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LONDON — In early February, Universal Music Group chairman/CEO Lucian Grainge drew a line in the sand between the traditional record business and financial companies entering the fray to tap into the global growth of streaming. “Our industry is entering a new chapter where we’re going to have to pick sides,” Grainge said at the Billboard Power 100 launch event in Hollywood. “Are we on the side of fintech [financial technology] and functional music, functional content? Or are we on the side of artistry and artists?”
Though Grainge didn’t name names, he could well have been talking about Utopia Music, a Zug, Switzerland-based tech company that delivers financial services for labels, publishers and distributors. Over the past two years, Utopia, whose motto is “Fair pay for every play,” has embarked on a frenetic buying spree of 15 companies, including music tech company Musimap; Lyric Financial, a Nashville-based provider of royalty-backed cash advances; and Proper Music Group, the United Kingdom’s leading independent physical music distributor, which provides distribution services for 1,000-plus indie labels and service companies.
Industry executives don’t quite know what to make of Utopia’s rapid growth, its direction or where exactly the company fits in today’s multifaceted global music business. It’s one of several fintech companies, many backed by venture capitalists, that have penetrated the music business to varying degrees amid the streaming boom. “At its core, Utopia is a royalty tech company,” co-founder and executive chairman Mattias Hjelmstedt tells Billboard in a rare interview. “It’s about fixing the many data gaps in the industry.”
Hjelmstedt says he understands and even agrees with Grainge’s opposition to “pure fintech” companies that “go in and try to optimize [their] revenue versus the rest of the industry.” But that, he insists, is not what Utopia is about. His company uses technology — leveraging what has been described as “a database of more than 213 billion global data points” — to better capture royalties and process them accurately, faster and with greater transparency. That, in turn, will “help all facets of the industry earn more money,” not just Utopia’s slice of it, he says.
“We’re on the side of anyone who owns the copyright, which is a creator, which is an artist, which is also a Universal [Music Group] or a copyright fund or a publisher,” he says. “I don’t think there is a mismatch there [between fintech and artists]. It is actually fully aligned for me to have a clear path from usage to creator.”
Utopia is hardly alone in pitching ways to use tech to give artists more control over their music royalties than they’ve traditionally had with label deals. Hifi, a fintech with backers that include industry executives like Quincy Jones and Capitol Records chair/CEO Michelle Jubelirer — as well as artists Diplo and G-Eazy — is launching an “enhanced royalties acceleration service” that promises to pay artists advances based on predicted streaming royalties. Los Angeles-based beatBread offers funding for existing music catalogs and employs artificial intelligence to help artists secure advances of up to $1 million for unreleased music. And Brazilian fintech company Hurst Capital says it has set up a “hyper-specialized team” to manage the royalties of catalogs it has acquired from sertanejo (Brazilian pop-country) stars like Gusttavo Lima and the late Marília Mendonça.
Hjelmstedt is a Swedish serial entrepreneur known for founding gaming platform Electronic Sports Network, which Electronic Arts acquired in 2012, and co-founding video-on-demand platform Voddler, which filed for bankruptcy in 2018. He co-founded Utopia in 2016 with Thomas Gullberg, basing it in the town of Zug, where around 60 of the company’s staff of 1,000 are based.
Details about Utopia’s finances and funding remain opaque. The company’s only publicly listed investors are Switzerland-based investment firms CV VC and FiveT Fintech (formerly Avaloq Ventures). Hjelmstedt says the firms “are by far not among the largest investors” but declined to reveal any others. Utopia, which he says generates over 100 million euros ($107 million) in revenue a year, recently completed an investment round, but Hjelmstedt declined to discuss figures or what the capital will be used for.
Lately, the company has been characterized by change. In November, Utopia cut its workforce by around 20%, or about 230 jobs, according to a company representative. Hjelmstedt says the job cuts resulted from the global economic downturn coupled with the company’s goal of achieving sustainable growth. A month later, in December, Utopia restructured its business into two separate divisions: Music Services and Royalty Platform. Then in January, Utopia reshuffled its senior leadership, with former CEO Markku Mäkeläinen exiting the company and Hjelmstedt taking over as interim chief executive. (U.K.-based Roberto Neri is CEO of the Music Services division.)
As part of the reorganization, Utopia announced on Feb. 7 that it had sold U.S.-based music database platform ROSTR — which has a directory of artists, managers, booking agents and record labels — back to ROSTR’s founders for an undisclosed sum. Utopia purchased the company in December 2021 to strengthen its direct ties with the artist community. But Hjelmstedt says Utopia will now primarily focus on delivering financial services. He declined to comment on whether there will be further divestments or acquisitions this year, claiming the company will reveal more about future plans, including new product launches, in the coming months.
Utopia’s music services division is headed by U.K.-based former Downtown executive Roberto Neri and includes the acquired companies Proper, Absolute Label Services, Liverpool-based publisher Sentric Music Group and Cinram Novum, one of the U.K.’s leading physical home entertainment suppliers. (Cinram Novum provides warehouse, fulfillment and distribution services to labels, including UMG, Sony Music Entertainment and [PIAS].)
