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Spotify was the biggest contributor to the 13% increase posted by the 21 stocks tracked by the Billboard Global Music Index for the first half of 2023.
Fueled by cost-cutting and corporate reorganization, shares of Spotify gained 103.4% through June 30. While that wasn’t the largest on a percentage basis for stocks on the index, Spotify’s size — it has the second-largest market capitalization of stocks that Billboard tracks — meant the company’s improvement was the single largest factor in the index’s gain.
The Global Music Index is a float-adjusted index of 21 music stocks. Each company’s market capitalization — the value of outstanding shares — is adjusted to remove the shares of insiders, corporate owners and long-term investors. The remaining market value reflects the shares available to be bought and sold on the open market. The index does not weight stocks to balance the influence of larger and smaller companies. (MSG Entertainment is not included in the index because it wasn’t an active stock for the entire six-month measurement period.)
Only half of the index’s six streaming stocks posted gains through June 30: Los Angeles-based platform LiveOne — with a relatively small market cap of $151 million — shot up 173%, and China’s Cloud Music improved 7.1%. On the losing end, Tencent Music Entertainment, also based in China, fell 10.9%; France’s Deezer dropped 17.8%; and Anghami, based in Abu Dhabi, United Arab Emirates, lost 26.6%.
Outside of music, other streaming companies’ stocks also performed well in the first half of 2023 after losing ground in 2022. Netflix and Roku gained 49.4% and 60.5%, respectively, while Warner Bros. Discovery and Walt Disney Company — broader entertainment companies with streaming platforms and, lately, much C-suite drama — improved 32.3% and 2.8%, respectively.
Strong demand for in-person experiences following the pandemic helped live-music companies recover from share-price losses in 2022. Live Nation shares improved 30.6% to $91.11, and the company had the second-largest gain in adjusted market capitalization. Sphere Entertainment, CEO James Dolan’s gambit to change the live-entertainment business, gained 31.9% after adjusting for the spinoff of MSG Entertainment in April. Germany’s CTS Eventim, stung by criticism over fee transparency by a German public TV show in June, dropped 2.9%. Live Nation’s market cap overpowered CTS Eventim’s loss, and all of the live-music companies collectively accounted for 32% of the index’s growth.
The index’s 13% gain was less than closely watched indexes such as the S&P 500 (up 15.9%) and the Nasdaq composite (31.7%). Both indexes are dominated by gains from tech titans such as Nvidia (up 189.5%), Meta (138.5%), Apple (49.3%), Microsoft (42%) and Alphabet (36.3%). Of that group, only Meta has a market cap under $1 trillion. The Billboard Global Music Index easily beat the 7.2% gain of the Russell 2000, an index of small-cap U.S. stocks with a median market cap of about $1 billion.
While Spotify’s share price of $160.55 is well below its all-time high of $387.44 reached in February 2021, it shows that investors regained some belief in the company’s long-term prospects. Spotify benefited from the same pandemic boost that carried Netflix to a record-high market cap. At the same time, investors were also enthusiastic about the potential for its podcasting business to evolve the music platform into an audio entertainment hub and improve margins constrained by label licensing deals.
Diving into podcasting required large cash outlays for acquisitions, staff and content deals with Joe Rogan, former President Barack and Michelle Obama, and Prince Harry and Meghan Markle, among others. By March 2022, investors had become impatient for margins to improve, and Spotify’s share price dipped to $118.20. As a wave of belt-tightening swept corporations worldwide, Spotify made drastic changes: It laid off 6% of its workforce in January and cut another 2% in June entirely from its podcast division. It restructured its podcasting leadership, canceled shows and consolidated its various podcast brands — The Ringer, Gimlet and Parcast — under the Spotify Studios umbrella.
Layoffs and reorganization have been especially common in the radio business. SiriusXM laid off 8% of its workforce in March and reorganized its podcast business. After the company announced it would shutter its stand-alone podcast app, Stitcher, its share price increased 18.5% in the last week of June. Its stock was down 22.4% at the year’s midway point, hurt by soft forecasts for self-pay subscribers and the weak advertising market that led to three radio companies in the index falling an average of 32.3%. IHeartMedia (down 40.6%) and Cumulus Media (34%) have also cut costs and laid off staff.
Two South Korean companies — both a mix of label and management company — accounted for two of the biggest gains outside of Spotify and Live Nation. HYBE, home to BTS, improved 62.2%, and SM Entertainment, the company behind NCT 127, gained 39.2%. SM’s share price benefited from a takeover battle. HYBE lost out to Kakao Corp. and Kakao Entertainment, which now collectively own 40% of SM, but its stock has more than reclaimed the losses suffered in June 2022, when BTS announced its hiatus.
Outside of South Korea, label and music publishing stocks had mixed results at midyear. Universal Music Group, the index’s largest company by market cap, and Warner Music Group declined 9.6% and 25.5%, respectively.
Downtown Music‘s neighboring rights division struck deals with the Meat Loaf and Miles Davis estates. The division will represent the entire catalog for both artists. Concurrent with that announcement, Downtown Music unveiled a new royalties and rights management platform powered by FUGA technology. “We strive to give clients the best of our in-house knowledge and arm them with resources to make them aware of how they’re able to maximize collection of these rights,” said Downtown Neighbouring Rights GM Dean Francis in a statement. “The launch of our new platform will bolster this further by providing more insight as we look to continue to improve efficiencies in the administration of our clients’ exceptional catalogs.”
Create Music Group acquired Music For Pets, which creates music and entertainment for dogs and cats. Founded by Amman Ahmed and Ricardo Henriquez, Music For Pets boasts franchises including “Relax My Dog” and “Relax My Cat.” Create will invest an additional $10 million to expand Music For Pets’ reach over the next 36 months. According to a press release, Music For Pets currently serves over 20 million pets, with users listening to more than 12 million hours of music every month.
