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Independent musicians will have more power to negotiate with artificial intelligence developers over “fairer rates and terms for the use of their music” if a newly introduced version of the Protect Working Musicians Act passes the U.S. House, according to Rep. Deborah Ross (D-N.C.).
“AI threatens the creator — finding the person or entity that has co-opted your work and turned it into something else and then going after them is so onerous,” Ross, who sponsored the revised act and sits on the House Judiciary Committee, says in a phone interview from Washington, D.C. “That’s one of the reasons for this bill — to allow people to do this collaboratively. We need to do this sooner than later. We’re seeing this threat every single day.”
The Protect Working Musicians Act, which Rep. Ted Deutch (D-Fla.) introduced in October 2021 a few months before he left Congress, would allow indie artists to collectively bargain for royalty rates with streaming giants such as Spotify and Apple Music. As it stands, the major labels that own most worldwide master recordings have enormous negotiating power to set rates; the act would “give the smaller independent more of a voice,” says Jen Jacobsen, executive director of the Artist Rights Alliance, which worked with Ross on revising the bill.
Ross picked up the bill when Deutch announced he would not return to the House, then held hearings with indie artists in her district, which includes Raleigh. Since then, Ross says, “The AI issue has become even more important.” The revised act would allow artists to behave like plaintiffs in a class-action suit, she adds, “fighting for their rights” with a central attorney.
“Our work is being scraped and ingested and exploited without us even knowing,” Jacobsen says. “Adding the AI platforms seemed like a relevant and important thing to do.”
Writers and artists have warned for months that AI could transform their ideas into new works with no way to get paid for the usage. In April, “Heart On My Sleeve,” an AI-created song that mimics the voices of Drake and The Weeknd, landed millions of TikTok, Spotify and YouTube plays. At the time, Sting told the BBC: “The building blocks of music belong to us, to human beings. That’s going to be a battle we all have to fight in a couple of years: defending our human capital against AI.”
“Musicians are really worried about this — not just the big-name ones, but small artists, too. Small ones, especially,” Jorgensen says. “The most important thing for this bill is that small, independent artists and record labels need to be recognized and have each others’ backs.”
It’s unclear when the House might vote on the revised bill — or if it would pass. “As you can see in Congress, lots of bills aren’t passing — like the budget!” Ross says. “But this has been a very bipartisan issue in the judiciary committee. It’s the perfect time to bring these issues up.”
Travis Scott was questioned for several hours on Monday (Sept. 18) in a civil deposition he gave in connection with hundreds of lawsuits that were filed against him and others over the deaths and injuries at the 2021 Astroworld festival. Scott was questioned in Houston during a deposition that lasted around eight hours, two people with knowledge about the litigation said.
Lawyers and others connected to the civil lawsuits are under a gag order, preventing them from saying little beyond what happens during court hearings.
“Travis Scott’s deposition is typical legal procedure. What is not typical is how the media continues to focus on him despite being cleared of any wrongdoing by extensive government investigations, including by the Houston Police Department,” Ted Anastasiou, a spokesperson for Scott, said in a statement. “Travis is fully cooperating with the legal process while still remaining committed to his tour in support of his record-breaking album, Utopia, and his charitable efforts to support at-risk communities.”
Following an investigation by Houston Police, no charges were filed against Scott after a grand jury in June declined to indict him and five other people on any criminal counts related to the deadly concert. Police Chief Troy Finner declined to say what the overall conclusion of his agency’s investigation was.
In July, the police department made public its nearly 1,300-page investigative report in which festival workers highlighted problems and warned of possible deadly consequences.
According to a summary in the investigative report of a police interview conducted two days after the concert, Scott told investigators that although he did see one person near the stage getting medical attention, overall the crowd seemed to be enjoying the show and he did not see any signs of serious problems.
This was the first time Scott was questioned by attorneys for those who have filed lawsuits since a crowd surge at his Nov. 5, 2021, concert in Houston killed 10 festivalgoers. Those killed, who ranged in age from 9 to 27, died from compression asphyxia, which an expert likened to being crushed by a car.
Similar crushes have happened all over the world, from a soccer stadium in England to the hajj pilgrimage in Saudi Arabia to Halloween festivities in the South Korean capital. Most people who who die in crowd surges suffocate.