Utopia’s royalty platform arm, which Hjelmstedt oversees, looks after the company’s financial technology services, data operations, copyright and royalty processing.
Hjelmstedt declines to comment on whether dividing Utopia into two separate divisions signals an intention to make the split between distributor and royalty platform permanent. He rejects speculation that Utopia is a tech scale-up looking to capitalize on the growth of the music industry rather than to build a sustainable business. The company’s myriad acquisitions, he says, were made “to understand different parts of the industry better, so we can serve them better with the data.” Despite acquiring a significant chunk of the U.K. music distribution business, he says, it was “never the idea of Utopia to be a distributor.”
“We will never be a collecting society or a [performing rights organization],” says Hjelmstedt. “We will never sell data and we will not take investments from a large strategic player in the industry, and by doing so, we can safeguard the core of what we stand for.”
While the use of magnetic tape to record and play music dates back to the 1930s, it wasn’t until 1963, at the Berlin Radio Show, that Philips introduced the two-spool cassette. Twenty years later, the finicky format passed vinyl as the most popular music medium in the United States, but it was a short-lived victory: The CD soon spun it into the bargain bin of history. But two decades after most music fans pressed the Eject button, cassettes are following vinyl’s comeback in stores and stereos.Reel Love
Operating under the Norelco brand in the United States, Philips launched an “intensified advertising and promotion drive” to get cassettes into American homes,” according to the Sept. 24, 1966, Billboard. “The Norelco success on TV with shavers will hopefully be duplicated with recorders.” By the Nov. 26 issue, Philips predicted that “the market for equipment that can record and play back cassettes will reach 4 million sets” within a few years, citing one advantage the format had over vinyl: the “capability to play in any position, even upside down.”
Hitting Pause on High-End
Over the next decade, cassette sales were on fast-forward — but the format struggled to attract audiophiles, who stuck with vinyl. “A $19 cassette is a difficult sale to make,” mused an ad executive who worked for a chain store in the May 8, 1982, Billboard, referring to high-end cassettes. But electronics company Maxell tried: In that very issue, a pre-fame Geena Davis, leaning on a shelf full of tapes, appeared in a full-page ad targeting audiophiles.
Tapes and Tapes
Big Brother must have carried a Walkman: In 1984, the March 24 issue reported that “cassettes toppled LPs as the dominant prerecorded audio configuration last year, accounting for almost 53% of all album product shipped to trade.” Cassettes were up 30.1% year over year, while vinyl dropped 14.1%. The “portable lifestyle,” Billboard noted, “continues to propel sales to new peaks.”
Find Cassingles Near You
“Is Cassette-Single Format Winding Down Already?” asked the front page of the Dec. 21, 1991, Billboard. Apparently so: “The dollar value of CD sales surpassed that of cassettes,” according to an article in that issue. “Most distribution executives [agree that] the format has passed its peak,” though one Midwest chain store owner blamed “lousy songs,” insisting that the decline was nothing “a couple of hits couldn’t fix.”
Measuring Tapes
By the end of the ’90s, cassette sales were unspooling. “The decline of today’s cassette mirrors the disappearance of the 8-track tape two decades ago,” Billboard reported in its Dec. 28, 2002, issue. A year later, cassette sales had dropped 40.3% while CD sales had dropped just 3%, due to the rise of online piracy. In a Dec. 19, 2009, year-end “Sales by Album Format” graphic, cassettes had been folded into the “other” category. But reports of the format’s death were greatly exaggerated. From 2015 to 2022, the little tape that could saw a 443% increase in U.S. sales, according to Luminate, as marquee names like Taylor Swift, Megan Thee Stallion and Maren Morris cued up the cassette’s comeback.
This story originally appeared in the Feb. 25, 2023, issue of Billboard.
A Florida judge has issued an arrest warrant for rapper Kodak Black for failing a drug test while on bail for a drug charge, court records show.
The warrant was issued Thursday after Black, whose legal name is Bill Kapri, did not appear for a scheduled drug test in early February and then days later submitted a sample that tested positive for fentanyl, according to records.
Broward County Judge Barbara Duffy issued the warrant and wrote that the rapper had violated the conditions of his pretrial release for an oxycodone trafficking charge from July. At the time, Black was pulled over by the Florida Highway Patrol (FHP) for suspected illegal window tint. After smelling marijuana and searching his SUV, police said they found 31 oxycodone pills and $74,960 in cash, according to an FHP press release. A record check also revealed that Black’s vehicle tag and driver’s license were both expired.
Black had pleaded not guilty to the trafficking charge. At the time, the rapper’s attorney Bradford Cohen told Billboard, “Never judge a case based on an arrest. There are facts and circumstances that give rise to a defense, especially in this case. We negotiated a bond of 75,000 and we will move forward with resolving the matter quickly.”
In January 2020, then-President Donald Trump commuted a three-year federal prison sentence the rapper had for falsifying documents used to buy weapons. Black had served about half his sentence.