Protect the Culture, a new label founded by music industry veteran Marc Byers, signed a global joint venture with Warner Records that will focus on the African music scene. Byers will work closely with Warner Records president of A&R Steve Carless and executive vp/head of A&R Karen Kwak. The label’s first signing is Lord Afrixana, a Ghana-born, Massachusetts-based singer-songwriter who has a solo project slated to drop later this year, preceded by the single “No Dey Tire.” Byers was most recently GM at Motown Records prior to launching the new venture.
Canva, an online visual communications and collaboration platform, announced partnerships with Warner Music Group (including Warner Recorded Music and Warner Chappell Music) and Merlin that will allow Canva users in many countries to use music clips in their designs, which can be shared across multiple social platforms and also utilized for internal uses like work presentations. Canva customers will be able to access music clips starting this fall in the United States, Europe, Brazil, Canada and Australia; artists will earn royalties when clips of their songs are featured in published Canva designs. At launch, the Warner Music and Merlin libraries will be available for Canva Pro, Canva for Education and Canva for Nonprofit customers, with Canva for Teams users to follow. According to a press release, Canva boasts 135 million users worldwide.
Rapper EST Gee launched a new record label, Young Shiners, in partnership with the Sony Music and Alamo Records-powered label services company Santa Anna. The label is part of EST Gee’s mission to put rappers from his hometown of Louisville, Kentucky, on the map. The label will be home to emerging artists including EST Lil Zoski, EST Marti, EST DonWon, and Santa Anna’s EST SkiMike and EST Lu Mike — all of whom are local to Louisville. The launch coincides with the imminent release of Young Shiners’ debut mixtape, Shiners Are Forever, which drops on Friday (July 14).
Universal Music Group (UMG) acquired the music catalog of RS Group, which is the second-largest music catalog in Thailand, according to a press release. The catalog includes over 10,000 master recordings as well as 6,000 copyright ownerships, publishing rights and licenses dating from 1981-2022 and represents the work of more than 960 artists including Dan-Beam, James Ruangsak Loychusak and Parn Thanaporn Wagprayoon. The acquisition will underpin a new strategic partnership between the two companies — one that will be 70% owned by UMG and 30% owned by RS Group — designed to allow UMG to scale in the Thailand music market. Under the deal, UMG will become RS Group’s exclusive music service partner for new releases and new music repertoire globally while receiving exclusive rights of first refusal and matching rights to acquire new releases and repertoire. According to the press release, UMG will become the second-largest player in the Thai market following the deal.
Raedio, the “audio everywhere” company founded by Issa Rae, signed a multi-year partnership with Def Jam Recordings. Under the deal, Raedio will be able to sign, market and distribute its artists through the Def Jam network.
Tuned Global partnered with Greenland-based telco Tusass to launch the first Greenlandic music streaming service. According to a press release, the partnership is designed to “promote and champion underserved local homegrown musicians and their fans by gathering them into a single service” as opposed to relying on “unofficial uploads on user-generated content sites, with varying quality and unclear connections to the artists who made the music.” The app will be available in Greenland, Denmark, Canada and the Faroe Islands, as well as in the Kalaallisut (Greenlandic), Danish and English languages. “A number of smaller and more specialized markets need ‘glocalized’ apps that offer local music lovers a catalog that’s culturally relevant and timely,” said Tuned Global senior vp/head of EMEA Rick Gleave in a statement. “Therefore, telcos are often the perfect players to launch these types of music apps, as they add significant value to their customers, as well as supporting local culture in general.”
SoundCloud partnered with EDM events company Brownies & Lemonade to highlight emerging electronic artists. The partnership includes the relaunch of Brownies & Lemonade’s Twitch livestream, Open Aux Arcade, on which submitted demos and new music will receive live feedback from Brownie & Lemonade creative director Chad Kenney and musician RamonPang. SoundCloud will serve as a presenting partner, with submissions “flowing directly” from the SoundCloud platform. The partnership will also encompass an artist spotlight series and editorial playlist consideration on SoundCloud.
Reactional Music, the maker of an interactive music engine for video games, struck an agreement with production music leader APM Music. The deal, which marks Reactional’s first move into production music, will allow developers to search for and access the APM catalog through the Reactional platform — which will become available for commercial use later this year — as they build their games.
Janelle Genzink‘s Volara Management signed a strategic partnership with Red Light Management. The deal will provide Volara with additional resources and support to benefit her roster, which includes Sabrina Carpenter, Carmen DeLeon, Mosaic MSC and Riah.
ASM Global partnered with multidisciplinary venue strategist Forward Associates, which specializes in everything from architecture to interior design to premium seat sales and marketing. Current projects under the deal include Everton FC’s new stadium, Stockholm Live’s portfolio of venues including the Avicii Arena, the AO Arena in Manchester, England and the Desert Diamond Arena in Glendale, Arizona.
Sony Music Latin formed a strategic partnership with Nexoom AG, a Swiss-based interactive entertainment company. The collaboration is aimed at “tapping into Nexoom’s innovative digital ecosystem to offer unique experiences” for Sony Latin artists and their fans.
Karta, a metaverse studio that deals with in-game experiential marketing and has delivered projects on Roblox, Fortnite and Decentraland for clients including Amazon Music, Unilever’s Sunsilk and K-pop group TWICE, secured an investment round led by GameTech Ventures and including former Hipgnosis chief catalog officer Amy Thomson, entertainment company Tokido, Sports Loft CEO Charlie Greenwood, UK Finance chairman Robert Wigley, Powster founder/CEO Ste Tompson and venture studio Big Ideas Group. The company declined to reveal the amount of the funding round.
SoundExchange added PayPal and Venmo as royalty distribution payment options for registered creators after adding CashApp and Zelle last year. The addition of these options allows creators in countries that can’t be serviced through direct deposits to receive their SoundExchange royalties without requiring a bank account. Payment via PayPal and Venmo will be immediately available to domestic and international registrants, whether they are paid as individuals and companies. To sign up for either Paypal or Venmo, creators are encouraged to use SXDirect, which provides self-service opt-ins for all payment methods.
