Business
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Independent music publisher Primary Wave Music has partnered with the estate of country/folk singer-songwriter Jerry Jeff Walker on Walker’s music publishing catalog, recording copyrights and artist royalties. The partnership provides the Walker estate access to Primary Wave’s marketing team and publishing infrastructure to work on new marketing, branding, digital, synch opportunities and film/TV projects. The deal also features an agreement for Walker’s recorded masters, in partnership with his label Tried & True Music, to be released and distributed through Sun Records; Sun Records will provide overall catalog marketing strategy, including streaming, social media marketing and physical releases. The deal includes some of Walker’s biggest hits, including “Mr. Bojangles,” “Railroad Lady” and “Sangria Wine.” – Jessica Nicholson
AI-powered social music app Hook partnered with Glassnote Records to add new tracks from artists including Tors, bby, Hayes Warner and Dylan Cartride to its library, with more acts to be added soon. Glassnote’s roster also includes Mumford & Sons, Childish Gambino and Phoenix. Hook allows users to remix existing songs by speeding them up, slowing them down, mashing them up with other songs and more to post on social platforms, effectively opening up another revenue stream for participating artists. In a statement, Glassnote founder/president Daniel Glass called Hook “a comprehensive solution to the use of remixed music across social platforms in a way that emphasizes artists’ control and compensation.”
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Leading music licensing platform Slipstream acquired Anthem Entertainment‘s production music businesses, including U.S.-based Jingle Punks and 5 Alarm Music and U.K.-based Cavendish Music. The acquisition encompasses more than 650,000 tracks along with music production capabilities. The purchase was made possible by financing and expertise offered by Pollen Street Capital, while Moelis & Company served as the exclusive financial advisor to Anthem on the negotiation. The acquisition represents a full-circle moment for Slipstream co-founders Dan Demole and Jesse Korwin; Demole co-founded Jingle Punks and previously served as president of Anthem Music Group, while Korwin served as Jingle Punks’ MD. Anthem Entertainment will make an investment in Slipstream as part of the deal.
Reactional Music, which allows video game developers to create interactive music soundtracks in their gaming titles, struck a global licensing partnership with Naxos, a leading rights holder of classical and regional music. The two companies are also exploring a collaboration on the composition of interactive soundtracks that would allow gamers to personalize Naxos-owned music in real time while playing, without affecting the master recording. Reactional has previously struck licensing partnerships with companies including Beggars Group, Hopeless Records, Hipgnosis Music Group and production music groups like APM Music, Soundstripe and Alibi.
Global investment firm CVC has invested alongside KKR to support live entertainment group Superstruct Entertainment in its next phase of development. KKR acquired Superstruct, which owns and operates more than 80 music festivals across Europe and Australia, in June 2024. CVC’s previous investments include Stage Entertainment, Formula One, Women’s Tennis and LaLiga.
SoundExchange and the Societies’ Council for the Collective Management of Performers’ Rights (SCAPR) announced that SoundExchange has become the first non-member collective management organization (CMO) to be able to create and issue international performer numbers (IPNs) — unique universal identifiers associated with performers, created and administered by SCAPR, that are used to identify them in data exchanges with other CMOs globally. Through the deal, SoundExchange will create and assign SCAPR’s IPNs to further link performers to their recordings, thereby improving identification of their creative contributions. “IPNs represent another tool in our expanding arsenal helping to get the right people paid the royalties they deserve,” said SoundExchange president/CEO Michael Huppe in a statement.
Downtown-owned business to business distributor FUGA partnered with Manila, Philippines-based management and production company ASINTADA while announcing new hires across the APAC region, including Noorcahyo Istyabudi and Jaya Singh, who will lead business development in Indonesia and South Asia, respectively. FUGA will provide global distribution and bespoke marketing services to ASINTADA, which will also have access to FUGA’s trends and analytics platform. ASINTADA represents some of the biggest hip-hop artists in the region, including Filipino rapper Gloc-9 and rising OPM (original Pilipino music) talent including Shanti Dope, Flow G and Skusta Clee. FUGA also announced a partnership with the Jesuit Communications Foundation, the media arm of the Philippine Province of the Society of Jesus; Crown Studios Inc., a full-service talent and management agency; and record label and production house 314 Studios.
Global children’s audio platform Yoto secured a $15 million funding package from HSBC UK‘s Growth Lending Fund to support its international growth. The funding will allow Yoto, which is based in the U.K. and currently operates in five countries, to extend its reach beyond those markets. Yoto additionally plans to expand the manufacture of its audio players and content cards to satisfy growing demand. The company says it expects to double its revenue with the funding.
Legendary hip-hop producer Madlib has filed a lawsuit against his former manager Eothen “Egon” Alapatt, alleging the executive abused his role to claim undue profits from Madlib’s music and merch companies, among other accusations.
