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Songwriters and publishers will see a royalty bump in the new year for physical sales (including vinyl, cassettes and CDs) and digital downloads. According to a new document, published in the Federal Registrar on Tuesday (Dec. 12), the Copyright Royalty Board (CRB) upped the U.S. statutory mechanical royalty rate from the current rate of 12 cents to 12.40 cents if the song has a run time of five minutes or less. (If over five minutes, the rate is 2.39 cents per minute.)
This rate change is based on the Consumer Price Index for All Urban Consumers (U.S. City Average, all times) that was published by the Secretary of Labor.
This form of publishing royalty is paid to songwriters and publishers by record labels, which license their compositions for sound recordings that are then made into digital downloads or physical copies. This system is unlike that for U.S. mechanical royalties for streaming, which are paid to publishers and songwriters by streaming platforms like Spotify, Apple Music and Amazon Music.
Consistent Cost of Living Adjustments (COLA) have been an important (but controversial) part of the conversation around U.S. mechanical royalty rates in recent years. Prior to January 2023, the minimum statutory mechanical rate in the United States had been stuck at 9.1 cents since 2006, losing value each year as inflation climbed. January 2023’s raise represented a 32% rate increase.
In May 2022, when the 2023 adjustment was announced, BMG made a statement criticizing the majors, saying in part, “The entire songwriter community owes a huge debt of thanks to those who fought for this increase in the face of the opposition of major record companies and indifference of music publishers. … Without their belief and commitment, the [Recording Industry Association of America] RIAA (representing record companies) and the [National Music Publishers’ Association] NMPA (representing music publishers) would not have been forced back to the negotiating table.” This is a sentiment also held by independent songwriter George Johnson, who has consistently led the fight for a COLA adjustment through his participation in the Copyright Royalty Board proceedings.
For years, the NMPA didn’t push for the rate to be raised beyond 9.1 cents, while all sides weighed how to first establish streaming models and what rates should be paid for the fast-growing income stream of the music publishing business. While dealing with those larger issues, the NMPA and the labels continued the cycle of a 9.1 cent settlement for every five-year term from 2008 through 2022, and they were ready to do so again for the 2023-2027 term, as indicated in their initial settlement.
When Johnson, followed by other songwriter advocates like the Songwriters Guild of America and Music Creators of North America, pushed against the initial settlement rate of 9.1 cents for that term, the NMPA noted that litigation is costly, running into the tens of millions of dollars — which is why the organization initially focused on adjudicating streaming rates rather than the penny rate for physical and downloads. To litigate for both streaming and the penny rate would be even more costly than the millions the NMPA was already spending.
Moreover, it was argued that spending money fighting for the rate change for digital downloads and physical sales could be a wash for publishers when weighing the legal costs against how much additional revenue a possible rate increase could achieve. While physical and downloads back in 2021 accounted for 15% of market share for labels, for publishers it was a 5% market share. Some in the publishing business were also afraid that if they pushed for a higher penny rate, they would lose the support of the major labels in their quest for better streaming rates.
The CRB judges ultimately tossed out the 9.1 cent settlement for 2023-2027, and then the publishers and major labels came together to put together a second settlement for that term featuring a 12 cent penny rate and a COLA adjustment.
In a Dec. 7 statement about the upcoming adjustment from 12 cents to 12.4 cents for 2024, NMPA president/CEO David Israelite, said: “We are pleased that the Copyright Office has approved a Consumer Price Index (CPI) increase for physical products like vinyl records and digital downloads. Last year NMPA, the Nashville Songwriters Association International (NSAI) and others worked to raise these mechanical royalties from 9.1 cents to 12 cents — a 32% increase with the added insurance of including a mandated Cost of Living Adjustment (COLA) lift each year. While these forms of consumption are not top revenue streams in the current market they still represent a meaningful piece of the music industry and it is important that they continue to grow.”
SiriusXM will merge its publicly traded stock with a Liberty Media tracking stock to create a single, streamlined public stock, the company announced Tuesday (Dec. 12). The deal — a piece of financial engineering rather than an overhaul of the companies’ organizations — will create a new public company that continues to use the SiriusXM brand.
SiriusXM and Liberty Media laid out numerous benefits of the transaction: a simplified equity structure; enhanced trading liquidity; a larger float (a larger percentage of outstanding shares on the market); the elimination of a multi-class stock structure; greater strategic flexibility; and greater potential for inclusion in stock indexes.
Investors have had two ways of investing in SiriusXM: the SiriusXM stock that trades on the Nasdaq and Liberty SiriusXM Group (LXSM), a “tracking stock” created by majority shareholder Liberty Media. (A tracking stock is a stock that depends on the financial performance of a specific business unit or division.) LXSM accounts for 84% of SiriusXM’s 3.84 billion outstanding shares; SiriusXM’s public shareholders own the remaining 16%.
On Sept. 26, with SiriusXM’s typically stable stock price down 26% year to date, Liberty Media announced a proposal to merge the two stocks. As detailed Tuesday, Liberty will separate Liberty SiriusXM Group by creating “SplitCo,” which will holds all LXSM assets and liabilities. SplitCo will immediately acquire SiriusXM in an all-stock transaction to form “New SiriusXM” with one class of common stock. New SiriusXM is expected to continue to be traded on the Nasdaq under the familiar stock ticker SIRI.