The city of Busan, South Korea enlisted AI-assisted business-to-business marketplace SURF Music to find “thematic, Olympic-style music” to accompany their bid for the World Expo 2023. SURF’s subscription-based marketplace allows artists and music creators to manage their song catalogs via AI song tagging; organize playlists; and submit songs to fit a particular brief. After SURF submitted a playlist of unreleased music to Busan, the city chose “Welcome to World Expo” by Lee Muina. The partnership will continue through the Expo’s “judgment day” in November 2023.
At the midyear mark of 2023, there’s one over-arching theme: so far, it’s the year of Morgan Wallen. The artist’s album One Thing At a Time is the most-consumed album of the year so far by far, racking up 3.312 million equivalent album units in the U.S. since its March release, while its single “Last Night” gobbled up the most U.S. on-demand audio streams of the year so far, with 588.7 million.
That helps explain a huge leap in country music market share so far this year, with the genre growing to 8.36% of the U.S. market, from 7.83% at the halfway point last year. Overall, in terms of current consumption units — those derived from albums released within the past 18 months — country music increased by 4.5 million equivalent album units over the same period in 2022, the highest among all 15 genres tracked by Luminate in 2023 so far.
But that’s just one of the big takeaways derived from combing through the data six months into this year. Here are four other observations from the first half of 2023.
Why is Rock so big? Catalog.
Overall, rock has grown most of any genre year over year in consumption units, with 11.2 million more units in 2023 over 2022. That growth, however, is almost entirely from catalog — 10.3 million of it, compared to 900,000 units of growth from current releases. It’s the second-largest growth metric among genres in terms of catalog, just behind R&B/hip-hop in raw numbers (11.2 million), though because R&B/hip-hop actually declined in current releases (more on that later), rock saw the biggest overall growth in unit terms.
It’s a testament to the enduring value that exists in classic rock recordings — and a reason those catalogs continue to be valued, bought and sold at such high figures — and helps explain why it still represents such a large part of the market, despite rock not generally being represented in the highest echelons of the charts. Rock’s catalog share of 23.31% is behind R&B/hip-hop’s 27.15% in the rankings, but is much higher than that of pop (12.91%) and country (7.69%), the next two genres in share.
Courtesy Photo
Consider the rankings in terms of current share: rock (10.32%) slides to third place, behind pop (10.69%) and barely ahead of country (10.16%), with Latin coming in fifth at 7.84%. And its current unit growth year over year of 900,000 is significantly behind country (4.5 million), world music (3.3 million) and Latin (2.5 million), although at least it’s still growing, while R&B/hip-hop and pop is not.
R&B/Hip-Hop: The Elephant In the Room
The drumbeat has been growing louder over the past year when it comes to what, exactly, is going on with R&B/hip-hop from a market share perspective. But despite concern that the genres’ grip on the public consciousness is getting diluted, a few things have remained consistent: it remained the largest genre in consumption units, it was still growing the most in raw numbers (if not percentage-wise), and R&B and hip-hop artists were continuously topping the charts dictating the culture.
Some of that dominance, however, has begun to slip. There is the biggest one — in the first half of the year, no hip-hop album had yet topped the Billboard 200, a distinction that finally ended in the first week of the third quarter with Lil Uzi Vert’s Pink Tape this week. And in terms of year over year unit growth, R&B/hip-hop slipped to second at 13.01% of the market’s growth, behind rock (17.71%) and just ahead of country (12.35%). And as consumption overall grew by 13.4%, R&B/hip-hop remained stagnant at 6.3% — the same mark it had at the midway point of last year. Still, it’s been a weird year; R&B/hip-hop actually accumulated more growth in raw units in the first half of 2023 (8.3 million) than in the first half of 2022 (7.8 million).
Yet there are signs for concern — and not necessarily just because of gains in other genres. R&B/hip-hop’s overall market share has slipped from 27.64% halfway through 2022 to 25.92% halfway through 2023, more than a point and a half. Its share of on-demand streaming has dropped from 29.39% to 27.31% — more than two percentage points. Overall album sales growth — huge for rock (45.85%) and pop (30.99%) — was just 2.53%, though growth at all in that metric is still positive. Even more concerning are its current numbers, which we’ll get to in a second. So, with R&B/hip-hop’s market share at its lowest point since 2018, is it just a cyclical, first-half blip due to domination by the likes of Morgan Wallen and Taylor Swift so far this year? Or something deeper?
Current Share Tells the Story of the First Half
The three genres that experienced the biggest growth over the first half of 2023 also tell the story of the first six months of the year, and they’re undeniable on several metrics. In terms of overall percentage growth year over year, World Music — which encompasses ex-U.S. genres like K-Pop and Afrobeats — was up 42.5%; Latin was up 21.9%; and Country was up 21.1%. Each managed to grow their overall share of the market significantly over the same period last year: Country, the fourth-biggest genre, rose from 7.83% to 8.36%; Latin, in fifth, grew from 6.25% to 6.72%; World, in seventh, grew from 2.20% to 2.76%. In comparison, the top three genres — R&B/Hip-Hop, Rock and Pop, in that order — all ceded share of the market at least somewhat year over year.
Looking at the current share illustrates where those gains came from. The country genre came in 4.5 million units higher than at the same point in 2022, boosting its current share from 7.98% to 10.16%. world music added 3.3 million units, vaulting over dance/electronic into sixth with a 5.22% share of the current market, up from 3.29% at this time last year. And Latin added 2.5 million units over last year’s total, increasing from 6.86% to 7.84% this year.
