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Snoop Dogg kept his word. Less than a month after pledging to bring the Death Row Records catalog back to traditional streaming services “real soon,” the rapper-entrepreneur did just that on Thursday night (March 9). “Yessir. Heard you,” he tweeted along with a six-second hype clip. “Death Row Records catalog is back streaming everywhere tonight.”
Death Row released Snoop Dogg’s first two albums: the seven-times platinum Doggystyle in 1993 and the two-times platinum Tha Doggfather in 1996. Other album releases now back on Spotify, Apple Music and other services include 2Pac’s All Eyez on Me and The Don Killuminati: The 7 Day Theory, as well as the label’s comprehensive Greatest Hits album, Lady of Rage’s Necessary Roughness and Kurupt’s Against the Grain, among many others.
The label’s other stone-cold classic, Dr. Dre’s The Chronic, returned to DSPs in early February after it was reunited with Interscope Records after Dre sold his music assets to UMG and Shamrock Holdings for an estimated $200 million.
Snoop (real name Calvin Broadus) acquired the Death Row catalog and brand, along with its trademark, name and logo, from MNRK Music Group in February 2022, and almost immediately pulled the legendary catalog off streaming services, telling REVOLT it was because “those platforms don’t pay.” In December, Snoop quietly sold a stake in the label’s catalog to gamma, a new full-service music company led by former Apple Music executive Larry Jackson. Their first course of action was to release the catalog — without mentioning their partnership — exclusively on TikTok to give fans the ability to create their own videos using clips from classic albums like Doggystyle. The deal was touted as the “first-ever catalog reissue to release exclusively through SoundOn,” the distribution and marketing service that TikTok launched in 2022.
“Since I took Death Row off streaming almost a year ago, not a day goes by without people asking me to put it back up,” Snoop said at the time of the TikTok announcement.
Founded in 1992 by Dr. Dre, Suge Knight, The D.O.C. and Dick Griffey, Death Row’s fortunes began to falter late in that decade following the murder of 2Pac, the departures of Dre and Snoop and the imprisonment of Knight. In 2006, the label declared bankruptcy following a slew of legal troubles, including a lawsuit brought by “silent” Death Row co-founder Lydia Harris that resulted in a $107 million judgment being awarded in Harris’ favor.
Death Row was eventually sold to Toronto-based development company WIDEawake Entertainment Group at auction for $18 million in 2009. When WIDEawake declared bankruptcy in 2012, Death Row was acquired by eOne (then known as Entertainment One). In 2019, eOne was acquired by Hasbro. Last April, Blackstone purchased eOne Music (which was rebranded as MNRK Music Group in September) for $385 million. The acquisition included Death Row, which was then sold to Snoop.
LONDON – Vinyl sales generated more money for record labels and artists than CDs for the first time in more than three decades in the United Kingdom last year, helping drive a 4.7% rise in overall music revenue, according to annual figures from labels trade body BPI published Thursday (March 9).
In 2022, sales of vinyl LPs climbed 3.1% year-on-year in the U.K. to £119.5 million ($142.4 million) and now account for over half (55%) of all trade revenues from physical sales. The last time vinyl revenues eclipsed CD sales in the United Kingdom, BPI says, was in 1987 when Michael Jackson’s Bad was the year’s best-selling album and Rick Astley had the best-selling single of the year with “Never Gonna Give You Up.”
In total, 5.5 million vinyl LPs were sold in the United Kingdom last year. That marks the highest level of vinyl purchases in the country since 1990, according to BPI figures released in January measuring music consumption. The best-selling vinyl titles in the U.K. in 2022 were Taylor Swift’s Midnights, Harry Styles’ Harry’s House and Arctic Monkeys’ The Car.
Despite the ongoing vinyl revival, overall revenue from physical formats was down 10.5% to £216 million ($258 million), with CD sales slipping 24% to £89 million ($107 million).
Offsetting that decline was 6.3% year-on-year growth in streaming revenues, which climbed to £885 million ($1 billion) and accounted for 67% of U.K. recorded music revenues in 2022 — up from 66.2% the 12 months prior. Vinyl sales made up 9% of the market in terms of annual trade revenues, while CDs accounted for 7%.
Breaking down streaming revenue, paid subscriptions generated £763 million ($910 million), up 4.8% on 2021, while ad-funded revenue grew by more than a fifth (22%) to £63 million ($75 million). Digital download sales fell 17.5% to £28 million ($33 million).
Synch revenues were up even more sharply, rising 39% year-on-year to £43 million ($51 million), while public performance income spiked 23% to £143 million ($170 million).
Total U.K. recorded music sales — comprising digital and physical revenues, public performance rights and synch — climbed 4.7% to £1.32 billion ($1.57 billion) in 2022. That marks a rise of 36% over the past five years, according to BPI, as well as the eighth-consecutive year of growth.
The United Kingdom is the world’s third biggest recorded music market behind the United States and Japan with sales of just over $1.8 billion in trade value, according to IFPI’s 2022 Global Music Report. (BPI’s year-end sales figures are based on pound sterling, rather than the far stronger U.S. dollar, hence the perceived decline in overall revenues when BPI’s figures are converted into dollars at a constant currency basis).
“2022 was another great year for British music, but we must guard against any complacency in the face of growing challenges and keep promoting and protecting the value of music,” BPI chief strategy officer and interim CEO Sophie Jones said in a statement. She also called upon the U.K. music community to work together to “create the impetus” for further growth and “futureproof the success of British music in an increasingly competitive global music market.”
