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This is The Legal Beat, a weekly newsletter about music law from Billboard Pro, offering you a one-stop cheat sheet of big new cases, important rulings and all the fun stuff in between.
This week: Ed Sheeran wins his trial over whether “Thinking Out Loud” infringed Marvin Gaye’s iconic “Let’s Get It On”; Tory Lanez is denied a new trial over the shooting of Megan Thee Stallion; Adidas faces a class action over its Kanye West partnership; and much more.
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THE BIG STORY: Ed Sheeran & The Copyright Road Ahead
That sound you hear? It’s not Ed Sheeran strumming his guitar from the witness stand, or the tinny audio from a supposedly “smoking gun” YouTube video. It’s the music business letting out a giant sigh of relief.
After one of the biggest music trials in years, Sheeran won a jury verdict last week that his “Thinking Out Loud” didn’t infringe the copyright of Marvin Gaye’s famed “Let’s Get It On,” clearing the singer of wrongdoing and avoiding the potential for millions in damages.
A verdict against the singer would have reverberated throughout the industry, much like the infamous 2015 verdict against Robin Thicke and Pharrell Williams over their megahit “Blurred Lines.” Like in that earlier case, many music pros and copyright lawyers believed that Sheeran and Gaye’s songs shared only common musical “building blocks” that everyone is entitled to use. They worried that a verdict against Sheeran could have blurred the line between legal similarities and illegal copying.
For years, the verdict on “Blurred Lines” led the industry to be hyper-cautious about songs that sounded remotely similar. Musicology reports and insurance policies became far more common, and songwriting credits were liberally doled out at the first sign of trouble — by Mark Ronson and Bruno Mars for their smash hit “Uptown Funk,” by Sam Smith for his Grammy-winning “Stay With Me” and by Olivia Rodrigo for her chart-topping “Good 4 U,” among many others. When cases were filed in court, many defendants chose to quickly settle, rather than face an unpredictable jury.
The legal reality, though, is that courts have slowly been back-tracking from “Blurred Lines” for a while now — first with an appellate court decision in 2020 on Led Zeppelin’s “Stairway To Heaven,” then with a similar ruling last year on Katy Perry’s “Dark Horse.” Both of those rulings provided clear case law that simple elements of music creation, standing alone, cannot be monopolized by any one songwriter. Over just the first few months of 2023, song-theft cases against Donald Glover (over his Childish Gambino chart-topper “This Is America”) and Nickelback (over the band’s 2005 hit “Rockstar”) have both been dismissed at the earliest stage of litigation.
Far from throwing the industry back into confusion, Sheeran’s victory last week seems to be the latest incremental step in a march toward a post-“Blurred Lines” world. Jury verdicts don’t change case law, but they can serve as a powerful disincentive to the next round of potential copyright accusers, who might be less willing to head to court if they see that artists are willing to successfully fight back rather than quickly settle when faced with an allegation.
For Sheeran, that seems to be precisely the effect he’s aiming for.
“By stopping this practice, we can also properly support genuine music copyright claims so that legitimate claims are rightly heard and resolved,” Sheeran said on the courthouse steps, minutes after the verdict was read aloud in court. “We need songwriters and the wider musical community to come together to bring back common sense. These claims need to be stopped so that the creative process can carry on, and we can all just go back to making music.”
Other top stories…
NO NEW TRIAL FOR TORY – A Los Angeles judge refused to grant Tory Lanez a new trial after he was convicted last year of shooting Megan Thee Stallion in the foot, setting the stage for the rapper to be sentenced to as much as two decades in prison. His lawyers called the trial a “miscarriage of justice,” but such requests are very rarely granted.
CLASS-ACTION KANYE – Adidas was hit with a class action lawsuit claiming the sportswear giant knew about Kanye West‘s problematic “personal behavior” years prior to ending its partnership with the disgraced rapper but failed to warn investors about it. West himself was not named in the case.
SPINRILLA SHUTTERED – Hip-hop mixtape site Spinrilla and founder Jeffery Copeland agreed to shut down the site and pay $50 million to Universal Music, Warner Music, Sony Music and others to end a years-long copyright infringement lawsuit over the unauthorized use of thousands of songs by Bob Marley, Beyonce, Kendrick Lamar and more.
