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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.
Music companies face a multitude of pressures as 2022 comes to an end: crippling inflation, a tight labor market, a chaotic environment for breaking new artists, interest rates that are dampening catalog valuations, and high costs of touring amidst a crush of artists on the road, among other challenges. The upcoming slate of corporate earnings provides an opportunity to hear about these opportunities and challenges from leaders of publicly traded music companies who rarely go on the record.
Spotify reports third-quarter earnings after the close of trading on Tuesday (Oct. 25). Universal Music Group and Deezer follow on Thursday (Oct. 27) after the close of trading in the Netherlands and France, respectively. Cumulus Media reports Friday morning (Oct. 28). SiriusXM reports earnings on the morning of Nov. 1. Tencent Music Entertainment announces earnings on Nov. 15. The other 14 publicly traded music companies in the Billboard Global Music Index have not yet announced when they will report.
Look for executives to comment about subscription prices and digital platforms’ ability — or reservation — to raise subscription prices. It’s been a recurring theme from digital and label executives throughout the years, in part because it’s been over a decade since streamers last did it in any meaningful way. “Music is a good value” seems like a popular position when streaming video on-demand services are engaged in cut-throat competition and undercutting one another’s prices to attract new customers and prevent current customers from departing. But the industry has arguably moved past that stage, with many now interested in other means to grow revenue. Still, expect music streaming companies to be reticent to hike prices while inflation is running at a 40-year high.
On Tuesday. Spotify could offer a bevy of information and insights about its progress toward its drive to improve margins, as laid out in its June 9 investor presentation: goals for 35% gross margins in music and 30-35% gross margins in podcasting within the next three to five years. Music margins will be helped by improvements in ad monetization in developing markets as well as price increases in mature markets.
More pressing will be Spotify’s opinions on macroeconomic forces that could affect its growth. The company’s advertising business was roiled by an advertising slowdown during the first year of the pandemic, and now many experts are predicting a recession in 2023 that could again dampen online advertising. On Alphabet’s July 26 earnings call, the company repeatedly used the word “uncertain” when talking about the economy, while reporting that YouTube ad sales grew at their slowest pace since the company started disclosing metrics in 2018. Meta’s second-quarter revenue, meanwhile, was 1% lower than a year earlier — its first decline in a decade. If the same market conditions affect Spotify, how will it react? Even though advertising accounted for only 12.6% of the company’s total revenues in the second quarter, it’s critical to the podcasting business that’s expected to deliver margin relief in the coming years.
If social media company Snap’s third-quarter results Thursday are any indication, a weak advertising market will be a recurring theme throughout October and November earnings reports. In a letter to shareholders, Snap warned its “advertising partners across many industries are decreasing their marketing budgets, especially in the face of operating environment headwinds, inflation-driven cost pressures and rising costs of capital.” At the same time, Snap announced a stock repurchase program of up to $500 million “to protect shareholder value from the impact of dilution.” Investors reacted quickly and decisively by sending Snap shares down as far as 32% to $7.33 on Friday — 87.9% below its 52-week high of $60.78.
Also, expect questions about Spotify’s long-awaited HiFi subscription tier. Last week, reports surfaced that Spotify could be prepping a “platinum” subscription plan that bundles high-fidelity audio with other products. The reports were based on an online survey that sought consumers’ opinions on various product bundles, not hard evidence of an upcoming product launch. But the fact that Spotify would sweeten the offer with reduced advertising in podcasts and other items could suggest it realized demand for a standalone HiFi tier is weaker than hoped — especially when Apple Music and Amazon Music are offering it at no additional cost. What CEO Daniel Ek will say is another matter, however, as Spotify is unlikely to discuss details about a product before an official announcement.
High-fidelity audio is pertinent to Spotify investors because it could help improve gross margins. The June 16 acquisition of audiobook distributor Findaway led to the Sept. 20 launch of an audiobook download store. As both retailer and distributor, Spotify can get 60% margin in audiobook purchases, more than double its current gross margin. Of course, the more important question is how many margin dollars audiobooks will ultimately deliver. With only a few weeks of audiobook sales under its belt, and no audiobook sales in the third quarter earnings, Spotify will have few tangible results for a progress report.
