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If the 2010s were the decade that established streaming as the de facto way that most people enjoy music, the 2020s will be the decade the platforms’ royalty rates took a leap forward.
For much of streaming services’ existence, the industry has tried to gently balance the need to foster growth with the need to generate something close to subsistence-level income for creators and rights holders. If rights holders squeeze too tight, they could strangle the life out of the companies they depend on to carry them in a post-CD, post-download world. Too loose a grasp on streaming platforms would mean the spoils of technological disruption would remain with tech companies.
The process requires patience. With social media apps, licensing deals start small, with lump-sum payments rather than percent-of-revenue royalties while the fledgling platform builds a sustainable business model. Because licensing deals are renewed every three years, rights owners endure long waits to secure better terms that will result in more royalties. It will take a few cycles for a platform to generate meaningful royalty income for its label partners.
This year, there were numerous developments that point to better royalty rates in 2023 and beyond. They have different degrees of certainty, however. Higher subscription prices are sure to move the needle and result in higher payouts to artists and labels. Whether artists and labels will finally get paid for terrestrial radio play in 2023 is less certain, although the mood in Washington D.C. seems favorable. And with the authors of Chokepoint Capitalism, Cory Doctorow and Rebecca Giblin, currently making the media rounds, and the Federal Trade Commission cracking down on companies that take advantage of gig workers, the plight of creators in today’s digital economy is getting mainstream attention (my colleague Rob Levine brought attention to tech companies’ value destruction in his book, Free Ride, a decade ago).
Congressional Bill to Get Artists & Labels Paid for Radio Airplay Clears Critical House Vote
12/09/2022
Music subscription price increases
Artists have wanted a raise from streaming services for years. Part of the problem is how royalties are calculated — a pool of money is split according to the number of times the tracks were played. That puts album-oriented artists at a mathematical disadvantage to mainstream artists in popular genres like pop and hip-hop. Another common complaint is that streaming services have barely raised their subscription prices for more than a decade. With prices flat, the best way to improve streaming royalties is to attract more subscribers. Keeping subscription fees relatively affordable, especially when Netflix and other video streaming services routinely hiked their prices, ensured customer acquisition would continue. Affordable family plans, which cover up to six people for 50% more than an individual plan, helped attract customers and reduced churn — but didn’t help artist payouts. Finally, this year Amazon, Deezer, YouTube Premium (which includes YouTube Music) and Apple Music announced broad price increases to individual and family plans. Spotify has hinted it will follow with price hikes of its own in 2023. The financial impact could be massive: A modest increase of $1 per month for individual plans and $2 per month for family plans in mature markets — less in developing markets with lower prices — would easily generate many hundreds of millions of incremental subscription royalties, which totaled $12.3 billion in 2021, according to the IFPI.
A TikTok subscription service
TikTok doesn’t pay much in royalties, but it plays an outsized role in cultural trends — the app has over 1 billion active users and is especially popular with Gen Z consumers. That has changed the balance of power in music streaming. “The major streaming platforms are reacting to culture now rather than driving it,” Tatiana Cirisano, music industry analyst and consultant for MIDiA Research, recently told Billboard. In that light, news that TikTok is working to expand its Resso subscription service (it’s available only in Indonesia, Brazil and India) is a big deal. Currently, TikTok creates impressions and demand for music that has downstream effects on other platforms — see a TikTok video, listen to the entire track at Spotify, YouTube Music or Apple Music. But if TikTok owned both the short-form video platform and the subscription platform, it could better convert that initial interest into downstream listening while eroding the influence of the Spotifys and Apple Musics of the world. More importantly, a TikTok subscription service would help change TikTok’s status as a royalty underperformer.
Subscription streaming rates
Publishers and songwriters will get a slight raise in subscription streaming royalty rates over the next five years due to a settlement reached in August by the National Music Publishers’ Association, the Nashville Songwriters Association International and the Digital Media Association. The headline royalty rate will go from 15.1% of revenue in 2023 to 15.35% in 2027. That’s not a huge gain, but it’s an improvement. The settlement could help in other ways, too. Streaming services were able to get favorable terms for bundles and free trials that allow them to get more subscribers into the ecosystem. That would help songwriters and publishers by increasing the number of subscribers — the major driver in streaming royalty growth — as they enjoy modest annual increases in royalty rates.
