Business
Page: 405
Warner Music Group’s share price fell nearly 10% on Tuesday (May 9) following the release of the company’s second quarter earnings report, which showed that revenue from the recorded music division was effectively flat over last year ($1.143 billion vs. $1.147 billion in the year-ago quarter).
On Tuesday, Warner’s stock fell from $28.50 at the start of the day to $25.76 at the market’s close — a 9.58% drop.
This marks the second straight quarter of disappointing results in recorded music for Warner, the world’s third-largest label. Last quarter, revenue in the division fell 10.6%, or 5.6% in constant currency, on lower digital, physical and artist services and expanded rights revenue.
In the current quarter, streaming revenue was down 0.4% (or, in constant currency 2.2% higher) on fewer releases and a slowdown in ad-supported revenue due to macroeconomic uncertainty. By contrast, music publishing revenue grew 12% to $257 million, up from $230 million a year ago.
“While our publishing was best in class, we underperformed in recorded music,” said CEO Robert Kyncl on an earnings call Tuesday.
In attempts to bolster confidence, WMG executives on the call stressed that the company is already seeing improvement with the late-April releases of Jack Harlow’s Jackman., Tïesto’s Drive and Ed Sheeran’s Subtract, which was released earlier this month. CFO Eric Levin noted that the label’s release slate “was a little lighter in the first two quarters of the year and will be weighted to (the third quarter) and (the fourth quarter),” with upcoming releases expected from Dua Lipa‘s Barbie soundtrack, among others.
“We absolutely expect this to improve our results in recorded music streaming in the second half of the year,” Levin added.
Nonetheless, investors appear to be growing skittish over the lackluster performance. Tuesday’s closing price marked a sharp drop of nearly 20% of Warner’s stock over the past month, with the share price falling from $32.12 on April 10.
On Monday (May 8), President Joe Biden announced his intent to nominate Deborah Robinson as the next Intellectual Property Enforcement Coordinator (IPEC). The role was formed in 2008 as part of the Executive Office of the President and advises the president on U.S. intellectual property strategy.
Robinson most recently served as the head of intellectual property enforcement at Paramount Global (formerly ViacomCBS), but before that, she worked at the Recording Industry Association of America (RIAA) for five years, protecting music rights. She also spent seven years as an assistant district attorney for Philadelphia.
Along with her strong history of employment in the entertainment business, Robinson serves as co-chair of the diversity committee of the IP section of the New York State Bar Association and as a Board Member of Aequitas, a non-profit focused on access and quality of justice in cases of human trafficking and gender-based violence.
Robinson would replace Vishal Amin, who was confirmed as IPEC under President Donald Trump and left the post in 2021. Since then, the position has been vacant, something pointed out by Congressman Adam Schiff and Mark Cohen — a distinguished senior fellow and director of Asia IP Project, Berkeley Center for Law and Technology — in a recent meeting for the Congressional subcommittee on courts, intellectual property, and the internet.
“RIAA applauds President Biden’s nomination of Deborah Robinson to serve as Intellectual Property Enforcement Coordinator,” said RIAA chairman/CEO Mitch Glazier in a statement. “Deborah is deeply qualified to serve our nation as IPEC and will bring unmatched policy depth and appreciation for the economic and cultural importance of strong IP enforcement to this vital role. Deborah will be an extremely welcome and effective addition to the Executive Office of the President, filling a position that has been vacant for the past three years and leading an exceptional team. We thank President Biden for selecting such an outstanding nominee to advance smart, pro-growth IP policies and enforcement practices around the world.”
“We welcome the nomination of Deborah Robinson to serve as the Intellectual Property Enforcement Coordinator (IPEC),” added NMPA president/CEO David Israelite. “Ms. Robinson brings incredible experience and insight to the role which serves an important function to spotlight and safeguard creator’s work across the globe. In addition to an extensive career as a prosecutor, she has held senior positions specifically in the field of music and copyright enforcement. We look forward to engaging with Ms. Robinson and supporting her important work once confirmed.”