Scott’s deposition comes as a judge earlier this year scheduled the first trial from the lawsuits for May 6, 2024. That first trial would take place nearly 2.5 years since the deadly concert. Documents filed in court in April listed more than 1,500 active cases, many of which were filed against Scott and Live Nation, the concert promoter.
Of these, 992 were cases with physical injuries and 313 were cases of “emotional distress, pain, suffering and mental anguish.” Orthopedic surgeries have been completed in 17 of these cases, with other surgeries recommended in another 21.
Some of the lawsuits have since been settled, including those filed by the families of three of the people killed during the concert.
Scott’s deposition on Monday took place on the same day that hip-hop artist Drake, who performed several songs with Scott during the Astroworld concert, was performing in Houston. Drake was also sued in connection with the deadly concert.
Halfway through 2023, the U.S. recorded music industry has set a record for first-half retail revenue, generating $8.4 billion, according to the new RIAA mid-year 2023 report released Monday (Sept. 18). But within that headline number, there are several trends and statistics that are worthy of their own exploration, from increasing revenue to slowing growth figures and the factors behind them. Digging deeper into the numbers, here are four takeaways (and a bonus fifth) from the mid-year report.
Ad-Supported Revenue Flatlines
The RIAA reported that ad-supported on-demand streaming revenue came in at $870.1 million — just a 0.6% bump over the $865 million it generated in the first half of 2022. Looking at the 2022 mid-year report, the ad-supported revenue figure was $871.5 million, up 16.4% from $748.5 million midway through 2021. (The RIAA regularly adjusts and updates figures each year as more data becomes available, hence the discrepancies.) What it points to, at best, is a stagnant advertising market; and at worst, one that risks going backwards.
On one hand, it’s not surprising, given the adverse advertising market across the board in 2023 so far. On the other hand, it’s yet another blow to a part of the model for services like Spotify and YouTube that has been maligned for years and considerably detracts from the value of music. Still, revenue from the “other ad-supported streaming” category grew 56.8% year over year for an increase of $58 million after a few years of negligible growth at best.
The Big Pricing Shift
In the past two weeks, a lot of conversation in the industry has revolved around how royalties from streaming services should be divided moving forward. But the broader issue that many executives are, and have been, pointing to has been about pricing. Music streaming services have fallen behind the times in keeping the price of a monthly subscription largely static over the past decade-plus, while video streamers (with fractionalized offerings) have raised prices regularly.
That’s now starting to change — and it’s being reflected in the numbers. Apple Music and Amazon Music both raised prices for their streaming services at the turn of the year, and that has translated into paid subscription streaming revenue growing 12.4% in the first half of 2023 — even as the average number of subscriptions grew at a much slower rate, increasing just 6.4% from 90 million to 95.8 million. With YouTube Music and, most critically, Spotify increasing prices over the summer — numbers that were not reflected in the first half of this year — the additional value realized will be something to keep an eye on moving forward.
But It’s Not Just Streaming
Those streaming service price hikes get a lot of attention — and rightly so. But the industry is seeing increased revenue from consumers in more than just streaming. The physical product market has continued to grow in revenue, up 5% overall, with vinyl revenue rising 1.3% year over year (up $8.2 million) and CD revenue growing 14.3% (up $29.6 million). What’s more interesting — apart from, perhaps, the winding down of the “vinyl explosion” double-digit increase narrative of the past several years — is that both formats grew in revenue while being down in unit counts.
Vinyl, overall, seemed to be a little static year over year. The number of records sold dropped by about 400,000 or so, even as revenue ticked up. But the discrepancy in CDs was stark: despite the type of double-digit revenue growth that’s been associated with vinyl in years past, there were actually 3.2 million fewer CDs sold in the United States in the first half of 2023 compared to 2022. Whether that’s a reaction to the hyper-fandom of artists who tend to do well in the physical market raising prices significantly or a marker of an industry-wide price hike there, it’s another example of how pricing is shifting across the industry and changing the revenue picture as a result.
Subscriptions Slowing Down?
As noted above, the average number of paid music streaming subscriptions grew by 5.8 million in the first half of the year to 95.8 million. That represents the slowest level of growth — both in raw numbers and in percentage — since at least 2015, when the U.S. streaming industry was still in its nascent phases. The growth in the number of subscribers has been slowing down now for about five years straight, as those who haven’t already gotten on board with paid music streaming slowly sign on. But it’s unclear how much room for growth remains — and, either way, the focus will continue to shift from acquisition and retention to growing value.