Former LXSM shareholders will get 8.4 shares in New SiriusXM for each share of LXSM and will own 81% of the post-merger company’s outstanding shares. Former SiriusXM shareholders will own the remaining 19%.
The new company will have a leverage ratio of 3.9 at close and a target leverage ratio of 3.0 (net debt to earnings before taxes, interest, depreciation and amortization). New SiriusXM has secured financing commitments up to $1.1 billion to fund the refinancing of a LXSM loan and an exchangeable bond. The companies told investors share buybacks will take less priority until that target leverage is reached.
“This combination will create value for all stockholders by eliminating the tracking stock structure, enhancing liquidity and allowing former LSXM stockholders to participate directly in the ongoing performance of SiriusXM,” said Greg Maffei, Liberty president/CEO, in a statement. “SiriusXM commands the largest paid share-of-ear in the car and has proven itself as an incredibly successful and profitable business. We are confident SiriusXM will continue to create value by building on its resilient business model to execute its strategic initiatives.”
“We are pleased that the Special Committee of our Board of Directors has reached this agreement with Liberty Media, which will allow SiriusXM to enter its next phase of value creation,” added Jennifer Witz, CEO of SiriusXM. “In a highly fragmented audio entertainment industry, SiriusXM has differentiated itself as the leading audio entertainment provider by creating an experience centered on our high-quality, premium, human curated radio that is more relevant than ever. In doing so, we have built a profitable business that is poised for continued success.”
The deal is expected to close in the third quarter of 2024 and is subject to regulatory approvals and a majority vote of Liberty SiriusXM Group shareholders. The transaction has been approved by Liberty Media’s board, a SiriusXM special committee and SiriusXM’s board of directors. The deal will be tax-free to Liberty SiriusXM Group and SiriusXM shareholders, except for cash received instead of fractional shares.
SiriusXM’s stock price has dramatically improved since September thanks to news of the merger plan as well as a 10% increase in its dividend in October. Shares of SiriusXM rose 5.6% to $5.30 following Tuesday’s announcement, reducing its year-to-date deficit to 9.2%.
As the son of veteran agent Dennis Arfa, whose clients include Billy Joel, Metallica, Def Leppard and Rod Stewart, Jarred Arfa felt the pull of the entertainment business early on but wanted to make his own mark. And though he joined the family business, Artist Group International (AGI) — after a stint at Robert F.X. Sillerman’s licensing and rights company, CKX — he didn’t quite follow in his father’s footsteps, choosing to focus on agency management and business strategy instead of the day-to-day work of an agent.
In June, those responsibilities doubled when Jarred, 39, was promoted to executive vp/head of global music at Independent Artist Group (IAG), the talent firm formed when billionaire Ron Burkle’s The Yucaipa Companies merged AGI and the Agency for the Performing Arts, more commonly known as APA. (Yucaipa purchased AGI in 2012 and had been financing APA since 2020.)
The combined agencies now represent approximately 400 acts — a big jump from the 270 or so on AGI’s premerger roster — now that APA’s artists — among them, 50 Cent, Mary J. Blige, Lauryn Hill, Ne-Yo, Robert Glasper, Kamasi Washington, Cypress Hill and D’Angelo — have been folded into the mix.
That said, Jarred points out that “my role isn’t just signing clients, it’s signing agents” and growing the business as a whole. He also oversees the music division’s day-to-day operations and continues to work with his father, who is now IAG’s music division chairman. (Both manage Joel.)
Jarred, who lives with his wife and son in Manhattan, spoke to Billboard about the changes he has made at the agency. He also sized up his main competition and weighed in on WME and CAA agents’ dissatisfaction with their treatment after their companies’ initial public offering (IPO) and sale, respectively.
How did the IAG deal come together?
[Yucaipa co-founder and managing partner] Ron Burkle made an investment in APA during the pandemic. Frankly, we were not interested in them at first. The way their music department was run was not the way we ran ours, but I also saw they had some nice pieces of business. We met with Jim Osborne, who’s now [IAG] CEO, and we were really impressed by what he did with 50 Cent and Mary J. Blige — reinvigorating their brands through film and TV and how that enhanced their touring. So we started very organically. We decided not to commingle our music departments, but we had some artists interested in film and TV and started working with projects for Jane’s Addiction and Ghost. Eventually, we became agreeable to doing something bigger with APA if they handed the reins over to us in music. We merged, and Jim and Ron bet on me as the guy to help clean up their current music business in terms of who to keep and who not to keep.
How did Yucaipa’s culture affect IAG?
Their mantra has always been to let entrepreneurs be entrepreneurs and stay hands-off in the running of the business. We have one person from Yucaipa who works with us on a day-to-day basis, and then we go direct to Ron for bigger-picture things. When we sold the business to Yucaipa in 2011, I was still in my 20s, and I never felt he judged me by age. It was simply, “Are you smart? Can you get the job done?” If you deliver for him, you continue to rack up credibility. If I email him on something work-related, I’ll usually get a response quickly. It’s incredible, honestly, to have access to someone at that level.
How many clients does the company currently oversee?
In terms of touring, we have over 400 clients. That said, there were another 400 that were cut from the roster. We scrapped APA’s territorial system — which revolved around adult contemporary [acts] — and parted with some of the people in that model that didn’t work with our culture. We shifted some of the workforce and resources to where they were needed, which was their thriving urban department.
