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Releases by Travis Scott, SZA, Harry Styles and Luke Combs, along with continued paid subscription growth, helped Sony Music Entertainment revenues hit a record 408 billion yen ($2.83 billion at the quarter’s average exchange rate) in its fiscal second quarter ended Sept. 30, up 13.7% from the prior-year period, parent company Sony Corp. announced Thursday.
The company’s previous high for quarterly revenue was 363.7 billion yen ($2.57 billion) in the third quarter of fiscal 2022 (the quarter ended Dec. 31, 2022).
Adjusted operating income grew 10.9% to 97 billion ($672 million). Adjusted OI excludes the impact of a $41.2 million one-time benefit recognized in the prior-year quarter related to settlements of copyright infringement lawsuits. The appreciation of the yen contributed some of the revenue growth in the quarter. Of the 49.4 billion yen ($342 million) revenue increase, foreign exchange accounted for a 12.7 billion yen ($88 million) gain — about a quarter of the improvement.
Recorded music revenues grew 13.3% to 253.8 billion yen ($1.76 billion) on the strength of subscription streaming services such as Spotify, Apple Music and YouTube Music. Streaming revenue grew 14.4% to 173.9 billion yen ($1.2 billion), accounting for 69% of recorded music revenues. Other revenues, which encompass merchandise, licensing and live performances, jumped 51.6% to 50.9 billion yen ($352 million). Physical revenues dropped 14.4% to 20.8 billion yen and download sales fell 42.2% to 8.2 billion yen ($57 million), although the two categories combined accounted for only 11.4% of recorded music sales.
Miley Cyrus’s Endless Summer Vacation, Beyoncé’s Renaissance, Lil Durk’s Almost Healed, Doja Cat’s Scarlet and Luke Comb’s This One’s For You were also among Sony Music’s top ten recorded music releases ranked by revenue. In Japan, Sony Music Entertainment’s top title was Social Path, a Japanese-language EP by K-pop group Stray Kids released with JYP Entertainment. Social Path hit No. 1 on the Billboard Japan Hot Albums chart for two weeks in September.
In the music publishing division, a 14.8% increase in streaming revenue helped total publishing revenue increase 12.6% to 82.7 billion yen ($573 million). Other publishing revenue, which includes mechanical, performance royalties and synch licensing, grew 9.6% to 34.3 billion yen ($237 million).
The visual media and platform division rose 5.7% to 62.9 billion yen ($436 million) and accounted for 15.7% of Sony Music’s total revenue. The division includes mobile games, software for PCs and game consoles, and sales related to software development contracts.
Sony Music increased its full-year guidance for revenue by 5%, or 70 billion yen ($485 million), and adjusted operating income before depreciation and amortization by 4%, or 15 billion yen ($104 million). The upward revisions were due to the impact of foreign exchange, increased streaming revenues in the music publishing division and higher mobile game sales in the visual media and platform division.
Financial metrics for Sony Music’s second fiscal quarter ended Sept. 30, 2023:
Revenue of 408.7 billion yen ($2.83 billion), up 13.7% year over year.
Adjusted operating income of 97 billion yen ($672 million), up 10.9% year over year.
Recorded music revenue of 253.7 billion yen ($1.76 billion), up 13.3% year over year.
Music publishing revenues of 82.7 billion yen ($573 million), up 12.6% year over year.
Visual media and platform revenue of 62.9 billion yen ($436 million), up 5.7% year over year.
Antonio “L.A.” Reid — the legendary music industry executive who headed up labels including Epic, Island Def Jam and Arista over the course of a storied career — has been sued for sexual assault and harassment by former Arista A&R executive Drew Dixon.
In a complaint filed Wednesday (Nov. 8) in U.S. District Court in New York, Dixon publicly claims for the first time that Reid sexually assaulted her on two separate occasions — incidents she claims derailed her once-promising career and ultimately cost her millions of dollars in lost income. Dixon had previously accused Reid of harassment in a 2017 article for The New York Times as well as a subsequent documentary.
The lawsuit was brought under New York’s Adult Survivors Act, which allows alleged victims of sexual offenses that fall outside the statute of limitations to file civil suits for a year-long period spanning from Nov. 24, 2022, to Nov. 24, 2023.
Dixon contextualizes Reid’s alleged harassment and assault with the abuse she claims to have suffered at the hands of another former boss: Russell Simmons. In the same 2017 New York Times article where she lodged harassment claims against Reid, Dixon claimed that Simmons raped her during her tenure as an A&R executive at his Def Jam label. She now claims that Reid was “aware” of Simmon’s alleged assault at the time she began working for him at Arista — and that Reid nevertheless went on to abuse her as well.
According to the Nov. 8 complaint, the first alleged assault occurred on a private plane to Puerto Rico in 2001, when Dixon was serving as vp of A&R at Arista during Reid’s tenure as president/CEO. Dixon claims she was told not to book her own flight to Puerto Rico, where Reid was hosting a company-wide retreat, because Reid had invited a group of senior executives to join him on a private jet. But when she arrived, she claims she “was confused…to find Mr. Reid all alone.” Dixon claims that Reid began flirting right away and, after asking her to sit beside him to go over materials for a presentation, he began “kissing her and digitally penetrated her vulva without her consent.”
