Business
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BMG terminated about 40 employees on Thursday (Oct. 27), sources within the company tell Billboard. The layoffs cut effectively the entirety of its film/TV, theatrical, and international marketing department for recordings as well as its Modern Recordings label, according to sources and an internal memo obtained by Billboard. It took place on the day of the New York office’s annual Halloween party, says a source.
The eliminations include company leaders like Fred Casimir (executive vp, global repertoire) and Jason Hradil (senior vp, global repertoire) and affected employees in its Berlin, New York, and Los Angeles offices. A source within the company fears there are more layoffs to come and believes the layoffs may be a result of the company hiring the consulting firm McKinsey & Company in recent months.
After employees were notified they were being laid off, the company hosted a call with the U.S. recorded music team — including those who were let go — according to a source within the company.
“Everyone at BMG says it feels like a venture capital firm now and not a record label,” laments an employee. “Things got dark real fast, and it bums me out watching a lot of amazing people lose their jobs right before the holidays.”
In a video call hosted by CEO Thomas Coesfeld, the leader explained that the restructuring was part of the implementation of its new strategy, BMG Next, according to an internal memo shared with Billboard. “The international marketing team was set up five years ago in response to the needs of the company at the time,” he said to senior managers. “Our talented team has done a great job, driving international campaigns for artists including Lenny Kravitz, Kylie Minogue, and Louis Tomlinson, but unfortunately on a business level, expectations from this novel structure were not met and it created duplication of functions with local teams. The clear business decision is to instead give artists a single contact point with their local repertoire teams.”
A BMG spokesperson declined to comment beyond providing the memo.
In the last year, BMG — which represents talent like Jelly Roll, Halsey and Lainey Wilson as well as certain rights to the catalogs of Tina Turner, Peter Frampton, Mötley Crüe, and more — has made a number of significant business changes. In January, its longstanding chief executive Hartwig Masuch announced he would retire and would be succeeded by then-CFO Coesfeld, effective Jan. 1, 2024. On April 18, BMG claimed it would be the first music company to fully integrate its catalog and frontline music operations. On May 17, Masuch announced he would accelerate Coesfeld’s transition to CEO to July 1 instead.
In September, BMG announced it was winding down its agreement with Warner Music Group’s ADA and would be taking over direct management of its 80-billion-stream digital distribution later this year. (Digital revenues contributed 70% of BMG’s overall revenues in 2022.) Last week, BMG also announced it would be partnering with UMG’s commercial services division for the distribution of its physical recorded music. Coesfeld described the deal as the first project of a burgeoning “alliance” between the two music companies.
Spotify’s third-quarter earnings results helped give investors confidence about the company’s path and sent its shares up 10.3% to $170.63 on Tuesday before closing at $159.35 on Friday — up 6.3% for the week. Not only did the streaming giant turn an operating profit of 32 million euros ($34.8 million) — compared to a $247 million euro ($269 million) operating loss a year earlier — it added 6 million subscribers in the same quarter a price increase went into effect.
That third-quarter growth will help the NYSE-listed, Swedish company exceed its expectations for subscriber gains this year. “We walked into 2023 thinking we would do just over 20 million in net subscriber adds for the full year,” CEO Daniel Ek said during Tuesday’s earnings call, “but we’re actually on track to deliver 30 million.”
Morgan Stanley analysts raised their Spotify price target from $190 to $200 on Wednesday, writing in an investor note that the company is “a superior product with pricing power” that will continue to expand gross margins. Likewise, analysts at JP Morgan increased their Spotify price target from $190 to $205 with a belief that the operating margin and free cash flow milestones reached in the quarter will attract more investors to the company.
Led by Anghami’s 11.5% improvement to $1.07, six music streaming companies had an average gain of 4.3% this week. China’s Tencent Music Entertainment, which will report third-quarter results on Nov. 14, gained 7.2% to $7.13, while another Chinese music streamer, Cloud Music, gained 3.3% to 85.50 HKD ($10.93). Meanwhile, U.S.-based LiveOne gained 1% to $1.00.
Overall, the 21-stock Billboard Global Music Index dropped 0.7% to 1,304.74 this week, marking its third consecutive weekly loss and tenth down week in the second half of 2023. The slight decline dropped the index’s year-to-date gain to 11.7%. Of its 21 stocks, 13 finished the week in negative territory, seven posted gains and one, Round Hill Music Royalty Fund, was unchanged. (Round Hill’s purchase by Concord for $469 million was approved by shareholders on Oct. 18.)
Despite the widespread losses across the music business, the Billboard Global Music Index fared better than many indexes. In the United States, the S&P 500 and the Nasdaq composite each declined 1.9%, while the United Kingdom’s FTSE 100 dropped 1.5% and South Korea’s KOSPI composite index fell 3%.
The Nasdaq has slipped 10.3% from its peak on July 31, officially putting it in correction territory — a 10% decline from a high — on Wednesday. The Billboard Global Music Index hasn’t entered a correction yet, but it’s close, having declined 9.9% from its peak of 1,447.32 on July 21.
Shares of Universal Music Group (UMG) fell 4.2% to 23.31 euros ($24.46) this week, with the company’s third-quarter results on Thursday preceding a 7.2% decline on Friday. Guggenheim analysts maintained both their buy rating on UMG’s stock and their 27.00 euro ($28.56) price target. But the analysts dropped their fourth-quarter forecasts for UMG’s streaming revenue (from 4.4% to 3.5%) and subscription revenue growth (13.0% to 12.8%).
