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Ariana Grande has a new manager in Brandon Creed. The superstar has signed with his newly-launched Good World Management firm, sources tell Billboard.
Grande made major headlines in August when she split with longtime manager Scooter Braun‘s SB Projects. Grande had been with the company since 2013, the year she released her breakthrough debut album, Yours Truly.
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“[Ariana] likes that he understands her on a different level and between acting and music, she has a lot coming up and is excited to have found a new support system to help her execute her plans,” says a source close to the situation.
“She wants the focus to be her art and he puts her artistry and vision before anything else,” adds another source. “He is the perfect person to help her execute her visions for this next chapter of her life and career.”
In 2017, Creed — a longtime manager whose previous clients have included Bruno Mars and Lizzo — merged his own The Creed Company with Irving and Jeffrey Azoff‘s firm to form Full Stop Management. He split with the Azoffs in July, announcing the launch of Good World Management, bringing his clients Mark Ronson, Troye Sivan and Charli XCX along with him. Grande marks his third major signing since then.
In early August, Creed and Lydia Asrat announced they had signed Normani to a co-management deal through Good World and Asrat’s Q10. Then, in September, he signed Demi Lovato — another former Braun client.
Grande has had eight charting albums on the Billboard 200, six of them hit the top 10, with five topping the list. Her last release, Positions, debuted atop the chart in 2020 and spent two weeks at No. 1.On the Hot 100, she’s logged 73 entries — including 20 top 10s, seven of which hit No. 1. She most recently led the tally with her remix collab on “Die for You” with The Weeknd in March 2023.
Across her catalog of songs, she’s generated 23.5 billion on-demand official streams in the U.S., according to Luminate. Her albums have earned 22.4 million equivalent album units in the U.S, of which traditional album sales equal 3.3 million.
Grande recently teased her forthcoming seventh studio album with a series of photos posted to Instagram back in the studio. Artists including Selena Gomez, Billie Eilish and SZA expressed excitement in the comments for the pop star’s anticipated return.
On Saturday (Dec. 9), Grande performed “Oh Santa!” alongside Mariah Carey in New York. Next year, she will star as Glinda alongside Cynthia Erivo in the long-awaited Wicked film.
When Travis Scott performed a virtual concert inside the battle royale game Fortnite in April 2020, it drew 12.3 million concurrent players at its peak — the largest in-game gathering in Fortnite history. But despite this pull, “music has always been a little bit of a one-off” for us, says Nate Nanzer, vp of partnerships for Epic Games, the company behind Fortnite.
“We’ve done a concert here, and then a year-and-a-half later there’s another one. We haven’t had a persistent space to celebrate music before.”
This changed Saturday (Dec. 8), as the company rolled out Fortnite Festival, a music-focused game made in collaboration with Harmonix, the developer behind titles like Rock Band and Guitar Hero. Players can create a band with friends — or forge ahead solo — and perform hits on a variety of virtual instruments.
“For almost 30 years now, we have been trying to invent new ways for people to experience music through gameplay,” says Alex Rigopolous, co-founder and studio lead of Harmonix. “We never had an opportunity to do that on anything like the insane scale that Fortnite offers.”
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Epic Games previously dabbled in music by purchasing the platform Bandcamp in 2022, but the partnership proved short-lived. In September, Epic announced that it was laying off 16% of its staff and that the licensing company Songtradr was acquiring Bandcamp in September. (Layoffs hit Bandcamp as well.)
“While Fortnite is starting to grow again, the growth is driven primarily by creator content with significant revenue sharing, and this is a lower margin business than we had when Fornite Battle Royale took off,” Epic Games CEO Tim Sweeney wrote in an email to staff.
Fortnite is known for unbridled mayhem: Up to 100 players fight to death on an island, with the goal of being the last one standing. Rigopolous believes the game’s new music component may attract new users who steered clear in the past.
“Not everyone on Earth is interested in a battle royale game,” he says. In contrast, “basically everyone on Earth loves music.”
Fortnite Festival players will initially be able to drum, strum, or sing along with more than 30 songs, including the Weeknd’s “Blinding Lights,” the Killers’ “Mr. Brightside,” and Psy’s “Gangnam Style.” Players form a team, pick their track of choice, and choose an instrument — in addition to the usual suspects like guitar and percussion, they can select vocals, bass, keytar, and more. Once they’re transported to the stage to perform, game play may remind some users of Guitar Hero, with brightly lit notes zipping towards the user indicating what button they’re supposed to press on their keyboard or console.
Epic Games’ goal is eventually to have “hundreds” of songs available to play in Fortnite Festival, according to Nanzer.
“There will be a rotation of songs that anyone can play for free,” he explains. “If there’s a song you really like and want to be able to play whenever you want, you can go buy that song” to retain access to it. Nanzer says “music rights holders will share in the revenue from sales of music in the game.”
We’ve taped the launch setlist to your amp, so you can prepare for the Festival 😎These sweet Jam Tracks will be on rotation starting in just three more days, so study up! pic.twitter.com/gYJc8jzfLN— Fortnite Festival (@FNFestival) December 6, 2023
These tracks — “Blinding Lights,” “Mr. Brightside,” Lady Gaga’s “Bad Romance” — are already massive, billion-stream hits. “Most of the music in the game is going to be huge hit music, household names,” Rigopolous acknowledges. But the hope, in time, is to introduce music from “lesser known artists who are cool and people should hear.”
“We have lots of pitches already from our label partners,” Nanzer adds. “We really want this to become a real opportunity for [the music industry] to reach this audience in a way that they’ve never been able to reach them before.”
If YG Entertainment’s re-signing of all four BLACKPINK members is any indication, investors can worry less about K-pop companies’ ability to retain their artists.
YG Entertainment gained 17.2% this week to 59,300 won ($45.00) as investors reacted to news that the four members of BLACKPINK signed to new, exclusive contracts with the agency. (The share price rose 29% the morning the announcement was made.) Uncertainty about contract renewals had caused the company’s share price to decline 16% in the week ended Sept. 22, as news reports out of South Korea said three BLACKPINK members would leave YG and spend just six months out of the year with the group. At the time, the company denied the news and insisted that the deals were still being discussed.
The BLACKPINK renewal appeared to have a positive impact on the stocks of other K-pop companies. Shares of HYBE gained 12.3% to 237,500 won ($180.24), while SM Entertainment shares rose 3.6% to 88,200 won ($66.94). Those improvements far exceeded the 0.5% gain posted by South Korea’s KOSPI composite index.