Inflation adjustments to noninteractive streaming rates
Each year, the rate paid by noninteractive streaming platforms in the U.S. is adjusted to account for inflation over the previous year. In 2023, artists and labels will get a raise due to inflation rates that reached a 40-year high in 2022. (The rates increased 7.1% for subscription plays and 9.1% for ad-supported plays.) In years past, noninteractive streaming services such as Pandora were a more significant part of artists’ and labels’ incomes. That gave extra weight to the decisions of the Copyright Royalty Board and changes in the per-play streaming rates. Now, on-demand services like Spotify and YouTube dominate the streaming landscape and noninteractive webcasting has diminished in value and relevance. Still, Pandora’s ad-supported listening hours fell only 5% year over year in the third quarter of 2022 — to 2.75 billion — and it paid out $921 million in royalties in the first nine months of the year. Above all, a raise is a raise.
Terrestrial radio royalties
Legislation that would pay artists and labels for airplay on U.S. terrestrial radio was passed by the House Judiciary Committee on Wednesday (Dec. 7). With only a month left in the current Congress, Rep. Jim Jordan, ranking member of the House Judiciary Committee, said he’s confident the bill could make it through the next Congress (that could be 2023 or 2024). While this isn’t the first legislation to address the lack of a performance right, the AMFA arrives at a time when lawmakers — in D.C. and elsewhere — have taken an interest in creators’ ability to make a living in the streaming age. Outgoing House Judiciary Committee chair Jerry Nadler has shown concern about a “race to the bottom” in streaming royalties, for example, and U.K. lawmakers examined the equitableness of streaming royalties paid to artists in that market. Passage of an AMFA-like law, or a settlement with radio broadcasters, would be a huge coup for artists and labels who get only promotion from radio airplay while radio stations are obligated to pay songwriters and publishers. In fact, U.S. radio royalties would be two — not one — new stacks of money. That’s because the lack of a performance right for broadcast radio in the U.S. means European countries withhold royalty payments from American artists for performances on their soil, SoundExchange CEO Michael Huppe explained in a recent Billboard op-ed.
Not long ago, a placement on Spotify’s RapCaviar or Apple Music’s Today’s Hits playlists could ignite a single’s streaming numbers overnight. “Today’s Top Hits [32 million followers on Spotify] used to be the holy grail,” says one manager of several major-label acts. “Or even Pop Rising [2.7 million] — it was like, ‘If a song got on Pop Rising, it’s going to get to Today’s Top Hits and do 5 million streams a week.’ ”
But in 2022, the manager continues, “it doesn’t feel like that’s the case.” This realization is growing around the music industry. “The Spotify and Apple editorial playlists don’t have as much punch” as they did, agrees Kieron Donoghue, founder of Humble Angel Records and former vp of global playlists strategy at Warner Music Group. “The major streaming platforms are reacting to culture now rather than driving it,” adds Tatiana Cirisano, music industry analyst and consultant for MIDiA Research.
In a statement to Billboard, Sulinna Ong, global head of editorial at Spotify, countered that the platform’s “top five editorial playlists are followed by more than 80 million listeners — they’re wildly popular.” She added that the overall audience for playlists is larger than ever, “these listeners have increasingly diverse tastes, Spotify is meeting that consumer demand, and, as a result, more artists are being discovered.” A representative for Apple Music declined to comment for this story.
But managers sound nearly misty-eyed when they reminisce about the streams that some editorial playlists once generated. “There used to be a world where an unknown artist would get the cover of the Fresh Finds playlist [on Spotify] and they would get between 60,000 and 100,000 streams a week,” says one manager who works primarily with developing acts. “Now you’re looking at more like 15,000 to 20,000 streams a week.”
“Does Today’s Top Hits move the needle as much now as it did four years ago?” one senior label executive asks. “No.” The difference is especially stark, he adds, if you’re not near the top of the playlist.
Label executives say the change in firepower of marquee editorial playlists is caused in part by the increased emphasis on personalization, especially at Spotify, which encourages users to play music similar to what they’ve streamed — in essence, burrow deeper into their own tastes — rather than pushing all listeners to play the same tracks. The shift is also a reflection of the growing power of apps like TikTok in music discovery: “The pie of ‘discovery market share’ has become more fragmented,” according to Daniel Sander, chief commercial officer of music marketing technology company Feature.FM. The gatekeepers who program editorial playlists are ceding ground to user-generated content on short-form-video platforms.
