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Chicago impresario Nick Karounos and his partners at Auris Presents Stuart Hackley and John Curly are opening a 750-person capacity, 10,000 square foot venue in Chicago’s famed Bucktown neighborhood later this spring. Explore Explore See latest videos, charts and news See latest videos, charts and news Outset, located on the outskirts of the Lincoln Yards […]
Tupac Shakur’s estate is threatening to sue Drake over a recent diss track against Kendrick Lamar that featured an AI-generated version of the late rapper’s voice, calling it a “a flagrant violation” of the law and a “blatant abuse” of his legacy.
In a Wednesday cease-and-desist letter obtained exclusively by Billboard, litigator Howard King told Drake (Aubrey Drake Graham) that he must confirm that he will pull down his “Taylor Made Freestyle” in less than 24 hours or the estate would “pursue all of its legal remedies” against him.
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“The Estate is deeply dismayed and disappointed by your unauthorized use of Tupac’s voice and personality,” King wrote in the letter. “Not only is the record a flagrant violation of Tupac’s publicity and the estate’s legal rights, it is also a blatant abuse of the legacy of one of the greatest hip-hop artists of all time. The Estate would never have given its approval for this use.”
Drake released “Taylor Made” on Friday, marking the latest chapter in a back-and-forth war of words between the Canadian rapper and Lamar. Beyond taking shots at both Kendrick and Taylor Swift, the track made headlines because of its prominent use of artificial intelligence technology to create fake verses from Tupac and Snoop Dogg – two West Coast legends idolized by the LA-based Lamar.
“Kendrick, we need ya, the West Coast savior/ Engraving your name in some hip-hop history,” the AI-generated Tupac raps in Drake’s song. “If you deal with this viciously/ You seem a little nervous about all the publicity.”
In Tuesday’s letter, Tupac’s estate warned Drake that the use of his voice clearly violated Tupac’s so-called publicity rights – the legal power to control how your image or likeness is used by others. And they took particular exception the use of his voice to take shots at Lamar.
“The unauthorized, equally dismaying use of Tupac’s voice against Kendrick Lamar, a good friend to the Estate who has given nothing but respect to Tupac and his legacy publicly and privately, compounds the insult,” King wrote.
A rep for Drake declined to comment on the demands of the Shakur estate.
It’s unclear if Snoop Dogg, whose voice was also featured on “Taylor Made,” is planning to raise similar legal objections to Drake’s track. On Saturday, he posted a video to social media in which he seemed to be learning of the song for the first time: “They did what? When? How? Are you sure?” A rep for Snoop Dogg did not return a request for comment.
The unauthorized use of voice cloning technology has become one of the music industry’s thorniest legal subjects, as AI-powered tools have made easier than ever to convincingly mimic real artists.
The issue exploded onto the scene last year, when an unknown artist named Ghostwriter released a track called “Heart On My Sleeve” that featured – ironically – fake verses from Drake’s voice. Since then, as voice-cloning has proliferated on the internet, industry groups, legal experts and lawmakers have wrangled over how best to crack down on it.
It’s not as simple as it might seem. Federal copyrights are difficult to directly apply, since cloned vocals usually feature new words and music that are distinct from existing copyrighted songs. The publicity rights cited by the estate are a better fit because they protect someone’s likeness itself, but they have historically been used to sue over advertisements, rather than over creative works like songs.
Faced with that legal uncertainty, the recording industry and top artists have pushed for new legislation to address the problem. Last month, Tennessee passed a statute called the ELVIS Act that aims to crack down on voice cloning by expanding the state’s publicity right laws beyond just advertisements. Lawmakers in Washington DC are also considering similar bills that would create new, broader publicity rights at a federal level.
In Wednesday’s letter, however, the estate said that California’s existing publicity right laws clearly outlaw something as blatant as Drake’s use of Tupac’s voice in “Taylor Made.” King argued that the song had caused “substantial economic and reputational harm” by creating the “false impression that the estate and Tupac promote or endorse the lyrics for the sound-alike.”
The estate also argued that the song was likely created using an AI model that violated the estate’s copyrights by “training” on existing recordings of Tupac’s music. The legality of using copyrighted “inputs” is another difficult legal issue that’s currently being tested in several closely-watched lawsuits against AI developers, including one filed by major music publishers.
“It is hard to believe that [Tupac’s record label]’s intellectual property was not scraped to create the fake Tupac AI on the Record,” King wrote, before demanding that Drake also provide “a detailed explanation for how the sound-alike was created and the persons or company that created it, including all recordings and other data ‘scraped’ or used.”
Wednesday’s letter also pointedly highlighted that Drake himself has made previous objections to the use of his own likeness by others. In addition to last year’s incident surrounding “Heart on My Sleeve” — which was quickly pulled down from the internet — King pointed to a lesser-known federal lawsuit in which Drake’s attorneys accused a website of using his image without authorization.
“The [“Taylor Made Freestyle”] has generated well more than one million streams at this point and has been widely reported in the general national press and popular entertainment websites and publications,” the estate wrote. “Without question, it is exponentially more serious and damaging than a picture of you with some other people on a low volume website.”
In its closing paragraphs, the letter demanded written confirmation by noon Pacific on Thursday that Drake’s representatives were “expeditiously taking all steps necessary to have it removed.”
“If you comply, the estate will consider whether an informal negotiation to resolve this matter makes sense,” King wrote. “If you do not comply, our client has authorized this firm to pursue all of its legal remedies including, but not limited to, an action for violation of … the estate’s copyright, publicity and personality rights and the resulting damages, injunctive relief, and punitive damages and attorneys’ fees.”