PJ Harvey signed with Partisan Records, which will release her tenth studio album, I Inside the Year Old Dying, on July 7. The album — Harvey’s first since 2016’s The Hope Six Demolition Project — was preceded by the song and video, “A Child’s Question, August.” Harvey is managed by Sumit Bothra at ATC; her agents are Marsha Vlasic at AGI in North America and Alex Bruford at ATC for the rest of the world.
Rising Toronto artist ThxSoMuch signed with Elektra Records, which will release his debut EP, Sleez, on May 19, preceded by the single “Crumbled.” ThxSoMuch is managed by Tommy Kiljoy at mad world and Mac Moon; his booking agents are Jay Belin, Jesse Robbins and Robby Fraser at WME.
Country singer/songwriter/rapper David Morris signed with Virgin Music Group via a partnership with Grey Area Music. The label will release Morris’ new single, “Jenny’s Song,” on May 23.
British rock band Skunk Anansie signed with Blue Raincoat Artists for management. They will be managed by the company’s co-founder/CEO Jeremy Lascelles, in partnership with Kat Kennedy of Big Life Management (Lascelles signed the band to their first music publishing agreement in 1994 while at Chrysalis Music). Skunk Anansie was previously managed by Leigh Johnson, who oversaw the band’s career for over three decades. The group is currently working on tracks for a new album to be released next year, with plans to tour in 2024 and 2025.
Singer-songwriter BJ the Chicago Kid signed with Yeti Beats‘ Reach the World Records, a joint venture with RCA Records. His latest single, “Forgot Your Name,” was released May 3, with a second single expected soon. He is managed by Myisha Brooks; his booking agent is DeMont Callender at Wasserman.
Jonas Group Entertainment announced two new management signings: Country-pop artist/songwriter Levi Hummon (“Good Riddance,” “Paying for It”) and country singer MaRynn Taylor. Hummon is signed to Reservoir Media for publishing, while Taylor, who will work directly with Blue Raincoat CEO Phil Guerini, is signed to Black River for both recording and publishing.
Mysterious artist-producer underscores signed with Mom+Pop Music. Her first release on the label is the new song and video, “Cops and robbers.”
Swedish synth-pop duo Kite signed with Dais Records, which released their single, “Don’t Take the Light Away,” last month. Kite is represented by manager Adam Borjesson and booking agent Robin Sumpton at Luger.
Married Americana artists Mark and Maggie O’Connor signed with ONErpm Nashville, which will release their latest album, Life After Life, this summer. It will be preceded by the lead single “Verbovaya Doschechka,” which is a new arrangement of the Ukrainian folk song of the same name. Maggie will play violin and sing leads on the new album, while Mark will add harmonies while playing acoustic guitar, violin and mandolin. They’re represented by Skyline Artists for booking and managed by MOC Enterprises. They were previously signed to Sony/The Orchard for distribution.
Jazz artist/pianist/producer/composer Kayla Waters signed with Shanachie Entertaiment, which will release her label debut album, Presence, on July 7.
Australia garage rock band Girl and Girl signed to Sub Pop, which released their single, “All I See,” last month. The group is currently working on new music and touring throughout May. Girl and Girl are managed by Simone Ubaldi and Andrew Parisi; they’re signed to Virgin in Australia.
Tim Kinsella and Jenny Pulse signed to Kill Rock Stars, coinciding with the release of their new single, “Sun Inspector.” Kinsella has played with bands including Joan of Arc, Carp’n Jazz and Owls; Pulse is a vocalist, electronic musician and producer who has released dance-oriented pop songs under her own name as well as experimental soundscapes and field recordings as Spa Moans. The duo is represented by booking agent Robin Taylor at Inland Empire.
Montreal quartet Nora Kelly Band signed with Mint Records for the release of their debut album, Rodeo Clown, on August 25. The label released their new single, “Lay Down Girl,” earlier this month. The group is managed by Kathryn Huyhn at Danagement.