Universal Music Group reports earnings on Thursday (Oct. 27) after the end of the trading day in Amsterdam, where UMG shares are listed. UMG’s share of the U.S. recorded music market dropped slightly from 38.3% in the first half of 2022 to 37.1% at the end of the third quarter, which was lower than its 38.4% share in the prior-year period. UMG’s biggest competitor, Sony Music Entertainment, meanwhile, saw its share boosted from 26.3% to 26.7% thanks to the runaway success of Bad Bunny‘s Un Verano Sin Ti, the biggest album of 2022. UMG biggest releases were Kendrick Lamar’s Mr. Morale and the Big Steppers and The Weeknd’s Dawn FM (Republic). A handful of albums released in 2021 were also in the top 10 in total consumption: Morgan Wallen‘s Dangerous (Jan. 8, 2021), The Weeknd’s The Highlights (Feb. 5, 2021) Olivia Rodrigo’s Sour (May 21, 2021) and Drake‘s Certified Lover Boy (Sept. 21, 2021).
During UMG’s last earnings call, on July 27, CEO Lucian Grainge recounted a string of recent releases (Drake’s Honestly, Nevermind got off to a great start), partnerships (HYBE’s first release through its deal with UMG’s Ingrooves/Geffen), how it planned to get a return on investment on some recent acquisitions (Frank Zappa and Neil Diamond) and how the new Mercury Studios (which produced documentary films on The Rolling Stones and Shania Twain) had helped lift catalog streams.
More important to investors and industry professionals are concrete examples of UMG moving its business forward. Last quarter, Grainge announced UMG’s new licensing deal with Meta and revealed the company had become one of its top 10 revenue-generating digital platforms. He also announced the creation of the New Music Media Network, a service that connects brands and partners with proprietary data and exclusive media from UMG. Given the vital role advertising plays in today’s streaming-led music business and the platforms of tomorrow, a progress update on the New Music Media Network would be helpful.
Less important are comments made about Web3, NFTs and metaverse initiatives. Despite initial enthusiasm around NFTs, these businesses are a work-in-progress and represent an immaterial amount of revenue to a major music company. Conversation about these businesses merely shows that a company is looking ahead and taking the proper steps to capitalize — somehow — on them in the future. That requires hiring the right people, making investments, striking partnerships and trying new things to learn and gain experience. But as of now, Web3, NFTs and the metaverse are solidly in the experiment phase.
The Mechanical Licensing Collective held its second annual membership meeting this week in Nashville. In the presentation, the organization shared key insights into its second year of operation, including that it had distributed almost $700 million in blanket royalties to its members.
According to the meeting, the MLC, which has been operational since Jan. 1, 2021, now has 22,000 members, with 6,000 new additions in 2022 alone, and has over 17 million works registered to date, processing more than 98% of those registrations. To date, it has collected nearly $1 billion in mechanical royalties on behalf of songwriters and publishers, and rights holders have received more than $800 million in royalties, nearly $700 million of which were blanket royalties distributed directly by The MLC. About $120 million royalties were processed by The MLC but paid by digital service providers like Spotify, Apple Music, YouTube, and more, pursuant to voluntary licenses.
Since it began operations, The MLC says it has finished 19 monthly royalty distributions, all of which were completed on time or early. For the last six months in particular, the non-profit organization reported that its current match rate for all royalties processed through September’s royalty distribution is 89% and has exceeded 85% for six straight months.
“We are incredibly proud of these accomplishments,” says CEO Kris Ahrend. “Our team has worked hard to build robust data processing systems that allow us to distribute royalties accurately and on time. We have also released a suite of tools for our Members that enable them to manage their catalog data effectively and correct any missing or inaccurate data they find. While there is still more work to do, we are pleased with our progress and are deeply appreciative of all the support we have received from our Members and from the broader industry at large.”
During the meeting, the MLC also shared that Tim Cohan and Scott Cutler were elected to serve as board directors for a second three-year term, and Kara Dioguardi was elected as songwriter director of the board for a second three-year term.
The MLC was formed in response to the Music Modernization Act of 2018 to be exclusively responsible for administering blanket compulsory licenses for music compositions to streaming services.
The MLC was formed with designation from the the U.S. Register of Copyrights in response to the Music Modernization Act of 2018 to be exclusively responsible for administering blanket compulsory licenses for music compositions to streaming services. Operations began at the start of 2021, and it has been paying out royalties since April of that year, including money from Spotify, Apple Music, Pandora, and more.