A Los Angeles judge is refusing to grant Tory Lanez a new trial after he was convicted last year of shooting Megan Thee Stallion in the foot, setting the stage for the rapper to be sentenced to as much as two decades in prison.
Attorneys for Lanez (real name Daystar Peterson) had called the case a “miscarriage of justice,” arguing that Judge David Herriford made numerous errors during a star-studded, two-week December trial that resulted in a guilty verdict. But prosecutors later called those claims “vague and unsupported” and urged the judge to uphold the jury’s decision.
At a hearing on Tuesday (May 9) in Los Angeles Superior Court, Judge Herriford sided with prosecutors and denied Lanez’s motion, according to a person with knowledge of the proceedings. Neither prosecutors nor Lanez’s legal team immediately returned requests for comment.
The ruling is not particularly surprising. Such requests for a judge to overturn a jury verdict are rarely granted, reserved for major revelations about procedural errors or withheld evidence. Similar arguments could still be successfully raised in a future appeal.
Tuesday’s decision clears the way for Lanez’s sentencing, in which he potentially faces up to 22 years in prison. It had originally been scheduled for January but was repeatedly delayed due to his request for a new trial. Sentencing is now expected within the next month but could be delayed again.
Lanez was convicted on Dec. 23 on three felony charges over the mid-2020 incident, during which the rapper allegedly shot Stallion (born Megan Pete) in the foot during an argument after a pool party in the Hollywood Hills.
The shooting happened in the early-morning hours of July 12, 2020, when a driver was shuttling Lanez, Stallion and her assistant and friend Kelsey Harris from a party at Kylie Jenner’s house. According to prosecutors, Megan got out of the vehicle during an argument and began walking away when Lanez shouted “Dance, bitch!” and proceeded to shoot at her feet.
Following the incident, Stallion initially told police officers that she had cut her foot stepping on broken glass, but days later alleged that she had been shot. Lanez was eventually charged with the shooting in October 2022.
During the blockbuster trial, Lanez’s lawyers made their best effort to sow doubt over who had pulled the trigger, painting a scenario in which Harris could have been the shooter. But a key defense witness offered only confusing eyewitness testimony, and prosecutors pointed to an earlier interview in which Harris pinned the blame squarely on Lanez. Stallion herself offered powerful testimony that Lanez had been the one to shoot her; neither Lanez nor the driver took the witness stand.
In a motion for a new trial filed in March, Lanez attorneys Jose Baez and Matthew Barhoma argued that Judge Herriford made numerous errors during the course of the trial. Among others, they said he should not have allowed jurors to see an Instagram post that appeared to undermine the rapper’s central defense that Harris actually pulled the trigger. In it, Lanez appeared to personally post a comment that such a suggestion was “not true.”
“The court erred on numerous questions of law in allowing the People to introduce this post, depriving defendant of a fair trial,” Lanez’s lawyers wrote. “The only acceptable remedy for this miscarriage of justice is a new trial.”
Lanez’s lawyers made numerous other arguments, too. They said that key DNA evidence had been mischaracterized and improperly admitted; that Lanez had been denied his right to counsel because his longtime attorney withdrew at the eleventh hour; and that prosecutors had run afoul of a new California law that bans the use of creative expression in criminal trials.
But prosecutors argued back last month that the request for a new trial was groundless. The Instagram comment was a “relatively insignificant piece of evidence,” they argued, among an “overwhelming” amount of testimony and other evidence showing that Lanez had been the one to shoot Stallion.
“The defendant’s brief is replete with colorful rhetoric and conclusory statements, but it lacks substance,” prosecutors wrote. “Despite being nearly 80 pages long, the defendant has failed to cite a single instance of error in the trial court.”
Following Tuesday’s decision, Lanez can still file an appeal of the verdict at a state appellate court. But such a challenge will face an uphill climb: In 2022, California appeals courts overturned a defendant’s guilty verdict in just 19% of cases.
If Netflix, HBO, Disney, The CW and others slash their budgets for TV and movie content, as they’ve been suggesting for more than a year, the music industry could take a hit in the steady song-placement business that generates hundreds of millions of dollars annually for rightsholders.