In a complaint filed Thursday (Oct. 31) in Los Angeles court, attorneys for Madlib say Alapatt began managing Madlib’s business affairs around 2010 when the famed producer left his deal with Stones Throw Records — where Alapatt worked as an executive — in an effort to “own and control his music.” Around that time, the complaint alleges that Alapatt was fired from Stones Throw.
According to the lawsuit, Madlib trusted Alapatt to set up and manage two business entities (“Madicine Show” for his music interests and “Rapp Cats” for his merchandise) in Madlib’s name, with profits from the businesses to be shared between the two parties. However, Madlib allegedly discovered only recently that Alapatt was not only failing to properly run those businesses but was “also engaged in rank self-dealing, concealing information from and repeatedly breaching his duties to Madlib, and otherwise engaging in persistent and pervasive mismanagement.”
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The complaint further alleges Alapatt abused his position by taking “a fee off the top” of all income generated by Madlib’s label, Madicine Show, and that he “refused to account to Madlib” about his compensation and failed to provide any written agreements to the producer. Madlib’s lawyers additionally claim that Alapatt refused to allow an audit of his own business, Now-Again — which they say Alapatt inserted under false pretenses as a go-between for Madicine Show and its distributor, Ingrooves — to ascertain what proceeds it earned from Madicine Show.
Elsewhere, the complaint alleges that Alapatt “directed a single lawyer and single accountant to represent him” as well as Madlib, Madicine Show, Rapp Cats and Now-Again without Madlib’s “informed consent” and then “directed that lawyer and that accountant to refuse to cooperate with Madlib” and the new professional team Madlib had assembled after his relationship with Alapatt went south.
The complaint states that Madlib only discovered the extent of Alapatt’s alleged malfeasance in April 2023, when he finally managed, through “forensic accounting,” to learn more about the financials of Madicine Show and Rapp Cats during the period of 2018 to mid-2022. His lawyers claim this revealed “several accounting irregularities” and “a lack of any backup documentation” for several hundred thousand dollars in “‘consulting,’ ‘commissions,’ ‘fees’ or ‘reimbursements’” for Alapatt as well as a second named defendant, Jeffrey Carlson, a.k.a. Jeff Jank — an alleged associate of Alapatt’s who formerly worked as an art director at Stones Throw and is described in the complaint as “a member of Rapp Cats.”
The complaint further claims that Alapatt took “tens of thousands of dollars for personal expenses” from the two business entities, and that there was no documentation of employee payroll, inventory or artist royalty statements.
Alapatt also allegedly “captur[ed] half of Madlib’s producer royalties and advances for himself” while locking Madlib out of his Ingrooves, Apple Music, Bandcamp, YouTube and Facebook accounts; the complaint also claims he locked Madlib out of the Instagram account for his trademarked alter-ego Quasimoto, a cartoon character that the producer used throughout his career for merchandise and music.
“Madlib has since demanded that Madicine Show and Rapp Cats be wound up and dissolved and that any contractual relationship with those entities…be terminated,” the complaint reads. “[Alapatt] refuses to do so.” Instead, it claims, Alapatt told Madlib that he’s welcome to “‘buy him out’ of his interest in those entities or the underlying intellectual property.”
Thursday’s lawsuit is the second lawsuit to be filed against Alapatt over the past year. Last October, the manager was also sued by the estate of Madlib’s late collaborator MF DOOM for allegedly stealing the rapper’s notebooks full of lyrics. In response to that suit, attorneys for Alapatt called the case “baseless and libelous,” and characterized it as “the continuation of a year-long smear campaign.”
Madlib’s team is seeking a jury trial and a judicially supervised wind-up and dissolution for Madicine Show and Rapp Cats, “to include a full and complete accounting of the assets and liabilities of the entities [and] a determination of any unauthorized remuneration,” among other requests. Madlib is also seeking damages from Alapatt and Now-Again.
Alapatt and his attorney did not immediately respond to Billboard‘s requests for comment. Carlson also did not immediately return a request for comment.
Young Thug was sentenced to 15 years probation and no prison time after pleading guilty in the long-running criminal case accusing him of leading a violent Atlanta street gang, a stunning end to a legal saga that rocked the music industry.
After days of closed-door negotiations with Fulton County prosecutors, Thug (Jeffery Williams) refused Thursday (Oct. 31) to take a plea deal that would have sent him home immediately. Instead, he opted for a non-negotiated guilty plea, leaving his fate in the hands of Judge Paige Reese Whitaker.
The move paid off: Later on Thursday, Whitaker sentenced Thug to only 15 years probation with no time to be served in prison, meaning that he would be set free on Thursday after more than two years in custody. In doing so, she urged the Grammy-winning rapper to use his platform to set a good example for young people in the future.
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“I know you’re talented, and if you choose to continue to rap, you need to try to use your influence to let kids know that is not the way to go and that there are ways out of poverty besides hooking up with the powerful guy at the end of the street selling drugs,” Whitaker said.