Dixon goes on to state that though she was entitled to her own room at the hotel in Puerto Rico, she insisted on sharing a room with her assistant “to avoid any possibility that Mr. Reid might try to find another way to be alone with her during the retreat.” She says that throughout their time there, she “stayed close to her assistant” before taking a commercial flight home in order to avoid a similar incident.
The second alleged assault occurred later that same year following a work event in New York, when Reid allegedly insisted that Dixon “join him for a ride to drop her at home so they could continue to discuss work and he could listen to some of the music she had been waiting for him to review,” including a demo of a young singer named Alice Smith. Dixon says she agreed because “it was not a very long ride” and because she knew Reid’s driver would be present — and also “that if she continued to avoid Mr. Reid, she would never be able to get anything approved for her artists.”
Not long into the car ride, Dixon alleges, Reid began “to grope and kiss” her as she “squirmed and pushed him away” while his driver “stared straight ahead.” After Reid allegedly “complained and became visibly irritated with her lack of compliance,” Dixon says she “froze” and claims that Reid once again “digitally penetrated” her vulva without her consent.
Following the second alleged assault, Dixon says she “intensified her efforts to avoid” Reid, knowing that reporting the alleged assaults would be “career ending.” Though she says she was advised by other Arista executives, at Reid’s behest, “to wear skirts and high heels” at work, she claims she began wearing “jeans and Birkenstock clogs” to the office under the belief that it would make her less of a target for Reid.
However, Dixon claims that Reid continued to sexually harass her, including by inviting her to meetings in his hotel room at the Four Seasons “night after night.” Though she says she continually turned down these overtures, she claims Reid began calling her late at night and that, when she began letting his calls go straight to voicemail, he “became angrier and angrier” and “turned hostile towards her, and her artists, and her ideas.”
Dixon claims Reid then channeled his anger into thwarting her career and the careers of her artists.
“Promotional and recording budgets were suddenly reduced dramatically or frozen altogether,” the complaint reads. “Song demos and artist auditions were flatly rejected. Ms. Dixon could not do her job at Arista, and she became increasingly concerned that her stifled success at Arista would impede her ability to secure a similar job at another label.”
Dixon additionally accuses Reid of “blocking” artists she attempted to sign — including, she claims, future megastars Kanye West and John Legend. After allegedly bringing in West for an audition, she claims Reid passed on the rapper “and then proceeded to berate Ms. Dixon in front of the whole A&R department about how bad she was at her job and what a waste of his time the audition had been, all while Kanye waited in the lobby.”
In the case of Legend, Dixon claims that while Reid initially showed some interest in the singer after Dixon played a demo for him, her subsequent refusals to join him in his hotel room led Reid to no-show at Legend’s audition as punishment.
“Once she realized Mr. Reid would continue to stifle her career and the prospects of any of the artists she brought to him and that he would continue to undermine the artists she had already signed like Toya in order to punish Ms. Dixon for rejecting his sexual pressures, Ms. Dixon gave up not just on Arista, but on her dream of starting a label,” the complaint reads. “She left Arista to pursue an MBA at Harvard Business School in 2002. Resigned to the fact that she would not ever be able to function in the music industry without being sexualized.”
Dixon claims that after graduating from Harvard with honors in 2004, she joined Legend as a GM at his Homeschool Records, where she worked with the singer to co-executive produce Estelle‘s U.S. debut album, Shine, and arranged for West to record a feature on the Grammy-winning single “American Boy.” However, while working on the promotion of the album with staff at Atlantic Records, she claims coming into contact with Reid and Simmons’ “enablers” at the label “triggered depression” and caused her to retreat from the industry once again.
According to the complaint, Dixon came into contact with Reid once more, during his tenure as chairman/CEO at Island Def Jam, when she was trying to kickstart a career as a songwriter-producer. Claiming she “still had not worked through the abuse she had experienced in the music industry,” she says she set up a meeting with Reid to play a demo of her songs with the hope of placing them with some of his artists. During the meeting, she said Reid “insisted that she stand up and sing for him” despite coming to him as a songwriter-producer, leading to the return of “the crass feeling of being objectified” by Reid. “No amount of time, education, marital status, or additional hit records would undo the harm of the assaults,” the complaint reads.
Dixon says the legacy of Reid’s assaults is ongoing. In 2017, after starting her own label, The Ninth Floor, she alleges that an unnamed label executive who initially “appeared to love” the music of her artist, Ella Wylde, cut off communications after allegedly learning of Dixon’s history with Reid.
“Mr. Reid’s looming presence and power in the music industry affects Ms. Dixon in the present day,” the complaint reads. “As she attempts to participate in new dimensions of the industry such as the highly lucrative music royalty space where her combination of A&R chops and her Harvard MBA should make her a highly employable senior professional, Ms. Dixon has been told that although she is well-known, well-respected, and highly qualified, she is essentially blackballed because she has spoken out against Mr. Simmons and Mr. Reid. Thus, the harm is ongoing and unceasing.”
