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Last year, a 17-YEAR-old artist from Houston named d4vd released “Romantic Homicide,” a track he had made using BandLab, the Singapore-based social music creation platform. “He recorded a song in his sister’s closet on his mobile phone with Apple earbuds, using a stock preset,” says CEO Meng Ru Kuok — stock presets being one of many things aspiring musicians can find on BandLab, which wants to make it possible for anyone with an idea, no matter their skill set, to create music.
“Romantic Homicide” became an example of that ideal: The brooding, guitar-hooked track caught fire on TikTok, and d4vd (pronounced “David”) signed to Interscope, with the song peaking at No. 45 on the Billboard Hot 100
“I was cheering him on,” Meng says of d4vd. “We’re so excited and rewarded when people move on to other places, whether they stay independent or get signed by major labels.”
BandLab, which was founded in 2015, doesn’t receive royalties from music made on its platform. Instead, the company makes money on artist services (which include distribution, livestreaming and BandLab Boost) that allow acts to turn their profiles or postings into ads on the platform to better reach the 50 million registered users BandLab has.
Meng, 34, has aggressively expanded BandLab’s assets, which are grouped under the holding company of Caldecott Music Group. Along with instrument manufacturing and sales (including Michigan-based Heritage Guitars and Asia’s largest musical instrument retailer, Swee Lee), Caldecott has editorial properties like Guitar.com, Uncut and NME. (BandLab acquired 49% of Rolling Stone in 2016 before selling it in 2019 to Penske Media, Billboard’s parent company.) In September, Billboard and BandLab launched the Bringing BandLab to Billboard portal to expose emerging artists to a global audience.
“On a day-to-day basis, it is not just geographically split, but also mentally in terms of all those areas,” Meng says.
In November 2021, BandLab announced the acquisition of independent artist platform ReverbNation from its parent company, eMinor. And in April, it announced it had raised $65 million in series B funding, bringing the valuation of the platform upwards of $300 million. BandLab envisions a different sort of future — shorter songs made by anyone, using presets or even artificial intelligence (AI) — with the idea that the more music that exists, the more need there is for its range of offerings, from equipment cases to advertising. Business, says Meng, is “gangbusters, in terms of focusing on product and improving the experiences that we bring out.”
Do you feel that d4vd’s success validated your business model?
Yeah, it’s extremely rewarding. We’ve seen stories like that happening thick and fast. Earlier this year, we had an amazing viral success with an incredibly talented young rapper. He was 13 when he started making music on BandLab. He’s 14 now. His name is Cl4pers. He has 1.2 billion views on his hashtag on TikTok alone. It’s not just the viral success but the incredible talent — like d4vd, like Cl4pers — that, prior to BandLab, wasn’t making music with the capabilities that their creativity would have afforded them. D4vd is now signed to Interscope Records and [its artist development/management joint venture] Darkroom and has changed his personal career and the life of his family. Millions of people around the world have listened to his song and have really connected with it. It’s truly special, and it just reminds us of what we’re doing every day, beyond just creating a great business that we’re excited about.
What are the numbers behind that growth at BandLab?
Our last public figure that we shared, we have over 50 million registered users around the world. More than 16, 17 million songs are being made a month on BandLab. I still feel like we’re a small platform getting started. We have 80 full-time staff, 140 if you include all team members around the world. That has grown relatively quickly, and we have a lot of hiring plans in place to expand even further in the next six to 12 months.
Do the creators get royalties?
Yeah, that goes to the artists. We don’t take a position on artists’ rights. There’s a big movement, obviously, toward independent creators being fully in control of what they own. That’s really important to us. We’re focused on empowering the artists. The music is their content. So they are generating their own royalties if they’re distributed by BandLab or ReverbNation or via TuneCore, CD Baby, DistroKid — that’s one way they can be generating money off their music. The artist gets 100%. That’s what we do.
You don’t take commission?
We don’t. Actually, we have a lot of creator economy features on BandLab. For example, someone can tip users on BandLab in their profiles. We allow users to subscribe to other users, similar to Patreon or OnlyFans. We have features where artists can sell their tracks and albums, similar to the iTunes Store or Bandcamp, for example, and the artist keeps 100%. We don’t take a commission from the artists’ earnings after processing fees; Stripe and PayPal are involved in that transaction. We as a platform don’t take a cut of the creator economy. We believe it’s very important the artists are able to monetize. Especially in the United States, you guys get taxed enough. They don’t need more taxes on top from a platform.
How do you make your cut?
We’re focused on empowering artists in creating, making that accessible and free, and truly democratizing music. What Apple did with GarageBand was obviously an incredible progression in democratizing music creation, but 80% of the world uses Android. To be able to afford an iPhone is already out of reach for many people around the world. We don’t believe that people’s creativity or their ability to make music or to express themselves should be limited by their spending power or their knowledge of how to write a song.
Where we make our money is actually in artist services. If you are spending to distribute your music to Spotify, Apple Music, if you are running a promotional campaign — things to help promote your music or develop your career as an artist — that’s where we charge. We have a subscription service that we’ve just announced. There’s our BandLab Boost membership. We also have ReverbNation services that come through membership and various a la carte services.
Your business also supplies royalty-free music packages?
We do provide royalty-free samples. One of our features is BandLab Sounds: We collaborate with artists, commission our own sample packs for people to use in their music-making. And those are provided royalty-free — loop samples, one shots, which are utilized by musicians all around the world to make music. We also have an AI feature called SongStarter, which helps people generate royalty-free song ideas to start off their songwriting process.
All the music on BandLab is original music and original content. We’re very strict and pro-rights owners because we’re trying to protect the creators and all rights holders. This is something that we take very seriously with regard to licensing. It’s about protecting rights holders both on platform and off platform.
Do you train your AI to mimic popular human artists?
No, we don’t.
In the United States, the presumption, based on the Copyright Office, is that only works by human authors can be copyrighted. Who will own the copyright to AI-created portions of songs?
Ownership of content that is developed further from our AI SongStarter tool is owned by the user.
Do you offer marketing services?
