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PRS for Music, the U.K. collecting society that represents composers and publishers, announced Monday (April 24) that it collected a record-high 964 million pounds ($1.20 billion) in 2022, a 22.9% increase over the previous year and an 18.9% increase over the previous high of 964 million pounds reached in 2019. The organization also distributed a record 836.2 million pounds ($1.04 billion) in 2022, an increase of 23.5% over 2021, while reducing its cost ratio to 9.3%.
“Live revenue came back,” says PRS for Music CEO Andrea Czapary Martin — up 683% from 2021 as the concert business rallied after the worst of the pandemic, and 16.1% compared to 2019. “At the same time, we saw a huge increase in music streaming — 25% — that exceeds market growth.”
PRS for Music is not the only collecting society that’s doing well as live music returns and streaming continues to thrive: In early March, ASCAP announced a 14% increase in collections to $1.52 billion and three weeks ago the German rights body GEMA posted 13% growth to 1.178 billion pounds ($1.25 billion).
Even by those standards, PRS’ results are impressive, although currency fluctuations and differences in accounting make exact comparisons between international collecting societies difficult. And it is rare to see a cost ratio below 10% for a society that collects for publishers and songwriters. PRS says it hit its goal to get its cost ratio below 10% four years ahead of its five-year plan.
“I run this like a commercial company, except we’re owned by the members and profits are distributed to our members,” says Martin, who joined PRS in mid-2019. Martin, a newcomer to the music business, worked for a variety of data- and subscription-focused businesses, including Reader’s Digest Association and the U.K. Royal Mail. “My background,” she says, “is in tech and data.”
Other highlights of 2022 include new and renewed licenses — “better agreements and new agreements,” Martin says. Revenue from video-on-demand services rose 16.5%, while that of linear television declined 2.4% and commercial radio, driven by advertising, grew 2.6%. “A TikTok agreement paid out last year,” Martin says, “and we doubled video game royalties.”
ICE, the Berlin-based music licensing hub that PRS owns as a joint venture with GEMA and Sweden’s STIM, is also “helping PRS immensely,” Martin says. “ICE is the biggest growth opportunity for PRS.” Expansion elsewhere is also a priority, Martin says, including in Africa.
PRS, like most of its sister societies, has a monopoly over U.K. collections — at concert venues, bars and restaurants, for example. Starting a few years ago, though, it also competes to represent composers and publishers online, to streaming services. ICE gives PRS the reach and resources to compete with SACEM. And PRS’ push toward efficiency gives it a solid competitive position.
“I’m very optimistic for the future,” Martin says. “But that doesn’t mean there aren’t challenges.”
Carlos “Charly” Pérez, who for over two decades led public relations and later promotion for Universal Music Latino, has been named senior vice president for communications and public relations for Warner Music Latina, effective immediately, Billboard has learned.
Pérez will be based in Miami and report to Roberto Andrade Dirak, managing director of Warner Music Latina, with whom Pérez previously worked closely with when Andrade Dirak managed Colombian star Sebastian Yatra.
In his new role, Pérez will craft strategies to promote WM Latina’s artists and people across a wide range of different media outlets to a business and consumer audience. He will also work closely with Ruben Abraham, svp of marketing and artist strategy, as well as Hector Ruben Rivera, svp and head of A&R, Latin Music, who both also report to Andrade Dirak.
Pérez is widely recognized as a beacon of knowledge, integrity and professionalism in the Latin music world as well as for his knack for singling out promising new acts, having pushed for early coverage of future superstars like Karol G, Feid and Sebastian Yatra, to name just a few.
Pérez is also particularly valuable given his deep knowledge of the pop, urban and regional Mexican markets.
Indeed, he started out 26 years ago working as an assistant to the International department at Mexican media company Televisa, where he later became a label manager. He later joined Univision Music Mexico as a label manager, focusing largely on regional Mexican music and working with acts like Los Tigres del Norte, Ana Bárbara, Banda El Recodo and Jenni Rivera, and subsequently moved to Miami as press and television coordinator.
Pérez rose steadily through the ranks and after Univision Music was acquired by Universal Music Latin Entertainment, he worked as national publicity director. In 2020 he was promoted to international vice president of public relations and promotions, overseeing the parent label, Machete Music and Capitol Latin and working closely with regional Mexican labels Fonovisa and Disa.
“I’m very happy and grateful for this huge opportunity to become part of the Warner Music Latina team,” said Pérez. “I’ll bring my experience to bear as we continue to evolve our company, enhancing our value proposition to artists, and positioning ourselves as a leader at the intersection of music and technology.”
Roberto Andrade Dirak adds: “Charly is an amazing addition to the team here at Warner Music Latina. His knowledge and experience transcend genres and borders, and he’s helped take some of the best Latin music to every corner of the world, empowering the careers of the artists he’s collaborated with. We’re delighted to have him join us.”
Pérez leaves Universal on good terms.
On April 3, Billboard broke the news that Jimin’s track “Like Crazy” reached No. 1 on the Billboard Hot 100 — a first for a solo Korean artist — while his album, FACE, debuted at No. 2 on the Billboard 200. Released by Big Hit Music, one of the labels under Korean entertainment company HYBE, “Like Crazy” currently marks the best performance by a member of K-pop supergroup BTS, whose hiatus announcement last year presented a significant challenge to HYBE’s ability to forge another chart success in the United States. “Like Crazy” reached only No. 11 in South Korea, although FACE topped album charts in South Korea and Japan.
Investors took note of Jimin’s U.S. accomplishments. The following day, HYBE’s share price on Korea Exchange rose as much as 11.4% to 212,500 won ($161) before ending the day at 205,000 won ($155), up 7.5% from the previous day (as of April 17, it had risen 40%). That was the highest closing price since June 10 of last year — three trading days before BTS confirmed it would take a hiatus, worrying investors and sending HYBE’s share price down 28% in a single day. For a company with grand ambitions to build off of the success of BTS, “Like Crazy” was an important validation.
The music industry should take note, too. HYBE did with Jimin what all South Korean music companies are attempting with increasing urgency: ride the wave of K-pop’s global success by expanding outside of Korea and build up operations in the United States, the world’s largest music market. “All the shareholders want to see the ability for them to diversify [their] portfolios,” says Sung Cho, CEO of Chartmetric and newly appointed board member of the pioneering K-pop agency SM Entertainment.