Americana artist and songwriter Al Staehely signed with Quarto Valley Records, which will release his new album in June. Staehely is also a music/entertainment attorney; as a musician, he has played with Spirit, the Staehely Brothers and more. He has also released music as a solo artist and written songs for acts including Bobbie Gentry, Marty Balin and Keith Moon.
As the music industry grapples with the far-reaching implications of artificial intelligence, Warner Music Group CEO Robert Kyncl is being mindful of the opportunities it will create. “Framing it only as a threat is inaccurate,” he said on Tuesday (May 9) during the earnings call for the company’s second fiscal quarter ended March 31.
Kyncl’s tenure as chief business officer at YouTube informs his viewpoint on AI’s potential to contribute to the music industry’s growth. “When I arrived [at YouTube] in 2010, we were fighting many lawsuits around the world and were generating low tens of millions of dollars from [user-generated content],” he continued. “We turned that liability into a billion-dollar opportunity in a handful of years and multibillion-dollar revenue stream over time. In 2022, YouTube announced that it paid out over $2 billion from UGC to music rightsholders alone and far more across all content industries.”
Not that AI doesn’t pose challenges for owners of intellectual property. A wave of high-profile AI-generated songs — such as the “fake Drake”/The Weeknd track, “Heart on My Sleeve,” by an anonymous producer under the name Ghostwriter — has revealed how off-the-shelf generative AI technologies can easily replicate the sound and style of popular artists without their consent.
“Our first priority is to vigorously enforce our copyrights and our rights in name, image, likeness, and voice, to defend the originality of our artists and songwriters,” said Kyncl, echoing comments by Universal Music Group CEO Lucian Grainge in a letter sent to Spotify and other music streaming platforms in March. In that letter, Grainge said UMG “would not hesitate to take steps to protect our rights and those of our artists” against AI companies that use its intellectual property to “train” their AI.
“It is crucial that any AI generative platform discloses what their AI is trained on and this must happen all around the world,” Kyncl said on Tuesday. He pointed to the EU Artificial Intelligence Act — a proposed law that would establish government oversight and transparency requirements for AI systems — and efforts by U.S. Sen. Chuck Schumer in April to build “a flexible and resilient AI policy framework” to impose guardrails while allowing for innovation.
“I can promise you that whenever and wherever there is a legislative initiative on AI, we will be there in force to ensure that protection of intellectual property is high on the agenda,” Kyncl continued.
Kyncl went on to note that technological problems also require technological solutions. AI companies and distribution platforms can manage the proliferation of AI music by building new technologies for “identifying and tracking of content on consumption platforms that can appropriately identify copyright and remunerate copyright holders,” he continued.
Again, Kyncl’s employment at YouTube comes into play here. Prior to his arrival, the platform built a proprietary digital fingerprinting system, Content ID, to manage and monetize copyrighted material. In fact, one of Kyncl’s first hires as CEO of WMG, president of technology Ariel Bardin, is a former YouTube vp of product management who oversaw Content ID.
Labels are also attempting to rein in AI content by adopting “user-centric” royalty payment models that reward authentic, human-created recordings over mass-produced imitations. During UMG’s first quarter earnings call on April 26, Grainge said that “with the right incentive structures in place, platforms can focus on rewarding and enhancing the artist-fan relationship and, at the same time, elevate the user experience on their platforms, by reducing the sea of noise … eliminating unauthorized, unwanted and infringing content entirely.” WMG adopted user-centric (i.e. “fan-powered”) royalties on SoundCloud in 2022.
A Los Angeles judge on Tuesday (May 9) dismissed much of Marilyn Manson’s defamation lawsuit against his ex-fiance, Evan Rachel Wood, ruling that many of his claims were barred under a California law aimed at protecting free speech.
Manson (real name Brian Warner) sued Wood last year, claiming her 2021 accusations of sexual abuse against him had been false and that she had “secretly recruited, coordinated, and pressured” other women to make similar allegations against him to destroy his career.
But Judge Teresa A. Beaudet ruled Tuesday that Manson had not sufficiently shown that he would ultimately be able to prove many of those accusations against Wood, including that she had been “pressuring multiple women to make false accusations,” as well as the allegation that she had forged a letter from the FBI.
