Business

08 Aug 2023

Rylo Rodriguez Signs to Lil Baby’s Glass Window Entertainment, Partners With Motown/Capitol

Shortly after notching his first Billboard 200 top ten album with Been One, Rylo Rodriguez became the first artist signed to Lil Baby’s Glass Window Entertainment through a partnership deal with Motown Records and Capitol Music Group. According to sources, the signing of Rodriguez is believed to be a multi-million deal.

“I’m overly excited for Rylo and his fans and the world to really get to see him on a larger platform,” Baby tells Billboard. “It’s been a long time coming with Rylo, and even longer to go! We got work to do and money to get! Thank you to Motown/Capitol Music Group and Universal Music Group for trusting my process, and I’m looking forward to a wonderful partnership.”

“We are excited to welcome Dominique, Rylo, and the Glass Window Entertainment team to Capitol Music Group/Motown Records,” says Michelle Jubelirer, chair & CEO, of Capitol Music Group, in a press release. “Glass Window and Virgin Records have done a phenomenal job introducing Rylo. We’re thrilled to support this remarkable artist and upcoming Glass Window releases.”

Over the last few years, Baby and Rodriguez have proven to be a formidable team, showcased on records such as “Forget That,” “Cost to Be Alive,” and their recent collaboration “Real Type.” As for Rodriguez, his album Been One dropped last month and includes features from Lil Baby, Lil Yachty, Est Gee, Fridayy, and more. Anchored by “Taylor Port Junkie,” and his Hot 100 entry “Equal Dirt,” Rodriguez’s penchant for love-drunk ballads and seamless R&B flips are resonating with fans, as his album peaked at No. 3 on the Billboard rap charts. 

“Most of the people that I sign come from my walk of life,” Baby told Billboard in his 2021 cover story. “I got to feel your vibe because I ain’t on no ‘studio rapper’ s–t.”

08 Aug 2023

Technology Is the Key to a More Transparent Revenue Model for Artists (Guest Column)

The music industry has progressed rapidly over the last decade. TikTok is launching music careers, sites like YouTube are creating new distribution channels and artists like Grimes are open-sourcing their vocals for generative AI creation. But for all of that progress, the opaque systems that control the industry are not in favor of artists driving culture. As listeners, we’ve seen the tip of the iceberg with Taylor Swift’s highly publicized re-recording of her masters and Megan Thee Stallion’s legal dispute with her record label over unpaid royalties.

Music is the most consumed category of art on the planet, and it’s time to evolve the system so that all artists — from top recording stars to indie creators to those who are just getting their careers started — are set up to succeed. But to really grasp what’s needed to shift the power dynamic in the direction of artists, it’s important to peel back the complexities of music revenue.

Changing the narrative on music revenue

There’s a false narrative that is pervasive in the media that says music doesn’t generate any money, driven in large part by the litany of really bad record deals that draw public attention (like the aforementioned Megan Thee Stallion example). But in reality, music makes money — it’s the artists who don’t get paid what they deserve.

The streaming revolution of the 21st century has transformed the way people consume music. But despite streams making up 80-90% of the industry’s revenue, artists see few of those dollars after industry players take their inevitable cuts. Though record labels serve a valuable role in the music ecosystem (from marketing and developing an artist to licensing and distribution), artists can be haunted for decades by bad deals signed early in their careers that unknowingly give away creative control and a significant portion of their future earnings. Artists who have signed contracts with unfavorable terms typically don’t earn negotiating power until they’ve amassed a large following and a fruitful career.

Why the bad deals?

Most artists simply don’t know what they’re signing — it’s not necessarily that they’re making a bad decision. As an artist myself, I experienced this firsthand early in my career. It would take years for me to get paid for my songs — and as someone who’s proficient in accounting from my time studying business in college, my inability to see how much I made from my music was mind-boggling.

The reason that deals are so opaque is that music revenue is growing and coming from more sources than ever before, which creates a complex web of intermediaries within the ecosystem. Every different distributor has a different deal with every different streaming service, and every label has a different deal with every streaming service. And the streaming services are not transparent about how their rates differ across these various deals. Beyond that, there are numerous types of royalties — from performance royalties to mechanical royalties to in-app streaming royalties. Therefore, when it comes to signing on the dotted line, artists must blindly place their trust in a network of counterparties, lacking any real visibility into their actual earnings once every entity has taken their cut. All of this is perpetuated because record labels are incentivized to control information so they can make more competitive deals with artists.