Exporting is what South Korea does best. “After the Korean War, the only way to survive was to export things,” says Cho. Over the last three decades, the success of companies such as Samsung, LG and Hyundai has turned the country of 52 million into a top 10 exporter, according to the World Bank. But in recent years, South Korea has become known not just for its exports of high-tech products and manufactured goods, but as a global entertainment dynamo as well. South Korea’s music business built its economic success into a trade surplus of about $3.1 billion for intellectual property of music and images in 2021, up from $800 million in 2020, according to the country’s Ministry of Culture, Sports and Tourism. The South Korean film Parasite won a 2020 Academy Award for best picture. A year later, Squid Game became the most watched series in Netflix history, a worldwide phenomenon that racked up 1.7 billion viewing hours in its first month.
South Korean music companies have become international powerhouses by drawing on hip-hop, R&B and pop music and selling the K-pop blend of these genres back to fervent fans in the United States, Japan and Europe. But to compete globally with larger companies, the South Korea approach to the music business, and not necessarily the music itself, could be the deciding factor. “We’re seeing not only the export of K-pop bands — the boy bands, the girl bands — we’re starting to see the export of the K-pop business model,” says Bernie Cho, president of DFSB Kollective, a Seoul-based artist and label services agency. SM Entertainment founder Lee Soo-man coined the term “cultural technology” in the ’90s for his system of producing K-pop and promoting it worldwide. Other K-pop companies have adopted a similarly disciplined, systematic approach to finding, developing and promoting musicians.
The widespread music-business anxiety about the death of artist development doesn’t apply to South Korea. Western labels fight bidding wars over viral artists with instantaneous popularity or favor proven artists and catalogs, leaving the task of building an audience to artists themselves or independent labels. In contrast, K-pop companies spend years recruiting and rehearsing talent, as well as giving artists instruction in a specific approach to the music business. “Combing through social media platforms like TikTok may give us a chance to sign artists who are technically proficient as music producers or performers, but we demand more from our artists,” says HYBE CEO Jiwon Park in an email to Billboard. That means trainees work with HYBE’s training and development department to “internalize the values of autonomy and responsibility” so they can navigate the expectations put on them.
To learn the U.S. market, South Korean companies have partnered with U.S. labels to distribute, market and promote their music. HYBE has a joint venture with Universal Music Group’s Geffen Records to create a U.S.-based girl pop group. JYP Entertainment has teamed with UMG’s Republic Records to form the global girl group America2Korea, or A2K. Additionally, Kakao Entertainment’s Starship Entertainment subsidiary has partnered with Sony Music Group’s Columbia Records to co-manage marketing and promotion of the six-member female group IVE in North America.
These U.S.-Korean partnerships have also given domestic labels a chance to learn the K-pop method of A&R. To Glenn Mendlinger, president of Imperial Music, a new division of Republic Records, the JYP partnership has provided insight into “what it is to build a fandom and foster it through immersive packaging and increasing the collectability of the products.” Mendlinger is impressed with JYP’s attention to detail and ability to build storylines for their artists. “That’s why they’re so successful,” he says in an email to Billboard. “The level of care is unparalleled and unrivaled in terms of its intimacy and diligence.”
But more and more, South Korean companies have boots on the ground and control of their destinies in the United States. HYBE is the furthest along in building out its stateside operations. In 2021, it acquired Scooter Braun’s Ithaca Holdings for $1.05 billion and named Braun the CEO of HYBE America, a genre-spanning collection of artist management and record labels that includes SB Projects, Nashville-based Big Machine Label Group and Atlanta hip-hop company Quality Control, which was acquired in February for $300 million. Those deals are “just the beginning,” HYBE chairman Bang Si-hyuk said in a speech in March. He believes building in the United States will give HYBE the “strong network and infrastructure” it needs to “minimize the cost of trial and error” and attain stronger bargaining power and distribution rates relative to local companies.
SM Entertainment, the company behind such groups as NCT 127 and aespa, and Kakao Entertainment have created a U.S. joint venture and plan to acquire a U.S.-based company to expand into hip-hop or R&B, according to SM’s road map made available to investors. Kakao now owns a 40% stake in SM Entertainment, having quelled HYBE’s attempt to buy a commanding stake and control its board of directors following a break with SM founder Lee.
South Korean music companies’ do-it-yourself nature extends to tech platforms, too. While most labels depend on the likes of Meta, Twitter and Fortnite to reach fans, HYBE owns its own social network, Weverse, and JYP and SM have a joint venture with tech company Naver called Beyond LIVE that streams live online concerts. SM also owns a social networking app, Bubble, and its artists will begin building fan communities at HYBE’s Weverse in September. It makes sense in one of the world’s most wired and wireless countries, says Cho of DFSB Kollective. In Korea, “youth culture, pop culture and digital culture are one and the same in many ways.”
For HYBE, Weverse not only diversifies its business but allows it to control how its artists communicate with their fans. With the addition of artists from North America and Japan, Weverse “will serve as a gateway to the fandom market in Asia, North America and the world,” says Park. With enhancements and new services, “Weverse will seek boundless expansion beyond K-pop.”
This story originally appeared in the April 22, 2023, issue of Billboard.
Both country labels and broadcasters want to speed the advance of singles on the Country Airplay chart, though figuring out how to do that is a slow process.
A volunteer panel, spurred by a 2022 Country Radio Seminar session, reported on its progress during an April 20 CRS 360 webinar, concluding that stations need to generate 150 spins on most singles to gain reliable research about the song’s connectivity. Stations that limit a new single to overnights and play it only six times a week require 25 weeks to hit that plateau, one of several factors that slow the hit-development process.
Songs ranked No. 11-20 on the chart have the toughest time advancing, according to the panel’s research, in part because of the plethora of approaches by programmers. Reporting stations that commit early to a new single are sometimes ready to move on from particular titles just as slower-evolving stations are beginning to boost rotations.
One partial suggestion, sure to meet pushback, was to use a smaller playlist, expose new singles more quickly in daytime rotations and make a decision at that 150-spin mark.
The issue is more intense in country than any other format, in part because artists and their representatives have a stronger personal relationship with broadcasters and are more invested in succeeding on that platform — and in controlling the outcome.