AGI was a music-first booking agency. How has merging with an agency involved in branding, film and TV benefited your roster?
Initially, [our music focus] served us well. We got a lot of clients who were promised the world by the major agencies, and when nothing was delivered for them, they’d come to us and say, “At least we know you’ll handle our touring well.” At the same time, it made it difficult to attract younger clients who were looking for [film/TV opportunities] and hoping for a branding deal. We need those other assets now to get us in the room for touring, which the APA partnership unlocks for us. And then we show them how much of a difference we can make on the touring side.
You have said that one of your most important responsibilities at AGI is to “stay neutral.” What does that mean?
It means I’m totally neutral when it comes to how we use our resources. A lot of times when we do sign an artist and I’m involved in the signing, I’m the one deciding which agent makes the most sense for the project because I’m the most versed in our agents’ skill sets and which one’s personality type suits the artist.
Billy Joel’s Madison Square Garden residency was a huge success. How will its completion affect business?
Nothing in our strategy changes. Obviously, you can never replace a once-in-a-lifetime-caliber artist on the level of Billy Joel, but as he recently said, he plans to continue to work after his residency at MSG is complete. We also have many other arena and stadium headliners.
How does IAG stack up against a competitor like Wasserman Music?
They’ve inherited a very strong music business. I think the problem they have — and they can dismiss it all they want, but it’s the same problem we had at AGI — is that they’re attached to a sports business. They don’t have the traditional film and TV core that is so important to so many of our artists. That’s an impediment.
Both WME and CAA have come under fire for how employees were treated during WME’s second IPO and CAA’s sale to Artemis. Agents at both firms were extremely disappointed with the amount and value of the shares they received. What’s your take?
First, I want to acknowledge that CAA’s $7 billion valuation is amazing for the agency business. As far as taking care of their people, when it comes to bonuses, I’ve always believed in the split model because there’s no arguments at the end of the day. The agent knows, based on a set formula, what they’re going to earn. There’s no gray area to be worked out, and that leads to a lot less headaches come those year-end conversations.
You’ve been public about your support of Ticketmaster. What is the government doing wrong in its constant probing of the ticketing space?
They should be focusing on the secondary market. That’s where the real problem lies. But they get lobbied hard by companies like StubHub. As agents, the best we can do is get as much of the high-end revenue for our artists that otherwise would go to the secondary market while keeping enough tickets available at affordable prices. Ticketmaster tools like Dynamic and Platinum are very helpful.
Do you think programs like Verified Fan are here to stay?
As much as I like Ticketmaster programs, this is the one that I don’t think works. Look at the backlash from Taylor Swift and Bruce Springsteen fans. Ticketmaster is making people take an extra step, and in exchange, the fans believe they’ll get a ticket at a fair price — neither of which is necessarily true. Verified Fan creates this false hope for the fan, and while the intention is noble, it ends up creating a lot more frustration than reward.
How often do you communicate with your father on agency business?
We speak a couple of times a day about what’s going on in his artist world and what his needs are. I would say we spend at least one phone call a day talking about Billy Joel and strategy. It is always a lot of fun.
When you two get together for family events, do you talk business?
It’s a blend. We could be talking about my son for one minute, then it goes back to the business. Then we talk about sports, and it’s back to business again.
The National Independent Talent Organization (NITO) has hired its first MD: Nathaniel Marro from New York’s Entourage Talent Associates. Having worked closely with Entourage founder Wayne Forte for over a decade, during which he worked on the management team for Tedeschi Trucks Band, Marro is now tasked with expanding NITO membership and advocating for policy […]
True to its title, Brenda Lee‘s “Rockin’ Around the Christmas Tree” — which just notched its second straight week at No. 1 on the Billboard Hot 100 — brings in some serious green over the holiday season.
Billboard estimates that in 2022, the enduring holiday hit racked up $2.7 million in master recording revenue for Lee and her label, Universal Music Group, and $1.274 million in publishing revenue, totaling nearly $4 million, on the strength of 464 million on-demand streams and 25,000 track downloads.
So far this year, Billboard estimates the master recording has garnered $1.6 million in revenue and about $700,000 in publishing revenue, or $2.3 million total, on the strength of 301 million on-demand global streams and 16,000 track downloads.
In the United States last year, “Rockin’ Around The Christmas Tree” generated nearly 1.75 million song consumption units (track downloads and on-demand streaming), while it has so far accumulated 967,000 song consumption units (and, within that, 301 million on-demand streams) in 2023.
But there’s still plenty of holiday season left — and when you compare the 49-week period that has elapsed so far this year with the same period in 2022, it’s clear that “Rockin’” is on track to surpass last year’s total. The song’s 967,000 song consumption units to date in 2023 is far ahead of last year’s 807,000 song consumption units (and 195 million streams) at the same point. (Luminate doesn’t compile global song consumption units).
“Rockin’ Around the Christmas Tree” was solely written by the late Johnny Marks, whose publishing company, St. Nicholas Music, would get the publishing revenue. Marks wrote a number of other holiday favorites including “Rudolph the Red-Nosed Reindeer,” “A Holly Jolly Christmas,” “Silver and Gold” and “I Heard the Bells on Christmas Day.”
The above estimates don’t include whatever royalties come in from licensing the song to Christmas compilation albums; while the publishing total doesn’t include whatever revenue is generated from cover versions.