There are exceptions: Managers say some of Spotify’s editorial playlists in Southeast Asia, for example, still have oomph, as does the phonk playlist, which launched earlier this year and caters to a rising subgenre of dance music popular in Eastern Europe. (Beneficiaries include dhruv, who has 7.5 million monthly listeners on Spotify, and Kordhell, with 12.7 million.) But executives maintain that many of the big-name editorial collections are not magnifying songs the way they once did.
Some of that decline is due to changes at the streaming services. In 2019, Spotify took playlists like Beast Mode and Chill Hits, which previously had been the same for all listeners, and personalized them “for each listener based on their particular taste,” according to a company press release. (This change did not affect playlists like RapCaviar, Baila Reggaeton, and Today’s Top Hits.)
Spotify found that this had two effects: Listeners tuned in to personalized collections for longer, and the streaming wealth was spread across more acts — raising “the number of artists featured on playlists by 30% and the number of songs listeners are discovering by 35%,” according to one 2021 announcement.
In her statement, Spotify’s Ong noted that “listener habits have become increasingly diverse, so our playlist strategy has expanded to accommodate that.” She says personalized editorial playlists are responsible for “a third of all new artist discoveries on Spotify.”
TikTok, which now spurs a lot of music discovery, embraced personalization from the beginning. Users marvel at how well the app seems to anticipate their tastes: “Everything on TikTok feels like it was meant especially for you,” says one music executive.
Short-form-video platforms like TikTok have also fundamentally altered the timeline of a hit. “With the rise of TikTok, YouTube Shorts and Instagram Reels, artists can play song snippets or behind-the-scenes content and drive fans to take action — discovery is happening before your song would even be able to be put on an editorial playlist,” says Sander.
In addition, TikTok rejuvenates catalog tracks — ranging from Fleetwood Mac’s “Dreams” (released in 1977) to Thundercat’s “Them Changes” (2017) — and pushes them back on to the charts, defying many marquee editorial playlists’ emphasis on front-line releases. “The path of a hit has changed,” says one major-label executive. The major streaming platforms “haven’t built anything to adjust to that.”
As a result, the power of streaming-service gatekeepers has eroded. “You’re going to find the next curator on TikTok,” says one A&R consultant at a major label. The mantle of the editorial playlisters has been taken up partly by remix-focused accounts on TikTok, which release sped-up or slowed-down versions of sounds that millions of users incorporate into their own videos.
User-generated content is “what’s driving TikTok and driving the charts,” says Kuok Meng Ru, CEO of music technology company BandLab. “People feeling involved gets them more excited.”
And there’s no way to be involved with editorial playlists other than hitting the “like” button. “We’re seeing in consumer surveys how much Gen Z really does want to actively participate in music — not just listen and consume passively, but make their own videos, remix the song, create their own content on top of it,” Cirisano adds. “The major streaming services don’t offer that.”
After years of trying to clean up its act and shed its reputation as a major source of pirated music, Russian streaming service VK is allowing users to upload albums released on major record labels that exited Russia after the invasion of Ukraine.
A search by Billboard on Dec. 7 found that dozens of albums from major labels were were available to all VK users and could be found using the service’s search tool. They included Taylor Swift‘s Midnights, released by Universal Music Group’s Republic Records, and Red Hot Chili Pepper‘s Return of the Dream Canteen, a Warner Records Music release.
VK did not reply to Billboard‘s request for comment.
Global labels body IFPI in London did not immediately condemn the apparent copyright violations, nor confirm if they or its label members had issued takedown orders to VK in recent days. “We’re continuously monitoring the situation in Russia with regard to unauthorized services and will take appropriate action as necessary,” an IFPI spokesperson said.
Sony, Warner and Universal all declined to comment. “It’s disappointing and wrong but comes as no surprise considering [Russia’s] current lack of respect for rights or the rule of law,” one senior industry executive told Billboard.
Courtesy Photo
Just some of the pirated Taylor Swift music featured on VK.
Courtesy Photo
Launched as VKontakte in 2007 in St. Petersburg, VK offers music and other features of a social media platform. As of last month, it was the sixth most-popular web site in Russia, according Similarweb, a website tracking company. It is the second most-popular platform offering music in Russia after Yandex.Music.
In the first quarter, VK had 73.4 million monthly average users and a global audience of 100.4 million. The platform offers both an ad-sponsored model and a subscription service with 3.5 million subscribers, according to the most-recent data available. (Before pulling out, Spotify reportedly had 600,000 paid subscribers in Russia.)