The cloudy future of Hipgnosis Songs Fund (HSF) became clearer on April 18, when the embattled company’s board of directors publicly supported a $1.4 billion takeover bid by Concord, followed two days later by a $1.5 billion offer by investment giant Blackstone.
Regardless of the buyer, an acquisition would mark an end to the 5-year-old London Stock Exchange-listed company and give shareholders an offramp after HSF faced questions about its operational acuity and, most recently, alleged evidence of accounting missteps that overstated both revenue and its portfolio’s valuation.
Concord’s offer is a 32.2% premium over HSF’s closing price on April 17, but the board said it would support Blackstone’s offer — which represents a 41.8% premium — if the asset manager makes it official.
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Blackstone’s bid for the publicly traded music rights company wasn’t a surprise: It owns two other entities under the Hipgnosis name. Blackstone is the majority owner of the public fund’s investment adviser, Hipgnosis Song Management (HSM), and it funds Hipgnosis Songs Capital (HSC), a private music rights fund operated with HSM that has its own portfolio of music rights from such stars as Justin Bieber and Kenny Chesney. Sources say Blackstone’s private fund, HSC, is worth upwards of $700 million. HSM has the right to buy HSF’s portfolio if its advisory agreement is terminated — and Blackstone and HSM “will vigorously protect its interests should the company purport to terminate the [investment advisory agreement],” according to a statement issued by HSM on April 22. “We will use all means necessary to defend our contractual position and interests.”
Neither HSF nor HSM responded to requests to comment for this story.
When investors vote on a proposed acquisition at HSF’s June 10 board meeting, a majority of stock- holders representing at least 75% of voting rights must approve the deal. Before Blackstone’s offer, Concord’s bid had the support of shareholders that own 29.4% of the company’s equity.
Any offer would free the fund and its investors from a serious bind. Once a freewheeling darling of the music business that acquired rights to music by Red Hot Chili Peppers, Neil Young and Shakira, the company suffered from a struggling share price, the cancellation of the dividend and — the coup de grace — an unflattering due diligence report by investment bank Shot Tower Capital released March 28 that found the company’s investment adviser, the Merck Mercuriadis-led HSM, committed a series of missteps. Among them: HSM “materially overstated” annual revenue by improperly accounting for revenue and missed growth forecasts on 75% of the fund’s catalogs by an average of 23% annually, and the investment adviser overstated the amount of control that HSF has over the rights it had acquired. The latter conclusion is key to the value of HSF’s portfolio because owning a song’s copyright is more valuable than owning a writer’s or producer’s share of the royalties it generates.
As a result of its findings, Shot Tower lowered HSF’s portfolio value by 26%, from $2.62 billion to $1.95 billion.
“Shareholders are going to vote for whichever [bid is] the higher,” says Josh Gruss, co-founder and CEO of Round Hill Music, who until last November, ran Round Hill’s rival publicly listed music royalty fund. (Concord bought that public fund last year, and Gruss became a Hipgnosis shareholder a few months later.) “I think investors have been through such a roller coaster most of them just want their money back.”
HSM’s response to the Shot Tower report, which was issued the same day, claimed that aspects of it were “factually inaccurate and misleading.”
Not surprisingly, several of HSF’s largest and most long-lasting investors were angered by the report’s findings. Investment managers, some of whom spoke on the condition of anonymity because they did not want to comment publicly before the next board meeting, said that the report’s findings presented extraordinary examples of gross incompetence and “myriad” accounting issues.
Stifel analyst Sachin Saggar, who raised red flags about the company’s accounting and valuation as far back as 2021, says the Shot Tower report revealed “a catalog of errors” that should have been prevented by the layers of protection — a board of directors, an independent auditor, internal systems and adherence to accounting principles — typically afforded to investors.
“If you had a half-decent board at [the initial public offering], you [could] have stopped some of these things happening very easily because they’re quite obvious and they were well-flagged by us three years ago.”
Merck Mercuriadis on Feb. 8, 2021 in Los Angeles.
Spencer Lowell
While the offers could be the answer to HSF’s financial straits, if the Concord bid gets accepted, one question remains: What becomes of Mercuriadis, who is the founder and public face of Hipgnosis, the chairman of HSF’s investment adviser and, until recently, the cocksure self-appointed spokesman for the red-hot song catalog sales market?
The Shot Tower report reinforced doubts that the board can continue to work with Mercuriadis and his team — one investor deems the relationship “broken down” — although parting with him is easier said than done.
Terminating the investment adviser’s contract without cause would give HSM a termination fee and, more critically, an option to buy the entire portfolio at whichever is highest: fair market value, a third party’s bid or the company’s market capitalization.
According to the April 18 announcement, Concord would take over management of HSF’s assets after “a brief transition period” during which Mercuriadis’ HSM remained the investment adviser. The announcement stated that the two sides have not yet begun discussions about terminating the investment advisory agreement.
Matt Hose, a London-based equity analyst for Jefferies, says the HSF board “is trying to highlight that Merck was incompetent so they can terminate [the investment adviser] with cause and not pay out the fees.” He adds that this strategy would prevent Mercuriadis from “stopping the board from selling the portfolio in the open market and getting full value.”
Removing the investment adviser would be an unusual outcome. Hose says he has never seen an investment manager terminated for cause in the 15 years he has covered investment trusts.
HSF’s largest investors support terminating the investment adviser’s contract, but they were reticent to say that the board can prove it has sufficient reason to fire HSM “with cause.”