Dixon is suing Reid for sexual battery/assault, false imprisonment, intentional infliction of emotional distress and gender-motivated violence. She is demanding a trial by jury.
Representatives for Reid’s current company, mega, did not return a request for comment at press time.
Though Dixon’s assault claims against Reid are new, Reid’s image began to crumble in 2017 when the then-Epic Records head was accused of sexually harassing one of his female assistants. That allegation led to Reid’s exit from the label, where it was alleged that other executives knew of his conduct but did nothing to stop it. Since that time, Reid has continued to work in the industry, launching the HitCo label alongside Charles Goldstuck before selling it to Concord in 2022. Earlier this year, Reid launched mega, a music collective co-founded by Usher which is distributed by Larry Jackson‘s gamma.
In 2020, Reid, also an accomplished record producer, sold his music catalog to Hipgnosis Songs Fund and joined the company’s advisory board.
Stories about sexual assault allegations can be traumatizing for survivors of sexual assault. If you or anyone you know needs support, you can reach out to the Rape, Abuse & Incest National Network (RAINN). The organization provides free, confidential support to sexual assault victims. Call RAINN’s National Sexual Assault Hotline (800.656.HOPE) or visit the anti-sexual violence organization’s website for more information.
Former Recording Academy president/CEO Neil Portnow has been sued by an unnamed female musician who says he drugged and sexually assaulted her in 2018. Also named as a defendant is the Recording Academy itself, which the plaintiff accuses of enabling the assault through negligence.
In the lawsuit, filed in New York State Supreme Court on Wednesday (Nov. 8), the woman — described in the complaint as “an internationally acclaimed musician, inventor, and former member of The Recording Academy” who performed at Carnegie Hall in 2015 — claims that while meeting with Portnow in his hotel room in June 2018 to conduct an interview with him for her magazine, she “began to feel woozy” after drinking a glass of wine he offered her.
When the woman allegedly attempted to exit Portnow’s hotel room, she claims Portnow refused to help her leave “while begging her to stay” and attempting to kiss and massage her body. After allegedly losing consciousness, she says she would periodically wake to find Portnow sexually assaulting her in his hotel bed, forcing her hand to “manipulate” his penis and penetrating her vagina with both his penis and fingers.
The woman claims she awoke the next morning “woozy and confused” in the hotel bed as Portnow took a phone call. Once he finished the call, she claims Portnow “begged” her to stay in the hotel room “and under his control” but that she resisted. She says she gathered her things and made her escape after he left.
According to the complaint, the woman first met Portnow in January 2018 at the Paley Center for Media in New York, where he was speaking on a panel at an event for the 50th annual Grammy Awards. One week later, she says she received two VIP tickets to the Grammys and afterparty access from Portnow’s secretary, though she was unable to attend.
In February 2018, the woman says she emailed Portnow to thank him for the tickets, apologize for not being able to attend and tell him about her magazine. She says Portnow subsequently reached out to her in May 2018 telling her that he was traveling to New York City, at which point she told him she was interested in interviewing him for her magazine — leading to their alleged June 2018 meeting in his hotel room.
“In the immediate aftermath” of the alleged assault, the plaintiff says she tried reaching out to Portnow several times “to understand and gain clarity as to what had occurred,” but that Portnow ignored her and returned to Los Angeles around June 15, 2018.
The woman further claims that in October 2018, she emailed the Recording Academy to notify them of the assault and received an email response from the Academy’s chief people and culture officer (a position then filled by Gaetano Frizzi) “asking for a phone call to discuss the allegations.” She claims, however, that no one from the Academy ever reached out to interview her.
The following month, the woman says she received an email from Portnow’s legal representative that contained a private message from Portnow. According to a copy of the email which is included in the complaint, Portnow does not directly mention the woman’s assault allegation but instead expresses that he was “deeply saddened by your communications which unfortunately now require me to have an attorney involved.” Portnow also states that he had “always respected” the defendant and that “it is important that we hear each other with compassion and care.”
In December 2018, the woman says she filed a police report with the New York City Police Department naming Portnow as the man who sexually assaulted her.
In the aftermath of the alleged rape, the woman claims she “has suffered and will continue to suffer, great pain of mind and body, severe and permanent emotional distress, physical manifestations of emotional distress, embarrassment, humiliation, physical, personal & psychological injuries.” She also says she has “incurred and will continue to incur expenses for psychological treatment, therapy, and counselling,” “has and/or will incur loss of income and/or loss of earning capacity in her musical career” and was “unable to maintain” her status as an Academy voting member.
The woman is suing Portnow for sexual battery; the Recording Academy for negligent hiring, supervision and retention; and both defendants for gender-motivated violence. She is demanding a trial by jury.
In a lengthy statement sent to Billboard, a spokesperson for Portnow called the woman’s allegations “completely false.”
“The claims are the product of the Plaintiff’s imagination and undoubtedly motivated by Mr. Portnow’s refusal to comply with the Plaintiff’s outrageous demands for money and assistance in obtaining a residence visa for her.