The ruling came under California’s so-called anti-SLAPP statute — a law that aims to make it easier for judges to quickly dismiss cases that threaten free speech. Wood’s lawyers claimed Manson’s case was exactly that: a prominent musician using a lawsuit to try to silence someone who was speaking out publicly about years of alleged abuse.
Anti-SLAPP laws work by putting more burden than usual on defamation plaintiffs like Manson, forcing them to clearly show at the outset that their case is legitimate. In Tuesday’s decision, Judge Beaudet said Manson had failed to do so.
“The court does not find that plaintiff has demonstrated a probability of prevailing on his [intentional infliction of emotional distress] claim based on the FBI Letter,” the judge wrote, referring to one of Manson’s specific legal claims.
Importantly, the decision did not dismiss Manson’s case entirely, and several claims remain pending against Wood. Those claims will continue into discovery and toward an eventual trial. But the ruling was still a major victory for Wood.
In a statement to Billboard following the decision, Wood’s attorney, Michael Kump, said: “We are very pleased with the court’s ruling, which affirms and protects Evan’s exercise of her fundamental First Amendment rights. As the court correctly found, plaintiff failed to show that his claims against her have even minimal merit.”
Wood is one of several women to accuse Manson of serious sexual wrongdoing over the past two years. Manson has denied all of the allegations, and many of the lawsuits filed against him have since been dropped, dismissed or settled.
Manson filed the current lawsuit against Wood in March 2022, accusing her and a woman named Illma Gore of launching an “organized attack” that had derailed his career. His lawyer said the women had carried out “a campaign of malicious and unjustified attacks.”
But Wood quickly fought back, moving to strike Manson’s case under the anti-SLAPP law: “For years, plaintiff Brian Warner raped and tortured defendant Evan Rachel Wood and threatened retaliation if she told anyone about it,” her attorneys wrote. “Warner has now made good on those threats by filing the present lawsuit.”
Tuesday’s ruling came despite a bombshell recantation by Ashley Morgan Smithline, another woman who has accused Manson of wrongdoing. In a February filing submitted by Manson’s lawyers, Smithline said she had “succumbed to pressure” from Wood to make “untrue” accusations against Manson.
But Wood strongly denied those allegations, and Judge Beaudet ultimately refused to consider Smithline’s statements entirely, saying they had been filed far past a key deadline for submitting evidence. That means the statements about Wood’s “pressure” played no role in Tuesday’s decision.
In a statement to Billboard, Manson’s lawyer, Howard King, said the ruling was “disappointing but not unexpected.”
“The court telegraphed this outcome when it refused to consider the bombshell sworn declaration of former plaintiff Ashley Smithline, which detailed how women were systematically pressured by Evan Rachel Wood and Illma Gore to make false claims about Brian Warner,” King said.
“The failure to admit this critical evidence, along with the court’s decision to not consider Ms. Gore’s iPad, the contents of which demonstrated how she and Ms. Wood crafted a forged FBI letter, will be the subject of an immediate appeal to the California Court of Appeal,” King added.
This is The Legal Beat, a weekly newsletter about music law from Billboard Pro, offering you a one-stop cheat sheet of big new cases, important rulings and all the fun stuff in between.
This week: Ed Sheeran wins his trial over whether “Thinking Out Loud” infringed Marvin Gaye’s iconic “Let’s Get It On”; Tory Lanez is denied a new trial over the shooting of Megan Thee Stallion; Adidas faces a class action over its Kanye West partnership; and much more.
Want to get The Legal Beat newsletter in your email inbox every Tuesday? Subscribe here for free.
THE BIG STORY: Ed Sheeran & The Copyright Road Ahead
That sound you hear? It’s not Ed Sheeran strumming his guitar from the witness stand, or the tinny audio from a supposedly “smoking gun” YouTube video. It’s the music business letting out a giant sigh of relief.