The flip side of that is the current percentage drops from the other leading genres. Current R&B/hip-hop share fell from 27.50% halfway through 2022 to 22.62% this year, an almost 5% decline, and dropped 8.0% in consumption units year over year. Pop slid from 12.87% to 10.69% in share, dropping 7.1% in consumption units year over year. Rock’s slip in share was more modest (10.83% to 10.32%), but also still fell, though its unit count actually grew (the slide in share is due to larger gains elsewhere). It’s a reflection of how the first half of the year has gone in terms of impactful releases in the market.
World Music’s Growth Isn’t Slowing Down
World music now accounts for 2.76% of the overall market in the U.S., up from 2.20% at the midway point last year. It’s not huge, but by percentage, it’s far and away the fastest-growing genre (up 42.5% year over year) in the industry; by raw consumption unit growth, it’s sixth-highest, having increased by 4.4 million units over its midyear 2022 mark. And it’s up by huge percentages in just about every metric: overall album sales (71.3%), physical album sales (76.4%) and on-demand streaming (38.2%) growth all far outstrip the industry overall.
Some of this is just a function of how percentages work: a smaller number that’s growing quickly will naturally have a higher percentage growth than a larger number that, while growing at a larger volume, is growing at a slower rate. But these percentages continuing getting higher, not smaller: in 2020, it grew 8.0% over 2019; in 2021, the metric was 18.9%; in 2022, it was 26.4%. From the first half of 2019 through the first half of 2023, world music is up 131.3%.
So far this year over midway through 2022, K-pop consumption is up 154.9%, and Afrobeats consumption is up 143.8%. They’re still small in terms of actual consumption numbers — K-pop’s numbers compare most directly to those of children’s music for the first half of the year, for example — but they no longer exist in the realm of the potential. The industry has spent the past few years pouring money and resources into these areas and hoping to boost these artists in the States. The metrics are no longer about what the future may look like: it’s here now.
Myke Towers has signed a management deal with Brandon Silverstein’s S10 Entertainment, Billboard has learned. The signing — which is in partnership with Orlando “Jova” Cepeda (One World Music) and Jose “Tito” Reyes (Casablanca Records) — comes on the heels of Myke’s viral hit song “LALA,” which topped Spotify’s Top 50 Global chart and entered at […]
Jimmie Allen is fighting back against a pair of lawsuits filed this spring that accused the country star of sexual assault, denying all the allegations and countersuing both women — claiming that one of them defamed him and that the other illegally swiped his cellphone.
In documents filed Thursday (July 13) in Nashville federal court, Allen, 38, lodged his first formal responses to the two abuse lawsuits, which have seen the once-rising country star dropped from his label and removed from festival lineups. The first case claims he repeatedly assaulted an unnamed “Jane Doe” on his management team; the second claims he assaulted another woman in a Las Vegas hotel room and secretly recorded it.
Allen’s lawyers went beyond simply denying those allegations in Thursday’s filings, bringing a countersuit against each accuser and seeking unspecified monetary damages. In the case of Allen’s former day-to-day manager, the attorneys claim that she defamed him by making “deliberate, intentional, malicious, and willful” statements to Variety beyond what is included in the lawsuit. Variety broke the news of her lawsuit in early May.
“Throughout the Variety article, Jane Doe made several untruthful statements which painted Allen and Doe’s consensual affair as nonconsensual sexual misconduct,” his lawyers claim. “Allen’s reputation and relationships within the entertainment industry have also been severely damaged as a result Jane Doe’s statements in the Variety article.”
(Variety, which is owned by the same parent company as Billboard, is not named as a defendant or accused of any wrongdoing.)
In responding to the second lawsuit, in which the woman claims that Allen surreptitiously filmed their sexual encounter, his lawyers say that she had explicitly consented to the recording — and that she then unfairly took his phone with her when she left the hotel. In technical terms, they accuse her of “conversion,” a civil tort similar to theft that involves someone taking property that doesn’t belong to them.
“By taking his camera phone without permission, Jane Doe 2 wrongfully exerted a distinct act of dominion over Allen’s personal property,” his lawyers write.
The attorney representing both of Allen’s Jane Doe accusers, Elizabeth Fegan of the law firm Fegan Scott, did not immediately return a request for comment on Thursday morning.
In a statement, Allen tells Billboard that he has “engaged with a legal team to proceed with an appropriate course of action,” saying he has done so in order to “protect my reputation and refute these claims that have caused severe damage to my family, mental health, and business.”
“As the son and brother of rape victims, and the father of daughters, these false claims are extremely hurtful to me and everyone around me,” Allen said. “These false allegations have caused me to lose a vast number of business and endorsement opportunities that I worked extremely hard for. These false allegations have also not only harmed me, but have caused severe financial damage to my band, my team, and their families.”
A Rapid Fall
In the wake of the two lawsuits, Allen’s once-flourishing career has cratered.
After signing with BMG’s Stony Creek/BBR imprint in 2017, Allen’s first two singles, “Best Shot” and “Make Me Want To,” reached No. 1 on Billboard’s Country Airplay chart, while he scored a third No. 1 in 2021 with “Freedom Was a Highway” (with Brad Paisley). “Down Home,” the first single from his 2022 album, Tulip Drive, reached No. 2. He also performed for Garth Brooks at the superstar’s Kennedy Center Honors induction in 2021, and with Elton John on the legend’s 2021 album The Lockdown Sessions.
But following the accusations, his label, booking agency (UTA), former publicist (Full Coverage Communications) and management company (The Familie) have all suspended or dropped him. His live appearances have also dried up, including a June 11 performance during CMA Fest and several other summer festival gigs.
In addition to the career fallout, Allen has also separated from his wife, Alexis Gale, who is pregnant with their third child. The couple announced the news on social media, just weeks before the first lawsuit was filed and the accusations were made public.
That first case, filed on May 11, alleged that Allen had “manipulated and used his power” over the plaintiff, who was employed by his then-management company Wide Open Management, in order to “sexually harass and abuse her” over a period of 18 months from 2020 to 2022.
“Plaintiff expressed in words and actions that Jimmie Allen’s conduct was unwelcome, including pushing him away, sitting where he could not reach her, telling him she was uncomfortable and no, and crying uncontrollably,” the woman’s lawyers wrote in the complaint. “However, Allen made clear that plaintiff’s job was dependent on her staying silent about his conduct.”
Allen Responds
In Thursday’s response to those claims, Allen tells a different story — one of “a consensual sexual relationship” in which encounters were “initiated by both Allen and Doe,” an affair that he says he ended in the fall of 2022 to “focus on repairing his relationship with his wife.” He says the first time he heard any claim about “improper conduct” was in November 2022, when he was contacted by her attorney.
In counter-suing for defamation, Allen’s lawyers focus on Doe’s statements made to Variety rather than the actual claims in her lawsuit — likely because it’s harder to bring such claims over statements made as part of a judicial proceeding. The article, Allen says, contained “several pieces of information that were not included in her complaint,” as well as statements that “disparaged” him, including calling him a “threat.”
“The statements … caused great damage to Allen, including impairment of his reputation and standing in the community, personal humiliation, and mental anguish and suffering,” his lawyers write. In technical terms, they also accuse Doe of invasion of privacy, inflicting emotional distress, and interference with business relations.
The second case against Allen, filed on June 9, was brought by a woman identified as Jane Doe 2, who accused him of battery, assault and other wrongdoing over a July 2022 incident at the Cosmopolitan Hotel in Las Vegas. Though she had “willingly joined Allen in the bedroom,” she claimed she had “repeatedly told him she did not want him to ejaculate inside her” because she was not on birth control, but that Allen had done so anyway.
The June lawsuit also claimed that, after the sexual encounter, Doe 2 discovered a cell phone in a closet of the hotel room, “focused on the bed, recording the scene.” She alleged that she had “not consented to being recorded” and that, after failing to convince Allen to allow her to unlock the phone to delete the recordings, she had taken it with her and later passed it along to the Las Vegas Police Department.
In his response to that lawsuit on Thursday, Allen admits to having “unprotected sex” with Doe, but claims that he “did not ejaculate during the encounter.” He also acknowledged recording the incident but, crucially, alleges that he secured her explicit permission to do so while the pair kissed on a hotel balcony.
“Before the encounter escalated further, Allen asked Jane Doe 2 if it was OK for him to set up his camera phone to record their encounter. Jane Doe 2 agreed,” Allen’s lawyers wrote of the incident. “Allen left the balcony and set up his camera phone in plain view at the foot of the bed. Allen and Jane Doe 2 began to engage in a consensual sexual encounter in view of the camera phone.”
When he awoke to find that Doe 2 had “left the hotel room with his camera phone,” Allen claims that he texted her, to which she allegedly responded that she “did not approve of him recording their encounter.” When she “demanded the passcode to Allen’s camera phone” so that she could further delete the recording, he says he declined to offer it because the phone “contained several pieces of confidential personal and business information.” He says he offered to “delete the video to her satisfaction” if she returned the phone, but that she did not do so.
“Allen still does not have possession of the camera phone,” his lawyers write.
(When the second case was filed in June, a spokesperson for the Las Vegas Metropolitan Police Department [LVMPD] confirmed to Billboard that “a report was completed” over the incident, but did not provide any additional information. A request for any public records linked to the report was unsuccessful.)
Former Manager Wants Out
Allen wasn’t the only defendant to file his response to the abuse lawsuits this week. On Tuesday, his former management company Wide Open Music filed a motion seeking to be dismissed from the first case, which claimed the company did not do enough to protect Allen’s day-to-day manager from his abusive behavior and had then fired her when she complained about it.
In its response, attorneys for Wide Open Music (which parted with Allen in October 2022) expressed dismay at the woman’s allegations about Allen’s conduct, but said the company itself could not be held legally responsible.
“Undoubtedly, if the actions she claims Allen took against her actually occurred, they are deplorable and clearly inappropriate,” the company’s lawyers wrote. “Despite the nature of the allegations, however, Plaintiff has not stated any plausible claims … that [Wide Open Music] should be held liable, either for its client’s misconduct or independently of it.”
Following this week’s new filings, the Jane Doe plaintiffs will file their own responses in the months ahead, both to Allen’s new accusations and to Wide Open Music’s motion to be dismissed from the case. The case will then head toward more litigation and an eventual jury trial, but it could be years before such a courtroom showdown is reached.
In his statement Thursday, Allen seemed intent on getting to such a trial: “As the legal process runs its course, I look forward to the opportunity to clear my name.”
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.
Merck Mercuriadis‘ publicly-traded Hipgnosis Songs Fund Ltd reported a gross revenue decline for its fiscal year ended in March due to one-time charges and a tough year-ago comparison, but said adjusted revenues in 2022 grew on strong growth in streaming revenues and the return of live performances.
Gross revenues for Hipgnosis Songs Fund declined by 11.5% to $177.3 million for the year ending March 2023 compared to the year-ago period, mainly due to two large, non-recurring adjustments related to usage accrual and other factors. Net revenues also declined to $147.2 million from $168.3 million a year ago.
Stripping out those one-time items and taking into consideration a $16.1 million benefit Hipgnosis expects to gain from the CRB III retroactive accrual, the fund’s underlying revenues rose $12.9 million, chief financial officer Chris Helms said during an investor presentation discussing the results.
The fund’s pro-forma annual revenue (PFAR), which reflects revenue earned from royalty statements and strips out impacts from new catalog acquisitions and one-time items — the metric executives say best reflects the fund’s revenue performance — rose by 12.1% to $130.2 million for the year ending December 2022, rising strongly for catalogs aged younger and older than 10 years.
Overall, streaming income rose 14.8% to generate $52.1 million for the fund, while syncronization income rose 24.7% to make up $19.4 million and performance income rose 9% to $30.8 million, all compared to the year ago period. Mechanical income edged 2% lower to 4.9 million, while digital downloads made up $2.5 million and other publishing income comprised $3.9 million of revenues.