“We’ve been in a boom period. Cutting back on production would cut down on that revenue, for labels and publishers,” says Kier Lehman, a music supervisor who works on Abbott Elementary and Spider-Man: Across the Spider-Verse. “It’s a pretty direct effect.”
After the COVID-19 quarantine ended, the decrease in demand helped create some problems for the streaming business. That has created challenges for the video streaming business: Netflix’ spending on content declined in 2022, after company officials announced a “pulling back”; HBO Max removed dozens of streaming titles last summer to cut costs; and Disney announced $5 billion in cuts two months ago, including 7,000 jobs, although newly returned CEO Bob Iger has emphasized streaming growth. The CW, Showtime and others have also removed content or cut costs.
“We’re trying to be smart about it and prudent in terms of pulling back on some of that spend growth to reflect the realities of the revenue growth,” Spencer Neumann, Netflix’s CFO, said last year.
So far, executives at labels and publishers – which generally split revenue from synch licenses 50-50 – say they haven’t noticed a change in licensing volume or rates, but in a wobbly economy beset with entertainment layoffs, they’re bracing for a harder business. “The idea of less content is always going to be a concern for us,” says a source at a major label. “If there’s going to be a slowdown in content production, it’s going to be a slowdown in music usage — it’s definitely something we’d be keeping an eye on.”
While its impact won’t be felt for a while, the ongoing Writers Guild of America strike has already pushed the pause button on numerous productions, including Stranger Things, Saturday Night Live and Loot.
Synchs have been a remarkably consistent revenue stream for the record business over the last five years, as Netflix, Hulu, HBO and others competed for viewers and created a content boom. Synch revenues for recorded music hit $285.5 million in 2018 and, after a slight dip, rose to $318 million last year. (Publishing revenue has been even more robust in recent years, growing from $696 million in 2018 to more than $1.2 billion in 2021, according to the National Music Publishers Association; synch makes up nearly 26% of that total revenue.) Synch executives at labels and publishers say they’re preparing for more challenging times. “I don’t think anybody’s not going to be affected by cutbacks,” says Oscar Martinez, creative director for film, TV and Hispanic advertising with publisher peermusic. “We expect to feel a little bit of it.”
How will labels and publishers contend with content cuts once they kick in? “We have a plan in place,” Martinez says, predicting a pivot to placing music in games such as Fortnite and FIFA. “There’s still content being made and opportunities to be had.”
Amy Hartman, svp of creative services for film and TV music at Spirit Music Group, adds that the publisher is emphasizing “budget-friendly” moves — remixing classic hits such as Billy Squier’s “The Stroke” for the Air trailer, and encouraging songwriters to create originals that can be licensed more affordably than familiar hits. “That’s one way we can make up loss of synch revenue,” she says.
Sara Torres, sync and licensing supervisor for ASAP Clearances, which works with labels and publishers to clear songs, suggests the number of scripted shows may decline in favor of reality shows — which tend to use more tracks on tighter budgets. A scripted show might blow its budget on one big song, by, say, the Beatles, then try to round out its song lineup with more affordable music by indie artists or “library music.” The reality shows Torres works with have “most favored nations” clauses, so all synchs receive the same fees. “There’s always a whisper of cutbacks with any network, so you just have to be ready,” she says.
For now, label executives say they’re not worried about content cutbacks or more inflexible network demands for lower rates. “It’s business as usual. It’s not doomsday,” says Esther Friedman, Sony Music Publishing’s svp of creative marketing for film and TV, although she adds: “This could be a different conversation in six to nine months.”
Those who work every day with production companies say labels and publishers should prepare for cutbacks. “You might be looking at the same amount of TV shows, but they have less episodes,” says Justin Kamps, music supervisor for Grey’s Anatomy and Bridgerton. “That is rough for everyone involved.”
At least to some extent, any decrease in production would hurt the music business at least somewhat. “If there are fewer shows, there will be fewer places to place music,” says Lindsay Wolfington, a veteran music supervisor whose current shows include Netflix’ Virgin River and Starz’ The Venery of Samantha Bird: “That’s just a fact.”
