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Movie star Leonardo DiCaprio testified in federal court Monday morning (April 3) as part of a trial involving international money laundering, bribery and a prominent rap artist.
Prakazrel “Pras” Michel — a founding member of the iconic 1990s hip-hop group the Fugees — is accused of funneling money from a fugitive Malaysian financer through straw donors to Barack Obama’s 2012 re-election campaign. Five years later, prosecutors say he tried to squelch an investigation into that same financer under former President Donald Trump’s administration.
At the heart of the case is Low Taek Jho, usually known as Jho Low. He is accused of masterminding an international money laundering and bribery scheme that stole billions from the Malaysian state investment fund known as 1MDB.
DiCaprio’s connection with the case comes from his yearslong relationship with Low, who was one of the primary financers of the movie The Wolf of Wall Street. Low is currently a fugitive but has maintained his innocence.
According to the charges, Michel essentially became a conduit for Low’s pilfered millions and his attempts to influence the U.S. government. Prosecutors allege that from June to November 2012, Low directed more than $21.6 million to be moved from foreign entities to Michel’s accounts in order to funnel money into the 2012 presidential election. They say Michel then paid about 20 straw donors and conduits so they could make the donations in their names and conceal where the money actually came from, according to the indictment.
DiCaprio testified that he met and befriended Low at a birthday party in Las Vegas in 2010. “I understood him to be a huge businessman with many different connections in Abu Dhabi and Malaysia,” he said.
The 48-year-old Oscar winner answered questions on the witness stand calmly — occasionally deferring to a fuzzy memory on some details and dates. In addition to his relationship with Low, DiCaprio said he had known the defendant Michel since sometime in the 1990s when they met backstage after a Fugees concert.
Low was known for hosting lavish star-studded parties and group vacations on his private jet to events like the World Cup in Brazil. DiCaprio recounted one particular junket that involved flying to Australia to celebrate New Year’s Eve, then flying to Las Vegas to celebrate a second time in one day. Michel was present on some of these trips, DiCaprio said.
Low became a regular contributor to DiCaprio’s charitable foundation, and eventually Low floated the idea of providing the primary financing for The Wolf of Wall Street.
DiCaprio said he had Low’s funding and legitimacy carefully vetted before entering into a business relationship.
“I was given the green light by my team as well as my studio,” he said. “He was a legitimate business person wanting to invest in the movie.”
DiCaprio also recalled a “casual conversation” with Low in which Low told him he intended to make a large contribution to Obama’s re-election campaign.
“It was a significant sum — something to the tune of $20-30 million,” he testified. “I said, ‘Wow that’s a lot of money!’”
Lizzo and Amazon Studios have reached an extension on the singer’s first-look deal after the scorching success of her Emmy Award-winning show Watch Out for the Big Grrrls. Produced by Lizzo’s production company, Lizzo Bangers, and Amazon Studios, Watch Out for the Big Grrls notched three Emmys in categories including directing and picture editing and became the first streaming series to win the outstanding competition program category.
“Lizzo is one of the most exciting, creative, joyful artists in the industry, and the impact of her Emmy award-winning series Lizzo’s Watch Out for the Big Grrrls exceeded our every expectation,” said Vernon Sanders, head of television, Amazon and MGM Studios. “We are excited to continue our relationship with Lizzo and can’t wait for our global Prime Video audience to experience what’s next.”
“I’m thrilled to continue this partnership with the Amazon team after an incredible experience on season one of Watch Out for the Big Grrrls,” said Lizzo. “I’ve witnessed lives change through this show, and I’m grateful for the opportunity to continue making space for even more Big Grrrls around the world to shine and break down barriers across this industry.”
After a successful first season, Lizzo is now searching for women who can sing and dance onstage. Those interested in applying can sign up here for casting. Along with nabbing Emmys, Watch Out for the Big Grrrls also received a fistful of wins at the Critics Choice Real TV Awards, Costume Designers Guild Awards, Hollywood Critics Association Television Awards, NAACP Image Awards and Producers Guild Awards.
WWE and the company that runs Ultimate Fighting Championship will combine to create a $21.4 billion sports entertainment company.
A new publicly traded company will house the UFC and World Wrestling Entertainment brands, with Endeavor Group Holdings Inc. taking a 51% controlling interest in the new company. Existing WWE shareholders will hold a 49% stake.
The companies put the enterprise value of UFC at $12.1 billion and WWE’s value at $9.3 billion.
The new business, which does not yet have a name, will be lead by Endeavor CEO Ari Emanuel. Vince McMahon, executive chairman at WWE, will serve in the same role at the new company. Dana White will continue as president of UFC and Nick Khan will be president at WWE.
“Together, we will be a $21+ billion live sports and entertainment powerhouse with a collective fanbase of more than a billion people and an exciting growth opportunity,” McMahon said in a prepared statement Monday.
He also provided some idea of where the focus of the new company will be, saying that it will look to maximize the value of combined media rights, enhance sponsorship monetization, develop new forms of content and pursue other strategic mergers and acquisitions to further bolster their brands.
Ties already exists talent wise between WWE and UFC, with stars such as Brock Lesnar and Ronda Rousey crossing over between the two businesses.