“People are pretty fed up with the [investment adviser] as a result of this [report],” one investment manager says. “There are some quite extraordinary allegations in this report. I don’t think I’ve seen accusations of gross incompetence laid out in this way. I’ve seen accusations of fraud, but not this.”
Hose points out that, counterintuitively, HSF’s stock price rose 10% on the day the Shot Tower report was released.
“Shareholders want termination for cause because it’s the cleanest exit. Whether they’re going to get it or not — that’s the question.”
If the board moves to terminate the investment manager with cause, investors say Mercuriadis and Blackstone may fight it in court. In such a scenario, they say the two sides would probably settle with HSF for a lump sum of money but not the right to buy the portfolio. They note that a prolonged court battle would bring Blackstone the kind of negative headlines it’s known to avoid.
Other catalog portfolio managers say, bad press be damned, Blackstone will not give up its right to HSF’s quality assets.
“The underlying assets are solid, whether they paid one turn or two turns too much,” says David Schulhof, CEO of music-focused exchange traded fund MUSQ.
A Blackstone acquisition, on the other hand, would be the best outcome for Mercuriadis, as HSM would continue to oversee the portfolio. Regardless of how the aftermath plays out, half a dozen HSF investors and analysts said they cannot see Mercuriadis and HSM remaining the investment manager of a publicly traded fund or the fund continuing as a publicly listed entity.
“It has to spin into a sale at this point,” Round Hill’s Gruss says. “It’s clear that even before these announcements shareholders were hell bent on removing Blackstone as the investment adviser, through legal means or otherwise. It’s a much more elegant solution for shareholders to just sell.”
Despite the enduring value of much of HSF’s portfolio, the board is telling shareholders that a quick sale is their best option. In its April 18 announcement, the board indicated that accepting Concord’s bid would “[mitigate] the risks we see ahead to achieving a material improvement in the share price.” Other than an outright acquisition, it warned, “all alternative options carry significant risks, uncertainties and limitations.”
A version of this story will appear in the April 27, 2024, issue of Billboard.
Fifty years ago, Steven Gaines, a New York Sunday News rock ‘n’ roll newspaper columnist, lined up to ask the Beatles‘ John Lennon a question during a press event for the musical Sgt. Pepper’s Lonely Hearts Club Band On the Road. Gaines blurted out, “Hi, John, does seeing Sgt. Pepper’s being made into an off-Broadway show make you feel old?” Lennon responded acerbically: “I don’t need that to make me feel old, mate. Next!”
It was a humiliating moment for Gaines, and he wandered off. Peter Brown, the Beatles‘ former day-to-day manager and president of the Robert Stigwood Organization, which produced the show, noticed Gaines’ dejection, invited him to talk in a nearby lounge, and the pair became lifelong friends. Later, using Brown’s connections, the duo spent much of 1980 recording exclusive interviews with Paul McCartney, Ringo Starr, Yoko Ono and Beatles insiders such as Apple Corps’ Neil Aspinall and publisher Dick James. The transcripts became the basis for their 1983 best-seller The Love You Make: An Insider’s Story of the Beatles.
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Reading like a “paperback pulp novel,” as Rolling Stone declared, the book contains revelatory allegations such as Lennon’s brief sexual relationship with the Beatles’ late manager, Brian Epstein, and Lennon and Ono’s journey through heroin addiction. When the book came out, McCartney burned it in his fireplace, and his late wife, Linda, photographed the destruction. Now that Brown and Gaines have released the full transcripts from those 1980 interviews in a new book, All You Need Is Love: The Beatles In Their Own Words, which is out now, Gaines tells Billboard by phone from his East Hampton, N.Y., home that the first book may have been “polarizing,” but it’s based on talks with reliable — and comfortable — sources such as a jovial, weed-smoking McCartney.
Billboard: Why put this book out now, 41 years after the publication of The Love You Make?
Steven Gaines: I had the tapes in a bank vault for 40 years while we tried to figure out what to do with them. I wanted there to be full access to the tapes for historians, for the public. Peter and I, getting up in years, decided we had to make a decision now. Publishers were interested. We didn’t do it for the money, because there’s not a huge amount of money involved.
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My favorite detail in the book is “Dalí’s coconut” — a $5,000 gift Lennon commissioned for Starr in which the surrealism master Salvador Dalí created what appeared to be half a coconut lined with a sponge and “a long, curly black hair that he’d plucked from his mustache, he claimed, although I had my suspicions,” as Brown writes in the book.
A young man working for the Beatles in New York, Arma Andon, came in from America, because Dalí wanted to be paid in cash, and you couldn’t bring cash, especially in American dollars, out of England. He went out with Peter Brown and Dalí and his wife Gala to dinner. When it was over, Salvador Dalí asked Arma Andon if he’d like to go with him to a whorehouse. We didn’t put that in the book because it had nothing to do with the Beatles.
The other weird thing was … the hair in the coconut. We don’t know if Dalí got that from his mustache or his pubic hair. John wanted so badly to give Ringo something special, because Ringo felt so maligned and [like] such an outsider and they didn’t appreciate his drumming. When Peter showed it to John, they wet the hair, and the hair curled up, or straightened out, or — I forget what it did. John loved it so much. I forget what they gave Ringo instead. Ringo never knew about the coconut.
I was surprised at the bluntness of your questions, especially to McCartney: “Rock ‘n’ roll bands had a reputation for being bad on the road, like tying groupies to bedposts and f—– them with a fish. But you guys were supposed to be celibate.”