VK’s history of piracy is well noted. When VK emerged as Russia’s response to Facebook, it had a feature that Facebook didn’t — a tool allowing users to upload music tracks that immediately became available to all other users.
That feature was, arguably, one of the reasons why VK quickly became popular with younger users. However, it also made the social network an archenemy of international major labels who accused it of facilitating online piracy.
A range of lawsuits were brought against VK, but the company stood its ground, claiming it had no technical capability to control user-generated content but was willing to remove any copyrighted content at rights holders’ request. The problem was that if a pirated music track was removed, another copy of it would be almost immediately added by another user.
For a while, courts accepted VK’s argument about its inability to control user-generated content, but an array of lawsuits eventually forced VK to sign licensing deals with the majors and the streaming platform got rid of user-generated pirated music a few years ago.
Then in March, in support of Western sanctions to penalize Russia for Vladimir Putin’s invasion of Ukraine, Sony, Warner and Universal said they were suspending operations in Russia, and their new releases were no longer available on VK. That same month, Amazon, Deezer, Spotify and TikTok either closed their Russian offices or stopped trading in what was previously the 13th largest music market. (YouTube, for its part, suspended all monetization programs for users in Russia in March.) Among major global music providers, only Believe, the French music distributor, has continued to operate in Russia, saying in September that it was doing so “to support its artists, labels and protect its people’s safety as well as ensure access to music production and distribution.”
The pullout by the global music industry slowed the legal development of a market that Spotify, in particular, had targeted as a key country in its expansion into Eastern and Central Europe. Russia was the fastest-growing market among the global top 20 both in 2019 and 2020, when it produced $328 million in recorded-music revenue, a 58% increase over 2020, according to IFPI.
Some Russian officials have called for a regulation that would permit the use of music and movies whose rights holders have left Russia. The most popular proposal was that all royalties owed to foreign rights holders who left Russia would be held in a dedicated account in Russian rubles and then distributed at some point in the future. Nothing concrete has been done in that area so far, but the Russian government has authorized imports of products by companies which left Russia. They cannot be technically sold in Russia, but they are imported via third countries.
Under current Russian law, the use of music or movies without permission from rights holders remains illegal.
Additional Reporting By Richard Smirke
Justin Bieber, Snoop Dogg, The Weeknd and dozens of other celebrities are facing a new class action alleging they were secretly paid to “misleadingly” promote NFTs like the Bored Ape Yacht Club, leaving investors with “staggering losses.”
In a complaint filed Thursday in Los Angeles federal court, attorneys for a pair of consumers claimed that Bored Ape parent company Yuga Labs Inc. perpetrated a “vast scheme” in which they “discreetly” paid “highly influential celebrities” to pump up the value of the NFTs (non-fungible tokens).
“Defendants’ promotional campaign was wildly successful, generating billions of dollars in sales and re-sales,” the lawyers for the plaintiffs wrote. “The manufactured celebrity endorsements and misleading promotions … were able to artificially increase the interest in and price of the BAYC NFTs…, causing investors to purchase these losing investments at drastically inflated prices.”
Though this “conspiracy” eventually “raked in millions” for the various defendants, the lawsuit said investors in Bored Ape and other NFTs “were left with staggering losses.”
Yuga Labs and reps for Justin Bieber, Snoop Dogg, The Weeknd also did not return requests for comment.
The case is the latest over celebrity endorsements for cryptocurrencies and NFTs, which soared in value during 2020 and 2021 but have taken a bruising as the economy has slowed in 2022.
In January, investors sued Kim Kardashian, Floyd Mayweather and others earlier this year for promoting the cryptocurrency EthereumMax. And last month, after the spectuacular collapse of crypto company FTX, investors filed a similar suit against Larry David, Tom Brady, Giselle Bündchen, Shaquille O’Neal and Stephen Curry.
But such cases could be facing legal headwinds. The lawsuit against Kardashian and others over EthereumMax was dismissed by a federal judge on Wednesday, who said the conduct raises “legitimate concerns” about online “snake oil,” but that investors must still be expected to “act reasonably before basing their bets on the zeitgeist of the moment.”
Notably, that case was filed by the same lawyer, John T. Jasnoch of Scott + Scott, who filed the new case on Thursday against Yuga Labs. The new case was brought by Adonis Real and Adam Titcher, two consumers who say they bought NFTs, on behalf of potentially thousands of other buyers.
The new lawsuit centers on an alleged partnership between Yuga and music industry bigwig Guy Oseary – longtime manager to Madonna, U2, Red Hot Chili Peppers and others – in which they aimed to “leverage their vast network of A-list musicians, athletes, and celebrity client” to promote Bored Ape and other offerings.
The plaintiffs claim that this was achieved via MoonPay, a crypto platform in which Oseary’s venture capital firm had allegedly invested. Since the celebrity defendants were also allegedly investors in MoonPay, the lawsuit claims Yuga and Oseary used it “as a covert way to compensate the Promoter Defendants for their promotions of the BAYC NFTs without disclosing it to unsuspecting investors.”
Oseary did not immediately return requests for comment on the allegations.
Read the entire complaint here:
AEG Presents, a global leader in concert promotion and artist development, on Thursday (Dec. 8) announced an official strategic partnership with K-pop touring and marketing company Powerhouse.
The two live music companies, which have worked together on many successful K-pop artists over the past 13 years, will collaborate on all aspects of the live K-pop business including touring, production, marketing and media across every level.
“In the course of last two decades, K-pop has grown to be one of the most popular genres in the global music industry.,” says C.S. Hah, Powerhouse chief executive and president. “The K-pop market has proven its depth and width to be more matured than ever, and I hope our launch of this formal partnership with AEG Presents can help K-pop grow to reach new horizons across the regions.”
AEG Presents and Powerhouse started their successful relationship in 2010, producing the SM Town concert at Staples Center, regarded as the first blast of K-pop in the U.S. and selling out 12,500 tickets in a matter of minutes. Since then, the two companies have collaborated on historic K-pop tours including two for BTS — the 2017 Wings arena tour in North America and the group’s Love Yourself arena world tour the following year — as well as MONSTA X’s massive 2018 The Connect world tour.
“C.S. Hah and Powerhouse have a track record that speaks for itself,” commented Gary Gersh, AEG Presents president of global touring and talent. “Powerhouse has tapped into what’s becoming an ever-expanding international market for K-Pop, and we are thrilled to build upon an already strong foundation between the two companies.”
Added Adam Wilkes, president and CEO, AEG Asia Pacific: “Powerhouse and AEG Presents have a great history together, and our collaboration has only become more extensive as the barriers continue to evaporate between global music markets. This feels like a logical progression in our ongoing partnership.”
Over the last five months, Powerhouse and AEG Presents have produced and promoted four massive tours for some of the most popular K-pop groups: BLACKPINK, Tomorrow X Together, ENHYPEN and ATEEZ. This year, BLACKPINK sold out 14 North American arenas, plus an additional 10 in the U.K. and Europe. Tomorrow X Together performed eight sold-out shows in two months. ENHYPEN sold out seven arenas in October 2022, and ATEEZ sold out 11 arenas on their North American tour which ended earlier this month. All four of those artists expect to tour the rest of the world in 2023.
Backstreet Boys member Nick Carter was hit with a lawsuit Thursday (Dec. 8) alleging that he raped a 17-year-old fan on his tour bus following a 2001 concert in Washington.
In a civil lawsuit filed in Nevada court, Shannon “Shay” Ruth says Carter picked her from a group of women seeking autographs after a concert in Tacoma. She says he then brought her aboard the bus, gave her an alcoholic beverage called “VIP juice” and repeatedly assaulted her.
The woman, now 39, says waited more than 20 years to come forward because she was afraid of retaliation.
“He told plaintiff she would go to jail if she told anyone what happened between them,” Ruth’s lawyers wrote in the complaint, obtained by Billboard. “He said that he was Nick Carter, and that he had the power to do that. Due to his various threats, plaintiff did not report Carter’s crimes for many years.”
The attack allegedly left Ruth infected with the sexually-transmitted infection human papillomavirus, or HPV, according to the lawsuit.
In addition to Ruth, the lawsuit was filed on behalf of three other unnamed “Jane Doe” accusers who allegedly experienced similar attacks by Carter from 2003 to 2006. According to the complaint, all three of those women were also given alcohol before being forced to have sex with him; one was allegedly similarly underage.
A rep for Carter did not immediately return a request for comment from Billboard. An unnamed source close to the singer reportedly told TMZ that the accusations were “categorically false.”