As a result, artists gravitate to what comes naturally — the music. They don’t want to worry about the business side of things because the system isn’t set up in a way that empowers them to ask questions or negotiate favorable deals, and it distracts them from doing what they love.

Finding the opportunity in technology

To rewrite the way music institutions approach music revenue and income, we need to make it as transparent as possible. It seems like a lofty goal for an industry that has long been set in its ways, but technology is making it possible. My company Royal recently launched a free tool that allows any artist to estimate the streaming revenue for their songs. The hope is that artists become more empowered to make deals that uplift their careers.

I’ve also been bullish on crypto since its earliest days, for a variety of reasons, including its ability to transform the music industry with transparency. Blockchain is inherently transparent — in fact, the one thing you can’t do on a blockchain is hide information. It’s all there, at all times. It’s also time-stamped which establishes a clear provenance (traceability of ownership over time). This is especially useful in the music business, where copyright infringement plagues artists and record labels alike. Perhaps most importantly, leveraging tokens that represent rights enables artists to see the value of their songs and create tangible benchmarks upon which to negotiate better deals. With more information always comes more power.

Artists don’t know how much money they’re missing out on, but they could. And it doesn’t have to be a public battle when they do find out. If we embrace technological progress to improve outdated systems, we can create an open data ecosystem that gives artists not only more transparency into their earnings and fan bases but more control over their artistic careers. Better deals alongside more creative freedoms is a winning combination that can define the next 30 years of music — we just have to be willing to change.

Why should artists even care?

As much as streaming has changed the music industry for the better, there are still unanswered questions about how value accrues in this system. Do we equate the value of passively listening to a sleep playlist in the background to actively listening to your favorite album with friends?

This talk of numbers and questions of value may seem like a distraction for artists who just want to spend their time making music — but ignoring this topic completely opens the door to predatory industry practices that threaten musicians’ longevity and entire legacies.

More industry transparency should improve all the variables that play into an artist’s career and result in musicians keeping more ownership of the art they create. Having the humility to acknowledge what music is actually worth is the first step in unlocking more value in this new era of the industry.

Justin Blau is CEO of Royal and a world-renowned musician and producer, known as 3LAU. An early crypto adopter, Justin has been advocating for building the investable layer of music on blockchains since 2017. In 2021, he founded Royal to empower artists to share their music with fans and give people the opportunity to invest in music.

08 Aug 2023

Iggy Azalea ‘Never Intended to Publicly Comment’ on Tory Lanez Sentencing: ‘I Support Prison Reform. Period’

Iggy Azalea is clarifying reports that she has spoken out in support of rapper Tory Lanez (born Daystar Peterson) as the “Say It’ MC is awaiting sentencing in his felony assault and weapons case in connection with his attack on Megan Thee Stallion in July 2020. The Associated Press reported on Monday that Azalea was among the dozens of people who wrote the judge in the case, with her note asking that the sentence be “transformative, not life-destroying.”

In a series of tweets, however, Azalea wrote, “I have not been in touch with tory for months, I have no reason to be, but I do wish him well,” adding, “I don’t ‘support’ anyone. the whole thing is full of oddities. My letter never mentioned anything in regard to what happened that night.”

Lanez’s sentencing will stretch into Tuesday (Aug. 8) and in a written statement, Megan described the ongoing trauma she has suffered since Lanez shot her in the feet after they left a Hollywood party together three years ago. “Since I was viciously shot by the defendant, I have not experienced a single day of peace,” Megan said in a statement read by Los Angeles County Deputy District Attorney Kathy Ta. “Slowly but surely, I’m healing and coming back, but I will never be the same.”

Megan, who testified during the trial, said she struggled with appearing in person to read the statement, but said she, “simply could not bring myself to be in a room with Tory again.”