As subscriptions continue to near critical mass in the United States, the industry will need to continue its growth rate by convincing digital service providers to get more from the subscribers they already have. Whether that comes from price hikes or finding new ways to monetize fans on platforms — or, more likely, some combination of both — is an area to watch.
And, Finally…
A last word for our favorite sector of the RIAA report each year: ringtones and ringbacks. U.S. consumers spent $6.0 million on them in the first half of 2023 — down slightly from $6.2 million halfway through last year — while the unit count also slightly declined. We are a long way away from the Billboard Ringtones Chart of 2004, yet they continue to hang on as a line item year after half year. What a blessing.
BMG is exiting its current distribution agreement with Warner Music Group’s ADA and taking direct control of its 80 billion-stream digital business in a move the company called “the biggest change to its recorded music strategy” yet, according to a statement released Monday. The fourth largest global music company will begin phasing in the new […]
In late August, Billboard reported that BMI is in serious discussions to sell itself to New Mountain Capital for $1.7 billion, less than a year after the organization announced it was switching for a for-profit model. No deal has been signed, but talks are serious enough that the two sides have entered into exclusive negotiations, and the change in the way BMI operates — especially after the industry became aware of how much profit it has generated in its most recent fiscal year — has triggered an avalanche of questions from songwriters and music publishers. The most important: Will BMI’s future profits come at the expense of royalty payouts to its more than a million affiliated songwriters and publishers.
BMI had $147 million in earnings before interest, taxes, depreciation and amortization in its most recent — but as yet unannounced — fiscal results, according to Reuters. The question is where this money came from.
“Where does profit come from for a performance rights organization?” asks one veteran music publishing executive. “It can come from only two buckets — the cost bucket or the royalty distribution bucket.” And that executive, like several others, believes that BMI “definitely didn’t cut $147 million in expenses.”
Although BMI made news in October 2022 when it announced it would begin to operate on a for-profit basis, all four U.S. performance rights organizations are actually set-up as for-profit corporations – BMI and ASCAP both file form 1120 with the I.R.S., as SESAC and GMR likely do as well. For decades, though, the first two have operated as not-for-profit companies, which likely means that since they pay out all the royalties they collect, minus expenses, they have no profit on which to pay tax. ASCAP’s Articles of Association states that “all royalties and license fees collected by the society shall be…distributed among its members,” except for expenses and contributions to a reserve fund.
BMI has always operated the same way, even though it has always been a private company owned by radio and television companies. In July 2022, though, rumors started spreading about BMI’s plans to change its operations, and the company hired Goldman Sachs to shop the company, preferably to a company which can fill the role of a strategic, but non-industry, partner. That effort didn’t result in a sale, either because the not-for-profit model BMI operated under at the time left it without any profit to show potential buyers, according to some sources; or, as other sources say, because BMI didn’t find a partner at that time that shared its vision of prioritizing the interests of songwriters.
Last October, when BMI announced it would switch to operating on a for-profit basis, the initial reaction in the industry was muted. This summer, however, when Reuters reported that BMI was once again up for sale — and that it had generated $147 million in earnings before interest, taxes, depreciation and amortization — creators expressed alarm, especially at the idea that those earnings might have been taken out of their royalties.
On Aug. 17, five creators groups sent an open letter to BMI CEO Mike O’Neill that asked 17 questions about BMI’s new business model, including whether songwriters and publishers would receive any of the proceeds from a potential sale, how the organization generated so much profit, and how it could continue to do so without reducing payouts to songwriters and publishers, the last of which is an especially significant worry, according to sources. The letter came from the Black Music Action Coalition, the Music Artists Coalition, the Songwriters of North America, SAG-AFTRA, and the Artists Rights Alliance.
So far, the only music publisher to comment on the changes at BMI is Universal Music Publishing Group chairman and CEO Jody Gerson, who said in a statement that, “We will only support changes that increase value for songwriters and will not stand for any that result in our songwriters being paid less than what they deserve.” Other publishers would not comment on the record but expressed concerns.