After splitting with her original record label in October, Megan Thee Stallion is entering a new era: A source at Warner Music Group confirmed to Billboard that the artist has signed a distribution agreement with the company that includes services from a select global team.
For years, Megan Thee Stallion was embroiled in a legal battle over the deal she signed early in her career with 1501 Certified Entertainment, which released her music in partnership with 300 Entertainment. (300 was acquired by Warner Music Group in 2021.) In October, the rapper and 1501 “reached a confidential settlement to resolve their legal differences,” making Megan Thee Stallion — who is managed by Roc Nation — a free agent. “I’m so excited to be doing something for the first time independent since it was just me and my mama,” she said during an Instagram Live session.
Artists prize distribution deals because they typically get to retain ownership of their recordings. At the same time, Megan Thee Stallion will still benefit from WMG’s global infrastructure, marketing muscle and longstanding relationships at radio and television. Her team will include some staffers from 300 Entertainment as well as others across the company. (A rep for Megan Thee Stallion did not respond to requests for comment.)
These types of distribution agreements within major label systems have become more common in the modern music industry once artists gain a certain amount of leverage. Some young acts that have fast-climbing viral hits are even able to negotiate similarly favorable agreements right at the start of their careers, which would have been unthinkable a decade ago.
There is a potential downside to these arrangements: Because labels stand to earn less revenue from distribution deals, they may be less incentivized to throw their full weight behind these artists. Still, this is a dream scenario for many artists because it inverts the traditional music industry power dynamic.
Historically, artists handed their recordings over to a label in perpetuity in exchange for an advance and the chance to become a household name. Now it’s possible to have the best of both worlds. “That’s an amazing position to be in, to keep your copyright and still be famous,” says Tab Nkhereanye, a senior vp of A&R at BMG. (BMG has long offered artists licensing deals; in these agreements, ownership of recordings typically reverts back to an artist after a set period, conditional upon recouping the costs of the deal.)
As a result of these shifts in the industry, though, the term “independent” has become so roomy as to be nearly meaningless. It now stretches from an act self-releasing homemade recordings on TuneCore for a handful of fans all the way to Bad Bunny, who fills stadiums and tops charts around the world while enjoying lavish funding from The Orchard, which is owned by Sony Music. Most basketball players probably wouldn’t group together Giannis Antetokounmpo and a decent guy in a local pickup game, but that’s sort of what happens on a daily basis in the music industry. Adding to the confusion — “indie” is now often used to describe a specific style of rock music, regardless of whether it’s released by a major or independent label.
In many cases, “I don’t know that [independent] is really an applicable phrase anymore,” says Lulu Pantin, founder of Loop Legal. “The big distinction is self-funding versus receiving funding from an outside source.” “Now it seems like you’re either an unsigned artist or an independent artist,” adds Todd Rubenstein, founder of Todd Rubenstein Law.
Artists once required a hefty amount of financial support to record, manufacture, distribute, and market their music. Signing with a major record company meant acts had more resources at their disposal, while remaining independent signified a scrappier, bootstrapping approach, usually with a select group of labels — 4AD, for example, or Secretly Canadian. “Releasing on XL at one point was the height of independence,” says Ben Blackburn, who manages girl in red.
The initial outlay required to get a successful artist project off the ground plummeted with the rise of production programs accessible on laptops, digital distribution companies, streaming services, and social media platforms. Artists had a “newfound ability to compete on the same level without [the major labels], and in doing so, the ability to claim more control and literal ownership,” says Nabil Ayers, president of Beggars Group US.
“With digital distribution, artists weren’t going to keep doing perpetuity deals on the master side for five albums and an 18 point royalty,” adds Nick Stern, a longtime artist manager. “It was just a matter of time.”
In the second half of the 2010s, especially during the SoundCloud rap era, it became more common to hear about major labels chasing artists who were already amassing streams by the million. This meant that record companies had to give up a lot for the privilege of being associated with the artists, rather than the other way around.
Today many rising artists and their managers are intent on giving away as little as possible. This means that the major labels have all beefed up their distribution-and-services offerings, making attractive deals like the one obtained by Megan Thee Stallion more prevalent. “All of these major players with power and money decided to head into the [distribution] fray,” says Blackburn.
Sony Music has had the most success with the distribution-and-services model: It runs these deals through The Orchard, which enjoyed a bigger current market share in 2023 than any frontline label other than Republic and Interscope. The Orchard is hardly a loner, though; every major label group has at least one, if not more, distribution companies. (Warner has the Alternative Distribution Alliance, though Megan’s deal doesn’t run through ADA, according to a source with knowledge of the arrangement.)
“There are a lot of options out there for people to find those kinds of deals now that there weren’t even two years ago, and certainly weren’t five years ago when we started,” says J. Erving, a manager and founder of the artist services and distribution company Human Resources (which was acquired by Sony Music in 2020). “Initially a lot of artist managers and executives thought that type of deal was subpar in terms of your ability to have success. Now it’s something that’s sought after.”
A side effect of this new desirability, though, is “there really is no clear delineation of what it means to be truly independent,” Pantin says. “Independence now is a flexible term,” Blackburn adds. “It’s also a commodified term.”