Radio stocks were hit particularly hard in the wake of Cumulus Media’s third-quarter earnings, which showed that the company’s revenue declined 11% year-over-year, to $207.4 million. That was chalked up to “weakness in national markets,” the company said on Friday. Cumulus Media’s share price fell 11.7% to $4.77 on Friday and finished the week down 5.4%. iHeartMedia, which will report earnings on November 9, fell 4.9% on Friday and finished the week down 12.7%.
K-pop stocks had a tumultuous week following Wednesday’s arrest of Lee Sun-kyun — an actor and member of the group BIGBANG known as G-Dragon — on charges of using illegal drugs. Lee, whose exclusive contract with YG Entertainment ended in June, denied the charges. Following his arrest, shares of YG Entertainment fell 7.9% to 50,200 won ($37.01) on Thursday, though they recovered most of the loss to finish the week down 2% to 52,600 won ($38.78).
News of Lee’s arrest sparked days of frenetic media coverage in South Korea, hurting other K-pop stocks and eliciting statements from K-pop agencies to quash any speculation their artists might be involved. Shares of HYBE fell 10.7% to 204,000 won ($150.42) on Thursday. The company issued a statement to the local press saying “BTS is in no way related to the rumors spreading online,” according to reports. HYBE shares recovered some of Thursday’s losses with a 3.9% gain on Friday and finished the week down 5.6% to 212,000 won ($156.32).
SM Entertainment, home to K-pop groups NCT and Red Velvet, fell 5.1% on Thursday and closed the week down 8.4% to 103,900 ($73.61). JYP Entertainment, the agency behind Stray Kids and Twice, lost 6.2% on Thursday but finished the week up 2.7% to 103,600 won ($76.39).
One of the most popular albums in the United States, Taylor Swift’s 1989, is about to lose significant market share to a newer version, Swift’s re-recorded 1989 (Taylor’s Version).
It’s happened three times before. 1989 (Taylor’s Version), a re-recorded and expanded version of the nine-times platinum 2014 album, with five previously unreleased tracks, follows the insanely successful formula of the three preceding albums: Fearless, Red and Speak Now. If 1989 (Taylor’s Version) enjoys the same trajectory as its predecessors, the Big Machine-era version of 1989 will lose a majority of its weekly consumption and forever get crowded out by the more popular, Swift-endorsed re-recordings.
To understand what could happen to 1989, consider its predecessor, Red. Average weekly consumption of Red — measured in equivalent album units, which combines physical and digital album sales, track sales and streams — dropped 40% in the 12 weeks following the release of Red (Taylor’s Version), according to Billboard’s analysis of Luminate data for the United States. The original version of Speak Now took an even bigger hit, losing 59% of its average weekly consumption in the 12 weeks after the re-recordings were released. Given those two trajectories, the original version of 1989 could very well lose half its average weekly consumption.
Consumption of the original 1989, which includes Hot 100 chart-toppers “Shake It Off” and “Bad Blood,” has soared this year as Swift reached a Michael Jackson-level of media coverage. As Swift Mania heated up, thanks to her record-setting Eras Tour and steady output of new and rerecorded material, 1989’s average weekly album equivalent units (AEUs) climbed from 16,000 in January to 29,000 in May to 39,000 in August, peaking at 46,000 in the week ended Aug. 17. On the latest Billboard 200 albums chart, the original 1989 ranked No. 20 — one spot behind Speak Now (Taylor’s Version) and two spots ahead of Reputation, Swift’s final album for Big Machine.
That has been great news for Shamrock Holdings, which acquired Swift’s Big Machine master recordings in 2020 for a reported $300 million. In the year before Shamrock Holdings acquired Swift’s catalog, 1989 averaged about 10,000 AEUs per week — 70% below the current level. While Swift’s previous three albums of re-recordings ate into the Big Machine originals, 1989 was spared and got to benefit from Swift’s success — that is, until she got around to releasing her Taylor’s Version.
The original version of 1989 — Swift’s best-selling album to date — has more to lose than its predecessors: 1989 has averaged 33,000 equivalent album units over the previous 12 weeks, nearly 1.8 times more consumption than the 19,000 AEUs Speak Now averaged in the 12 weeks before Speak Now (Taylor’s Version) was released. The original versions of Fearless and Red had even less consumption in the 12 weeks before Swift’s re-recordings came out: 7,000 AEUs for Fearless and 9,000 AEUs for Red.
If 1989’s weekly AEUs drop by 50%, Billboard estimates the gross sales from purchases and streams will drop by nearly $120,000 per week — equal to more than $6 million per year. That’s gross sales, not wholesale. Shamrock pockets less than wholesale after paying royalties, distribution and manufacturing.
And if 1989 (Taylor’s Version) performs like the other three albums of re-recordings, it will far outperform Swift’s Big Machine originals. Through the first 41 weeks of 2023, the re-recordings of Fearless and Red have respectively averaged 4.8 times and 4.1 times the weekly consumption of the original albums. Speak Now (Taylor’s Version), which has just 14 weeks of sales history since its July release, currently has 5.3 times the average weekly consumption of the original.
The original version of Reputation also has a lot to lose. In the past 12 weeks, Reputation has averaged 27,000 AEUs per week. And just as 1989 consumption skyrocketed this year, Reputation’s weekly AEUs have more than doubled since January. Shamrock Holdings will enjoy those spoils, too — that is, until Reputation (Taylor’s Version) inevitably arrives.
Lizzo’s attorneys are firing back at a bombshell sexual harassment lawsuit filed by three of her former dancers, calling the allegations a “fabricated sob story” launched by “opportunists” seeking “a quick payday.”
In a motion to dismiss the case filed Friday (Oct. 27) in Los Angeles court, Lizzo’s team argued that the lawsuit — claiming sexual harassment discrimination, and fat-shaming — came from three women with “an axe to grind” who had shown “a pattern of gross misconduct and failure to perform their job up to par.”
