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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.”
Sony Music has reached a settlement to resolve a lawsuit filed by New York Dolls singer David Johansen and other artists in an effort to regain control of their masters, finally ending years of closely-watched class-action litigation against major record labels over copyright law’s termination right.
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The tentative agreement, announced in court papers last week, will resolve a case in which artists claimed Sony had unfairly rejected their efforts to invoke termination – a federal law that’s supposed to let authors take back control of their works decades after they sold them away.
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The exact terms of the settlement, which attorneys for Sony called “an agreement in principle to settle all claims in this case,” were not disclosed. Neither side immediately returned request for comment on the agreement.
Johansen, along with fellow artists John Lyon and Paul Collins, filed the case against Sony in 2019, claiming the company had essentially refused to approve any termination requests from its recording artists. The case, filed as a proposed class action that aimed to represent hundreds of others in a similar situation, was lodged the same day as a closely-related case against Universal Music Group.
Taken together, the two lawsuits represented a sweeping critique of how the two music giants were allegedly approaching termination rights, which were created in the 1970s as a means of helping correct the imbalance of power between large entertainment companies and individual creators. In the case of the music business, if a musician sold away the rights to a song that later became a smash hit, termination theoretically allows them to get those lucrative copyrights back decades later — between 35 and 56 years later, depending on when the song was sold.
According to the lawsuits against Sony and UMG, the music companies had imposed an across-the-board rule that sound recordings (separate from the underlying musical compositions) were effectively never subject to the termination. The labels allegedly argued that most recordings were “works for hire,” in which the company simply hires artists to contribute to them; if true, that would mean the label was the legal author, and performers had no rights to win back in the first place.
But the lawsuits were dealt a serious blow last year, when a federal judge ruled that the UMG case could not proceed as a class action. Though he noted that the artists “raise issues of fairness in copyright law that undoubtedly extended beyond their own grievances,” the judge said that each of the individual musician’s circumstances were different, meaning each would need to file their own case against UMG.
That ruling did not decide the merits of the case, but it presented a severe logistical hurdle. Such lawsuits are extremely expensive, and artists typically lack the same kind of legal resources as the major labels who have allegedly denied their termination requests. A class action would have allowed the artists to pool their resources and secure a sweeping decision with only a single set of legal costs.
Following that ruling – and the judge’s subsequent rejection of the artists efforts to quickly appeal it – the two sides began moving toward a settlement. “Missing You” singer John Waite, one of the artists who filed the case against UMG, settled out in May; the remaining defendants in that case reached a settlement with UMG in December.
The UMG ruling was not directly binding on the lawsuit against Sony, which was being handled by a different judge in the same federal district court. But the two cases were filed by the same lawyers and were largely identical, meaning the UMG ruling certainly did not bode well for the Sony case’s chances to be approved as a class action.
Before last week, the Sony case had long been paused while the two sides worked on a settlement. In Friday’s motion announcing such an agreement, Sony asked to extend that pause until May, allowing them time to finalize the settlement in writing and submit it to the judge. The request was approved Monday, putting the case on track to be closed out this spring.
Attorneys for Sony and the plaintiffs both did not return requests for comment on Wednesday.
As broadcasters begin assembling in Nashville this morning (Feb. 28) for the Country Radio Seminar, expect a lot of talk. About talk.
Radio personalities’ importance has been on the decline for decades. They used to pick the music on their shows. That privilege was taken away. Then many were encouraged to cut down their segues and get to the music. Then syndicated morning and overnight shows moved in to replace local talent.
But once the streaming era hit and started stealing some of radio’s time spent listening, terrestrial programmers began reevaluating their product to discover what differentiates it from streaming. Thus, this year’s CRS focus is talk.
“That’s what’s so important about this year,” says iHeartMedia talent Brooke Taylor, who voicetracks weekday shows in three markets and airs on 100 stations on weekends. “The radio on-air personality is sort of regaining their importance in the stratosphere of a particular station.”
Taylor will appear on a panel designed for show hosts — “Personal Branding: It’s Not Ego, It’s Branding!” — but it’s hardly the only element geared to the talent. Other entries include “On Air Personalities: The OG Influencers,” a research study about audience expectations of their DJs; a podcasting deep dive; and four different panels devoted to the threats and opportunities in artificial intelligence (AI).