The deal between Endeavor and WWE catapults WWE into a new era, after functioning as a family-run business for decades. McMahon purchased Capitol Wrestling from his father in 1982, and took the regional wrestling business to a national audience with the likes of wrestling stars such as Andre the Giant, Hulk Hogan and Dwayne “The Rock” Johnson. The company, which changed its name to World Wrestling Federation and later World Wrestling Entertainment, hosted its first WrestleMania in 1985.
McMahon, in an interview with CNBC, addressed the notion that there was doubt among some WWE fans and industry experts that he would ever make a deal for the business. “It’s the right time to do the right thing. And it’s the next evolution of WWE,” he said.
The announcement of the WWE sale arrives after McMahon, the founder and majority shareholder of WWE, returned to the company in January and said that it could be up for sale.
Rumors swirled about who would possibly be interested in buying WWE, with Endeavor, Disney, Fox, Comcast, Amazon and Saudi Arabia’s Public Investment Fund all in the mix.
McMahon acknowledged to CNBC that there were several suitors for WWE, but that combining with Endeavor is the right move.
“It makes all the sense in the world for all these synergies that we have to extract all of the value that we can out of the marketplace,” he explained.
Media industry analysts viewed WWE as an attractive target given its global reach and loyal fanbase, which includes everyone from minors to seniors and a wide range of incomes.
The company held its marquee event, WrestleMania, over the weekend. Last year, WWE booked revenue of $1.3 billion.
The company is also a social media powerhouse. It surpassed 16 billion social video views in the final quarter of last year. It has nearly 94 million YouTube subscribers and has more than 20 million followers on TikTok. Its female wrestlers comprise five out of the top 15 most followed female athletes in the world, across Facebook, Twitter & Instagram, led by Ronda Rousey with 36.1 million followers.
WWE had more than 7.5 billion digital and social media views in January and February of this year, up 15% from the same time frame a year ago.
The new company plans to trade on the New York Stock Exchange under the “TKO” ticker symbol. Its board will have 11 members, with six being appointed by Endeavor and five being appointed by WWE.
“We like the assets of UFC and also WWE in a world where linear TV is losing market share to streaming, thus live sport content is in high demand,” wrote Jeffries analyst Randal Konik said in a note to clients.
The transaction, which was approved by the boards of Endeavor and WWE, is targeted to close in the second half of the year. It still needs regulatory approval.
Shares of World Wrestling Entertainment Inc., based in Stamford, Connecticut, are up 33% this year, but fell 5% at the opening bell Monday. Shares of Endeavor, based in Beverly Hills, California, slipped less than 1%.
On March 4, hundreds of metalheads stormed into Pierce the Veil’s pop-up store in Glendale, Calif., scooping up T-shirts, hoodies and other merchandise. In the process, they helped boost sales for an ostensibly dying product: compact discs. “Kids would look at the display and pick every single one of our records on CD,” says Michele Abreim, the band’s manager. “It definitely felt like CDs were a merch item, not just a means to listen to music.”
A relic of the record industry’s pre-Napster boom period thanks to megastars like *NSYNC, Britney Spears and Eminem, U.S. CD sales accounted for $13.2 billion in 2000, their peak year, according to the RIAA. But though the format has been in steady decline throughout the streaming era, retail, manufacturing and management sources say the digital discs have gained in popularity as keepsakes. More portable than vinyl albums and less affected by manufacturing delays due to supply chain issues, CDs are once again becoming merch table mainstays, and in the first 10 weeks of 2023, sales are up slightly over the same period last year, according to Luminate — 6.8 million in 2022 to 6.9 million, a 2.5% increase.
This growth could be a sign of a growing coolness factor, similar to the unexpected, and sustained, vinyl revival that began in the early 2000s, which is fueled by limited-edition releases pressed on colored vinyl and other bells and whistles. Taylor Swift took a page from that playbook when she put out Midnights CDs in different collectible colors last year, and BLACKPINK is among the many K-pop acts to sell elaborate CD box sets.
“There are ways to do CDs that are incredibly impactful,” says Carl Mello, brand engagement director for Newbury Comics. “You can get more revenue out of it, so it’s not like a ‘Will this do $7.99?’ thing. You’re selling a $30 thing that a customer will be really happy with.”
Bill Wilson, senior vp of operations and innovation for MNRK Music Group, which oversees 50 independent labels, says specialized CD-buying audiences are keeping the format afloat. “There are still pockets and subgenres of music [fans] — like metal — who like holding and cuddling CDs — and they’re not vinyl collectors,” he says.
For those who can’t afford box sets or to spend upwards of $20 for a standard-issue vinyl album, “the CD is a much more budget-friendly item,” says Tony van Veen, CEO of New Jersey-based vinyl/CD manufacturer Disc Makers, who crunched the latest RIAA sales data and found that vinyl album prices rose last year by 13.5%, to $29.65, while CD prices went up 15.3%, to $14.45. “Music fans are deciding with their wallets.” He adds that his company’s CD sales stabilized in 2022 after years of decline.
CDs are generally far cheaper than vinyl albums — especially classic-rock catalog releases, which labels occasionally put on sale in the format. Creedence Clearwater Revival’s Chronicle: The 20 Greatest Hits goes for $13.99 on Amazon, compared with $28.31 for vinyl; a Foo Fighters Greatest Hits CD sells for $11.49, slightly more than half the $21.91 vinyl price.