Thug’s guilty plea marks a key turning point in a criminal case that has captivated the music industry for more than two years. Pitting prosecutors in America’s rap capital against one of hip-hop’s biggest stars, the YSL case has raised big questions — about the fairness of the criminal justice system; about violent personas in modern hip-hop; and about prosecutors using rap lyrics as evidence.
Standing before the judge at a tense hearing Thursday, Thug pleaded guilty to several counts, including possession of drugs and firearms, and pleaded no contest to several others, including the core racketeering accusations that alleged he was the leader of a criminal gang.
Without the negotiated plea deal, prosecutors recommended a far harsher sentence than they had offered: a whopping 45 years, with 25 served in prison and 20 years on probation. Thug’s attorney, Brian Steel, then offered an extended rebuttal to the state’s claims and urged leniency. Finally, Thug himself spoke, saying he took “full responsibility for my crimes” and pleading with the judge to see that he has “a good heart.”
“I just hope that you find it in your heart to allow me to go home and be with my family and just do better as a person,” the artist told the judge.
After she handed down her sentence, the judge offered a quick warning to Thug before adjourning for the day: “Good luck to you. And there better be no violations, but if there are any, you’re coming back to see me.”
“Yes, ma’am,” Thug said back.
Thursday’s guilty plea came days after the trial was thrown into chaos by botched testimony from a state’s witness, sparking talk of a mistrial. Since then, prosecutors and defendants have struck a slew of deals rather than risk starting over from scratch in the trial, which has already stretched across 10 months of jury selection and 11 months of testimony to become the longest-ever in state history.
Thug, a chart-topping rapper and producer who helped shape the sound of hip-hop in the 2010s, was arrested in May 2022 along with dozens of others. In a sweeping indictment, prosecutors alleged that his “YSL” — nominally a record label standing for “Young Stoner Life” — was also a violent gang called “Young Slime Life” that had wrought “havoc” on the Atlanta area for nearly a decade.
The case, built around Georgia’s Racketeer Influenced and Corrupt Organizations (RICO) law, claimed that YSL had committed murders, carjackings, drug dealing and many other crimes. And prosecutors alleged that Thug was “King Slime,” operating as a criminal boss amid his rise to fame. “It does not matter what your notoriety is, what your fame is,” Fulton County District Attorney Fani Willis said at the time. “We are going to prosecute you to the fullest extent of the law.”
Thug strongly denied the accusations and has long maintained his innocence. On the opening day of the trial, his attorney Steel argued that despite a difficult local upbringing, Thug “doesn’t even know most of the people in this indictment” and had no reason to run a criminal organization.
From the start, the YSL case has been beset by delays. Starting in January 2023, it took an unprecedented 10-month process just to pick a jury. After the trial itself got underway in November 2023, prosecutors meandered through a vast list of witnesses that included a stunning 737 names. There was also a jailhouse stabbing of one defendant, as well as a bizarre episode over a secret meeting with a witness that resulted in the presiding judge being removed from the case.
While the slow-moving trial dragged on, Thug sat in jail for more than two years, repeatedly denied release on bond over fears that he might intimidate witnesses.
Though Thug is now going home, the YSL case is not over.
Attorneys for co-defendants Deamonte “Yak Gotti” Kendrick and Shannon Stillwell said their clients had refused plea deals on Thursday, meaning they will continue to face trial and move toward an eventual verdict. Kendrick and Stillwell stand accused of carrying out the 2015 murder of rival gang leader Donovan Thomas, a crime that figures prominently in the prosecution’s case.
Boyd Muir, who serves as executive VP/CFO/president of operations at Universal Music Group (UMG), has been promoted to COO, the company announced Thursday (Oct. 31). Muir, who has been the company’s CFO since 2010, will hold the titles of both CFO and COO while UMG undergoes its search for a replacement. “Boyd’s done an outstanding […]
On Sept. 27, indie labels and distributors around the world received a letter from Merlin, the coalition that negotiates their licenses with TikTok and other digital services. “With no warning, TikTok walked away before negotiations even began… they do not want to renew our deal, which expires on October 31st,” Merlin’s letter said.
Instead, Merlin explained, TikTok wanted to forge deals with most of the labels and distributors the coalition represented directly, a move that Merlin read as an attempt to “fragment” its membership and “minimize” payments for indie music. (TikTok says it walked away from negotiations with Merlin due to concerns about fraudulent content from certain Merlin members making its way onto the social media app. The company also says it wanted to form closer relationships with Merlin members.)
TikTok and Merlin both declined to comment for this story.
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Since then, 12 different labels and distributors among the thousands represented by Merlin have spoken to Billboard about what they would do when their licenses expire after Halloween. Will the indies walk away, attempting to take a stand against TikTok in solidarity with Merlin? Will they renew their licenses individually? And if they do, how will those deals compare to what Merlin negotiated previously? (Nearly all of the executives who spoke to Billboard for this story requested anonymity, given most of their respective companies have non-disclosure agreements with TikTok.)
At first, one distribution executive said their company was not yet negotiating its own license with TikTok — because this exec said they were still hopeful that Merlin and TikTok might come back to the negotiating table. “We want to make sure there is no possibility with Merlin first,” the executive said. John Carnell, CEO of Phoenix Music International (PMI), had a similar view. In an email to Merlin, obtained by Billboard, Carnell said that while TikTok has approached Phoenix individually, “There is no way we would undermine Merlin’s position.”
Unlike Universal Music Group (UMG), which pulled its entire label and publishing catalog from TikTok earlier this year when its license with the platform expired amid renewal negotiations, antitrust laws prevent Merlin from forcing its members to move off of TikTok. It can’t even ask its members to collectively strike against TikTok, leaving the coalition with little choice but to accept TikTok’s decision.
Carnell ultimately decided PMI would “not be entering a deal with TikTok,” according to his email, but the other executive holdout took a different tack. This week, in a second interview, the executive said their company had decided to sign a direct deal with TikTok after all. “If I still thought that not signing would help Merlin get a new deal, or could help the independent music community, I would try to not sign,” the distribution executive said. “But even when Universal didn’t sign [a licensing deal], [TikTok] didn’t care… We have no choice [but to sign a new licensing agreement] because our artists want to be on TikTok — perhaps too much — but for them, it is very important.”
This is a commonly held sentiment among Merlin members, many of whom say their artists want to be on TikTok, and they need to oblige — or risk losing talent to competitors. In the last week, both UnitedMasters and Ditto announced that they had signed new agreements with TikTok. Steve Stoute, founder and CEO of UnitedMasters, told Billboard, “I believe we struck a fair deal with TikTok for UnitedMasters and our artists, who understand how valuable promotion can be for their reach… Merlin has done a great job representing independent labels across the world, and I am a proud Merlin member.” TikTok says that now the vast majority of Merlin members have signed direct deals with the company.
Multiple members say TikTok offered them new agreements around the time that Billboard broke the news in late September that Merlin’s negotiations with TikTok had collapsed. But not every member received an offer — which tracks, considering TikTok’s claim that fraudulent activity allegedly stemmed from specific members of Merlin. TikTok’s music licenses typically last two years, and most of the new deals offered this October will expire in late 2026.
Three sources say that the compensation terms provided under the new, individual offers from TikTok are not significantly better or worse than what Merlin previously negotiated, but that there have been some key changes. First, TikTok is now paying out music licensors based on views that videos featuring a song receives, rather than “creates” (how many videos are created with a given song in the background).
Specifically, TikTok will calculate market share based on views, and then the payment will be divided up from there. This does not mean TikTok now pays a certain royalty per view. “It makes sense,” says one indie executive. “I don’t know why they didn’t always pay based on views.” Another exec added, “It won’t lead to a major difference in how much we are paid. We are still doing the math, but it seems like there will be about a 4% difference in what we take in from TikTok, give or take.”
“TikTok was always paying us badly, so none of this is a financial problem in the short term,” says the indie label executive who initially wanted to hold out. “They are one of the biggest social media companies in the world, and the smallest revenue earner for a music company.” Another indie label source had a similar feeling. “It’s a promotional avenue more than anything else,” this person said. “I think there’s value in TikTok deals, but it’s, like, 1% of every company’s books. It’s not a big part of anyone’s business. I truly think the royalty conversation wasn’t the deal breaker, but there were other material terms that we wanted.”
One of those key term changes had to do with “ad credits,” which can also be referenced as “marketing credits.” Three sources said that the deals TikTok sent them did not include these credits, which amount to money offered by TikTok that a label can put toward advertisements and marketing on the app. One source says the previous, Merlin-negotiated agreement guaranteed a budget in the millions for ads and marketing on TikTok, with the sum of credits divided among individual members based on their size. Now, at least some labels, particularly the ones with less bargaining power, might not get them at all.
The three sources also said that while the previous contract included a “most favored nations” (MFN) clause, which gives licensors the right to the same terms and benefits as other licensors who enter similar contracts with TikTok, the new agreements did not. One also said their individual agreement included a new clause requiring “know your customer” (KYC) checks — which would require verification of artists’ identities before allowing them to upload songs — something TikTok says is designed to curb bad actors and fraudsters from getting their music on to TikTok. It also serves to place more responsibility on the labels and distributors for the content they deliver. The executive also claimed, however, that the provision’s language is vague and seems difficult to enforce.
Four sources suggested UMG’s previous licensing dispute with TikTok was the catalyst for TikTok to walk away from Merlin. “[UMG] definitely emboldened TikTok,” says one source close to the situation. “They lost that war, and they created a really bad situation for Merlin. Sony and Warner are up next year, too. If I was them, I’d be terrified right now.”
Still, another indie label executive, whose releases run through a Merlin distributor, holds a different view — that, maybe, TikTok is not so important now after all. “We’re sticking with Merlin,” the executive says. “I don’t know what’s going to happen. If this happened a year, two years ago, I’d be freaking out. But these days, TikTok isn’t moving the needle for our artists like it used to.”
While his artists used to “easily get tens of thousands of views on most TikToks without any spend,” he says the social media platform is too “saturated” now, and he’s watched as his artists’ impressions have tanked. He’s not alone. In a recent Billboard story about the modern creator campaign on TikTok, multiple digital marketing sources expressed that it is harder than ever to get a song off the ground on the service. But, as one source put it, “It’s still the best thing we have.”
“But what does not having a deal even mean at this point?” another indie label executive asked. “When these things come down, it just encourages the bootleg use of songs on these platforms. The music will be up, just not properly attributed.” During UMG’s boycott of TikTok earlier this year, it was common to still find Universal songs on the platform, just as bootlegged remixes, not as official audio. Sometimes, to skirt the effects of the boycott, top UMG stars like Olivia Rodrigo would even use these bootlegs to promote their latest releases.
TikTok originally told Merlin members that the deadline to finalize their individual agreements with the service was Oct. 25, but one label executive said they have heard that TikTok has offered extensions to certain members. Three sources believe that smaller Merlin members won’t have room to negotiate past the original boilerplate offer, but the larger players will find more wiggle room. Those who received extensions or finalized deals will not have their music removed from the app today, but TikTok says it has already started removing songs from those members that chose not to strike a deal. The company assures that the vast majority of Merlin members have already cemented their deals.
“I wish it had worked out differently between Merlin and Tiktok,” one Merlin member says. “But if our partnership needs to be direct with ByteDance in order to serve our clients, then you know, that’s the avenue that we have to take. Only time will tell how this all plays out.”
Additional Reporting by Elias Leight
A federal appeals court says Live Nation and Ticketmaster must face a class action claiming they charged “extraordinarily high” prices to thousands of ticket buyers, ruling that the concert giants cannot enforce “opaque and unfair” user agreements to scuttle the lawsuit.
Live Nation claimed fans had waived their right to sue in court when they bought their tickets, arguing they had signed agreements promising to litigate any legal disputes via private arbitration — a common requirement when purchasing event tickets and other services from many companies.
But in a ruling Monday (Oct. 28), the U.S. Court of Appeals for the Ninth Circuit ruled that Live Nation’s agreements were “unconscionable and unenforceable” since they would make it “impossible” for fans to fairly pursue claims against the company.
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“Forced to accept terms that can be changed without notice, a plaintiff then must arbitrate under … opaque and unfair rules,” the appeals court wrote. “The rules and the terms are so overly harsh or one-sided as to unequivocally represent a systematic effort to impose arbitration as an inferior forum.”
The ruling described Live Nation’s agreements in scathing terms, calling them “so dense, convoluted and internally contradictory to be borderline unintelligible” and “poorly drafted and riddled with typos.” The terms were so confusing, the court said, that Live Nation’s own attorneys “struggled to explain the rules” during a court hearing.
A spokesperson for Live Nation did not immediately return a request for comment on Thursday (Oct. 31).
The ruling came as Live Nation is facing a sweeping antitrust lawsuit from the U.S. Department of Justice, seeking to break up the company over allegations that it illegally maintained a monopoly in the live entertainment industry. That separate action, which could take years to resolve, remains pending.
The class action against Live Nation, filed in 2022, accuses the company of violating antitrust laws by monopolizing the market for concert tickets and engaging in “predatory” behavior. Filed on behalf of “hundreds of thousands if not millions” of ticket buyers, the case claims Live Nation and Ticketmaster abused their dominance to charge “extraordinarily high” prices to consumers.
The lawsuit was something of a sequel to an earlier class action, in which the same legal team (from the law firm Quinn Emanuel) made highly-similar claims against Live Nation. That earlier case was dismissed after a federal judge ruled that such accusations must be handled via private litigation because of agreements that the plaintiffs had signed when they purchased their tickets.
In Monday’s ruling, the Ninth Circuit said that earlier victory had been both a gift and a curse for Live Nation. Though it had allowed the company to avoid a class-action lawsuit, the ruling raised the troubling prospect of facing thousands of individual arbitration cases all at once.
“Defendants foresaw that if their motion to compel [arbitration] in that case were granted, they would be faced with a large number of parallel individual claims by ticket purchasers,” the appeals court wrote. “In anticipation of such claims, defendants sought to gain in arbitration some of the advantages of class-wide litigation while suffering few of its disadvantages.”
According to the ruling, doing so involved amending its terms of use to require fans to submit to “novel and unusual” procedures for “mass arbitration” offered by a new arbitration company called New Era ADR.
It was this new arbitration agreement that the appeals court declared unenforceable in Monday’s ruling. The court roundly criticized the rules, saying they had placed unfair terms on any consumers who wanted to litigate a dispute with Live Nation. And, citing the company’s market share, the court said fans had almost no choice but to sign the agreement.
“Because Ticketmaster is the exclusive ticket seller for almost all live concerts in large venues, prospective ticket buyers in most instances are faced with a choice,” the court wrote. “They can either use Ticketmaster’s website and accept its terms, or refuse to use the website and be entirely foreclosed from purchasing tickets on the primary market.”
Strong subscription revenue, improved margins and successful new releases by Sabrina Carpenter, Chappell Roan and Post Malone helped Universal Music Group (UMG) post revenue of 2.87 billion euros ($3.16 billion) in the third quarter, up 4.3% year-over-year (4.9% at constant currency).
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) reached 621 million euros ($683 million), up 8.2% from the prior-year period. The Amsterdam-based company’s adjusted EBITDA margin improved to 21.6% from 21.1% in the prior-year quarter and was helped by cost savings from the organizational redesign announced in February and lower A&R and marketing costs, CFO Boyd Muir said during Thursday’s (Oct. 31) earnings call.
If not for a one-time gain in the prior-year quarter, the revenue growth rate would have been 7.6% and adjusted EBITDA growth would have improved to 10.8%. Last year, Universal Music Publishing Grou (UMPG) recognized the accrual of a catch-up payment from the Copyright Royalty Board (CRB) Phonorecords III ruling. That resulted in revenue of 53 million euros ($58 million) and added 11 million euros ($12 million) to UMPG’s adjusted EBITDA.
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UMG had a typically strong quarter of chart-topping new releases. CEO Lucian Grainge noted during the call that Carpenter’s album Short n’ Sweet, released on Aug. 23, went to No. 1 in 15 countries and topped the Billboard 200 albums chart in the U.S. for four non-consecutive weeks. Elsewhere, Roan’s The Rise and Fall of a Midwest Princess topped Billboard’s Album Sales Chart in September, while Malone’s latest album, F-1 Trillion, debuted at No. 1 on the Billboard 200 and also summited the Top Country Albums chart. Island also has a top 10 hit song in the U.K. with Gigi Perez’s “Sailor Song,” which peaked at No. 28 in the U.S.
The recorded music division improved 5.4% to 2.15 billion euros ($2.36 billion) on the strength of a 7.6% improvement in subscription revenue. Other streaming revenue, however, dropped 0.8% (up 0.3% at constant currency) to 354 million euros ($389 million). Physical sales dropped 2% to 288 million euros ($317 million) while licensing revenue jumped 20.4% to 325 million euros ($357 million). Subscription growth was negatively affected by “just over a percentage point” from “ongoing challenges” in the home fitness subscription market and the departure of the record label 10K Projects to Warner Music Group, said Muir. Lower CD sales in Japan were partially offset by strong vinyl sales, he added, especially in the U.S.
Muir affirmed UMG’s previously announced guidance of an 8% to 10% compound annual growth rate for recorded music subscription revenue through 2028. UMG may not always hit that target range in any given quarter, however, and Muir reminded listeners that the fourth quarter marks one year since a Spotify price increase that has helped UMG — and other record labels — experience a surge in year-over-year subscription growth.
UMPG improved 1.8% (2.2.% at constant currency) to 500 million euros ($550 million). Excluding the CRB accrual, publishing revenue was up 22.4% (22.9% at constant currency). Digital revenue grew 0.3% to 295 million euros ($324 million), synchronization royalties jumped 18.5% to 64 million euros ($70 million) and mechanical revenue climbed 12% to 28 million euros ($31 million). Performance royalties fell 4.7% to 101 million euros ($111 million).
UMG’s Bravado merchandise division had revenue of 237 million euros ($261 million), up 4.4% from the prior-year period. The company attributed the growth to stronger direct-to-consumer sales and higher touring merchandise sales. In the U.S., Bravado benefitted from the touring activity of such artists as Slipknot, Imagine Dragons, Nicki Minaj, blink-182 and Malone, according to Muir.
Thirty years ago, when Megadeth was the first musical artist ever to participate in a “chat room” on its “website” on the “Internet,” an anonymous troll posted a single word over and over, to the point of driving Dave Mustaine crazy. “I looked at it like, ‘How do I get rid of this thing?’” the metal band’s frontman and guitarist tells Billboard. “I still, to this day, don’t know who the guy was. There was no one else, so this guy saw that as an opportunity.”
What was the word?
“S—,” Mustaine recalls.
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Such were the travails of the virtual city of Megadeth, Arizona, in October 1994. As envisioned by Robin Bechtel — then sales director for Megadeth’s label, Capitol Records — Megadeth, Arizona, based on the location of the band’s new studio in Phoenix, was the concept for the first-ever artist website. In addition to the chat room, called the Megadiner, the site featured an art-and-digital-postcard repository, Vic’s Cactus Hut and Souvenir Shop, a newspaper titled Horrorscopes and links to videos and online-radio tracks. It was designed to promote Megadeth’s album Youthanasia, but its legacy ultimately became to “onboard people onto the World Wide Web,” according to Bechtel, today an angel investor in Uber, Everlane and others, “which is wild to think about.”
Megadeth
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Bechtel, a digital music pioneer who later worked at Warner, first envisioned the Megadeth concept while touring a multimedia studio in Los Angeles and learning about the use of Macromedia software in videos and websites. She signed up for the dial-up service CompuServe and set up a modem at her apartment. At Capitol, she wrote a proposal for the Megadeth website and requested a $30,000 budget. Her boss, Lou Mann, senior vp of sales and field marketing, agreed, even if other Capitol employees had no idea what she was talking about. Earlier that year, Tim Berners-Lee had invented the World Wide Web, and it was catching on among tech insiders and early adopters, but the idea would take years to spread to music fans — and record executives.
“I wrote a proposal. It’s hysterical — it’s me trying to explain what a website would be,” Bechtel recalls. “We had a Megadeth record coming out. I was invited to the meeting. Nobody knew what the Internet was. Everyone was focused on who was going to shoot the album cover, and would the cover make the poster and would the cover and poster be in the record stores.”
It was the first time among many, during Bechtel’s label career, that she would be told the Internet was a fad.
Megadeth
Courtesy Photo
“She made a big presentation about it, and there were maybe 10 people in the room. Nine of the people didn’t even understand what she was talking about: ‘What is this fake city?’” recalls Mann, now CEO of StageIt, which broadcasts live performances online. “There were a lot of traditionalists in our industry. You play it on the radio, you get it in the stores. But this was a new way of marketing. It was tough. They were dubious and it affected other things.”
Mann believes the industry skepticism of Megadeth, Arizona, represented a broader overall skepticism of new technology threatening music’s business model, largely built on marketing and selling CDs. This attitude, within labels, lingered through the late ’90s. For example, Capitol released a Duran Duran single online, and old-school record retailers did not react kindly. Later, when Napster popped up and threatened the business model of selling CDs in stores, piracy-fearing label execs neglected an opportunity to create a new business model. “It was a whole industry education that was taking place,” Mann recalls. “Nobody wanted it, because it challenged the protocol. On the other hand, that was the beauty of it.”
Megadeth
Courtesy Photo
Megadeth, Arizona, launched with grey backgrounds and Times Roman typefaces — “That’s how limited it was back then,” Bechtel says. And while the website may not have moved the needle on Youthanasia sales, it generated copious attention in newspapers and magazines. “Once Megadeth got involved, it took off,” she adds. “The band was always in there logging into the Megadiner. They saw it, I think, as modern-day tape-trading. They totally got it.”
Soon other artists were demanding websites, too. Mustaine heard KISS‘ Gene Simmons had said, “I want a website just like Mustaine’s,” and contacted the band’s manager to confirm the rumor. An hour later, he received a call from Simmons himself. “There was nothing like this before,” Mustaine says. “It’s such an unfathomable concept: There was no Internet back then.”
Mustaine, who is once again planning to release a new Megadeth album, today is the focal point of an official website, megadeth.com, which contains standard features like tour dates, videos, T-shirt-selling web stores and band-member biographies. Plus social media, of course. But he retains a fondness for the denizens of Megadeth, Arizona, “If you go to Megadeth concerts and find somebody that was a member of the Megadiner,” he says, “that’s real street cred.”
Megadeth
Courtesy Photo
The infamous 2016 surveillance video showing Sean “Diddy” Combs assaulting his former girlfriend wasn’t illegally leaked to the media by prosecutors, government attorneys argue in a new filing that accuses the rapper’s lawyers of trying to “suppress a damning piece of evidence.”
In a motion filed late Wednesday, federal prosecutors responded to leaking accusations made by Combs’ lawyers earlier this month. They say it was impossible that they had leaked the video of Combs striking Cassie Venture to CNN because they didn’t even have it at the time it was published in May.
The government says Diddy’s attorneys know that, but that they’re using the leak accusations as a way to prevent jurors from seeing Combs “brutally physically assaulting a victim” — a crucial piece of evidence.
“Without any factual basis, the leak motion seeks to suppress highly probative evidence … by claiming that it was grand jury material leaked by government agents,” prosecutors write. “But, as the defendant is fully aware, the video was not in the Government’s possession at the time of CNN’s publication and the Government has never, at any point, obtained the video through grand jury process.”