“It’s the only format I’ve ever been in,” said McVay Media president Mike McVay, “where people call and yell at me for playing a song or beg me not to drop a song.”
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Tomorrow comes the most wonderful time of the year: Record Store Day. As fun as some fans find it – and I joke that it’s my favorite holiday – it’s hard to remember how odd an idea it seemed when it started, in 2007. Back then, CD sales were sliding fast, download sales were growing a lot slower, and mass-market streaming was still taking shape. The idea of a day devoted to buying vinyl, much less in physical stores, was anything but obvious.
Now look. Vinyl generated more revenue in the U.S. than CDs by 2019, and more unit sales by 2022, according to the RIAA. Last year, vinyl generated $1.2 billion in the U.S. — more than Latin music, which brought in $1.1 billion, although Latin music brings in far more worldwide. And much of this growth came at a time of serious challenges, from insufficient manufacturing capacity to supply chain problems.
Now what? The future of vinyl was one subject that came up at a Nov. 3 panel that I moderated at RIAA headquarters in Washington, D.C. With me were Vinyl Me Please CEO Cameron Schaefer, Byrdland Records co-owner Alisha Edmonson, Thirty Tigers director of physical sales Mike Couse and consultant Simone Piece.
Among the topics that came up:
How vinyl fulfills a need for “better connection with music”
How the pandemic supercharged growth
Whether recent new buyers will stick around for the future
The most important question, of course, is what this means for artists. It was disheartening to hear that delivering vinyl to stores even close to an album’s release date requires up to ten months of advance planning. Even so, many independent acts make more money on vinyl than they do from streaming.
Another highlight? A performance from Lola Kirke:
No one knows what the future holds for vinyl. Judging by the format’s fast growth, however, it will remain an important part of the recording industry’s revenue mix for at least the next few years, and perhaps long after that.
Watch the entire panel here:
Frank Ocean’s decision to cancel his second of two performances at Coachella this weekend will likely cost the festival several million dollars, sources tell Billboard — losses that the festival will try to offset, in part, with finding new uses for the giant ice pad the company created for Ocean’s long-awaited performance.
A source close to the situation tells Billboard that festival promoter Goldenvoice is trying to make the best out of the millions of dollars spent on building a giant ice pad that was supposed to accommodate over 100 skaters during Ocean’s set last Sunday night but was scrapped at the last minute after the artist suffered an ankle injury. The ice pad cannot be used as a public ice rink, the source says, but the Goldenvoice team is working out how to incorporate it into another yet-to-be determined performance.
Ocean was to be paid $4 million for each of his two Coachella performances, for a total of $8 million, sources say. Since Ocean is not performing for the second weekend, he will only be paid for the first weekend’s performance. Goldenvoice, however, will still need to pay Blink-182 that same $4 million rate for their replacement one-hour headlining set on Sunday, sources say, and will also need to pay the newly announced Skrillex, Four Tet and Fred again.. combo for their closing set.
Typically, festival promoters pay an artist a performance rate and also cover basic production needs such as staging, sound, lighting and video boards. The artists will cover all additional production elements from their fee that are unique to their performance such as musicians, dancers, performers and other major visual elements.
In Ocean’s case, however, the most expensive part of his production — the custom ice pad— was built by Goldenvoice and came with significant energy costs. So, while Goldenvoice had planned to recoup that cost from his performance fees, sources say the production costs Ocean racked up exceed the $4 million he earned for the first weekend. That means Ocean failed to turn a profit from his Coachella appearance and that the festival will have to eat the remaining loss — for which it is highly unlikely to demand repayment.
Ocean also racked up about $45,000 in curfew fines during his set, which played 25 minutes past the mandatory midnight curfew imposed by Indio, California, city officials. However, a source close to Ocean says those fines are Goldenvoice’s fault, claiming Ocean’s set started an hour late because festival staff took an additional 50 minutes to change over the stage from Bjork’s set to Ocean’s set.
Despite the curfew fines, which added up to $133,000 over the weekend, according to officials with the city of Indio, the millions of dollars spent on an unused ice sheet and extra talent costs, Goldenvoice is still likely to make a profit from the festival. In an average year, Coachella grosses more than $115 million in ticket sales across both weekends and makes tens of millions more in food, beverage and hospitality.
Coachella’s second weekend kicks off Friday (April 21) in Indio.
For Rimas Entertainment CEO Noah Assad, it was a night to celebrate. On Feb. 1, seven years after signing Bad Bunny, Assad, 32, took the stage to accept the Executive of the Year award at the annual Grammy-week Billboard Power 100 event to honor the most important executives in the business. In front of an audience that included Universal Music Group CEO Lucian Grainge, HYBE Chairman Bang Si-hyuk and music mogul Clive Davis, Assad, sporting white sneakers and a ponytail, accepted the award from fellow Puerto Rican Bad Bunny. Minutes later, manager and executive Scooter Braun told Assad from the stage: “You’re the best of us now.”
Bad Bunny’s fifth studio album, Un Verano Sin Ti, ended the year at No. 1 on the Billboard 200 — the first non-English album to do so — and his 81 concerts in 2022 grossed a record $434.9 million. Assad was the force behind a lot of this success, as the artist himself noted onstage. “There is no Bad Bunny superstar without Noah,” he said in halting English, then handed Assad the obelisk-shaped plaque. “Without [Bad Bunny],” Assad said as he accepted the award, “a lot of my dreams would have never become true.”
The same could be said of another figure, Rafael Ricardo Jiménez Dan, who founded Rimas nine years ago but has had no interaction with Bad Bunny or the company’s other stars. He went unmentioned in Assad’s acceptance speech, andfew of the executives in that room even knew that he existed. Jiménez says he was the sole owner of Rimas — which manages, records and publishes Bad Bunny — until 2018, when he says he made Assad a 40% owner, though a source close to Assad disputes that description of their initial deal. Before that, Jiménez had been a vice minister in authoritarian leader Hugo Chávez’s Venezuelan government; while in the regime he worked to modernize the country’s information systems and was charged with helping oversee the development of a national ID that Chávez wanted to deepen his control over the populace.