In a further clarification, Azalea noted that she was told her statement would be for the judge’s eyes only. “Yet it’s being discussed in public? I never intended to publicly comment,” she wrote. “Iam not in support of throwing away ANY ones life if we can give reasonable punishments that are rehabilitative instead. I support prison reform. Period.”

Further explaining why she wrote a statement, Azalea said she was asked to share her “genuine experience and the type of punishment I think he deserves: I did.” In another tweet Azalea lamented that the statement became a topic of conversation on Monday because, in her words, “it’s not really an explosive revelation. Yes: he should be held accountable. No: the charges don’t warrant 5plus in prison.”

She argued that “most agree” with her position because “it’s a reasonable take.”

Though Megan did not come to court to make her statement in person, she asked Judge David Herriford not to take that as a sign of indifference and urged him to issue a stiff sentence to Lanez. Sentencing hearings typically take only a few hours, but Herriford allowed attorneys for each side to argue factors for Lanez’s potential sentence, allowing seven witnesses to give statement’s about the rapper’s charitable works, his childhood trauma and his status as a father to a six-year-old son.

Prosecutors have asked the judge to hand down a 13-year sentence to Lanez, 31, who was convicted of three felonies: assault with a semiautomatic firearm, having a loaded, unregistered firearm in a vehicle and discharging a firearm with gross negligence. Lanez’s lawyers have argued in a sentencing memo that he should get only probation and be released from jail to enter a residential substance abuse program.

See Azalea’s tweets below.

08 Aug 2023

Quality Control CEO Pierre ‘P’ Thomas Wins Billboard’s R&B/Hip-Hop Power Players’ Choice Award

For 2023, Billboard is introducing the R&B/Hip-Hop Power Players’ Choice Award, a peer-voted accolade chosen by Billboard Pro members to honor the executive they believe has made the most impact across the R&B/hip-hop music business over the past year. After three rounds of voting, Billboard Pro members have chosen Pierre “P” Thomas, CEO of Quality Control, to receive the inaugural award.

Celebrating QC’s 10th anniversary this year, Thomas and COO Kevin “Coach K” Lee have built a star roster that includes Lil Baby, City Girls, Lil Yachty, Quavo and Migos. In addition to its $300 million merger with South Korean music company HYBE earlier this year, the Atlanta-based full-service label and management company expanded into film and TV last year with the Lil Baby documentary Untrapped for Amazon Prime and an executive producer credit on Issa Rae’s Max series Rap Sh!t.

“This award might mean more to me than any I have received because it’s coming from my peers in the business who are in the trenches like I am,” says Thomas. “Their respect and support mean the world to me. I’m truly humbled and honored to receive this.”

This story originally appeared in the Aug. 5, 2023, issue of Billboard.

08 Aug 2023

Larry Jackson: Photos From the Billboard Cover Shoot

In February, TikTok’s billion-plus users received an unexpected gift for Valentine’s Day: exclusive access to the catalog of one of hip-hop’s most revered labels, Death Row Records. Snoop Dogg had purchased the catalog in 2022 and pulled it from streaming services. So the only place to hear tracks from Snoop’s classic Doggystyle or 2Pac’s 10-times-platinum All Eyez on Me was TikTok.

This partnership — as unusual as it was savvy — was the handiwork of veteran music executive Larry Jackson, 42, who seized the attention of the industry this year when he launched his new entertainment company, gamma. Backed by $1 billion in financing and focused on putting that capital to work “in particular and acutely on Black culture,” Jackson has created a deep-pocketed alternative to the major labels.

His TikTok gambit paid off, showing a younger generation that “knows Snoop only from Corona commercials” why the rapper — and gamma investor — is a “national treasure.” “‘Gin and Juice’ went viral; ‘Who Am I (What’s My Name?)’ went viral,” Jackson says. “We were able to have three hits on social this year — and the lucrative world of high-end brand deals (Jackson is the U.S. ambassador for Cartier).

“What LJ is doing is a new way of thinking about things,” says Travis Scott, who has known Jackson for around a decade. “I love that he is opening up ways for an artist to come in and really elevate, and it’s more than just music.”

Read the full cover story on Larry Jackson here.

Check out love letters to hip-hop culture from rappers and executives here.