The Billboard Global Music Index gained 2.2% to a record 1,481.56, surpassing the previous high of 1,426.49 set four weeks earlier. That brought the index’s year-to-date gain to 26.9%. Half of the index’s 20 stocks finished the week in positive territory.
This week’s 2.2% gain outpaced major indexes around the world. In the United States, the Nasdaq improved 0.7% to 14,403.97 while the S&P 500 rose 0.2% to 4,604.37, reaching an all-time high of 4,609.23 on Friday (Dec. 8). In the United Kingdom, the FTSE 100 gained 0.3% to 7,554.47.
Spotify was the biggest contributor to the Billboard Global Music Index’s gain this week. The streaming company — the largest component of the 20-company, float-adjusted index — enjoyed a double-digit increase this week, gaining 9.6% to $198.05 after Monday’s news the company will lay off 17% of its workers. Following Thursday’s news that CFO Paul Vogel will leave the company in March 2024, Spotify shares rose 1.1% on Friday.
Another stock to react to financial news was Sphere Entertainment Co., which announced the sale of $225 million in convertible senior notes that mature in 2028. That sent the company’s shares down 15.5%, but the stock recovered most of its losses and finished the week down only 5.3% to $32.66. Following the debt announcement, Sphere Entertainment was upgraded by Seaport to a “buy” with a $38 price target, representing a 16.4% upside over Friday’s closing price. U2 concerts were doing $500,000 more per show than expected and the $99 average ticket price to the Darren Aronofsky film Postcard From Earth was above analysts’ $84 estimate.
The smallest stock on the index, Abu Dhabi-based music streamer Anghami, dropped 41.3% to $1.35 without any regulatory filings or other news. The stock was trading below $1.00 per share as recently as Nov. 15 but jumped to $3.49 on Nov. 21 on trading volume of 57.7 million shares, or about 50 times the daily average.
The Michael Jackson estate isn’t happy about a recently-announced digital sale of an early Jackson 5 recording, warning that it “violates the Jackson Estate’s rights” and could lead to a lawsuit.
A Swedish company called anotherblock announced Wednesday (Dec. 6) that it would digitally release a 1967 version of the song “Big Boy,” claiming it represented the first time Jackson’s voice had been put on tape. But in a letter sent Thursday, the estate’s attorney, Jonathan Steinsapir, pointedly advised the company about several problems that might “expose you to liability to the Jackson Estate.”
Among other things, the letter (which was obtained by Billboard) warned that the estate owns all rights to Jackson’s name, image and likeness rights, along with his trademarks. “Given this,” Steinsapir wrote, “any use of Michael’s name, image, and likeness in marketing, advertising or in the product itself violates the Jackson Estate’s rights.”
At issue in the budding dispute is a 1967 version of the Jackson 5 song “Big Boy,” a subsequent version of which was commercially released in 1968. The earlier version is called the “One-derful Version” because it was recorded at Chicago’s One-derful Studios. According to Rolling Stone, that version of the song first surfaced in 2009 and was released in 2014 on vinyl.
On Wednesday, anotherblock said it would release the track for the first time in digital format, doing so in partnership with Jackson’s mother, Katherine Jackson, and with a company called Recordpool, which purportedly controls the intellectual property rights to the recording. The sale, which included $25 and $100 packages with various other goodies, is meant to continue through the weekend via the anotherblock site.
But in its letter on Thursday, the estate warned that whatever deals anotherblock had struck to facilitate the “Big Boy” sale could be invalid if they covered rights that were controlled solely by Michael’s estate, like his trademark rights. And the estate’s lawyers strongly questioned the claim that the “One-derful Version” was Jackson’s first studio recording.
“We have no information to confirm that the unreleased recordings you are making available are in fact the first time Michael Jackson’s ‘voice was put on tape’ or even that it was the first time he recorded in a studio at all,” the estate’s attorney wrote. “Indeed, we have good reason to believe that this is not the first time Michael Jackson ever recorded in a studio. Because of that, you are likely misleading the public.”
A 2009 article by the Chicago Reader called the “One-derful” track “the earliest known studio recording of Michael Jackson and his brothers.” A 2014 article from Rolling Stone likewise called the recording the “earliest commercially available Jackson 5 recording.”
In Thursday’s letter, the estate also sharply criticized the decision to publish previously unreleased songs, telling anotherblock that Jackson was “was the consummate perfectionist” and that he had been “very careful about what recordings he released to the public.”
“Because of this, we have serious doubts that Michael would have ever wanted these recordings released and commercialized,” the estate’s attorneys wrote. “As the persons designated by Michael to protect his legacy after his untimely passing, the Estate’s Co-Executors are duty-bound to point this out. What you are doing is the opposite of honoring Michael Jackson.”
As if the message wasn’t clear enough, at the bottom of the letter the estate warned that it reserved “all of the Jackson Estate’s rights and remedies,” including the right to seek monetary damages and an injunction blocking further sales.
A spokeswoman for anotherblock declined to comment.
Spotify’s announcement this week that it was laying off 17% of its global workforce surprised a music business enjoying a renaissance. After all, Spotify ignited the subscription-streaming boom that saved the industry. And while the companies that depend on the online advertising business go through booms and busts — think of Meta cutting 21,000 jobs since 2022 — music business jobs have been relatively safe.
Spotify’s decision to eliminate about 1,500 full-time staffers shouldn’t have come as a surprise, though. As CEO Daniel Ek put it in a letter announcing the layoffs, “Today, we still have too many people dedicated to supporting work and even doing work around the work rather than contributing to opportunities with real impact.”
Over a decade and a half, Spotify pioneered a new model for music subscriptions by prioritizing growth over profit. While on-demand video streaming services such as Netflix frequently raised prices, Spotify left most of its prices unchanged until July. Digital music platforms have a notoriously tricky path to profitability, but Spotify’s share price soared thanks to a pandemic-era boost to streaming companies as well as high expectations for its nascent podcasting business. By February 2021, as Spotify poured money into acquisitions and pricey podcasting content, the stock was trading at $364.59 per share, valuing the company at roughly $71 billion.