It was one of the things I always wondered about. They were always painted as such angels. Then, of course, there was Hamburg [where the Beatles performed in Germany in the ’60s] and all the hookers. It really shocked me that Paul said there were lots of girls on the road. Why hadn’t any of them come forward?
Paul invited me and Peter to his house in Sussex for the weekend. Paul whispered to me, “Do you smoke grass?” I said, “Not since I’ve been here.” He said, “I’m not allowed to smoke in the house because of the kids and because I’ve been arrested. Let’s go out in my car and we’ll drive around and smoke a joint.” We got into his Mini, the fanciest Mini I’d ever seen. He put one joint on the dashboard of the car.
Then the second joint fell down around the windshield-wiper defroster slot. Paul said, “Oh, no, no, no, they’ll find it, they’ll pull me over for a ticket, and Linda, and they’ll find it! We’ve got to get it out of there.” So we pulled over to the side of the road. We opened up both the doors to the car. He got some screwdrivers out of the bonnet and we started unscrewing the dashboard. His neighbors were walking down the street: “Having car trouble, Mr. McCartney?” “Oh, no, that’s OK, that’s fine, thank you very much.” We never found the joint. We screwed everything back together.
That was my experience in the interview: He was really shockingly forthcoming.
For decades, Yoko Ono was said to have broken up the Beatles, but the studio footage in Peter Jackson’s documentary Get Back suggests it was really about business — particularly regarding Allen Klein, whom Lennon wanted to hire as manager, while McCartney and others disagreed. All You Need Is Love indicates all these reasons are true, and others as well.
The first thing was that Brian [Epstein] died. He was the glue that held the Beatles together. Then the guys were getting tired of each other. They couldn’t go out on the street, they were the most famous people on earth, everything they did, every gesture, everything they said, was blown up, and they could only see each other, and it created tremendous tension.
If the feelings behind them weren’t so bad, they maybe would have solved those financial problems. There is a moment in Get Back when John and Yoko go over to speak with Peter Brown. Peter says, “Allen Klein is here,” and John and Yoko say, “Oh, when can we see him?” Peter says, “He’s at the Dorchester [Hotel in London], you can see Allen Klein tomorrow.” What they do behind everyone’s back is call the Dorchester and see him that night. And he brainwashes them. He made everything worse. He picked at all the scabs. He made the Beatles fight with each other.
How did you and Peter come up with this arrangement to write together?
In 1980, I was broke and down and out and unhappy and miserable in New York. He was living in Laguna Beach in a penthouse on a cliff. He said, “You’ve got to get out of New York. Stay here for a while.” It was glorious, and I said, “What about that book now?” He said, “Let’s write a proposal.” Then it exploded. We got $250,000 for the hardcover rights, $750,000 for the paperback rights. It went on and on until we had almost $2 million in advances. The problem was, it was too honest, it was too direct and the Beatles fans weren’t ready for it. But everybody’s grown up now. They’re ready for All You Need Is Love.
The 2024 IMS Ibiza conference began today (April 24) on the event’s namesake island electronic music mecca. The conference’s program includes three days of talks on multiple facets of the electronic music business, including streaming, labels, AI, wellness, the island clubbing economy and much more.
As is tradition, IMS started today with an introduction from the event’s founders, including BBC Radio legend Pete Tong, followed by the presentation of the annual IMS Business report, which looks at the trends, growth sectors and general health of the global electronic music industry.
Marking its tenth edition this year, the report was authored by MIDiA Research’s Mark Mulligan and is available here. Generally, the 2024 report found significant growth areas along with a higher year over year valuation of the industry as a whole. It also offered insights on the general music industry landscape, stating that “after a slower 2022, the global recorded music market returned to strong growth in 2023, up 10%.”
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These are ten key findings from the 2024 report.
1. Spotify Gained Market Share, But Totaled Less Than a Third of The Global Streaming Market
The global streaming market currently has a whopping 713.4 million total subscribers, with this subscriber base growing by 14.4% between the third quarter of 2022 and the third quarter of 2023. This equates to 90 million added subscribers, which is 6.5 million more subscribers than were added over the same period a year earlier.
The report finds that Spotify remained the largest DSP, increasing its global share to 32% in the third quarter of 2023. Tencent Music Entertainment remained the third largest, overtaking Amazon Music in the third quarter of 2022. Meanwhile, Chinese platform NetEase Cloud Music also had strong growth and helped contribute to significant growth for the whole of the Chinese streaming market.
2. Revenues Grew Strongly Across The Industry, Especially In the Live Sector
Revenues of 15 of the world’s biggest music companies – across labels, publishers, DSPs and the live sector – grew by 18% in 2023, for a total value of $75.9 billion. “While less than the post-lockdown boom growth of 2022,” the report states, “this is still strong.”
2023’s largest growth sector was live, a function of the fact that “lingering pent-up lockdown interest fostered increased demand, and tickets were both more expensive and sold in larger quantities.” The growth of live was followed by growth of DSPs, which grew by 16% over the last year.
3. Major Labels Dominated, But Lost Market Share To New-Generation Labels
While record labels across the board experienced strong growth in 2023, “non-majors grew the fastest.” More specifically, major labels grew by 7% overall in 2023, with the publicly traded non-majors like HYBY and Believe growing by 17%. Additionally, 57% of HYBE’s revenue was in non-recorded products, compared to 23% for WMG.
“HYBE and Believe grew the fastest,” the report states, “representing the spearhead of a new generation of record labels that pursue revenue streams closely aligned with the dynamics of today’s fan and creator centered music business.”