The allegations are not the first against Carter. Back in 2017, Melissa Schuman, a former member of teen-pop group Dream, publicly accused him of sexually assaulting her in 2003 when she was 18 years old. Carter denied the allegations at the time, saying Schuman had “never expressed” to him that “anything we did was not consensual.”
After an investigation into Schuman’s accusations, prosecutors in Los Angeles declined to bring criminal charges against Carter on the grounds that the 10-year statute of limitations had expired.
The new lawsuit against Carter contains explicit and disturbing details of the alleged sexual assault.
Once she had finished her “VIP drink,” Ruth says Carter took her to a bathroom and demanded that she perform oral sex on him: “Alone and under duress, Plaintiff reluctantly complied with his demand. Plaintiff cried during the ordeal.”
Following that incident, Ruth says Carter took her to another room on the bus where he “pushed plaintiff down onto the bed and proceeded to mount her.” She says she “begged him to stop” and tried to get away, but that “every time she said ‘No’ and tried to get up, Carter got angry and pushed her down harder.”
After the attack, Ruth says Carter grabbed her, called her a “retarded little bitch” and said that nobody would believe her story. Ruth has autism and cerebral palsy, according to the complaint.
Read the entire complaint here:
Music companies’ quarterly results in October and November were a bright spot amid a mostly bleak earnings season. High inflation, rising interest rates and the chance of a recession presented a triple-whammy to most sectors — particularly tech and retail — but in the music industry, those macroeconomic threats weren’t enough to dampen consumer demand and investors’ confidence.
“While the broader economy is facing challenges, the music industry as a whole remains healthy,” says Golnar Khosrowshahi, founder and CEO of Reservoir Media, which raised its full-fiscal-year forecast by 11% for both revenue and adjusted earnings before interest, tax, depreciation and amortization (EBITDA).
So what worked in music companies’ favor? In short, more people are going to concerts and buying streaming subscriptions, and revenues from those sectors helped bolster quarterly results for nearly every publicly listed music company.
Diversifiction = Fortification
The major labels, which have a piece of the market in nearly every segment of the music industry, all reported quarterly revenue gains over the third quarter last year, ranging from 16% at Warner Music Group to 6% at Sony Music Entertainment. On Universal Music Group’s third-quarter call, chairman/CEO Lucian Grainge attributed the company’s 13.3% third-quarter revenue gains to UMG’s diversification strategy. While ad-supported streaming revenue slowed significantly, only growing 5.2% (from last year’s 15.6% growth), licensing and other revenues rose by 30% due to an $84.2 million increase in touring revenue from Latin American, European and Asian markets where UMG is in that business. Merchandising and other revenue related to those tours grew by over 100% to almost $199 million. “We are better positioned to navigate the inevitable ebbs and flows of revenue of any particular business, as well as to weather any macroeconomic headwinds,” said Grainge.
Live’s Alive Again
Live Nation Entertainment had its biggest summer concert season ever, reporting that more than 44 million fans attended 11,000 events in the third quarter, as attendance for stadium shows tripled to nearly 9 million. Companywide, Live Nation reported $6.2 billion in quarterly revenue, up nearly 67% from the last-comparable quarter, which for it was the third quarter of 2019.
Streaming’s Still Strong
On a call with investors, an analyst asked Sony deputy president/CFO Hiroki Totoki what risks Sony Music Entertainment faces. His reply: “Streaming is very successful, and we don’t really have that much of a concern.” Spotify’s third-quarter results confirm that. Revenue rose 12% to roughly $3.2 billion at a constant currency, on a 13% uptick in subscription revenue from more than 195 million subscribers — 1 million more than the company targeted.
French streaming company Deezer also reported double-digit revenue growth, although it attributed the increase in part to a one-euro price hike the company instituted in France earlier this year. Deezer’s revenues rose nearly 14% to $112.5 million at the Sept. 30, 2022, exchange rate.
Price hikes, coming at a time consumers’ costs are rising across the spectrum, are the final thing working for music industry companies. After Apple said it would raise its standard individual streaming plan price by $1 to $10.99 in the U.S. and Spotify signaled it was also considering a price increase, major labels and other streaming company executives all said they expect trickle-down benefits.
It’s also worth noting that although Totoki said on the call that Sony is “taking steps to prepare for further deterioration… in each of our businesses,” the company raised its revenue and operating income targets for the full fiscal year by $9.8 billion and $1.9 billion, respectively (at Sony’s assumed exchange rate for the second half of the fiscal year).
AEG Presents UK has appointed Chris Wareing to senior vp of global touring and hired Paris Harding as a promoter, the company announced on Thursday (Dec. 8).
Wareing — a leading hip-hop, rap and R&B promoter as well as the founder of the annual Gods of Rap tour — joins AEG with the view of expanding the company’s hip-hop and rap presence across the globe. Wareing joins AEG from SJM Concerts, where he served for the last 10 years as a promoter. Harding brings with him a wealth of skills and experience in the rap space and also served as a promoter at SJM Concerts.
“Having worked alongside Chris for a number of years and admired his presence from afar, I couldn’t be more thrilled to have him join our team,” said AEG Presents UK CEO Steve Homer in a statement announcing the hires. “He’ll be working closely with myself and my colleague Gary Gersh [president of global touring and talent, AEG Presents] at an international level, to drive our footprint in these important genres forward. It’s rare to come across talent at the level he and Paris exhibit and I couldn’t think of a better way to close out a stellar year.”
In his own statement, Wareing added, “I’m excited to kick off the New Year with a new challenge booking globally with AEG. I admire the vision and work of the company and I’m looking forward to further driving their presence in the hip hop and rap space.”
If you think 100,000 songs a day going into the market is a big number, “you have no idea what’s coming next,” says Alex Mitchell, founder/CEO of Boomy, a music creation platform that can compose an instrumental at the click of an icon.
Boomy is one of many so-called “generative artificial intelligence” music companies — others include Soundful, BandLab’s SongStarter and Authentic Artists — founded to democratize songwriting and production even more than the synthesizer did in the 1970s, the drum machine in the ’80s and ’90s, digital audio workstations in the 2000s and sample and beat libraries in the 2010s.
In each of those cases, however, trained musicians were required to operate this technology in order to produce songs. The selling point of generative AI is that no musical knowledge or training is necessary. Anyone can potentially create a hit song with the help of computers that evolve with each artificially produced guitar lick or drumbeat.
Not surprisingly, the technology breakthrough has also generated considerable anxiety among professional musicians, producers, engineers and others in the recorded-music industry who worry that their livelihoods could potentially be threatened.
“In our pursuit of the next best technology, we don’t think enough about the impact [generative AI] could have on real people,” says Abe Batshon, CEO of BeatStars, a subscription-based platform that licenses beats. “Are we really helping musicians create, or are we just cutting out jobs for producers?”
Not so, say the entrepreneurs who work in the emerging business. From their perspective, generative AI tools are simply the next step in technology’s long legacy of shaping the way music is created and recorded.
“When the drum machine came out, drummers were scared it would take their jobs away,” says Diaa El All, founder/CEO of Soundful, another AI music-generation application that was tested by hit-makers such as Caroline Pennell, Madison Love and Matthew Koma at a recent songwriting camp in Los Angeles. “But then they saw what Prince and others were able to create with it.”
El All says the music that Soundful can instantly generate, based on user-set parameters, like beats per minute or genre, is simply meant to be a “jumping-off point” for writers to build songs. “The human element,” he says, “will never be replaced.”
BandLab CEO Meng Ru Kuok says that having tools to spark song creation makes a huge difference for young music-makers, who, so far, seem to be the biggest adopters of this technology. Meng claims his AI-powered SongStarter tool, which generates a simple musical loop over which creators can fashion a song, makes new BandLab users “80% more likely to actually share their music as opposed to writing from zero.” (Billboard and BandLab collaborated on Bringing BandLab to Billboard, a portal that highlights emerging artists.)
Other applications for generative AI include creating “entirely new formats for listening,” as Endel co-founder/CEO Oleg Stavitsky says. This includes personalized music for gaming, wellness and soundtracks. Lifescore modulates human-made scores in real time, which can reflect how a player is faring in a video game, for example; Endel generates soundscapes, based on user biometrics, to promote sleep, focus or other states (Lifescore also has a similar wellness application); and Tuney targets creators who need dynamic, personalized background music for videos or podcasts but do not have a budget for licensing.
These entrepreneurs contend that generative AI will empower the growth of the “creator economy,” which is already worth over $100 billion and counting, according to influencer Marketing Hub. “We’re seeing the blur of the line between creator and consumer, audience and performer,” says Mitchell. “It’s a new creative class.”