As previously reported, British artists accounted for the top 10 biggest-selling singles in the U.K. last year (either as the lead or as a featured artist) for the first time since year-end charts were introduced more than 50 years ago. Leading the pack was Harry Styles’ “As It Was,” which topped the U.K. singles chart for 10 consecutive weeks (it also spent 15 weeks atop the Billboard Hot 100) and was streamed more than 180 million times in the country.
Joining Styles in the U.K. top 10 was Ed Sheeran, Cat Burns, Glass Animals, Lost Frequencies & Calum Scott, LF System, Sam Fender and Kate Bush, whose 1985 track “Running Up That Hill” spent three weeks at No. 1 following its high-profile Stranger Things synch; it was streamed 124 million times in her home country last year.
Styles also landed the year’s best-selling album with his third studio set, Harry’s House, making him the first artist to have both the United Kingdom’s top single and top album since Lewis Capaldi in 2019. Sheeran’s = (Equals) and Swift’s Midnights were the year’s second and third-best-selling albums.
On Thursday (March 9), the RIAA released its annual year-end report on recorded music revenues in the U.S., with an encouraging top line: In 2022, total revenue was up 6% to $15.9 billion, with paid subscription and wholesale revenues each surpassing $10 billion for the first time. That marks the seventh straight year of growth for an industry that at this point is far removed from the doldrums of the early part of the century.
In fact, the industry could credibly be a little underwhelmed by the rate of growth, as the 6% figure is the lowest percent increase across those seven years — and the only time other than pandemic-affected 2020 (+9.2%) that growth has fallen below double digits during that period. In actual figures, it’s the smallest increase ($900 million) year over year since 2016, when the business grew 11.4% and added $700 million.
There are plenty of other interesting takeaways to discern from digging through the RIAA’s report. Here are four (plus one bonus item!) that stand out.
Paid Subscriptions — Anything to Worry About?
Both the average number of paid subscribers (those subscribing to full-catalog services like Apple Music or Spotify’s paid tier) and the revenue from full-catalog paid subscriptions grew at much slower rates, both in percentage terms and in actual numbers, than in recent years. The former metric showed an increase of 8 million subscribers (9.5%; 84 million in 2021 to 92 million in 2022), while the latter metric reflected an increase of $600 million (7.2%; $8.56 billion to $9.17 billion). As with the overall growth rate for the industry, that’s the first time in several years that those figures grew by less than double-digit percentages. So, is it anything to worry about, when looking at how much growth there is left in the paid streaming business?
Not necessarily. For one thing, between 2018 and 2022, paid subscribers (up 96.2%) and revenue from full-catalog subscriptions (up 93.6%) have grown fairly in line with each other, and the revenue per subscriber has averaged $98.92 over that period of time (pandemic-affected 2020 was an outlier year, at $92.35). In 2022, the average revenue per subscriber was $99.77, which was down from $101.94 in 2021 but not out of line with the overall average.
That number should be expected to grow, given price increases by Apple Music, Amazon Music and Deezer in the past year and the increasing pressure on Spotify to boost its price higher than $9.99/month, where it has stayed since entering the U.S. in 2011. This will be something to keep an eye on as the year progresses, as strategies shift from gaining subscribers to getting more out of those who do subscribe, given that a ceiling on the number of subscribers could be coming into view (for context, the U.S. government counted 124 million households in the latest census).
Another reason for optimism: The above numbers don’t include limited-tier subscription revenue — things like Amazon Prime and fitness apps like Peloton — which crossed the $1 billion mark for the first time in 2022. Since 2020, when the pandemic led to a home fitness app craze and resulted in additional areas of limited music subscription beyond the traditional paid streaming realm, limited-tier subscription revenue has grown 47.7%. As more licensing opportunities arise, that sector should continue to contribute meaningful revenue moving forward.
Ad-Supported Streaming Takes a Hit
Ad-supported on-demand streaming revenue reached $1.8 billion in 2022, accounting for 11% of the overall revenues for the business last year. But growth was just 5.5% over 2021 — a big reality check after the category grew 46.7% in 2021 over pandemic-affected 2020 and 16.4% at the mid-year mark of 2022. Even in 2020, when the world essentially came to a standstill for several months, year-end ad-supported streaming revenues grew 16.8%, up $170 million — higher than the $95 million gain seen in 2022.
The advertising slump last year was certainly a blow to U.S. industries, with layoffs across the music and tech landscapes in particular. Many companies cited “economic headwinds” due to a combination of factors, including the war in Ukraine, rising interest rates, inflation and the threat of recession as companies scaled back spending that had ballooned coming out of the pandemic and readjusted forecasts for an uncertain future. All of that certainly played a part. But since 2018, ad-supported on-demand streaming revenue grew 137%, becoming an increasingly large part of the overall pie. In comparison, 5.5% is likely a disappointing number to many in the industry.
Vinyl, Vinyl, Vinyl
Another year, another big headline involving vinyl’s 16-year winning streak: For the first time since 1987, the number of vinyl LPs sold in the United States (41 million) surpassed the number of CDs sold in the calendar year (33 million). Vinyl sales reached $1.2 billion in 2022, up 17.2%, while CD sales plummeted once again, decreasing 17.6% to $482 million. Despite the eye-popping vinyl revenue numbers, however, actual unit sales only rose 3%, meaning that the price of vinyl is getting more expensive. In 2021, the average vinyl record cost $26.12; in 2022, that number rose to $29.65. There’s plenty to unpack there, including increased production costs and inflation.
Another notable development in the vinyl craze that has sharpened in recent years is the shifting market share among vinyl retailers. As far back as 2015, when the industry started to emerge from its nadir, the market was dominated by indie records stores (45.42%), internet/mail order sellers like Amazon (32.88%) and chain stores like Best Buy (15%), according to Luminate. By 2018, indie stores and Amazon sales had essentially settled into a market share tie — each at 41% — while the Best Buys of the world had shrunk to just north of 10%.