08 Aug 2023

Seventeen, Suga Lead HYBE to 21% Gain in Quarterly Revenue

HYBE’s growing roster of K-pop groups and a heavy touring schedule helped revenue improve 21.2% to 621 billion won ($472 million) in the second quarter of 2023, the South Korea company announced on Tuesday (Aug. 8). Revenue for the six-month period surpassed 1 trillion won ($760 million) for the first time in the company’s history.

Strong album sales by Seventeen and Tomorrow X Together led HYBE to 22.7 million albums in the first half of 2023 and put the entertainment business on pace to far surpass sales of 22.2 million and 15 million in calendar 2022 and 2021, respectively.

Seventeen’s 10th Mini Album ‘FML’ sold 3.99 million units globally on its first day of release and debuted at No. 1 on the Billboard 200 albums chart dated May 13. Nine years after Seventeen’s debut, the group’s fandom “is growing significantly, which is leading to selling out and reprinting of older albums as the group is attracting much attention,” CEO Ji-won Park said during the earnings call.

Tomorrow X Together sold 3.54 million albums in the quarter. NewJeans accounted for 2.1 million units and nabbed its first No. 1 on the Billboard 200 with the Get Up EP. Le Sserafim sold 1.9 million units and Enhypen moved 1.8 million units. HYBE’s sixth- and seventh-best-selling artists were solo members of BTS: Jimin sold 1.6 million units and Agust D sold 1.3 million units. 

A revitalized global concert business and more artists on tour helped HYBE’s concert revenue improve 85.4% to 157.5 billion won ($120 million). Suga attracted 290,000 fans to 28 concerts in 10 cities across South Korea, the United States, Southeast Asia and Japan. HYBE plans to have 111 concerts by seven artists in 2023, almost double the 59 concerts by four artists in 2022.  

Merchandise and licensing revenue improved 13.3% to 111.9 billion won ($85 million). Contents revenue dropped 28.1% to 50.8 billion won ($39 million) while fan clubs and other indirect revenue grew 29.4% to 21.8 billion won ($17 million). 

Despite the strong demand for its artists’ albums and concerts, HYBE’s operating profit declined 7.9% to 88.3 billion won ($67 million), however, and operating margin as a percent of revenue dropped to 13.1% from 17.2% in the prior-year period. CFO Kyung-Jun Lee attributed the decline to expenses related to BTS’s Festa concert in June to celebrate the group’s tenth anniversary and “substantial investment” in Weverse Con festival, also in June. Adjusted earnings before interest, taxes, depreciation and amortization declined 1.2% to 106.4 billion won ($81 million). 

Weverse, HYBE’s in-house social media platform, finished the second quarter with a record 9.5 million monthly active users, up 200,000 MAUs from 9.3 million in the first quarter and more than 50% greater than the 6 million MAUs in the second quarter of 2022. In the second quarter, Weverse launched a payment method called Jelly; Weverse DM, a subscription-based private chat service that allows fans to exchange messages with artists; and Fan Letter, a feature that allows fans to write and decorate messages to artists. 

Shares of HYBE rose as much as 4.6% to 287,000 won ($218.03) on the South Korea Stock Exchange Tuesday morning. As of Monday’s closing price, HYBE’s share price had gained 58.2% year to date. 

06 Aug 2023

Elon Musk Says His Cage Fight With Mark Zuckerberg Will Be Streamed on X

Elon Musk says his potential in-person fight with Mark Zuckerberg would be streamed on his social media site X, formerly known as Twitter.

The two tech billionaires seemingly agreed to a “cage match” face-off in late June. Zuckerberg is actually trained in mixed martial arts, and the CEO of Facebook’s parent company Meta posted about completing his first jiu jitsu tournament earlier this year.

“Zuck v Musk fight will be live-streamed on X,” Musk wrote in a post Sunday (Aug. 5) on the platform. “All proceeds will go to charity for veterans.”

Musk said earlier Sunday he was training for the fight by lifting weights.

“Don’t have time to work out, so I just bring them to work,” Musk wrote.

Whether or not Musk and Zuckerberg actually make it to the ring in Las Vegas has yet to be seen — especially as Musk often tweets about action prematurely or without following through. But even if their cage match agreement is all a joke, the banter has gained attention.