By 2022, however, Spotify’s investors had run out of patience. The stock was trading at $110 on June 8 when Ek and CFO Paul Vogel shared their ambitious plan at the company’s Investor Day presentation: $100 billion in annual revenue, 40% gross margins and 20% operating margins. To get there, Spotify would continue to scale its podcasting business and lean on its audio content acquisitions — The Ringer, Parcast, Megaphone and Anchor — to help the format reach larger audiences. Now, Spotify also wants to do for audiobooks what it did with podcasts: piggyback on its massive base of music listeners, develop innovative products and build a bigger market.
Podcasts and audiobooks, as well as services sold to artists and record labels like merchandise listings and Discovery Mode, are important to reaching the targets of 40% gross margin and 20% operating margin. Given the nature of licensing deals with record labels and music publishers, music margins have little room to improve. Whereas video streamers like Netflix pay fixed costs for much of their content, Spotify pays a percentage of revenue to record labels and music publishers. That means as revenue increases, so do its content costs. And that’s not likely to change. “Our strategy is not predicated on trying to extract margin by negotiating better terms with the content partners we have,” Ek said at the 2022 Investor Day.
Over a year later, however, Billboard’s analysis of Spotify’s financial statements shows the company is still nowhere near its target margins. Since the first quarter of 2020, its gross profit margin has fallen between 24.1% and 28.4% while its operating profit margin has ranged from –8.8% to 3% and was below zero in 11 of 15 quarters.
Merely adding subscribers isn’t enough. (The company reported 226 million at the end of Q3 2023.) Reaching its targets requires Spotify to cut costs while investing in new growth opportunities such as podcasts and audiobooks. Ek said as much when explaining Vogel’s upcoming departure on Thursday. “I’ve talked a lot with Paul about the need to balance these two objectives carefully,” he said in a statement. “Over time, we’ve come to the conclusion that Spotify is entering a new phase and needs a CFO with a different mix of experiences.”
Spotify’s cost-cutting started in 2022 with a pause on new hires, layoffs in October and the cancellation of six live audio shows in December. This year, it laid off 6% of its global staff in January and in June merged two podcast production houses, Gimlet and Parcast, and further cut its podcast workforce by 2%. In August, it shut down Spotify Live, a short-lived live streaming app. Then on Monday, Spotify announced it would lay off 17% of its workforce. It also canceled two in-house podcasts, Heavyweight and Stolen.
As the graphs show, recent trends in Spotify’s financials made it clear larger cuts were necessary to meet the company’s ambitious targets. Personnel costs as a percentage of revenue rose from 13.8% in 2021 to 16.2% in 2022. Research and development expenses — which include some salaries — jumped from 9.4% of revenue in 2021 to 11.8% in 2022.
As Ek explained in the memo to employees, Spotify grew in 2021 and 2022 to take advantage of lower-cost capital. Today’s environment is different, however, and Ek believes Spotify’s “cost structure for where we need to be is still too big.” Indeed, Spotify’s head count steadily increased as it acquired companies, developed new formats and created product innovations that both resonated (Spotify Wrapped) and flopped (Spotify Live) with users. The number of full-time employees increased nearly 50% from 2020 to 2022.
This growth came without added efficiency, however. The revenue generated per employee peaked at 1.54 million euros ($1.66 million) in 2019 and declined to 1.4 million euros ($1.51 million) in 2022 — the lowest since 2017. The July price increase will help Spotify bring in more revenue without additional staff or resources, though the effectiveness of those increases won’t be known until Spotify releases full-year results in late January.
What’s more, Spotify’s gross profit per employee fell to a five-year low in 2022. Gross profit is what’s left after cost of sales — primarily royalties to labels and publishers — is deducted from revenue. It goes toward personnel costs, sales and marketing expenses, and general and administrative costs. But as Spotify added employees in recent years, gross profit per employee fell to 350,000 euros ($377,000) in 2022 from 391,600 euros ($421,000) in 2021.
An obvious way for Spotify to reach its target margins was to make larger cuts to its workforce and, as Ek phrased it, “become relentlessly resourceful.” Cutting 17% of its personnel costs would have resulted in savings of 323 million euros ($349 million) in 2022, based on total personnel costs of 1.9 billion euros ($2.05 billion). That savings would have halved Spotify’s 2022 operating loss of 659 million euros ($711 million).
Ultimately, the multi-billion-dollar question is simple: Can Spotify continue adding subscribers as fast as it has in previous years and develop its spoken word products into the higher-margin businesses it needs with far fewer employees? That’s the high-stakes situation the new CFO will walk into in 2024 and that will determine the company’s future from here on out.
Each week we’ll be sharing the most important news from the north with Canada’s top music industry stories, supplied by our colleagues at Billboard Canada.
For more Canadian music coverage visit ca.billboard.com.
Online Streaming Act hearings
For the last few weeks, a who’s who of stakeholders in Canadian music and media have been appearing before the Canadian Radio-television and Telecommunications Commission (CRTC) — from rights manager SOCAN to Spotify, Sirius XM and even UFC. The occasion is Bill C-11, a.k.a. the Online Streaming Act, which will update Canada’s Broadcasting Act for the first time in decades. The hearings will continue until Friday (Dec. 8).
It’s a major deal for the Canadian music business, whose system of CanCon requirements and public funds have built an industry that can compete — or at least not crumble — in a market dominated by American media to the south. This first round of hearings are focused on major streaming platforms like Spotify and YouTube and potential regulations and monetary contributions they may have to make in order to continue operating in Canada.
“We hope that the CRTC will lean into this idea that it’s a once-in-a-generation regulatory process,” says Patrick Rogers, CEO of Music Canada, which represents the major label. “There are a lot of big questions: Who gets regulated? Who pays? How much? Who has access to the money? Now is when we’re going to figure it out.”
A worry among many is that too much financial regulation of big American tech companies could cause them to scale back their investment in Canada. Something similar recently happened with Bill C-18, in which Meta chose to block all Canadian news rather than pay for it. In Spotify’s hearing, company executives — who have an office in Toronto — said that compelled spending could affect their existing Canadian investments.
“The objective here should be: how do we build a stable, viable, resilient, equitable, middle class of artists and thriving Canadian-owned businesses and the music space that can compete globally?” says Andrew Cash, president and CEO of the Canadian Independent Music Association. READ MORE
How Quebec markets its music to the world
M for Montreal festival took place from Nov. 15-18, bringing Canadian and international visibility to Quebec music and artists. That’s an important objective in Quebec, where francophone music is marketed as much to France and globally as to the rest of Canada, which is divided by language.