Black is nominated for the iHeartRadio Music Awards’ hip-hop artist of the year and has sold more than 30 million singles, with massive hits such as “Super Gremlin,” which reached number three on the Billboard Hot 100 last year.
The process of collecting public performance royalties from DJ sets has long been a tricky one in the United States, with uneven data collection processes often obscuring what songs are played at dance festivals. That makes it difficult for artists with the rights to the music to get paid what they’re due.
But one music market with a firm grasp on the performance royalties collection and distribution process as it relates to the dance world is The Netherlands, where electronic music is deeply woven into the country’s social fabric.
Buma/Stemra, one of the world’s most progressive collective management organizations (CMOs) for electronic music producers, operates within a live music market that generated 34 million euros ($36 million) in public performance royalties in 2022. Of this revenue, 7.2 million euros ($7.6 million) came from dance festivals, with roughly 1 million euros ($1.1 million) from clubs, making dance music comprises a quarter of the Netherlands’ total performance royalties
Since dance music incorporates so much different music from different artists in a set, that leaves a lot of rights holders to be identified. For this, Buma/Stemra uses audio fingerprinting technology that monitors and identifies songs played during sets.
“In the Netherlands, we have such a wide range of successful DJs with worldwide success,” says Juliette Tetteroo, accounts manager of dance events at Buma/Stemra. “As Buma/Stemra, that’s also why we find it really important to be at the front of developments like fingerprinting technology.”
For its fingerprinting, Buma/Stemra primarily uses Amsterdam-based DJ Monitor, an electronic music monitoring technology. DJ Monitor functions much like Apple-owned audio-recognition mobile app Shazam, identifying tracks within its library — a database of roughly 100 million songs submitted to DJ Monitor by global performance rights organizations (PROs) — and creating set lists for any given set with 93% accuracy, the company reports. (Billboard‘s recently published lists of the top 50 tracks and the top 50 artists played at Dutch dance festivals in 2022 was made with data collected by DJ Monitor.)
DJ Monitor is one of a number of music recognition technologies, including Pioneer’s KUVO, that can make the monitoring and reporting of DJ sets easier and more accurate. Buma/Stemra says that DJ Monitor has the highest identifying rates of all audio fingerprinting technology.
DJ Monitor is currently employed by CMOs in France, Germany, Finland, Belgium, Australia, New Zealand, the U.K. and The Netherlands, where it fingerprints 70% of all festivals. (Another fingerprinting company, Soundware, is also used by some Dutch events.)
Buma/Stemra’s work collecting performance royalties from a given event begins well before any tracks are even played. The CMO begins by determining licensing fees for any given event; for festivals with revenue lower than 110,000 euros ($116,000), the festival organizer pays the standard 7% licensing rate for events. This percentage is based on the assumption that more than two-thirds of songs played during the course of a given event are in Buma/Stemra’s repertoire. (If the event organizer provides a setlist showing that less than two-thirds of the music played was Buma/Stemra repertoire, the licensing fee drops to between 3% and 5%.)
For festivals with revenue higher than 110,000 euros, the event organizer provides Buma/Stemra with audio from the events to be fingerprinted. The festival can submit the audio manually, or upload it to the Buma/Stemra server, where it is then fingerprinted by DJ Monitor. The festival can also let DJ Monitor monitor audio during live performances, in which case DJ Monitor tech is implemented at every stage at the festival.
For bigger events, Buma/Stemra pays for fingerprinting costs, as, they say, it serves their goal of paying royalties on every song played at a given event.
“Our goal is to work towards one-on-one collection and distribution,” says Tetteroo. “It is all about the quality of what we do. [Paying for fingerprinting costs] also helps in encouraging organizers to pay, because they know that the money they pay goes to the composers and their publishers of the songs that have been paid. This is why we happily invest in technology that points in this direction.”
Buma/Stemra receives hundreds of songs from any given festival, given that most events host multiple stages and often run for three days. DJ Monitor typically identifies between 80% to 90% of this music (more than 80% if monitoring electronic music; 90% if monitoring open format/pop music) and sends formatted lists of the data to Buma/Stemra. Buma/Stemra imports this data, 60% to 70% of which is typically imported automatically — given that roughly that amount of music from any given event is recognized as something already in the Buma/Stemra database.
The percentage that’s not automatically recognized goes to an outsourced supplier in India that works to manually identify it. Money collected from a festival is then divided and paid out based on a system that assigns points to songs.
Given that a certain percentage of songs aren’t recognized, hundreds of hours of unclaimed music aggregates over the year because, says Buma/Stemra’s music processing manager Rob van den Reek, “we have a real lot of festivals here in the Netherlands.”
Buma/Stemra publishes this unclaimed music on their website, where artists can find and claim their songs. Artists are able to make a claim for up to three years after the song is posted online. If no one has claimed it after three years, the money owed to all unclaimed music is divided between rightsholders included in what’s called a “reference repertoire” — or a Buma/Stemra-compiled sample of common songs played at festivals. Introduced four years ago, this claiming system adds another layer of transparency — and more opportunity for creators to get the money they’re owed.