Although pandemic-related manufacturing delays for vinyl are easing, they have prompted touring acts to stock their merch tables with CDs. “I had a conversation with somebody yesterday, and they’re about to go on tour,” says Ric Sherman, owner of The Production Department, a consulting company that works with artists, labels and record plants. “Trying to get vinyl on time was impossible, and they defaulted to CDs immediately.”
The profit margin for vinyl albums is slightly higher than CDs — a $15 CD would yield roughly $13.50 in profit; a $30 vinyl album, $15 — but Sherman adds: “Vinyl’s expensive to manufacture.” According to van Veen, 100 CDs cost $150 to manufacture, compared with $1,500 for 100 vinyl albums.
“If artists are touring, it’s easier to cart those around than vinyl,” says Mello. “There are utilities to it, for sure.”
Despite the small sales uptick so far in 2023, the 20-year decline in CD sales shows no sign of dissipating: Sales dropped from 40.6 million units in 2021 to 35.9 million last year, an 11.6% decrease, compared with a 4.2% rise in 2022 vinyl sales, according to Luminate. (That said, vinyl’s sales growth has slowed considerably from the 51% increase it logged in 2021.) Major labels are also reluctant to bet on CDs to drive significant revenue in the future. Says a major-label source: “I haven’t heard of the idea that somebody’s so committed to buying a physical product that they’re just going to move over to the CD if they can’t get a vinyl product.”
Then again, 35.9 million in annual sales is not nothing, and CDs will probably be around for a long time. “They’re highly valued and sought-after,” Mello says.
As reported April 2, 2023, Seymour Stein, Sire Records co-founder who signed Madonna, The Ramones & other legendary artists, died at age 80. Stein began his storied career in the music industry as a teenager at Billboard, where, as an intern after school, he contributed to the founding of the Billboard Hot 100 chart. The following interview was conducted and originally published in 2015.
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“I look at my schooling as, in part, my early years at Billboard.”
That’s how Sire Records co-founder and Rock and Roll Hall of Fame enshrinee Seymour Stein, who in January 2021 oversaw the relaunch of the Blue Horizon label in partnership with Fat Possum, recalled his industry education.
That upbringing included the unveiling of the Billboard Hot 100 chart in the magazine’s Aug. 4, 1958, issue. At the time, Stein was a high school student eager to learn, and help shape, the music business, soaking up information firsthand from inside Billboard’s offices.
The Hot 100’s hot shot debut wasn’t front-page news, but it did make page two, in an editorial succinctly headlined “The Billboard Hot 100”: “On pages 36 and 37 of this issue, we are proud to present The Billboard Hot 100, the fastest, most complete and most sensitive index to the popularity of recorded music in America. This new chart feature, which each week will list the 100 most popular recorded sides, is a guide to potential, as well as the current hits.”
When the ranking premiered, ruled by Ricky Nelson’s “Poor Little Fool,” it encompassed “such factors as [radio] disc jockey plays, jukebox activity and record sales.” Today, airplay is still among the Hot 100’s data mix, with downloads continuing the form of record sales. Streaming is essentially a modern-era, digital jukebox, with clicks of a mouse having replaced the clicks of a mechanical arm selecting and dropping a 45 perfectly into place.
At the heart of the Hot 100’s launch was then-head of charts Tom Noonan, along with music-radio-TV editor Paul Ackerman and Stein. “Tom and Paul were great mentors to me,” says Stein. “It was such an honor when Tom asked me to help start the Hot 100.”
Similar to today, as Billboard wrote in its story unwrapping the first Hot 100, “Data is obtained and tabulated right up to deadline time” (with Luminate data figures having fueled the chart since 1991, and multiple streaming sources having joined in recent years). “Weighted factors in the carefully-designed formula result [in] the fastest and most complete guide to the national popularity of records.”
While the Hot 100 marks over six decades as the chronicle of American hits, Stein’s legacy has likewise become legendary. Sire’s first signee? Steven Tallarico. Then in a band called Chain Reaction, he’d change his name to Steven Tyler as frontman for Aerosmith. In 1975, Sire signed the Ramones and Talking Heads. The Pretenders followed in 1980 and Madonna in 1982. (“I realized, ‘This woman is smarter than all of us. Just get out of her way,’” Stein said of Madonna in 2012.) Other acts Sire signed in that formative era: Depeche Mode, The Cure, The Smiths and Ice-T.
In 2005, Stein was inducted into the Rock and Roll Hall of Fame, in its lifetime-achievement category. In 2012, he was honored as Billboard’s first Icon Award recipient, presented to him at the annual MIDEM industry gathering in Cannes, France.
Here, in Stein’s words (from an interview first published in 2015), is his recollection of how the Hot 100 originated, how it helped speed up the measurement of hits, thanks to the inclusion of radio airplay data, and the story of how the chart’s name was (possibly) chosen.
On the need for a then-new chart: “Back in the day, before the Hot 100, there were many different charts in Billboard reflecting the success of singles in the marketplace [including] Best-Selling Pop Singles in Stores, Jukebox Favorites, Most-Heard on the Radio and Sheet Music.