According to the Société de développement des entreprises culturelles québécoises (SODEC), one of the festival’s main financial partners, M for Montreal is a significant market. “It’s an extraordinary opportunity to check the interest of foreign professionals in very particular artistic proposals whose potential is not yet known internationally,” says Élaine Dumont, general director of international affairs, exportation and marketing of Cinema at SODEC.
For her, events like M for Montreal are a fantastic way to gauge interest in Quebec musicians. “They are at home with their audience, so they can give the best of themselves, and that is precious,” says Élaine Dumont.
Similarly, SODEC supports collective presence, which means making sure Quebec artists and music industry professionals are represented at festivals worldwide. “We collaborate with M for Montreal, Mundial Montreal, FME, POP Montreal, for example, so that they send professionals internationally,” she adds. Thus, M for Montreal participates in events such as South by Southwest in Texas, Reeperbahn Festival in Germany, The New Colossus in New York and The Great Escape Festival in England.
“The festival has a good network in France, Germany, the UK, the US, and the rest of Canada,” notes programmer Mathieu Aubre. And because the French market is not approached like that of Francophone Africa, for example, SODEC, with an annual budget of over $4 million for the export of Quebec music, also offers specific support to territories. “We distribute various aids that allow us to take risks, support artists’ careers and develop audiences outside Quebec and internationally,” says Dumont. READ MORE
Diljit Dosanjh to play the biggest Punjabi concert outside of India
Diljit Dosanjh is set to make history next year with a just-announced performance at Vancouver’s BC Place on April 27, 2024 — the country’s first-ever Punjabi stadium show. With a capacity of 54,500, it’s expected to be the largest ever Punjabi music performance outside of India.
The BC Place announcement caps off a banner year for Dosanjh. This summer, he became the first artist to perform a fully Punjabi set at Coachella and in September, he released his latest album, Ghost, blends smooth R&B, moody trap and laid-back pop. The album spent seven weeks on Billboard’s Canadian Albums chart, peaking at No. 5. His collaboration with Sia, “Hass Hass,” also went to No. 37 on the Canadian Hot 100.
Speaking to Billboard Canada for a cover story about the popularity of Punjabi music in Canada, talent buyer Baldeep Randhawa recalled taking a job at Live Nation with a goal of supporting South Asian music. At the time, he hinted at big things to come with Dosanjh and said he had already shown there’s a major market for Punjabi music in Canada.
“I told them I was gonna prove the concept, book a 500 cap[acity] room and eventually go bigger,” Randhawa said.
When only a couple of months later, Live Nation booked Dosanjh, Randhawa learned he could skip right over the 500 capacity rooms and book arenas. Dosanjh performed at Scotiabank Arena in Toronto, then a sold-out show at Vancouver’s Rogers Arena — which has a capacity of 18,000 — in June 2022.
Dosanjh is a superstar, but he’s not the only Punjabi artist making waves in Canada. Dosanjh collaborator Ikky recently announced a headline tour visiting five Canadian provinces in February 2024. READ MORE
A bipartisan coalition of high-profile U.S. senators introduced a sweeping ticketing reform bill today that backers say would significantly improve transparency in concert and sports ticketing, better manage and enforce laws around ticket resale and ban deceptive sales tactics designed to trick consumers into overpaying for access to major events.
The Fans First Act, sponsored by U.S. Senator John Cornyn (R-TX) and co-sponsored by Amy Klobuchar (D-MN), Marsha Blackburn (R-TN), Ben Ray Luján (D-NM), Roger Wicker (R-MS) and Peter Welch (D-VT) is the most comprehensive ticketing industry reform package ever introduced in Congress. It could lead to needed reforms long championed by consumer rights groups, advocacy groups and live music companies including both Live Nation and Ticketmaster, as well as members of the Fix The Tix coalition: the National Independent Venue Association, the Recording Academy, the National Independent Talent Organization, the Screen Actors Guild-American Federation of Television and Radio Artists and the Association of Performing Arts Professionals.
“The current ticketing system is riddled with problems and doesn’t serve the needs of fans, teams, artists, or venues,” Sen. Cornyn said in a statement. “This legislation would rebuild trust in the ticketing system by cracking down on bots and others who take advantage of consumers through price gouging and other predatory practices and increase price transparency for ticket purchasers.”
Klobuchar added, “Buying a ticket to see your favorite artist or team is out of reach for too many Americans. Bots, hidden fees, and predatory practices are hurting consumers whether they want to catch a home game, an up-and-coming artist or a major headliner like Taylor Swift or Bad Bunny. From ensuring fans get refunds for canceled shows to banning speculative ticket sales, this bipartisan legislation will improve the ticketing experience.”
The Fans First Act boasts more than a dozen reform proposals aimed at protecting consumers, including requiring sites like StubHub and Ticketmaster to disclose the full price of tickets including fees at the beginning of the sale and detail if tickets are being sold by a primary seller or a reseller.
The bill would also strengthen the Better Online Ticket Sales (BOTS) Act, signed into law in 2016 by President Barack Obama, which prohibits the use of automated bots to purchase tickets online. It would additionally require sellers and resellers to provide proof of purchase to consumers within 24 hours of purchase and refund consumers the full cost of their tickets when events are canceled. If passed, the bill would also commission a Government Accountability Office study to investigate the marketplace and make recommendations.
Among other provisions, the Fans First Act would also ban the sale of a ticket that the reseller claims they possess but don’t acquire until they have already secured a sale for the ticket. Known as speculative ticket sales, the practice is often the subject of complaints from consumers who later learn they significantly overpaid for tickets.
Those who violate the law could face civil penalties and be added to a reporting website for fans to file complaints about illegal ticket sales tactics that would then be investigated by the Federal Trade Commission and state attorneys general.
“Fans have become increasingly frustrated with how difficult it has been to obtain affordable tickets to see their favorite artists perform,” said Sen. Blackburn. “Bots are snatching up tickets and selling them for exorbitant prices on secondary markets, while some ticketing companies are selling speculative event tickets that don’t even exist. This bipartisan legislation builds upon my work to safeguard artists and their fans in the online ticket marketplace.”