“A series of erratic, bizarre text messages and e-mails to both Mr. Portnow and the Recording Academy from the Plaintiff had already persuaded numerous previous Plaintiff’s lawyers who resigned, as well as a police agency, that her claims were baseless. The latest incarnation offers a ‘new and improved’ story, padding it with even more outrageous and untrue allegations.
“More than 5 years later, Mr. Portnow remains consistent in his refusal to assist the Plaintiff in her absurd demands that he help her in procuring a United States permanent resident visa, marry her, make children with her, support her musical career, or pay her millions of dollars so that she would not bring her frivolous lawsuit.
“When the first attempt was made to extract money and other benefits as listed above, Mr. Portnow, who was at that time President/CEO of the Recording Academy, immediately enlisted the Academy’s HR Department to review the nonsensical text messages and emails that he made immediately available. An outside independent investigation led by top-tier lawyers, reviewed all relevant texts, emails, interviewed witnesses, and found absolutely no proof to support any of the allegations. The Academy’s Executive Committee and Board of Trustees were made aware of the results of the investigation and report; subsequently, Mr. Portnow served at the helm of the Recording Academy for the balance of the term of his contract. Throughout these processes, Mr. Portnow voluntarily and fully cooperated with and supported the investigation of these false allegations.
“Accordingly, Mr. Portnow will defend the case with vigor and will prevail.”
The Recording Academy sent the following statement to Billboard: “We continue to believe the claims to be without merit and intend to vigorously defend the Academy in this lawsuit.”
The woman’s allegations were partially aired nearly four years ago in the explosive discrimination complaint filed by Deborah Dugan, who briefly replaced Portnow as Recording Academy president/CEO after he stepped down in August 2019. The following January, Dugan was placed on administrative leave, after which she filed a discrimination complaint against the Academy with the Equal Employment Opportunity Commission. In that complaint — details from which are outlined in the new lawsuit — Dugan claimed that during a May 2019 meeting of the board prior to assuming Academy leadership, she was informed that sexual assault allegations had been lodged against Portnow by a foreign female recording artist who was also a member of the Academy. Dugan alleged that she was placed on leave after she refused to bring Portnow back as a consultant for the Grammys.
Shortly after Dugan filed her complaint, Portnow released a statement calling the rape allegations “ludicrous, and untrue. The suggestion that there was is disseminating a lie.” He added that following “an in-depth independent investigation” of the allegations, he was “completely exonerated.”
Dugan and the Recording Academy reached a confidential settlement in June 2021.
Sphere, the stunning venue that has transformed the Las Vegas skyline and redefined the concert-going experience, generated $4.1 million from U2’s first two concerts in September, its owner, Sphere Entertainment Co., reported in its quarterly earnings release on Wednesday (Nov. 8).
The $2.3 billion Sphere is a 366-foot tall, 516-foot wide spherical venue with a wrap-around video screen that envelopes a seated audience of 17,600. Sphere’s external skin — called Exosphere — is covered in 580,000 square feet of programmable LED exterior lights that advertises the venue’s technological capabilities.
Sphere also made $2.6 million in additional revenue, primarily from advertising on the Exosphere that began in September.
With only two concerts under its belt through the end of September, Sphere’s earnings release was about the venue’s potential, not its revenue to date. “Our journey with Sphere is just beginning,” said executive chairman/CEO James Dolan during Wednesday’s earnings call. “And while it will take some time for Sphere to realize its full potential, we’re off to a great start.”
U2’s original 25-show residency has been extended by an additional 11 shows that will occur in January and February 2024. The company expects to host two additional residencies in the second half of the fiscal year that ends June 30, 2024, according to Dolan. “We’re having conversations with artists across a wide variety of genres, including discussing runs of varying lengths,” he said.
Sphere had an adjusted operating loss of $83.1 million in the quarter, an increase of $19 million from the prior-year period. It also had $2.8 million of venue operating expenses in the quarter and $2.2 million of event-related expenses. An additional $2.1 million in advertising costs were related to the Oct. 6 launch of The Sphere Experience featuring the film Postcard from Earth by Darren Aronofsky. Selling, general and administrative expenses amounted to $84.2 million.
The Las Vegas venue is the first of what Sphere Entertainment expects to be multiple Sphere venues. Dolan was light on specifics but said there is “a great deal of interest and substantive discussions” in several additional markets. “I will say that it does look like Sphere will be a global brand,” he said, “and so we should expect the expansion globally rather than just in the U.S.”
Sphere Entertainment had total revenue of $118 million in its fiscal first quarter ended September 30, down 4% from the prior-year period. MSG Networks contributed $110.2 million of revenue, down 10% year over year. MSG Networks, which operates two regional sports networks, joined Sphere following a spin-off of MSG Entertainment in April. That same month, Sphere reached an agreement to sell its stake in Tao Group Hospitality to global luxury lifestyle company Mohari Hospitality for about $300 million.