Warner Music Group reported quarterly revenues grew 1.7% to $1.399 billion (4.6% in constant currency) as strong revenues from its music publishing revenue helped offset a slow quarter for recorded music releases.
WMG, the music industry’s third largest major label, reported revenue from its recorded music revenue was effectively flat at $1.143 billion for the second fiscal quarter ending March 31, compared to $1.147 billion in the year ago quarter. (In constant currency, recorded music revenue rose 2.5%.) Streaming revenue in the quarter was down 0.4% (or, in constant currency 2.2% higher) on fewer releases and a slowdown in ad-supported revenue due to macroeconomic uncertainty.
In contrast, music publishing revenue rose 12% to $257 million from $230 million a year ago.
“While our publishing was best in class, we underperformed in recorded music,” Robert Kyncl, chief executive officer, said on a conference call.
WMG executives have said throughout this fiscal year that the label’s major releases of the year would come in the second half, and on the call, they stressed they are already seeing improvement with the late-April releases of Jack Harlow’s Jackman., Tïesto’s Drive and Ed Sheeran’s Subtract, released in early May.
“Our release slate was a little lighter in the first two quarters of the year and will be weighted to (the third quarter) and (the fourth quarter),” Warner chief financial officer Eric Levin said, flagging releases expected from Dua Lipa with her Barbie soundtrack track, among others.
“We absolutely expect this to improve our results in recorded music streaming in the second half of the year.”
Key Points From WMG’s Q2:
WMG’s revenues grew 1.7% (or 4.6% in constant currency, a measure that standardizes foreign exchange fluctuations) to $1.399 billion
Digital revenue increased 1.2% (or 3.7% in constant currency) to
Streaming revenue increased 1.9% (or 4.5% in constant currency) on growth in music publishing streaming
Music publishing revenue increased 12%, or 14.2% in constant currency
Music publishing streaming revenue grew 16.4% (18.3% in constant currency)
Recorded music streaming revenue decreased 0.4% (an increase of 2.2% in constant currency) on a lighter release schedule, foreign exchange currency fluctuations and slowdown in ad-supported revenue.
Net income was $37 million this quarter, down 60% from $92 million one year ago, primarily driven by the negative impact of currency fluctuations on the company’s Euro-denominated debt. Adjusted net income up 5% to $116 million from $111 million a year ago.
Operating income was $124 million, down 25% from $166 million a year ago, with adjusted operating income up 10% to $203 million from $185 million.
Adjusted net income of $116 million was up 5% from $111 million in the year ago quarter.
Several months after shutting down his SiriusXM station, Garth Brooks has found a new radio home.
Starting this summer, Brooks will launch SEVENS Radio Network through TuneIn, the free livestreaming audio platform with more than 75 million monthly active users and distribution across 200 platforms and connected devices.
SEVENS Radio will include multiple stations dedicated to country music and more, all curated and conceived by Brooks. “I’m excited about the future of TuneIn and feel lucky to announce a partnership with them,” said Brooks in a statement. “The thought of a global network of stations uniting all music fans is something I want to be a part of. The possibilities are bigger than I can dream.”
TuneIn already boasts more than 100,000 stations, accessible by downloading the TuneIn app for Android or iOS, via tunein.com or through smart speakers. Ad-supported content is available for free; listeners can also choose a commercial-free premium service.
“Garth Brooks is a tireless entrepreneur and one of the most recognizable stars in the world. When he shared his vision for SEVENS Radio, we knew TuneIn should be his home,” said TuneIn CEO Rich Stern. “At TuneIn, we believe in the power of radio and those artists who are passionate about it. Garth and the entire SEVENS team are creating something we believe fans will love and we’re so proud to have them on TuneIn.”
Brooks, the top-selling solo artist in the United States with more than 156 million domestic albums sold, according to the RIAA, comes to TuneIn after six years spent helming the 24/7 Garth Channel on SiriusXM, which ceased airing on September 30.
SEVENS will fill and expand the void left by the end of the Garth Channel, which had served as a community hub for Brooks and his fans since its launch in 2016. The singer frequently appeared on the channel, sharing his experiences with the artists the outlet played, while the station offered fun bits of Brooks trivia. The Garth Channel featured Brooks’ music roughly 25% of the time, with the rest of the airplay dedicated to artists he liked, including acts he grew up on, his contemporaries and newer performers.