Sen. Luján stated that the “current ticketing system is limiting access to live entertainment,” adding, “That’s why I’m proud to join my colleagues in introducing the Fans First Act to ensure the sale of tickets is accessible to all consumers.” Sen. Wicker added, “Deceptive ticketing practices have become far too common. This bipartisan effort would result in more transparency and less price gauging.”
The Fan First Act is expected to be heard by the Senate Committee on Commerce, Science, and Transportation. Earlier this week, the U.S. House Subcommittee on Energy and Commerce passed a similar bill called the Speculative Ticketing Oversight and Prohibition (STOP) Act, which is now eligible for a vote by the full House.
The STOP Act also bans speculative ticketing, and like the Fans First Act, addresses a range of deceptive ticketing practices and pricing transparency issues. Live Nation and other groups have also expressed support for the STOP Act.
Earlier today, Live Nation officials issued a statement endorsing the Fans First Act.
“We support the Fans First Act and welcome legislation that brings positive reform to live event ticketing. We believe it’s critical Congress acts to protect fans and artists from predatory resale practices, and have long supported a federal all-in pricing mandate, banning speculative ticketing and deceptive websites, as well as other measures. We look forward to our continued work with policymakers to advocate for even stronger reforms and enforcement,” the statement reads.
Recording Academy CEO Harvey Mason jr. also came out with a statement supporting the bill on Friday. “With the introduction of the Fans First Act today, the Recording Academy applauds Senators Klobuchar, Cornyn, Blackburn, Luján, Wicker and Welch for taking this important step towards comprehensive ticketing reform,” he said. “As we work together to improve the ticket marketplace, we urge Congress to act on this bill quickly and continue its effort to protect both artists and fans by increasing transparency and limiting bad actors that take away from the joyous experience of live music.”
Youtuber and rapper Trevor Hurd, who goes by the name Crip Mac, was arrested in LA County court Tuesday (Dec. 5) on federal gun charges and is currently being held on pretrial detention, according to an indictment and other court records obtained by Billboard.
The 30-year-old’s arrest came moments after an LA County judge agreed to drop gun charges against the South Los Angeles resident and expectant father for a Sept. 3 arrest for being a felon in possession of a firearm. Seconds after learning the state charges were dropped, Hurd was arrested by waiting U.S. Marshals who informed him that his case had been transferred to the US Attorney’s office where he would face the gun charges in federal court.
Shortly before Tuesday’s arrest, a two-month-old indictment against Hurd was unsealed. It showed that he was charged with being a felon in possession of an unregistered weapon and ten rounds of ammo.
“Defendant HURD possessed such ammunition knowing that he had previously been convicted of at least one of the following felony crimes,” the indictment reads, laying out five arrests since 2014. Hurd was also arrested for being a felon in possession of a firearm in LA County on July 27, 2022, and Oct. 12, 2021. On Nov. 8, 2017, Hurd was arrested for attempted second-degree armed robbery; on Aug. 12, 2015, he was arrested for grand theft; and on Oct. 20, 2014, he was arrested for transportation of a controlled substance.
California defense attorney Curtis Briggs, who is not involved with the Crip Mac case, tells Billboard it’s not uncommon for federal officials to take over state criminal cases in coordination with local authorities.
“Sometimes, local authorities become frustrated by lenient sentencing for people who are prolific [offenders] so they request the feds review for prosecution. This puts more prison time in the discussion,” Briggs explains.
The feds also could be working on a larger case, like a Racketeer Influenced and Corrupt Organizations Act (RICO) case involving multiple defendants and a superseding indictment, Briggs explained.
“The worst case is he gets folded into a larger gang conspiracy and RICO case involving murders. In that case, it’s likely life in prison,” Briggs adds. If he’s just facing the gun charges, “it’s possible, depending on the specific facts of his case, he could do 10 years. It depends on various individual factors” and details of the case, Briggs says.
Hurd is currently being held in pretrial custody. His next hearing is scheduled for Monday (Dec. 11).
Crip Mac
Courtesy Photo
The American Society of Composers, Authors and Publishers (ASCAP) argued that AI companies need to license material from copyright owners to train their models and that “a new federal right of publicity… is necessary to address the unprecedented scale on which AI tools facilitate the improper use of a creator’s image, likeness, and voice” in a document filed to the Copyright Office on Wednesday (Dec. 6).
The Copyright Office announced that it was studying “the copyright issues raised by generative artificial intelligence” in August and solicited written comments from relevant players in the space. Initial written comments had to be submitted by October 30, while reply comments — which give organizations like ASCAP the chance to push back against assertions made by AI companies like Anthropic and Open AI — were due December 6.
Generative AI models require training: They ingest large amounts of data to identify patterns. “AI training is a computational process of deconstructing existing works for the purpose of modeling mathematically how [they] work,” Google wrote in its reply comments for the Copyright Office. “By taking existing works apart, the algorithm develops a capacity to infer how new ones should be put together” — hence the “generative” part of this.
ASCAP represents songwriters, composers, and music publishers, and its chief concern is that AI companies will be allowed to train models on its members’ works without coming to some sort of licensing arrangement ahead of time. “Numerous comments from AI industry members raise doubts about the technical or economic feasibility of licensing as a model for the authorized use of protected content,” ASCAP writes. “But armchair speculations about the efficiency of licensing do not justify a rampant disregard for creators’ rights.”
ASCAP adds that “numerous large-scale AI tools have already been developed exclusively on the basis of fully licensed or otherwise legally obtained materials” — pointing to Boomy, Stable Audio, Generative AI by Getty Images, and Adobe Firefly — “demonstrating that the development of generative AI technologies need not come at the expense of creators’ rights.”
ASCAP also calls for the implementation of a new federal right-of-publicity law, worried that voice-cloning technology, for example, can threaten artists’ livelihood. “Generative AI technology introduces unprecedented possibilities for the unauthorized use of a creator’s image, likeness, and voice,” ASCAP argues. “The existing patchwork of state laws were not written with this technology in view, and do not adequately protect creators.”
“Without allowing the artists and creators to control their voice and likeness,” ASCAP continues, “this technology will create both consumer confusion and serious financial harm to the original music creators.”