It all started when Musk, who owns X, responded to a tweet about Meta preparing to release a new Twitter rival called Threads. He took a dig about the world becoming “exclusively under Zuck’s thumb with no other options” — but then one Twitter user jokingly warned Musk of Zuckerberg’s jiu jitsu training.

“I’m up for a cage match if he is lol,” Musk wrote.

Representatives of X, Meta and Ultimate Fighting Championship, which owns the venue where the fight might take place, didn’t immediately respond to emails seeking comment.

Musk’s push to stream the video live on X comes as he aims to turn the platform into a “digital town square.” However, his much-publicized Twitter Spaces kickoff event in May with Florida Gov. Ron DeSantis announcing his run for president struggled with technical glitches and a near half-hour delay.

Musk had said the problems were due to “straining” servers because so many people were trying to listen to the audio-only event. But even at their highest, the number of listeners listed topped out at around 420,000, far from the millions of viewers that televised presidential announcements attract.

04 Aug 2023

SM Entertainment’s Strong Earnings Place It Atop Music Stocks In Down Week Overall

SM Entertainment’s second quarter earnings, which were announced Wednesday (Aug. 2), helped shares of the K-pop music company, home to such acts as NCT Dream and Red Velvet, gain 7.6% to 137,700 won ($105.59) this week. That made it the top performer of the 21 stocks in the Billboard Global Music Index this week.

The index fell 1.9% to 1,360.05 in a week in which stocks were broadly down around the world. In the United States, the S&P 500 and Nasdaq composite fell 2.3% and 2.8%, respectively, marking their worst weeks since March. The FTSE 100 in the United Kingdom declined 1.7%. South Korea’s KOSPI composite index declined 0.2%.

The return of the concert business helped SM Entertainment revenues grow 30% to 239.8 billion won ($184 million), beating the 20.3% year-over-year improvement in the first quarter of 2023. SM artists had 60 concerts in the second quarter compared to six in the prior-year period. Merchandise revenue jumped 75% from sales increases from pop-up retail stores related to album releases. The day before SM announced earnings, the company’s shares got a 3.1% boost from Tuesday’s announcement that it had combined its North American operations with the U.S. operations of Kakao Entertainment, which acquired a 40% stake in SM in March.

Most of the companies that reported earnings this week saw their share prices decline week-over-week, though. Believe dropped 5.4%, SiriusXM fell 5.5% and Deezer lost 7.1%. Shares of Reservoir Media were unchanged.

Another K-pop company, HYBE, was one of just five of the index’s 21 stocks in positive territory this week. Shares of HYBE, which will report second-quarter earnings on Tuesday (Aug. 8), improved 5.2% to 272,000 won ($208.58). iHeartMedia, which also reports earnings on Tuesday, gained 6.9%.

04 Aug 2023

3 Takeaways About Music Streaming From Recent Earnings Reports

Two weeks into earnings reports for the second quarter of 2023, the music streaming business is showing that subscriptions — not advertising — are the dependable driving force behind the industry’s growth.

Subscriptions — which accounted for 65% of the U.S. recorded music business in 2022, up from 63% in 2021, according to the RIAA — aren’t affected by economic forces that influence how brands spend their advertising dollars. Consumers continue to pay monthly or annual fees for Spotify, Apple Music, Amazon Music, YouTube Music, Deezer and other offerings. Even faced with higher prices (see “pricing power” below), more people are opting for subscription services.

More information will be gleaned in the coming weeks from earnings results from Warner Music Group (Aug. 8), HYBE (Aug. 8), Sony Music Entertainment (Aug. 9), Tencent Music Entertainment (Aug. 15), Cloud Music (Aug. 24) and Anghami (no date set).

Based on earnings by Universal Music Group, Spotify, Deezer, Believe and Reservoir Media, here are three takeaways from reported results through Aug 4.