On Aug. 18, O’Neill responded in a letter to the creators groups and acknowledged that they raised “some important questions” about BMI’s evolution. (His letter was shared with Billboard, and published in full along with a story on it.) He said that the change would allow BMI to invest in its business in order to grow, plus increase payouts. Most important, O’Neill wrote, in the event of a sale, BMI “would ensure that any partner embraces our mission of prioritizing the interests of songwriters, including their financial success. This is especially important as we navigate this rapidly changing industry together.”
(BMI executives declined to be interviewed for this article but they responded to questions with emailed statements, issues other statements for two other stories on the issue, and provided Billboard with the letters O’Neill wrote in response to the creators groups.)
“Relying on the past never sustained a business for the future,” BMI said in an Aug. 29 statement to Billboard. “Our goal is to stay ahead of the changing industry and invest in our business to grow the value of our affiliates’ music.”
O’Neill’s initial letter didn’t satisfy the groups behind the letter, which followed up with another letter to BMI on Aug. 25, which was also obtained by Billboard. “While we appreciated you responding to our letter,” it read, “all of our questions went unanswered.” So far, sources involved with the music creators groups argue. BMI has still not responded to most of the questions in the original letter.
SLICING A FOR-PROFIT PIE
The other big question hanging over a potential sale of BMI is what it would mean for its competition against and its relationships with the other collective management organizations that it competes with but also collects money for and in turn receives royalties from under reciprocal agreements. Because of BMI’s change in governance, it has gone from being a member of CISAC, the international organization of CMOs, to a client, so it is no longer bound by the organization’s transparency rules but will still have access to its data systems.
ASCAP, BMI’s main competitor in the U.S. for more than eight decades, had a pointed take, which it shared in a social media campaign clearly aimed at BMI, though it did not mention the company by name. Its tweets included “We pay songwriters, not shareholders;” “growth without greed;” “Not for profit since 1914 and still growing;” and “There is no I in ASCAP.” Asked to respond, BMI issued a statement: “Our focus is not on how our competitors position themselves, our focus is on delivering for our affiliates.”
So far, BMI has made record payments to affiliates under its for-profit model, the company claims. In a Sept. 5 letter, posted on BMI’s website, O’Neill points out that the company has made three distributions under the new model, each higher than the corresponding one from the previous year. BMI said in an emailed statement that the three combined payments are 9% higher than they were in the previous year. Two of those payouts, according to O’Neill’s Sept. 5 letter, “are the “largest in [the] company’s history.” BMI also set a record in 2022, when it collected $1.573 billion, a 15.58% increase over the previous year, and distributed what it called an “unprecedented” $1.471 billion, a 10.2% increase.
If BMI’s core business keeps growing, it would be relatively easy for the company to continue to increase annual payouts, while keeping healthy profits for itself, industry financial executives point out. From now on, though, songwriters and publishers will have to take BMI’s word for its financial success because, according to sources, its 2022 results are the last ones it will make public. The kind of financial information BMI has traditionally shared would allow publishing executives to see where BMI’s EBITDA is coming from – which could potentially fuel further debate about how much of that money ought to have gone to rightsholders, but didn’t.
Going forward, BMI will instead emphasize and expand the financial information it provides to individual songwriters and their publishers to allow them to compare its payouts with previous years – and potentially, if BMH songwriters so choose, with those going to their co-songwriters who are affiliated with other PROs. That information would show affiliates that it takes its obligations to pay creators competitively, say sources familiar with BMI’s thinking.
BMI’s reluctance to share information is not unique. Both SESAC and Global Music Rights (GMR) operate under a for-profit model, and neither shares information about its overall financial results. Sources speculate that GMR, a boutique U.S. performance rights organization that represents top-tier writers for performance rights licensing, collects more than $150 million. Less is known about SESAC’s financials, which it guards closely, but in 2013 when investment firm Rizvi Traverse acquired a 75% interest in the company, Billboard obtained the financial information used to shop the company which showed that in 2011 SESAC took in $128 million in collections, and paid out $60 million in distributions, leaving itself with $68 million in net publisher’s share. After $27 million in expenses, the company realized $41 million in EBITDA, an EBITDA margin of 32%, according to Billboard calculations. (Rizvi Traverse subsequently sold SESAC to Blackstone for about $1 billion in 2017.) For the year ended June 30, 2023, Billboard estimates that BMI has an EBITDA margin of 8.1%, although BMI is unlikely to make public these financial results. In other words, SESAC’s 2011 EBIDTA margin was four times larger than BMI’s, Billboard estimates.