Also unknown to most of the Power 100 attendees, Assad had spent the last few months embroiled in negotiations, which were so intense they continued through the year-end holidays, that would buy Jiménez out of Rimas. After working to build Rimas together for nearly a decade, the relationship between the two men broke down, and for the past five years, multiple sources say, Assad has been pushing to get him out, for “business reasons,” says the source close to him. When Rimas was initially formed in March 2014, Assad believed Jiménez was simply an investor who owned restaurants and packaging companies.
After they started working together, Assad began to hear talk about Jiménez’s connections to the Chávez regime, but when Assad inquired on one occasion, Jiménez told him he had “nothing to hide,” according to the source close to Assad. Now, though, Jimenez may finally be on his way out.
Under the terms of Sony Music Group’s potential deal with Rimas, which is still under discussion, Sony would put up capital toward buying out the 60% stake owned by Jiménez and, through an ownership restructuring, assign a significant minority stake to its independent distribution subsidiary, The Orchard. Bad Bunny, who does not currently have a stake in Rimas, could get some equity and Assad could get a bigger stake in the company, which Billboard estimates could be valued at more than $300 million overall, not including publishing. Together, sources say, Assad and Bad Bunny would likely emerge from the deal controlling Rimas, although the agreement is still being discussed. A separate Rimas publishing arm, also believed to be 60% owned by Jiménez and 40% by Assad, which Billboard estimates is worth about $70 million, will likely be sold in a separate deal, sources say.
Jiménez, Assad and a spokesperson for Sony Music Entertainment declined to comment about any deal in the works.
The size of the potential deal speaks to the growing sway of Latin music and especially of Bad Bunny, who has helped grow the San Juan-based Rimas into a 100-person company that essentially functions as a label, publisher, manager and booking agency and also works with other Latin artists like Arcángel and Karol G.
In a series of email exchanges through his lawyer, Jiménez gave Billboard an unprecedented look at his unlikely journey from an army captain raised in Portuguesa, a rural part of Venezuela, to one of music’s most successful behind-the-scenes investors. The image that emerges is that of a savvy operator who positioned his business enterprises in ways that benefitted from his government connections in Venezuela — and who in both his five-year government career and his second life in the U.S. music business has remained out of public view while playing a role in the lives of prominent people, like an unseen gravitational force.
Jiménez, 56, who played violin in Venezuela’s youth orchestra system and got his first taste in the music industry managing a Venezuelan urban duo, formed at least a dozen companies from 2005 to 2013, in Venezuela and the Caribbean, and he also served as CEO of a cardboard and paper packaging firm that Chávez nationalized. He tells Billboard that the funding to start Rimas and his life in the United States came from a Miami restaurant and from a company that imported food products from Brazil and other countries.
Assad was always thought to be the co-founder of Rimas. Although he privately acknowledged the company had a silent partner, he previously told Billboard on the record that he co-founded the company with José “Junior” Carabaño, a 20-year-old Venezuelan graffiti artist. But Jiménez tells Billboard that after meeting a 22-year-old Assad in 2012, he formed Rimas in Puerto Rico in March 2014 and hired Assad as an employee — an arrangement that continued until 2018, when Assad became part-owner after he “agreed to assume more responsibilities.” A source close to Assad disputes that claim but wouldn’t provide more detail. Billboard was unable to obtain documentation of the initial deal terms.
Assad “demonstrated a great talent in the artist development side of the business and worked hard to scale up the growth of the company,” Jiménez says, adding that he brought Assad aboard as part of “a strong team of talented people were brought aboard to take over the day-to-day operations.”
Jiménez would not tell Billboard how much he initially invested in Rimas. A 2017 corporate filing for Risamar Business Group, the entity Jiménez used to hold his share of Rimas, shows $1.34 million in assets and $648,098 in liabilities. Property records show that, in 2014, while still living in Caracas, Venezuela, Jiménez also purchased a foreclosed property in an exclusive beachfront neighborhood in San Juan for $390,000 in cash to turn into Rimas’ first offices and recording studios.
Rimas Entertainment’s first office in San Juan, Puerto Rico.
Juan R. Costa
Assad served as the face of Rimas in the music business, but Jiménez says he led the company for four years before effectively handing the reins to Assad. Until then, Jiménez had to approve — and often vetoed — artist signings that would exceed the company’s budget, and he was also kept apprised of the label’s other big decisions, including the very important one to sign Bad Bunny. Jiménez was copied on the April 11, 2016, email from Rimas attorney Jessie Abad to Assad about the “360 deal and songwriter agreement” for Benito Martínez Ocasio (Bad Bunny), according to a copy of a partially redacted email in a civil case in San Juan and one person familiar with the matter.
From Army Captain to Vice Minister
Like many leaders in Venezuela, Jiménez’s career started at a military academy. He graduated in 1987, No. 3 in his class. He finished the same year as Diosdado Cabello and Jesse Chacón, he noted, both of whom participated in Chávez-directed coup attempts in 1992; Rodolfo Marco Torres was a class below them. All three went on to become high-level officials in the Chávez regime.
Venezuela’s legacy as one of the wealthiest and most-stable democracies in the region began to change on Feb. 4, 1992, when Chávez, then a disaffected army officer, led a failed coup attempt. Once out of prison, he rose to fame and was elected president in 1998 on an anti-establishment platform. A disciple of Cuban leader Fidel Castro, he later veered toward autocratic socialism by silencing opposition parties, packing the courts, harassing the media and nationalizing more than 1,000 businesses.
While Chávez’s “missions to save the people” initially helped stem poverty, his policies laid the foundation for the oil-rich country’s descent into full-blown dictatorship after his death in 2013. His legacy also included “an institutionalized kleptocracy the likes of which the world has never seen before,” Marshall Billingslea, former assistant secretary for the Office of Terrorist Financing and Financial Crimes in the U.S. Treasury Department, wrote in 2021. Over the past two decades, Chávez and Maduro, his successor, “and their cronies,” Billingslea wrote, “plundered at least $300 billion from state assets.”
President of Venezuela Hugo Chavez gives a speech during the closing session of the 4th PetroCaribe Summit in the Camilo Cienfuegos refinery Dec. 21, 2007 in Cienfuegos, Cuba.
Sven Creutzmann/Mambo photo/GI
Jiménez, who was commissioned as an army captain, retired from the military in 1999, by which time he had earned degrees in both law and systems engineering. Once Chávez took power in 1999, the new president initiated a sweeping modernization program, and Jiménez’s knowledge of telematics, which involves the long-distance transmission of computerized information, proved valuable. He joined the government in late 2002, serving initially in a management and technical unit that oversaw the operational side of the Judiciary, helping to digitize the country’s law enforcement and criminal and civil administration.