But beginning in 2019, a fourth player began to emerge: Mass merchant stores like Walmart and Target, which dramatically expanded their inventories. As a result, their market share went from less than 1% in 2015 — accounting for some 7,000 sales — to 10.19% in 2019 and 14.75% in 2021, with sales of 6.1 million units. While the market share economics have shifted during that time, sales have continued to increase for each sector across the board. In short, part of what has been driving the boom has been sheer visibility in some of the biggest stores in the country, which has correlated to more sales, and thus more visibility, and around and around we’ve gone. (For those curious, in 2022 indie stores accounted for 48.1% of the market, having reclaimed their dominant position as the country emerged from the pandemic.)
The Synch Explosion
In the past few years, more and more songs have caught huge waves due to synchs in popular TV shows and films. Think Kate Bush’s “Running Up That Hill” following its Stranger Things placement, The Cramps’ “Goo Goo Muck” following its Wednesday placement and Gerry Rafferty’s “Right Down The Line” from Euphoria, to name a few. That seems to have stemmed from the explosion of content, as the streaming wars in TV/film world heated up during that time — with Netflix, Disney+, Hulu, Peacock, Paramount+, Apple TV+ and the rest all throwing money around to reel in subscribers. The RIAA numbers back that up: In 2022, synch revenue grew 24.8%, from $306.5 million to $382.5 million, marking a gigantic jump. In fact, from 2020 to 2022, synch revenue jumped 44.2%, outpacing the industry at large (which was up 30.3% in that span).
Will that upward trend continue? It’s unclear. The TV/film streamers have publicly cut back their content spends in the past six months as the battle for market share and subscribers veered into profligacy and waste, while corporations looked to reel in costs amid the broader economic landscape. But it’s possible those gains are here to stay, even if they regress a bit. One music group executive recently told Billboard that in addition to the big four streamers (Spotify, Apple, Amazon and YouTube), Netflix was quickly becoming a fifth major source of revenue thanks to a combination of direct synch payments and the long tail of streams that result from a high-profile placement. That’s something to keep an eye on moving forward.
Bonus Takeaway — Ringtones!
Finally, a small bonus addition from a personal favorite aspect of the RIAA report. The mid-to-late-2000s were, of course, a time of great uncertainty and anxiety in the recorded music business, as piracy and digital music chipped away at a once-dominant physical sales format. At their height in 2007, ringtones and ringbacks were able to plug the gap to the tune of $1.1 billion, according to the RIAA. (That would be around $1.6 billion today.) So, how much money did ringtones and ringbacks generate in 2022?
$11 million!
Please, RIAA, continue printing this as a line in every report, no matter how small the figure gets. While it’s currently the smallest line item by revenue in the entire report, I cherish it more than all the others.
TikTok is facing a slew of class action lawsuits alleging it tracks and harvests troves of personal information on users through its in-app browser.
In the most recent suit filed on Wednesday, users allege TikTok has “secretly amassed massive amounts of highly invasive information and data by tracking their activities on third-party websites.” At least a dozen class actions have been filed since November alleging violations of the federal wiretap act, among other claims.
TikTok remains under fire by the government due to concerns that data it collects on American users can be leveraged by the Chinese government to advance its interests. The company could, for example, be forced to tweak its algorithm to boost content that undermines U.S. democratic institutions or muffles criticism of China and its allies, according to lawmakers. A bipartisan bill backed by the White House was introduced on Tuesday that would establish a unified process for reviewing and addressing technology that could be subject to foreign influence. Under the measure, Chinese parent company ByteDance could be forced to sell TikTok or the platform could be completely banned, though that would face significant hurdles.
The first suit, known as Recht v. TikTok, was filed in November. It was based on a report from Felix Krause, a software researcher who found that the company injects lines of code that commands the platform to copy user activity on external websites. Of the seven popular apps he tested — including Instagram, Snapchat, Amazon — he found that only TikTok monitored keystrokes.
The named plaintiff in the complaint, California resident Austin Recht, says he clicked on an ad to a third-party website, where he bought merchandise after he entered private data that included his credit card information. Tiktok “surreptitiously collected data associated” with his activity on the third-party site accessed through the platform’s in-app browser, according to the complaint.
The class actions detail how TikTok intercepts and harvests data. The in-app browser inserts code into the websites visited by users with the purpose of tracking “every detail about [their] activity,” Recht claims.
“In the case of online purchase transactions, this would include all of the details of the purchase, the name of the purchaser, their address, telephone number, credit card or bank information, usernames, passwords, dates of birth,” reads the complaint filed in California federal court.
The data isn’t limited to purchase information and extends to private information about users’ health, the suit alleges. When users click on a link to Planned Parenthood on TikTok, for example, their activity on the site is tracked and harvested. This could identify users looking for abortion services or those looking for information about gender identity, according to the suit.
TikTok has faced legal action for illegally harvesting user data. In 2020, it was sued for alleged violations of the Illinois Biometric Information Privacy Act, a state statute that prohibits private companies from collecting users biometric identifiers without first obtaining consent. It settled the litigation for $92 million.
In response to suits alleging violations of the Federal Wiretap Act, Tiktok has said that the purported class members are covered under the settlement for those who sued for violations of the Illinois privacy law because it “addressed all user data collected through the app.”
Though the plaintiffs in the suit don’t allege any injury, the Federal Wiretap Act doesn’t require proof of actual harm to recover monetary damages. The law prohibits the intentional interception of communications, which includes personal information.