SESAC and GMR declined to comment or could not be reached to comment on their profitability. But an executive familiar with SESAC’s strategy noted, “everyone who’s affiliated with SESAC has known SESAC is a for-profit” company. The implication is that it didn’t switch models, as BMI did.
The same goes for GMR, and some industry sources find it ironic that Irving Azoff, who founded the for-profit GMR, is on the board of two of the creators groups leading the charge in criticizing BMI. Like SESAC, GMR has always made clear to songwriters that it operates as a for-profit business, and it shows its affiliates a rate card with the amounts of money it collects from different licensees, sources say, so they can compare that to other PROs. It sticks to those rates, unlike BMI and ASCAP, which have bonus plans, explained on their respective web sites, which pay out more money per play to songwriters who accumulate a certain number of plays.
At BMI and ASCAP, for example, a pop song might generate a payout of about a dollar a play on a popular big-city radio station, but a composition that qualifies for a bonus could generate three times that much, to use a simplified example. These bifurcated rate structures apply to most big genres, and to subscription streaming and satellite radio play, as well as terrestrial radio. While some songwriters and executives argue that it’s not fair to pay top songwriters and their publishers at a higher rate, since their songs accumulate more plays anyway, these plans allow BMI and ASCAP to compete for top writers with SESAC and GMR, which are not bound by antitrust consent decrees the way BMI and ASCAP are. For BMI and ASCAP, having those top writers helps them get better rates from licensees. “A rising tide lifts all boats,” as one PRO executive says.
Even so, these plans show how the two big PROs structure their businesses in order to pay different rates to songwriters, which sources suggest BMI had to do even more in order to generate a profit.
Sources familiar with BMI’s thinking dismiss as inaccurate the idea that it will change the way it pays songwriters and publishers and BMI in an email to Billboard called this unfounded speculation. But other industry sources suggest that BMI’s switch to a for-profit model gives it an incentive to grow that would make such a switch worth considering. And there are plenty of ways it could do so. “There are a lot of rule changes they can make there and in other places to get dribs and drabs that would impact people equally but not so noticeably,” says an executive at a competing PRO. As another executive notes, paraphrasing a music publishing saying, “If you get a crumb here and a crumb there, eventually you have a loaf of bread.”
If BMI does decide to alter its payout structure, changes are likely to come at the expense of less popular songwriters on the so-called long tail, argue other sources, or smaller publishers who are less likely to push back. “The people with no representation are at the biggest risk in the for-profit model,” the music publishing executive says. “For sure, [BMI’s profit] will come out of the pocket of many, many people who are currently paid little amounts of dollars.”
Another executive familiar with BMI’s plans says that this kind of speculation is nonsense, and O’Neill said in the Sept. 5 letter that there is no truth to these rumors. “The industry’s most successful music creators didn’t start out that way,” he said in the Sept. 5 letter, “and we pride ourselves on our work helping to guide, develop, and support your talent to ensure your passion can also be a profession.”
Not everyone is convinced, though. “In the music industry,” says another veteran executive, “we usually oil the squeaky wheels with money.”
OTHER QUESTIONS
Even after these two big questions are addressed, others remain. One: Will BMI loosen its rules on songwriter departures, since its switch to a for-profit model represents such a dramatic change in how it operates?
More immediately, will BMI’s balancing act – operating for-profit while continuing to make sure its affiliates are paid fairly – appeal to a private equity player? The company already operates under a consent decree, and its first attempt at a sale, in the summer of 2022, didn’t succeed.
It’s also hard to predict what effects a potential BMI sale to a private equity fund would have on its regulatory environment, from the possibility of more antitrust scrutiny from the U.S. Dept. of Justice to the chance of a renewed look at a compulsory license for public performances.
And the big question driving all of the arguments still remain unanswered. If BMI does make a deal to sell itself, will songwriters and publishers share in what sources suggest is a $1.7 billion valuation price? Will some of that money be earmarked for infrastructure improvements? Or will all of it go to the radio and TV stations that own BMI? Since BMI has taken in an average of about $238 million a year in annual licensing fees from terrestrial radio and broadcast television over the last half-decade, that means that a price of about $1.7 billion would fund about a seven-year licensing rebate for BMI’s owners.