SoundCloud chief content & marketing officer Lauren Wirtzer-Seawood has departed the company after nearly two years, Billboard has confirmed. There is no word yet on her next moves.
Wirtzer-Seawood joined SoundCloud in June 2021 from UnitedMasters, where she served as president for more than two years. Prior to that, she worked as head of music partnerships at Instagram for over three years and head of digital at Beyoncé‘s Parkwood Entertainment for over two years; she has also held senior roles at Def Jam and Zynga.
“I came to SoundCloud to help transform the company and set it on a path toward success,” says Wirtzer-Seawood in a statement sent to Billboard. “After nearly two years of building teams, processes, priorities — and hiring some really stellar people — it was time to move on. I have no doubt that Eliah and the executive team will drive massive success for SoundCloud.”
During Wirtzer-Seawood’s tenure, SoundCloud has made efforts to differentiate itself as a more artist-friendly alternative to rival streaming services. Chief among these efforts is the fan-powered royalty payment system, first unveiled in March 2021, which has since been opted into by both Warner Music Group and Merlin. Unlike the traditional pro-rata model, under which streaming services collect all subscriber revenue and then pay out earnings based on each rightsholder’s share of total streams, fan-powered royalties direct a portion of every listener’s subscription or advertising revenue to the rightsholders for the specific tracks they listen to.
“Fan-powered royalties give us the ability to have specific data around who those fans are,” Wirtzer-Seawood told Billboard last year, “and we can now unlock those relationships with the superfans and communicate with them, to sell them something or whatnot.”
On Monday, SoundCloud unveiled “Fans,” a new SoundCloud for Artists product that’s being billed as the next evolution of the fan-powered payment system. Now in beta, the tool allows music creators to tap into the platform’s proprietary data and sort their most engaged listeners based on factors like comments, listening behavior, sharing habits and location — and then directly message individual fans to share previews of upcoming releases; sell tickets and merch; and more.
SoundCloud is bringing music creators even closer to their biggest fans with a new product that gives artists access to granular user data and facilitates direct, one-on-one interaction with their most loyal listeners.
Dubbed simply “Fans” and now available on SoundCloud for Artists, the tool allows artists to tap into the platform’s proprietary data and sort their most engaged listeners based on factors like comments, listening behavior, sharing habits and location — and even identify who among their listeners are fellow artists. Using SoundCloud’s pre-existing messaging feature, they can also directly message individual fans to share previews of upcoming releases via private links; sell tickets and merch; and/or just say thanks. (SoundCloud notes there’s an opt-out option for users who don’t wish to be contacted by artists.)
Tracy Chan, svp of creator at SoundCloud, says there’s a special power in fans receiving direct acknowledgment from their favorite artists that can unlock “real revenue opportunities” for creators.
“[It’s] one thing to blast out, ‘Hey, come attend my concert or my show,’ but actually asking specific people, like, ‘Hey, I know you’re a super fan, will you come to my show?’ is a very kind of different way to ask,” Chan says. “You can imagine the possibilities of commerce that open up between artists and fans once the communication lines are open.”
Prior to Monday’s announcement, SoundCloud had been running a six-week test of the tool, which is currently in beta, with roughly 10,000 artists. Starting now, the platform is opening up the product to an additional 50,000 artists who are part of its premium Next Pro tier.
Chan describes the tool as “the next step” in SoundCloud’s fan-powered royalties payment system first unveiled in March 2021, which has since been opted into by both Warner Music Group and Merlin. Unlike the traditional pro-rata model, under which streaming services collect all subscriber revenue and then pay out earnings based on each rightsholder’s share of total streams, fan-powered royalties direct a portion of every listener’s subscription or advertising revenue to the rightsholders for the specific tracks they listen to. Some of the user data SoundCloud artists now have access to under the new tool derives from that fan-powered royalties system.