“Transparency is one of the benefits that stands out the most from the way we work,” says Buma/Stemra marketing manager Annabel Heijen. “That’s where we’ve made the most progress.”
There is one fault with the Buma/Stemra system that’s in the process of being addressed. Currently Buma/Stemra pays out based on the length of a full song that’s registered — not how much of it was actually played in a DJ set. If a song was registered at a length of three minutes, but only played for two minutes, Buma/Stemra pays based on that full, original timestamp. Buma/Stemra is currently building a new system that will pay out against the real timestamp identified during DJ sets that the organization expects to release by the end of 2023 or early 2024.
In the latest episode of the battle of K-pop giants, HYBE, the home of BTS, took some swings at SM Entertainment’s business partnership with tech company Kakao, owner of a popular messaging app, Kakao M, and music streaming service Melon.
On Feb. 6, Kakao announced it would purchase a 9.05% stake in SM Entertainment, whose roster includes NCT 127 and Red Velvet. Three days later, HYBE announced it would acquire a 14.8% stake in SM Entertainment by purchasing the majority of shares of the company’s founder and legendary K-pop producer, Lee Soo Man. Following a campaign by an activist investor for SM Entertainment to reduce Lee’s role, the company canceled his producer contract on Dec. 31, 2022.
SM Entertainment called HYBE’s investment “hostile M&A” and said its partnership with Kakao is “the first step” in its long-term transformation plan. HYBE sees SM Entertainment’s relationship with Kakao as one-sided and bad for shareholders.
“The contract between SM and Kakao, which grants acquisition of convertible bonds, undermines shareholder interest,” HYBE said in a statement Friday (Feb. 24). A clause grants Kakao or Kakao Entertainment the ability to “continuously increase its stake in SM” by allocating stocks issued through a paid-in capital increase to a third party, HYBE stated. “This will dilute the value of stocks owned by all shareholders other than Kakao or Kakao Entertainment.”
HYBE further argued the contract would hurt SM Entertainment’s chance of attracting “new strategic investors” and make it easier for Kakao “to seize control of SM’s management rights.”
HYBE also took issue with the Kakao’s role in managing SM Entertainment artists and distributing their music, arguing the contract gives Kakao an “unexpiring, exclusive” right to distribute SM Entertainment’s recorded music and allow Kakao Entertainment to manage SM Entertainment artists in North and South America.
In turn, SM Entertainment subsidiary SM Life Design will produce the recordings of Kakao Entertainment artists and provide a music video shooting set. “Compared with the important business rights that SM is handing over,” HYBE stated, “the return seems unreasonably small.”
After reviewing the contract’s legal issues, HYBE “will take all necessary legal measures, both civil and criminal,” it stated.
Thomas H. Lee, a billionaire private equity investor and part of the group that acquired Warner Music from Time Warner in 2004, died Thursday (Feb. 24) in New York at age 78, his family said in a statement.
A pioneer in the private equity world, Lee was the chairman of Lee Equity and formerly the chief executive of Thomas H. Lee Partners, the namesake firm he founded in 1974. Over nearly five decades in finance, Lee invested $15 billion in hundreds of companies and transactions, including the acquisition and sale of household brands like Snapple.
The Wall Street Journal, citing a New York Police Department source, said Lee was found dead in a bathroom at his Fifth Avenue office from what first responders believe to be a self-inflicted gunshot wound to the head. They were responding to an emergency call placed Thursday morning by Lee’s office assistant, the WSJ reported.
“The family is extremely saddened by Tom’s death,” Lee’s family said. “Our hearts are broken. We ask that our privacy be respected and that we be allowed to grieve.”
Lee’s Thomas H. Lee Partners, Bain Capital, Providence Equity Partners and Edgar Bronfman Jr. bought Warner Music from Time Warner Inc. for $2.6 billion in 2004. The group took the company public the following year, and Lee’s firm, Bain Capital Partners and Bronfman controlled 56% of Warner’s outstanding shares when it was sold to Len Blavatnik‘s Access Industries in 2011 in a deal valued at $3.3 billion.
Lee sat on WMG’s board as a director from 2004 to 2021, when he became a director emeritus.
“We are deeply saddened by the passing of our friend and colleague Tom Lee,” Warner Music Group CEO Robert Kyncl said in an emailed statement. “Tom made valuable contributions to WMG’s trajectory for almost two decades. Tom’s experience, wisdom, and enthusiastic support helped guide WMG through periods of major transformation, both within our company and in the music industry at large. Our condolences go out to his family and many friends.”
When Lee announced he would retire from the role of WMG board director in 2021, he described the company as having “undergone an extraordinary evolution,” and said he was gratified to have helped it transform and grow.
Lee was worth an estimated $2 billion, according to Forbes, and he was an active philanthropist involved in several New York City cultural institutions, including Lincoln Center for the Performing Arts and the Museum of Modern Art.
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Ticket fees have been called everything from “exorbitant” (Sens. Richard Blumenthal and Amy Klobuchar) to “completely bats—” (Last Week Tonight with John Oliver). And they can increase the price of a concert ticket by an average of 27-31%, according to a 2017 study by the U.S. Government Accountability Office.