On Aug. 10, the day before the 50th anniversary of DJ Kool Herc’s 1973 Bronx block party — considered the official birth of hip-hop — TIDAL hosted its first public event at its new high-rise offices near Manhattan’s Union Square. As part of the festivities, music consultant and writer ladidai conducted a panel featuring three artists at three different points in their careers: veteran Yonkers MC Styles P from The LOX, which headlined shows in Queens and The Bronx as part of the anniversary celebration; critically acclaimed Alabama rapper Flo Milli, who the following night would make a surprise appearance at the star-studded Hip-Hop 50 Live concert at Yankee Stadium; and rising Roc Nation signee Reuben Vincent, a North Carolina rapper. The panel focused on advice for developing artists about navigating the music industry and building career longevity.
“Artists have to look at themselves as entrepreneurs,” Styles told the crowd. Now in his third decade as a performer, he also owns a series of health-focused juice bars in New York. “If you think about the most successful people in hip-hop, they all have their hands in a few different pots. That’s just the way of the hustler.”
For TIDAL, events like these are a key component of a new strategy that, it hopes, will foster its own longevity. They are part of its revamped Rising program, which grew out of conversations with more than 100 artists and provides tools for creators that can streamline their business dealings so they can focus more on their art. This strategic focus on economic empowerment for artists derives from TIDAL’s new corporate owner, Block, the mobile payments company led by Twitter co-founder Jack Dorsey that was known as Square when it acquired the streaming platform in March 2021 for an initially announced $297 million — more than five times the $56 million that Jay-Z paid to acquire it in 2015.
Block changed the way small businesses operate through its Square credit card reader, Cash App, and financial service offerings that cater to small-business owners and entrepreneurs overlooked by major credit card companies. The services and solutions it offers have helped it achieve a market cap of $39.6 billion at press time.
Not surprisingly, TIDAL’s new owner sees independent artists in the same vein: self-funded, slim-margin businesses that lack the tools needed to succeed in their line of work.
The financial services that TIDAL intends to offer will begin rolling out in 2024, and when they do, TIDAL plans to introduce a pricing structure that, if it attracts enough artists, will create an income stream that is not dependent on streaming subscriptions. “If we help creators manage and grow their businesses, so will we,” a representative says.
More than ever, artists in the music business are piecing together a living through streams, merchandising, live shows, social media ads and synch placements — supplemented with side gigs and temp jobs — as the old world of big advances and steady album sales becomes a distant memory and the odds of standing out in a torrent of new music grow slimmer.
Every day, over 120,000 audio tracks are uploaded to streaming services, according to Luminate — a figure that has nearly tripled in the past five years — making it harder for artists to break through and build a fan base, much less earn and manage their money. It’s a disparate, complicated and often confusing business, especially for up-and-coming artists trying to get by without the support of a traditional label or the institutional know-how of an experienced management team.
“The vast majority of artists on a streaming platform cannot afford to live off their music, even though that’s the No. 1 goal for them,” TIDAL global head of product Agustina Sacerdote says. “It’s not to be famous, it’s not to have an entourage of 20 people. It’s just to be able to quit their side jobs.”
Global head of product Agustina Sacerdote
Those artists who have established a foothold “are cobbling together ways of handling payroll and invoices, paying their quarterly taxes and understanding what’s a write-off and what isn’t. That’s part of being a small-business owner,” says Matt Graham, managing partner for talent management company Range Media Partners. He adds that when a young artist does break through, “a lot of money comes fast, and without the appropriate mechanisms to allocate things properly and pay people on time, you can run into tax issues with the government; you can run into lawsuits with collaborators — it’s a really tricky business to navigate.”
That’s exacerbated by a lack of financial management resources for emerging artists, in part because there isn’t much money in it for those with the know-how to help. Many business managers, for example, won’t take on clients who bring in less than $500,000 a year.
TIDAL’s Rising program operates with these hurdles in mind and is “anchored around three pillars: educate, amplify and connect,” says Alex Mas, the platform’s marketing director and one of the first five employees hired after the company’s 2015 U.S. relaunch. That includes offering artists resources, webinars and workshops on, for instance, balancing release and tour budgets, the mechanics of synch licensing and marketing, and understanding how paid media such as Facebook directly relates to streaming numbers and ticket sales.
TIDAL’s artist relations team also works to connect emerging acts with label executives, potential managers, lawyers and booking agents, among other industry facilitators. “It’s helping artists become more self-sufficient so they can go off and succeed regardless of the platform,” Mas says.
Given TIDAL’s modest subscriber numbers — some 2.1 million subscribers globally as of mid-2020, according to a lawsuit filed the following year, compared with Spotify’s approximately 138 million, a number that has since grown to 220 million — the company’s CEO, Jesse Dorogusker, who has spent over a decade at Block and was instrumental in the development of the Square card reader, says the platform’s support of artists must extend beyond monetizing the streams that artists generate on its platform. The representative says TIDAL does not disclose subscriber numbers, but adds that “streaming will continue to have value” for its new owner. “We’re a music platform and remain excited by the opportunity to evolve our streaming services.”
“Even if we were one of the bigger services, just making [an artist’s] experience better on TIDAL is not enough,” says Dorogusker, a Liz Phair superfan and Silicon Valley veteran who, before joining Block, spent eight years developing iOS accessories for Apple. “You have to know all of your revenue, your data, your collaborators, your access to capital, all of your taxes — it can’t be platform-captive,” he explains. “How could you hope for artists to be fortunate enough to work solely on their art if they have no access to this information?”
This is decidedly new territory for TIDAL, which is still, in the minds of most consumers, associated with Jay-Z, a claim to superior audio quality and a creator-first ethos. (It was notably the first streaming service to introduce full writer credits for tracks and the ability to search by producer.) And though sources tell Billboard that the Roc Nation owner has been just as, if not more, involved in TIDAL’s business since the sale — “I would say his spirit is felt,” senior vp of artist and label relations Jason Kpana says — the company’s messaging must pivot as it changes course. Dozens of industry figures, managers and artists Billboard contacted for their thoughts on TIDAL 2.0 all said they were unaware of its new business strategy. Now, as the company attempts to transform itself from a consumer-centric to artist-focused platform, will anyone be listening?
TIDAL debuted in May 2015 at a star-studded and controversial press conference at the James A. Farley Post Office in Midtown Manhattan. Jay-Z had purchased Scandinavian streaming service Aspiro and brought together 15 of his celebrity-artist friends — including his wife, Beyoncé; Kanye West; Madonna; Jason Aldean; Alicia Keys; Arcade Fire; Coldplay’s Chris Martin; Rihanna; and deadmau5 (replete with his bulbous rodent helmet) — to announce what Keys called “the first-ever artist-owned global music and entertainment platform.” Each of the artist-owners were given a 3% share in the company, and TIDAL began implementing a plan that leaned on exclusive album releases, video premieres and high-quality audio to draw in subscribers who were, by then, used to getting music for free.