Jay-Z wants to sell his stake in D’Usse Cognac, and says that Bacardi – which owns the other half of the business – is legally required to buy it. But in a new lawsuit, the superstar claims the liquor giant is “lowballing” and “stonewalling” him to get a cheaper price.
In a complaint filed in Delaware court, Jay-Z’s SCLiquor LLC says that it exercised a contractual option to sell its 50 percent stake in D’Usse to Empire Investments, the Bacardi unit that owns the other half and runs the company’s day-to-day operations. Hov’s company claims the move came after years of “mismanagement and underperformance” by Bacardi.
But according to the lawsuit, which was made public on Thursday (Oct. 20), Bacardi and Empire responded to the move not by following the rules, but by refusing to hand over key information and scheming to “artificially depress” the price it would pay.
“Empire sought to stall and stonewall SC’s efforts in an attempt to wrest SC’s 50% membership interest in D’Usse at a cheaper price by, among other things, refusing to provide necessary information,” SCLiquor’s lawyers wrote.
According to the lawsuit, SCLiquor holds a so-called “put option” on D’Usse’s corporate entity, a legal mechanism that, when triggered, requires Bacardi to buy out Jay-Z’s half of the business. The two sides are supposed to negotiate in “good faith,” exchange information and agree on a fair price.
But Jay-Z’s lawyers say that when they exercised the put option last year, Empire and Bacardi did anything but operate in good faith.
“Instead, Empire has abused its day-to-day control of D’Usse to deprive SC of information necessary to … assess D’Usse’s value,” SCLiquor’s lawyers wrote. “Empire has done so by engaging in an apparent shell-game with its parent company Bacardi.”
They say the move to sell off Hov’s stake came amid “growing concern” about how Empire was running the company, including its “blatant conflict of interest” with Bacardi. Jay-Z’s lawyers say Empire has relied on Bacardi to provide key services, even though the parent company has had repeated failures that hurt D’Usse, including supply chain failures and an unwillingness to change prices.
In its current form, the lawsuit is only seeking to force Empire to turn over more information about D’Usse. But the complaint says that information will also be used to “investigate potential future actions for damages.”
A rep for Bacardi did not immediately return a request for comment on the lawsuit.
Elon Musk plans to lay off most of Twitter’s workforce if and when he becomes owner of the social media company, according to a report Thursday by The Washington Post.
Musk has told prospective investors in his Twitter purchase that he plans to cut nearly 75% of Twitter’s employee base of 7,500 workers, leaving the company with a skeleton crew, according to the report. The newspaper cited documents and unnamed sources familiar with the deliberations.
San Francisco-based Twitter and a representative for Musk attorney Alex Spiro did not immediately respond to messages seeking comment.
While job cuts have been expected regardless of the sale, the magnitude of Musk’s planned cuts are far more extreme than anything Twitter had planned. Musk himself has alluded to the need to cull some of the company’s staff in the past, but he hadn’t given a specific number — at least not publicly.
“A 75% headcount cut would indicate, at least out of the gates, stronger free cash flow and profitability, which would be attractive to investors looking to get in on the deal,” said Wedbush analyst Dan Ives. “That said, you can’t cut your way to growth.”
Ives added that such a drastic reduction in Twitter’s workforce would likely set the company back years.
Already, experts, nonprofits and even Twitter’s own staff have warned that pulling back investments on content moderation and data security could hurt Twitter and its users. With as drastic a reduction as Musk may be planning, the platform could quickly become overrun with harmful content and spam — the latter of which the Tesla CEO himself has said he’ll address if he becomes owner of the company.
After his initial $44 billion bid in April to buy Twitter, Musk backed out of the deal, contending Twitter misrepresented the number of fake “spam bot” accounts on its platform. Twitter sued, and a Delaware judge has given both sides until Oct. 28 to work out details. Otherwise, there will be a trial in November.
A computer hacker who stole unreleased songs from British pop star Ed Sheeran and American rap artist Lil Uzi Vert has been sentenced to 18 months in prison, U.K. prosecutors said Friday.