Magnus Talent Agency, the agency division of Marc Anthony and Michel Vega’s company Magnus, has acquired the booking and management division of Tomas Cookman’s Industria Works.
Moving forward, Spain-based Industria Works’ staff and global roster will join MTA’s Miami-based team at Magnus, with five new staff members joining MTA, and for a total of 25 artists on its roster.
MTA’s original roster includes Marc Anthony, Fonseca, Gente de Zona, Il Volo, Micro TDH, Mau y Ricky and Bacilos, among others. Now, it will incorporate artists such as Trueno, Love of Lesbian, Paula Cendejas, Villano Antillano, YSY A, Maikel Delacalle, Nicola Cruz and YADAM, which Industria Works currently books for shows and tours in Europe and Latin America.
Industria Works founder Tomas Cookman, who also owns Nacional Records and founded the Latin Alternative Music Conference, will continue to play a leadership role within the new partnership.
“I’ve known and admired Tomas for over twenty years and we share the same passion for excellence in talent representation,” said Michel Vega, CEO of Magnus, and who originally founded the company with Marc Anthony. “This new partnership is an important step in our international expansion and will provide a crucial local presence and expertise in the European market and beyond, all in the name of continuing to provide top of class service to the careers of iconic and soon-to-be iconic artists.”
Cookman says he opted not to have a title in the new venture, “but I am involved in building this with Michel on a day-to-day basis (along with my other ventures) as always. I have always considered Michel Vega a friend – and am now proud to call him a partner. We are excited for the opportunity to join forces with a solid team to maximize opportunities and bring a truly global booking and management experience to our combined artist roster. I am a believer in the power of teamwork and Michel and Marc have created a solid foundation to continue building upon.”
Industria Works’ current head of Spain, Agustin Lopez, will lead the Madrid-based office and overall Spain team. Other Spain-based team members, Ulia Moreno, Patricia Zavala and Alicia Toboso, have also joined MTA and will continue to work out of Madrid and Barcelona.
The acquisition will give MTA added presence in Europe and it will also diversify its roster. At the same time, Industria Works will benefit from MTA’s infrastructure and its presence in Miami, the epicenter of Latin music.
“Tomas is coming on board to help us grow the agency in the future by leveraging his extensive network of contacts, vast experience in artist representation, independent thinking and entrepreneurial spirit,” added Vega.
Cookman will continue to oversee both Nacional Records and the LAMC, which are not part of the deal.
Today we are releasing U.S. recorded music revenue data for the first half of 2023, reflecting 9.3% growth over the first half of 2022 — the ninth straight year of positive growth.
With overall first-half revenues hitting an all-time high of $8.4 billion at retail value and paid streaming subscriptions nearing 96 million, this report makes clear the strength of American recorded music’s fundamentals.
For example, this new data shows broad strength across formats — especially digital streaming, which now comprises some 84% of recorded music revenues and grew at a robust 10.3% rate this period. Looking solely at paid streaming subscriptions, that figure climbs to 11%.
In fact, paid subscription services were responsible for nearly two-thirds of total revenues and more than three-quarters of streaming revenues. And they continued to grow at an even faster rate than ad-supported revenues.
But it’s not only streaming; the new data also show the lasting power of physical formats — which grew by 5% — including growth in the value of sales of CDs and vinyl. Overall, physical revenues reached their highest level since a full decade ago, topping $880 million so far this year.
And digital and customized radio music revenues, which include SoundExchange distributions for revenues from services like SiriusXM and internet radio stations, grew 16% to $657 million for the period.
As we’re fond of saying, “Music doesn’t just happen.” This success reflects the hard work, innovation, and creative genius of the artists, songwriters, labels, publishers, and services that make up the U.S. music community.
Finally, with annual Latin music revenues in the U.S. exceeding $1 billion for the first time in 2022 and the first half of 2023 showing continued growth faster than overall revenues, Latin music continues to shine — both economically and creatively. We look forward to releasing a full report on the Latin segment during Hispanic Heritage Month and as a capstone to our upcoming RIAA Honors Celebration of Latin music where we will recognize legends Gloria and Emilio Estefan, superstar Sebastián Yatra and other Latin music trailblazers as well as the policymakers who protect it all.