After he was briefly ousted from office in 2002, Chávez launched Misión Identidad (Mission Identity), a program that became a cornerstone of his “Bolivarian Missions,” or social programs, and a way for him to tighten his hold on power after the failed coup —at the expense of civil liberties. Its focus became developing a national ID card with biometric data embedded in a chip that would be modeled after China’s smart card, which Beijing uses to track social, economic and political behavior. Chávez launched his ID program in 2003, employing a Cuban company to help implement it, according to the Center for a Secure Free Society (SFS), a conservative national security think tank in Washington, D.C., that has testified in Congress about the dangers of the Venezuelan regime.
Mission Identity involved transitioning Venezuela’s passport and naturalization system from what was called ONIDEX to the higher capacity SAIME system. Beginning around 2003, Jiménez worked with a hand-picked team on the automation of the project, according to two people familiar with the matter. SAIME went online in 2009. President Nicolás Maduro, Chávez’s successor, finally rolled out the national ID, later called the carnet de la patria, or “fatherland ID,” in 2018. (Jiménez would not comment on whether he worked on the transition to SAIME.)
Jiménez’s government career peaked in March 2006 when Chacón appointed him vice minister of legal security in the Interior Ministry. That led to a seemingly plum assignment the following January when he became one of five directors of Mission Identity, according to a government document.
Chávez officials in 2007 allegedly used Mission Identity to provide false identities to Cuban agents to enter Venezuela, and to facilitate the travel of suspected Islamist terrorists, Colombian guerillas and drug traffickers, says the SFS.
Despite his official designation as a director, Jiménez says he “personally never worked with Mission Identity” and that the directorate had “no decision-making authority.” He resigned from the Interior Ministry after about a year and a half, “due to frustration with the government’s unwillingness to fairly and justly apply the rule of law.” (Jiménez provided a copy of his resignation letter signed on Oct. 11, 2007, by Pedro Carreño, the Interior Minister at the time.) He adds that he “sought to implement several projects aimed [at] improving legal certainty, to guarantee a better participation of the civil society and to increase the standards of transparency but these were obstructed and stopped by the minister (Carreño) above him.”
Jiménez overlapped in the Interior Ministry by about five months with Tareck El Aissami, a powerful member of the regime who served as a vice minister through September 2008, and then as Interior Minister from 2008 to 2012. The Trump administration sanctioned El Aissami in 2017 and the Justice Department indicted him in 2019 for alleged international narcotics trafficking and money laundering; U.S. Treasury officials have also been investigating his ties to the terrorist group Hezbollah. (El Aissami responded to the accusations in 2017 on Twitter, calling them “infamy and aggression; Maduro said he had “delivered the strongest blows against the heads of drug trafficking” in Venezuela.)
Venezuela’s Vice President Tareck El Aissami delivers a speech during a rally against the secretary general of the Organization of American States (OAS), Luis Almagro, in Caracas on March 28, 2017.
FEDERICO PARRA/AFP via GI
El Aissami was the chief architect of the national ID program, according to Joseph Humire, who heads the SFS, and who testified to Congress about the program in 2015. El Aissami also allegedly oversaw a multiyear program to sell hundreds, if not thousands, of legitimate Venezuelan passports for as much as $50,000 apiece to people from Middle Eastern countries, says Mauricio Claver-Carone, former senior director for Western Hemisphere Affairs at the National Security Council. (Delcy Rodríguez, then Venezuela’s foreign minister, told CNN in 2017 that allegations of selling passports and visas were “totally” false.)
Through his lawyer, Jiménez says he has “no knowledge” of the passport-selling program and “has never had any personal, business or political relationship with Mr. El Aissami.” Jiménez’ lawyer adds that “the presence of individuals like Mr. El Aissami was one of the factors that led Mr. Jiménez to resign.”
On the Money
Jiménez was initially reluctant to discuss his investment in Rimas, which he first told Billboard derived from “private business activity,” without offering more details. He later clarified that the funding came from a food import company and a restaurant in Miami, as well as a line of credit he said was from a bank in Florida, “which was secured by his assets in Florida.”
Risamar Business Group also controls a Florida-based food company of the same name. The company’s website says it specializes in “high-quality, ethically produced snack foods, canned fruits and vegetables, cleaning supplies and animal care products.”
In October 2006, at the peak of his career in the Chávez regime, Jiménez also started an import-export food company in Venezuela, Agropecuario Ravigg C.A. It imported food to Venezuela from Brazil, Argentina and other countries, generating a net profit of 8,897,246 bolívares ($1.4 million) in 2013, according to the Registry of National Contractors (RNC). Ravigg shipments from January to May of 2014 alone totaled $7.9 million in value, according to Venezuela’s National Center for Foreign Commerce (CENCOEX). The firm, which is 85% owned by Jiménez and still operates, did business as food shortages were beginning to mount in the country after the price of oil plummeted. Food imports became controversial in 2019 when the U.S. Treasury Department sanctioned a Colombian national and others for allegedly orchestrating a scheme that enabled Maduro and his regime to “significantly profit from food imports and distribution in Venezuela” as far back as 2016. (Ravigg was not named in the sanctions.)
When asked to clarify if Ravigg was the company he was talking about that helped him fund Rimas, Jiménez said it was not and that he had been referring to a third “international food-trading entity,” founded in 2008, which he declined to name.
Jiménez also handled a variety of Venezuelan government contracts through Rialfi Consulting C.A., a company he set up in August 2005, seven months before joining the Interior Ministry. By the following August, when he was a vice minister, Rialfi landed a contract with the Venezuelan Institute of Social Services (IVSS), which manages employee pension funds.
Between 2006 and 2018, Rialfi completed 17 contracts, 15 of which were with government-controlled companies or institutions, including the national oil company Petróleos de Venezuela, the Bank of the Treasury and Banco de Venezuela. (Jiménez was still listed as CEO in 2019; Rialfi is 100% owned by Consorcio Riso C.A., which Jiménez also controls.)