The fair value of the fund’s portfolio rose 4% to $2.8 billion, and the operative net asset value broken down by share price rose 3.6% to $1.9153, driven by revenue exceeding the fund’s independent valuer’s forecast.
Nonetheless, Hipgnosis Songs Fund’s operative EPS for the period is negative 7.41 cents, and adjusted earnings per share is 4.12 cents, down nearly 43% compared to the year leading up to March 2022.
Mercuriadis said this was the company’s “best revenue performance since coming to market in 2018,” reflecting the fund’s high-quality catalog and active song management.
“The songs in our portfolio we’ve bought carefully and we’ve bought well,” Mercuriadis said during the investor presentation. “We have a relatively small portfolio with a very high rate of success. We optimize revenues and collect them as efficiently and cost-effectively as we can.”
Mercuriadis pointed to major synch wins Hipgnosis had from four songs Rihanna sang during the SuperBowl Halftime Show, including “Birthday Cake,” “All of the Lights,” and “Umbrella,” which Hipgnosis from its acquisition of rights held by The-Dream, J eff Bhasker and Tricky Stewart. Other major placements included some on The Masked Singer, where Bon Jovi’s Richie Sambora performed Fleetwood Mac’s “Go Your Own Way” and “Brass In Pocket” by The Pretenders.
Billboard and The Financial Times reported on Wednesday that Hipgnosis has selectively shopped around a portfolio of non-core assets, possibly with the aim of raising money to buy back shares and shore up the fund’s stock price.
Mercuriadis declined to comment on whether a portfolio was being shopped or what assets it could contain, saying the fund is exploring its options with shareholders and the board.
The fund’s adjusted operating costs were 21.2% lower for the period to $29.5 million, due to lower advisory fees “as a function of the company’s lower share price during the year,” reduced administration, legal and professional fees, and lower aborted deal costs, the CFO Helms said.
The company also recognized a $43.8 million catalog performance provision or bonus relating to 6 catalogs. The provision will be paid out contingent on performance hurdles being met by the catalogs, Helms said, declining to detail the targets, which were detailed in the acquisition agreements.
Here are the key points from HSF’s disclosure:
Gross revenues declined by 11.5% to 177.3 million for the year ending March 2023 compared to 2022, due to two large, one-off adjustments. Stripping out those two non-recurring costs, underlying revenues rose by 10.9%.
PFAR rose 12.1% to $130.2 million.
Hipgnosis operative net asset value per share rose 3.6% $1.9153
Syncronization revenues rose 24.7% to 19.4 million.
Streaming revenues rose 14.8% to 52.1 million
Performance income increased by 9% to 30.8 million
Radio broadcaster Audacy has begun talks with its lenders to restructure the company’s debt as a soft advertising market clouds its long-term outlook. The discussions, first reported by the Wall Street Journal, follow the May 10 statement by chairman/president/CEO David Field during the company’s first quarter earnings call that Audacy was “finalizing its preparation to […]
Universal Music Group general counsel/executive vp of business and legal affairs, Jeffery Harleston, spoke as a witness in a Senate Judiciary Committee hearing on AI and copyright on Wednesday (July 12) to represent the music industry. In his remarks, the executive called for a “federal right of publicity” — the state-by-state right that protects artists’ likenesses, names, and voices — as well as for “visibility into AI training data” and for “AI-generated content to be labeled as such.”
Harleston was joined by other witnesses including Karla Ortiz, a conceptual artist and illustrator who is waging a class action lawsuit against Stability AI; Matthew Sag, professor of artificial intelligence at Emory University School of Law; Dana Rao, executive vp/general counsel at Adobe; and Ben Brooks, head of public policy at Stability AI.
“I’d like to make four key points to you today,” Harleston began. “First, copyright, artists, and human creativity must be protected. Art and human creativity are central to our identity.” He clarified that AI is not necessarily always an enemy to artists, and can be used in “service” to them as well. “If I leave you with one message today, it is this: AI in the service of artists and creativity can be a very, very good thing. But AI that uses, or, worse yet, appropriates the work of these artists and creators and their creative expression, their name, their image, their likeness, their voice, without authorization, without consent, simply is not a good thing,” he said.
Second, he noted the challenges that generative AI poses to copyright. In written testimony, he noted the concern of “AI-generated music being used to generate fraudulent plays on streaming services, siphoning income from human creators.” And while testifying at the hearing, he added, “At Universal, we are the stewards of tens of thousands, if not hundreds of thousands, of copyrighted creative works from our songwriters and artists, and they’ve entrusted us to honor, value and protect them. Today, they are being used to train generative AI systems without authorization. This irresponsible AI is violative of copyright law and completely unnecessary.”
Training is one of the most contentious areas of generative AI for the music industry. In order to get an AI model to learn how to generate a human voice, a drum beat or lyrics, the AI model will train itself on up to billions of data points. Often this data contains copyrighted material, like sound recordings, without the owner’s knowledge or compensation. And while many believe this should be considered a form of copyright infringement, the legality of using copyrighted works as training data is still being determined in the United States and other countries.
The topic is also the source of Ortiz’s class action lawsuit against Stability AI. Her complaint, filed in California federal court along with two other visual artists, alleges that the “new” images generated by Stability AI’s Stable Diffusion model used their art “without the consent of the artists and without compensating any of those artists,” which they feel makes any resulting generation from the AI model a “derivative work.”
In his spoken testimony, Harleston pointed to today’s “robust digital marketplace” — including social media sites, apps and more — in which “thousands of responsible companies properly obtained the rights they need to operate. There is no reason that the same rules should not apply equally to AI companies.”
Third, he reiterated that “AI can be used responsibly…just like other technologies before.” Among his examples of positive uses of AI, he pointed to Lee Hyun [aka MIDNATT], a K-pop artist distributed by UMG who used generative AI to simultaneously release the same single in six languages using his voice on the same day. “The generative AI tool extended the artist’s creative intent and expression with his consent to new markets and fans instantly,” Harleston said. “In this case, consent is the key,” he continued, echoing Ortiz’s complaint.