4. The Top 10 Markets For Electronic Music As Determined By Monthly Spotify Listeners Are:
Germany
United States
Australia
United Kingdom
Brazil
India
Mexico
South Africa
Canada
France
Per the report, Australia is a standout on this list, as the country has 10 times more electronic music listeners than the entire country has people. (In the United States, this ratio is closer to 1:1.) Mexico, India and Brazil represent the newer wave of global electronic music markets, with listener numbers smaller than each country’s total population, which suggests that electronic music culture is still securing a foothold in these territories.
South Africa is also a standout, with nearly twice as many electronic listeners as people. The country’s strong listening figures, the report says, “reflect the degree to which South Africa has built its own electronic scenes and culture.”
5. Electronic Music’s Online Fandom Surged In 2023, Outperforming Other Genres
The genre gained significant followers across Facebook, YouTube, TikTok, Instagram and Spotify, and saw vastly more follower growth than rock, hip hop and Latin. This online expansion saw electronic’s following surpass that of rock on YouTube, Instagram, and TikTok. Meanwhle, while hip-hop remains the dominant streaming genre, electronic is getting closer to the stream counts of Latin and rock.
6. Ibiza Clubs Are Still Booming Post-Pandemic
Clubs on the island continued their post-pandemic rebound, with Ibiza club ticketing revenue reaching €141 million (approximately $150 million) in 2023, up 14% from 2022 and 76% from 2019. “The strength of demand,” the report states, “was illustrated by the fact that average ticket prices increased from €44 in 2022 to €51 in 2023.”
In 2019, total ticket revenue across clubs on the island was €80 million ($85 million), with an average of 123 events per venue over the course of the season. In 2023, ticket revenue was €141 million ($150 million), with 147 events per venue.
7. Tech House Remained The Most Popular Dance Genre on Beatport
Like last year, tech house was the digital download platform’s most popular genre. This year, Afro House shot up from being in the 18th spot in the first quarter of 2022 to the ninth spot in the third quarter of 2023. The report notes that this rise “coupled with the rise of South Africa as a leading Spotify market for electronic music, further points to the rising importance of sub-Saharan Africa in electronic music culture.
Beatport’s ten most popular electronic subgenre’s overall were:
Tech House
House
Techno (peak/driving)
Melodic House & Techno
Drum & Bass
Dance/Electro Pop
Deep House
Minimal/Deep Tech
Progessive House
Afro House
8. SoundCloud Maintained Its Position As a Home For Electronic Music
Electronic music genres grew by 24% on SoundCloud in 2023, the second successive year this has happened. The platform is forecasted to have at least another 10% growth of the genre, with the report stating that “SoundCloud is both consolidating and expanding its long-term position as one of the global homes of electronic music fan communities.”
9. There’s an Apparent Perception Gap Regarding The Industry’s Gender Equality Advancements
In a survey of members of the Association For Electronic Music and IMS delegates, 82% of respondents said that the industry was doing well on gender issues related to diversity of lineups and employees. But a survey of male, female and gender expansive industry members found that women and gender expansive creators were more likely than men to be “interrupted, excluded, questioned and judged unfairly.”
Additionally, a tendency among women to undervalue their contributions is reflected in a industry pay gap, with women creators nearly twice as likely as men to discover they are being paid less than their peers in the same or similar roles.
10. The Global Electronic Music Industry Was Worth $11.8 Billion In 2023
Particularly significant growth happened in festivals and clubs, with this sector representing nearly half of the industry total. Recording and publishing were also significant contributors, with music hardware and software making up the next biggest segment — around a quarter of total — although growth in this hardware and software sector was relatively slow in 2023.
Given this $11.8 billion valuation, the report states that “the global dance music business is now firmly in its post-pandemic growth phase.”
Universal Music Group is betting big on French-speaking Africa, announcing a new partnership on Wednesday with Wèrè Wèrè Music founder Binetou Sylla to lead Def Jam Africa‘s efforts in the rapidly growing music market. Working with Universal Music France and Capitol France, Sylla and her team will focus on discovering and producing French-speaking artists in […]
The Senate passed legislation Tuesday night that would force TikTok’s China-based parent company to sell the social media platform under the threat of a ban, a contentious move by U.S. lawmakers that’s expected to face legal challenges and disrupt the lives of content creators who rely on the short-form video app for income.
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The TikTok legislation was included as part of a larger $95 billion package that provides foreign aid to Ukraine and Israel and was passed 79-18. It now goes to President Joe Biden, who said in a statement immediately after passage that he will sign it Wednesday.
A decision made by House Republicans last week to attach the TikTok bill to the high-priority package helped expedite its passage in Congress and came after negotiations with the Senate, where an earlier version of the bill had stalled. That version had given TikTok’s parent company, ByteDance, six months to divest its stakes in the platform. But it drew skepticism from some key lawmakers concerned it was too short of a window for a complex deal that could be worth tens of billions of dollars.
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The revised legislation extends the deadline, giving ByteDance nine months to sell TikTok, and a possible three-month extension if a sale is in progress. The bill would also bar the company from controlling TikTok’s secret sauce: the algorithm that feeds users videos based on their interests and has made the platform a trendsetting phenomenon.
TikTok did not immediately return a request for comment Tuesday night.
The passage of the legislation is a culmination of long-held bipartisan fears in Washington over Chinese threats and the ownership of TikTok, which is used by 170 million Americans. For years, lawmakers and administration officials have expressed concerns that Chinese authorities could force ByteDance to hand over U.S. user data, or influence Americans by suppressing or promoting certain content on TikTok.