Shares of Sphere Entertainment fell as much as 8.4% to $30.58 on Wednesday morning before recovering to $31.90, down 4.4%, by mid-afternoon. The stock price took a bigger hit on Monday, however, dropping 9.6% following the company’s announcement late on Friday that CFO Gautam Ranji had left the company. Dolan attributed Ranji’s departure to Sphere being a new type of business. “It’s pretty challenging,” he said. “I think we both came to the conclusion that it probably wasn’t a great fit.”
Financial metrics for the first fiscal quarter:
Total revenue of $118 million, down 4% year over year.
Adjusted operating loss of $57.9 million, up 88% year over year.
Net income of $66.4 million, up from a $44 million net loss in the prior-year period.
Sphere revenue of $7.8 million.
Sphere event-related revenue of $4.1 million.
MSG Networks revenue of $110.2 million, down 10% year over year.
Migos rapper Offset is facing a lawsuit that claims he assaulted a security guard two years ago at Complex’s yearly Los Angeles festival. In a complaint filed Tuesday (Nov . 7) in Los Angeles court, Daveon Clark says he was attacked by Offset (real name Kiari Kendrell Cephus) and fellow rapper YRN Murk (real name […]
SiriusXM hosted an event in New York City on Wednesday (Nov. 8) in which the company unveiled a new-look version of its app, set to debut Dec. 14, while announcing a rebrand and a slew of new programming initiatives, including new channels run by John Mayer and Kelly Clarkson, among others.
In conjunction with the app, Sirius will also offer a streaming-only subscription tier for $9.99 per month, aimed at younger listeners who are interested in the service’s 400-plus channels of content and podcasts but don’t generally listen in the car, where Sirius has become dominant in recent years. The new-look app will include increased customization, a new playback experience, an audio library, a new home for its podcast content and improvements in search and discovery, executives stressed at the two-hour event.
The new channels will begin rolling out in the next few months, starting with Clarkson’s channel, called the Kelly Clarkson Connection, which will be available starting today. Clarkson appeared on stage at the event with her band and introduced her channel — which she said will be on Channel 12, as she isn’t a fan of odd numbers — that will include her music and a variety of other music she enjoys and is inspired by. To kick that off, she and her band performed a cover of Miley Cyrus’ “Flowers” — which she said they just learned hours before — and her own “Since U Been Gone.”
New channels from Shaggy (Shaggy’s Boombastic Radio), who also appeared on stage, and Smokey Robinson (Smokey’s Soul Town) are also available beginning today. A limited-edition channel from Dolly Parton, Dolly Parton’s Rockstar Radio, will go online Nov. 15, while Mayer’s show, which will be available year-round and is called Life With John Mayer, is set to debut Nov. 22. A weekly show by James Corden and a new true-crime channel from Crime Junkies podcast host Ashley Flowers will also soon come online.
“The introduction of the new SiriusXM streaming experience marks a pivotal moment in our history, one that kicks off a new era of innovation at our Company,” SiriusXM CEO Jennifer Witz said in a statement following the event. “And this launch is just the beginning; we will continue to iterate and develop our product offerings throughout the next year and beyond as we strive to deliver our subscribers the best listening experience on the go, in the car, and wherever they choose to tune in. From can’t-miss live moments to the perfect soundtrack for any occasion, with the new SiriusXM, we are putting our differentiators at the forefront and welcoming in a new generation of listeners, bringing them closer to what they love.”
The event opened with Witz introducing the new app, before turning the stage over to Sirius’ biggest and longest-tenured star, Howard Stern, who spoke about his frustrations during his time on terrestrial radio that led to him taking a chance on the then-nascent Sirius 17 years ago. “Everyone said it’s gonna fail, you’re stupid, you’re ugly — and those were my parents,” he joked. “To me, SiriusXM was an oasis in a desert of censorship. … My mission is to convince audiences that radio is worth paying for, and I think that mission continues to grow. I think there’s a bright future for Sirius. I banked my career on it.”
In addition to Clarkson and Shaggy, the event saw cameos from Conan O’Brien, Andy Cohen, Maren Morris, Flowers and Kevin Hart, while Corden and Mayer appeared in short video segments. And it ended with a performance from Def Jam rapper Armani White, who performed his hit song “Billie Eilish.”
As part of the rebrand — which includes a new logo — executives also re-introduced Sirius’ dog mascot, named Stella, after the Dog Star constellation from which Sirius took its name. The company also announced a new partnership with Audible to share content beginning next year, as well as renewed partnerships with car manufacturers and hotel chains. Next year will also see the company bringing on 160 new artist DJs, including Olivia Rodrigo and Morris, among many others.
Dreamliner Luxury Coaches has acquired Hemphill Brothers Coach Company, combining the two private bus and coach tour operators into the largest provider of entertainer busses in the world.
Formed just three years ago, the Nashville-based Dreamliner now boasts a fleet of 190 high-end luxury coaches, servicing approximately 50% of North American arena and stadium touring market, CEO Jeremy Maul estimates. The high-end bus company specializes in leasing and servicing artist and headliner buses with a client list that includes Beyoncé, Justin Timberlake, Drake, Jonas Brothers, Chris Stapleton, Olivia Rodrigo, Zach Bryan and more.