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Adrian Kwiatkowski, 23, of Ipswich in southern England, hacked the artists’ cloud-based accounts and sold their songs on the dark web in exchange for cryptocurrency. City of London Police, which investigated the case, said Kwiatkowski made 131,000 pounds ($147,000) on the transactions.
“Kwiatkowski had complete disregard for the musicians’ creativity and hard work producing original songs and the subsequent loss of earnings,” said Joanne Jakymec of the Crown Prosecution Service. “He selfishly stole their music to make money for himself.”
In August, Kwiatkowski pleaded guilty to a variety of charges, including 14 copyright offenses and three counts of computer misuse. He was sentenced Friday (Oct. 21) in Ipswich Crown Court.
City of London Police worked with authorities in the United States to investigate the case after the management companies of several musicians reported that an individual, known online as Spirdark, had gained access to their clients’ cloud-based accounts and was selling their content.
The Manhattan District Attorney’s Office launched an investigation in 2019, and linked the email address used for Spirdark’s cryptocurrency account to Kwiatkowski. It then identified the IP address of the device used to hack one of the accounts as his home address.
After further investigation, Kwiatkowski was arrested by the City of London Police’s Intellectual Property Crime Unit in September 2019.
“Cybercrime knows no borders, and this individual executed a complex scheme to steal unreleased music in order to line his own pockets,” Manhattan District Attorney Alvin L Bragg Jr. said.
The past two years have been a whirlwind of success for Doja Cat, who emerged from TikTok virality to become one of radio’s most beloved artists of the young decade so far. And she’s been on the type of hot streak that has her in rarefied territory: With five top five hits on Pop Airplay off her latest album, the RCA-released Planet Her, her album became just the seventh to ever accomplish that feat, a mark she set over the course of an entire calendar year — an impressive achievement in an era when attention spans are short and longevity is fleeting.
This week, Doja Cat adds to her run of success as her latest single “Vegas,” off the Elvis soundtrack (also out on RCA), became her sixth No. 1 single at Pop Airplay — replacing her collaboration with Post Malone, “I Like You (A Happier Song),” atop the list and making her the first artist to replace herself atop the chart since Ariana Grande nearly two years ago. And as “Vegas” also becomes Dojo’s sixth top 10 single on the Hot 100 — all since 2020 — her manager at SALXCO and newly-named executive vp of A&R and artist development at Capitol Music Group Gordan Dillard is Billboard’s Executive of the Week.
Here, Dillard tells Billboard about Dojo’s success at pop radio, how her team has kept the album alive and charting for so long and how they leverage TikTok to help work records at radio, as well as some of the transformations in the industry. “We approach albums with longevity in mind,” he says. “When the music is complete, we work months to build out strategic marketing plans, release schedules, promotional assets and much more. We are very strategic when it comes to how and when the records are released [and] we work very closely and far in advance with our partners to ensure maximize impact and longevity for every record.”
This week, Doja Cat’s “Vegas” reached No. 1 on the Pop Airplay chart, her sixth No. 1 on that chart, and became her sixth top 10 Hot 100 hit. What key decisions did you make to help make that happen?
There were a lot of decisions that went into the success of this record. We approached it the same as we would any solo Doja record, but also gave a ton of support to the director Baz Luhrmann, the film itself, and the release. We executed our marketing efforts in tandem with the film. “Vegas” was first premiered with Shonka [Dukureh] — rest in peace — at Coachella before the film or trailer featuring “Vegas” was released which laid a great deal of anticipation for the release. Along the way, the entire team, both RCA and management, played a key role in executing and staying consistent with the efforts to hit these record-breaking achievements.
“Vegas” replaced her collaboration with Post Malone, “I Like You (A Happier Song),” on the chart, making her the first artist to replace themselves there since Ariana Grande almost two years ago. Why has she had such success at that radio format?
Doja is a world-renowned musical artist and one of the biggest female pop stars of her generation. She has always put music first and with the incredibly hardworking promotional team at RCA, she has had and will continue to have radio success. Our radio partners are also amazing and supportive.
This song in particular didn’t make big waves immediately on its release, but after picking up steam on TikTok has grown into her latest major hit. How have you guys been able to use TikTok to help fuel Doja Cat’s songs and career in other areas?