This means the music industry would probably benefit from developing a new vocabulary to distinguish between artists with wildly different levels of financial support. “The record industry is currently lumped into two sectors: the majors and the independents, or ‘the rest,’” Ayers says. “‘The rest’ is actually a very disparate group of interests that don’t belong in a single bucket. We need a better way to describe the growing number of entities out there.”
Rubenstein agrees: “A deal with a major — or major independent label — is different than using a larger distributor that provides limited services, which is different than being your own ‘label’ and just loading your music up via DistroKid and jumping on TikTok,” he notes.
For now, as Blackburn puts it, “independence in the eye of the beholder.”
Last week, during Spanish Broadcasting System’s third quarter earnings call, Albert Rodriguez, the company’s president and COO, announced that he was leaving his post. While the announcement came as a surprise, Rodríguez says that, after 25 years at SBS, he is leaving in good terms.
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“I’m going to stay on as a consultant during the transitioning period,” he told Billboard in his only interview following his announcement. “We’re leaving in excellent terms and I’m very appreciative to Raul [Alarcón],” he added, referring to the chairman and CEO of the company, to whom Rodríguez directly reported to.
Rodriguez is still evaluating his future plans, but will likely launch his own consulting company.
SBS is the formidable Latin media company whose suite of radio stations in the top markets in the U.S. include La Mega in New York, the most-listened to Spanish language radio station in the country, according to Nielsen. SBS also operates the AIRE Radio Networks, a national radio platform of over 300 affiliated stations.
Rodríguez joined the company 25 years ago, initially as a general salesperson, and climbed the ranks. In June, 2021, he was named president, making it the first time in 36 years that the company named a new president, and first time it was led by a non-family member.
Working with Raúl Alarcón, who he calls a “beacon” of the Hispanic community, was a major highlight during his long tenure at SBS.
“The team we built is like family [to me]. We have performed better than all our industry peers,” says Rodríguez. A point of major pride, he says, was the launch of the Aire network, “which has grown immensely in terms of revenue and content and distribution.”
“We served very passionately the Hispanic voice in America,” adds Rodríguez of SBS, noting that despite Hispanics making up 20% of the total U.S. population, they represent only 6% of the U.S. market’s total advertising budget for 2022, according to the Hispanic Marketing Council. Moving forward, he says, “I want to be a leader in developing and increasing share to the multicultural space.”
Datwon Thomas has been named to the newly created role of executive producer, talent, for Dick Clark Productions (DCP). In his role, which takes effect immediately, Thomas will be part of DCP’s in-house talent team, collaborating on talent strategy, relations, bookings and creative, leveraging his experience from his 13-year stewardship of VIBE. Thomas will work out of both the New York and Los Angeles offices.
Thomas will also assume the role of editor-at-large of VIBE, supporting big-picture strategy for the brand. In addition, he will maintain his role as PMC’s vice president, culture and media, building diversity initiatives and programs for the company.
“I am thrilled to start this new chapter in my media and entertainment career,” Thomas said in a statement. “My time as editor-in-chief of VIBE has been incredibly rewarding. I would like to thank my staff of all eras for their hard work and support. Entering this new role is a valued achievement and one I take as an honor. I have been consulting with the DCP team for years, and during that time, my love of the rush of live television has grown. I look forward to getting even more involved in all aspects of great projects with amazing talent.”
“We’re very excited to have Datwon bring his experience and unmatched expertise in hip-hop and R&B to DCP,” Jay Penske, chairman, founder and CEO, Penske Media, and CEO, Dick Clark Productions, said in a statement. “His deep relationships and innate creative sensibilities will be instrumental in shaping the future vision of DCP’s world class portfolio of shows.”
Most recently, Thomas served as VIBE’s editor-in-chief. During this time, he pioneered new initiatives for hip-hop and R&B media and created platforms to showcase and discover emerging and established artists.
Since 2019, Thomas has worked closely with the DCP team as a consulting producer for flagship programs including the American Music Awards, Billboard Music Awards, Academy of Country Music Awards and Dick Clark’s New Year’s Rockin’ Eve with Ryan Seacrest.
Prior to VIBE and PMC, Thomas held positions as the editor-in-chief of hip-hop’s street authority, XXL Magazine, and founder/editorial director of XXL Presents Hip-Hop Soul, among other posts.
Whenever Ed Sheeran has toured Australia and New Zealand, he has partnered with Frontier Touring, the live division of the dominant independent music company, Mushroom Group. And he breaks records with almost monotonous regularity.
He did it with his Divide tour in 2018, which sold more than 1 million tickets in the market, according to Frontier, breaking Dire Straits’ record that had stood since the 1980s. And Sheeran did it again with his most recent trek, The Mathematics Tour, which filled stadiums across the country earlier this year, smashing the all-time ticket sales record on consecutive nights (March 2-3) at the Melbourne Cricket Ground, according to Frontier.
But this year’s tour was different. Mushroom Group’s legendary founder, Michael Gudinski, was not waiting at the airport to greet Sheeran. No Michael to see him off, either, or run amok on the adventures for which the good friends were famous.
“The reason I’m here right now,” Sheeran told the 105,000-strong Melbourne audience on March 2, “is because of an idea that he formed about eight years ago, and said, ‘Ed, you need to play in the round, in the MCG, with a band.’ I’d only started playing stadiums at this point, and I was like, ‘That place is really big. I’ve never played with a band.’ ” But Gudinski “convinced” him, he says, after his Divide tour ended. “I really wish he was here tonight,” Sheeran added.