While making his final point, Harleston urged Congress to act in several ways — including by enacting a federal right of publicity. Currently, rights of publicity vary widely state by state, and many states’ versions include limitations, including less protection for some artists after their deaths.
The shortcomings of this state-by-state system were highlighted when an anonymous internet user called Ghostwriter posted a song — apparently using AI to mimic the voices of Drake and The Weeknd –called “Heart On My Sleeve.” The track’s uncanny rendering of the two major stars immediately went viral, urging the music business to confront the new, fast-developing concern of AI voice impersonation.
A month later, sources told Billboard that the three major label groups — UMG, Warner Music Group and Sony Music — have been in talks with the big music streaming services to allow them to cite “right of publicity” violations as a reason to take down songs with AI vocals. Removing songs based on right of publicity violations is not required by law, so the streamers’ reception to the idea appears to be voluntary.
“Deep fakes, and/or unauthorized recordings or visuals of artists generated by AI, can lead to consumer confusion, unfair competition against the artists that actually were the original creator, market dilution and damage to the artists’ reputation or potentially irreparably harming their career. An artist’s voice is often the most valuable part of their livelihood and public persona. And to steal it, no matter the means, is wrong,” said Harleston.
In his written testimony, Harleston went deeper, stating UMG’s position that “AI generated, mimicked vocals trained on vocal recordings from our copyrighted recordings go beyond Right of Publicity violations… copyright law has clearly been violated.” Many AI voice uses circulating the internet involve users mashing up one previously released song topped with a different artist’s voice. These types of uses, Harleston wrote, mean “there are likely multiple infringements occurring.”
Harleston added that “visibility into AI training data is also needed. If the data on AI training is not transparent, the potential for a healthy marketplace will be stymied as information on infringing content will be largely inaccessible to individual creators.”
Another witness at the hearing raised the idea of an “opt-out” system so that artists who do not wish to be part of an AI’s training data set will have the option of removing themselves. Already, Spawning, a music-tech start-up, has launched a website to put this possible remedy into practice for visual art. Called “HaveIBeenTrained.com,’ the service helps creators opt-out of training data sets commonly used by an array of AI companies, including Stability AI, which previously agreed to honor the HaveIBeenTrained.com opt-outs.
Harleston, however, said he did not believe opt-outs are enough. “It will be hard to opt out if you don’t know what’s been opted in,” he said. Spawning co-founder Mat Dryhurst previously told Billboard that HaveIBeenTrained.com is working on an opt-in tool, though this product has yet to be released.
Finally, Harleston urged Congress to label AI-generated content. “Consumers deserve to know exactly what they’re getting,” he said.
A flurry of senior executives and staff members have left posts at Hipgnosis Song Management in recent months, as the company credited with popularizing songs as an asset class explored selling assets to shore up investor confidence ahead of a key vote this fall.
Since March, employees including Hipgnosis’ chief music officer Ted Cockle, along with the global heads of sync operations and song management and an executive vp of digital and innovation, have announced plans to leave the company, according to posts employees shared on LinkedIn and a statement from Hipgnosis.
The staff turnover comes as sources say the roughly 5-year-old Hipgnosis Songs Fund Ltd. has been shopping a package of assets that it apparently hopes to sell before its first continuation vote, where investors will be asked to decide whether the publicly traded trust should continue to operate under the management of founder Merck Mercuriadis or liquidate all assets.
SONG, the fund’s ticker on the London Stock Exchange, is down about 14% year to date and down 28% since it went public in July 2018. The stock was worth 0.75 British pounds ($0.97) on Wednesday (July 12).
At that price, SONG is worth less than half of its $2.2 billion operative net asset value, a discount that sources say has prompted Mercuriadis to explore selling some of the fund’s non-core assets.
For months, analysts at Jefferies and other investment banks have called on Hipgnosis to sell some of the fund’s non-core songs to raise cash to shore up the share price. The Financial Times reported Wednesday (Juy 12) that some Hipgnosis Songs Fund investors also want the fund to sell non-core assets to generate cash for buying back stock.
In addition to providing the fund’s managers with an arbitrage opportunity to boost the stock price, it could leave the company with enough extra cash to issue shareholders a special dividend — a sweetener issued ahead of the fund’s continuation vote at its next annual meeting in September.
If investors vote not to continue with the fund and to liquidate its assets, Mercuriadis and Hipgnosis Song Management — which is majority owned by private equity firm Blackstone — would likely have the right to bid on the assets in the fund; or if it goes up for auction, Mercuriadis, with Blackstone, likely has matching rights. Sources speculate that Mercuriadis and Blackstone would want to buy back the portfolio’s most iconic music assets, minus the non-core assets — the package of assets that has been selectively shopped around and which sources say includes copyrights from The-Dream and The Outfield — for their private, Blackstone-backed fund, Hipgnosis Songs Capital.
Hipgnosis Songs Fund will report results for the year ending March 31 on Thursday. In December, the company reported a 7.5% rise in revenues amid a “challenging environment” that “fundamentally undervalues the company,” founder Mercuriadis said during a shareholder meeting discussing the results.
On Wednesday, Hipgnosis announced Cockle, its chief music officer will be leaving the company. A former Universal Music Group executive known for nurturing the careers of Scottish superstar Lewis Capaldi, Bastille, Emeli Sandé and others, Cockle joined Hipgnosis Songs in 2020 as president.
“Given our decision to focus our marketing in the US, Ted Cockle, our Chief Music Officer, will not be moving long term with the Company,” Mercuriadis said in a press release. “He’ll work on the transition to America over the coming weeks. I would like to thank Ted for all he has done for Hipgnosis and I hope there will be opportunities for Ted and Hipgnosis to work together again in the future.”