Some of the suits also allege violations of state invasion of privacy and competition laws. A hearing has been set for March 30 on whether the litigation should be consolidated.
In California, TikTok could face massive damages if there’s a data leak. Under the California Consumer Privacy Act, companies that mishandle personal data face statutory damages ranging from $100 to $750 for each consumer per incident.
TikTok didn’t immediately respond to requests for comment.
This article originally appeared on THR.com.
Adidas is still wrestling with how to dispose of 1.2 billion euros ($1.3 billion) worth of Yeezy shoes after its breakup with the rapper formerly known as Kanye West, forcing the German sportswear maker into a big loss at the end of last year and expectations of more pain ahead.
CEO Bjorn Gulden said selling the popular line of shoes would mean paying royalties to Ye, who was dropped by Adidas five months ago after making antisemitic remarks on social media and in interviews. During an earnings call Wednesday, he pointed to “many variables” about what to do with the shoes now stacked in warehouses.
Destroying them could “raise sustainability issues,” though some companies have offered recycling solutions, said Gulden, who was named CEO after the blowup over Ye’s remarks. Restitching them to hide the Yeezy brand so they could be sold “is not very honest, so it’s not an option,” he added.
Suggestions to give them away to those in need in places like earthquake-hit Syria or Turkey would mean the product would “come back again very quickly” due to its high market value, “so that’s not really an option,” Gulden said.
If Adidas does decide to sell the shoes, “I can promise you that the people that have been hurt by this will also get something good out of it and get donations and proceeds in different ways, shapes or forms,” the CEO said.
Adidas split with Ye in October, following other brands that were facing pressure to end ties with the rapper over his antisemitic and other offensive remarks. The company is now struggling to find ways to become profitable again and replace its banner Yeezy line, which analysts have said amounted to as much as 15% of its net income.
The Ye breakup cost 600 million euros in lost sales in the last three months of 2022, helping drive the company to a net loss of 513 million euros. The decline, also attributed to higher supply costs and slumping revenue in China, contrasts with profit of 213 million euros in the fourth quarter of 2021.
More losses could be ahead, with the company forecasting a 500 million-euro hit to profit earnings this year if it decides not to repurpose the remaining Yeezy products in stock. The company is predicting a 2023 operating loss of 700 million euros.
Gulden said “so many companies” were willing to buy the popular shoes but that would mean paying royalties to Ye. Rumors that the company was in talks to sell them, however, “are not true.”
He had heard from “gazillions of people that have opinions about this, and of course when you’re sitting on the inside, it looks a little bit different than it looks on the outside.”
Gulden also said Adidas is still investigating former employees’ allegations that Ye created a toxic work environment and that the sportswear company knew about his problematic behavior and failed to protect workers.
The CEO called 2023 “a transition year,” saying “we can then start to build a profitable business again in 2024.”
Last year, fourth-quarter net sales were up a bare 1.3% at 5.21 billion euros from the same quarter a year ago. The company pointed to revenue dropping 50% in China and higher costs for supplies and shipping, which could not be offset by price hikes.
For the full year, the Herzogenaurach, Germany-based company said it made a net profit of 638 million euros on sales that rose 6%, to 22.5 billion euros.
Adidas also further shook up its leadership by replacing its top sales and marketing executives. Global sales head Roland Auschel will leave the company after 33 years and be succeeded by Arthur Hoeld, now head of the Europe, Middle East and Africa region.
Brian Grevy, head of global brands, will step down March 31. CEO Gulden will take on his product and marketing responsibilities.
A sonic mirage? The mysterious reverb of distant guitar? A hazy musical apparition? However the ear perceives the initial seconds of Miley Cyrus’ “Flowers,” the six-week Billboard Hot 100 No. 1 and record-breaking streaming smash, the seed behind the runaway track was planted during a simple writing exercise.
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“The idea really began with the word ‘flowers’ itself,” says “Flowers” co-writer Michael Pollack, speaking to Billboard from a music camp ahead of the release of Cyrus’ new album Endless Summer Vacation. “It’s been really incredible to watch,” he says of the fervent reaction to the song. “This is the kind of record you dream about having your whole career and I’m so grateful to be a part of it.”
Pollack has enjoyed a charmed rise. When he was just a student at Vanderbilt University, he accompanied his idol Billy Joel on the piano during an audience Q&A (he asked to come up to the stage, Joel accepted, and the subsequent video went viral). Since that auspicious introduction to the public sphere a decade ago, he’s been a close collaborator to artists like Lauv, Ben Platt, Justin Bieber and Maroon 5. For the latter band he co-wrote “Memories,” and with Bieber he collaborated on his Justice track “Holy.” As a result of Pollack’s prolific discography, he shared the title of songwriter of the year for 2022 at the BMI Pop Awards, tying with fellow chart-topper Omar Fedi.
When it comes to Pollack’s harmonious musical relationship with Cyrus, the two first met in May 2021 during a writing session. “We started working together periodically then, but really hit our stride in January of 2022,” Pollack says. “There’s an endless list of what makes Miley special as a collaborator, but one of her greatest strengths is her taste. Miley has impeccable taste. She listens to and loves such a wide breadth of music. Because of that, I don’t have to guess if something is great or not when we’re writing. If Miley says something is great, I trust her wholeheartedly.”
Pollack, who says he almost always writes on the piano (“It’s where I feel most comfortable and it’s where my best ideas have come”), is credited as a co-writer on “Flowers” alongside Gregory “Aldae” Hein and Cyrus. When it comes to the song’s birth, the songwriter says the majority of the track easily came into view.
