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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.”
When Uber Eats used mazie‘s “Dumb Dumb” in a commercial that played during the last Super Bowl, she ordinarily would have used the sought-after synch to promote the 2021 song relentlessly to her 375,000 TikTok followers. But her label, Goodbye Records, is distributed through Universal’s Virgin Music Group, which pulled its music from the social media platform at the beginning of February after negotiations for a new licensing deal fell apart. “It’s insane,” mazie says. “My song was just in a Super Bowl commercial, and I have to repromote it [by] using other people’s ripped versions of my song on the platform.”
The singer-songwriter, whose track went viral last year and says it “changed my life in every single way,” is one of many frustrated developing artists signed to or distributed by the world’s largest music company. They all have similar complaints: Their label contacts have spent years instructing them to focus the bulk of their marketing efforts on TikTok and its 1 billion-plus monthly active users. With their music no longer on the platform, they are scrambling for alternate ways to be heard.
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“A lot of us are left at the drawing board again, especially when we’ve gotten an artist over the anxiety of putting themselves out there on TikTok,” says Sabrina Finkelstein, manager of Los Angeles singer Kristiane. “Now that that’s gone, it brings you almost to square one.”
Kristiane is signed to Fader, a label distributed by UMG’s Virgin Music Group, so she’s building buzz for her upcoming Stray Dog EP by deemphasizing TikTok and talking to fans on Instagram Broadcast Channels and other platforms. “We’re putting up lost-dog posters all over New York and other cities,” says Finkelstein, who is also A&R director for the Sony Music-owned RECORDS label. “Small things you can do to bring it off TikTok and into the real world.”
Springfield, Mo., folk-country band Pawns or Kings can no longer post its 2022 track “Anymore” on TikTok, because Universal bought its distributor, Ingrooves, and merged it with Virgin Music Group — even after singer Edward Stengel spent $7,000 of his own money on a video. “That song was always our spearhead song,” says Stengel, who is still promoting the track on YouTube, Facebook and Instagram while posting older material released through independent label ONErpm on TikTok. But Pawns or Kings’ early music is darker than its current work, Stengel says, which makes the stopgap strategy “an abrupt pivot” for the band’s image.
Canadian rapper bbno$ says his 2021 track “Edamame,” which has nearly 426 million Spotify plays, was “having a moment” on TikTok when the UMG ban took effect. The artist had licensed the song to mTheory’s distribution division for a five-year period — the same mTheory that UMG acquired in 2022 (putting its top executives in charge of Virgin). “I’m actually fully independent. It was just this one deal that looped all the songs together, and I got fucked,” says bbno$, who is considering altering the song with pitch-correction and wild sound effects — such as the voice of SpongeBob SquarePants repeating, “I’m ready!” — to avoid detection from digital sweeps.
L.A. rock band Dead Posey, which released its single “Zombies” just days before the ban, sped up its songs on TikTok by 5% — an effective solution, although artists can’t link unofficial songs to official Spotify streams. “It has not been taken down,” says singer Danyell Souza, whose label, Position Music, has a Virgin distribution deal. Adds guitarist Tony Fagenson: “We’re hopeful this resolves soon in a favorable way to artists. In the meantime, we have to play some tricks to keep using this platform.”
UMG-signed and -distributed artists are also turning to their most potent asset on TikTok: fans. One of Kristiane’s followers recently posted a lip-sync video to a concert track, declaring, “At least UMG can’t take away my live audios.” Finkelstein is supportive of this approach. “No matter what, the fans are going to find a way to share their artists’ music and support them,” she says. “There are ways around it.”
This story will appear in the March 2, 2024, issue of Billboard.
A U.S. District Court judge is allowing a shareholder lawsuit against Live Nation to move forward, denying the concert promotion giant’s motion to dismiss it in a decision handed down Friday (Feb. 27).
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The case involves how much the company should have to disclose about ongoing public pressure from federal authorities and how much of its financial success it should attribute to its dominant market share in the concert industry — as opposed to demand for concert tickets or the strength of its business.
Shareholders Brian Donley and Gene Gress are suing Live Nation over drops in its share price from February 2022 to November 2023 that they say were brought on by the company’s “false and misleading statements and omissions” within its annual earnings reports — specifically regarding the company’s alleged “anticompetitive behavior and cooperation with regulators.”
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The lawsuit did not reveal any new antitrust allegations against Live Nation, nor did it detail any new antitrust investigations into the company by regulators. Attorneys for the shareholders instead focused on boilerplate language within the company’s shareholder report and argued that it should have spent more time talking about the threat a federal antitrust investigation posed.
In siding with the shareholders, Judge Kenly Kiya Kato took issue with how the company described its success, noting in a 13-page ruling that she believed that Live Nation’s “failure to include specific facts and details about their presence and control of the live entertainment industry” in its annual report didn’t paint the full picture. Kato wrote in her ruling that the company’s claim that 2022 revenue growth “was a reflection of the quality of the Ticketmaster platform and its continued popularity with clients across the globe” was “misleading” because it failed to mention that “Ticketmaster controls ticket distribution for over 70% of major concert venues,” and “77% of the top 100 amphitheaters worldwide.”
Kato also wrote that Ticketmaster’s claims that its success was based on the superiority of its ticketing systems was in part a false claim because it omitted criticism from competitors who testified against the company in front of the U.S. Senate in early 2023.
Since it merged with Ticketmaster in 2010, Live Nation has faced antitrust complaints over the company’s size and market share from competitors, politicians including Senators Amy Klobuchar and Richard Blumenthal, and consumer advocates. Scrutiny of the company increased in 2019 when officials with the Department of Justice opted to extend a decade-old consent decree against it, and then ramped up again following the high-profile 2022 crash of Taylor Swift’s Ticketmaster sale for her Eras Tour.
Since 2022, Live Nation has not been notified that it’s the subject of any legal action by the Department of Justice and has written in its annual disclosures that it cooperates with all federal and state authorities, operates in a highly competitive marketplace and attributes its revenue growth at the end of 2021 to an increase “in events and higher ticket sales.”
Attorney Laurence M. Rosen, representing several shareholders in the class action lawsuit, said Live Nation’s answers contradict June 2023 reports from Politico and CNBC that the company was “allegedly stonewalling” a Senate subcommittee led by Senator Blumenthal that was seeking documents from the company about how it operated its concerts division.
Live Nation countered that Blumenthal was misrepresenting the dispute, that it had already handed over thousands of documents and was contesting demands for confidential information that included private details about how much artists earned from touring. In its response to the Senate committee, the company argued it would only hand over the documents if confidentiality protections were put in place. While Live Nation’s attorneys viewed the disagreement as insignificant, Rosen argued that the objection meant the company was “not cooperating fully with the ongoing DOJ and Senate Subcommittee investigations,” an attorney for the shareholders wrote.
Live Nation declined to comment for this story.
Beyoncé‘s “Cuff It” vanished from TikTok on Tuesday (Feb. 27), the latest casualty of the platform’s stand-off with Universal Music Group (UMG).
“Cuff It” is not alone. Harry Styles‘ recordings are no longer available, SZA‘s recordings are gone, except for her new single “Saturn,” and most of Bad Bunny’s music is missing as well — even though none of these artists are signed to UMG labels.
When negotiations between UMG and TikTok fell apart at the end of January, official recordings made by UMG artists like Taylor Swift and Drake swiftly disappeared from the platform. After a grace period, songs that were penned in part by UMPG’s songwriters are now suffering the same fate.
“Cuff It” is one of many Beyoncé songs that features a contribution from a songwriter signed to Universal Music Publishing Group — in this case, Raphael Saadiq. UMPG’s roster also includes artists Styles, Rosalía, SZA, Bad Bunny and Steve Lacy for their songwriting credits. In the U.S., UMPG touches 20% to 30% of the music on TikTok, according to a rep for the platform. The rep declined to comment further.
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UMPG also declined to comment for this story. In a letter to songwriters earlier this month, the publisher said, “TikTok insists on paying our songwriters at a fraction of the rate that similarly situated major social media platforms pay — and without any material increase from our prior agreement… This is unacceptable.”
Tension between the music industry and TikTok has been growing for years. Many executives still believe it is the most effective platform for marketing music, even if it is maddeningly hard to influence.
At the same time, many around the music industry argue that TikTok does not pay enough to use the music that helped it become such a wildly popular app. (The music-tech company Pex found that 85% of TikTok videos incorporate music.) Late in 2022, UMG CEO Lucian Grainge noted that a value gap was “forming fast in the new iterations of short-form video.”
In a statement to Billboard at that time, TikTok global head of music Ole Obermann emphasized that the platform was not a music streaming service: “Our community comes to TikTok to watch videos, not to listen to full-length tracks.” He added, “We’re proud of the partnerships we are building with the industry and artists, and we are confident that we are enhancing musical engagement. That translates directly to more financial and creative opportunities for music creators.”
The simmering tension boiled over in late January. In an open letter, UMG announced that its negotiations with TikTok had fallen apart. “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. The record company accused TikTok of trying to “intimidate us into conceding to a bad deal that undervalues music and shortchanges artists and songwriters as well as their fans.”
TikTok responded by saying that UMG was pushing a “false narrative.” It’s “sad and disappointing, that [UMG] has put their own greed above the interests of their artists and songwriters,” TikTok continued.