We provide a variety of services through BandLab but also through our ancillary services. We acquired ReverbNation last year, which allows you to run third-party advertising campaigns on sites like Billboard, NME and Rolling Stone. They can buy campaigns and centralize their music for promotion on Instagram, Facebook and to promote videos they release on YouTube, for example. We recently announced the beginning of the rollout of BandLab Boost, which allows users to promote, for a fee, their posts and their profile on the BandLab network.
Do you have relationships with the streaming services?
Absolutely. We’re not a [digital service provider]. We believe there are platforms out there that do their job incredibly well. We’re here to empower the music that has been created that ends up on these platforms. We obviously have commercial relationships, like our distribution relationships, but also where we can funnel exciting talent that blows up on their platform.
Whom do you see as a rival?
I’ve been asked that question a bunch. BandLab is creating a whole new category of platform. There are certain services out there that do similar things, but our whole perspective on the ecosystem is that music is collaborative. By nature, it’s not just about the tools — it’s about collaboration, it’s about different influences when people get together. Services need to collaborate as well. That’s where we work closely with other platforms that people outside may see as competitors. There are lots of ways a platform like BandLab can have relationships as a funnel to other services through affiliate partnerships. There are many businesses that have the full suite of tools that we have as BandLab, and it’s our core objective to work closely with all of them. If the music market grows and the creator market grows, everyone benefits.
How has the democratization of music creation that BandLab and other companies and applications have enabled changed music?
The barrier to making a hit is now fundamentally more accessible to anyone. You don’t have to have had a long education or engineering degree to do so. So much of this is being empowered by short-form video and changes in the music industry where a hit song is no longer three minutes long but 10 to 30 seconds — which is really scary and meaningful at the same time.
As his husband, Elton John, prepares for the U.S. finale of his absolutely-positively-unambiguously-final farewell tour Sunday night (Nov. 20) at Dodger Stadium in Los Angeles, David Furnish wants to clarify one thing: “It’s really important to make a distinction between Elton retiring from touring but Elton not playing his very last public performance for the very last time,” says Furnish, 60, a former advertising executive who has produced numerous films, including John’s 2019 biopic, Rocketman. “Will Elton return as a live performer? I hope so! It’s in his blood.”
In a wide-ranging phone interview from the family’s home, Furnish, also John’s manager, discusses the tour’s COVID-19 challenges, how high gas prices and supply-chain issues have complicated budgets and his entry into the music business. “I love working in this world,” he says. “We have the privilege of working with the very best in the business.”
As of last month, the Farewell Yellow Brick World Tour has grossed $661.3 million and sold 4.5 million tickets, including 30 U.S. stadium shows this year that totaled $133.4 million and 830,000 tickets. When the tour returned in January, Omicron loomed over the concert business, but COVID-19 fears have dissipated. How has your thinking about the tour changed throughout 2022?
From us, nothing has changed. COVID is still out in the world. It is still a risk to the health of our crew and to Elton and the band. We put in place a very strict testing protocol. We went back out on the road last January with a regular cadence of testing, keeping everybody up to date on vaccines and boosters. We’ve kept all of that in place. We have people in the tour in separate bubbles. Elton feels really badly, but he hasn’t been able to mix with his band. His band travels in one bubble. He and his assistants, the people who support him, his hairdresser and people in security — they’re in his bubble. It’s been very challenging for Elton, because he always loves being with his band before he goes on stage. He always sits with them and chats and has a laugh with them. That’s not been possible. While he’s been home, between shows or in hotels, he has to isolate. Everybody that supports him at home is also tested regularly — all staff in the household.
How difficult was it to reschedule the shows in Dallas when Elton himself came down with COVID?
We had to postpone, but it meant we lost two shows in Montreal to allow those Dallas shows to be rescheduled. There’s only so much wiggle-room in a tour schedule. This is a big behemoth of a tour. You suddenly just can’t jump to another side of the country or cross the Atlantic to make up a show.
How did fans’ excitement for the tour evolve as the COVID-19 landscape changed throughout 2022?
Thankfully, COVID hospitalizations have massively decreased and there are more medical treatments than there were at the beginning, so people can make the decision as to what medical risk is appropriate for them and still come to see a show. Lockdown was very hard for most people. It was very isolating, and nothing brings people and the world together like music. It’s emotionally and mentally and spiritually very healthy for people to get back out and see shows again. We just had to go back on the road in the safest way possible, and that’s what we’re trying to do.
How have you adapted to higher gas prices and supply-chain issues? Does Elton eat the extra expenses, or have you cut the budget or production?
We just eat the extra cost, because the tour we started with is the tour we intend on finishing with. We sold tickets in good faith and people bought tickets in good faith and it’s really important that we don’t short-change anybody and we honor our commitments. Elton is really committed to that. It’s the largest traveling-production tour Elton’s ever mounted, and it didn’t even occur to us to try to reconfigure it in any way to make it cheaper.
Please set the record straight: Will Sunday’s concert at Dodger Stadium be the last U.S. show Elton ever plays?
I know for a fact he will not be touring in any capacity. What you’re going to see is the possibility of a special one-off or a small residency in one venue for a limited period of time. I don’t think it will be Las Vegas. Elton feels he’s done the best he can in Las Vegas. He mounted two hugely successful residencies there. When you’re an artist and something’s in your blood, you don’t want to shut the door completely. Having said that, I know Elton, and it wouldn’t surprise me if he didn’t do any more live shows, either. He’s really looking forward to spending time with his family. That’s the No. 1 priority in his life. Any type of return to any type of touring is going to be a very well-considered situation, and definitely not a given, at all.
Given your background in other businesses, I wonder what it was like to transition into the music business as Elton’s manager.
I have a business-advertising-marketing background, but I’ve also worked in musical theater, I’ve worked in film production and I’ve been in Elton’s life for 29 years. So it’s not foreign to me at all. When you launch a tour like this, it’s like going on a dangerous mission, and you say to yourself, “I’m hurtling down rapids, and we’re about to go over the falls — who do you want to steady things in the boat and keep things under control?” I’m very fortunate. When I took over, Elton’s tour infrastructure was very, very healthy.