Combs, also known as Puff Daddy and P. Diddy, was once one of the most powerful men in the music industry. But last month, he was indicted by federal prosecutors on charges of racketeering and sex trafficking over what the government says was a sprawling criminal operation aimed at satisfying his need for “sexual gratification.” If convicted on all the charges, he faces potential life prison sentence.
Wednesday’s new filing came three weeks after Combs’ attorneys demanded an investigation into the alleged leaks, claiming they had “led to damaging, highly prejudicial pre-trial publicity that can only taint the jury pool and deprive Mr. Combs of his right to a fair trial.”
Diddy’s attorneys pointed specifically to the Cassie video, which showed Combs striking his then-girlfriend in the hallway of a Los Angeles hotel in 2016 and made headlines when CNN released it in May.
“The videotape was leaked to CNN for one reason alone: to mortally wound the reputation and the prospect of Sean Combs successfully defending himself against these allegations,” Agnifilo wrote. “Rather than using the videotape as trial evidence, alongside other evidence that gives it context and meaning, the agents misused it in the most prejudicial and damaging way possible.”
Wednesday’s filing from prosecutors also addressed Diddy’s recent demand that the government reveal the names of his alleged sexual abuse victims. In a motion earlier this month, his lawyers arguing he cannot fairly defend himself without knowing their identities.
In the response, the government argued that such disclosures “poses serious risks” to the safety of the victims, citing Diddy’s “significant history of violence and obstruction” that resulted in him being denied release on bail last month.
“Due to the defendant’s history, the Government has serious concerns about victim safety and the possibly of witness tampering if a list of victim names were provided to the defendant,” prosecutors wrote.
French music streaming company Deezer’s revenue increased 11.0% (13.0% at constant currency) to 134.0 million euros ($147.3 million) in the third quarter, the company announced Wednesday.
That was slightly slower than the 15% growth rate in the second quarter and first quarter but ahead of the 7.4% revenue growth the company posted in calendar 2023.
Partnerships accounted for most of the quarter’s improvement by growing 21% to 41.5 million euros ($45.6 million). Deezer powers music streaming services for such companies as Germany’s RTL and Argentinian e-commerce company Mercado Libre. Through partnerships, Deezer offers its branded service to the likes of DAZN, a sports streaming platform, and Mexican mobile carrier WIM, whose customers get a 20% discount on Deezer Premium.
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Subscriber growth was helped by the conversion of “the first cohort of MeLi+ subscribers from trial accounts to premium accounts with higher margins,” said CEO Alexis Lanternier during Thursday’s earnings call. Also, Lanternier added, the Mercado Libre partnership, which provides 12-month trials, has produced results “higher than our initial expectations.”
Revenue from France was 78.5 million ($86.3 million) and 58.6% of total revenue, down from 59.4% in the prior-year period. The rest of the world generated revenue of 55.5 million euros ($61 million). The “other” category was 6.7 million euros ($7.4 million), up 63.8%, in part due to new verticals such as its wellness app, Zen.
The growth in France and contraction in the rest of the world is part of the plan, said CFO Carl de Place. “The strategy has been to improve the profitability and moving to positive profitability for Deezer, which has made us be more selective in the way we invest, in terms of marketing and making sure we invest in markets where we can see that the return on the investment is positive for for this. So that’s the reason why we are growing in France and over the rest of the world has been declining.”
Direct subscribers represent the majority of Deezer’s business but grew at a slower 4% to 85.8 million euros ($94.3 million). The number of direct subscribers rose 4.1% to 9.9 million; 5.2 million of them came from Deezer’s home market of France while the rest of the world produced 1.8 million subscribers, down from 2.0 million in the prior-year period. Deezer’s subscriber base took a hit because the company removed 400,000 “inactive family accounts,” but the company explained that the move had no impact on revenue and benefitted gross margin.
Despite the positive momentum in the quarter, the company chose to maintain its guidance from the previous quarter. Deezer forecasts 10% revenue growth in 2024 and expects adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to improve to a loss of 10 million euros ($10.9 million) and plans to have positive free cash flow.
Deezer was among the first music streaming platforms to raise prices in 2022 and did so again in 2023. There will be “potential for price increases” as Deezer continues to “upgrade the experience to add value to the user,” said de Place.
Following the release of third-quarter earnings after the market’s close on Wednesday, Deezer’s share price was practically unchanged, falling just 0.4% to 1.345 euros ($1.46) on Thursday. Year to date, Deezer’s stock price has fallen 36% from 2.095 euros ($2.27) per share.
Deezer’s third quarter financial metrics:
Revenue: up 11% to 134 million euros ($147.3 million)
Total subscribers: up 4.1% to 9.9 million
Direct subscribers: down 1.4% to 5.2 million
Partnership subscribers: up 11% to 4.7 million
Direct subscriber average revenue per user (ARPU): up 5.8% to 5.40 euros ($5.90)
Partnership subscriber ARPU: down 4.7% to 2.80 euros ($3.10)