Michael, the larger-than-life chairman and founder of Mushroom Group, which includes Frontier Touring and more than 20 music company brands, died March 2, 2021, at age 68.
The Mushroom Group and its staff was a family under Michael, and it remains so under his son, Matt, who now helms the company as chairman/CEO.
Michael (left) and Matt Gudinski in 2019.
Mushroom Creative House
Matt, 38, steered the business and its 300 staffers through the pandemic that crushed the live industry. Now Mushroom’s touring and agency activities have bounced back, and business is booming. As the company celebrates its 50th anniversary, Matt has taken the opportunity to look ahead and to remember the company’s achievements and challenges.
Matt had little time to grieve the death of his father. With his appointment to the top job confirmed in April 2021, he hit the ground running. He was at the helm when Mushroom announced its new talent management division, Mushroom Management; a multilayered international pipeline deal with Universal Music’s Virgin Music; the realignment of Frontier Touring; the launch of new booking agency MBA and events/touring company MG Live; and a partnership with hip-hop specialist Valve Sounds.
In 2021, he navigated Mushroom’s break with Harbour Agency, following claims from former staff of past management misbehavior at the agency.
On Nov. 26, dozens of Australia’s leading artists performed at Mushroom’s 50th-anniversary concert at Melbourne’s Rod Laver Arena — a venue where a statue of Michael, holding aloft his finger in the familiar No. 1 gesture, stands outside the entrance. Such Mushroom family acts as Jimmy Barnes, The Teskey Brothers, Amy Shark, The Temper Trap, Vika & Linda, DMA’S, Paul Kelly, Ross Wilson, Kate Ceberano and Missy Higgins joined the event that aired on the Seven Network, performing a mix of originals and classics from across the Mushroom catalog, including “Working Class Man,” “Holy Grail,” “Sweet Disposition,” “Riptide,” “It’s Only the Beginning,” “Before Too Long” and “Living in the 70s.”
The countdown to the concert included the Nov. 24 release of an all-star covers collection, Mushroom: 50 Years of Making Noise, and the theatrical release in August of Ego, The Michael Gudinski Story, a documentary on the executive whose death was mourned by many of the superstars he worked with, from Paul McCartney and Bruce Springsteen to Dave Grohl and Sheeran.
Veteran Mushroom artist Paul Kelly was among those on the bill of a Nov. 26 televised concert to mark the company’s anniversary.
Tim Lambert/Mushroom Creative House
In 1972, when Michael was just 20, he launched Mushroom Records, which soon became Australia’s indie music juggernaut. The company has shaped the country’s music culture like no other brand. Today, Mushroom Group embraces touring, booking agencies, publishing, merchandising/marketing services, venues, exhibition/events production, neighboring rights, branding, labels, talent management and more. (Warner Music acquired and absorbed the Mushroom Records label in Australia over a decade ago.)
“To survive 50 years as an independent music entertainment company is something we’re extremely proud of,” Matt says. “And throughout this year, we’ve tried to celebrate not only the history of the company, but the future.”
What were the first business challenges you took on when your father died?
We were still deep within the pandemic. And there were a lot of unknowns about how the music industry and the wider entertainment industry would move forward and recover from that. Without live music, it was an extremely challenging time for Mushroom Group and its survival. I’m really proud to be sitting here two-and-a-half years on from that, and I can confidently say that the Mushroom Group as a whole is in its best shape it has ever been.
What is your earliest memory of your father at work at Mushroom?
I’d always come into the office from a very young age, after school or even on holiday. We’d be going on tours together, whether it be Jimmy Barnes or Billy Joel. Before I’d even hit double [digits], I had a real passion for it. I was a budding concert promoter and entrepreneur, similar to my dad at a young age.
What was your first job in the music business?
When I was around 12 years old, I started trying to run some different events at different town halls, mostly for [those] under 18 and promoting bands. The first event I did wasn’t that successful; thenI started to hit my stride and was pretty much hooked. When I was about 16, I started getting involved with managing some upcoming artists and began to have influence in the A&R side of the group.
Your father was such a boisterous individual. What’s your management style?
It’s always an open-door policy and very collaborative. My dad was obviously a larger-than-life figure, and maybe some people out there thought that Mushroom was all about him, a one-man band. It was never that, never will be. Now there’s an opportunity for so many great people who’ve been part of the Mushroom Group for a long period of time to build up their profiles and really make a mark on this company and its future. Bringing their vision to life is something I’m very passionate about.
A U.S. No. 1 hit was high on your father’s wish list. What’s on yours?
At the time he had that dream, Australian artists having success [in] the biggest music market, the U.S. — outside of a very select few — was a foreign concept. Now there are so many artists that are making noise, having success globally. International success is a big priority, a big goal of mine. We have some artists who are doing really well, but we’d like them to go even further.
Michael Gudinski in 1979.
Mushroom Group Archive
You’ve recently had Robbie Williams, Paul McCartney, Sam Smith and Paramore tour Australia with Frontier Touring. Foo Fighters are next up. How would you describe the live business right now?
We’ve definitely had the biggest touring period in our history since the return to live. More artists are wanting to come here than ever before, and so many artists are selling more tickets than ever. But there’s still so many challenges to deliver these tours, whether it’s rising costs, economic challenges or just the competitiveness in the market. Everyone’s selling more tickets, but it’s more competitive than ever.