In an email, Jiménez says no funds from Rialfi were invested in Rimas and notes that with the “year-to-year devaluation of the bolívar, those proceeds would have had very little value if they were ever converted to dollars.” (A government document from 2019 shows Rialfi had total assets of 2.84 billion bolívares, worth $6,100 in December of that year, when the currency was cratering from hyperinflation of 9,586%.)
After Jiménez resigned from the Interior Ministry in October 2007, he didn’t stop doing business with the government. Since Jiménez left his post, Rialfi has executed at least 14 contracts with Chávez-controlled companies or institutions, according to the 2019 document. Jiménez says the contracts were granted “via a public bidding process.”
Jiménez, downplays his government service, describing himself as “an entrepreneur for over 20 years in different industries, including food and beverage, technology, packaging, hospitality and entertainment.” In April 2010, the board of Envases Internacionales S.A., a cardboard and paper packaging firm, named him CEO (and majority shareholder, he says); two months later, Chávez nationalized the company, in what became a common practice of appointing current or former military officers to lead companies the government had taken over.
Jiménez eventually controlled or ran at least 15 companies in Venezuela and Panama, and later in Barbados, Florida and Puerto Rico, according to corporate records.
He made his first foray into the music industry in Caracas in 2011, when he started managing and funding Kent & Tony, a newly formed urban act. The duo wanted to work with Puerto Rican producers Los de la Nazza, and in October 2012, Assad, their manager, flew with the producers to Caracas to work with the Venezuelans in the studio. Jiménez asked Assad to also manage Kent & Tony, and in January 2014, they signed a license agreement with Siente Music.
After that, Jiménez moved quickly, founding Rimas two months later in Puerto Rico, when he saw an opportunity “for a well-run full-service independent label focused on a genre that was growing exponentially.”
Helpful to the early interactions between Assad and Jiménez, say two people familiar with the matter, was Carabaño, the son of a Venezuelan folk singer from Barquisimeto popular with military veterans. Later, working with Assad at Rimas, Carabaño signed Venezuelan artists like rapper Big Soto. (Carabaño did not respond to requests for an interview.)
After Chávez died in 2013, Jiménez left Venezuela in November 2014, he says, and moved to the Miami area, where he had already bought a house in 2008 for $925,000 with his now wife Dayva Soto Vallenilla, a former Venezuelan judge, in Weston, a suburb known as Westonzuela for its popularity with Venezuelans. They purchased the home about six months after Jiménez left the Chávez government. They emigrated at a time when U.S. officials were allowing in few Venezuelans with high-level government backgrounds. Jiménez maintained his connection to his native country, traveling from Miami to Caracas 10 times between December 2014 and July 2018, according to Venezuelan passport records.
Rimas to Riches
“I’m from a place called Carolina, Puerto Rico,” Assad said to the audience of about 400 at the Billboard Power 100 event. Assad’s hometown, just outside of San Juan, is known as “Tierra de Gigantes” (Land of Giants), for 7-foot-11-inch resident Don Felipe Birriel González and for baseball star Roberto Clemente, the first Latin player named to the Hall of Fame.
By 2013, Assad was living in a small apartment in Carolina while organizing parties and booking performers in Colombia and other Latin American countries. By that time, he had already been managing future reggaetoón star Ozuna. Soon after, Assad created a YouTube business, striking the first direct partnership in Puerto Rico with the platform to more easily monetize content, says Mauricio Ojeda, YouTube’s manager of label partnerships, U.S. Latin. He says he first met Assad in San Juan in early 2014 — before Rimas existed — and decided to partner with him because of his connections to the underground Latin urban scene on the island. At the time, major labels and important markets like Mexico were not optimistic about the future of reggaetón and Latin trap music, and Ojeda says he was looking to recruit a partner in Puerto Rico, where the scene was heating up.
Jo-Ann Toro
“We spoke for hours, we hung out in Puerto Rico, he introduced me around,” says Ojeda, who says he also met Jiménez during that period. “[Assad] said he was going to come out with a ‘road map and a plan’ for becoming a YouTube partner,” says the YouTube executive.
YouTube signed a deal with Rimas in February 2015, Ojeda says, for a partnership that involved sharing revenue from video ads and other monetization features like channel memberships and merch sales. “This was providing the artists the opportunity to export their content and reach their audiences, during a time when nobody was really paying attention to them,” Ojeda says.
In 2016, with the YouTube partnership and Jiménez’s financing in place at Rimas, Puerto Rican rapper Eladio Carrión, an early Rimas signing, introduced Assad to Martínez, a then college student calling himself Bad Bunny, who was appearing at a Ponce show with Carrión. At the time, Bad Bunny was earning money for school by working as a bagger at the Econo supermarket near his home in Vega Baja. Martínez dropped out of the University of Puerto Rico at Arecibo, where he was studying audiovisual communication, and switched to a sound engineering program at the College of Cinematography, Arts and Television. (He chose his stage name after posting a picture of himself as a child wearing a bunny suit and a dour expression, then created a Twitter handle.)
After Bad Bunny uploaded some of his early music on SoundCloud, Assad in April 2016 signed him to the 360 deal with Rimas, collaborating on some early tracks with DJ Luian’s label Hear This Music.
Eventually, as Assad’s differences with Jiménez became increasingly apparent, Assad began seeking better opportunities for himself and his team, says a source close to Rimas. Days before Hurricane Maria hit Puerto Rico in September 2017, Assad met with manager Scooter Braun, whom he’d long admired, about a potential deal in which Braun would provide investment, making Jiménez aware of their discussions, according to multiple sources. The deal got close to the finish line but didn’t come to fruition.
Econo market in Vega Baja where Bad Bunny worked before Rimas signed him.
Alexei Barrionuevo
By mid-2020, with Bad Bunny’s success accelerating, Rimas had moved into newer offices in San Juan’s Miramar neighborhood on the top floor of a small office building. That November, Assad branched out, forming his own management agency, Habibi, which signed Karol G. The industry took notice: Even before Sony Music started negotiating a deal to help Assad buy out his majority partner, other companies were sniffing around Rimas, including HYBE, which has prioritized adding Latin companies to its portfolio.
This month, Bad Bunny and Rimas made history yet again when the Puerto Rican star performed at Coachella as the first Spanish-language headliner. The next night, Karol G, whose fourth studio album, Mañana Será Bonito (Tomorrow Will Be Beautiful) debuted at No. 1 on the Billboard 200 in March, performed on Saturday Night Live.