Artist investors Usher, Rihanna, Nicki Minaj, Madonna, deadmau5, Kanye West, Jay-Z and J. Cole (from left) at the TIDAL launch in New York in 2015.
Jamie McCarthy/Getty Images
Thus began a strategy aimed at disrupting what was quickly becoming the status quo for the music business. TIDAL’s 16 artist-owners were protesting the low royalty rates of ad-supported streaming services like then-burgeoning Spotify that paid fractions of a penny per stream and vowed to use their collective power to boost royalties for all. Their stated mission was interpreted by some as noble and others as a scheme by some of music’s 1 percenters to line their already brimming pockets.
Ultimately, giant conglomerates Apple, Google and Amazon entered the streaming space and, alongside Spotify, swallowed up market share, edging TIDAL increasingly toward the margins. Yet the staffers who worked in editorial, marketing and industry relations there carved out a niche that focused on rising artists and independent creators, highlighting their stories and creating video content, playlists and podcasts around their work. “It has absolutely always been a part of the fabric of the company to allow emerging artists to find a way to grow in their journey,” says Kpana, who has worked there since 2015.
It was a business philosophy that aligned with Block’s vision, and executives there say it was a reason they acquired the streaming platform. But the purchase wasn’t without friction. Block closed the deal on April 30, 2021, acquiring 86.8% of TIDAL for $223.1 million in cash and $10.1 million in stock. Shortly thereafter, the City of Coral Springs Police Officers’ Pension Plan (a Block shareholder) filed a lawsuit that challenged the acquisition. The complaint alleged that Block CEO Dorsey and the company’s board of directors had breached their fiduciary duties by acquiring a company that they alleged was failing financially.
The lawsuit laid bare some of TIDAL’s financial issues, including multimillion-dollar losses for 10 straight quarters; some $127 million in liabilities, largely in the form of unpaid streaming fees to record labels; and a $50 million loan that Jay-Z extended the company in 2020. Several of TIDAL’s licensing deals with labels and relationships with artists had expired or were not legally enforceable. Sources also told Billboard that the streaming service had been chronically late on royalty payments to labels, a situation Dorogusker says has been remedied. The complaint also contained a morsel of insider business gossip, alleging that the deal was first hatched while Dorsey was vacationing with Jay-Z in the Hamptons and later in Hawaii.
The lawsuit was dismissed in May, albeit with Delaware Court of Chancery Judge Kathaleen St. J. McCormick writing in her memorandum opinion that Block buying TIDAL was, “by all accounts, a terrible business decision.”
With that hurdle cleared, Jay-Z joined Block’s board of directors, and along with several of the original artist-owners, retained a small stake in TIDAL. (Each of those artist-owners either declined to comment or did not respond to requests for comment, and a representative for Jay-Z did not comment.)
Inside TIDAL’s new Manhattan office.
Julian Walter
McCormick’s assessment of the Block-TIDAL deal had merit. According to Goldman Sachs’ June 2023 Music in the Air report, the top six streaming services globally — Spotify, Apple Music, YouTube Music, Amazon Music, Tencent Music and NetEase — accounted for 92.2% of the global streaming market, and by 2030, that number is predicted to climb to around 94%. And yet, the music streaming business model has yet to produce many profits for anyone, even a company as big and as synonymous with the space as Spotify, which reported a 2022 annual operating loss of 659 million euros (around $720 million) and recently slashed 17% of its work force, or some 1,500 jobs, in the pursuit of profits. (This week, Block also forced austerity measures on TIDAL, laying off some 40 people in an attempt to “right-size our team,” a spokesperson said.) Apple Music and Amazon Music are loss leaders for corporate behemoths with other profit-generators, Deezer is unprofitable, and SoundCloud shifted to distribution and other artist services in an attempt to capitalize on the troves of data it has collected through its streaming service, while also imposing layoffs in May.
Block’s plans for TIDAL, then, could not rely on a pure streaming play, and in a March 4, 2021, Twitter thread, Dorsey revealed his strategy. He wrote that the TIDAL deal was about making the economy “work for artists, similar to what Square has done for sellers.” He added, “We’ll work on entirely new listening experiences to bring fans closer together, simple integrations for merch sales, modern collaboration tools and new complementary revenue streams.”
The deal perplexed industry observers. “If Square wants to create new ways to help musicians sell real goods and digital goods, it could just do that,” Vox tech writer Peter Kafka wrote at the time. “Instead, Square is paying [what was then reported] $300 million for a failed music service that doesn’t help it accomplish any of those goals.”
Nearly three years later, several music industry insiders echo Kafka’s point. Dorogusker’s response: “There are very few companies on the planet that have the rights to offer 100 million songs to music subscribers” and produces a valuable trove of data. Under his leadership, TIDAL plans to use that data, and the access it provides to artists and their teams, to create tools of economic empowerment that don’t readily exist in the music business.
In June, TIDAL unveiled its Artist Home portal, which lets users add their social media accounts to their artist pages, connect with TIDAL employees for support, allow members of their teams to access their profiles and generally manage their look on the platform. It’s essentially a stripped-down version of Spotify for Artists or any of the back-end profile portals that digital service providers currently offer creators. It was a modest move compared with its streaming rivals, but leadership contends an important step forward.
“It is the first concrete milestone toward our vision of establishing a direct relationship with artists and building products and services for them,” Sacerdote says. “We have been in the music business for a very long time, but we have never built specifically for an artist or even dealt directly with an artist.”
TIDAL has always had relationships with the artist community through its artist-owners, exclusives that were intended to build market momentum — interviews, artist-curated playlists, podcasts, and album rollouts for superstars like West, Prince, Rihanna, Beyoncé and Jay-Z — and live events like its annual TIDAL X concert series in Brooklyn and activations at Roc Nation’s Made in America Festival in Philadelphia. But those initiatives were largely designed to pull in fans. Artist Home is the first time TIDAL has worked with artists to build a toolkit on its platform for artists.