“Congress is not acting to punish ByteDance, TikTok or any other individual company,” Senate Commerce Committee Chairwoman Maria Cantwell said. “Congress is acting to prevent foreign adversaries from conducting espionage, surveillance, maligned operations, harming vulnerable Americans, our servicemen and women, and our U.S. government personnel.”
Opponents of the bill say the Chinese government could easily get information on Americans in other ways, including through commercial data brokers that traffic in personal information. The foreign aid package includes a provision that makes it illegal for data brokers to sell or rent “personally identifiable sensitive data” to North Korea, China, Russia, Iran or entities in those countries. But it has encountered some pushback, including from the American Civil Liberties Union, which says the language is written too broadly and could sweep in journalists and others who publish personal information.
Many opponents of the TikTok measure argue the best way to protect U.S. consumers is through implementing a comprehensive federal data privacy law that targets all companies regardless of their origin. They also note the U.S. has not provided public evidence that shows TikTok sharing U.S. user information with Chinese authorities, or that Chinese officials have ever tinkered with its algorithm.
“Banning TikTok would be an extraordinary step that requires extraordinary justification,” said Becca Branum, a deputy director at the Washington-based Center for Democracy & Technology, which advocates for digital rights. “Extending the divestiture deadline neither justifies the urgency of the threat to the public nor addresses the legislation’s fundamental constitutional flaws.”
Sen. Ron Wyden, a Democrat who voted for the legislation, said he has concerns about TikTok, but he’s also worried the bill could have negative effects on free speech, doesn’t do enough to protect consumer privacy and could potentially be abused by a future administration to violate First Amendment rights.
“I plan to watchdog how this legislation is implemented,” Wyden said in a statement.
China has previously said it would oppose a forced sale of TikTok, and has signaled its opposition this time around. TikTok, which has long denied it’s a security threat, is also preparing a lawsuit to block the legislation.
“At the stage that the bill is signed, we will move to the courts for a legal challenge,” Michael Beckerman, TikTok’s head of public policy for the Americas, wrote in a memo sent to employees on Saturday and obtained by The Associated Press.
“This is the beginning, not the end of this long process,” Beckerman wrote.
The company has seen some success with court challenges in the past, but it has never sought to prevent federal legislation from going into effect.
In November, a federal judge blocked a Montana law that would ban TikTok use across the state after the company and five content creators who use the platform sued. Three years before that, federal courts blocked an executive order issued by then-President Donald Trump to ban TikTok after the company sued on the grounds that the order violated free speech and due process rights.
The Trump administration then brokered a deal that had U.S. corporations Oracle and Walmart take a large stake in TikTok. But the sale never went through.
Trump, who is running for president again this year, now says he opposes the potential ban.
Since then, TikTok has been in negotiations about its future with the secretive Committee on Foreign Investment in the United States, a little-known government agency tasked with investigating corporate deals for national security concerns.
On Sunday, Erich Andersen, a top attorney for ByteDance who led talks with the U.S. government for years, told his team that he was stepping down from his role.
“As I started to reflect some months ago on the stresses of the last few years and the new generation of challenges that lie ahead, I decided that the time was right to pass the baton to a new leader,” Andersen wrote in an internal memo that was obtained by the AP. He said the decision to step down was entirely his and was decided months ago in a discussion with the company’s senior leaders.
Meanwhile, TikTok content creators who rely on the app have been trying to make their voices heard. Earlier Tuesday, some creators congregated in front the Capitol building to speak out against the bill and carry signs that read “I’m 1 of the 170 million Americans on TikTok,” among other things.
Tiffany Cianci, a content creator who has more than 140,000 followers on the platform and had encouraged people to show up, said she spent Monday night picking up creators from airports in the D.C. area. Some came from as far as Nevada and California. Others drove overnight from South Carolina or took a bus from upstate New York.
Cianci says she believes TikTok is the safest platform for users right now because of Project Texas, TikTok’s $1.5 billion mitigation plan to store U.S. user data on servers owned and maintained by the tech giant Oracle.
“If our data is not safe on TikTok,” she said. “I would ask why the president is on TikTok.”
Spotify’s stock jumped as much as 17.3% on Tuesday (April 23) following the company’s first-quarter earnings report showed the company is starting to deliver better profits and margins. The share price closed at $303.49, up 11.5%, after reaching a new 52-week high of $319.30 earlier in the day.
Investors’ expectations for future quarters often drive large swings in stock prices when a company delivers results for past quarters. For Spotify, cost-cutting and newfound financial discipline are expected to produce tangible results next quarter. The company’s guidance for second quarter operating income of 250 million euros ($268 million) was well ahead of Guggenheim analysts’ estimate of 179 million euros ($192 million) and JP Morgan’s estimate of 199 million euros ($213 million), and was a vast improvement from the 247 million euro ($264 million) operating loss in the second quarter of 2023. Gross margin guidance of 28.1% far exceeded Guggenheim’s estimate of 26.6% and JP Morgan’s estimate of 26.9% and would be nearly four percentage points above the prior year period’s 24.3% gross margin.
First-quarter results often exceeded Spotify’s guidance from three months ago. Revenue of 3.63 billion euros ($3.9 billion) slightly topped the high end of guidance of 3.6 billion euros. Gross margin of 27.6% was more than a percentage point above guidance of 26.4%, although operating income of 168 million euros ($180 million) was under guidance of 180 million euros ($192 million).
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Gross margin was 243 basis points — 2.43 percentage points — better than the 25.2% gross margin in the prior year period. Spotify said the improvement came from improved music and podcast profitability that was partially offset by costs from its growing audiobooks business. Operating income was impacted by 82 million euros ($89 million) in social charges and was helped by lower personnel costs and marketing spending.