Unfortunately for ticket buyers, those fees aren’t going anywhere quickly. They may change or disappear completely, but consumers won’t reap any savings in the end, Live Nation CEO Michael Rapino explained during Live Nation’s fourth quarter 2022 earnings call on Thursday.
Say, for example, a venue is prohibited from charging fees on top of a ticket’s face value. “Well, then the venue would say, ‘Okay, artists, the rent isn’t $50,000 anymore. It’s $100,000,’” Rapino said.
The ticket fee is a surcharge that helps cover a venue’s costs. Rapino’s point is that the venue needs to cover its costs, so it’s going to collect money to cover them, no matter what. In a normal scenario, the consumer helps cover those costs by paying a surcharge directly to the venue.
If fees were eliminated, artists — who are the final authority on primary ticket prices — would be forced to raise them to cover the additional cost. The surcharge may have disappeared, but that cost would still exist in the form of a higher face value. Regardless of the approach, the consumer’s expense and the venue’s revenues would be unchanged.
“The true cost of going to a show and making the show happen is the full price all-in,” said Rapino. The concept is apparent to anybody who has pondered how airlines set prices. If airlines charged an all-in fee that encompassed all its costs, ticket prices would be dramatically higher. Legislation that banned fees for checked baggage could result in higher prices for everything from flight themselves to in-flight beverages. Airlines that previously allowed free carry-on bags might start imposing fees on those. They could also charge more to change your travel plans (which used to cost the consumer nothing).
Rapino acknowledged that Live Nation, which owns and operates venues, would do the same. “If tomorrow someone said, ‘You know, you can’t charge 20% service fees on your amphitheater, you have to [charge] 10%.’ Well, then the $75,000 house rent that we charge artists would be $100,000,” he said as an example. Live Nation couldn’t simply absorb the cost, he explained. Since the company requires money to pay staff and operate the venue, it would find a way to recoup the lost fees.
While what consumers pay won’t change, they may get more transparency. In the wake of Ticketmaster’s disastrous Taylor Swift Eras Tour pre-sale, President Joe Biden unveiled an initiative to limit, among other types of fees, mandatory, back-end fees that “often hide the full price” of a good or service. The White House pointed to research that found hiding the full price encourages consumers to spend more than they would have otherwise.
Live Nation has also come out publicly — and forcefully — against hidden fees. On Thursday, Rapino called numerous times for the industry to adopt all-in pricing that show the ticket buyer a single price at the beginning of the transaction. Also on Thursday, Live Nation issued a press release that encouraged lawmakers to introduce legislation that includes, among other things, mandatory all-in pricing.
The uproar against Live Nation and Ticketmaster over ticket fees is just one of many criticisms to gain momentum in recent months. Some members of Congress have called Live Nation a monopoly that limits competition in the touring business and harms consumers by charging high prices and leaving some unable to purchase tickets for in-demand concerts like Swift’s Eras tour. Many inside and outside of Washington have called for the Department of Justice to break up the company’s concert promotion and ticketing operations. On Thursday, Sens. Klobuchar and Mike Lee sent evidence of the Jan. 24 Senate hearing on the ticketing market to the Department of Justice and encouraged its antitrust division “to take action if it finds that Ticketmaster has walled itself off from competitive pressure at the expense of the industry and fans.” Others have suggested Ticketmaster improve its security practices to deal with the bot attacks that derailed Swift’s pre-sale.
Ticketmaster may be most reviled for its fees, though. And as Rapino pointed out, those aren’t going away anytime soon.
When Bonnie Raitt‘s touching ballad “Just Like That” won the Grammy for song of the year, the singer-songwriter seemed just as shocked as the crowd. “I am just totally humbled,” she said while accepting the award.
Though she is a decorated and critically acclaimed musician, with 11 Grammys and five top 40 hits on the Hot 100 to her name, Raitt’s “Just Like That” was the least commercially successful song up for the category this year by a long shot. Despite not cracking the Hot 100 chart, “Just Like That” managed to beat out the nine other nominated songs, each of which ranked in the top 20 of the Hot 100 this year, including two No. 1 tracks (“As it Was” by Harry Styles and “About Damn Time” by Lizzo). Many see Raitt’s win as proof that the top Grammy awards do not necessarily always go to those with the most commercial or widespread success.
This particular award win is surprising for Raitt in more ways than one. Song of the year is one of four top awards given out each year by the Recording Academy, along with record of the year, album of the year and best new artist, and it is the only one of the big four that honors the craft of songwriting specifically. Raitt, as she admitted in her acceptance speech, “[doesn’t] write a lot of songs,” but she did write “Just Like That” singlehandedly.
So how much did “Just Like That” earn in publishing royalties for Raitt as its only songwriter, and how much did the Grammy win help the song commercially?
Billboard estimates that before the Grammys, “Just Like That” had earned Raitt over $6,000 in publishing royalties from its release date (April 22, 2022) to the week of the Grammys, which aired on Feb. 5, 2023, for her work as a songwriter from U.S. streaming, sales and airplay combined. In the two weeks following the show, those formats earned her another nearly $6,000. In other words, Raitt earned almost as much from the song in just two weeks as she did in the more than nine months prior to the broadcast.