After one of the biggest music trials in years, Sheeran won a jury verdict last week that his “Thinking Out Loud” didn’t infringe the copyright of Marvin Gaye’s famed “Let’s Get It On,” clearing the singer of wrongdoing and avoiding the potential for millions in damages.
A verdict against the singer would have reverberated throughout the industry, much like the infamous 2015 verdict against Robin Thicke and Pharrell Williams over their megahit “Blurred Lines.” Like in that earlier case, many music pros and copyright lawyers believed that Sheeran and Gaye’s songs shared only common musical “building blocks” that everyone is entitled to use. They worried that a verdict against Sheeran could have blurred the line between legal similarities and illegal copying.
For years, the verdict on “Blurred Lines” led the industry to be hyper-cautious about songs that sounded remotely similar. Musicology reports and insurance policies became far more common, and songwriting credits were liberally doled out at the first sign of trouble — by Mark Ronson and Bruno Mars for their smash hit “Uptown Funk,” by Sam Smith for his Grammy-winning “Stay With Me” and by Olivia Rodrigo for her chart-topping “Good 4 U,” among many others. When cases were filed in court, many defendants chose to quickly settle, rather than face an unpredictable jury.
The legal reality, though, is that courts have slowly been back-tracking from “Blurred Lines” for a while now — first with an appellate court decision in 2020 on Led Zeppelin’s “Stairway To Heaven,” then with a similar ruling last year on Katy Perry’s “Dark Horse.” Both of those rulings provided clear case law that simple elements of music creation, standing alone, cannot be monopolized by any one songwriter. Over just the first few months of 2023, song-theft cases against Donald Glover (over his Childish Gambino chart-topper “This Is America”) and Nickelback (over the band’s 2005 hit “Rockstar”) have both been dismissed at the earliest stage of litigation.
Far from throwing the industry back into confusion, Sheeran’s victory last week seems to be the latest incremental step in a march toward a post-“Blurred Lines” world. Jury verdicts don’t change case law, but they can serve as a powerful disincentive to the next round of potential copyright accusers, who might be less willing to head to court if they see that artists are willing to successfully fight back rather than quickly settle when faced with an allegation.
For Sheeran, that seems to be precisely the effect he’s aiming for.
“By stopping this practice, we can also properly support genuine music copyright claims so that legitimate claims are rightly heard and resolved,” Sheeran said on the courthouse steps, minutes after the verdict was read aloud in court. “We need songwriters and the wider musical community to come together to bring back common sense. These claims need to be stopped so that the creative process can carry on, and we can all just go back to making music.”
Other top stories…
NO NEW TRIAL FOR TORY – A Los Angeles judge refused to grant Tory Lanez a new trial after he was convicted last year of shooting Megan Thee Stallion in the foot, setting the stage for the rapper to be sentenced to as much as two decades in prison. His lawyers called the trial a “miscarriage of justice,” but such requests are very rarely granted.
CLASS-ACTION KANYE – Adidas was hit with a class action lawsuit claiming the sportswear giant knew about Kanye West‘s problematic “personal behavior” years prior to ending its partnership with the disgraced rapper but failed to warn investors about it. West himself was not named in the case.
SPINRILLA SHUTTERED – Hip-hop mixtape site Spinrilla and founder Jeffery Copeland agreed to shut down the site and pay $50 million to Universal Music, Warner Music, Sony Music and others to end a years-long copyright infringement lawsuit over the unauthorized use of thousands of songs by Bob Marley, Beyonce, Kendrick Lamar and more.
A Los Angeles judge is refusing to grant Tory Lanez a new trial after he was convicted last year of shooting Megan Thee Stallion in the foot, setting the stage for the rapper to be sentenced to as much as two decades in prison.
Attorneys for Lanez (real name Daystar Peterson) had called the case a “miscarriage of justice,” arguing that Judge David Herriford made numerous errors during a star-studded, two-week December trial that resulted in a guilty verdict. But prosecutors later called those claims “vague and unsupported” and urged the judge to uphold the jury’s decision.