Hemphill Brothers was launched in 1980 by Joey and Trent Hemphill, Tennessee-based brothers who toured in the family Gospel band and eventually bought out their father’s two-bus leasing company. In 1995, Hemphill Brothers opened their current 55,000 square foot office complex and shop facility on 15 acres of land near Nashville.
Dreamliner was founded in late 2020 during the COVID-19 pandemic by businessman Rich Thomson, managing partner at Caprice Capital Partners and Jeremy Maul, Thomson saw the revival of the touring business as potential investment opportunity for his LA based private investment firm focused mainly on small cap companies with at least $2 million in EBITDA.
The bet on Dreamliner was fairly simple – while the pandemic had completely devastated the touring and concert business, the industry was expected to come back strong in mid-to-late 2021, as evidenced by ticket purchases during the pandemic and pent-up demand. Artists returning to the road would encounter a shortage of high-end luxury buses due to a pivot in the transportation industry away from concert touring.
The tour bus shortage, coupled with the explosion in demand, caused the leasing price for tour buses to nearly double overnight and created a backlog of demand for the industry, Maul explained.
Dreamliner’s first tour was the Jonas Brothers’ August 2021 tour. In June 2022, Dreamliner purchased Diamond Coach leasing from founder Kyle Ervin, growing the company’s fleet from 12 buses to 75 buses while establishing the company’s headquarters in Nashville.
Maul told Billboard that the Hemphill purchase took approximately one year to finalize. The combined business is expected to generate $100 million in business in 2024 from a fleet of 190 coaches, Maul said.
That puts Dreamliner ahead of Encore Luxury Coach, which briefly held the title of largest entertainment coach leasing company in North America following its acquisition of Nitetrain in September.
“As we further our goal of redefining the art of tour travel, we will leverage the strengths and experience at the heart of both Dreamliner and Hemphill to become the industry’s largest and most sought-after resource for high-end tour coaches,” Maul said in a recent press release.
Diaa El All, CEO/founder of generative artificial intelligence music company Soundful, remembers when the first artists were signed to major label deals based on songs using type beats — cheap, licensable beats available online that are labeled based on the artists the beat emulates (i.e. Drake Type Beat, XXXTentacion Type Beat). He also remembers the legal troubles that followed. “Those type beats are licensed to sometimes thousands of people at a time,” he explains. “If it becomes a hit for one artist, then that artist ends up with major problems to unravel.”
Perhaps the most famous example of this is Lil Nas X and his breakthrough smash “Old Town Road,” which was written over a $30 Future type beat that was also licensed by other DIY talents. After the song went viral in early 2019, the then-unknown rapper and meme maker quickly inked a deal with Columbia Records, but beneath the song’s mammoth success lay a tangle of legal issues to sort through. For one thing, the song’s type beat included an unauthorized sample of Nine Inch Nails’ “34 Ghosts IV,” which was not disclosed to Lil Nas X when he purchased it.
El All’s solution to these issues may seem counter-intuitive, but he posits that his AI models could provide an ethical alternative to the copyright nightmares of the type beat market.
Starting Wednesday (Nov. 8), Soundful is launching Soundful Collabs, which is partnering with artists, songwriters and producers in various genres — including Kaskade, Starrah, 3LAU, DJ White Shadow, Autograf and CB Mix — to train personalized AI generators that create beats akin to their specific production and writing styles. To create a realistic model, the artists, songwriters and producers provide Soundful with dozens of their favorite one-shot recordings of kick drums, snares, guitar licks and synth patches from their personal sonic libraries, as well as information about how they typically construct chord progressions and song structures.
The result is individualized AI models that can generate endless one-of-a-kind tracks that echo a hitmaker’s style while compensating them for the use of their name and sonic identity. For $15, a Soundful subscriber can download up to 10 tracks the generator comes up with. This includes stems so the user can add or subtract elements of the track to suit their tastes after exporting it to a digital audio workstation (DAW) of their choice. The hitmaker receives 80% of the monies earned from the collaboration while Soundful retains 20% — a split El All says was inspired by “flipping” major record labels’ common 80/20 split in favor of the artist.
The Soundful leader, who has a background as a classical pianist and sound engineer, sees this as a novel form of musical “merchandise” that offers talent an additional revenue stream and a chance at fostering further fan engagement and user-generated content (UGC). “We don’t use any loops, we don’t use any previous tracks as references,” El All says. As a result, he argues the product’s profits belong only to the talent, not their record label or publishers, given that it does not use any of their copyrights. Still, he says he’s met with “a lot of publishers” and some labels about the new product. (El All admits that an artist in a 360 deal — a contract which grants labels a cut of money from touring, merchandise and other forms of non-recorded music income — may have to share proceeds with their label.)
According to Kaskade, who has been a fan of Soundful’s since he tested the original beta product earlier this year, the process of training his model felt like “Splice on crack — this is the next evolution of the Splice sample packs,” where producers offer fans the opportunity to purchase a pack of their favorite loops and samples for a set price, he explains. “[With sample packs] you got access to the sounds, but now, you get an AI generator to help you put it all together.”