“Plaintiffs embarked on a press tour, vilifying defendants and pushing their fabricated sob story in the courts and in the media. That ends today,” wrote Martin D. Singer, a well-known Hollywood attorney. “Instead of taking any accountability for their own actions, plaintiffs filed this lawsuit against defendants out of spite and in pursuit of media attention, public sympathy and a quick payday with minimal effort.”
In support of their motion, Lizzo’s attorneys also filed sworn statements from 18 members of her touring company who dispute many of the lawsuit’s specific factual accusations. That included several who challenged the headline-grabbing claim that Lizzo fat-shamed some of her dancers — a particularly loaded allegation against a singer who has made body positivity a key part of her brand.
“I never saw anyone, including plaintiffs, being weight shamed or body shamed,” one dancer wrote in Friday’s legal filings. “Far from it. Lizzo inspired all of us to celebrate and love ourselves and our bodies as we are.”
In their motion, Lizzo’s lawyers argued that the case should be dismissed immediately under California’s so-called anti-SLAPP statute — a special type of law enacted in states around the country that makes it easier to quickly end meritless lawsuits that threaten free speech.
It’s unusual to see an anti-SLAPP motion aimed at dismissing a sexual harassment lawsuit filed by former employees against their employer. Such motions are more common in defamation cases, where a defendant argues that a powerful plaintiff is abusing the court system to silence them from speaking out.
But in Friday’s motion, Lizzo’s lawyers argued that the anti-SLAPP law could also apply to the current case because of the creative nature of the work in question.
“The complaint — and plaintiffs’ carefully choreographed media blitz surrounding its filing — is a brazen attempt to silence defendants’ creative voices and weaponize their creative expression against them,” Singer and Lizzo’s other lawyers wrote.
The case against Lizzo, filed in August by dancers Arianna Davis, Crystal Williams and Noelle Rodriguez, accuses the singer (real name Melissa Jefferson) and her Big Grrrl Big Touring Inc. of creating a hostile work environment through a wide range of legal wrongdoing, including not just sexual harassment but also religious and racial discrimination. The alleged weight-shaming, the lawsuit claims, amounted to a form of disability discrimination.
In one particularly vivid allegation, Lizzo’s accusers claimed she pushed them to attend a live sex show at a venue in Amsterdam’s famed Red Light District called Bananenbar, and then pressured them to engage with the performers, including “eating bananas protruding from the performers’ vaginas.” After Lizzo herself led a chant “goading” Davis to touch one performer’s breasts, the lawsuit says, Davis eventually did so.
But in Friday’s filings, Lizzo tour manager Molly Gordon sharply called into question that version of the evening.
“When I was at Bananenbar, I spoke with Davis. She did not say that she felt uncomfortable, that she felt forced to be there, or that she wanted to leave but felt that she could not do so,” Gordon said in the filing. “There would have been no question about whether she could leave if she was uncomfortable. I did not witness her engaging with any of the Bananenbar performers.”
Another key allegation in the August complaint was that Shirlene Quigley, the captain of Lizzo’s dance team, forced her religious beliefs on the plaintiffs and took repeated actions that made them uncomfortable, including commenting about their sexual virginity and simulating oral sex on a banana in front of them.
In sworn statements filed Friday, several members of the touring company disputed those allegations. Chawnta Van, a dancer, said the lawsuit’s description of Quigley was “not an accurate portrayal of her at all.”
“Quigley never treated anyone differently because of their religious or spiritual beliefs or actions,” Van said. “I never witnessed her bullying anyone about Jesus or about not having the same religious beliefs as she does, and that is completely contrary to who she is.”
The August complaint also detailed alleged outbursts by Lizzo, including an “excruciating re-audition” during which one dancer claims she wet herself because she feared she would be fired if she left the stage. The case also claims Lizzo repeatedly told dancers “none of their jobs were safe” and, most notably, raised “thinly veiled concerns” about Davis’ weight gain.
But according to Asia Banks, a dancer who described herself in Friday’s filings as “the biggest dancer on the tour,” she never experienced anything like that. “Lizzo always went out of her way to make me feel secure and confident in my body, including by making sure I was comfortable in every single costume for the show.”
Other statements from tour members alleged behavior and performance issues with Lizzo’s accusers. Zuri Appleby, a bass player, claimed Davis had been “lax about her performances, her hygiene and her health.” Gordon, the tour manager, said Williams had been terminated because she was “frequently late for rehearsals” and had missed a flight.
A representative for the plaintiffs did not immediately return a request for comment on Friday.
Even amid the streaming-driven spectacular recovery of the music business, rights management organizations are thriving. Music rights collections reached €10.83 billion ($11.4 billion) in 2022, according to CISAC, the trade organization of collective management societies, a historic high that represents 28% growth over 2021 revenue, partly because the live business is recovering so fast.
“It’s an excellent result,” CISAC director general Gadi Oron told Billboard. “It’s record-breaking in terms of collections, since we exceeded €12 billion” — CISAC member societies racked up €12.1 billion ($12.7 billion) in revenue, counting audiovisual, literary and other collections — “and it’s record-breaking in terms of year-on-year growth.”
This arguably undervalues the rights business, because it only counts money that goes through rights management organizations — both collective management societies and private businesses that license the same rights — and not revenue from direct deals with publishers. In the U.S., the world’s biggest market, for example, it counts public performance royalties but not the mechanical royalties handled by the Mechanical Licensing Collective. Add in that money and, although an apples-to-Apple Music accounting would get complicated, the total is almost certainly more than half of the $26.2 billion global recorded music revenue that IFPI reported for the same year. That’s a lot of money flowing through organizations with unpronounceable initials.