Raitt owns her publishing, and she houses her songwriting catalog under two entities, Kokomo Music and Open Secret Music. In 2018, she entered an arrangement with indie publishing house Bluewater Music to administer her publishing catalog worldwide. Because she owns her publishing and wrote “Just Like That” by herself, the vast majority of the money she earns from the song will end up in Raitt’s pocket, with deductions likely only made to pay Bluewater Music administration fees and whatever cut her manager makes.
Overall, since the release of “Just Like That,” Billboard estimates that Raitt has earned a total of about $12,000 in publishing royalties from streams and sales of the song. The majority of that came from both physical sales of the album on which the song appears — also called Just Like That — and U.S. on-demand audio streams, according to Luminate. In the two-week period after the Grammys, song downloads and streaming were the biggest source of royalties by far.
In terms of streaming alone, Raitt earned only about $975 worth of publishing royalties from U.S. on-demand audio streams in the almost 10 months that elapsed between the song’s release and the week of the Grammys. But in just the two weeks since her song of the year win, she has earned a little over $2,000 in publishing royalties for U.S. on-demand audio streams.
The week before the Grammys, dated Jan. 27-Feb. 2, “Just Like That” was racked up 44,000 on-demand audio streams in the U.S. The week after the Grammys, dated Feb. 3-9, on-demand U.S. audio streams increased by 3,028% to 1.377 million, according to Luminate. The massive spike, however, did not hold steady in the following week, dated Feb. 10-16, when the number of U.S. on-demand audio streams fell to just over 410,000.
On the physical sales side, Raitt earned over $4,000 in publishing royalties from selling copies of her albums through to the night of the Grammys. In the two weeks after the awards show, Raitt earned about $700.
Along with increased consumption in the sales and streaming categories, “Just Like That” has also sparked interest at radio. The week before the Grammys, it was played just a handful of times, but in the two weeks after her win, she received a total of 144 radio spins, according to Luminate. While still not significant enough to push her to the top of any charts, airplay could contribute solidly toward her future publishing earnings if it continues to gain traction.
So far, the big Grammy win for “Just Like That” doesn’t appear to be boosting sales and streaming activity for Raitt’s overall catalog in the U.S. While weekly catalog album consumption activity jumped to over 9,000 copies on average in each of the two weeks after the show — up from the weekly average of over 3,000 copies before the show — all of that gain is coming from the Just Like That album.
Rising British singer PinkPantheress has been gaining recognition with a set of mixtapes and EPs that have caught the attention of fans, and the U.K. charts, over the past few years. And while she had been bubbling under in the United States, she had yet to crack the Hot 100 until this month, when her single with Ice Spice, “Boy’s a liar Pt. 2,” went viral and debuted at No. 14 on the Hot 100 before rocketing to No. 4 this week. The track is the first Hot 100 Top 10 for both artists, as well as the first duet by two acts who are each making their first Hot 100 Top 10 appearance to reach that mark in only two weeks since February 2021.
The story of “Boy’s a liar Pt. 2” started in November, when PinkPantheress’ original, solo version of the song was released and started gaining traction — where else? — on TikTok. A few months later, rising Bronx MC Ice Spice jumped on the remix and the two shot a video in New York City. Released Feb. 3, the “Pt. 2” remix exploded out of the gate, making waves not just in the United States but also globally; this week, it concurrently shot up to No. 4 on the Billboard Global 200. And that earns 300 Entertainment vp of marketing Lallie Jones the title of Billboard’s Executive of the Week.
Here, Jones discusses the viral spark that 300 — along with its U.K. and global partners at Warner Music Group — managed to turn into a Top 5 hit, the differences between the U.S. and global marketing campaigns and the impact of radio jumping on the song, which led U.S. spins to increase 258% week over week. “One can embark on a release with what you think will and should happen, but timing and cultural appetite will always dictate the impact of a record,” she says. “The collision of PinkPantheress’ underground notoriety and mystique, mixed with Ice Spice’s ubiquity and virality, led to a pop culture explosion.”
This week, PinkPantheress and Ice Spice’s “Boy’s a liar, Pt. 2” surged to No. 4 on both the Hot 100 and the Billboard Global 200 charts. What key decisions did you make to help make that happen?
So much about this project has been a collaborative effort amongst PinkPantheress, her management and the global team across WMG. Our goal at 300 was to utilize the remix to broaden her already growing profile and further develop her reach Stateside. PinkPantheress’ music transcends genre, but it was important in the U.S. market to establish her as a Black artist creating on her own terms. As such, we strategically secured support from social accounts that could help accelerate the cultural conversation. We also targeted influential livestreamers and enlisted creators whose reaction videos propelled the track’s consumption. The official video also played a key role in setting this release on fire as the No. 1 trending video on YouTube for 11 straight days. PinkPantheress really wanted to step into Ice Spice’s world and film in NYC with the rising directors George and Fred Buford. Zak Boumlaki, her incredible marketing lead at Warner Records U.K., and I ensured the cast reflected youth and diversity that truly resonated.