“Compared to other songs, the lyrics for ‘Flowers’ came relatively quickly,” he notes. “The only line that gave us trouble was the end of the pre-chorus.” Pollack is referring to when Cyrus potently muses, “I didn’t wanna leave you, I didn’t wanna lie.” “I think it was really important to contrast the empowerment of the chorus with a little bit of sadness and vulnerability, and that line ‘started to cry, but then remembered I’ does exactly that. I also love that the sentence is incomplete. It’s a subtle cliffhanger to take you to the chorus.”
Perhaps that’s why “Flowers” soars with its singular sound, presenting a blend of genres that simultaneously compete and gel together. While a friend told him it brought to mind Gloria Gaynor’s “I Will Survive” (alluding to its crescendos, disco violins and empowering theme, no doubt), many have also pointed out similarities to Bruno Mars’ “When I Was Your Man.” Pollack won’t comment on the connection (perhaps that’s Miley’s story to tell), but any listener can detect that the song boasts a chorus that is the inverse of what Cyrus sings on “Flowers.” (Bruno croons, “I should have bought you flowers and held your hand.” Interestingly, Mars’ co-writer Philip Lawrence once said that “When I Was Your Man” was inspired in part by the artistry of Billy Joel.)
Pollack will say that the original chorus was initially less empowering than what it evolved into. “I remember singing the tagline with the lyric, ‘But I could never love me like you can,’ and Miley and Greg wanted to flip the script and say, ‘Yeah, I can love me better than you can.’ Once we had the tagline established, the rest of the lyric came rather quickly.”
With that, a breakup anthem morphed into a hardy independent roar as opposed to something sorer. According to Pollack: “That was without a doubt one of the biggest moments of the writing process.”
Riding that inspiration, an ephemeral and anthemic moment in “Flowers” comes in the form of a cacophony of voices where Cyrus proudly announces to the world, “I can love me better, baby, I can love me better.” Pollack says the discovery of that puzzle piece was his favorite moment in the (excuse the metaphor) blossoming of the song. It came late in the process. “We had finished writing the entire song and sang it down to see how it flowed from top to bottom,” he recalls. “After the second chorus, Miley freestyled the post-chorus (when she says “I can love me better”), but the way she originally sang it was in this cool, talky tone. That section brought a sexiness to the record that we didn’t even know it needed.”
While Pollack said he “felt the magic” on the demo he recorded with Cyrus, the songwriter was taken aback by its success. “We were also so engulfed in the writing process for the album that I didn’t really overanalyze any of the individual songs we made, but instead just focused on what we were going to write next.”
In addition to other cuts on Endless Summer Vacation, Pollack has other major tracks floating around, ranging from the melancholy (Selena Gomez’s “My Mind and Me”) to the romantic (“Marry Me” from Jennifer Lopez and Maluma). But it’s the record-breaking success of “Flowers” that has grown highest; not just on the charts, but to become one of the biggest success stories in Cyrus’ already blockbuster legacy. (Rolling Stone went so far to say that “Miley’s whole career has been building to this moment.”)
“I think they’re all easy types of songs to write, as long as there is a genuine emotion to tap into and an authentic muse,” says Pollack. “I personally struggle to write songs when no one in the room can tap into the source of the emotion. Each of these songs is rooted in truth.”
Live Nation president/CFO Joe Berchtold might have been the sole defender of his company’s 2010 merger with Ticketmaster at a Senate Judiciary Committee hearing in January, but behind the scenes, he wasn’t alone.
Advising Berchtold and managing key relationships on Capitol Hill is a small army of over 30 lobbyists, deployed to defend the company from growing criticism by senators like Amy Klobuchar, D-Minn., and Richard Blumenthal, D-Conn. Klobuchar, who serves as the chair of the Senate Judiciary Subcommittee on Competition Policy, Antitrust and Consumer Rights, has made repeated calls to the Department of Justice to investigate Ticketmaster and break up the company if any wrongdoing is uncovered during a DOJ review of the consent decree it created to foster competition in ticketing. That review is expected to wrap up soon.
While Live Nation’s lobbying spending has been historically low for a company of its size and domi- nance, that’s changing. Last year, the company spent nearly five times as much on lobbying as it has in the past, according to data from Open Secrets, which uses public records to track such spending. From 2012 to 2018, Live Nation spent an average of $225,000 annually to lobby federal officials. In 2022, its annual lobbying expenses had increased to $1.1 million.
The company’s agendas include defending criticism regarding Ticketmaster’s handling of the Swift presale last November.
One of those insiders is Seth Bloom, a former longtime general counsel for the Senate’s antitrust subcommittee and advisory board member for the American Antitrust Institute. Another is Jonathan Becker, a former chief of staff and chief counsel to Klobuchar who now serves as a partner at law firm Mayer Brown and represented a dozen big-name clients in 2022, including Meta, Microsoft and Phillip Morris.
Live Nation now spends significantly more than its competitors in the touring sector. Last year, enter- tainment conglomerate AEG spent $140,000 on federal lobbying, according to Open Secrets, while secondary-market ticketing competitor SeatGeek spent $170,000 and Viagogo, the British company that bought StubHub in 2020, spent $140,000. Live Nation partner company Oak View Group spent $570,000 on lobbying, while Spotify, which has rolled out a new ticketing offering for concert promoters and is hoping to broaden its reach within the live space, spent $710,000.
Live Nation could spend even more this year as it ramps up efforts to exit the consent decree once the five year extension ends in 2024. The company now has more than seven lobbying firms working for it on issues that include ticketing, event safety and Federal Aviation Administration rules on the use of drones at events.