The new Soundful product is illustrative of a larger trend in AI towards personalized models. On Monday, OpenAI, the leading AI company behind ChatGPT and DALL-E, announced that it was launching “GPTs” – a new service that allows small businesses and individuals to build customized versions of ChatGPT attuned to their personal needs and interests.
This trend is also present in music AI, with many companies offering personalized models and collaborations with talent. This is especially popular on the voice synthesis side of the nascent industry. So far, start-ups like Kits AI, Voice-Swap, Hooky, CreateSafe and more are working with artists to feed recordings of their voices into AI models to create realistic clones of their voices for fans or the artists themselves to use — Grimes’ model being the most notable to date. Though much more ethically questionable, the popularity of Ghostwriter’s “Heart On My Sleeve” — which employed a voice model to emulate Drake and The Weeknd and which was not authorized by the artists — also proved the appetite for personalized music models.
Notably, Soundful’s product has the potential to be a producer and songwriter-friendly counterpart to voice models, which present possible monetary benefits (and threats) to recording artists and singers but do not pertain to the craftspeople behind the hits, who generally enjoy fewer financial opportunities than the artists they work with. As Starrah — who has written “Havana” by Camila Cabello, “Pick Up The Phone” by Young Thug and Travis Scott and “Girls Like You” by Maroon 5 — explains, Soundful Collabs are “an opportunity for songwriters and producers to expand what they are doing in so many ways.”
El All says keeping the needs of the producer and songwriter communities in mind was paramount in the creation of this product. For the first time, he reveals that longtime industry executive, producer manager and Hallwood Media founder Neil Jacobson is on Soundful’s founding team and board. El All says Jacobson’s expertise proved instrumental in steering the Soundful Collabs project in a direction that El All feels could “change the industry for the better.” “I think what Soundful provides here is similar to what I do in my own business,” says Jacobson. “I supply music to people who need it — with Soundful, a fan of one of these artists who wants to make music but doesn’t quite know how to work a digital audio workstation can get the boost they need to start creating.”
El All says the new product will extend beyond personalization for current songwriters, producers and artists. The Soundful team is also in talks with catalog owners and estates and working with a number of top brands in the culinary, consumer goods, hospitality, children’s entertainment and energy industries to train personalized models to create sonic “brand templates” and “generative catalogs” to be used in social media content. “This will help them create a very clear signature identification via sound,” says El All.
When asked if this business-to-business application takes away opportunities for synch licensing from composers, El All counters that some of these companies were using royalty free libraries prior to meeting with Soundful. “We’re actually creating new opportunities for musicians because we are consistently hiring those specializing in synch and sound designers to continue to evolve the brand’s sound,” he says.
In the future, Soundful will drop more artist templates every four to six weeks, and its Collabs will expand into genres like Latin, lo-fi, rock, pop and more. “Though this sounds good out of the box … what will make the music a hit is when a person downloads these stems and adds their own human imperfections and style to it,” says El All. “That’s what we are looking to encourage. It’s a jumping off point.”
When artists announce a new tour, ticket sales tend to exhibit a pattern: An initial surge of fan enthusiasm followed by a gradual decline in interest.
So, Tim Collins, who manages the Swedish artist Benjamin Ingrosso, was surprised to see demand for tickets to see his client increase throughout his summer tour. “At the beginning of the tour, we hadn’t sold out,” Collins says. “With every show we did, interest in him became bigger. And it was mainly because of how TikTok talked about him throughout the tour.”
TikTok marketing has been a central part of promoting music for more than three years at this point, almost entirely reshaping record labels’ strategy. When the platform started to regularly mint hit singles in 2020, however, the concert business was mostly shut down due to the coronavirus pandemic and shows didn’t get the same sort of attention.
This year, though, TikTok has become the new frontier for marketing tours. “Traditional promoters are starting to really wake up to it,” says Sanu Hariharan, co-head of music partnerships at Creed Media, a marketing company focused on Gen Z.
“It’s opened up a new revenue model for me,” adds Johnny Cloherty, co-founder of the digital marketing company Songfluencer. “A lot of the heavier touring acts are interested in, ‘I’ll pay a handful of creators to come to my VIP section to film content with me backstage to help sell tickets.’ We can get influencers to talk about the merch and do promotion that way.”
What took so long? “In general, live music lags behind the rest of marketing,” according to William Van Orsdel, chief growth officer of the live promotions company Breakaway. “Larger companies out there can’t change the way they’ve been doing things because they’ve always been doing them that way” — relying on tried-and-true techniques like print advertisements, billboards and posters.
Sure enough, Cloherty says when he pitched live music companies on using modern TikTok marketing techniques in 2019 and 2020, he “got laughed out of the room.” “People were like, ‘No way are you going to do this,’” he recalls. But, Van Orsdel continues, “you can’t market in just one silo and expect to be successful.”