At first glance, it looks like revenue from collections is growing much slower than those from recordings — music rights collections are up 31% since 2018, while recording revenue is up nearly 50%. But that may not paint a full picture. Most of the growth in the recording business is tied to streaming — much of its future growth will come from streaming in the developing world. The same is true of collections, except that digital only became the biggest source of revenue this year, representing 38% of the total. Most other sources of collections revenue are growing slower, except for live, which was whipsawed by the pandemic and will only recover fully this year. And since 2018, digital collections grew by150% while global digital revenue grew by just under 100%.
The current pace of growth is unsustainable, since it includes the once-in-a-century recovery of revenue collected from live performance, which grew 185.7%. But digital collections alone grew 33.5%, and that revenue will make up a larger share of total revenue in the coming years, which implies faster growth overall. In five years, “the one thing I’m certain of is that digital will become more than a third of the pie,” Oron says. It could even be half — presumably without much erosion in live revenue and other sources of income.
As in the recorded music business, the larger amount of that money will come from countries that thus far have had small, or even negligible, music industries. The countries that brought in the most revenue in 2022 aren’t so different from the usual — the U.S. in the lead with €2.6 billion ($2.7 billion, up 30.5%), then France with €1.3 billion ($1.3 billion, up 39.3%), the U.K. with €1 billion ($1 billion, up 24.3%), Germany with €903 million ($951 million, up 17.9%) and Japan with €848 million ($893 million, up 10.1% in local currency). That’s similar to the biggest markets for recorded music, only France does better in collections, comparatively, while Japan fares a bit worse. (Europe still accounts for 51% of collections revenue, with another 27% coming from the U.S. and Canada.) “The countries in the top 10 have always been the biggest collectors,” Oron says.
The balance of power will tilt even more toward some of these markets, however, as the biggest and most important European societies — SACEM in France, PRS for the U.K. and GEMA in Germany — sign more affiliates to collect more digital revenue. Those societies now have the repertoire, and thus the leverage, to negotiate better deals with big platforms that cover much of the globe. Some of the growth in collections is fueled by the fact that “many societies renegotiated,” Oron says, and he predicts that “hubs” will become more popular over the next decade.
At the same time, the fastest growth is coming from developing markets that are almost entirely digital: Vietnam, India, Indonesia and Thailand. Collections in Latin America grew almost 65% in 2022. As in recorded music, these markets never accounted for much revenue of any kind, so their emergence is almost entirely pure growth. And since not all of the countries with fast-growing music businesses have collecting societies that function well, rights organizations could face a stark choice: Reform them or work with them in order to collect a range of royalties; or try to license streaming services that operate in those markets from outside the countries to ensure that the fastest-growing stream of revenue will flow more directly to songwriters and publishers?
One of the questions around the future of collections is artificial intelligence, the industry’s favorite savior or bogeyman, depending on the day, and the CISAC report devotes most of two pages to it, in the form of forewords by Oron and CISAC President Björn Ulvaeus. “There is no question that the way we address it now will have a huge bearing on collections in the future,” writes Oron, who calls the technology an “existential issue” that presents both “threats” and “amazing opportunities.”
Ulvaeus takes the same tone. “Fresh from COVID and the economic squeeze, what we now face is a potentially far more serious, existential challenge — that of Artificial intelligence,” he writes. “I think of it as having the power to extend the human mind and potentially create wonderful art. But it brings dangers too, and without hard rules protecting human creators it could also threaten their livelihoods on a huge scale.”
Both Oron and Ulvaeus say CISAC intends to play a leading role in making sure AI helps, rather than hurts, creators. Collecting societies could be an important part of any such solution, given the amount of material that would need to be licensed. Right now, “you don’t know what you’re licensing and to whom,” Oron says. “The most important issue is transparency.”
If it’s Friday that means another spin around the Executive Turntable, Billboard’s comprehensive(ish) compendium of promotions, hirings, exits and firings — and all things in between — across the music industry.
Caron Veazey and her nearly four-year-old consultancy firm Something In Common have partnered with global management company Three Six Zero, with Veazey officially joining as partner. The industry veteran brings with her singer-actress Mette Towley (aka METTE), who is fresh off a role as Video Girl Barbie in Greta Gerwig’s Barbie movie and recently released an EP via RCA, METTENARRATIVE. Veazey is co-founder and co-chair of the Black Music Action Coalition and prior to forming Something in Common, spent nearly a decade managing the career of Pharrell Williams during the pinnacle of his “Happy” and “Get Lucky”-fueled fame. During that time she also general-managed Pharrell’s i am OTHER creative collective.
“I believe things happen at the right time, and now could not be a more perfect time to partner with Mark and the team at Three Six Zero,” Veazey said. “I’m so impressed with what they have built, and very excited about the ambition for the future. They are a group of big forward thinkers, and I am truly energized to join the team.”
Robin Nastri joined Sony Music Publishing in the newly created role of senior vp, global business office. SMP devised the position to oversee what it calls “global transformation initiatives” like streamlining global operations and enhancing its technologies in order to boost the publisher’s growth. She reports to chief financial officer Tom Kelly. Nastri joins SMP after an inventive, 25-year tenure at IT company Accenture, where in 2019 she and her team won inventor of the year for creating the company’s market-leading automation platform. “I am deeply grateful to be joining Sony Music Publishing at such an exciting time,” she sai. “My heartfelt thanks go to Jon Platt, Tom Kelly, and the entire SMP team for entrusting me with this incredible opportunity. It is a privilege to work with such a talented and dedicated team, all with a passion for changing the world by supporting the songwriters who inspire it.”