The original “Boy’s a liar” was released in November. Why did you guys want to put out this remix, and how did it come together?
The original “Boy’s a liar” sound started to go crazy on TikTok in November, and once released, the track continued its viral trajectory throughout the holidays. The U.S. and U.K. teams pushed for an additional version, believing that the song deserved a longer story. It was PinkPantheress’ decision to enlist Ice Spice for the remix. Coincidentally, Ice Spice had posted the song on her IG stories, and PinkPantheress responded to it by asking if she’d like to team up.
The song has been a smash out of the gate, becoming the first duet by two acts each making their first Top 10 appearance on the Hot 100 to reach that mark in only two weeks since February 2021. What was the marketing plan behind it?
Leading up to release, the main marketing anchor was releasing a vibrant visual that placed the two artists in the same world. Initially, we wanted to keep the collaboration a surprise, with the intention of slowly teasing the partnership on both artists’ TikTok accounts. [But] snippets of them shooting together fueled a frenzy, and, even before the partnership was revealed, there was a bubbling conversation amongst their fans fantasizing about what would happen if the two actually came together. One can embark on a release with what you think will and should happen, but timing and cultural appetite will always dictate the impact of a record. The collision of PinkPantheress’ underground notoriety and mystique, mixed with Ice Spice’s ubiquity and virality, led to a pop culture explosion.
The song is not just No. 4 in the U.S., but also globally. How did the worldwide rollout plan differ from the U.S. plan?
In [the U.S.] market, we face the common challenge of tying the artist themselves to their music, especially when they’re not from here. While other markets might have impacted radio at launch, our plan was to first focus on setting the table culturally before pursuing a commercial radio push. We had the fortune of PinkPantheress being Stateside on release weekend and were able to capture her moving around with different artists, including her linking with Ice Spice throughout the weekend. Seeing her outside in the States is all part of her establishing a true U.S. presence.
The song has grown significantly in streams (up 54%) and radio airplay (up 258%) in just its second week out. How do you plan to keep the momentum going?
There’s no ceiling for this song or PinkPantheress as a writer, producer and artist. Despite its online ascension, the radio story is only beginning and the track will see a multi-format impact in March. Radio airplay will take the song’s consumption and visibility to the next level, positioning the track as one of the most popular anthems of the year. Alongside radio, the track will sustain momentum through thoughtful digital strategy, out-of-home campaigns, and her upcoming appearances at U.S. festivals this year. Following her gut and internal compass has resulted in PinkPantheress developing into one of the most intriguing artists of this time. Our North Star is protecting her brand and supporting her vision by pursuing only the right opportunities that will take her to new heights.
What’s TikTok without music? That’s the central question at the heart of debates between major rights holders and the Bytedance-owned social media platform negotiating rates for their content, and a group of Australian users have been pulled into the middle to try to find out.
Earlier this month, it was revealed that that TikTok is running tests in Australia that limits the amount of licensed music some users can encounter on the platform. The test impacts fewer than half of Australia-based accounts, and it doesn’t affect everyone in the same way, according to a person familiar with the situation. The test puts people into multiple cohorts and provides them with different libraries of sounds to use in video creation. So, not everybody in the test will have the same catalog to choose from. Likewise, users in the test cohorts have different encounters with audio. Some people in test cohorts will encounter muted music on other users’ videos. This allows TikTok to compare and measure the different ways people interact with the app.
The results may inform TikTok’s licensing strategy, but evidence that some Australians are unhappy members of the test cohort can be seen on Twitter. “Tiktok really ruining its own app with all this ‘sound removed’ garbage,” one Australian user tweeted last week. Another echoed the sentiment: “wtf is up with tiktok removing like half the sounds??? like i swear ive seen SO many tiktoks where the sound has been removed.”
The risk of upsetting users and creators isn’t lost on TikTok. “We appreciate it’s disappointing if a certain track is unavailable or if a sound is muted on a previous video,” the company said in a statement. “This change will not be in place for long and not all music is affected.” The test will run from a month to a month and a half, according to a source familiar with the situation, meaning it should conclude by mid-March.
Why would TikTok degrade its user experience even in a relatively small market like Australia? A source familiar with the company’s thinking said TikTok is using the experiment to study what is trending, how users are accessing the platform through different entry points and how they are enjoying it. It is not a negotiating tactic, the person said. Nonetheless, the company is gathering the data during a year when most, if not all, of TikTok’s agreements with music rights owners come up for renewal. The source said it is predictable that TikTok would gather this information ahead of high-stakes negotiations, like those ongoing with major labels and other stakeholders.
Around the music industry, there are different interpretations for TikTok’s actions. One explanation is that TikTok is doing what tech companies do all the time: run tests, collect data and analyze the results. That narrative fits with what’s known. Australia, an important yet small and isolated English-speaking market, is a popular place for tech companies — Spotify, Facebook, Google, Tinder and others — to test new products. Much like these other companies, TikTok is an engineering-led company with engineers who want to take data-driven approaches to making decisions on how much time and resources should be invested in projects, building systems and, yes, even licensing rights. Sometimes, as history has shown with most of those other companies, too, a different mindset puts them at odds with creative industries.