TIDAL Rising, which has run in various iterations since the service’s birth, was initially similar to programs like Apple’s Up Next, YouTube’s Foundry and Spotify’s RADAR. But last May, it was overhauled to dovetail with the platform’s artist-empowerment focus. Initially, some two dozen creators were chosen to enroll in the program, which provides resources like webinars and workshops on budgeting money for tours and rollouts, platforms like artist showcases and traditional marketing, instructionals on effective digital marketing and industry connections that would otherwise be out of reach. But crucially, artists in the program are also eligible to receive anywhere between $500 and $50,000 in direct funding, no strings attached.
“We are sitting down with these artists and figuring out where they are in their career, but we’re not defining what funding they get based on what they have coming up,” says Kpana, the artist relations lead. “Mostly, we’re looking at them to see where we think we can be of most assistance, and that’s how we’re deciding what we give them. We’re not deciding what they do with the money.”
Artist relations lead Jason Kpana
Travis Shinn
Billboard spoke to nearly all of the initial two dozen artists and their teams in the Rising program, and though TIDAL executives declined to get into the specifics of who qualifies for inclusion and funding, a number said they were invited after previously building relationships with the TIDAL team through playlisting or editorial. All said the money they received gave them more control over their careers.
This past summer, for example, Nashville-based singer-songwriter Gabe Lee got the chance to open for more seasoned folk artist Pony Bradshaw on four sold-out dates in Texas during a mid-August weekend; at the end of the trek, his take was $1,200, minus hotel stays (when he wasn’t able to crash with friends) and fuel costs. “In the end, Gabe probably lost money on that trip; it’s expensive to be on the road,” says Torrez Music Group’s Alex Torrez, who manages Lee and signed him to his record label. The grant from TIDAL narrowed those losses while expanding his audience by having him perform for more than 2,000 people across the four shows.
For folk-punk artist Sunny War, who used to tour solo but required a full band to perform her latest record live, the money she received enabled her to pay for extra musicians, which allowed her to play bigger shows, and to buy proper road cases for her gear when she travels. Latin pop/hip-hop artist Angie Rose used her funds to buy new studio equipment (a laptop, microphones and software) she can use to record music on her own. For Nigerian American rapper-producer Akinyemi, the money went toward mixing and mastering costs, as well as marketing materials for his next release. Vincent — who participated in the panel at TIDAL’s Hip-Hop 50 event — was able to pay a video crew to shoot his performance at J. Cole’s Dreamville festival; he used the content to promote an upcoming release. For a handful of other artists, the money went straight to recording costs; for half a dozen more, it covered rent and daily expenses.
The music business has traditionally worked through advances, which must ultimately be recouped. TIDAL’s monetary distributions are more like grants. “This feels more like a social-good project,” says Alex Rosen, head of U.S. streaming at Partisan Records, whose group Geese is in the program. “I think it’s an empowering program. It’s really refreshing to not see any true expectations on funding, and it gives a band that is starting to break out a lot of freedom to help make their art.”
TIDAL sees it as a research opportunity. “At a basic level, it’s just a better use of marketing dollars,” Dorogusker explains. “We could talk about how great TIDAL is, or we could invest in artists and let them talk about how great being a Rising artist is. It’s marketing and communications, and the learning we get out of it is incredibly valuable.”
CEO Jesse Dorogusker
It also aligns with the emerging view of the business from the perspective of young artists, who in many cases are loath to sign away ownership of their masters in a label deal when there are other potential pathways to success. “We really value equity and ownership, so the core mission for the [TIDAL Rising] program really aligns with how we want to move forward with our artists on both the label and management side,” says Celena Fields, vp of marketing at indie music company LVRN, whose artist, singer-songwriter-producer Alex Vaughn, is in the program. “They’re holding our hand every step of the way, and instilling these resources that are super critical in an artist’s career, especially early on. It’s not just giving you the money, but really providing that educational aspect as well.” Up-and-coming managers, who are beginning to learn the ropes, benefit from the educational aspects, too.
TIDAL says it has hundreds of artists signed up for Artist Home, has grown its Rising program to 106 artists and has distributed grants totaling $830,000. It recently rolled out its Collabs feature — making it easier for creators to work with others through the platform — and held an artist summit in October with musicians from the United States and Poland that focused on career planning, financial well-being and the basics of music law and touring. The services are free for now, and the representative says that a timetable has not been set for when TIDAL will begin charging for its services.
While TIDAL’s financial support for new artists may be the sexiest part of its new business strategy, helping demystify the business is just as crucial. “The education component is humongous,” says Nicholas Judd, co-founder and CEO of music-focused business management and financial services firm LeftBrain, about the biggest obstacles young artists face. He explains that “having a more informed client start with us, where they’ve been very active in learning about and managing their own finances, means that we can have higher-level conversations and provide even more value because we’re not getting them from zero to one; we’re getting them from one to 10.”
To that point, in October, Block purchased Hi-Fi, a financial services startup that tracks artist royalty income from a variety of different sources — publishing, streaming, performance rights, distribution — in one place. Hi-Fi came the closest, Dorogusker says, to the business model the new owners are in the process of creating. He adds the acquisition is still in the “early days” of being incorporated into TIDAL’s structure, but that it will go a long way toward helping “to build products that help artists manage their money.”
If TIDAL becomes a destination for independent artists looking to optimize and grow their businesses, the expectation is that the company’s future will no longer depend on the financially difficult business of running a streaming service. Businesses that employ Cash App pay processing fees of just under 3% per transaction, and TIDAL will eventually create a pricing structure for the services it will offer. The company says that pricing will vary, with some services being monetized and others incorporated into Artist Home for free. “There’s no one size fits all,” a spokesman says. “How we set pricing is informed by many variables.”
Whether TIDAL’s turn toward artists will resonate remains to be determined, but insiders say there is a new sense of purpose at the company.
“Two years ago, when we bought a music streaming service, we told a story about building scalable self-serve tools for software and financial services to make emerging artists successful, but we didn’t have it yet. It was philosophical,” Dorogusker says. “Now we’re into the tangible. One of the fundamental flaws of the music business is that you mortgage your whole future for that first opportunity. And not everything has to be that way. You can have access to your data. You can have a way to project how many T-shirts you should print for a tour. We thought we could pull a lot of that knowledge in and turn that into tools for artists. But it’s going to be in the act of showing it, not just telling it. This is the start of that.”
This story will appear in the Dec. 9, 2023, issue of Billboard.