Sara Benz joined Big Machine Records as a project manager, tasked with overseeing release campaigns and driving audience growth for the label’s star-heavy artist roster (Tim McGraw, Carly Pearce and Midland, heard of’em?). Benz most recently served as a senior A&R coordinator at Universal Music following a stint at Small Giant Records + Management. “She has hit the ground running and is making a huge difference with our team and our artists,” said Big Machine Records’ GM, Clay Hunnicutt. “This is truly only the beginning for her.” Benz is based in Nashville and is at sara.benz@bmlg.net.
What about Bob Papke? Well, ASM Global has tapped him as the venue management firm’s first vp of industry relations and client development. Papke, a member of the ASM family for 33 years, will now oversee all entertainment industry relations for the 80-plus venues that the company manages, including one that he’ll continue to helm: the Maxwell C. King Center in his home base of Melbourne, Florida. He was most recently vp of live entertainment for theaters. Prior to ASM, Papke managed several venues in environs such as Jacksonville, Toronto, Miami Beach and Richmond, Virgina. “Bob has put his heart and soul into this division for years and has created a pathway for our continued success,” said Will Beekman, vp of theater operations. “He has also outlined a strategic and detailed plan for a smooth transition of leadership to ensure that our partners and venues are left in great hands. I thank him for his decades of commitment and look forward to him taking the reins and continuing what he started.”
Across the Board: Ticketmaster veteran Don Orris and former Shazam exec Will Mills joined the advisory board of Tickets for Good, a platform giving UK health and charity works access to free or discounted event tickets … HeadCount, a non-profit that enlists politically engaged music artists to help inspire youth participation in elections, appointed CAA Foundation executive Travis Merriweather to its board of directors.
Boutique publicity firm Reybee, Inc promoted Heather Hawke from publicist to senior director of publicity. Since joining Reybee in November of 2018, she has worked with or led press campaigns for artists such as Queen’s Brian May and Roger Taylor, Spice Girls, Eve, Circa Waves and Josie Cotton, among others. The LA-based Hawke is also a veteran journalist and photographer, having founded Decorated Youth Magazine and boasting a portfolio of visual work for clients including Warner Records, Rolling Stone and The FADER. “Ever since she joined my company, I’ve been hard-pressed to find anyone who out-thinks, out-shines or out-hustles Heather,” said president and founder Rey Roldan. “She’s the best in class and provides a tremendous service to our clients across a broad array of creative opportunities. Plus, she gives me a run for the money and challenges me every day to re-think and re-learn some of my old-seated, old school music industry habits. She scares me.”
Create Music Group promoted Mark Hill Jr. to senior vp of A&R and business development. He will oversee the company’s A&R team and continue to sign and develop new acts, as well as manage recording projects for roster artists. Based in Los Angeles, Hill joined CMG in 2016 as an intern and in seven years has helped cement deals with Ice Spice and signed artists like YNW Melly and Lucki, among others. “From the very beginning of his tenure here, Mark has been a powerhouse,” said Create Music Group co-founder and chief business operator, Wayne Hampton. “His passion for music, his keen eye for talent, and his ability to lead our teams, have made him an invaluable member of the A&R team. I look forward to seeing him continue to build his career at Create.” He reports to Hampton and co-founder and CEO Jonathan Strauss.
ICYMI: Live Nation president of Asia Pacific Roger Field resigned this week after more than 13 years with the company. It’s understood that Alex Klos will now step into the permanent role as COO of LN ANZ, alongside his position as CFO … Independent promoter and entertainment company LiveCo promoted Shane Quick to president of touring and strategic expansion … Hipgnosis Songs Fund shareholders voted to bid adieu to board chair Andrew Sutch (he already signaled his departure), while directors Andrew Wilkinson and Paul Burger also resigned this week.
Rogét Chahayed’s TruSauce publishing company recently hired Warner Records veteran Sarah Ferrie as its new head of creative. Ferrie has ten years of music business experience, dating back to an A&R role at Capitol Records before stints at GODMODE and Columbia Records. In late 2018, she joined WMG, where she signed Maude Latour and Sofia Valdes, and worked on major releases including Dua Lipa’s Future Nostalgia. Ferrie is based in Los Angeles.
Nashville-based business management and bookkeeping firm, Luma Business Services, hired Mallori Kirchenschlager as a business manager. Kirchenschlager joined the company earlier in 2023 after an eight-year tenure at business and financial management firm Flood Bumstead McCready & McCarthy. The Belmont University grad got her start at CAA as a music agent assistant and later was director of strategic alliances and events at the International Entertainment Buyers Association. “I am thrilled to have Mallori join the incredible team we have built,” shares Luma’s Founder and President Adrien Good. “Her talents and diverse experience across the industry are a huge asset to our clients and I am excited to work alongside her everyday.”
Milestone Publicity promoted Taran Smith and Lily Collins to account executives, and Campbell Jenkins to associate publicist. Smith has been with the Nashville-based PR agency since April of 2022, and has worked with acts including Leftover Salmon and Robbie Fulks. Collins joined the firm in August of 2022 and has assisted national and tour campaigns for Gin Blossoms, Lonestar and others. Jenkins has spent her short time at Milestone assisting other publicists on various client campaigns.
PRG hired Ariane Coldiron as senior vp of corporate events at the live project management firm. At PRG, Coldiron will be in charge of the business-y events being serviced by the company, which offers audio, lighting, video and other technical production services. She arrives after nearly a decade at trade show specialists Freeman, where as svp she drove the firm’s agency business and managed a portfolio that included Google, SalesForce and HP.
Last Week’s Turntable: WHY&HOW Promotes Three Company Veterans
French music streaming company Deezer added 500,000 subscribers in the third quarter, helping its revenues improve by 4.8% (5.5% at constant currency) to 120.7 million euros ($131.4 million), the company announced Thursday (Oct. 26).
“We are back to meaningful subscriber growth and secured top line acceleration starting in Q4 thanks to the implementation of a new wave of price increases, as well as the ongoing growth of new partnerships,” said CEO Jeronimo Folgueira in a statement.
A relatively small music subscription service, Deezer has recently taken an outsized position of influence with its partnership with Universal Music Group to revamp how it calculates artist royalties and addresses fraud. The “artist-centric” system was announced in September and will be implemented in France in the current quarter, to be followed by additional markets. Around half of Deezer’s streams are already running on the new model, the company said Thursday.
While direct subscriptions remained flat at 5.6 million, subscribers from partnerships grew from 3.8 million to 4.3 million. Deezer said it had “very strong initial subscriber growth” in Brazil and Mexico stemming from its partnership with Uruguay-based e-commerce giant Mercado Libre. The third quarter was also the first full quarter for which Deezer managed the Sonos Radio service. Deezer also powers the music streaming in RTL+, a multimedia platform launched by RTL Germany that has 4.5 million subscribers, according to RTL’s website.
Revenue from direct subscribers grew 3.3% to 71.7 million euros ($78 million). Revenue from partnerships increased 11.9% to 34.2 million euros ($37.2 million). Other revenue (advertising and ancillary revenue) decreased 16% to 4.1 million euros ($4.5 million).
France accounted for 59% of Deezer’s revenue in the quarter compared to 60% in the prior-year period. Direct subscribers in France increased by 200,000 while subscribers elsewhere decreased by an equal amount.
Direct subscribers are more lucrative than partnerships on a per-subscriber basis. Direct subscriber ARPU (average revenue per user) rose 3.4% to 4.9 euros ($5.33) while partnerships ARPU improved 10.6% to 2.9 euros ($3.16). Direct subscriber ARPU will get a further boost from a price increase instituted on Sept. 21 for all new subscribers in France, the United Kingdom, Spain and the Netherlands. For all current direct subscribers, the increase will progressively roll out starting on Oct. 24.
Deezer reiterated its previous guidance of 7% to 10% revenue growth for the full year and a “significant reduction” in adjusted earnings before interest, taxes, depreciation and amortization in the second half of the year.
Q3 2023 financial metrics:
Revenue grew 4.8% (5.5% at constant currency) to 120.7 million euros ($131.4 million).
Total subscribers grew 4.9% to 9.9 million.
Direct subscribers were flat at 5.6 million. Subscribers from partnerships grew by 500,000 to 4.3 million.
ARPU from direct subscribers grew 3.4% to 4.9 euros ($5.33).
ARPU from partnerships grew 10.6% to 2.9 euros ($3.16).
Led by strong subscription growth and a dominant quarter from Taylor Swift, along with strong sales of releases by Olivia Rodrigo, Morgan Wallen and Seventeen, Universal Music Group (UMG) grew revenue 3.3% (9.9% at constant currency) to 2.75 billion euros ($3 billion at the period’s average exchange rate) in the third quarter, the company announced Thursday (Oct. 26).
UMG will get another boost this quarter from Swift’s release of the re-recorded version of her 2014 album, 1989, on Friday. “She is a phenomena,” said UMG chairman/CEO Lucian Grainge, listing a string of global chart successes of Swift’s previous 2023 album of re-recordings, Speak Now (Taylor’s Version), released in July. “This level of performance can only really be described as truly astonishing.”
UMG’s fourth quarter will also benefit from the new release of an unreleased track by The Beatles, “Now and Then,” on Nov. 2. “Now and Then” was written by John Lennon in the late ‘70s and just recently finished by the band’s remaining members, Paul McCartney and Ringo Starr. “The fact that more than four decades after its original recording, we can use the latest technology to bring this recording everywhere is truly remarkable and something that we’re very proud of,” said Grainge.
Third-quarter adjusted earnings before interest, taxes, depreciation and amortization (EDITDA) increased 5.1%, or 11.3% at constant currency, to 581 million euros ($632 million), and adjusted EBITDA margin improved 0.3 percentage points to 21.1%.
The company’s recorded music segment declined 1.1% to $2.04 billion ($2.2 billion), a 5.2% increase at constant currency (or an 8.9% increase excluding a 71 million euro legal settlement recognized in the prior-year quarter). Subscription revenue grew 6.7% (13% at constant currency), despite not yet receiving a boost from recent price increases at Spotify and YouTube Music. Those benefits are expected to be felt in the fourth quarter, said CFO Boyd Muir, who noted that “each of these services raised prices in certain markets, and on certain plans, not across all subscribers.” YouTube, which Muir said “has a particularly global subscriber base,” raised prices first in the United States and other markets in the following weeks. As a result, “the benefit will initially be more limited.”
Recorded music’s ad-supported streaming revenue grew 5%, the same as the previous quarter. UMG remains “cautious” about ad-supported growth in the coming quarters, said Muir. Results in any quarter come from a mix of fixed and variable deal structures, he explained, meaning UMG’s results aren’t a close reflection of trends in the advertising market. “We do, however, continue to see opportunities for improved deal terms and product innovation driving higher levels of growth in this business over the medium term,” he said.
Downloads and other digital revenue declined 56.9% (53.2% at constant currency) due to the prior-year legal settlement and a broad decline in download sales. Licensing and other revenue declined 11.8% (6.9% at constant currency) due to a strong prior-year quarter that benefitted from artists’ return to touring as the concert business recovered from pandemic-era shutdowns.
Music publishing revenue grew 17.5% (24.6% at constant currency) to 491 million euros ($534 million). Excluding a 53 million euro ($58 million) catch-up payment in the music publishing segment related to the Copyright Royalty Board’s (CRB) Phonorecords III ruling for streaming royalties from 2018 to 2022, publishing revenue improved 4.8% (11.2% at constant currency).
Publishing’s digital revenue grew 25.6% (33.6% at constant currency) on strong streaming and subscription growth and the CRB III catch-up payment. Synch revenue declined 3.5% (and grew 3.8% at constant currency) while mechanical revenue was stable.
Revenue growth “is beyond our expectation and guidance,” said Muir, while noting that “the revenues that are incremental to our expected growth are actually coming from lower-margin areas of our business.” In the third quarter, 75% of UMG’s revenue above analyst’s consensus expectations came from merchandise and physical products. “They are EBITDA-accretive, but margin-dilutive of the business segments we must pursue,” said Muir. UMG still expects a one-point improvement in adjusted EBITDA in calendar year 2023.
Revenue grew 3.3% (9.1% at constant currency) to 2.75 billion euros ($3 billion).
Recorded music revenue declined 1.1% to $2.04 billion ($2.2 billion), a 5.2% increase at constant currency.
Publishing revenue grew 25.6% (33.6% at constant currency), or 4.8% (11.2% at constant currency) excluding a CRB III retroactive royalty adjustment.
Adjusted EBITDA increased 5.1%, or 11.3% at constant currency, to 581 million euros ($632 million).
Adjusted EBITDA margin improved 0.3 percentage points to 21.1%.
Utopia Music is facing another lawsuit over an aborted deal to buy a U.S. music technology company called SourceAudio, this time over allegations that the Swiss company violated a $400,000 settlement that aimed end the dispute.
The two companies have been battling since February, when SourceAudio filed a lawsuit claiming that Utopia – a buzzy music fintech firm – had bailed on 2022 deal to buy the smaller company for $26.5 million. The case claimed that after a year of delays, Utopia owed more than $37 million on the deal.
That case, filed in Delaware, quickly settled on confidential terms. But in a new lawsuit filed Wednesday in Los Angeles, SourceAudio says Utopia has now flaked on that agreement, too.
“Desperate to get the Delaware litigation out of the public eye, Utopia negotiated an agreement to pay SourceAudio $400,000 in exchange for a full release and dismissal of the lawsuit,” the company’s lawyers write. “But as with the underlying contract, Utopia has refused to pay what it owes.”
According to the new lawsuit, just days after signing the legal settlement, Utopia “failed to make the required settlement payment—with no explanation at all.”
“It now appears that the settlement was simply a ruse by Utopia to buy time and avoid paying its debts,” the smaller company’s lawyers write. “SourceAudio brings this action to collect what it is owed [or] to rescind the fraudulently procured settlement agreement. Utopia’s gameplaying must come to an end.”
A spokesman for Utopia did not immediately return a request for comment on Thursday.
Utopia, a Swiss-based tech company that delivers financial services for labels, publishers and distributors, had been on a buying spree over 2021 and 2022. The company has acquired at least 15 companies, including music tech company Musimap, U.K. physical distributor Cinram Novum and Lyric Financial, a provider of royalty-backed cash advances.
But last fall, news broke that Utopia would restructure operations and lay off 20% of its workforce, representing about 230 jobs. In April, the company undertook a fresh round of job cuts, eliminating another 15% of its global workforce. Then in July, Utopia announced it was closing its research and development offices in the United Kingdom and Finland, resulting in the loss of another 5% of its global workforce.
SourceAudio — a tech platform for digital asset management and monetization — sued in February, claiming it had struck a deal in March 2022 to sell itself to Utopia for $26.5 million. Since almost immediately after the deal was reached, SourceAudio claimed, the bigger company had continually balked at actually completing the purchase.
“Despite repeated assurances that Utopia would be able to close…, Utopia engaged in a pattern of discontinuing discussions for an extended period of time, only to resurface immediately before the next intended closing date to indicate that it was unable to close by such date,” the complaint read.
In Wednesday’s new lawsuit, SourceAudio claims that Utopia quickly agreed to pay $400,000 to end the earlier case. Though Utopia made an initial $50,000 payment under the deal, the lawsuit claims, the remaining $350,000 – due this month – has not been paid.
“Defendants fraudulently represented through their attorney that they would perform the settlement agreement, while never intending to make any payment beyond the first installment of $50,000,” The company wrote. “Defendants’ objective with its false promise was to secure a release and dismissal of the Delaware action in exchange for a $50,000 payment and nothing further.”
This time every year, music’s biggest stars unleash carefully constructed marketing campaigns for new Christmas music, hoping to join Bing Crosby and Mariah Carey on the lucrative list of holiday classics. Duran Duran chose a different direction.
After dressing as top-hatted ghouls and covering Talking Heads’ “Psycho Killer” and The Specials’ “Ghost Town” at the Wynn Las Vegas casino last Halloween, the veteran U.K. band recorded a themed album, Danse Macabre, which is due Oct. 27. “Funnily enough, I can’t think of many Christmas songs that I like, apart from the few obvious ones,” keyboardist Nick Rhodes says. “But Halloween, I can think of plenty of songs I love. It’s the mood and the chaos and the dark spirit of excitement about it.”
For decades, Halloween’s soundtrack has come from a reliable archive of catalog hits: Rockwell’s “Somebody’s Watching Me” (1984), Michael Jackson’s “Thriller” (1982), Ray Parker Jr.’s “Ghostbusters” (1984), Warren Zevon’s “Werewolves of London” (1978) and, of course, Bobby “Boris” Pickett and the Crypt-Kickers’ undead “Monster Mash” (1962). But in recent years, thanks to TikTok memes, Netflix and Disney synchs and music streaming, newer songs have joined the pantheon, from Lady Gaga’s “Bloody Mary,” which went viral after TikTok users spliced it into a dance clip from Netflix’s 2022 hit Wednesday, to LVCRFT’s “Skeleton Sam,” a spooky novelty track engineered by hit songwriters who aspire to update the Halloween music canon.
“There’s room in the marketplace for more than just ‘Monster Mash’ and ‘Ghostbusters,’ ” says Kay Anderson, vp of marketing for Craft Recordings, the Concord catalog label that represents late singer Andrew Gold, including his meme-friendly ’90s Halloween-season hit, “Spooky Scary Skeletons.” “The demand is there, and the momentum for Halloween-themed content kicks off earlier each year.”
When singer-songwriter Evan Bogart was a kid, his mother threw bobbing-for-apples Halloween parties and put dry ice in the pool to create ghostly smoke. By 2018, the son of Casablanca Records founder Neil Bogart was a hit songwriter for Lizzo, Rihanna, Beyoncé and others and, as he recalls, his horror movie-obsessed friends wondered: “Why isn’t there any f—ing Halloween music? We’ve been listening to the same stuff since we were kids: Rockwell, The Specials, Warren Zevon, Ray Parker, Oingo Boingo. Most of it’s decades old.” They formed a collective, LVCRFT, and made an album of all-new music, 2019’s This Is Halloween Vol. 1, which included “Skeleton Sam.” The single has since racked up more than 8.5 million on-demand audio streams, according to Luminate, and its Oct. 31 streams increased from 57,343 in 2019 to 569,313 last year. LVCRFT followed the album up with new installments every year.
At the same time, Kat Basolo, senior vp of creative synch for Bogart’s publisher, Kobalt, had been thinking up song ideas to pitch to Freeform, Disney’s streaming channel for young adults. When Bogart mentioned his Halloween music obsession to Basolo, she encouraged him to cover songs from Kobalt’s catalog for Freeform’s annual, heavily promoted “31 Nights of Halloween” campaign. Kobalt also represents Gold, and LVCRFT chose “Spooky Scary Skeletons” and “It Must Be Halloween,” which the Disney channel wound up licensing. “It was very successful,” Basolo says. “That became a well we would keep tapping into.”
In Basolo’s view, the resurgence of new Halloween tracks is, at least in part, a synch phenomenon: Horror movies and spooky shows such as Wednesday, American Horror Story, the Hocus Pocus franchise and this year’s Haunted Mansion remake have led to more topical placement opportunities for artists, labels and publishers. “There’s a lot of content out there that people are constantly clamoring for because they’re genuinely Halloween fans,” she says. “Halloween is a very popular holiday for a reason, and people tend to have a cult-like affinity. They look for content out there that has themes that are adjacent.”
Streaming numbers for “Spooky Scary Skeletons,” “Skeleton Sam” and other Halloween hits may not be as big as those of “All I Want for Christmas Is You,” but they add up. “Bloody Mary” never charted when Gaga released it in 2011, but after the Wednesday-related TikTok phenomenon, it hit No. 68 on the Billboard Hot 100 in 2022, scoring over 412 million plays on Spotify and placement in the service’s Halloween Party playlist, which has 981,000 likes. “Bloody Mary” streams grew from 128,708 on Oct. 31, 2019 to 166,893 on October 31, 2022, an increase of 29.7%. However, from October 1-9, 2023, the streams have totaled 2.04 million, according to Luminate.
Since the pandemic, Spotify’s playlist team has noticed what Talia Kraines, the services’ senior editor, pop, describes as “massive spikes on our Halloween playlists” earlier and earlier each year. One enduring seasonal beneficiary of stay-at-home TikTok and binge-watching has been the Beetlejuice soundtrack — the popularity of Schitt’s Creek led to discovery of Catherine O’Hara’s other films, including Beetlejuice, which led to streaming Harry Belafonte’s classic “Day-O (The Banana Boat Song).” “Labels have tended to focus on the classics. Catalog teams at labels are trying to go deeper and find more songs to pitch because the existing classics are so well covered,” Kraines says, pointing to September-October spikes for spooky-adjacent songs like Sam Smith and Kim Petras’ “Unholy,” Rihanna’s “Disturbia” and the Cramps’ “Goo Goo Muck.” “A lot of the new Halloween music is coming from real baby artists who don’t have that major label or publisher system in place.”
Even songs unrelated to Halloween, such as Ghost’s “Mary on a Cross,” which went viral a year ago, and Ava Max’s pop smash “Sweet but Psycho,” have landed on Spotify’s Halloween Party and other official streaming playlists this year. Rapper Ashnikko’s adult-oriented “Halloweenie” tracks, released from 2018 to 2021, have drawn roughly 67 million on-demand streams as of Oct. 9, according to Luminate.
“It takes years to mature a song like that into a classic,” says Mike Chester, executive vp of commerce and promotion at Warner Records, which represents Ashnikko. “It’s not ubiquitous like Christmas season, so you have to focus on the week leading up to Halloween and maximize that attention. It’s a pretty tight window, but it’s rabid in that moment.” Kobalt’s Basolo adds that Halloween synch prep begins earlier every year: “I’m looking at Halloween at the beginning of summer. It’s [about getting] ahead of the timeline and thinking about it a few months in advance.”
By contrast, Duran Duran never expected to make a Halloween album. The group’s ghoulish October 2022 Vegas show was a one-off, so spontaneous that singer Simon Le Bon had to put in extra work memorizing new lyrics, but it evolved into the upcoming album of covers and originals. “We hadn’t thought about it that much as any kind of business proposition — we thought we just wanted to do a Halloween album,” Rhodes says. “But one thing we definitely have on our side is that I’m not sure I know many other artists who’ve done a Halloween album. It’s a whole new genre.”