The saturation of the post-COVID touring market has also spurred artist managers and event promotion companies to try new concert-marketing techniques. Prices are high; competition for fans is fierce. “The interest in seeing shows is bigger than ever before,” Collins says. “But at the same time, the financial situation is worse than ever before in regards to what you actually can afford to go to. To win a fan, you really have to stand out.”
On top of that, labels have started to see that a tour with buzz leads to streaming gains for the artist on the road, which ultimately helps the record company’s bottom line. Labels don’t participate in artists’ touring income — unless the artist has signed a “360 deal” — which often disincentivizes them from investing in their acts’ live business. “What they’ve realized is that there’s a correlation between having a tour or a set of shows that are relevant and streaming,” Hariharan says.
“Touring goes hand in hand with cultural significance,” adds Andy Serrao, president of Fearless Records. “The moments that are created on touring or in festivals, those don’t just happen and go away. We don’t participate in our artists’ touring revenue, but what we can do to drive the rest of our marketing going into releasing new music is huge.”
Those “moments” from a show depend a lot on the charisma of the artist on stage, of course. “If people are seeing you live and not filming you, that’s a bad sign,” Serrao says.
But marketers can work to make sure that anything exciting that happens is talked about by as many people as possible. “Having influencers at the show is the most important piece of it, because they are really essentially megaphones for the tour,” says Laura Spinelli, digital marketing manager at Shopkeeper Management. “Within the past year, this has become something that we’ve devoted a more significant budget to” for artists like Miranda Lambert and Tenille Townes.
Creed Media recently ran a two-week campaign in Europe for the group Chase Atlantic, using influencers to “create and convey a sense of hype and FOMO around the experience of going to their show,” Hariharan explains. “We wanted to do this early in the tour so that we’re getting consistent relevance and engagement as the tour progresses.” The most successful post — about a guy who takes his girlfriend to see Chase Atlantic — earned nearly 3 million views.
Demand for this sort of marketing is on the rise. “It feels very similar right now to a few years ago when we were trying to convince our label partners to really see the value in influencer marketing for their releases,” Hariharan. “Talking about what we can do for live and touring is a fresh new thing.”
“I’ve gone to a lot of country labels and management companies with this,” Cloherty adds. “Entering 2023 marketing anything without an influencer plan doesn’t seem like it’s very holistic, and that’s especially true if you’re trying to get a younger audience.”
Starting Wednesday (Nov. 8), Spotify subscribers in the United States can effortless transition from Britney Spears’ music to her recently released audiobiography, The Woman in Me, thanks to the launch of its previously announced offering of 15 hours of free audiobook streaming per month in Spotify Premium.
The Spotify Premium audiobook catalog includes more than 200,000 titles, over 70% of them bestselling titles from all five major book publishers (Hachette, HarperCollins Publishers, Macmillan, Penguin Random House, Simon & Schuster and RB Media) as well as independent publishers such as Bolinda, Dreamscape and Pushkin. Although Spotify has offered audiobooks since Sept. 2022, the user experience has been less than optimal. Users could listen to audiobooks in the Spotify app but, because Spotify wants to avoid costly in-app fees, users must purchase titles at its website.
Spotify announced its audiobook strategy on Oct. 3 and initially gave access to the company’s audiobook catalog only to subscribers in the United Kingdom and Australia. Rolling out audiobook streaming in its largest market will allow Spotify to better capture the expected benefits of offering free listening to a segment of its 226 million subscribers. “This greatly improves our offering, which will increase engagement on Spotify, which will then, of course, reduce churn,” explained CEO Daniel Ek at an Oct. 3 event.
Listeners who exceed the 15-hour monthly allotment can purchase additional listening time. In the early days of the audiobook offering in the United Kingdom and Australia, Spotify has “already seen consumers doing that in ways we probably wouldn’t have imagined, where some consumers are heavily upgrading and being really heavy audiobook listeners [from] day one,” Ek said during the company’s Oct. 24 earnings call.
To help listeners find audiobooks, Spotify offers an audiobook button on the search page and offers an editorially curated selection of popular titles at its audiobooks hub. Listeners can search by category — such as mystery & thriller or self-help — and scroll through lists such as “From book to screen” and “As seen on social media.”
The impetus for audiobook streaming harkens back to Spotify’s origins as a friction-less substitute for digital piracy that had decimated record label revenues by the time Spotify was founded in 2006. “We looked at the world and we thought the only way to beat piracy was to offer a much better experience,” said Ek during the Oct. 3 event. In 2018, Spotify applied the lessons it learned in music to a new format, podcasts, and, Ek claimed, added more than 100 million to podcast listeners to the ecosystem. “This created a win-win,” he explained. “The more people listened to podcasts, the more music grew. And the more people listened to music, the more podcasting grew as well.”
Now, Spotify sees audiobooks as the next opportunity to revitalize an underserved ecosystem with a single dominant player — Amazon-owned Audible in this case. “And just like in music and podcasting,” said Ek, “we’re really excited to be able to bring all the amazing tools that we built for creators and consumers alike to enable more discovery of these amazing audiobooks to the world.”