As part of the unveiling, SoundCloud noted several successful individual use cases among the 10,000 artists included in the previous phase of the tool’s beta period. These include Lil West, a hip-hop artist from Delaware who used the artist filtering tool on Fans to connect with fellow artists 100 gecs and nothing,nowhere., leading to collaborative track releases. After gaining access to the tool, Def Jam artist Armani White worked with SoundCloud and his label to set up a listening party/meet-and-greet with his top fans at SoundCloud’s Los Angeles office on Thursday.
Fans is the latest effort by SoundCloud to differentiate itself as a more artist-friendly alternative to rival streaming services. Chan frames the tool in opposition to the limited functionality offered by other major streamers along with ticketing and merch platforms, which don’t allow artists to identify their individual fans or connect with them one-on-one.
“When artists are like, ‘Cool, I want to go connect with my fans’ [on other streaming services] … they see lots of charts and graphs describing their audiences, but the platforms will not tell artists who their fans are…so that means you can’t market to them,” he says.
According to data provided by SoundCloud, the platform currently boasts more than 320 million tracks from over 40 million creators and operates in 193 countries.
LONDON — Mariah Carey, Lewis Capaldi and Sam Smith are among the recipients of the new BRIT Billion award, which recognizes artists who have surpassed one billion career streams in the United Kingdom.
U.K. labels trade body BPI, which also runs the Brit Awards, is naming the honorees, using the Official Charts Company to verify the data. Certification is based on tracks being streamed on music services like Spotify and video platforms such as YouTube where an artist has appeared either as the main performer or as a featured artist.
Around 140 acts have passed the one billion U.K. streams milestone to date, but BPI has only named 13 recipients of the award initially, a spokesperson tells Billboard. The other artists are ABBA, Coldplay, Whitney Houston, AJ Tracey, Headie One, Anne-Marie, Ellie Goulding, George Ezra, RAYE and Rita Ora.
BPI says the United Kingdom is the first country in the world in the streaming era to run a certifications scheme that recognizes an artist’s success across their entire career and multiple projects, as opposed to individual recordings.
Carey said in a statement that she was honored to be one of the first recipients of the BRIT Billion award and thanked her U.K. fans “for their endless and enduring support.”
Capaldi said in a statement that he was “buzzing,” adding that “never in a million years did I think any of this stuff would happen, but now [that] it is I will gladly accept each and every award.”
The new sales certification category recognizing one billion career plays reflects how streaming has completely upended the recorded music industry over the past decade.
Previously, the biggest sales awards issued in the U.K. were platinum, granted to albums that sell 300,000 chart equivalent units, and multi-platinum (multiples of 300,000 sales). Below that is gold (100,000 sales) and silver (60,000 sales). For singles, platinum recognizes 600,000 chart equivalent sales. Gold is 400,000 and silver is 200,000.
Those totals are, however, dwarfed by the huge number of streams that the world’s biggest artists increasingly generate with many acts racking up millions and, in some cases, hundreds of millions of streams every year. But artists must generate several multiples of more streams to make the same money they made per unit in the physical era.
In November, Capaldi’s “Someone You Loved” overtook Ed Sheeran‘s “Shape Of You” to become the most-streamed song of all time in the U.K. with over 600 million audio and video streams, according to the Official Charts Company. George Ezra’s “Shotgun” has been streamed just under 500 million times since its release in 2018, reports BPI, which first began certifying silver, gold and platinum-selling records in 1973.
The labels trade body says the number of audio music streams in the U.K. crossed 160 billion last year with streaming now accounting for more than 85% of all U.K. music consumption.
“For a recording artist, there can be few greater sources of pride than having a platinum or gold disc on their wall,” Sophie Jones, BPI chief strategy officer/interim chief executive, said in a statement. “But in an era when success in measured in the hundreds of millions and indeed billions of streams, it was clear that we needed a new and additional way to recognize and celebrate outstanding achievement in recorded music.”
Over the past few years, country superstar Luke Combs has succeeded in crossing over to a pop audience with a pair of Billboard Hot 100 top 10 hits: 2020’s “Forever After All” (No. 2) and last year’s “The Kind of Love We Make” (No. 8). Now he’s gunning for a third, with his cover of Tracy Chapman‘s 1988 hit, “Fast Car,” reaching No. 14 on the tally this week (it’s also sitting pretty at No. 2 on Hot Country Songs).
It’s rare for a country artist to record a cover of a pop hit, but as a fan-favorite staple of Combs’ live shows, “Fast Car” built up a head of steam that was undeniable, making the choice to get it on record an easy one (the song is included on Combs’ latest album, Gettin’ Old). But the decision to release it as a single — an even more unusual move — was part of a strategy to continue expanding Combs’ fanbase to a pop audience. And that helps Combs’ manager, Make Wake Artists founder Chris Kappy, earn the title of Billboard‘s Executive of the Week.
Below, Kappy discusses the choice to finally record “Fast Car” six years after Combs first released a snippet of it, the track’s embrace by radio programmers and how it ties into Combs’ success as a worldwide touring phenomenon. “Being able to have a hit that is globally recognized and accepted outside of country radio, and into the ears of CHR and Hot AC listeners, is very much the same thing as being able to do sold-out shows in places we have never been,” says Kappy. “The music is traveling and we want to be on the forefront in any way possible.”
This week, Luke Combs’ cover of “Fast Car” hit No. 14 on the Billboard Hot 100 and No. 2 on Hot Country Songs. What key decision did you make to help make this happen?
I got out of the way. I know that sounds weird, but it truly is what we do with Luke. He knows his fanbase so well, and he also knows what works. The song felt right when he sang it in the studio, and we all just nodded in the control booth.
Luke Combs performs onstage during Day 3 of the 2022 Stagecoach Festival at the Empire Polo Field on May 01, 2022 in Indio, Calif.
Amy Sussman/GI for Stagecoach
“Fast Car” was a popular staple at Luke’s live shows, but the decision to record the cover for Gettin’ Old — and especially to release it as a single — feels like an outside-the-box move. What was behind that?
The demand from our fans has been rabid for “Fast Car” since he first released a snippet of it more than six years ago. We also felt that it would help draw non-country fans into the genre and experience the wonder that is country music. This song is an iconic masterpiece and we all felt that it was the perfect song to crossover to a new audience that we didn’t particularly have.
It’s interesting to note that Luke kept the “checkout girl” lyric instead of changing it to “checkout boy.” What was behind the decision to stay 100% faithful to the original lyrics?
Luke is a songwriter too and Tracy is one of his favorite artists. So his goal was to never change the song. His goal was to honor the perfection that it is, and changing the gender never crossed his mind.
Was there a good-faith attempt made to reach out to Tracy and ask her permission to cover the song, even though that wasn’t required? If so, did you all track her down, and what, if anything, was her response?
At this level, our labels and teams have been in communication and we were always going to follow her lead. Luke, nor I, have spoken directly to Tracy. This is her song and we were going to live within any parameters she had for her song. We are just happy we were able to release it and see the response of fans enjoying it.
Are there plans to make a video?
If given the opportunity, we would love to be able to create a visual piece that would only enhance this already amazing song.
Are there any plans for Luke and Tracy to perform the song together?
As of right now, no. But we never say never to anything.
Big pop covers are a bit of a rarity these days — the trend has swung more toward interpolations recently, which allows songwriters to keep a bigger piece of the publishing pie. But are there advantages to trying to break a cover as opposed to an interpolation?
I don’t think we were looking to make money off of this, as much as Luke wanted to be able to deliver a great song, that has shaped his musical career, and give it to a new generation and genre of fans. Luke doesn’t think, “How can I make money off of this,” more so, how can he give the fans a look into the music that shaped him?
Is it tough going to radio with a big cover in 2023? There are so few conventional covers on the airwaves these days. Do you have to demonstrate a song’s strength at streaming before program directors will even start a conversation with you about putting it in rotation?
Luckily, this song has hit home with a lot of programmers. It has given them the opportunity to showcase a song they also love. We are having streaming success, very early out of the gate, but we are also having radio success running parallel with it. It’s fun to see the both running, hand in hand, with one another.
Luke already saw success with Billboard top 10 hits like “Forever After All” and “The Kind of Love We Make.” What could the success of “Fast Car” at pop radio mean in terms of exposing him to a new audience?
We have always wanted to bring our genre to the ears of more people. That’s why we play shows internationally and invest in Europe, Australia, and Canada. Being able to have a hit that is globally recognized and accepted outside of country radio, and into the ears of CHR and Hot AC listeners, is very much the same thing as being able to do sold-out shows in places we have never been. The music is traveling and we want to be on the forefront in any way possible.
Speaking of crossover success, Luke is at such a career high point all around, including as a global touring star — rare for a country artist. Do these kinds of big successes at pop radio help his act translate to an international audience?
Luke has already laid the groundwork for his global success before this release. What I think happens now, is that we are able to widen our focus so when we do come back to other countries, we can welcome more fans and give them the experience that is three chords and the truth. It’s all we have ever wanted to do.
Previous Executive of the Week: George Prajin of Prajin Records
For years, the major labels have been clamoring for streaming services to raise their subscription prices. The publicly stated position of leadership at Warner Music Group and Universal Music Group is that music is undervalued, in part due to artificially low subscription rates. Warner Music CEO Robert Kyncl was recently quoted as saying “We are the lowest (cost) form of entertainment; we have the highest …engagement, highest form of affinity and lowest per hour price. That doesn’t seem right. It should change in an orderly fashion.” As I noted in an April Billboard article looking at both sides of the issue, it’s astounding that I pay about the same amount for my monthly streaming subscriptions as I did for Rhapsody in 2003 — between $9.99 and $10.99 per month. Although Apple and Amazon recently raised prices, even those prices fall below the Rhapsody benchmark of $9.99 per month set in the early aughts once adjusted for inflation. There’s a strong case for price increases.
What if this thinking is wrong, though? Are there reasonable arguments for leaving prices where they are?
In the US music streaming subscription penetration is relatively high, at 41% of internet users over the age of 13. Many who might subscribe have access through family plans while some share account log-ins. Overall about 50% of internet users have access to a paid on-demand subscription music service through direct payment, sharing or trials and that number is even higher if you include SiriusXM.
These statistics are important for two reasons. First, they demonstrate that there is more room to grow music subscriptions in the US. They also reveal an underlying demographic divide. The half without access to on-demand services are older (59% over age 44), less invested in music and likely to be more price sensitive than earlier adopters.
Research that MusicWatch conducted on the economy and music highlighted that younger fans are more stressed about their personal financial situations as well as inflation. Respected music analyst Mark Mulligan of MIDiA Research noted that helping subscribers through difficult economic times might create goodwill for audio services. And he might have a point, especially for the younger demographic who make up a large part of the current subscriber base.
We need to be clear about how this price argument might apply to different consumers. Would services raise prices for current subscribers, who already rate the offer quite highly? What about new subscribers? As pointed out earlier, there is still growth to be had for subscriptions. In the U.S., trials are the primary feeders to paid subscriptions. According to MusicWatch’s Annual Music Study, released in March 2023, the likelihood of moving from a trial to a full paid subscription is slowing. The number one reason triers don’t expect to convert is “I’m watching my money more carefully due to inflation.”
For years the main barrier to converting from a trial to a full subscription has been not using the service often enough. According to MusicWatch surveys, subscribers to paid on-demand services spend 26% more time streaming music than people who are on a trial. They also consider music more important..They are nearly twice as likely to spend money on things like concert tickets, vinyl records CDs and merchandise. And keeping prices low could be more attractive to these potential subscribers now sampling the service through a trial.
There’s also a strong case to be made for increasing audio subscription prices, of course. Stagnant rate adjustments, high loyalty and usage, and outstanding value suggest that reasonable increases would meet modest resistance, if any at all. Those of us with long histories of paying for music subscriptions and passion for our favorite services are unlikely to churn out.
The question is not whether we can grow “ARPU” among current subscribers. It is whether the services can raise prices and continue to grow the subscriber base in the US, especially since that growth would come from later adopters who are older and less committed to music. There are segments of music fans struggling to manage inflation. That may argue for maintaining low prices. It could also argue for a SiriusXM-style strategy that combines low introductory prices with increases upon renewal. Whatever the argument, these questions should be resolved by testing, not proclamation.
Russ Crupnick is the principal at market research firm MusicWatch.