Am I reaching you at the family home in Los Angeles?
Yeah. The whole family’s here in Los Angeles. Obviously, I’m here for work, but I’m here to support my husband and our sons are here. This is a big, big moment in our family’s life.
After Smallpools’ “Dreaming” popped up in the FIFA 14 soccer video game, singer Sean Scanlon noticed something had changed: his Los Angeles electro-pop band began booking more college gigs. The fans reacted differently, too. “We’d get to the soundchecks, and we’d have students who wouldn’t even know what our band was called go, ‘Yo, FIFA’s here!’” Scanlon says. “We’d kind of be branded with that. That was huge for popularity on the younger front.”
As the FIFA World Cup opens Sunday (Nov. 21) in Qatar, the 29-year-old video game franchise based on the international sport, which allows Playstation and Xbox users and others to simulate tens of thousands of real-life soccer stars, is maintaining its global popularity. The 2023 version is at No. 8 on the NPD Group’s list of the year’s global best-sellers, and the FIFA series has scored 325 million sales overall, according to Electronic Arts. This sales power has been a unique song-breaking opportunity for artists going all the way back to FIFA: Road to World Cup 98, which licensed Blur‘s woo-hooing “Song 2.”
Over the years, the game has used music synchs from Kasabian (whose “L.S.F.” appeared in the 2004 game, the first of many for the band) to Billie Eilish (“you should see me in a crown” was in FIFA 19) to Glass Animals (whose “Heat Waves” was in the 2021 game, then hit Billboard‘s Hot 100, where it rose to No. 1 in March). “You see a noticeable uptick in streams,” says Adam Faires, manager of U.K. electronic-music duo Jungle, whose “Busy Earnin’” was in FIFA 15 and has since streamed nearly 120 million times on Spotify and has 30 million YouTube plays. “You can almost pinpoint it to the exact moment that the game comes out.”
The game provides different looks for synchs — some artists hit the soundtrack, airing prominently throughout the game, some are in marketing trailers, and certain stars, such as Jack Harlow and Rosalía, design custom uniforms as kits to be unlocked during the game. “It’s a little ahead of the curve. They’ve done a great job of breaking artists over the years,” says David Nieman, Interscope Geffen A&M Records’ senior vp of sports and gaming, who has placed Tierra Whack, Louis The Child and other synchs in FIFA. “We see followers increase, we see streams increase, then we see other people wanting to license that song after FIFA is taking that risk.”
Game giant EA Sports launched FIFA in 1993 as an international counterpart to its American-focused Madden NFL franchise, but the soccer game didn’t turn into a song-breaking fixture until the early 2000s. That was when Steve Schnur, an early MTV programmer who’d been a promotions, marketing and A&R exec for Elektra and other labels, took over the music. Schnur’s vision was to turn FIFA into its own music company, scouting and breaking new acts.
“The producer at the time wanted to record a symphony to do an orchestral score,” Schnur recalls. He had grander visions. He instructed EA’s music staff: “We’re going to make the real estate of FIFA really important real estate, where people discover their next favorite band with no global barriers.” After that, FIFA soundtracks expanded, breaking tracks by artists old and new, including Ms. Dynamite, Avril Lavigne, The Dandy Warhols, Junior Senior and even Radiohead.
“All of the artists got it,” says Schnur, Electronic Arts’ worldwide executive and president of music. “They knew that they not only played games, but their audience played games.” Artists featured in FIFA often expanded their touring business, reaching “a huge part of the world that potentially terrestrial radio and streaming services don’t have the same impact,” says A/J Jackson, frontman for pop-rock band Saint Motel, which landed “My Type” in FIFA 15. “We noticed in our shows, especially in the U.K., we were getting football fans and hooligans jumping around and chanting their team name. It exposed us to a lot of new people.”
The FIFA game sound, as defined by Schnur and Electronic Arts music supervisors such as Cybele Pettus, has a “particular mix of that DNA,” including world, electronic, hip-hop and pop, says Jonathan Palmer, BMG’s U.S. senior vp of creative synch, who has placed many tracks in the game over the years. Looking at artists on this year’s soundtrack, including Yeah Yeah Yeahs, Biig Piig, Black Thought and Danger Mouse, he adds, “That’s a great day at Lollapalooza.”
When Palmer worked on synchs for Columbia a decade ago, he placed Foster the People‘s “Call It What You Want” in FIFA, which helped extend the band’s post-“Pumped Up Kicks” run. “This just felt like a good fit — not just for the tone and style for the music, but also for the fact that they’re massive football fanatics. It culturally made sense,” he says. “People were showing up at shows and telling the band, ‘I heard your song in the game.’ This was making a difference.”
In a week when everybody seems to be talking about touring, Post Malone pulled off his biggest feat yet: wrapping his 39-date Twelve Carat Tour with four sold-out shows in Los Angeles, the most he’s done in the city in his career. The run marked his return to touring, after a pandemic pause, and featured the hitmaker re-connecting with a fan base that has only grown with the release of his latest album, Twelve Carat Toothache, which he released this year.
Across the first 33 shows of the tour that were reported to Billboard Boxscore, Post moved 413,000 tickets between Sept. 10 and Nov. 6, bringing in $59.7 million, according to Billboard Boxscore — with the L.A. dates not even factored into those totals as yet. And it helps Post’s agent, UTA partner Cheryl Paglierani, earn the title of Billboard’s Executive of the Week.
Here, Paglierani — who also reps clients like Dominic Fike, who played the Palladium this week, and Flo Milli, who just wrapped her own tour at The Roxy — speaks about booking the Post Malone tour, the challenges caused by the pandemic and the return to live music, and the differences in booking an artist as their career grows from the club level to arena headliner. “We’ve seen a lot of success by not skipping any steps and staying focused on consistent growth with each tour,” she says.
This week, Post Malone wrapped his Twelve Carat Tour with four sold out shows in L.A., after having sold 413,000 tickets across the tour’s first 33 dates. What key decisions did you make to help make that happen?