RIAA is proud to develop and release this transparent data which shows the continued power and vitality of U.S. recorded music.
Mitch Glazier is chairman/CEO of the Recording Industry Association of America.
Recorded-music revenues in the United States grew 9.3% in the first half of 2023, reaching an all-time mid-year high of $8.4 billion at retail value, the RIAA said in its mid-year report released today (Sept. 18). That reflects a second year in a row of 9% increases at the mid-year mark, as growth steadies after the upheaval of the pandemic led to market unpredictability.
Once again streaming was the primary driver of both revenue and growth, increasing 10.3% over the first half of 2022 to reach $7 billion, accounting for 84% of all revenue and marking the fourth year in a row that it has accounted for 83%-84% of the overall total.
Paid subscription streaming accounted for the bulk of that number, growing 11% year over year to $5.5 billion, up from $5 billion halfway through 2022 — making up 65.4% of the total revenue figure, and 78.6% of streaming. Notably, the RIAA points out that subscription streaming revenue is growing at a faster rate than the average number of subscriptions — the latter number is up to 95.8 million, from 90 million last year, up 6% — suggesting that some of the price hikes instituted by digital service providers like Apple Music and Amazon Music have begun yielding results. (Increases from YouTube Music Premium and Spotify are too recent to be reflected in the first half of this year.)
Ad-supported streaming, however, is a different story. Total revenue from such services was essentially flat year-over-year, at $870 million, up just 0.6% from 2022. Digital and customized radio revenues were up 16% year over year, reaching $657 million; within that, SoundExchange distributions ticked up 7% to $498 million.
Overall, sales revenue reached $1.1 billion, up slightly from the same period last year, with the growth in physical sales offsetting a decline in digital downloads. Digital sales accounted for just 3% of revenues, and dropped 12% year over year to $225, with digital albums dropped 12% to $107 million and digital tracks declining 14% to $97 million.
Meanwhile, physical revenues of $882 million marked the highest level since the first half of 2013, growing 5% year over year. Vinyl continued to dominate, accounting for 72% ($632 million) of the sector, despite growing just 1.3% year over year, while CD revenue grew 14.3%, to $236 million. Vinyl, for the third year in a row, outsold CDs. But as a window into how prices are changing, unit sales of both vinyl (down 1.8% to 23.4 million) and CDs (down 17.2% to 15.1 million) both declined, despite those increases in the revenue derived from them.
“This report describes a thriving, growing music ecosystem that continues to reach new heights and shape our culture,” RIAA chairman/CEO Mitch Glazier said in a statement accompanying the report. “And it reflects the creative human genius and hard work of all the artists, songwriters, labels, publishers and services who make the music happen and meet fans and audiences where they are in today’s forward looking and innovative music community.”
Litmus Music, a catalog rights company backed by private-equity giant Carlyle Group LP, said on Monday (Sept. 18) it acquired the rights to Katy Perry’s five studio albums released for Capitol Records, including her Grammy-nominated Teenage Dream.
According to sources, Litmus paid $225 million for Perry’s stake in the master recording royalties and music publishing rights to her five albums released between 2008 and 2020—One of the Boys, Teenage Dream, PRISM, Witness and Smile. Litmus declined to comment on the deal terms.
Perry’s catalog sale, finalized earlier this year, follows other 2023 music rights deals like Justin Bieber’s $200-million sale to Hipgnosis Songs Capital, demonstrating that household name artists can still command top dollar even as high interest rates moderate investors’ appetites for song rights.
From her breakout single “I Kissed A Girl” in July 2008 to the five chart-topping songs from 2010’s Teenage Dream, Perry has notched a total of nine No. 1s on the Billboard Hot 100. During a musical era that saw major hits from other female pop stars like Lady Gaga, Beyoncé, Rihanna, Taylor Swift, and Adele, Perry remains the first woman and only second artist ever (after Michael Jackson) to send five songs from the same album to the summit of the Hot 100. Those songs are “California Gurls,” “Firework,” “E.T.,” “Last Friday Night (T.G.I.F.)” and “Teenage Dream.”