“Then, there was an overall chart which was called the Honor Roll of Hits. This was a [composition, not singles] chart, because back in those days, there were multiple versions of just about every song. Sometimes three or four or more were successful, like in the case of ‘Unchained Melody.’ To show the strength of the song, the Honor Roll of Hits would list the points of all versions to obtain a position.
“Back then, jukebox sales were enormous. If a hot artist, like Perry Como, Patti Page or Nat ‘King’ Cole, with a successful track record put out a new single, record stores knew how to order based on their recent sales. But, in the case of new artists, and there were a lot of them in those early days of rock & roll, stores had no way of being guided. More urgently, jukebox operators needed to know quickly to get these new records into their machines.
“It was the jukeboxes, in particular, that first instigated the need for a faster way of making the charts. Fortunately, this was around the same time as the dawn of top 40 radio, and the Hot 100 used radio playlists from across the country weighted by the size of the market to help compile this new chart.
“It wasn’t entirely error-free or 100 percent accurate; remember, this was [1958]. I was just 16, working at Billboard after school. From the time I was 9 years old, I knew I wanted to be in the music business.”
On Billboard’s editorial impact: “As important as the charts were, the Billboard review sessions that picked spotlight winners of the week were even more important. If a record was accorded a spotlight review, it could stir the sales upwards of 75,000 copies by jukebox operators alone in the first week. Before the Hot 100, the charts were so slow, the jukebox operators couldn’t wait for these records to prove themselves and had to go by the reviews in Billboard.
“Paul Ackerman invited me to attend these music review sessions on Wednesday nights and even provided me with a due-bill to stay at one of the hotels close to the Billboard offices and that way I could get up and take the subway to Lafayette High School in Brooklyn. It was at these sessions that I met people like Syd Nathan of King Records, Leonard Chess, George Goldner, Lew Chudd of Imperial, Herman Lubinksy of Savoy, Don Pierce of Starday and publishers like Freddy Bienstock and Al Gallico, to name a few.”
As for the name Hot 100? “I can only imagine that what the industry was looking for was a hotter, quicker way of getting chart information. Tom [Noonan] could have come up with the name. I certainly did not. It might have been one of the reporters, or Paul Ackerman. I just don’t remember. Then we added star performers to show quick movement upward, aka, bullets.
“Reaction was, of course, positive from every corner of the music business. These were still the early days of rock & roll. Mitch Miller and Hugo Winterhalter were still the heads of A&R of Columbia and RCA Victor, the two leading majors, and rooting for rock & roll not to happen. Milt Gabler over at Decca was the first of the majors to embrace rock & roll and it was Steve Sholes at RCA who arranged to buy Elvis Presley’s contract from Sun; but not without first taking the advice of Paul Ackerman.
“Record stores certainly reacted favorably and radio stations, too.
“Through the success of the chart, more execs were drawn up to the Billboard offices, often with their artists in tow, whether it was for a story or just to say thanks for acknowledging their No. 1 position.”
As Cindy Mabe officially takes the reins as chairman/CEO of Universal Music Group Nashville (UMGN), she is pledging to make some changes that could radically grow the label she inherits from Mike Dungan.
In a staff memo titled “Our future starts today,” obtained by Billboard, Mabe — Billboard’s 2019 Country Power Players executive of the year — lays out several areas of expansion for the company.
Among her plans are to “dramatically expand our partnerships with independent labels and entrepreneurs.” Mabe states, “Inspiration and new ideas are coming from everywhere. Much of that innovation is coming from the independent sector, but by the same token there is so much more they could do if they partnered with us in key areas. Universal Nashville will actively take a role to position ourselves as the best partners to expand their growth and help develop and support these artists.”
She also vows to expand the label’s space in film and TV. “While we are the leaders in recorded music, I want us also to lead in the music-based film and TV space,” Mabe writes. “Our artists stories are powerful and not linear and so the means of telling their stories should have a wide reach. This means growing our presence in audiovisual to develop our Country culture and our artists stories in film and television.” She gives no further specifics, but UMG launched a film and TV studio in 2020.
As country music grows globally, Mabe also plans to take advantage of that explosion. “We will collaborate even closer (and more creatively) with our label colleagues around the world where we can leverage each other’s strengths to break artists who are either signed to their rosters or ours,” she writes. “There’s so much more we can do together.” Label artists like Keith Urban and Kip Moore already have considerable international followings.
Mabe ascended from president, a role she has held since 2014, to replace Dungan, who retired after 43 years in the music industry on March 31.
Mabe joined UMGN in 2012 as senior vp of marketing, leading marketing initiatives across Capitol Records Nashville, EMI Records Nashville, MCA Nashville and Mercury Nashville — UMG’s expanded suite of country labels following its acquisition of EMI. Prior to that, she spent five years at Capitol Records Nashville as senior vp of marketing.
UMGN is home to, among others, Urban, Carrie Underwood, George Strait, Parker McCollum, Little Big Town, Dierks Bentley, Priscilla Block and Brad Paisley. The company finished 2022 at No. 1 on Billboard’s year-end Top Country Labels chart.
Read Mabe’s memo is in full below:
Good morning team!