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As it turns out, artifice is not particularly popular, according to the research study “On Air Talent and Their Roles on All Platforms,” conducted by media analytics firm Smith Geiger.
“Americans have very mixed feelings about AI,” says Smith Geiger executive vp of digital media strategies Andrew Finlayson. “This research proves that the audience is very interested in authentic content and authentic voices.”
Not to say that AI will be rejected. Sounds Profitable partner Tom Webster expects that it will be effective at matching advertisers to podcasts that fit their audience and market priorities. And he also sees it as a research tool that can assist content creation.
“If I’m a DJ and I’ve got a break coming up, and I’ve pre-sold or back-sold the same record 1,000 times, why not ask an assistant, ‘Give me something new about this record to say’?” Webster suggests. “That’s the easy kind of thing right there that can actually help the DJ do their job.”
CRS has been helping country radio do its job for more than 50 years, providing network opportunities, exposure to new artists and a steady array of educational panels that grapple with legal issues, industry trends and listener research. In the early 1980s, the format’s leaders aspired to make country more like adult contemporary, offering a predictable experience that would be easy to consume for hours in an office situation. The music, and radio production techniques, became more aggressive in the ’90s, and as technology provided a bulging wave of competitors and new ways to move around the dial, stations have been particularly challenged to maintain listeners’ attention during the 21st century.
Meanwhile, major chains have significantly cut staffs. Many stations cover at least two daily shifts with syndicated shows, and the talent that’s left often works on multiple stations in several different markets, sometimes covering more than one format. Those same personalities are expected to maintain a busy social media presence and potentially establish a podcast, too.
That’s an opportunity, according to Webster. Podcast revenue has risen to an estimated $2.5 billion in advertising and sponsorship billing, he says, while radio income has dropped from around $14 billion to $9 billion. He envisions that the two platforms will be on equal financial footing in perhaps a decade, and he believes radio companies and personalities should get involved if they haven’t already.
“It’s difficult to do a really good podcast,” Webster observes. “We talk a lot about the number of podcasts — there are a lot, and most podcasts are not great. Most podcasts are listened to by friends and family. There’s no barrier to entry to a podcast, and then radio has this stable of people whose very job it is to develop a relationship with an audience. That is the thing that they’re skilled at.”
That ’80s idea of radio as predictable background music has been amended. It’s frequently still “a lean-back soundtrack to what it is that you’re doing,” Webster suggests, though listeners want to be engaged with it.
“One of the people in the survey, verbatim, said it’s ‘a surprise box,’ ” Finlayson notes. “I think people like that serendipity that an on-air personality who really knows and understands the music can bring to the equation. And country music knowledge is one of the things that the audience craves from an on-air talent.”
It’s a challenge. Between working multiple stations, creating social media content and podcasting, many personalities are so stretched that it has become difficult to maintain a personal life, which in turn reduces their sources for new material. Add in the threat of AI, and it’s an uneasy time.
“What I see is a great deal of anxiety and stress levels, and I don’t know how we fix it,” concedes Country Radio Broadcasters executive director R.J. Curtis. “There’s just so much work put on our shoulders, it’s hard to manage that and then have a life.”
Curtis made sure that CRS addresses that, too, with “Your Brain Is a Liar: Recognizing and Understanding the Impact of Your Mental Health,” a presentation delivered by 25-year radio and label executive Jason Prinzo.
That tension is one of the ways that on-air talent likely relates to its audience — there are plenty of stressed, overbooked citizens in every market. And as tech continues to consume their lives, it naturally feeds the need for authenticity, which is likely to be a buzzword as CRS emphasizes radio’s personalities.
“Imagine having a radiothon for St. Jude with an AI talent,” Taylor says. “You’ll get a bunch of facts, but you’ll never get a tear. You’ll never get a real story. You’ll never get that shaky voice talking about somebody in your family or somebody that you know has cancer. The big thing that just will never be replaced is that emotion.”
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ASCAP collections grew 14.1% to $1.737 billion in 2023 and payouts to songwriters and publishers increased 14.7% to $1.592 billion, the performance rights organization reported Wednesday (Feb. 28). Those figures represent a record year for ASCAP in both revenue buckets, as well as all-time highs for any U.S. performance rights organization ever, ASCAP claimed.
