought before the Montana Legislature a few weeks after a Chinese spy balloon flew over the state.
It would prohibit downloads of TikTok in the state and fine any “entity” — an app store or TikTok — $10,000 per day for each time someone “is offered the ability” to access or download the app. There would not be penalties for users.
TikTok spokesperson Jamal Brown issued a statement saying the company was pleased that “the judge rejected this unconstitutional law and hundreds of thousands of Montanans can continue to express themselves, earn a living, and find community on TikTok.”
A spokeswoman for Montana Attorney General Austin Knudsen, also a Republican, tried to downplay the significance of the ruling in a statement.
“The judge indicated several times that the analysis could change as the case proceeds,” said Emily Cantrell, spokeswoman for Knudsen. “We look forward to presenting the complete legal argument to defend the law that protects Montanans from the Chinese Communist Party obtaining and using their data.”
Western governments have expressed worries that the popular social media platform could put sensitive data in the hands of the Chinese government or be used as a tool to spread misinformation. Chinese law allows the government to order companies to help it gather intelligence.
More than half of U.S. states and the federal government have banned TikTok on official devices. The company has called the bans “political theatre” and says further restrictions are unnecessary due to the efforts it is taking to protect U.S. data by storing it on Oracle servers. The company has said it has not received any requests for U.S. user data from the Chinese government and would not provide any if it were asked.
“The extent to which China controls TikTok, and has access to its users’ data, forms the heart of this controversy,” the judge wrote.
Attorneys for TikTok and the content creators argued on Oct. 12 that the state had gone too far in trying to regulate TikTok and is essentially trying to implement its own foreign policy over unproven concerns that TikTok might share user data with the Chinese government.
TikTok has said in court filings that Montana could have limited the kinds of data TikTok could collect from its users rather than enacting a complete ban. Meanwhile, the content creators said the ban violates free speech rights and could cause economic harm for their businesses.
Christian Corrigan, the state’s solicitor general, argued Montana’s law was less a statement of foreign policy and instead addresses “serious, widespread concerns about data privacy.”
The state hasn’t offered any evidence of TikTok’s “allegedly harmful data practices,” Molloy wrote.
Molloy noted during the hearing that TikTok users consent to the company’s data collection policies and that Knudsen — whose office drafted the legislation — could air public service announcements warning people about the data TikTok collects.
The American Civil Liberties Union, its Montana chapter and the Electronic Frontier Foundation, a digital privacy rights advocacy group, have submitted an amicus brief in support of the challenge. Meanwhile, 18 attorneys generals from mostly Republican-led states are backing Montana and asking the judge to let the law be implemented. Even if that happens, cybersecurity experts have said it could be challenging to enforce.