“I don’t think they truly understand music at these tech companies,” says a record label executive. “It just doesn’t resonate with them.”
Negotiating tool?
TikTok, of course, has numerous people from the music world on staff: Ole Obermann, global head of music, and Tracy Gardner, head of licensing and partnerships, are former Warner Music Group executives. Jordan Lowy, head of music publishing licensing and partnerships, previously worked at Universal Music Group and Disney Music Group, and dozens if not hundreds of other music industry alums work at TikTok in editorial and artist partnerships. But the company looks and acts like a social media company, not a music company.
A less benign view of the test is that TikTok is looking for a rationale to argue music is not important to the platform – or not as important as labels believe. Annabelle Herd, the CEO of ARIA, the trade body for the Australian record industry, said TikTok “seeks to rationalize cutting artists’ compensation” and “downplay the significance of music on its platform.” Another industry executive believes the test is meant to lower expectations going into discussions with rights holders. “They’re looking to anchor their negotiating position near zero,” says a music industry source.
TikTok has spent years playing up music’s importance to creators, users and artists. “Music is at the heart of the TikTok experience,” Obermann stated in the opening words of the TikTok 2021 Music Report. That year, around 430 songs surpassed 1 billion views, up 200% from the previous year, and over 175 songs that trended that year charted on the Hot 100. In the company’s 2022 year-end report, Obermann reiterated TikTok’s value to artists, saying the platform “continues to unlock real-world opportunities for artists and labels, helping talent to secure record deals, brand collaborations, chart success, or be re-discovered decades later.”
And while the platform has certainly evolved beyond lip-syncing videos – book reviews and finance advice abound, for example – much of the recent news coming out of the company still involves music: StemDrop, an interactive, collaborative songwriting platform led by Max Martin, Syco Entertainment, Universal Music Group and Samsung; a Calvin Harris virtual reality concert; and welcomes to The Rolling Stones and Dolly Parton for joining the platform.
Anecdotally, exactly how important records labels’ music is to TikTok is debatable. Its top three trending songs of 2022 were independent releases, and the No. 1 song, “Sunroof” by Nicky Youre & Dazy, was originally released independently through SoundOn, TikTok’s music distribution business that’s been known to add promotion to music uploaded through its service. In all, only five of the top 10 of 2022 were signed to major labels. Major label music is arguably more important to on-demand streaming platforms and radio stations. By contrast, all the top 10 tracks of Billboard’s year-end Hot 100 and Radio Songs charts were released through major labels.
But major label music is everywhere on TikTok. Lizzo’s “About Damn Time” was the No. 4 trending song of 2022. Pharrell Williams’ “Just a Cloud Away” was No. 5. Kate Bush’s “Running Up That Hill” was No. 10. And TikTok’s ability to give unknown artists a large audience increases its need to license music from labels. “Sunroof” was so successful that Youre signed with Colombia Records and reached No. 4 on the Hot 100.
What’s past is prologue
TikTok has ample motivation to reduce what it pays music rights holders. Licensing costs eat up more than 70% of a music subscription service’s revenue with little left over after paying operating expenses. Social networks, on the other hand, generate huge sums of free cash flow. Facebook, for example, had an operating margin of 25% in 2022 and 40% in 2021.
Services that once butted heads with music rights holders decided it was wiser to build partnerships that enriched both sides. Like TikTok, YouTube began as an ad-supported platform built on user-generated content and characterized by minuscule royalties. Over time, YouTube attracted better advertisers, built a strong on-demand premium service and became a major source of revenue for labels and publishers. In the 12-month period ended June 30, 2022, YouTube paid music rights holders $6 billion through YouTube advertisements and fees from the YouTube Music subscription service.
Now, YouTube has “a phenomenal partnership” with rights owners after it “decided that music is important to us forever,” Warner Music Group CEO Robert Kyncl, YouTube’s former chief business officer, said during WMG’s Feb. 9 earnings call. It invested in music “holistically” by building a copyright management platform, Copyright ID, launching the YouTube Music subscription service and taking on TikTok with its short-form video platform, YouTube Shorts.
TikTok appears to share YouTube’s ambitions to offer a multitude of services that segment the market into ad-supported and paying customers. Parent company Bytedance already has an on-demand music service, Resso, operating in Brazil, Indonesia and India, and a separate on-demand service, Qishui Yinyue, in China. But in major markets like the U.S., TikTok users that want to listen to an entire track and explore an artist’s catalog end up going – in large numbers – to on-demand services like Spotify and Apple Music. Pairing its short-form video platform with an on-demand service would give TikTok a “significant opportunity” to leverage data and manage customers across multiple platforms, says one of the music industry sources. “Why would they not want to capture that demand themselves?”
“TikTok needs to do that [also],” Kyncl said during Warner’s earnings call. “It’s the right decision for them to evaluate.”
Additional reporting by Liz Dilts Marshall