The subscription market is holding up well. Spotify beat expectations for both monthly active users (MAUs) and subscribers, “aided by improved retention and marketing efficiencies,” the company explained in its July 25 shareholder presentation. Spotify’s premium subscribers grew 17% year-over-year to 220 million, beating its guidance of 217 million. Spotify’s MAUs increased 27% year-over-year to 551 million compared to guidance of 530 million. Universal Music Group attributed subscription growth in its recorded music segment — 13% in the second quarter and 11.6% in the first half of the year — to “broad-based growth in subscribers across all major global platform partners.” Reservoir Media CEO Golnar Khosrowshahi cited Spotify’s “higher than expected subscriber numbers” in the company’s Aug. 2 earnings call and said its strong quarterly results “reflect increasing demand trends for streaming music globally.” Not all subscription services made gains, though. Deezer lost 100,000 subscribers from June 30, 2022, to June 30, 2023, and Pandora ended the quarter with 6.2 million subscribers, down 100,000 from 6.3 million a year earlier.

Services have pricing power. Spotify raised its individual subscription plan in the U.S. on July 24 to great fanfare. After all, the price had gone unchanged since the service launched in the United States in 2011, although the family plan price increased by $2 per month in 2021. Spotify is relatively late to the game, though. Deezer raised its price from 9.99 euros to 10.99 euros in January 2022 — a major factor in the company’s direct subscriber average revenue per user climbing 4.9% year over year. Apple Music and Amazon Music both raised their prices last year as well. And according to Deezer CEO Jeronimo Folgueira, the increase had “pretty much no impact on churn” — the number of subscribers who leave a service over a period — and “clearly demonstrated that music is highly undervalued, and that platforms like us have more pricing power than initially anticipated.” That said, Folgueira stated that Deezer’s guidance for full-year revenue growth does not include another price increase later in the year.

The advertising market continues to have challenges. At Spotify, music advertising revenue grew in the “mid-single digits” year-over-year, lower than the 12% (15% at constant currency) growth in total ad-supported revenue. That implies advertising revenue from podcasts, which was up 30% year-over-year, contributed to most of the growth. Spotify also noted “softer pricing due to the macroeconomic environment” that offset double-digit gains in impressions. Universal Music Group’s ad-supported streaming revenues were up 5% in the second quarter and 2% in the first half of the year. UMG’s CFO Boyd Muir said “it’s too early to call a positive turnaround in the market.” Believe is “still impacted by the weak ad-supported monetization,” said CFO/chief strategy officer Xavier Dumont. The advertising malaise extends to broadcast radio, too. Weak national advertising “remained the main factor driving a decline in total revenue,” Frank Lopez-Balboa, Cumulus executive vp/treasurer/CFO, said in the company’s July 28 earnings call. National brands appear likely to increase ad spending in the second half of the year, however, according to B Riley Securities analyst Daniel Day.

04 Aug 2023

5 Ways AI Has Already Changed the Music Industry

“Fake Drake” and similar controversies have gotten most of the attention, but not all uses of artificial intelligence in music are cause for concern.

AI Music

Illustration by Cathryn Virginia

Hype around artificial intelligence has been higher this year than any time since The Terminator, with implications ranging anywhere from dating app messages to doomsday predictions. In music, excitement and hysteria has been similarly mixed, thanks to a flurry of AI-generated soundalikes that have shown the potential to change artistry — and fandom — as we know it, while many companies are assessing how to best protect their artists, copyrights and revenue streams from the growing threat. 

But not all AI in music is “Fake Drake.” In fact, many uses are a lot less freaky. 

For example, when Paul McCartney told BBC Radio 4 that he would use artificial intelligence to create the final Beatles song, including vocals from the late John Lennon, it prompted widespread confusion. Many fans assumed that this meant McCartney was using AI to bring his bandmate’s voice back from the dead, generating some kind of new recording of Lennon’s out of thin air. Quickly, McCartney clarified on Twitter that “nothing has been artificially or synthetically created.” Instead, the singer is using AI to clean up an old recording made by the bandmates while they were still living using a process known as “stem separation.”

Not every use-case of the emerging technology involves generating computer-made songs or voices instantaneously. While some applications of AI certainly present urgent legal and ethical concerns, there are also many applications that give musicians and rights holders new creative opportunities from the way it’s created to how it’s released and beyond.

Here are five of the ways AI is already affecting the music business: