Business
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A raft of equity analysts lowered their price targets for Spotify’s stock following the company’s third-quarter earnings report on Tuesday, helping send the music streaming company’s share price down 13.1% to $84.42 on Wednesday (Oct. 26).
KeyBanc dropped its price target from $135 to $125, Barclays lowered its target from $164 to $135 and Raymond James cut its target from $150 to $110. J.P. Morgan analysts, who dropped the price target from $130 to $115, wrote in an investor note they were “encouraged” by fourth-quarter guidance on monthly active users and subscribers — 479 million and 202 million, respectively — but believes investments and foreign exchange will pressure fourth-quarter profitability. Spotify expects this quarter’s 300 million-euros ($303 million) operating loss to include a 95 million-euros ($96 million) negative impact from foreign exchange.
For most of its four-plus years as a public company, Spotify prioritized growth over profit and attracting new users. This year’s emphasis is winning over investors with larger margins while maintaining momentum. In an interview on Spotify’s For the Record podcast released Wednesday, CEO Daniel Ek admitted gross margins were hurt by “advertising [being] a bit softer than we would have liked” but insisted the results were fundamentally on point with the company’s expectations. “We still feel really good about the underlying core trends in the business,” he said. “We feel really good about where we think we’re going to end up over the next one to three years.”
That long-term vision is part of the company’s transition from a music-focused company to one that embraces many forms of audio entertainment. The early results show promise: Spotify users spending more time with the service and its churn rate – the fraction of subscribers that leave in a month – is “the lowest across our competitive set,” said Ek during the earnings call. Podcasting advertising is growing faster than music advertising, and the number of monthly active users that listened to a podcast great “in the substantial double-digits” year-over-year, according to a letter to shareholders.
But investors aren’t showing a great deal of patience — and not just with Spotify’s stock. Numerous tech stocks have fallen this week on less-than-stellar results and guidance. Alphabet’s stock price fell 9.6% after the company’s third-quarter earnings on Tuesday showed that revenue growth slowed to 6% from 41% a year earlier. What’s more, ad revenue at Alphabet’s YouTube, which beat Netflix in U.S. streaming TV viewership in September, according to Nielsen, fell 1.9% year-over-year in the third quarter.
Another bellwether of online advertising, Meta, fell 14.9% in after-hours trading Wednesday. The social media giant’s third-quarter earnings missing expectations on both revenue and earnings per share, according to Bloomberg, and its third-quarter revenue declined 4% from the prior-year period. Three months ago, Meta posted the first year-over-year quarterly revenue decline since going public in 2012.
Since Spotify is primarily a subscription business, it doesn’t face the same threat from advertising weakness as Alphabet or Meta. “Any headwinds in the advertising business for us, it’s just a lot smaller than it is for platforms that solely rely on ads,” Ek said during Tuesday’s earnings call. But advertising is crucial to the company’s podcasting business, an increasingly vital part of its long-term strategy to boost profitability. So far this year, Spotify’s heavy spending on its podcasting business has been a drag on margins. That’s to be expected, however, Ek and chief financial officer Paul Vogel repeatedly said during the earnings call and on the For the Record podcast. Next year, they pledged, podcasting will start to contribute to the bottom line.
Round Room Live, one of the world’s top family entertainment producers, has announced that founders and co-presidents Stephen Shaw and Jonathan Linden have completed a management buyout of its lead investor eOne, a subsidiary of Hasbro, Inc. The acquisition was backed by Manhattan West, a Los Angeles-based strategic investment firm.
“This deal is a significant milestone for Round Room, which has become one of the most dynamic live entertainment producers and promoters in the world,” said Shaw. “This new partnership with Manhattan West will fuel our ambitious growth plans to distribute exciting entertainment experiences on a global scale.”
Led by Shaw and Linden, Round Room Live specializes in transforming intellectual property into live events. Round Room Live’s current roster of touring shows and exhibitions include: Baby Shark Live!, Blippi The Musical, Peppa Pig Live, Blue’s Clues & You! Live On Stage, Jurassic World: The Exhibition, Mandela: The Official Exhibition, Tupac Shakur: Wake Me When I’m Free and Formula 1: The Exhibition, which will launch early in 2023.
“We are excited to continue to grow this exceptional business together with our new partners at Manhattan West,” added Linden. “eOne and Hasbro were a great home for Round Room starting in early 2018, and I want to thank [CEO] Darren Throop and the eOne and Hasbro teams for their support and partnership. We look forward to continuing to work with Hasbro on live tours for some of its most iconic brands.”
Matt Gibbons with Manhattan West added the “Round Room team has our full support as they continue to expand their global footprint.”
The share purchase deal closed on Friday, Oct. 21.
Meta, the parent company of Facebook and Instagram, reported $27.7 billion in second-quarter revenue, down 4 percent compared to the same quarter a year ago, continuing a trend of ad-supported tech companies feeling the pain of a tougher macroeconomic environment and renewed competition from competitors like TikTok.
However, the company beat Wall Street expectations for revenue. The company had previously forecast revenue of $26 billion–28.5 billion for the quarter, so it met its own guidance.
Going forward, however, things look tough. The company forecast Q4 revenue of $30-32.5 billion, below Wall Street expectations, sending its share price lower after hours.
Meta net income fell by 52 percent to $4.4 billion, while its daily active user base rose by 4 percent to 2.93 billion.
The company is in the midst of a strategic pivot toward the “metaverse,” which it seems to define as being driven by virtual reality and augmented reality. However, its early efforts in the space remain niche, even as it has committed billions of dollars toward investing in the space.
In its Q3 earnings report, the company said it was making “significant changes across the board to operate more efficiently,” including shrinking some teams and keeping others flat, so that it is “investing headcount growth only in our highest priorities.”
Those priorities will include developing its AI discovery engine, its ads and business messaging platforms, and its future investment in the metaverse.
In the near-term, the company expects savings as it “rationalizes” its office footprint.
The AI discovery engine is particularly relevant to Meta’s TikTok competitor Reels, which CEO Mark Zuckerberg says is stealing time spent from the other app. Reels is now a $3 billion annual run rate business, he added.
When the discovery engine is built out, the company will be able to “recommend photos, text, links, communities, short and long form videos, alongside posts from family and friends,” Zuckerberg said, differentiating it from TikTok.
“While we face near term challenges on revenue, the fundamentals are there for a return to stronger revenue growth,” Zuckerberg added in a statement. “We’re approaching 2023 with a focus on prioritization and efficiency that will help us navigate the current environment and emerge an even stronger company.”
Still, on the company’s earnings call, Zuckerberg also projected some optimism, telling analysts that “our product trends look better from what I see than what some of the commentary suggests.”
On Facebook specifically, the number of people using it each day is the highest it has ever been,” he added, noting that it now has nearly 2 billion users, and that WhatsApp’s fastest-growing region is now North America.
Meta’s quarterly report follows similarly disappointing results from Snap and Alphabet, which have also been feeling the pinch of the advertising environment. Snap cut about 20% of its staff last quarter, and saw its losses widen, as it seeks to restructure. It did, however, see double digit user growth.
Alphabet, the owner of YouTube and Google, also missed expectations, with YouTube revenue falling year-over-year for the first time since it was broken out by the company.
This article was originally published on THR.com.
A Los Angeles judge on Wednesday ordered Tory Lanez be placed under house arrest ahead of a trial over accusations that he shot Megan Thee Stallion, citing an incident last month in which the singer allegedly assaulted singer August Alsina in Chicago.
Lanez (real name Daystar Peterson) had been out on bail over the alleged shooting, but last month Alsina claimed that Lanez and his entourage attacked him following a Chicago concert. At the time, prosecutors in the Stallion case said they were “aware” of Alsina’s claims and were investigating them.
At a hearing in Los Angeles Superior Court on Wednesday, Judge David Herriford cited those accusations to revoke bail, ordering Lanez to be placed under house arrest until Nov. 28, when the trial is scheduled to begin. If convicted, he faces more than 22 years in prison.
A rep for Lanez did not immediately return a request for comment from Billboard.
Lanez was charged in October 2020 with one count of assault with a firearm and another gun possession charge over the July 2020 incident, in which he allegedly shot Stallion in the foot during an argument after a pool party in the Hollywood Hills.
Stallion had initially told police officers that she cut her foot stepping on broken glass, but days later revealed that she had suffered a gunshot wound. After media outlets reported that Lanez had fired the gun, Megan directly accused him in an August 2020 Instagram video.
Lanez pleaded not guilty in November 2020. At a December 2021 hearing, a Los Angeles judge allowed the case to move forward to a trial. During that hearing, a police detective testified that Stallion had told him that Lanez yelled “Dance, bitch!” as he opened fire around her feet, according to the Los Angeles Times.
Though he’d remained out on bail while awaiting trial, Lanez has repeatedly drawn the ire of the judge overseeing the case.
In August 2021, the rapper’s bail was increased from $190,000 to $250,000 after he made a surprise appearance at the Rolling Loud Miami Festival on July 25 just moments after Stallion departed the stage — effectively violating a protective order that requires him to stay at least 100 yards away from the “Savage” hitmaker. And this past April, a judge increased his bail again to $350,000 after some of the rapper’s social media posts were found to have breached court orders requiring him to avoid any contact with Stallion.
The incident with Alsina was apparently the last straw.
In a Sept. 18 post on Instagram, Alsina shared an image in which he can be seen standing in an elevator with blood coming from his mouth. In the caption, Alsina claimed Lanez physically assaulted him after he refused to shake his hand following a show the previous night.
A video published to Twitter a day later, which purported to document the lead-up and aftermath of the alleged assault, appears to show Alsina rebuffing a handshake from Lanez backstage. In the final half of the video, Lanez seems to be celebrating as a man off-camera can be heard saying Lanez “knocked him out.”
Alsina appears to have filed a police report with the Chicago Police Department, who confirmed to Billboard that they had received a report of a “30-ye[a]r-old male” being “punched in the face by a 30-year-old male after exiting a building in the 2300 block of S. Lake Shore Drive” – the location of a theater where both Lanez and Alsina were billed to perform that night.
Slacker is pleading with a judge to overturn his recent ruling requiring the streamer to pony up $10 million in unpaid royalties, arguing it will cause the company economic ruin. But SoundExchange says it is merely the company’s “latest attempt to shirk their obligations.”
The two have been battling in court since June over allegations that Slacker’s parent LiveOne — formerly LiveXLive — owes millions to artists and labels. Earlier this month, SoundExchange demanded — and quickly won — a ruling from Judge André Birotte Jr. that LiveOne must pay up the full $9,765,396 in unpaid royalties.
Faced with that massive judgment, Slacker now says that SoundExchange’s demand for full payment was an unfair tactic and must be overturned — or risk permanently harming its financials: “This economic damage this will cause LiveOne will be unsustainable for this small company.”
But SoundExchange is unimpressed. In a response, the company says that LiveOne has “steadfastly” avoided paying for music for years, and that harsh measures are “necessary to protect performing artists.”
“The court should deny defendants’ latest attempt to shirk their obligations with the promise that next time will be different,” SoundExchange’s lawyers wrote.
“Refusing To Pay”
SoundExchange, which collects performance royalties for sound recording copyrights, sued LiveOne in June, claiming the company had stopped paying artists and labels way back in 2017. And it claimed that a subsequent audit revealed it had been underpaying for years before that.
Court records show the two sides entered into the repayment plan in 2020, which gave Slacker two years to pay its debts. But in the June lawsuit, the SoundExchange claimed that Slacker had quickly failed to live up to the terms of the agreement.
“By refusing to pay royalties for the use of protected sound recordings, Slacker and LiveOne have directly harmed creators over the years,” SoundExchange president and CEO Michael Huppe said at the time. “Today, SoundExchange is taking a stand through necessary legal action to protect the value of music and ensure creators are compensated fairly for their work.”
Just a few months into the litigation, SoundExchange played an unusual legal trump card. On Oct. 12, the group invoked a pre-signed judgment, which had been inked by execs at Slacker back in 2020 as part of the repayment plan. Under the terms of that earlier deal, if Slacker ever defaulted again, its executives agreed that a judge should enter a so-called judgment against the company for the full sum owed.
On Oct. 13, Judge Birotte Jr. did exactly that, ordering the Slacker to pay $9,765,396, which covered both unpaid royalties and late fees. He also permanently barred the company from using the so-called statutory license, an important federal provision that makes copyright licenses for recorded music automatically available to internet radio companies like Slacker and Pandora at a fixed price.
“Economic Damage”
Faced with that huge debt, LiveOne responded last week with a motion seeking to “set aside the judgment” and asking the judge order the two companies into settlement talks – a move they say will allow them to reach “a fair payment schedule.”
LiveOne’s lawyers said they had been engaged in “ongoing and fruitful negotiations” for a new repayment plan when SoundExchange had suddenly invoked the pre-signed consent judgment. They argued the move came only because LiveOne did not agree to “a complete acceptance” of SoundExchange’s “last and final” settlement offer.
More startlingly, LiveOne’s lawyers said SoundExchange’s big judgment had quickly caused other creditors to call in other debts owed, threatening “economic damage” to the company that would be “unsustainable.”
“Plaintiff’s surreptitious request for entry of judgment has triggered LiveOne’s default on two substantial senior secured notes which are secured by all of LiveOne’s and their subsidiaries assets,” LiveOne’s lawyers wrote. “If LiveOne does not promptly discharge SoundExchange’s default judgment, the secured creditors will accelerate the loans and call for immediate repayment of principal and unpaid interest.”
A rep for LiveOne did not immediately return a request for comment on the filing or for elaboration on its claims about the company’s finances.
“Long Enough”
In a new filing this week, SoundExchange offered no apologies for playing hardball with LiveOne. It said it had spent years “indulging” the company’s “many excuses for non-payment,” and that it had simply become time for the streamer to be legally forced to pay up.
“Five years is long enough,” the group wrote. “SoundExchange has no obligation to negotiate ad infinitum with defendants, who have demonstrated at every opportunity that they will leverage the creativity of others without compensation.”
SoundExchange’s lawyers said the group had been “initially amenable” to working out another deal, but that their patience quickly ran out: “Facing stalled settlement negotiations and an apparent unwillingness to abide by their contractual, statutory, or judicial obligations, that willingness had limits.”
As for LiveOne’s warnings that such a ruling might destroy the company, SoundExchange was skeptical. The group’s lawyers pointed out that LiveOne had missed key deadlines in the case, and had waited months to hire litigation attorneys to deal with the lawsuit.
“Defendants’ contention that the judgment poses an existential threat to their business is difficult to square with their lackadaisical approach to finding counsel and subsequent non-adherence to the court’s deadlines,” they wrote.
And if things really are as bad LiveOne’s attorneys claim, SoundExchange said it’s all the more reason for a final judgment to be entered against the company.
“Every hour defendants divert consumers who might otherwise use a different, royalty-paying digital music streaming service, thereby depriving rightsholders of royalties to which they are entitled,” the group wrote. “If Defendants’ dire financial situation is to be believed, artists may never see those royalties.”
Over one year ago, alt-pop sister duo Aly & AJ released their first album in 14 years — and the pair has been on a steady release streak ever since.
Now, Billboard can announce that the act’s upcoming single, “With Love From,” will arrive Nov. 2, ushering in a new deal for the duo. The single doubles as the title of a new album, coming in the spring, which will be the first through a new distribution deal with SoundCloud that will also see the company provide Aly & AJ with marketing support.
“We couldn’t be more thrilled to have the support of SoundCloud entering this new album cycle,” Aly & AJ said in a joint statement. “They’ve allowed us to have the creative freedom we need to make our best possible music to date.”
The signing comes at a crucial time for SoundCloud, which cut 20% of its workforce in September. Not long before that, the company had added new features such as “the roster” — which signs artists to more traditional record deals (initial members included Lil Pump and Tekno) — and Repost, a distribution service offered at $30 annually that allows artists to keep up to 80% of the royalties they make from other streaming services. Aly & AJ’s deal fits into neither category, proving artists can still choose their own path when partnering with SoundCloud.
With Love From follows Aly & AJ’s independently-released 2021 album A Touch of the Beat Gets You Up on Your Feet Gets You Out and Then Into the Sun. Also last year, Aly & AJ scored a top 10 hit on Billboard’s Digital Song Sales chart with the re-released hit “Potential Breakup Song (2020),” which went viral on TikTok years after its initial release.
Following the arrival of A Touch of the Beat, Aly & AJ hit the road performing at festivals including Lollapalooza, Governors Ball and Austin City Limits. They just wrapped an opening gig on Ben Platt’s national tour, including stops at New York’s Madison Square Garden and Los Angeles’ Hollywood Bowl. Next up, a performance at Corona Capital in Mexico City followed by a string of overseas dates in Europe and the U.K.
For now, as fans patiently wait for Nov. 2 to arrive, a snippet of Aly & AJ’s new single can be heard in the teaser for an upcoming collaboration between Rowing Blazers and Seiko watches, with the collection set to drop Friday (Oct. 28) at 11 a.m. ET.
Robert Louis Gordy, Sr., younger brother of Motown Records founder Berry Gordy and chief executive for many years of the company’s successful music publishing division, died Oct. 21 at age 91. He passed away from natural causes, according to his family, at his home in Marina del Rey, Calif.
The youngest of eight siblings, Gordy enjoyed a little-noticed music career as a recording engineer and songwriter before taking command of Motown’s Jobete Music in 1965.
“His ability to succeed at whatever he attempted or that I threw his way amazed me over the years,” said Berry Gordy in a statement, noting that he was “deeply saddened” by his brother’s death. “He was absolutely the best lil’ brother anyone could ever hope for.” Gordy added, “I will miss his love, his support, and his loyalty.”
Born July 15, 1931 in Detroit, Robert Gordy followed his elder brother into boxing, then moved into music circles such as the city’s Flame Show Bar. Sister Gwen held the popular club’s photo concession, where he operated the darkroom. In his autobiography, Berry Gordy recalled visiting the Flame with Robert to see Billie Holiday perform; 20 years later, the younger Gordy played a character in Lady Sings The Blues, Motown’s production of the Holiday biopic.
In 1958, Gordy co-wrote and recorded “Everyone Was There” under the name of Bob Kayli. Leased to Carlton Records, the lightweight pop song referencing recent hits such as “Peggy Sue” and “Yakety Yak” became a minor chart success.
After his brother started Motown Records, Gordy left a post office job to join the venture, initially working for in-house engineer Mike McLean. “At that time, he was building the first eight-track machine in the east,” Gordy later explained. “I put together the electronics, learned how to read the schematics, helped with the writing and so on.”
He went on to become the company’s first stereo engineer, before working for the Quality Control department.
Reflecting its founder’s songwriting roots, Motown operated its own music publishing arm from the start. When Jobete manager, Loucye Wakefield, died prematurely in 1965, Robert Gordy sought the job. “When Loucye died, in fact, Berry first rejected my offer to go into Jobete,” he recalled in 1980. “‘What do you know?’ was his reaction, but I said, ‘Believe me, I’ll learn.’ ”
Motown’s explosive success from 1964 onwards with the Supremes and other acts made Jobete a substantial revenue source, capitalizing on the talents of writers Smokey Robinson, Holland/Dozier/Holland, Norman Whitfield and Barrett Strong, among others. Jobete opened its own professional department in 1966, securing covers and expanding the catalogue’s reach. Among its most popular titles to this day: “My Girl,” “Dancing In The Street,” “I Heard It Through The Grapevine,” “The Tears Of A Clown,” “You Are The Sunshine Of My Life,” “What’s Going On” and “For Once In My Life.” Earnings continued to grow as stars such as Stevie Wonder and Marvin Gaye evolved into self-sufficient, influential songwriters.
By 1971, with Robert Gordy promoted to vice president/general manager, the division had 5,000 copyrights under its roof and 100 writers under contract. He joined the board of the National Music Publishers’ Association, and actively participated in industry seminars and conferences. He retired from the post in 1985.
“One of the main values of our catalog,” Gordy once said, “is that it has stood the test of time.” When Britain’s EMI Group acquired half of Jobete in 1997, the sale price of $132 million proved that to be true (EMI bought the balance seven years later for $187 million).
In his 1994 memoir, To Be Loved, Berry Gordy wrote, “So Robert, I’d like to thank you for moving Jobete from a holding company for our copyrights into a highly profitable, competitive international publishing company, keeping us No. 1 for many years. And also for being my little brother.”
YouTube’s ad revenue dropped down to $7.07 billion during the third quarter, marking a 1.9 percent decrease compared to the previous year, parent company Alphabet reported on Tuesday.
The $7.07 billion figure is also a decline compared to the second quarter, when the video platform reported $7.34 billion in advertising revenue during the second quarter, slightly missing analysts’ expectations but representing a 4 percent year-over-year increase.
YouTube’s ad revenue growth has slowed down considerably since the earlier years of the pandemic, when the company saw massive gains; in July 2021, the company had even outperformed its first quarter ad revenue earnings by $1 billion, representing a whopping 84 percent year-over-year increase.
But the video giant isn’t the only tech and social platform to be impacted by a declining digital ad market. Snap, which has previously warned of macroeconomic headwinds impacting its ad business, reported a net loss of $360 million during Q3 as the company has seen engagement in the U.S. decrease by 5 percent year over year.
As YouTube continues to fend off competition, the video platform is preparing to launch one of the biggest updates to its ad revenue sharing program with creators. Beginning next year, short-form creators posting to YouTube Shorts — the company’s TikTok competitor — will receive a 45 percent cut of ad revenue, which will be calculated based on the creator’s share of total Shorts views.
To come to this calculation, YouTube will count the total amount of ad revenue from all ads displayed on Shorts each month. Of that total, an undisclosed percentage will be allocated toward creators, while the remainder will be used to cover the costs of music licensing, Neal Mohan, YouTube’s chief product officer, said at an event on Sept. 20 announcing the program. Creators will then receive 45 percent of the funding allocated toward creators, though each individual will receive different amounts based on their contribution to the total number of Shorts views.
The decision to opt for a 45 percent cut, rather than the 55 percent share that long-form YouTube creators receive, could also signal the start of platforms beginning to reassert themselves as they contend with declining ad revenue.
This article was originally published by The Hollywood Reporter.
One evening in July, panic spread in a small corner of the Web3 music space. Mysteriously, $6.1 million worth of cryptocurrency began moving out of blockchain music service Audius’ company treasury into an unknown wallet. Audius was being hacked.
The hacker discovered a bug that allowed them to take control of the Audius treasury — the crypto equivalent of a shared bank account — and transfer the entire funds to their own crypto address. The bug had lived in the code for two years.
This is shaping up to be the worst-ever year for crypto hacks, according to Chainalysis, with over 125 major hacks surpassing $3 billion in total, and on track to surpass the $3.2 billion in 2021.
Meanwhile, phishing scams continue to drain NFT wallets at an alarming rate. “Everything is unbelievably insecure,” says Sam Williams, founder of blockchain storage platform Arweave and a self-proclaimed “hacker,” though he uses the term as a broad description for coders. “We’re in the hackers’ Wild West of Web3 right now.”
Since the popularity of NFTs and cryptocurrencies like Bitcoin took off in early 2021, things have only gotten worse, creating a honeypot for hackers. “There was a lot of fluff brought in during the hype cycle last year,” Williams says, “and that typically lowers security standards for a period.” Teams scrambled to push products live to capitalize on the stream of new money paying too little attention to security.
For music companies or artists entering the space, the consequence of a hack could be enormous. Audius took a $6 million financial hit but it’s more than just money. Exploits can also damage the trust of music fans and undermine the entire promise of Web3. Warner Music Group considered this dilemma when launching its Stickmen Toys NFT collection earlier this year. “No matter how much time, how many resources, or how good of intentions go into a project, if there is a security breach, it can harm the project and its team’s reputation,” says Jillian Rothman, Warner’s vp of new business & ventures, business development.
The stakes of hacking are higher in Web3 than in today’s internet because customers are at direct risk of losing their money. If there’s a malicious link in a Discord server, dozens of community members could have their NFTs or cryptocurrency stolen from their wallet. If there’s a bug in the code, users could have their funds cryptographically locked with no recourse. The community backlash from these security incidents can be severe and costly that Web3 teams often resort to refunding users out of their own pocket. So, where are the biggest risks and what can music companies do to protect themselves and their artists?
Experts say the main vulnerabilities for the NFT space lie in smart contracts. These are programs written by developers on top of blockchains like Ethereum that hold funds and execute transactions — such as paying out royalties on secondary sales. “Smart contracts are just buggy and can be exploited,” says Nic Carter — partner at Castle Island Ventures, a VC firm with several Web3 music investments. “Things are so new in the crypto space that developers are still learning the best practices for safety.”
One NFT project, for example — Aku, by former MLB player Micah Johnson — got $34 million locked in a smart contract due a small bug in the code. The money was never recovered.
One way to immediately lower the risk is operating with transparency. “It should be damn open source,” says Williams, so that anyone can check and verify the code. “There’s no point trying to hide it. Better you find [bugs] early so you can fix them.” Blockchains like Ethereum are transparent by nature so hackers will find exploits if companies go live with buggy code. Better to test it in the open on so-called test-nets before deploying with real money and high stakes. While building publicly might take away an element of surprise in terms of marketing, it’s a small price to pay for added security. Additionally, smart contracts should be audited by external developers.
Next, there’s the risk of customers getting their wallets hacked. “[Crypto wallets are] probably the No. 1 risk,” for newcomers, says Carter. “A poor wallet setup or a failure of key management — that’s probably been responsible for the greatest loss of funds.” Companies can keep the community safe by highlighting the risks and educating music fans entering the space.
Carter recommends that anyone interacting with crypto use a hardware wallet — a USB device that disconnects from your computer and the internet. And they should limit the funds on a “hot wallet,” such as Metamask, which can be easily compromised through malicious links. “The NFT space is really aggressively targeted by phishing,” he cautions. “I think because it was mainstreamed so quickly… It meant a lot of people didn’t have as much experience in [wallet] management.” He also suggests using two-factor authentication on all crypto-related accounts and advises against clicking unknown links.
The team at Warner put this into practice using a “security” page on their projects’ Discord servers. Users have to read this page before entering. It explains the best practices and warns the community how to spot scams. “In a nascent space, bad actors prey on unsuspecting community members,” says Sebastian Simone, Warner’s vp of audience & strategy. “It will take longer for Web3 to go mainstream if people have negative experiences.”
Importantly, however, the failure of wallets and smart contracts does not imply a failure of the blockchain itself. “It’s extremely rare to have the blockchain itself be hacked,” says Carter. It is the code and applications on top of the blockchains that pose the biggest security threat.
Carter and Williams are both optimistic that these security issues will decline over the coming years through standardized contracts and simpler code, but the young industry is still learning the hard way. With every new exploit, developers are learning where the vulnerabilities are and adopting safer practices for the future.
As Carter puts it, “Safety rules are written in blood.”
The inaugural Black Music Summit (BMS) is coming to the island of Ibiza in summer 2023.
Founded by WME agent Jordan Hallpike and Kenny Eshinlokun, founder of creative agency Taboo, the event is described as a “social enterprise invested in the global development and celebration of Black music talent” on both the creative and executive fronts.
In a release announcing the forthcoming event, Eshinlokun further explains that the summit’s goal is “to give the next generation a chance to have more opportunities and a better experience in the music industry than many Black people have had to date. The BMS will offer Black musicians, creators and music industry professionals the opportunity to be seen and heard and, hopefully, reduce the amount of future discriminative challenges many Black people in the industry face. I’m excited about the opportunity to collaborate, celebrate and inspire the next generation, while showcasing so much amazing talent all in one place.”
Adds Hallpike, “Ibiza represents freedom, creativity, expression and beauty. Black culture has laid the foundations for so many genres of music. House and techno were formed by Black culture in Detroit and Chicago. Without the influences of Black pioneers like Frankie Knuckles, Ibiza — the island of dance — would simply not be what it is today. Our aim is to make more Black talent, executives and tourists view this wonderful island as a space they can also occupy, just like any other location in the world.”
Today’s announcement by the BMS Creative Council follows a soft launch in September at two Ibiza locations — Pikes and Hï Ibiza — that included performances from Seth Troxler, JULS, Lava La Rue and No Signal, among others. Leading up to the inaugural event next summer, BMS plans to host a series of events in key locations around the world. The summit itself will feature keynotes, panel discussions, workshops, live performances, various events and club nights.
Members of the BMS Creative Council include: Charisse Beaumont, chief executive of Black Lives in Music; Craig D’Souza, partner/agent at WME; Ebi Sampson, co-founder of August Agency; Jide Adetunji, co-founder of GUAP; Jojo Sonubi, co-founder of Recess/No Signal; Joseph “JP” Patterson, editor-in-chief of Complex UK; Kikelomo Oludemi, senior creator marketing manager at Native Instruments; Lola Oyewole, entertainment creator partnerships at TikTok; Preye Crooks, co-founder of Robots & Humans/Strawberries & Creem Festival; Seni Saraki, co-founder of Native Networks; Sheniece Charway, artist relationships manager at YouTube Music and Whitney Boateng, agent at WME.
Watch the Black Music Summit launch video here. And register for more information from The Black Music Summit here.