“We consider this a real trend” rather than the result of one-off events, said interim CFO Ben Kung during Tuesday’s earnings call when asked by an analyst what to expect from margin growth for the remainder of 2024.
Although Spotify didn’t surpass forecasts for subscriber growth, it met expectations and generated more revenue, on average, from each paid customer. Average revenue per user improved 5% to 4.55 euros ($4.94) thanks to price increases in July 2023. Total monthly active users of 615 million was slightly below Spotify’s guidance of 618 million, but the 239 million subscribers matched the company’s forecasts.
“It is really a new Spotify, and we are being relentless resourceful in all of our costs,” CEO Daniel Ek said during Tuesday’s earnings call. Second-quarter margins were helped by decreases in streaming delivery costs and other costs of revenue, Ek explained. The podcast segment, which was a drag on profitability in 2023, is expected to be profitable in 2024, he added.
The longtime knock against Spotify was it had a great product but wasn’t a great business. The economic demands of music streaming, which require Spotify to pay music rights holders most of its revenue, left little for R&D, marketing, salaries, and general and administrative expenses. Although the company has amassed more than 600 million monthly users — 239 million of them paid subscribers — it has been perpetually unprofitable.
Spotify’s fortunes began to change in 2023 after the company knuckled down, laid off 17% of its global workforce in December and jettisoned many high-priced, celebrity podcast deals — namely parting ways with Price Harry and Meghan Markle’s Archewell Studio and striking a non-exclusive deal with the previously exclusive-to-Spotify The Joe Rogan Experience.
If it’s possible, Record Store Day was even bigger this year than last year, when Taylor Swift caused a traffic jam at record stores across the nation, according to some of the merchants Billboard’s Retail Track columnist visited this past Saturday (April 20).
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This year, the Olivia Rodrigo “Stick Season”/Noah Kahan “Lacy” seven-inch was cited as the hottest seller by store managers and owners, but overall, a wider breadth of releases drove more traffic into stores, according to Rough Trade store manager George Flanagan.
Other big sellers — or records that the retailers wished they had more copies of — included Chappell Roan’s “Pink Pony Club” seven-inch; the Sparks/Noël double LP No. 1 Song in Heaven/Is There More to Life Than Dancing?; Talking Heads‘ Live at WCOZ double LP; Sabrina Carpenter’s “Feather” seven-inch; and a 12-inch featuring David Byrne‘s cover of “Hard Time” and Paramore‘s cover of “Burning Down The House.”
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This year, Swift issued The Tortured Poets Department on Friday, the day before Record Store Day (RSD), and it has so far sold an astounding 1.5 million records in its first three days of availability. But independent record store merchants say that while the album was a solid seller for the weekend, this album didn’t have the impact that Swift’s exclusive for last year’s RSD, Folklore: the Long Pond Studio Sessions. That’s because this year’s album was widely available at mass merchants, Amazon, and on her website, and at sale prices just a little bit above their wholesale cost. Nevertheless, retailers say they will always warmly welcome any new release by Swift.
Retail Track began the day at Darkside Records in Poughkeepsie, N.Y., where at 9:15 — 15 minutes after the store opened — there were some 250 people waiting in line for their turn to enter the store. Letting customers in 15 to 20 at a time, the line — which lasted until nearly 6:30 p.m. on Saturday — stretched around the 9,000-square-foot store and deep into the filled-to-capacity parking lot. The first person in line showed up at 8 p.m. Thursday (April 18), according to Darkside co-owner Justin Johnson, who added that when he showed up to open the store on Friday morning (April 19), a full day before Record Store Day kicked off, there were already four people queued up.
“It was absolutely an incredible turnout. Everyone was really cool and we had a great time,” Johnson told Billboard. “It was our best day ever and it blew away last year’s Record Store Day, which up to then had been our best day ever.”
What’s more, one woman drove 11 hours from Michigan to shop at Darkside because of how the store had handled the autographed Taylor Swift CD last year, she told Johnson. “[She] wanted to support us for treating the Swifties so fairly and combating the bots,” Johnson said. And she showed up early enough at the store to be No. 10 in line, he added.
After leaving Darkside, Retail Track drove over the Hudson River to Middletown, N.Y. to visit Rock Fantasy, a record store/pinball machine/video game arcade. Open since 1985, Rock Fantasy leans hard rock/metal, but owner Stephen Keeler said the Rodrigo/Kahan single was the day’s top seller. He added that about 30 customers were in line when he showed up to open the store. Moreover, he says the store celebrated Record Store Day/420 by staging two shows on successive nights at Quinnz Pinz, the local bowling alley where he promotes shows. The weekend kicked off with a Grateful Dead tribute band, Gratefully Yours, on Friday night; while on Saturday night, Kiss tribute band Psycho Circus performed. On the afternoon of Record Store Day, Rock Fantasy held a pinball tournament in the store.
Some of the 250 music fans waiting on line for their turn to shop Darkside Records—a store logo displayed about the tent structures.
Ed Christman
Rock Fantasy’s layout is long and narrow, almost like a railroad apartment with five or six rooms. Besides the records, tchotchkes and other music memorabilia it sells in the front two rooms, the store also houses 53 pinball machines and a few vintage video games. Customers can choose to play on machines featuring Led Zeppelin, Metallica, Kiss, Ted Nugent, AC/DC, the Beatles, Elton John, the Rolling Stones and Guns & Roses, as well as machines licensed from movies like Jaws, Pulp Fiction, Godzilla, OO7 and Jurassic Park.