After weeks of strategizing how to salvage Ticketmaster’s reputation in the wake of last November’s Taylor Swift presale debacle and Live Nation president/CFO Joe Berchtold’s January grilling by the Senate Judiciary Committee, the ticketing giant’s parent company has settled on an approach that will ramp up lobbying to hit back at scalpers while educating consumers about ticketing fees.
Despite breaking two company records with the Nov. 15 The Eras Tour presale — the most tickets ever sold in a single day (2.4 million) and, according to the company, keeping 95% of those tickets off secondary sites like StubHub and SeatGeek — Ticketmaster found itself cast as the villain and Live Nation as a monopoly after a cyberattack disrupted over 100,000 transactions.
The outcry has led to a mixture of disbelief and self-reflection at Live Nation’s global headquarters in Beverly Hills, Calif. “The company enables music fans to connect with the world’s greatest artists through concerts and events that often become the cornerstone moments of people’s lives,” says a Live Nation executive who was not authorized to speak on the record. “Why the fuck do people hate us so much?”
Although the controversy over the Swift presale had to do with ticket availability rather than price — the prime complaint of Ticketmaster’s July 2022 Verified Fan sale of tickets to Bruce Springsteen’s 2023 tour — the executive says that Live Nation has determined that redeeming itself with consumers “starts with the fees,” which can add over 30% to the final price of a concert ticket.
“We’ve got to now go out and do a much better job so policymakers and consumers understand how the business operates,” Live Nation president/CEO Michael Rapino said during the company’s most recent investor call. “We’ve historically not had a big incentive to shout out loud that venues are charging high service fees or artist costs are expensive. But I think now [that] education is paramount.”
Ticketmaster’s main source of revenue comes from the fees it charges to process ticket transactions. A ticket’s face value goes to the artist, while the ticketing giant shares the fees it collects with the venues that contract for its services.
Ticketmaster typically keeps $2 to $5 per ticket for processing costs and a small portion of the fees it collects to recoup any loans, advances or bonuses it may have paid the venue to win its ticketing contract. Contracts for large venues can be worth millions of dollars. The balance of the fees collected goes to the venue, which uses the money to cover the cost of the show.
Traditionally, promoters book venues for artists, pay rent to use the space and hire its staff. What’s left over as profit is divvied up with the act, which typically receives 80% to 85% of that amount.
But as competition to book top-shelf headline talent has increased over the last decade, venues have reduced the rent they charge and promoters have agreed to take a smaller percentage of base ticket sales — sometimes as little as 5%.
As Rapino said on the investor call: “The artist takes most of that ticket fee base. So the way that the venue, the promoter or the ticketing company [earns its] revenue fees is through that extra fee.”
The increasing costs of concert production, which are borne by the promoter, have also wid- ened the gap between a ticket’s face value and the final amount charged after fees, which can induce sticker shock when two $100 tickets can end up costing $265. While it has been very profitable for Ticketmaster to cover more of a concert’s costs through these fees, it has helped turn ticket buyers against the company.
Ticketmaster executives are hoping a simple fix can solve the problem — showing the total cost of a ticket, face value plus fees, at the be- ginning of the checkout process. That method is already used in New York, where it is mandated by state law.
“We all want to know what is the true cost to see the show when we start shopping,” Rapino said on the call. “We wish that would be mandated tomorrow across the board [because] that would relieve a lot of the stress [and] the consumer’s perception that there’s this magical extra fee added on” that isn’t part of the overall show cost.
Ticketmaster and other ticketing companies have long debated whether to abandon what’s known as a “drip pricing” model but haven’t pulled the trigger because studies show that fans are more likely to make a purchase if the fees that are tacked onto the face value of a ticket don’t appear until checkout. Secondary-market ticketing companies have also adopted the practice, advertising tickets at prices below those sold on the primary market, then hitting consumers with a 35% to 45% markup at checkout.
In a move more closely tied to the Swift situation, Ticketmaster has also decided to target scalpers through legislation and proposed legislation called the FAIR Ticketing Act that would outlaw drip pricing and grant artists the ability to ban scalper websites from reselling their tour tickets. Support for the initiative includes all four major talent agencies, Universal Music Group and a number of management companies.
Pro-ticket scalping groups have proposed their own counter-legislation, effectively banning Ticketmaster from using its proprietary technology to stop scalpers. Neither bill has a congressional sponsor in either chamber of Congress, however, and unless that happens, neither has any chance of passing.
Ticketmaster does appear to have some serious muscle in its corner when it comes to the scalp- ing issue. In a February interview with Billboard, Gregg Perloff, founder and CEO of independent promoter Another Planet Entertainment, which produces San Francisco’s Outside Lands festival, said: “My question for [Congress] is, ‘Why are you picking on Ticketmaster and Live Nation when you should be outlawing brokers?’ They are the ones who screw up everything. Does every promoter take a few tickets? Does every venue have a few tickets? … Sure. But it’s the scalpers that make it so no one can get a decent seat except the rich. The Senate didn’t do the research they should have done before they started pontificating and acting like they knew what they were talking about.”
In addition, Perloff suggested that touring artists were partially responsible because they “really want to go on sale for the whole tour at once because they can advertise the whole tour at once and make a bigger splash.” Regarding Swift’s tour, he said, “There’s no system in the world — and this is where I have to defend Ticketmaster — that could have handled the onslaught.”
Also in February, at the Pollstar Live conference in Los Angeles, music mogul Irving Azoff and Madison Square Garden Entertainment chairman James Dolan took on pro-scalping journalist-podcaster Eric Fuller when he argued that scalping made tickets cheaper, citing discredited media reports of bargain bin-priced tickets available for Springsteen’s North American tour dates.