In addition to releasing 2017’s Witness and 2020’s Smile, Perry is winding down a blockbuster Las Vegas residency that she started in late 2021.
The “Roar” singer’s professional relationship with Dan McCarroll, Litmus co-founder and chief creative officer, dates back to 2010 when McCarroll was president of Capitol Records, the company said.
“Katy Perry is a creative visionary who has made a major impact across music, TV, film, and philanthropy,” McCarroll said. “I’m so honored to be partnering with her again and to help Litmus manage her incredible repertoire.”
Launched in August 2022 with a $500-million-investment from Carlyle’s Global Credit Platform, Litmus has acquired publishing and recording rights of artists from a range of genres, including Keith Urban‘s master recordings and a package of publishing and performance copyrights from super producer benny blanco.
Hank Forsyth, Litmus co-founder and chief executive officer, called Perry’s “essential” songs “part of the global cultural fabric.”
“We are so grateful to be working together again with such a trusted partner,” said Forsyth, an industry veteran previously of Warner Chappell and Blue Note.
“We believe this is a testament to the team’s ability to partner with the world’s top artists. Katy’s iconic songs have not only achieved outstanding commercial success but have significantly influenced popular culture,” said Matt Settle, managing director at Carlyle.
Jann Wenner, founder of Rolling Stone and a co-founder and former chairman of the Rock & Roll Hall of Fame Foundation in New York, is no longer serving on the foundation’s Board of Directors, the Rock & Roll Hall of Fame Foundation confirms to Billboard.
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“Jann Wenner has been removed from the Board of Directors of the Rock & Roll Hall of Fame Foundation,” the foundation says in statement released on Saturday (Sept. 16).
Billboard reached out to John Sykes, current chairman of the foundation, and president and CEO Joel Peresman for further comment.
The move comes directly following an interview published by the New York Times Friday, in which Wenner, 77, addressed criticism of the scope of coverage in his new book The Masters, published through Little, Brown and Company.
In The Masters Wenner looks back at a collection of his interviews conducted in his years at Rolling Stone — all with white men, including Bono, Bob Dylan, Jerry Garcia, Mick Jagger, John Lennon, Bruce Springsteen and Pete Townshend.
The book noticeably does not feature any interviews with people of color or female musicians. Wenner notes in his introduction that neither are in his “zeitgeist.”
“When I was referring to the zeitgeist, I was referring to Black performers, not to the female performers, OK? Just to get that accurate,” Wenner told the NYT‘s David Marchese. “The selection was not a deliberate selection. It was kind of intuitive over the years; it just fell together that way. The people had to meet a couple criteria, but it was just kind of my personal interest and love of them. Insofar as the women, just none of them were as articulate enough on this intellectual level.”
Wenner clarified: “It’s not that they’re not creative geniuses. It’s not that they’re inarticulate, although, go have a deep conversation with Grace Slick or Janis Joplin. Please, be my guest. You know, Joni was not a philosopher of rock ’n’ roll. She didn’t, in my mind, meet that test. Not by her work, not by other interviews she did. The people I interviewed were the kind of philosophers of rock … Of Black artists — you know, Stevie Wonder, genius, right? I suppose when you use a word as broad as ‘masters,’ the fault is using that word. Maybe Marvin Gaye, or Curtis Mayfield? I mean, they just didn’t articulate at that level.”
He added that his selection was “intuitive” and noted, “You know, just for public relations sake, maybe I should have gone and found one Black and one woman artist to include here that didn’t measure up to that same historical standard, just to avert this kind of criticism. Which, I get it. I had a chance to do that. Maybe I’m old-fashioned and I don’t give a [expletive] or whatever. I wish in retrospect I could have interviewed Marvin Gaye. Maybe he’d have been the guy. Maybe Otis Redding, had he lived, would have been the guy.”
Wenner, who was inducted into the Rock & Roll Hall of Fame as a non-performer in 2004, was one of the founders of the Rock & Roll Hall of Fame Foundation in 1983. The founding group intended to celebrate rock ‘n’ roll and honor its icons; the foundation began inducting musicians in 1986. Wenner served as chairman from 2006 through 2020, with Sykes filling the role upon Wenner’s retirement.
He left Rolling Stone in 2019 when the publication was acquired by Penske Media Corporation, which is also Billboard‘s parent company.