We have worked alongside each other and in the trenches together for a while now but today is my first day as Chair and CEO of UMG Nashville. It’s a responsibility that I do not take lightly. To succeed Mike – a mentor and one of the most accomplished executives in the history of Nashville – is humbling. And to be surrounded by our incredible, world class artists and to be working alongside you, the best team in Country music, and with Lucian’s unwavering support, is an honor that gives me a great sense of pride, responsibility and excitement.
It is with that sense of excitement, I want to share with you my vision of how we’re going to build on the incredible work that we’ve done together and position this company for creative and commercial growth in what is a rapidly changing and expanding market. This is the next era of Universal Music Group Nashville!
First, we’re going to continue to sign and develop the best artists in Country music. Our roster reflects what we value the most: GREAT ARTISTS. And with those artists we will push the boundaries and reach of Country music and widen our artistic lens by signing and developing artists who have important stories to share and who shape our culture no matter where they are from and whomever they are influenced by. Country is—and will remain—a genre of deep roots grounded in great storytelling and truth that incorporates creative influences across music styles and genres and fans everywhere have shown us they are open to what our evolving genre has to offer. From Nashville to the world.
Second, we will dramatically expand our partnerships with independent labels and entrepreneurs. The marketplace is in flux with innovation. Inspiration and new ideas are coming from everywhere. Much of that innovation is coming from the independent sector, but by the same token there is so much more they could do if they partnered with us in key areas. Universal Nashville will actively take a role to position ourselves as the best partners to expand their growth and help develop and support these artists.
Third, we will broaden our storytelling to include film and TV. While we are the leaders in recorded music, I want us also to lead in the music-based film and TV space. Our artists stories are powerful and not linear and so the means of telling their stories should have a wide reach. This means growing our presence in audiovisual to develop our Country culture and our artists stories in film and television.
Finally, we will collaborate even closer (and more creatively) with our label colleagues around the world where we can leverage each other’s strengths to break artists who are either signed to their rosters or ours. There’s so much more we can do together.
In my excitement, I wanted to give you a glimpse of what the next era of Universal Nashville is going to look like. I’ll be sharing more about all of these areas in the coming weeks and months, but I wanted you to get a sense of where we’re headed and how excited I am to be working with all of you in this next chapter.
Our future starts today. Let’s build it together!
Cindy
Billboard‘s Global Music Index rose 4.2% this week to 1,263.70, its high level in six weeks, as 14 of the 20 stocks in the index were in positive territory. The index’s most valuable companies were among the gainers: Universal Music Group was up 2.1%, Spotify improved 4.1%, and Live Nation climbed 6.1%.
With additional help from Warner Music Group (+5.9%) and Tencent Music Entertainment (+8.1%), the Billboard Global Music Index outperformed the major indexes. The S&P 500 rose 3.5% to 4,109.31 and the Nasdaq composite improved 3.4% to 12,221.91. In the U.K., the FTSE 100 rose 3.1%.
In the first quarter, the Billboard Global Music Index was up 8.2% overall.
Radio company Audacy was the greatest gainer of the week, improving 18.2% to $0.13. In a proxy statement filed March 24, Audacy said it will propose a reverse stock split at the company’s May 24 shareholder meeting. The New York Stock Exchange will initiate a delisting process for stocks that close below $1.00 for 30 consecutive trading days; Audacy’s share price has not exceeded $1.00 since July 5, 2022. A reverse stock split will reduce the number of outstanding shares. Since the value of the company is unaffected by the event, the reverse split will increase the share price.
Elsewhere, Madison Square Garden Entertainment (MSGE) improved 9.6% to $59.07. On Thursday (March 30), MSGE revealed its final plan to separate its live entertainment company from the rest of its businesses. On April 20, the current parent company will be renamed Sphere Entertainment Co. and be comprised of the state-of-the-art Sphere venue, MSG Networks and Tao Group Hospitality. That will leave a pure-play live entertainment company, MSG Entertainment, which includes such venues as Madison Square Garden and Radio City Music Hall.
Competing interests drove SM Entertainment shares higher in February and early March, but the stock has fallen 36.9% in the last three weeks after dropping another 13.1% this week. The K-pop company’s share price started the year at 76,700 won ($58.71) and surged to 114,700 won ($87.79) on Feb. 10 after HYBE acquired a 14.8% stake from SM’s founder, Lee Soo-man. By March 10, when HYBE and Kakao Entertainment were locked in a battle to become SM’s largest shareholder and lead the company’s expansion following its break from Lee, SM shares hit 147,800 ($113.13). Once Kakao Corp. and Kakao Entertainment’s tender offer expired on March 26, the share price plummeted. Still, SM Entertainment shares are up 21.5% year to date.
SEOUL — South Korea’s SM Entertainment appointed Jang Cheol-hyuk as the company’s new CEO on Friday (March 31), as the K-pop giant vowed to turn over a new leaf by bringing on a fresh leader and board of directors. Jang succeeds outgoing CEO Lee Sung-soo.
“I feel a great responsibility to assume the position as a CEO when SM is about to take a big leap forward,” said Jang in a statement. “We will establish a sound [and] transparent governance structure and faithfully implement the SM 3.0 strategy so that SM can become a fan-and shareholder-centered global entertainment leader.”
The landmark corporate shakeup is part of SM’s bid to improve corporate governance as well as its production system, which in recent years lagged behind rivals and invited investor scrutiny. Friday’s appointments also put an end to the weeks-long drama that gripped the K-pop world, pitting industry giants HYBE, home to boyband BTS, and South Korean tech giant Kakao against each other.
A certified accountant and professional manager, Jang joined SM in early 2022 as CFO and has been involved in creating the blueprint for SM’s future. Dubbed SM 3.0, the plan is to diversify the company’s artist portfolio and delegate more creative control away from the single-pipeline structure helmed by SM founder Lee Soo-man.
For years, Lee hasn’t had an official role at SM — which developed K-pop groups EXO, NCT and Girls’ Generation — but he had nearly unchecked powers as its largest shareholder. He was being paid millions of dollars a year in production fees, a setup that ended late last year following a shareholder revolt.
At Friday’s meeting, Kim Kyung Wook, a former SM CEO and now shareholder, pressed the agency to recoup the production fees, but outgoing CEO Lee Sung-soo — who is Lee Soo-man’s nephew — said the company was not ready to consider that step.
Cracks began to show at SM in February after management, without Lee Soo-man’s approval, signed a partnership deal with Kakao. The founder retaliated by selling most of his shares to HYBE and laying the groundwork for a possible merger between the two largest K-pop agencies.
Friday’s shareholder meeting had been hyped as a spirited battle between HYBE and Kakao before HYBE abruptly threw in the towel last week and ceded some of its SM shares to its rival.
Together with subsidiary Kakao Entertainment, Kakao has now secured nearly 40% of shares in SM, becoming the company’s largest stakeholder. Jang Yoon-Joong, executive vp/global strategy officer at Kakao Entertainment, as well as Align Partners CEO Lee Changhwan — who led the shareholder revolt — have now joined the board as non-executive directors.
Three SM executives, including incoming CEO Jang, were also appointed to the board, while five outside directors were also approved: Kim Kyu-Shik, chairman of the Korean Corporate Governance Forum; Kim Tae-him, attorney at Pyeong San Law Firm; Moon Jungbien, professor at Korea University Business School; Lee Seung-min, partner at Peter & Kim; and Sung M. Cho, CEO of music analytics company Chartmetric.
Before BTS conquered the world, Lee Soo-man was the most famous face of K-pop in Korea for reasons both good and bad. He has been lauded as a visionary but criticized for his harsh treatment of trainees and artists. While he treated stalwart artists like family, keeping them on the roster even after their career peaks, he also was accused of excessive control over the acts’ professional and personal lives. He has also been convicted of embezzlement, though he later received a presidential pardon for his contribution to K-pop.
Lee Soo-man still holds over 3% of SM’s shares but hasn’t disclosed his future plans regarding the company. A representative sent to Friday’s meeting on his behalf stayed silent at the gathering.
“Today marks an end of an era at SM, a company I founded in my name,” said Lee, in a statement emailed to reporters shortly before the shareholder meeting. While not commenting directly on the proceedings, he said he was staying outside the country and is “deeply immersed in the world of global music.”
Even if classical music made up just 1% of U.S. music consumption in 2022, according to Luminate, Apple’s new streaming service dedicated to the genre could mean big things for the subscription market.
Global recorded music revenues rose for the eighth straight year in 2022 — but markets are maturing, and the once high-flying growth rate fell to single digits. That doesn’t mean the music subscription business is getting stale, though. In fact, there are plenty of new ideas and much-needed innovations that can help push the streaming market forward.
The latest, and one of the best, examples of how the music business can build a better mousetrap is Apple Music Classical. Apple wanted to better serve classical music fans but realized the best path was to break away from the Apple Music subscription app that works fine for every other genre. So, it built Apple Music Classical, a standalone app for Apple’s iOS devices — the Android app will arrive later — that launched on Tuesday to some rave reviews (GQ called it “a ton of fun”).
Classical music has always been a second-class citizen in digital music because of the way its metadata — information about the recording — is organized. For most genres, describing music by artist, track and album is an adequate way to organize a massive number of recordings. Download stores and streaming services are built around this classification system. But since the advent of iTunes and download purchases, people have recognized that classical music doesn’t fit well in the standard metadata system. In classical music, music is better organized by such categories as conductor, orchestra and movement. This could help explain why classical music accounted for 2.7% of U.S. digital album sales but just 0.8% of on-demand streams in the U.S. last year, according to Luminate.
“It’s the works-based nature of classical,” says Dart Music founder Chris McMurtry, now a vp at Pex, a digital music rights company. “That’s why Apple had to build a separate app.” McMurtry addressed that problem at Dart Music, a digital distributor that focused on classical music and built a database with metadata fields better suited for the genre.
Apple wasn’t the first company to see an opportunity in classical music. Dart Music launched in 2015 to tackle the metadata angle (its assets were acquired in 2017 by Haawk), and classical-focused streaming isn’t new, either. Idagio debuted in 2015. Primephonic launched in 2019 and was acquired by Apple in 2021. Universal Music Group’s Deutsche Grammophon imprint debuted its own service, Stage+, in 2022.
But Apple’s entry into the classical music streaming market could be the most impactful to date. Apple has billions of customers around the globe and an increasingly successful services business that includes the Apple Music subscription app and Apple TV+, a streaming video-on-demand platform. Those cloud-based services, combined with Apple’s bread-and-butter business of selling smartphones and laptops, give the company the resources and marketing might to activate a passionate group of music aficionados that has been underserved by streaming platforms better suited for rock, pop and hip-hop.
“It exceeded my expectations,” says McMurtry, who looked up well-known names and obscure composers to appreciate the app’s level of detail. He says he was impressed by the depth of metadata — the producers, engineers, mixers, other contributors, year of the recording and even the composers’ birth and death years. “It’s a very educational experience.”
If Apple Music Classical can hook McMurtry, maybe it can lure more people into the music subscription market. In 2022, there were 92 million subscribers to streaming services such as Spotify, Apple Music and YouTube Music, according to the RIAA. In total, 214 million Americans — 75% of the population 12 and older — streamed music in the past month, according to a January 2023 survey by Edison Research. Younger consumers were far more likely to stream music than older listeners, however, with 53% of people over the age of 55 having done so compared to 89% of 12-to-34-year-olds and 85% of 35-to-54-year-olds. A good classical music app can help narrow that sizable gap, attract more subscribers and generate more subscription revenue.
Going after classical music fans makes financial sense, too. For starters, they’re plentiful, says Russ Crupnick, partner at market research firm MusicWatch. “By comparison, they are somewhat larger than the entire population of vinyl buyers,” he says. As older consumers, they can afford a standalone classical music app: Crupnick says classical music fans’ mean income is 35% higher than average. They’re also twice as likely to purchase expensive, audiophile stereo equipment. When asked if obtaining the highest-quality sound format is important, 64% of classical music fans said yes, and 54% are willing to pay more to get it. Fortunately for them, Apple Music Classical is free of charge to Apple Music subscribers. “It will be interesting to see whether Apple eventually adds fees to monetize the service, or subsidizes it as they have higher resolution audio,” says Crupnick.
There’s great potential outside of the United States, too. Apple Music Classical will eventually be available in three strong markets for classical music: Japan, China and South Korea. In China, the fifth-largest recorded music market in 2022, according to the IFPI, classical music has been a phenomenon since the Cultural Revolution. Gramophone magazine described it as a “gargantuan market for the consumption of recorded classical music even if only as a study aid or as a residue of having Mozart and Beethoven sonatas tinkling through the family home.”
The digital market has performed incredibly well without a mass appeal offering tailored for classical music fans. Record labels generated $16.9 billion from streaming in 2022 while mostly ignoring an important subset of the market. With Apple Music Classical, Idagio and Stage+ super-serving classical music fans, there’s potential to do better.
Classical music has been in the news this month, with the launch of Apple Music’s new classical-specific streaming app and Universal Music Group’s purchase of classical label Hyperion Records. But under the hood, another notable classical music story was brewing: for the first time in its history, Decca Records has nine of the top 10 songs on the classical U.S. on-demand audio streaming songs chart, according to Luminate.
The achievement is the fruit of several different strategies to help boost those artists, including Ludovico Einaudi, Max Richter, Cody Fry, Chad Lawson and Lang Lang, across streaming services, from reworks, playlisting and, of course, TikTok. And it helps earn Decca Records U.S. senior vp of marketing and artist strategy Joseph Oerke the title of Billboard’s Executive of the Week.
Here, Oerke tells Billboard about several of those strategies, which go beyond boosting individual artists and songs but also includes growing the genre’s footprint at streaming — which will be helped by Apple Music Classical, but also Deutsche Grammophon’s own streaming service, Stage+, that it launched last November to showcase DG and Decca’s roster of artists. And the growth of classical streaming is becoming apparent in the numbers: on-demand audio streaming of classical music has grown by double-digit percentages in each of the past three years, and outpaced the growth of the on-demand audio streaming business at large in 2022, according to Luminate.
“There is a massive population of people who listen to instrumental and classical music during activities like meditation, yoga, cooking dinner, studying and so much more,” Oerke says. “We’ve intensely focused on these spaces and created opportunities to highlight the genre.”
This week, Decca has nine of the top 10 on-demand streaming audio songs in the U.S., according to Luminate, the first time in the label’s history it has achieved that feat. What key decisions did you make to help make that happen?
It is quite an exciting week for us. There is an amazing team here at Decca Records US and across the larger Verve Label Group, led by President/CEO Dickon Stainer. This is a tribute to each department. While we always study the charts, our focus remains on artist development and bringing classical music to the widest audience possible. Each track had its own journey to the chart including TikTok virality, the undeniable talent of the artist, the perfect alignment of music and function and so much more. There is no one plan that works for every track, so we constantly analyze audience and streaming data to inform how we tailor each approach. For example, prolific pianist-composer Chad Lawson embraces the healing power of music and writes works that are not only beautiful to listen to but also can inspire mindful moments. We’ve worked with Chad to not only position his music as classical but also as music that can serve a purpose.
Additionally, we’ve released alternate versions of key tracks including sleep re-works that have helped expand the audience. Working with such a collaborative and flexible artist as Chad has increased the opportunities we have for success. We’ve also fully embraced a global outlook and these nine tracks represent artists from the U.S., Iceland, U.K., Italy and China which gives us even more music to work with and broaden our overall appeal. We have the honor to represent classical labels including Decca Classics, Deutsche Grammophon, ECM New Series and Mercury KX as well as working with artists locally signed around the world. This industry-leading wealth of artists and music is a key to our success.
With streaming’s dominance, many people have lamented the struggles that genres like classical and jazz have had in breaking through such a crowded and pop-heavy marketplace structure. How have you guys positioned yourselves to succeed at streaming in particular?
Rather than lament I’ve always chosen to fully embrace how listening habits have evolved over the years and find every possible outlet and platform for classical music. With instrumental music we work with both artist-forward listening as well as more passive forms of consumption. It’s this combination of listening styles that has helped us to grow our market share consistently over the last few years. One approach is to create moments or events that draw attention to our artists and music, with one example being World Sleep Day. We partnered with the World Sleep Society and curated a selection of new music from a range of artists around the world. We then worked with our commercial partners to drive overall awareness for the genre, which many people consume as part of their daily lives, which then drives increased consumption. There is a massive population of people who listen to instrumental and classical music during activities like meditation, yoga, cooking dinner, studying and so much more. We’ve intensely focused on these spaces and created opportunities to highlight the genre.
Deutsche Grammophon also launched its new streaming service, Stage+, in November. How has that service fared so far and what has it allowed you to do with the catalog?
Stage+ is a beautiful platform where you can enjoy some of the greatest musical performances from around the world. I’ve always been a fan of classical music and I attend operas and concerts in New York weekly, but I almost never get to see the Vienna Philharmonic at home, and I’ve only been to the Concertgebouw in Amsterdam once in my life. There is so much amazing work being done in concert halls around the world and now classical audience members everywhere can enjoy performances that we might only ever hear about. We are working hand in hand with Deutsche Grammophon to continue growing the audience for Stage+ and look forward to bringing these performances to many more fans in the years to come.
There seems to be more and more interest in classical-specific streaming lately, not only with Stage+ but with the official launch this week of Apple Music Classical. How do you leverage these types of platforms, and how does that help you break through with your fan base?
There has been, wrongly, a stigma that most streaming platforms only carry pop music but not classical or not all of classical music. That’s incorrect, but the perception remains. These classical-specific platforms highlight just how vast the available catalog is and can present recording information in a clean and easily understandable format. Personally, it makes me as a listener feel seen and heard which is not something classical music fans who grew up digging around CD bins in the back of a music store have enjoyed. I think part of our job now is to educate listeners that you can have the entire music store with one tap and find both popular and obscure recordings quickly and easily.
Several streaming services also have added additional data, such as performer, composer and conductor data. What else would you like to see added to better reflect the classical space?
One thing that was missing but now is less of a problem is improved sound quality. The dynamic range of classical music is so vast that higher quality audio was an issue in the past, but now most services offer it which is a huge benefit. While metadata display is an on-going conversation, I’d like to see more contextual information offered to listeners, such as a booklet or liner notes. Classical music has traditionally been about numerous artists recording the same piece — just imagine how many recordings of Beethoven’s Fifth Symphony there are — and so each artist’s individual interpretation is the key and listeners are keen to know the back story and the artist’s thoughts on the repertoire. With opera, which is really a challenge at streaming, there is a need for a libretto to understand what is being sung. This extra material helps with a richer listening experience deepening a listener’s connection to the genre.
You guys have also had success leveraging TikTok, particularly with Ludovico Einaudi’s 2013 track “Experience,” which went viral on the platform last year and is still the No. 1 on-demand streaming audio track in the U.S. this week. What was the story there and how have you been able to utilize platforms like that to benefit your artists?
In November 2020 our vp of digital analytics and advertising spotted the increasing uses of “Experience” on TikTok and that it was driving more streaming. We quickly identified the video where the trend started, which was of a student listening to “Experience” which dramatically helped increase his focus while writing a paper. It clearly resonated with a large audience and we could see the potential. From there we quickly delivered the official audio to Einaudi’s TikTok profile, ran influencer campaigns to boost engagement, drove awareness for Einaudi’s own channels, and then encouraged him to deliver an alternate solo piano version of the song. We had already been planning a YouTube livestream for December and decided that a performance of “Experience” needed to be added ASAP. I think most importantly, we looked at how people were engaging with his music and the cultural conversation around it to tailor our approach at broadening and consistently growing the audience.
In general, we are constantly monitoring trends and daily activity on social platforms like TikTok, Reels and Shorts and with our deep understanding of fan behavior we can double down on our consumer-led marketing. Elevating UGC with initiatives like influencer campaigns and plugging our artists and music into relevant cultural trends are just a few ways we work to position our artists at the forefront of online culture to give their music a chance to stand out amongst the thousands of tracks released every day.
How do you keep growing the genre moving forward?
We need to make sure artists and their music are present where fans are and that means a lot of content both premium and casual. The decline of classical music has and always will be lamented but despite that it is still here, both in the concert hall and coming through our speakers. I attended the opera earlier this week and soprano Lise Davidsen gave one of the most thrilling performances I’ve heard and now my job is to make sure others know about her and excite their curiosity to seek her out. She’s but one example of the countless performing and recording artists today who are giving phenomenal performances night after night, and they are the catalyst for moving the genre forward while we are here to amplify their art.
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