At a hearing on Tuesday (May 9) in Los Angeles Superior Court, Judge Herriford sided with prosecutors and denied Lanez’s motion, according to a person with knowledge of the proceedings. Neither prosecutors nor Lanez’s legal team immediately returned requests for comment.
The ruling is not particularly surprising. Such requests for a judge to overturn a jury verdict are rarely granted, reserved for major revelations about procedural errors or withheld evidence. Similar arguments could still be successfully raised in a future appeal.
Tuesday’s decision clears the way for Lanez’s sentencing, in which he potentially faces up to 22 years in prison. It had originally been scheduled for January but was repeatedly delayed due to his request for a new trial. Sentencing is now expected within the next month but could be delayed again.
Lanez was convicted on Dec. 23 on three felony charges over the mid-2020 incident, during which the rapper allegedly shot Stallion (born Megan Pete) in the foot during an argument after a pool party in the Hollywood Hills.
The shooting happened in the early-morning hours of July 12, 2020, when a driver was shuttling Lanez, Stallion and her assistant and friend Kelsey Harris from a party at Kylie Jenner’s house. According to prosecutors, Megan got out of the vehicle during an argument and began walking away when Lanez shouted “Dance, bitch!” and proceeded to shoot at her feet.
Following the incident, Stallion initially told police officers that she had cut her foot stepping on broken glass, but days later alleged that she had been shot. Lanez was eventually charged with the shooting in October 2022.
During the blockbuster trial, Lanez’s lawyers made their best effort to sow doubt over who had pulled the trigger, painting a scenario in which Harris could have been the shooter. But a key defense witness offered only confusing eyewitness testimony, and prosecutors pointed to an earlier interview in which Harris pinned the blame squarely on Lanez. Stallion herself offered powerful testimony that Lanez had been the one to shoot her; neither Lanez nor the driver took the witness stand.
In a motion for a new trial filed in March, Lanez attorneys Jose Baez and Matthew Barhoma argued that Judge Herriford made numerous errors during the course of the trial. Among others, they said he should not have allowed jurors to see an Instagram post that appeared to undermine the rapper’s central defense that Harris actually pulled the trigger. In it, Lanez appeared to personally post a comment that such a suggestion was “not true.”
“The court erred on numerous questions of law in allowing the People to introduce this post, depriving defendant of a fair trial,” Lanez’s lawyers wrote. “The only acceptable remedy for this miscarriage of justice is a new trial.”
Lanez’s lawyers made numerous other arguments, too. They said that key DNA evidence had been mischaracterized and improperly admitted; that Lanez had been denied his right to counsel because his longtime attorney withdrew at the eleventh hour; and that prosecutors had run afoul of a new California law that bans the use of creative expression in criminal trials.
But prosecutors argued back last month that the request for a new trial was groundless. The Instagram comment was a “relatively insignificant piece of evidence,” they argued, among an “overwhelming” amount of testimony and other evidence showing that Lanez had been the one to shoot Stallion.
“The defendant’s brief is replete with colorful rhetoric and conclusory statements, but it lacks substance,” prosecutors wrote. “Despite being nearly 80 pages long, the defendant has failed to cite a single instance of error in the trial court.”
Following Tuesday’s decision, Lanez can still file an appeal of the verdict at a state appellate court. But such a challenge will face an uphill climb: In 2022, California appeals courts overturned a defendant’s guilty verdict in just 19% of cases.
If Netflix, HBO, Disney, The CW and others slash their budgets for TV and movie content, as they’ve been suggesting for more than a year, the music industry could take a hit in the steady song-placement business that generates hundreds of millions of dollars annually for rightsholders.
“We’ve been in a boom period. Cutting back on production would cut down on that revenue, for labels and publishers,” says Kier Lehman, a music supervisor who works on Abbott Elementary and Spider-Man: Across the Spider-Verse. “It’s a pretty direct effect.”
After the COVID-19 quarantine ended, the decrease in demand helped create some problems for the streaming business. That has created challenges for the video streaming business: Netflix’ spending on content declined in 2022, after company officials announced a “pulling back”; HBO Max removed dozens of streaming titles last summer to cut costs; and Disney announced $5 billion in cuts two months ago, including 7,000 jobs, although newly returned CEO Bob Iger has emphasized streaming growth. The CW, Showtime and others have also removed content or cut costs.
“We’re trying to be smart about it and prudent in terms of pulling back on some of that spend growth to reflect the realities of the revenue growth,” Spencer Neumann, Netflix’s CFO, said last year.
So far, executives at labels and publishers – which generally split revenue from synch licenses 50-50 – say they haven’t noticed a change in licensing volume or rates, but in a wobbly economy beset with entertainment layoffs, they’re bracing for a harder business. “The idea of less content is always going to be a concern for us,” says a source at a major label. “If there’s going to be a slowdown in content production, it’s going to be a slowdown in music usage — it’s definitely something we’d be keeping an eye on.”
While its impact won’t be felt for a while, the ongoing Writers Guild of America strike has already pushed the pause button on numerous productions, including Stranger Things, Saturday Night Live and Loot.
Synchs have been a remarkably consistent revenue stream for the record business over the last five years, as Netflix, Hulu, HBO and others competed for viewers and created a content boom. Synch revenues for recorded music hit $285.5 million in 2018 and, after a slight dip, rose to $318 million last year. (Publishing revenue has been even more robust in recent years, growing from $696 million in 2018 to more than $1.2 billion in 2021, according to the National Music Publishers Association; synch makes up nearly 26% of that total revenue.) Synch executives at labels and publishers say they’re preparing for more challenging times. “I don’t think anybody’s not going to be affected by cutbacks,” says Oscar Martinez, creative director for film, TV and Hispanic advertising with publisher peermusic. “We expect to feel a little bit of it.”
How will labels and publishers contend with content cuts once they kick in? “We have a plan in place,” Martinez says, predicting a pivot to placing music in games such as Fortnite and FIFA. “There’s still content being made and opportunities to be had.”
Amy Hartman, svp of creative services for film and TV music at Spirit Music Group, adds that the publisher is emphasizing “budget-friendly” moves — remixing classic hits such as Billy Squier’s “The Stroke” for the Air trailer, and encouraging songwriters to create originals that can be licensed more affordably than familiar hits. “That’s one way we can make up loss of synch revenue,” she says.
Sara Torres, sync and licensing supervisor for ASAP Clearances, which works with labels and publishers to clear songs, suggests the number of scripted shows may decline in favor of reality shows — which tend to use more tracks on tighter budgets. A scripted show might blow its budget on one big song, by, say, the Beatles, then try to round out its song lineup with more affordable music by indie artists or “library music.” The reality shows Torres works with have “most favored nations” clauses, so all synchs receive the same fees. “There’s always a whisper of cutbacks with any network, so you just have to be ready,” she says.
For now, label executives say they’re not worried about content cutbacks or more inflexible network demands for lower rates. “It’s business as usual. It’s not doomsday,” says Esther Friedman, Sony Music Publishing’s svp of creative marketing for film and TV, although she adds: “This could be a different conversation in six to nine months.”
Those who work every day with production companies say labels and publishers should prepare for cutbacks. “You might be looking at the same amount of TV shows, but they have less episodes,” says Justin Kamps, music supervisor for Grey’s Anatomy and Bridgerton. “That is rough for everyone involved.”
At least to some extent, any decrease in production would hurt the music business at least somewhat. “If there are fewer shows, there will be fewer places to place music,” says Lindsay Wolfington, a veteran music supervisor whose current shows include Netflix’ Virgin River and Starz’ The Venery of Samantha Bird: “That’s just a fact.”
Warner Music Group reported quarterly revenues grew 1.7% to $1.399 billion (4.6% in constant currency) as strong revenues from its music publishing revenue helped offset a slow quarter for recorded music releases.
WMG, the music industry’s third largest major label, reported revenue from its recorded music revenue was effectively flat at $1.143 billion for the second fiscal quarter ending March 31, compared to $1.147 billion in the year ago quarter. (In constant currency, recorded music revenue rose 2.5%.) Streaming revenue in the quarter was down 0.4% (or, in constant currency 2.2% higher) on fewer releases and a slowdown in ad-supported revenue due to macroeconomic uncertainty.
In contrast, music publishing revenue rose 12% to $257 million from $230 million a year ago.
“While our publishing was best in class, we underperformed in recorded music,” Robert Kyncl, chief executive officer, said on a conference call.
WMG executives have said throughout this fiscal year that the label’s major releases of the year would come in the second half, and on the call, they stressed they are already seeing improvement with the late-April releases of Jack Harlow’s Jackman., Tïesto’s Drive and Ed Sheeran’s Subtract, released in early May.
“Our release slate was a little lighter in the first two quarters of the year and will be weighted to (the third quarter) and (the fourth quarter),” Warner chief financial officer Eric Levin said, flagging releases expected from Dua Lipa with her Barbie soundtrack track, among others.
“We absolutely expect this to improve our results in recorded music streaming in the second half of the year.”
Key Points From WMG’s Q2:
WMG’s revenues grew 1.7% (or 4.6% in constant currency, a measure that standardizes foreign exchange fluctuations) to $1.399 billion
Digital revenue increased 1.2% (or 3.7% in constant currency) to
Streaming revenue increased 1.9% (or 4.5% in constant currency) on growth in music publishing streaming
Music publishing revenue increased 12%, or 14.2% in constant currency
Music publishing streaming revenue grew 16.4% (18.3% in constant currency)
Recorded music streaming revenue decreased 0.4% (an increase of 2.2% in constant currency) on a lighter release schedule, foreign exchange currency fluctuations and slowdown in ad-supported revenue.
Net income was $37 million this quarter, down 60% from $92 million one year ago, primarily driven by the negative impact of currency fluctuations on the company’s Euro-denominated debt. Adjusted net income up 5% to $116 million from $111 million a year ago.
Operating income was $124 million, down 25% from $166 million a year ago, with adjusted operating income up 10% to $203 million from $185 million.
Adjusted net income of $116 million was up 5% from $111 million in the year ago quarter.
Several months after shutting down his SiriusXM station, Garth Brooks has found a new radio home.
Starting this summer, Brooks will launch SEVENS Radio Network through TuneIn, the free livestreaming audio platform with more than 75 million monthly active users and distribution across 200 platforms and connected devices.
SEVENS Radio will include multiple stations dedicated to country music and more, all curated and conceived by Brooks. “I’m excited about the future of TuneIn and feel lucky to announce a partnership with them,” said Brooks in a statement. “The thought of a global network of stations uniting all music fans is something I want to be a part of. The possibilities are bigger than I can dream.”
TuneIn already boasts more than 100,000 stations, accessible by downloading the TuneIn app for Android or iOS, via tunein.com or through smart speakers. Ad-supported content is available for free; listeners can also choose a commercial-free premium service.
“Garth Brooks is a tireless entrepreneur and one of the most recognizable stars in the world. When he shared his vision for SEVENS Radio, we knew TuneIn should be his home,” said TuneIn CEO Rich Stern. “At TuneIn, we believe in the power of radio and those artists who are passionate about it. Garth and the entire SEVENS team are creating something we believe fans will love and we’re so proud to have them on TuneIn.”
Brooks, the top-selling solo artist in the United States with more than 156 million domestic albums sold, according to the RIAA, comes to TuneIn after six years spent helming the 24/7 Garth Channel on SiriusXM, which ceased airing on September 30.
SEVENS will fill and expand the void left by the end of the Garth Channel, which had served as a community hub for Brooks and his fans since its launch in 2016. The singer frequently appeared on the channel, sharing his experiences with the artists the outlet played, while the station offered fun bits of Brooks trivia. The Garth Channel featured Brooks’ music roughly 25% of the time, with the rest of the airplay dedicated to artists he liked, including acts he grew up on, his contemporaries and newer performers.