Your father was very proud of you for landing a Drake tour. How did that come about?
Drake was an artist that I was following from quite early and had been trying to get to come to Australia for many years before we finally landed his tour in 2015. It was a coup to get such a global superstar like Drake to tour Australia when we did. And we’ve had a few successful tours with him since then. Bruno Mars was another artist I brought to Australia very early.
Taylor Swift’s last tour in Australia was with Live Nation. Now Frontier Touring is producing her tour, which is scheduled for February.
We’ve worked with Taylor many times before. She loves Australia. And we’re looking forward to hosting her again. To get her back working with Frontier is something that we’re really excited about. I know it would have meant a lot to my dad, who had a great relationship with Taylor. I don’t think we’ve ever seen that demand for a tour like this, not just for Frontier, but for any promoters. For every one person who has bought a ticket to her tour, there are probably another 20 in Australia who want a ticket.
Your father was a relentless traveler and loved it. Is that something you enjoy?
My dad loved getting out there and building relationships, showing up anywhere in the world to see an artist that we worked with or that we wanted to work with. I definitely do the same. Travel in our industry coming out of the pandemic has probably changed a little bit, and the technology has evolved, but that’s how you create, maintain and grow great relationships.
How has Mushroom survived as an independent while so many other indies have gone belly up or been absorbed by multinationals?
The core of Mushroom is to invest in supporting Australian talent and to take it to the world. My dad was big on the saying of being a leader, not a follower. We’ve continued to evolve and adapt; it’s why we sit here with so many different business arms to the Mushroom Group, because we’re not reliant on one. If we were just a record label, we would have struggled to survive to this point. [We’ve been] able to continually evolve and ensure that we’re looking for the next thing, not the current thing. And investing in great people and other great entrepreneurs has really allowed us to stay successful over such a long period of time. Part of what makes us unique is the fact that it is a family affair. So many people at Mushroom have been there a long time. And we’re really an extension of our family. That’s what else has made us survive.
How did your father prepare you to take the reins at Mushroom?
It’s all about reputation in our business. He just instilled into me those key fundamentals: how to ensure that the business moves forward and all the foundations that he’d laid go on for a long time. Mushroom’s success is really down to amazing people, great artists, loyalty and strong overall values. I was lucky enough that for a number of years my dad and I were working closely together, and the Mushroom Group expanded so much over the past 10 years. A lot of the areas we moved into were things that not only were we driving together, but that I was driving and really taking the reins on. I was well prepared to take on the greater responsibility. I’ll always say it: My dad and I love what we did so much because we did it together. It’ll never be the same doing it without him.
Overcoming the Tyranny of Distance
A restructured Frontier touring continues to bring superstars to Australia.
Dion Brant was named CEO of Frontier in 2022.
Ian Laidlaw
Australian promoter Frontier Touring has come roaring back from the 2021 death of founder Michael Gudinski and a pandemic that hobbled the live industry.
“We’ve completed around 160 tours since the restart of touring in mid-2022,” Frontier CEO Dion Brant says. “It has been a strong 18 months,” he adds, noting the company had 44 tours on sale as of early November. According to year-end Billboard Boxscore data, Frontier ranks as the No. 7 promoter worldwide for 2023.
Founded by Gudinski in 1979, Frontier was established on the core value of prioritizing artists and fans. The company has continued to channel this ethos since touring restarted following the health crisis.
In recent months, Ed Sheeran, Paul McCartney, Billie Eilish, Sam Smith and Luke Combs have played stadiums and arenas across Australia as part of Frontier-produced tours. Sheeran’s Mathematics Tour sold over 830,000 tickets across 12 shows in Australia and New Zealand and left excess demand, Brant says.
The heat isn’t dissipating from the market anytime soon.
Throughout the Southern Hemisphere summer, Frontier will promote treks for Robbie Williams, Foo Fighters and Taylor Swift, whose Eras Tour has sold out seven 2024 stadium shows across Sydney and Melbourne, Australia’s most populous cities.
The so-called “tyranny of distance” — a phrase coined in 1966 by Australian historian Geoffrey Blainey — makes the country a challenging touring market. “It is more expensive” post-COVID-19, Brant says. The cost to “move people and freight is much higher than pre-COVID. An already marginal business is even more marginal.”
Even the price of replacement turf has soared. “Artists and their agents are working harder than ever to make touring viable, to get their artists in front of audiences in a way that still stacks up financially,” Brant continues. “We all play our part in that.”
Brant was promoted in March 2022, heading up a new leadership team, part of wider restructuring designed to help the “legacy, mission and culture” of Frontier to flourish following Gudinski’s death in March 2021.
Brant reports to the Frontier board, which includes Michael’s son, Mushroom Group chairman/CEO Matt Gudinski; Jay Marciano, chairman/CEO of AEG Presents, which has a joint venture with Frontier; and AEG Presents Asia Pacific president/CEO Adam Wilkes, who was appointed Frontier chairman as part of the restructuring.
Legendary Australian concert promoter Michael Chugg, executive chairman of Chugg Entertainment, reunited with former business partner Michael Gudinski to form a joint venture in 2019. More recently, Chugg joined the Frontier leadership team alongside Matt, Frontier senior promoter Gerard Schlaghecke and others.