Behind the scenes, Sony and Rimas continue to work on the deal that could give both Assad and Jiménez — two driven hustlers from different generations and different worlds — keys to their futures. Assad would get the freedom to pursue his mogul dreams without an investor pulling at the purse strings, while Jiménez is expected to pocket what Billboard estimates could be more than $200 million for his stakes in the recording and publishing businesses he formed less than a decade ago.
Additional Reporting By Marcos David Valverde and Ed Christman
Sony Music Corp. is in the process of helping Bad Bunny manager Noah Assad — the CEO of Latin music label and management company Rimas Entertainment — buy out his partner, Rafael Ricardo Jiménez Dan, a former Venezuelan government official who has a 60% majority stake in the company, sources familiar with the matter tell Billboard.
Rimas — which manages, records and publishes Bad Bunny — also has a label and management roster that includes Arcángel, Eladio Carrión, Jowell & Randy and Tommy Torres. The company was founded in 2014 in Puerto Rico and now has about 100 employees.
According to sources, Sony will participate in a buyout of Jiménez, who has not been involved in running Rimas’ day-to-day operations since 2018. That will result in a reshuffling of the company’s ownership and will likely leave Bad Bunny with an equity stake in the firm— and either Assad, or the combination of Assad and Bad Bunny, with majority ownership.
However the deal is ultimately financed, Sony itself is expected to wind up with a significant minority share in Rimas, which it will assign to The Orchard, its rapidly growing music distribution and artists/label services powerhouse that currently distributes Rimas.
Billboard estimates that Rimas Entertainment — the record label and the management company — has a valuation above $300 million without including the company’s publishing assets, which sources say are not currently being considered as a part of this transaction.
Assad and Jimenez, respectively, also have the same 40–60% ownership stakes in the music publishing assets, Jiménez tells Billboard. The publishing company, which includes some Bad Bunny songs and was launched by Assad, Jiménez and lawyer Carlos Souffront, is also up for sale. The sellers are seeking a $70 million to $75 million valuation for the overall publishing company, those sources add. As on the recorded music side, Assad plans to retain his stake in the song catalog, which means that the Jiménez stake could potentially fetch $42 million to $45 million.
Assessing a valuation for the publishing deal is tricky, sources say, because many of Bad Bunny’s songs are still widely popular, which makes it harder to calculate how much their plays will decay until they level off and become a predictable income stream, likely in a decade or two from now. As it is, the Rimas publishing portfolio —which is currently being administered by Universal Music Publishing Group — has about $5 million to $7.5 million in net publisher share (gross profit after paying songwriter royalties), a level it is expected to maintain over the next few years.
The music publishing portion of Jiménez’s Rimas holdings have been shopped to private equity players, sources say, and there is currently no known buyer. That’s in contrast to the hoped-for sale of the label/management holdings, which appears to have only been offered to Sony. However, sources wonder if Assad has matching rights on the publishing assets, which means that he could also arrange a deal to buy the Jimenez publishing stake if he matches the highest offer.
Jiménez is being represented for the expected publishing sale by Brian Richards, co-founder and managing partner of the investment advisory firm Artisan. On the record label/management side of Rimas, sources say Jiménez is being advised by Mitchell, Silberberg & Krupp partner Joel Schoenfeld, the former general counsel of eMusic and BMG’s senior vp of business affairs before that; and by Colin Finkelstein, the former CFO for EMI Music, who sometimes consults with investors on music assets and also owns and runs a few artist management firms.
Both deals are said to be very complex, and sources say they have been in the works for months — with some wondering whether the deals have been stalled due to friction between the two partners, Jiménez and Assad.
Another looming issue may be how much financial capacity Sony Music Group has to close deals right now. As Sony negotiates the stake in Rimas, it is reportedly also in talks to acquire part — or possibly all — of the Michael Jackson estate in a deal that could carry a valuation of $1.5 billion to $2 billion.
The question is whether Sony’s corporate leadership in Japan has signed off on the funding and the completion of both deals and if the costs involved in the deals might force Sony to choose to between them.
If both deals are completed, sources suggest that they would likely still need to be approved by regulators. Under the Hart-Scott-Rodino Antitrust Improvements Act, as of Feb. 27, 2023, any merger and/or acquisition that has a transaction value of more than $111 million — or if the contemplated combined entity will have total assets of more than $445 million — must file and seek regulatory approval.
Assad, Jiménez, Sony, Finkelstein, Schoenfeld and Richards either declined to comment or didn’t respond to requests for comment.
Additional reporting by Alexei Barrionuevo
The case against a Fugees rapper accused in multimillion-dollar political conspiracies across two presidencies wound down with closing arguments Thursday (April 20) that capped off a trial that included testimony from actor Leonardo DiCaprio and former U.S. Attorney General Jeff Sessions.
Prakazrel “Pras” Michel is accused of funneling money from a now-fugitive Malaysian financer through straw donors to Barack Obama’s 2012 reelection campaign, then trying to squelch a Justice Department investigation and influence an extradition case on behalf of China under the Trump administration.
“He willingly broke the law to line his pockets and generate access and influence at the highest reaches of government,” prosecutor Sean Mulryne said. “He wanted money. Lots of it. And he got it.”
The defense argued the Grammy-winning rapper from the 1990s hip-hop group the Fugees simply got bad advice as he reinvented himself in the world of politics.
“Mr. Michel is a proud American [and] entrepreneur,” said defense attorney David Kenner. “Mr. Michel was simply being himself – a connector. He saw an opportunity to make easy money for himself, and there’s nothing wrong with that.”
The case is expected to go to a jury on Monday.
When Michel first met Low Taek Jho in 2006, the businessman usually known as Jho Low was dropping huge sums of money and hobnobbing with the likes of Paris Hilton. He helped finance Hollywood films, including The Wolf of Wall Street. DiCaprio testified Low had appeared to him as a legitimate businessman and had mentioned wanting to donate to Obama’s campaign.
Michel also testified in his own defense. He said Low wanted a picture with Obama in 2012 and was willing to pay millions of dollars to get it. Michel agreed to help and used some of the money he got to pay for friends to attend fundraising events. No one had ever told him that was illegal, he said.