It’s always a team effort amongst myself, his managers Dre London and Austin Rosen, and our tour promoter Colin Lewis. Each tour starts with mapping out the markets we want to play and then building out a strategy that allows us to hit all the major cities while also making sure we’re able to weave in smaller markets we may not play as often. Post already has such a massive fanbase, but the goal is to always continue expanding and make sure that we’re reaching more people each time than we have in the past. On the last tour, we did two nights in L.A. and New York and now we are doing four. We’ve seen a lot of success by not skipping any steps and staying focused on consistent growth with each tour.
This was Post’s first tour since the pandemic. How did you want to re-introduce him to audiences with this tour?
Post is an artist who needs no introduction. This tour was more about a re-connection with the fans after three years of being out of the spotlight. He really stepped up the production and put his all into creating not just an incredible show visually, but an experience that fans will remember forever. The stage is set up with two GA pits that allow fans to get right up against the stage. During the entire show, he is dapping their hands, taking items from the crowd and truly engaging with them in a way I have never seen an artist do. When the show ends, he stays on stage for an extra 30 to 40 minutes signing autographs and taking pictures with fans as the venue is clearing out. It’s truly mind blowing to watch one of the biggest stars in the world show so much love to his fans and go above and beyond. I think it’s a big part of what differentiates him from other artists.
How has touring changed since the pandemic?
At first there were a lot of new hoops to jump through to follow vaccination policies and COVID regulations. We are starting to see a lot of regulations that were put in place post-pandemic get lifted and touring feels to be on its way back to normalcy. I can’t say there’s any one thing I could point to that is drastically different as a result of the pandemic.
What challenges are you facing with routing, pricing and venue selection these days that perhaps weren’t there in the past?
The biggest challenge has been avails and oversaturated markets. With so many artists looking to get back out on the road we saw so many tours going out during the same time periods. You always want to make sure your clients are playing the right venue and we would often encounter venues that had no avails for weeks, so routing became a lot more challenging. We are starting to see things level out a bit but I think it will take another 12 to 24 months to truly go back to normal.
How is booking an arena tour different from booking theater or club outings these days, as for some of your other clients?
The booking process is very similar but there are more intricacies to work through as an artist grows into larger rooms on the deal-making side. As the show grows, so does the production, the amount of crew that needs to be out on the road, and the amount of money being offered to the artist. There are more deal points that need to be negotiated than at the club level. Ticketing also becomes a lot more complex at the arena level where you’re scaling rooms at different price levels versus general admission clubs. Paying attention to the ticketing and how fans are buying is crucial to maximizing show grosses and needs to be done in real time. If you’re doing it right it can be very time-consuming but also greatly impact the amount of money the artist makes, and as agents it’s our job to ensure that we get the best deal for our clients.
Maybe Live Nation chairman Greg Maffei’s statement that Taylor Swift and promoter AEG “chose” to work with Ticketmaster for her calamitous onsale earlier this week should have come with an asterisk.
On Thursday (Nov. 17), Maffei attempted to correct criticisms about Ticketmaster and its owner Live Nation operating as a monopoly by pointing out that Swift’s 2023 Eras Tour “is not actually a Live Nation promoted concert” but rather “promoted by one of our largest competitors.”
Maffei — who is also the president of Live Nation’s largest shareholder Liberty Media — continued: “AEG who is the promoter for Taylor Swift, chose to use us because, in reality, we are the largest and most effective ticket seller in the world. Even our competitors want to come on our platform.”
The thing is, AEG says it’s essentially forced to work with Ticketmaster because of the stranglehold it has over the touring business. “Ticketmaster’s exclusive deals with the vast majority of venues on the Eras tour required us to ticket through their system,” an AEG spokesperson told Billboard in a statement. “We didn’t have a choice.”
The debacle centers around Swift’s presale Tuesday for her Eras Tour, which initially crashed shortly after launch as 14 million fans and billions of bots flooded the site, causing service disruptions. The ticket crash caught the attention of Capitol Hill. Rep. Alexandria Ocasio-Cortez and Sen. Amy Klobuchar, both of whom criticized the outage at Ticketmaster and doubled down on claims that the Live Nation-owned ticketing service was a monopoly. The Justice Department is now reportedly investigating Live Nation, though the investigation reportedly pre-dated the Swift debacle.
AEG and Live Nation have a complicated relationship built around intense competition and steady cooperation going back decades. While AEG’s facility group relies on Live Nation for programming, AEG Presents, the company’s concert promotion wing, competes directly against Live Nation’s global touring team and has its own preferred ticketing system, AXS.
While AEG Presents prefers to use AXS, their partner in the Eras Tour, Louis Messina (Messina Touring Group is a 50-50 joint venture between AEG and Messina), is basically agnostic when it comes to ticketing systems — he will work with any ticketing company, based on where the show takes place. In North America, that means working with Ticketmaster, which is especially dominant in the NFL as it provides tickets to 27 of the NFL’s 32 teams. By choosing to stage her show in NFL stadiums – really, in choosing to tour stadiums in the U.S. — Swift and her partners at AEG and Messina Touring Group are effectively forced to use Ticketmaster due to its supremacy in North America.
In that sense, Maffei’s argument that AEG chose to work with Ticketmaster is misleading, but it would also be inaccurate to describe Swift or AEG’s relationship with Ticketmaster as one built upon coercion. Historically, it’s been more mutually beneficial.
AEG’s venue management company ASM Global — formed following the merger of AEG Facilities and SMG in 2019 to become the biggest such company in the country — expanded its partnership with Live Nation in 2021, allowing the use of Ticketmaster for any of the shows the promoter brings to ASM’s 300 clients. In this arrangement, both sides win, since AEG relies on Live Nation to bring content to its buildings and grants the company incentives to entice shows to their facilities.
Swift has worked very closely with Ticketmaster over the years — for her Reputation stadium tour, the COVID-19-canceled Lovers Fest and now the Eras Tour, building an entire fan verification and Taylor Swift-branded ticketing platform together. While Swift might have preferred to have had more options to sell tickets to her fans, she did partner with the company in a way that few artists have in the past.
Perhaps Ticketmaster and Swift will mend their relationship once they start counting how much money they made together. Or maybe, they’re never, ever, ever, ever getting back together.
The Ledger is a weekly newsletter about the economics of the music business sent to Billboard Pro subscribers. An abbreviated version of the newsletter is published online.
Is Ticketmaster a monopoly that treats customers unfairly? Problems with Taylor Swift’s record-breaking The Eras Tour onsale this week has created choruses of complaints around the ticketing giant that have now led to a reported Justice Department investigation.
On Thursday, Sen. Amy Klobuchar sent an open letter to Live Nation CEO Michael Rapino detailing her “concerns about the state of competition in the ticketing industry and its harmful impact on consumers.” The problem, wrote Klobuchar, is a lack of competition “that typically push[es] companies to innovate and improve their services. That can result in dramatic service failures, where consumers are the ones that pay the price.”
Breaking up Live Nation and Ticketmaster wouldn’t necessarily have prevented this problem. It’s likely that any ticketing platform would have struggled with such a high level of demand. StubHub crashed in 2018 after University of Georgia fans flooded the site to purchase tickets to see their team play in the NCAA football national championship game — and that was just one game.
Ticketmaster blamed the outage on a surge of unregistered fans and billions of bots. According to the company, over 3.5 million people pre-registered for Swift’s Verified Fan credentials, the largest registration in its history. Typically, only a fraction of registered fans show up to buy a ticket. This time, “a staggering number of bot attacks as well as fans who didn’t have invite codes” resulted in 3.5 billion total system requests — four times the previous record number.
One could argue Ticketmaster could have been better prepared for such a high level of demand. Perhaps the company should Swift-proof the platform in anticipation of a flood of speculators and unregistered fans — Swift said Friday (Nov. 18) that her team “asked them, multiple times, if they could handle this kind of demand and we were assured they could.” Overall, problems on the platform are relatively rare given Ticketmaster’s volume of business, but we talk about them because they happen with high-profile concerts that attract large numbers of customers. Those attract the most attention and complaints online, which in turn attracts politicians. Ticketmaster is one of the few non-partisan issues in America in 2022.
Some observers have conflated the issues surrounding Ticketmaster’s market power, though. Rep. David Cicilline, chairman of the House Judiciary Committee’s Antitrust, Commercial and Administrative Law Subcommittee, wrote about the Swift on-sale that “excessive wait times and fees are completely unacceptable … and are a symptom of a larger problem.” It’s fair for Cicilline to suggest that Ticketmaster does not invest enough in its platform to avoid the technical issues and wait times Swift fans recently experienced. That’s debatable, but it’s a defensible argument.
Fees are, however, an entirely different issue. Ticketmaster is a pioneer in the area of ticket fees but does not have a monopoly on the ability to charge them. More competition in ticketing would not prevent venues and promoters from adding to the face value of tickets. The ticket purchase is an opportunity for all parties involved to capitalize on fans’ demand for live music. As Bruce Springsteen’s controversial leap into dynamic pricing showed, leaving money on the table is an increasingly uncommon strategy in the modern music business.
Ticket prices occasionally get dragged into the argument, too. Politicians and consumers seem to want a form of price competition that doesn’t exist. Prices for an in-demand concert ticket won’t necessarily become more affordable if they’re sold at, say, StubHub rather than Ticketmaster. The laws of supply and demand say that prices for in-demand, scarce objects like a Swift concert ticket are going to be high no matter who’s selling them.
So, what tangible results might come from the calamitous The Eras Tour on-sale? Sen. Klobuchar’s letter points to customers’ desire for fair access to concert tickets. She asked Rapino, “Generally, what percentage of high-profile tour tickets are made available to the general public compared to those allocated to pre-sales, radio stations, VIPs, and other restricted opportunities?”
Klobuchar wants to know what percentage of tickets the average person has a realistic shot at getting without being the customer of a particular credit card, without buying high-priced VIP packages, without winning a radio station contest or without being a member of an artist’s fan club. In this case, Capital One is a sponsor of the Eras tour and offered a pre-sale to its customers.
But how do lawmakers regulate access? Do they establish rules that dictate what kind of marketing partnerships artists can and cannot establish? Would they tell American Express to stop giving such long-standing perks as pre-sale access and dedicated tickets to its credit card holders? If Congress really wanted to create a more level playing field for fans, they could do what the lawmakers in Victoria, Australia, did in 2021: pass a law that limits the resale value of a ticket to 110% of its face value. That could lower the number of resellers and bots clogging up Ticketmaster’s system for high-traffic on-sales like the Eras Tour. At the very least, price limits would bring a much-desired sense of fairness to the secondary market. Whether the U.S. Congress has the stomach to establish price controls on private companies remains to be seen.
A more likely outcome of the Eras Tour debacle is increased transparency. New York State legislators passed a law in June that improves transparency by requiring all-in pricing and prohibits revealing the ticket’s total cost — face value plus fees — after multiple clicks in a check-out process. The bill could have gone further: a requirement to disclose the percentage of tickets made available to pre-sales and VIPs was in an early form of the bill but not the final version.
But, again, are lawmakers willing to mandate such disclosures from private businesses? This would more likely be a voluntary disclosure done at the behest of the artist – Swift is exactly the kind of powerful artist who could persuade ticket sellers to reveal this information. Transparency wouldn’t immediately translate into greater access for the average fan, but it could fuel a larger conversation about how fans get access to concert tickets. That wouldn’t ease the pain of many Swift fans, but it would be a step forward.
Almost five years ago, I wrote a column about how Bitcoin and Blockchain might change the music business. At the time, the question seemed more about how than if: An online merchandise store had just started accepting cryptocurrency, several entrepreneurs had founded startups to use blockchain technology to pay rights holders, and entrepreneur and then-Dot Blockchain CEO Benji Rogers predicted that “Blockchain technology is coming like a tsunami.”
I was skeptical. I called Blockchain “a solution looking for a problem” and pointed out that the only person I knew who had bought anything with Bitcoin was a former neighbor in Berlin who had purchased LSD online. At that time, Bitcoin was worth $11,631 and the Dow Jones average was 25,803.
As Bitcoin shot up — to a November 2021 high of more than $56,000 — more artists and music executives became certain that cryptocurrency and Blockchain technology would change everything. Artists sold NFTs — as did Billboard — and in February Coachella sold $1.4 million of NFTs, including 10 lifetime passes to the annual festival.
Now the cryptocurrency exchange FTX is in bankruptcy, Bitcoin is down to $16,099, and the U.S. will almost certainly regulate cryptocurrency “banks” and exchanges. In economic terms, that means cryptocurrency companies might have to compete on an even playing field with traditional finance entities, which would reduce risk for consumers but eliminate some of the advantage that startups get from making their own rules. In non-economic terms, Mom and Dad are home, they’re pissed, and they’re not going to let you run your business unless you can wear your big-boy pants!
So, what about that tsunami? It has been a busy five years for the music industry: recorded music boomed, major financial players invested in publishing catalogs, two of the three major labels went public, Latin music gained a bigger global audience, and TikTok emerged as a transformative source of promotion. Blockchain and Bitcoin barely changed the industry at all, though. A few artists made an insane amount of money on NFTs and a bunch of companies announced plans to fundamentally disrupt disruption itself. But Bitcoin is still an inefficient means of exchange and a poor store of value — at best it’s a high-yield, high-risk investment — and Blockchain is still a solution in search of a problem.
A little more than a year after my column, Benji Rogers, he of the tsunami prediction, left Dot Blockchain, which in September 2019 rebranded as Verifi Media. The company still helps rights holders track ownership and use data, but it doesn’t emphasize Blockchain technology on its website. (Emails to the Verifi publicity contact came back as undeliverable.) That makes sense: The big problem with rights data has always been that it’s incorrect or incomplete. Blockchain is a distributed database that allows users to track changes, but it can’t fix incorrect or missing information.
Five years ago, the startup Choon had a plan to track music use with Blockchain and pay rights holders immediately with a digital currency called Notes. It went out of business in 2019, as Notes fell in value along with Bitcoin. The following year, Choon co-founder Bjorn Niclas launched Rocki amid the pandemic and exchanged outstanding Notes for Rocki tokens at a 50:1 ratio. (The company also lets independent musicians sell NFTs.) Since then, “Rocks” tokens have gone from being worth about 5 cents each, up to an April 2021 high of $5.45 — it peaked when Bitcoin did — and down to about a penny. That sounds exciting, and potentially profitable, but I suspect most artists prefer to get paid in currency that holds its value.
Bitcoin and NFTs aren’t going anywhere — some investors see the “crypto winter” as a buying opportunity, while others just want to HODL. (Art NFTs are performing better than most.) But the collapse of FTX will inspire investors, and hopefully government agencies, to ask more questions about whether celebrities who buy and sell NFTs are being transparent enough about their transactions — especially since the fans they influence may buy into investments in a way that help those who already own them.
Like many online technologies, Blockchain and Bitcoin offered a utopian dream of decentralization, free from government regulation and control. When it comes to finance, however, government regulation isn’t a bug, to use the technology phrase — it’s a feature. Just ask anyone who had money with FTX, which wasn’t insured by the Federal Deposit Insurance Corporation (FDIC) the way U.S. banks are. Among the assets stuck in the exchange are the Coachella Keys that offer holders access to the festival.
Coachella told Billboard that it’s confident it will handle this issue. But it’s hard not to wonder if there wasn’t an easier way to do this — say, passes with QR codes, or maybe even just spots in a database that could be sold with the cooperation of the event promoter. Blockchain is essentially a distributed database that can operate at internet scale, and it’s easy to see how exciting that is. It’s just still hard to see what use the music business might have for it.
In the wake of Ticketmaster’s disastrous sale of tickets to Taylor Swift’s upcoming tour, a report has surfaced that the U.S. Department of Justice is investigating whether parent company Live Nation has abused its huge market share in the live music industry.
According to a story Friday in the New York Times, the DOJ’s antitrust division had already been scrutinizing Live Nation for months before Tuesday’s botched rollout, which saw widespread service delays and website crashes as millions of fans tried – and many failed – to buy tickets for Swift’s 2023 Eras Tour.
The Times report said that antitrust investigators have been contacting music venues and others involved in the live music industry for months to ask about Live Nation’s practices, aiming to determine whether the company maintains an illegal monopoly over the sector. The story was sourced to “two people with knowledge of the matter”; a spokesperson for the DOJ did not immediately return a request for comment.
Though the DOJ probe reportedly predates the Swift debacle, it echoes criticism that has been leveled at Live Nation in the days since the messy Eras presale.
On Thursday, Sen. Amy Klobuchar (D-Minn.), the chair of the Senate subcommittee for antitrust issues, wrote an open letter to Live Nation, complaining that the company’s market power “insulates it from the competitive pressures that typically push companies to innovate and improve their services.” Klobuchar said the results were the kind of “dramatic service failures” that took place during Swift’s presale.
Rep. Alexandria Ocasio-Cortez (D-N.Y.), was even blunter, tweeting Tuesday: “Daily reminder that Ticketmaster is a monopoly, it’s merger with Live Nation should never have been approved, and they need to be reigned in. Break them up.”
As alluded to by Ocasio-Cortez, Ticketmaster and Live Nation have long been dogged by accusations that they exert an unfair dominance over the market for live concerts, particularly since they merged in 2010 to create their current structure.
The combined entity has operated for its entire existence under a so-called consent decree imposed by the DOJ when it approved the merger. Under the decree, Live Nation is prohibited from retaliating against venues that refuse to use Ticketmaster. Those restrictions were set to expire in 2020 but were extended by five years in 2019 after the DOJ accused Live Nation of repeatedly violating the decree.
Ticketmaster has already tried to offer explanations for what went wrong on Tuesday, publishing a since-deleted in-depth blog post that said that it had misjudged demand for presale tickets and was ill-prepared for the millions of fans that tried to log in.
“I apologize to all our fans. We are working hard on this,” Liberty Media CEO and Live Nation chairman Greg Maffei said in an appearance on CNBC on Thursday. “Building capacity for peak demand is something we attempt to do, but this exceeded every expectation.”
Whether or not that explanation satisfies federal antitrust investigators, it does not appear to have been enough for Swift. In a statement issued Friday in which the star said the calamitous presale “really pisses me off,” Swift did not call out Ticketmaster explicitly, but laid the blame on an unnamed “outside entity.”
“I’m not going to make excuses for anyone because we asked them, multiple times, if they could handle this kind of demand and we were assured they could,” Swift wrote.
In early October, Lil Yachty uploaded the 83-second track “Poland” to SoundCloud along with a grumpy message: “STOP LEAKING MY SHIT.” “Poland” consists of two keening hooks and some slack rhymes; a veteran publishing executive calls it “an idea, almost a tweet,” more than a song.
Either way, it’s a hit — it reached No. 40 on the Billboard Hot 100 — and it’s part of a larger trend: The average length of popular songs has been shrinking steadily for years. A 2018 study by San Francisco-based engineer Michael Tauberg concluded that songs on the Billboard Hot 100 shed around 40 seconds since 2000, falling from 4:10-ish to roughly 3:30. The average length of the top 50 tracks on Billboard‘s year-end Hot 100 in 2021 was even less, a mere 3:07. (Though this is a simple average, whereas Tauberg’s calculation was weighted by weeks spent on the chart.)
“Everyone’s aware of it — it’s a reaction to the culture of soundbites that we moved towards,” says Vincent “Tuff” Morgan, vp of A&R at the indie publisher peermusic. “I have producers in the studio this week just going through and making songs shorter.”
In this climate, writers are increasingly willing to ditch a third chorus and a pre-chorus — the musical alley-oop that sets up the hook’s slam dunk — according to the analytics company Hit Songs Deconstructed. And the portion of sub-three-minute top 10 hits ballooned from just 4% in 2016 to 38% so far in 2022. “Over the last two years, as I get demos back from artists, they’re consistently down to two minutes and 30 seconds or even two minutes,” says Caterina Nasr, senior manager of A&R at Elektra Entertainment. “Artists feel like they can express themselves quicker.”
Shorter songs aren’t exactly a new trend. Back in the early 1960s, little miracles of concision like The Chiffons “He’s So Fine” (1:52) topped the Hot 100 and The Beatles rose to international fame by releasing a series of snub-nosed pop missiles. More recently, Piko-Taro’s “PPAP (Pen-Pineapple-Apple-Pen)” made history as the shortest Hot 100 entry ever (45 seconds) in 2016. The following year, XXXTentacion‘s 17, which cycles through 11 songs in just 21 minutes, became a streaming sensation. In 2018, Travis Scott effectively mashed three 90-second songs into the massively successful “Sicko Mode.”
If the focus on brevity in the early 1960s was driven by the pace of AM radio, the streaming economy imposes its own pressures on song length. One theory holds that a concise track is more likely to spur multiple listens. “There’s charm to a short song because the person hits repeat — play it again, play it again,” according to Mitch Allan, a longtime writer-producer (Demi Lovato, Kelly Clarkson).
The other side of the same coin: “People are acutely aware of skip rates and how that relates to success on streaming services,” says Talya Elitzer, a former Capitol Records A&R who co-founded the indie label Godmode. Tracks with lower skip rates are prioritized by the platforms, and Elitzer believes that “a short song is less likely to be skipped.”
Most importantly, song snippets resonate with a generation of listeners used to short-form video apps. “To me this really started with the Vine era and Instagram,” says writer-producer David Harris (H.E.R., Snoh Aalegra). Brief clips have achieved a new level of commercial resonance in the music industry thanks to TikTok, where users repeatedly seize on fragments of unfinished singles and incorporate them into videos, making a mockery of the idea that a popular track must include a verse and a hook.
“Generally a song that pops off on the platform is based around a little moment,” says Elie Rizk, a writer, producer and multi-instrumentalist (Mazie, Remi Wolf). “Subconsciously you think about that: ‘Let’s pack a track with moments and try to hit the jackpot.’ I don’t feel the need to repeat a section three times — they’ve already heard that part; it doesn’t matter.”
What’s the difference between an explosive moment and a song? Since 2020, if not before, a heap of young acts have gone viral with the former and then scrambled to transform them into the latter — to build a full track around the snippet that captivated TikTok. Examples include Will Paquin’s flashy “Chandelier” (85 million), David Kushner’s woebegone “Miserable Man” (73 million), and Avenue Beat‘s goofy “F2020” (54 million).
As singles get shorter, though, the gap between a song and a hooky fragment begins to lose meaning. “To a lot of people, I think the snippet [they encounter on TikTok] is the song,” says Bart Schoudel, a longtime engineer and vocal producer (Pop Smoke, Selena Gomez).
Kuya Magik, a producer and DJ with more than 11 million TikTok followers, agrees. “If you go to a club and you watch people dance, they only dance to the 15 seconds of a song that’s famous on TikTok,” he says. “For the rest of it, they just sit there.”
For now, platforms like Spotify count 30 seconds of listening as a full play that triggers a royalty payout, so it makes sense to expand a musical idea to that length. But a generation native to TikTok may not require even 30 seconds to engage with the music. With that in mind, it’s easy to imagine that the length of singles will continue to shrink.
When a short verse goes viral on TikTok, “if that’s what the artist wrote and that’s what’s being used [on the platform], who’s to say that’s not the song?” asks Daniel Sander, chief commercial officer for the music-technology company Feature.FM. “The question is: How do you monetize that differently?”
Spotify’s quest to improve its margins has taken another step forward, as a pilot program for billing subscribers using Google devices expands to the U.S. and additional markets. Called “user choice billing,” the system allows app developers to provide Google Android smartphone users with the option of paying the developer directly — at a reduced fee — or through Google Play.
Last week, Google’s user choice billing pilot expanded to the U.S., Brazil and South Africa, and Google announced that dating app Bumble also joined the program. Spotify was the first developer to join the pilot program in March with test markets of Australia, India, Indonesia, Japan and the European Economic Area. With the additional markets, user choice billing will be tested in most of the world’s largest smartphone markets and most valuable music markets.