Last week, Tom Stingemore, Hipgnosis Song Management’s global president of sync & creative, wrote on LinkedIn he was leaving the company after joining in 2021 to build its sync and creative operation. Hipgnosis’ synch team has played a key role in getting the songs that it acquires to generate more money than the often-high price Hipgnosis paid for them, and the team has been successful. In December, Hipgnosis Songs Fund reported sync revenues for the first half of the company’s reporting year rose 32% to 9.78 million compared to $7.41 million a year ago.
“As the division is now fully up & running, my mission is complete,” Stingemore wrote, adding that he may “go & do it all over again” as he works to “plot my next adventure.”
Cockle and Stingemore’s departures follows several other senior staff members. In late May, Nick Jarjour announced on LinkedIn he had left his role as global head of song management at Hipgnosis Songs Fund (a source who declined to speak on the record says his departure occurred six months ago); and in March, Tony Barnes’ announced he would be leaving his role as executive vp of digital & innovation at Hipgnosis Songs Fund in the coming months to lead the metaverse gaming company he co-founded, Karta. Barnes is currently still employed by Hipgnosis.
Stingemore, Jarjour and Barnes did not respond to requests for comment for this story.
Hipgnosis continues to hire, announcing two new hires in Hipgnosis Song Management, a separate company from the publicly traded fund, on Wednesday.
Danny Bennett, son of iconic singer Tony Bennett, joined as executive vp leading global marketing and audience development. Bennett joined Hipgnosis from the Verve Label Group, a Universal Music Group company, where he was chief executive officer.
Sara Lord was hired as executive vp content creation from Concord Music, and Patrick Joest, who joined Hipgnosis in 2021, was promoted to the role of head of synchronisation.
In the press release announcing the hires, Mercuriadis said Hipgnosis has continuously invested in new hires and upgrading systems over the past 18 months.
“These appointments demonstrate our commitment to investing in our capabilities and team in order to grow the value of our catalogues, and, most importantly, bring our songs to new audiences around the world,” Mercuriadis said.
Continuation Vote
At Hipgnosis Songs Fund’s annual meeting in September, Mercuriadis’s young company will face one of its biggest tests yet.
In the United Kingdom, publicly traded trusts are required to hold regular continuation votes, where shareholders vote on whether an investment trust should continue in its current form. At this continuation vote, shareholders can choose to stay the course, change managers or liquidate the fund.
Analysts at the investment bank Jefferies issuesd a buy rating on SONG last month, upgrading from their previous “hold” rating, because they said they believe Hipgnosis may sell some non-core assets from its catalog, which would provide a catalyst to narrow its current discount to net asset value ahead of the vote.
However, the continuation vote comes at an inopportune time, only a couple months after Hipgnosis Song Management and Mercuriadis were publicly rebuked by Rod Stewart, who said he called off a deal to sell some his music assets to the company.
In an unusual move, Stewart issued a statement that said, “It’s become abundantly clear after much time and due diligence that this was not the right company to manage my song catalog, career or legacy.”
Additional reporting by Ed Christman
In the first half of 2023, an average of 112,000 new tracks were added daily to digital service providers such as Spotify and Apple Music, Luminate revealed in its 2023 midyear report Wednesday (July 12). That’s an increase of 19.9% from the 93,400 new tracks uploaded daily to digital platforms in the first half of 2022.
At the current rate, digital services will add around 41 million tracks this year, about 7 million more than the 34.1 million tracks added in 2022 and more than double the 16.4 million tracks added in 2018.
The flood of tracks did not bring a commensurate increase in listening, however. While the number of tracks uploaded to digital platforms grew 19.9%, audio on-demand streaming rose only 13.5%. That disconnect between supply and on-demand streams is not unusual. In 2022, on-demand streams increased 12.2% while average daily new tracks grew 12%. But in 2021, on-demand streams grew 9.9% while average daily new tracks grew 18%.
Low barriers to recording and distributing digital music give unknown artists a chance to compete against established, big-budget releases. Major labels — some of whom, like Universal Music Group, have endorsed a system that rewards their music with better royalty payouts — accounted for just 3.3% of new tracks added to digital platforms through June 30. Streaming services are filled with music not just from independent labels — who may be distributed by companies owned by the majors — but also independent musicians, bedroom producers using inexpensive digital audio workstations and a variety of “functional music,” a term used for generic music that often fills streaming playlists aimed at helping people sleep, relax or study.
The possibility that 112,000 new tracks per day will seem low in a few years is causing consternation in some quarters of the music business. A new generation of AI tools will further reduce the barriers to creating music. Just as generative AI programs such as Midjourney and DALL-E-2 create images based on text prompts, AI will instantly create songs without the need for musical expertise or technical ability. “We see a huge market with many billions of original unique songs, similar to photos,” Alex Mitchell, CEO of AI music platform Boomy, told Billboard earlier this year. Such a scenario had previously prompted Universal Music Group CEO Lucian Grainge to warn against “a vast and unnavigable number of tracks” of “lower-quality functional content” created to game algorithms and “divert royalties.”
While independently released music and AI content chips away at major labels’ market shares, the majors continue to produce hits that stand out in an increasingly crowded field. The most popular albums and tracks fared well in the first half of 2023. The top 10 albums took a 2.49% share of equivalent album units (EAUs), up from 2.18% in the first half of 2022. That improvement can be chalked up to Morgan Wallen, whose album One Thing at a Time had 3.31 million EAUs — 67% greater than the No. 2 album, SZA’s SOS. Excluding the No. 1 albums from each half-year period, the remaining top 10 albums’ share of 1.88% in the first half of 2023 was almost equal to the 1.85% in the prior-year period.
Led by Wallen’s “Last Night” and SZA’s “Kill Bill,” the most popular tracks also increased their share of total streams. The top 10 tracks at the midway point of 2023 owned a 0.63% share of on-demand audio streams, well above their 0.5% share in the prior-year period.