As live entertainment returned, Frontier has welcomed a new golden age of stadium shows, promoting gigs by Billy Joel, Foo Fighters and Elton John. In years past, Australia would host “two to three stadium tours a summer for all promoters, if we had a big summer,” Brant says. “That seems to have changed.”
“Twenty years ago, people were lamenting what would happen to the business when The Rolling Stones, Eagles and Neil Diamond-type acts stopped filling stadiums,” he says. Not anymore. Brant points to the evolution in stage production and the quality of new artists now making their mark.
Adds Brant: “To be in stadiums eight times over a couple of summers is big for Frontier.”
This story originally appeared in the Dec. 9, 2023, issue of Billboard.
More people around the globe are listening to licensed music services than ever before — and are doing so via a growing number of different platforms — but piracy continues to divert cash from creators’ pockets, while a majority of music fans think that artificial intelligence (AI) should not be used to clone music artists’ voices without authorization, according to a new consumer survey from international recorded-music trade organization IFPI.
IFPI’s “Engaging with Music 2023″ study reveals that music consumers are spending on average 20.7 hours listening to music weekly, up from 20.1 hours in 2022 – or the equivalent of an extra 13 three-minute songs per week.
The London-based organization found that 73% of the 43,000-plus music fans it surveyed listen to their favorite artists through subscription or ad-supported audio streaming service such as Spotify, Apple Music or Amazon Music, down slightly from last year’s figure of 74% (IFPI says that the small decrease is down to a change in accounting methodology, rather than a drop in real terms). The proportion of paying subscribers rises from 46% in 2022 to 48% this year.
Audio subscription services are the most used format, accounting for around a third (32%) of music fans’ weekly listening time, closely followed by video streaming via platforms like YouTube or TikTok, which make up 31% of consumption.
On average, people now use more than seven different methods to engage with music, reports IFPI, with other popular formats including radio listening (17%), purchased music (9%) and attending live concerts (4%).
In line with previous years, the adoption of subscription streaming services is highest among younger listeners, with 60% of 16–24-year-olds and 62% of 25-34-year-olds surveyed saying they use subscription music platforms. Usage drops to 28% in the 55-64-year-old age bracket, although consumption is up year-on-year across all age demographics.
Among 16-24-year-olds, short form video platforms such as TikTok are listed as the most popular way that they engage with music on a daily basis, followed by audio subscription streaming services and then video streaming formats like YouTube.
The top five countries where people spent the most time listening to music through a subscription streaming service were Sweden (61% of people surveyed), Mexico (57%), Germany (55%), the U.S. (53%) and New Zealand (52%), with the United Kingdom dropping out of the top five.
Overall, IFPI reports a 7% year-on-year rise in time spent listening to music on paid streaming services – a slower rate of growth than the 10% rise in listening time in 2022.
Artificial Intelligence and the Persistent Piracy Problem
For the first time, IFPI’s research team asked music fans for their views on how they think artificial intelligence will impact on the industry. Nearly eight in ten (79%) said that human creativity is essential to the creation of music and 74% of respondents said that AI should not be used to clone or impersonate music artists without authorization.
The vast majority of people surveyed supported the need for AI systems and developers to be transparent and clearly identify any training data they have used to create new music works, which is one of the key provisions of the recently agreed EU AI Act.
The IFPI report was compiled by surveying internet users aged 16-64 between August and October across 26 countries, including the United States, Japan, United Kingdom, Germany, France, China, Australia, Brazil, Canada, Mexico, Indonesia and Saudi Arabia.
Collectively, these markets accounted for more than 91% of global recorded music revenues in 2022, according to this year’s IFPI Global Music Report. IFPI says the report is the largest music survey of its kind ever conducted.
In terms of genres, pop remains the most popular type of music globally, followed by rock, hip-hop/rap, dance/electronic and Latin. On average, music fans said that they listened to more than eight different genres of music with local-language genres such as K-pop in South Korea or Amapiano in South Africa increasingly popular in domestic markets.
Writing in the study’s foreword, IFPI chief executive Frances Moore says its findings demonstrate how the music industry has evolved to give “artists more opportunities than ever to find audiences,” who are in turn “discovering and engaging with more music in an increasing number of ways.”
Nevertheless, music piracy remains an ongoing issue that has “a severe and direct impact on royalties,” warns Moore. Of those surveyed, 29% of respondents said that use unlicensed or illegal methods to listen to or obtain music, down slightly from the previous year.
Stream-ripping sites remain the most popular way for consumers to access copyright-infringing music, IFPI found, with 41% of 16-24-year-olds confessing to using them. One in five people (20%) said they had used an unlicensed mobile app to illegally download music.
The listening study also contains separate reports looking at music consumption in China, India, Indonesia, Nigeria, the Philippines, Saudi Arabia, UAE and Vietnam.
In China, which last year overtook France as the fifth-biggest music market worldwide with revenues of $1.2 billion, 96% of people surveyed said they now used licensed music streaming services with the total number of hours spent listening to music each week increasing to just under 30 hours among respondents.
Despite the rapid growth in streaming in China, 75% of people surveyed said that they still used unlicensed or illegal ways to access music, demonstrating that piracy remains a serious issue in the world’s most populous country.
Responding to the report’s findings, Moore said that tackling all forms of copyright infringement on a global basis would continue to be a priority for IFPI to “ensure the most secure digital environment possible for music creators and fans alike.”