Heading back to the other side of Hudson, Retail Track tried a little potluck with a store called The Vinyl Room in Beacon, N.Y. While it turned out to be more of a bar and restaurant than a record store, it was nevertheless a fun place to visit. The space had only two racks of vinyl, mainly used records, but the store’s interior design, which used records and other music memorabilia and ornamentation, more than made the trip worth it.
Across the street, at the local VFW Hall, was the Beacon Record & CD Fest, a swap meet with about a dozen vendors where Retail Track lucked out by scoring a copy of the Tommy James & The Shondells single “Gingerbread Man” on Roulette Records.
Staying on the same side of the Hudson, Retail Track next headed to Cold Springs, N.Y. and visited Half Moon Records at The Shoppes, an emporium-style setup with a number of different rooms and stores. Half Moon, which comprised the front two rooms of The Shoppes, was filled with records. One of the co-owners, Peter Hamboussi, said the store had just doubled the space devoted to records about a month ago; while co-owner Nicole Le Blanc said the store hopes to build its country music inventory. Like other merchants, Hamboussi said he wished he had received more copies of the Byrne and Paramore record, as well as the Cranberries. He said he usually does good business on Record Store Day later in the afternoon, as devout music buyers continue on their crawls.
Finally, Retail Track headed back to New York City to visit Rough Trade Records, which had a line of about 100 people when the store opened, including customer George West, who was first in line at about 5 p.m. on the Friday night prior. West is usually first in line every year at the store for the event, reported Rough Trade’s Flanagan, who added that by 8 p.m. on Friday, five people had queued up. The line lasted all day Saturday until about 5:30 p.m., when the store stopped regulating the in-flow. Nevertheless, when Retail Track showed up at around 6 p.m., the store was jam-packed and still doing brisk business.
Rough Trade and Rockefeller Center presented Indie Plaza in conjunction with Record Store Day, where eight bands and DJs entertained music fans, Rough Trade customers, and tourists from 1PM to 9PM. Pictured above is the Rough Trade booth, stocked with records and next to it is the artist merch booth selling wares from the bands. In the background, on the stage, Armand Hammer are working their way through their set.
Ed Christman
Another factor boosting traffic and sales at Rough Trade on Saturday was that it hosted Indie Plaza in Rockefeller Center, in the vast open space above the skating rink. During the day, DJs and bands alternated playing on a stage erected at the end of the plaza abutting 50th Street, keeping the crowd entertained until 9 p.m. Rough Trade set up a booth filled with music, while next to it was another booth with merch from the bands performing that day to sell to the fans enjoying the shows. Dave The Spazz, Sunrisa Disco, and Nancy Whang took turns helming the DJ booth in between sets by Cloud Nothings, Dehd, Armand Hammer, Glitterer, Sunny War, Corridor, Snõõper and Wishy.
“Last year, Record Store Day was our best day ever and it’s worth noting that Taylor Swift was a huge part of our business that day,” Flanagan said. “I was convinced we wouldn’t be able to top that, but we did; we were up by 5% to 10% more. I think one of the reasons why [2024 RSD] became the store’s best day ever is because there was something like 20% more titles out this year.”
For the last store visit of the day, the plan was to head back to home base of Astoria, Queens, to visit the semi-new Pancake Records on Steinway Street. But Retail Track ran out of gas (figuratively) and out of time (literally) — and the local bar with cold Pabst Blue Ribbon cans was beckoning.
Megan Thee Stallion and Roc Nation are facing a lawsuit from a cameraman who claims he was forced to watch her have sex with a woman inside a moving vehicle while she was on tour in Spain.
In a complaint filed Tuesday (April 23) in Los Angeles court, Emilio Garcia accused the superstar of subjecting him to a hostile work environment due to the alleged incident, which he says amounted to harassment that left him “embarrassed, mortified and offended.”
“After a night out, plaintiff Stallion and three other women were riding in a SUV together,” Garcia’s lawyers write in the lawsuit, obtained by Billboard. “Suddenly, Stallion and one of the other women start having sex right beside plaintiff. Plaintiff could not get out of the car as it was both moving and he was in the middle of nowhere in a foreign country.”
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Garcia claims that the day after the incident — which allegedly occurred in June 2022 near Ibiza, Spain — Megan told him, “Don’t ever discuss what you saw.” He says she then “berated him” and made “fat-shaming comments” towards him.
In the months following the alleged incident, Garcia claims that Roc Nation switched him from a monthly rate to a per-assignment arrangement. He says he also “noticed a change in how he was treated and saw a decrease in the number of bookings he received from Stallion.” In June 2023, he claims he was told that he was told that “his services would no longer be required.”
Beyond the allegations of a hostile workplace, Garcia also claims that Megan and Roc Nation violated California wage-and-hour laws by failing to fully pay him for the “myriad” tasks he performed for the superstar as her personal cameraman: “More than once, Stallion interrupted plaintiff during dinner and demanded that he immediately shift his focus to assist with her TikTok creative ideas.”
Despite his status as an independent contractor, Garcia claims that Megan effectively treated him like an employee. He says she repeatedly told him explicitly that he was “not allowed to service any other client other than herself.”
Notably, Garcia is represented by the same attorneys (Neama Rahmani and Ronald Zambrano) who filed a high-profile hostile workplace case against Lizzo on behalf of three of her backup dancers. Like the new case, that earlier lawsuit also features allegations that employees were forced to watch sex acts in a European country during an overseas tour.
A rep for Megan and Roc Nation did not immediately return a request for comment on Tuesday.