In the future Mitchell and El All both seem to imagine, every person can have the ability to create songs, much like the average iPhone user already has the ability to capture high-quality photos or videos on the fly. It doesn’t mean everyone will be a professional, but it could become a similarly common pastime.
The public’s fascination with — and fear of — generative AI reached a new milestone this year with the introduction of DALL-E 2, a generator that instantaneously creates images based on text inputs and with a surprising level of precision.
Musician Holly Herndon, who has used AI tools in her songwriting and creative direction for years, says that in the next decade, it will be as easy to generate a great song as it is to generate an image. “The entertainment industries we are familiar with will change radically when media is so easy and abundant,” she says. “The impact is going to be dramatic and very alien to what we are used to.”
Mac Boucher, creative technologist and co-creator of non-fungible token project WarNymph along with his sister Grimes, agrees. “We will all become creators and be capable of creating anything.”
If these predictions are fulfilled, the music business, which is already grappling with oversaturation, will need to recalibrate. Instead of focusing on consumption and owning intellectual property, more companies may shift to artist services and the development of tools that aid song creation — similar to Downtown Music Holdings’ decision to sell off its 145,000-song catalog over the last two years and focus on serving the needs of independent talent.
Major music companies are also investing in and establishing relationships with AI startups. Hipgnosis, Reservoir, Concord and Primary Wave are among those that have worked with AI stem separation company Audioshake, while Warner Music Group has invested in Boomy, Authentic Artists and Lifescore.
The advancement of AI-generated music has understandably sparked a debate over its ethical and legal use. Currently, the U.S. Copyright Office will not register a work created solely by AI, but it will register works created with human input. However, what constitutes that input has yet to be clearly defined.
Answers to these questions are being worked out in court. In 2019, industry leader Open AI issued a comment to the U.S. Patent and Trademark Office, arguing that using copyrighted material for training an AI program should be considered fair use, although many copyright owners and some other AI companies disagree.
Now one of Open AI’s projects, which was made in collaboration with Microsoft and Github, is battling a class-action suit over a similar issue. Copilot, which is AI designed to generate computer code, was accused of often replicating copyrighted code because it was trained on billions of lines of protected material made by human developers.
The executives interviewed for this story say they hire musicians to create training material for their programs and do not touch copyright-protected songs.
“I don’t think songwriters and producers are talking about [AI] enough,” says music attorney Karl Fowlkes. “This kind of feels like a dark, impending thing coming our way, and we need to sort out the legal questions.”
Fowlkes says the most important challenge to AI-generated music will come when these tools begin creating songs that emulate specific musicians, much like DALL-E 2 can generate images clearly inspired by copyright works from talents like Andy Warhol or Jean Michel Basquiat.
Mitchell says that Boomy may cross that threshold in the next year. “I don’t think it would be crazy to say that if we can line up the right framework to pay for the rights [to copyrighted music], to see something from us sooner than people might think on that front,” he says. “we’re looking at what it’s going to take to produce at the level of DALL-E 2 for music.”
Sony Music US Latin has officially opened its new headquarters in Puerto Rico, Billboard can confirm today (Dec. 8).
The multinational record label, which has had its facilities on the island since 1980 (formerly CBS Records), is relocating to the modern office complex Ciudadela in Santurce, where the label’s artists will have access to a press room, recording studio, content creation room for networks, and other benefits.
“These new offices are a tangible demonstration of what Puerto Rico represents for Sony and for Latino culture,” Alex Gallardo, president of Sony Music US Latin tells Billboard via email. “In addition, this expansion will allow us to provide a better service and support our current artists even more.”
Reaffirming its commitment to Boricua talent, Victor Manuelle, Pedro Capó, and Luis Figueroa were some of the Sony artists present at the inauguration, alongside Gallardo and Tuti Bou, vp and general manager of Sony Music US Latin (Puerto Rico Branch).
“After 42 years of having founded our company in Puerto Rico, today we celebrate this new stage,” Bou adds. “At Sony Music PR we are proud to be the only established multinational committed to the development of our music and culture. The space is modern, and spacious, and in which we have our own recording studio to continue developing, promoting, and discovering new talent. Sony Music Puerto Rico will continue to be ‘The House of Artists.’”
In addition, the label has commissioned a mural from the renowned artists of The Stencil Network in support of the urban development in Santurce.
Sony Music Latin offices in Puerto Rico
Dianeris Nieves/Sony Music Latin