With user choice billing, prospective Spotify subscribers are presented with two payment options side-by-side in an Android app: Spotify and Google Play. Choosing Spotify will take the user to a form to fill out credit card information to sign up for a subscription. Importantly, it all happens within the Spotify app, not Spotify’s external website. Choosing to pay with Google Play prompts the user to enter a password to pay with the credit card on file with Google.
Billing is an under-appreciated but important issue in the subscription music business. Because music streaming is inexorably tied to smartphones, and because consumers have come to expect simplicity when engaging in e-commerce on smartphones, in-app billing helps a company like Spotify sign up subscribers. The problem for a music service like Spotify operating on thin margins, though, is that app stores run by Apple and Google have traditionally demanded a cut of these in-app purchases. That’s left music companies either paying the app store fees themselves, without raising prices, eroding each subscription’s profitability, or raising the price to compensate for the fee, which could turn away potential subscribers. Prior to 2016, Spotify charged users 30% more for an in-app upgrade to Premium to offset Apple’s 30% fee.
There’s one other option, of course: To save on fees, a music service may disallow in-app subscriptions and encourage a customer to take a few extra steps and subscribe at its website. That process risks losing potential subscribers along the way, but nevertheless, Spotify has gone this route and not allowed in-app purchasing on its Apple app since 2016.
Companies have faced this quandary for years. In 2019, for example, Pandora raised the price for subscribers who used Apple’s in-app purchasing premium subscription service from $9.99 to $12.99 to offset the fees. Pandora reported paying $50 million in fees to Apple and Google in 2015 – 3.7% of its annual revenue.
“It certainly puts independent music services at a disadvantage where we’re paying 30% of the economics out to the platforms that distribute our apps, who also happen to be competing with us, and for the same users, and the same economics,” Pandora’s then-CFO Mike Herring told investors in 2016.
Apple typically charges a 30% fee for in-app purchases during the first year of a subscription and 15% thereafter, according to Apple’s website for developers. Neither Apple nor Spotify have said publicly what fees are paid for Spotify subscriptions. The fees that Spotify pays Google are also private.
“We’re not going to comment on the terms of our agreement with Google because they are confidential,” a Spotify spokesperson tells Billboard, “but it’s safe to say that our [user choice billing] partnership is based on commercial terms that meet our standards of fairness.”
Generally, subscription services such as Spotify pay a 15% fee for in-app purchases, but the fee can go lower. App developers in Google’s Play Media Experience Program, which integrates apps into Google’s ecosystem of wearables and other hardware products, can pay less than 15%, for example. For subscription-based services with significant licensing costs — such as music, video, books and audiobooks — fees “can be as low as 10%,” according to a Google spokesperson.
User choice billing provides additional savings for app developers on top of any other program or discount. If an Android user presented with user choice billing opts for the app developer’s payment system, Google lowers the fee by 4%. So, if an app developer were paying a 10% fee to Google, user choice billing would reduce the fee to 6%.
Small improvements to gross margin are crucial to a music service that pays more than three-quarters of its revenue to rights holders. Spotify’s gross margin on its Premium subscription service was 28% in the third quarter of 2022, meaning that Spotify paid out 72% of its subscription revenue for licensing fees and some smaller costs of sales. Every percentage point of revenue represents about $100 million in subscription revenue in 2022, based on past earnings and Spotify’s fourth-quarter guidance. If Spotify can move its gross margin by a small amount, it would greatly impact the company’s free cash flow. To put it in perspective, Spotify’s net cash flow from operations for the first three quarters of 2022 was $109 million.
While Google seems willing to consider alternative approaches to in-app billing, Apple does not. Prominent app developers, including Spotify, have been fighting for better terms for years. In 2019, Spotify filed a complaint against Apple with the European Commission for anticompetitive behavior alleging that Apple “continue to give themselves an unfair advantage at every turn.”
Additionally, Apple is currently involved in a lawsuit brought by Epic Games regarding its control over the App Store. Although the judge in the case has mostly sided with Apple, the judge did order Apple to allow apps to provide links to payment alternatives outside the App Store. The lower court’s requirement has been delayed until the appeals court rules on the case. The two sides began oral arguments in the Ninth Circuit Court of Appeals on Monday (Nov. 14).
Apple’s strict rules are particularly meddlesome to Spotify’s latest attempt to improve its margins — audiobooks. In September, the streaming service began selling 300,000 audiobook titles following its acquisition of audiobook distributor Findaway in June. The plan makes sense: Audiobook purchases on its platform can provide Spotify with 60% gross margins — about twice the margin in music streaming – and audiobooks are a natural addition to its burgeoning podcast business.
But Apple’s rules for in-app purchases would make audiobooks purchased through an iOS app far less profitable — and a less straightforward process. Whereas the Google app provides “a beautiful experience,” CEO Daniel Ek said during the Oct. 25 earnings call, the process of buying an audiobook through Apple “is inherently broken because Apple decided it wanted it to be broken.” Spotify had lawyers “in the room” working with developers, but Apple rejected Spotify’s app multiple times, according to Ek. “It holds developers back and holds creators back,” he said. “And it’s bad for consumers.” Plus, there’s the added element here that Apple happens to be Spotify’s leading competitor for music streaming.
With audiobooks, Spotify currently sells titles on its website rather than inside the app to avoid fees (the user can listen using the Spotify app after the title is purchased). But just getting people to its website isn’t straightforward. As Spotify claimed on a website called Time to Play Fair, Apple does not allow Spotify to explain how to purchase an audiobook outside of the app, include a link to direct the user to a Spotify audiobook page, request or receive an email with instructions on how to purchase an audiobook or reveal an audiobook’s price in the app or in an email. Spotify’s Android app does not sell audiobooks, but the app allows users to receive an email with a link to Spotify to purchase a title.
In its June investors’ day presentation, Spotify management looked beyond music, podcasts and audiobooks. In the next ten years, Spotify will add sports, news and education to the platform and double the current average revenue per user, said Gustav Norström, chief freemium business officer. The user choice billing pilot program can only help with that goal.