“It’s about a half-hour conversation, but you’re dead wrong,” Azoff told Fuller, who also operates a consulting business in ticketing.
“You got to take your hat off to this paid lobbying group that’s working for the scalpers,” Dolan chimed in. “These guys are pretty good. Maybe we should hire them.” In response, Fuller says Dolan’s comments are “grossly inaccurate.”
SEOUL — The bitter battle for control of K-pop’s fabled agency SM Entertainment has spilled out publicly like an episode of HBO’s Succession. K-pop’s largest agency, HYBE — home to boy band BTS — is pitted against the management of SM, which for years was South Korea’s dominant K-pop company. But as SM’s Lee Soo-man sided with HYBE against the company he founded, a corporate shakeup has turned into a battle royale.
SM sought to maintain its independence through a partnership with Kakao, a South Korean internet giant that has acquired several entertainment agencies. In February, Kakao said it would buy a 9.05% stake in SM against the wishes of Lee, SM’s charismatic founder and rock singer-turned-mogul, whose equity in SM allowed him to challenge the purchase in court.
About a week later, Lee — a controversial figure who helped build the K-pop business over the last three decades but has been convicted of embezzlement in the past — privately approached HYBE founder and chairman Bang Si-hyuk, offering to sell about 80% of his SM shares to HYBE, with an option to sell the remaining chunk at a later date, according to a person with direct knowledge of the matter. As a result, HYBE now has a 15.8% stake in SM, making it the company’s largest shareholder.
Since then, the companies have traded almost daily salvos.
After a March 3 provisionary injunction upheld Lee’s court challenge to the Kakao acquisition, Kakao announced it had canceled its investment in SM and launched a tender offer seeking to buy 35% of SM from minority shareholders. HYBE is now appealing to SM shareholders to back its board nominees and vision for the company. SM sees the move as a hostile takeover and is asking shareholders to appoint independent directors. The clock is ticking before a March 31 annual shareholder meeting.
Both HYBE and SM have grand ambitions to expand K-pop and take on the major labels globally. HYBE increased its revenue 125% to 1.78 billion won ($1.41 billion) from 2020 to 2022, largely by acquiring Ithaca Holdings in 2021 for $1.05 billion and giving its founder, Scooter Braun, the reins to its U.S. operations, HYBE America. In February, HYBE America made its first major move, purchasing Atlanta-based hip-hop company Quality Control Music for $300 million.
SM hopes to more than double its 2022 revenue of 850 billion won ($644 million) to 1.8 trillion won ($1.36 billion) by 2025 through a mix of partnerships and acquisitions, which include acquiring a U.S. management company and, by the second half of 2024, launching its first U.S.-based artist. “Our plan is not limited to local activities of Korean artists,” co-CEO Tak Young-jun said in a Feb. 23 video.
The company plans to spend 350 billion won ($266 million) on a music publishing company and 300 billion won ($228 million) to acquire record labels, with two-thirds of that amount ($152 million) targeting U.S. companies “with a solid local network that can support Korean artists’ global expansion and have global production capabilities in genres complementary to SM,” Lee Sung-soo, SM’s chief creative officer and co-CEO, said in the same video.
But minus its powerful founder, SM doesn’t intend to take the world stage with HYBE’s help. It had envisioned Kakao as its preferred partner in a mission — dubbed “SM 3.0” — it has said it will still push forward with in order to expand outside of Korea and build outposts in Japan, Southeast Asia and the Americas.
A HYBE acquisition of a controlling interest in SM could potentially face regulatory scrutiny from South Korea’s Fair Trade Commission since it exceeds 15% of SM’s stock ownership. In 2022, HYBE was behind 26.8% of albums sold in Korea, while SM was behind 19.1%, according to Korea chart company Circle Chart.
As Lee Dominated, SM’s Luster Was Fading
Though few had predicted such a dramatic unraveling, SM was overdue for a transformation. Once the leading K-pop innovator, SM has debuted just one completely new act, Aespa, in the last five years. It continues to operate through a single pipeline with Lee at the helm of artist management and production, while rivals like HYBE and JYP Entertainment have diversified their portfolios, relying on multiple teams that produce more acts with more independence.
SM’s shares have been chronically undervalued, industry observers say, due to an arrangement where the company paid producing fees to a separate entity owned by Lee. SM paid Lee 24 billion won ($18.1 million) in 2021, equivalent to more than a quarter of SM’s operating profit that year. Even in years when SM produced a loss, Lee took home a sizable paycheck.
The board of directors, packed with Lee allies, allowed the practice to continue for years, until Align Partners Capital Management, a private equity firm, led a shareholder revolt last year. Lee, who now holds about 3% of SM shares, appears headed out the door. HYBE and SM say his role will be reduced if not completely phased out.
“It’s hard to put up a resistance in Korean culture,” Lee Changhwan, CEO of Align Partners, says about the difficulty in over-riding a founder and company’s biggest shareholder. “The governance structure has to go through fundamental changes.”
South Korean stocks are often undervalued, analysts say, since some companies can seem to be managed for the benefit of founders and families to the detriment of general shareholders. Still, in the HYBE-SM power struggle, SM shareholders appear to have won either way: The March 7 share price of 149,700 won ($113.84) is up over 116% since SM announced it would terminate Lee’s contract on Oct. 14.
A K-Pop Pioneer With A Criminal Past
The 70-year-old Lee, who founded SM in 1995, has been credited with making K-pop what it is today. Inspired by early MTV music videos and New Kids on the Block, which he watched during his master’s degree studies in California in the 1980s, he paved the way for K-pop to win overseas fans with a signature formula of visually striking performance and dance pop.
Lee crafted BoA, the female singer who SM scouted in 1998 when she was 11 years old, into the first K-pop artist to break through in the Japanese market; she went on to sell millions of singles and albums. Groups from TVXQ and Girls’ Generation to EXO and NCT have followed suit with international stardom. In 2000, SM became the first K-pop agency to list its shares publicly.
Even before PSY and BTS became global household names, Lee was lecturing publicly about K-pop conquering the world — and about a future when non-Korean singers would join the fray and be trained and managed by K-pop production teams.
Lee’s artistic vision and drive didn’t make up for the company’s corporate governance problems, however. Shareholders have in recent years slammed SM for losses from non-music businesses such as a winery and restaurants while Lee was still getting his producer’s fees. Several SM acts have seen members leave acrimoniously over what they called harsh training and “slave contracts,” resulting in government intervention, including shorter contracts for K-pop trainees and stars.
In 2002, Lee made headlines when he fled the country to escape prosecution while facing embezzlement allegations. After a brief stay on Interpol’s wanted list, he surrendered to Korean authorities and was convicted for siphoning off 1.15 billion won ($892,000 at the time) in company funds during a recapitalization round, which he used to buy shares in SM. (He served three years of probation, and in 2007 he received a presidential pardon — and then returned to the company.) SM has also paid fines for tax evasion, most recently in 2021.
In recent weeks, Lee Sung-soo, the co-CEO who is also nephew to founder Lee’s late wife, leveled a series of accusations at his uncle, which range from previously undisclosed tax evasion through a shell company based in Hong Kong to making “arbitrary” changes to SM bands’ musical direction to advance his own business interests.
While the elder Lee has not directly addressed the allegations, HYBE has responded that it was unaware of such an arrangement during the deal’s signing. In a statement to Billboard, HYBE says its SM acquisition was made “following research on the corporate fundamentals, including publicly disclosed information about SM.”
Snoop Dogg teamed up with U.K. tech entrepreneur Sam Jones on Shiller, a live broadcast platform set to launch in April that will offer content creators a suite of tools to monetize their content, including the ability to token-gate their video and audio, share products from commerce sites and promote NFTs. According to a press release, the app “combines best of web3 technology with live, interactive video and audio streaming, to provide a one-stop-shop for creators, including NFT projects, artists, brands, and key opinion leaders, to monetize their following and connect with their audiences.”
B2B streaming technology company Tuned Global acquired Swedish music technology company Pacemaker, which holds several patents for its AI-driven DJ applications. “Thanks to Pacemaker, Tuned Global extends its B2B streaming technology dominance by now offering enhanced AI tools that will hook and excite users as part of our white-label music apps, as well as in a standalone product for companies who aren’t yet our customers,” said Tuned Global MD/founder Con Raso in a statement. Pacemaker’s AI DJ is capable of weaving together tracks and other audio, while a “match machine “can help curators instantly dig up great tracks in a massive catalog and keep the groove going for workouts, therapeutic sessions, or other playlist-driven moments,” according to a press release.
DJ/producer Steve Aoki launched Audio Media Grading in partnership with Collector Archive Services. The new company will provide grading, preservation and authentication services for grading vinyl records, cassettes, CDs and 8-track.
Cutting Edge Media Music (CEMM), a division of Cutting Edge Group, formed a strategic venture with Village Roadshow Entertainment Group that will encompass all of Village Roadshow’s past and future music publishing assets, soundtrack album releases and music supervision services for film and TV. The venture will be overseen by Brian McNelis, who heads CEMM division Lakeshore Records, along with Lakeshore’s Eric Craig, who will provide music supervision and music department support across the Village Roadshow slate. Village Roadshow COO Louis Santor will take the lead in implementing all aspects of the deal.
B2B distributor FUGA expanded its global user-generated content and rights management offering by completely integrating rights management company Adrev. Both are owned by Downtown Music. The integration formalizes months of collaboration between FUGA and Adrev, according to a press release, which states that with the integration, “both FUGA and Adrev clients will now be provided with an extended service aimed at amplifying and simplifying UGC and premium video content monetization into one, seamless environment.”
BMG partnered with Stockholm-based artist management company Scandinavian Talent Management (STM), which also specializes in music supervision, music publishing and live events. “We are delighted with BMG’s trust and are confident that we can create many synergies with their global resources and networks,” said STM founder/MD Henrik Johansson in a statement. STM clients include Swedish rock-pop singer-songwriter and BMG artist Kristofer Greczula; British guitarist, songwriter and producer Chad Neale; and Mando Diao bassist Carl-Johan “CeeJay” Fogelklou.
Chordal partnered with AI developer AudioShake to launch Auto-Instrumental, described as an “on-demand instrumental solution” for music supervisors that’s designed to streamline synch placement. “Auto-Instrumental reduces the time of obtaining an instrumental from days or weeks (if it even exists!) to a matter of seconds, making it immediately possible to trial music to picture,” said Chordal co-founder Grayson Sanders in a statement.
Film and TV company Gunpowder & Sky signed a multi-year, multi-project development and production deal with Audible. Under the deal, Gunpowder & Sky will provide Audible with an exclusive first look at the studio’s slate of audio initiatives covering music, pop culture and more. In February, Audible released In the Cut with Ghetto Gastro, an eight-episode Audible Original podcast executive produced by Gunpowder & Sky. Two upcoming music-oriented podcasts from the companies — Lighters in the Sky and Shelved — “will reveal iconic, often undercover, music stories to the masses,” according to a press release. The first-look deal builds on an existing collaboration that has spawned multiple installments in Audible’s Words + Music franchise.