Prosecutors said he was donating the money on Low’s behalf and later tried to lean on the straw donors with texts from burner phones to keep them from talking to prosecutors.
After the election of Donald Trump, prosecutors say Michel again took millions to halt an investigation into allegations Low masterminded a money-laundering and bribery scheme that pilfered billions from the Malaysian state investment fund known as 1MDB. Low is now an international fugitive and has maintained his innocence.
Prosecutors said Michel also tried to convince the U.S. to extradite back to China a government critic suspected of crimes there.
“This case is about foreign influence, it’s about foreign money, and it’s about greed,” Mulryne said.
The defense also pointed to testimony from Sessions, who was Trump’s top law enforcement officer until he resigned in 2018. He said he’d been aware the Chinese government wanted the extradition but didn’t know Michel. The rapper’s ultimately futile efforts to arrange a meeting on the topic didn’t seem improper, said Sessions
“What happened in 2017 was not willful and it was not deliberate,” Kenner said.
When Universal Music Group emailed Spotify, Apple Music and other streaming services in March asking them to stop artificial-intelligence companies from using its labels’ recordings to train their machine-learning software, it fired the first Howitzer shell of what’s shaping up as the next conflict between creators and computers. As Warner Music Group, HYBE, ByteDance, Spotify and other industry giants invest in AI development, along with a plethora of small startups, artists and songwriters are clamoring for protection against developers that use music created by professionals to train AI algorithms. Developers, meanwhile, are looking for safe havens where they can continue their work unfettered by government interference.
To someday generate music that rivals the work of human creators, AI models use a process of machine-learning to identify patterns in and mimic the characteristics that make a song irresistible, like that sticky verse-chorus structure of pop, the 808 drums that define the rhythm of hip-hop or that meteoric drop that defines electronic dance. These are distinctions human musicians have to learn during their lives either through osmosis or music education.
Machine-learning is exponentially faster, though; it’s usually achieved by feeding millions, even billions of so-called “inputs” into an AI model to build its musical vocabulary. Due to the sheer scale of data needed to train current systems that almost always includes the work of professionals, and to many copyright owners’ dismay, almost no one asks their permission to use it.
Countries around the world have various ways of regulating what’s allowed when it comes to what’s called the text and data mining of copyrighted material for AI training. And some territories are concluding that fewer rules will lead to more business.
China, Israel, Japan, South Korea and Singapore are among the countries that have largely positioned themselves as safe havens for AI companies in terms of industry-friendly regulation. In January, Israel’s Ministry of Justice defined its stance on the issue, saying that “lifting the copyright uncertainties that surround this issue [of training AI generators] can spur innovation and maximize the competitiveness of Israeli-based enterprises in both [machine-learning] and content creation.”
Singapore also “certainly strives to be a hub for AI,” says Bryan Tan, attorney and partner at Reed Smith, which has an office there. “It’s one of the most permissive places. But having said that, I think the world changes very quickly,” Tan says. He adds that even in countries where exceptions in copyright for text and data mining are established, there is a chance that developments in the fast-evolving AI sector could lead to change.
In the United States, Amir Ghavi, a partner at Fried Frank who is representing open-source text-to-image developer Stability AI in a number of upcoming landmark cases, says that though the United States has a “strong tradition of fair use … this is all playing out in real time” with decisions in upcoming cases like his setting significant precedents for AI and copyright law.
Many rights owners, including musicians like Helienne Lindevall, president of the European Composers and Songwriters Alliance, are hoping to establish consent as a basic practice. But, she asks, “How do you know when AI has used your work?”
AI companies tend to keep their training process secret, but Mat Dryhurst, a musician, podcast host and co-founder of music technology company Spawning, says many rely on just a few data sets, such as Laion 5B (as in 5 billion data points) and Common Crawl, a web-scraping tool used by Google. To help establish a compromise between copyright owners and AI developers, Spawning has created a website called HaveIBeenTrained.com, which helps creators determine whether their work is found in these common data sets and, free of charge, opt out of being used as fodder for training.
These requests are not backed by law, although Dryhurst says, “We think it’s in every AI organization’s best interest to respect our active opt-outs. One, because this is the right thing to do, and two, because the legality of this varies territory to territory. This is safer legally for AI companies, and we don’t charge them to partner with us. We do the work for them.”
The concept of opting out was first popularized by the European Union’s Copyright Directive, passed in 2019. Though Sophie Goossens, a partner at Reed Smith who works in Paris and London on entertainment, media and technology law, says the definition of “opt out” was initially vague, its inclusion makes the EU one of the most strict in terms of AI training.
There is a fear, however, that passing strict AI copyright regulations could result in a country missing the opportunity to establish itself as a next-generation Silicon Valley and reap the economic benefits that would follow. Russian President Vladimir Putin believes the stakes are even higher. In 2017, he stated that the nation that leads in AI “will be the ruler of the world.” The United Kingdom’s Intellectual Property Office seemed to be moving in that direction when it published a statement last summer recommending that text and data mining be exempt from opt-outs in hopes of becoming Europe’s haven for AI. In February, however, the British government put the brakes on the IPO’s proposal, leaving its future uncertain.
Lindevall and others in the music industry say they are fighting for even better standards. “We don’t want to opt out, we want to opt in,” she says. “Then we want a clear structure for remuneration.”
The lion’s share of U.S.-based music and entertainment organizations — more than 40, including ASCAP, BMI, RIAA, SESAC and the National Music Publisher’s Association — are in agreement and recently launched the Human Artistry Campaign, which established seven principles advocating AI’s best practices intended to protect creators’ copyrights. No. 4: “Governments should not create new copyright or other IP exemptions that allow AI developers to exploit creators without permission or compensation.”
Today, the idea that rights holders could one day license works for machine-learning still seems far off. Among the potential solutions for remuneration are blanket licenses something like the blank-tape levies used in parts of Europe. But given the patchwork of international law on this subject, and the complexities of tracking down and paying rights holders, some feel these fixes are not viable.
Dryhurst says he and the Spawning team are working on a concrete solution: an “opt in” tool. Stability AI has signed on as its first partner for this innovation, and Dryhurst says the newest version of its text-to-image AI software, Stable Diffusion 3, will not include any of the 78 million artworks that opted out prior to this advancement. “This is a win,” he says. “I am really hopeful others will follow suit.”