The last time BMI revealed its annual financials — for the year ended June 30, 2022 — the PRO reported collections of $1.573 billion and pay outs of $1.471 billion. BMI did not disclose any full-year financial information in its most recent annual report for its fiscal year ended June 30, 2023, and is not likely to disclose any financial information going forward, since it’s now owned by institutional investor New Mountain Capital and will be operating on a for-profit basis. ASCAP now stands as the only U.S. PRO operating on a not-for-profit basis.
ASCAP’s collections break down to $1.327 billion domestically (up 12.7% from the year prior), and $410 million internationally (up 19.2%). For distributions, ASCAP paid out $1.217 billion domestically (up 16.1%), and $375 million internationally (up 10.3%).
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“ASCAP’s mission and not-for-profit business model are more important now than ever before, as artificial intelligence transforms the music landscape, and the need for legislative advocacy to protect creators in DC has never been more important,” ASCAP chairman and president Paul Williams said in a statement. “ASCAP will always be a champion for the humans who create music and demand transparency and fair payment from those who exploit our work. ASCAP makes it possible for our songwriter and composer members to write the next song, to earn a living and to support their families. No one else in the industry has the backs of songwriters like ASCAP.”
In announcing its financial results, the organization pointed out that unlike its competitors, ASCAP has no debt, no shareholders, no private owners and no private equity investors. In other words, ASCAP’s music creator and publisher members are the sole beneficiaries of ASCAP’s financial success.
Moreover, it noted that a democratically elected Board of Directors composed of music publishers and music creators sets the royalty distribution rules and cost allocations based on follow-the-dollar principles. It is the only U.S. PRO that makes those distribution rules publicly available on its website providing transparency to its membership.
“We are delivering industry-leading technical innovation, legislative advocacy and revenue growth that solely benefits our members, not outside investors or shareholders,” ASCAP CEO Elizabeth Matthews said in a statement. “As we like to say, private equity never wrote an iconic love song which is why we fight purely for songwriters, composers and publishers, not for those who use creators and their works of art for their own profits or to secure their own debt. ASCAP differs from others because our mission and purpose is clear and unique.”
In looking at new technology, the PRO reported that in 2023 its board of directors adopted six principles to guide its response to the technology and later submitted them on behalf of members to a U.S. Copyright Office study on generative artificial intelligence. And it reported it had held some AI symposiums for members.
During the year, ASCAP membership grew by 66,000 new members bringing total membership to 960,000 members. Some of those new members included PinkPantheress, Jack Antonoff, Tyla, and Jared Leto and Shannon Leto of 30 Seconds to Mars, as well as art-pop singer-songwriter Caroline Polachek, alt-rocker d4vd, jazz vocalist Samara Joy, country genre bender Jessie Murph, dark balladeer Chappell Roan, post-punker ThxSoMuch and writer-producer Alexander 23, among others
Moreover, the organization says its song catalog now includes 19 million copyrights that consists of music from the likes of Beyoncé, Billy Joel, Cardi B, Dua Lipa, Garth Brooks, Jay-Z, Katy Perry, Lil Baby, Lin-Manuel Miranda, Mariah Carey, Olivia Rodrigo, Paul McCartney, Stevie Wonder and Usher, among others.
Getting back to the financial numbers, ASCAP notes that since the launch of its strategic growth plan in 2015, its compound annual growth rate (CAGR) for total revenue through 2023 has increased to 7%, and the CAGR for total distributions over the same time period rose to 8%.
Moreover, ASCAP reported that in 2023, audio streaming revenue rose 21%, general licensing revenue rose 23%, radio revenue rose 10% and audio-visual revenue rose 3% as compared to 2022. However, ASCAP didn’t break out the specific revenue numbers like it used to in the years preceding 2015, the last year that ASCAP provided extensive insight into its financials.
As a percentage of revenue, overall ASCAP paid out 91.7% of collections in 2023, which implies expenses accounting for 8.3% of revenue. Yet, ASCAP executives also say the organization’s pays out nearly 90% of collections, which means overhead amounts to a little bit more than 10% of revenue.
In any event, ASCAP claims its 90 cents payouts on every dollar of collections yield “the highest value exchange applied to the lowest overhead rate provided to creators and publishers of any U.S. PRO.”