The digital world is an ever-evolving machine. Breaking records and artists are much different than they were even just a few months ago. Doja and her music has always had a great following on TikTok and the TikTok team has always been great to work with while always being supportive of our marketing ideas. Social media has always been a key component to Doja’s organic communication with her fans and we’ll always keep it that way.
Planet Her had produced five top-five hits at pop radio, just the seventh album to do so, and stretching across more than a year. In an era when albums tend to come and go relatively quickly, what did you and your team do to keep the album so relevant and producing radio hits for such an extended period of time?
We approach albums with longevity in mind. When the music is complete, we work months to build out strategic marketing plans, release schedules, promotional assets and much more. We are very strategic when it comes to how and when the records are released [and] we work very closely and far in advance with our partners to ensure maximize impact and longevity for every record. Also, our team is very strong, smart and we strike together. Teamwork is key in our success.
This song is from the Elvis soundtrack. Do you work songs differently for a soundtrack song as opposed to something from one of her own projects?
No, this record specifically came at the perfect time. The process is still the same even if this song was from a soundtrack. We still approach it as if it’s a solely Doja Cat record.
You’ve been a manager for a decade, both with your own company and with SALXCO. How has management evolved in that time?
In my opinion, management is much more involved nowadays more than ever. Managers have become CEOs of the artist’s business. We are much more involved in the growth of the artist’s initiatives outside of just music. We are somewhat business partners with our artists.
You also have a new job at Capitol. How do you balance that job with managing an artist at another label?
I don’t think about it like that. They are separate and I don’t mix the two. Although the skill sets are transferable and help with both positions. I also have amazing teams on both sides that support and allow me to be instrumental in the individual successes. Without them neither would be possible.
Universal Music Group divisions Decca Records, Verve Label Group and Globe Soundtrack & Score joined forces to launch Mercury Classics Soundtrack & Score, a new boutique record label “dedicated to the art of soundtrack & score” and designed to “support today’s leading score composers and artists as they undertake major audio-visual projects globally,” according to a press release. Lana Thompson has been appointed as label manager. The label’s first major releases, slated for this year, include scores for Orion Pictures films Till, composed by Abel Korzeniowski, and Women Talking, composed by Hildur Guðnadóttir. Releases set for 2023 include the soundtrack to MGM’s A Good Person.
Republic Records promoted Tim Hrycyshyn to senior vp of digital strategy; he was previously vp of digital marketing. He is based in New York.
Epidemic Sound named Rikard Herlitz chief technology officer and Julian Persaud chief commercial officer. Both will start in January. Herlitz, who joins from Google, where he served as engineering director for Google Meet, will provide tech leadership and strategic direction across all Epidemic Sound markets. Persaud, who joins from European travel platform Omio, where he was chief commercial officer, will lead the company’s commercial strategy.
°1824, Universal Music Group’s youth-driven creative solutions division, named Possum Hill vp of content. Hill will oversee °1824’s content creation efforts while also working to scale UMG’s livestreaming capabilities. Hill, who joins °1824 from Capitol Music Group, where she was senior director of video production, will be based in Santa Monica and report to °1824 senior vp and head Todd Goodwin.
The College of Music and Media at Loyola University New Orleans — recently named a top music business school by Billboard — appointed music supervisor, music executive and independent film and TV producer and director Jonathan McHugh as its new Hilton-Baldridge eminent scholar and chair. McHugh will enjoy an endowed professorship, steering the university’s music industry studies program. His first initiative at Loyola is the launch of a “Composing for Video Games and Visual Media” major. “Since our student population is 55% diverse and the studios are having trouble filling the diverse hiring quotas and we have so much amazing talent, it makes perfect sense to do it next year,” says McHugh. “I am excited about helping to build next generation of entertainment and music stars at Loyola College of Music and get connected into internships and jobs in the entertainment business.” McHugh will continue in his various other roles outside the school. He recently directed two documentary films — Long Live Rock…Celebrate the Chaos and Cosplay Universe — and is music supervising season two of the animated series Freak Brothers (Lionsgate/Fox/Tubi). He is a member of the Television Academy and the Producers Guild documentary jury.
A2IM announced its 2022-23 executive committee, including Victor Zaraya (Concord Records) as chair, Louis Posen (Hopeless Records) as vice chair, Mariah Czap (Yep Roc Music Group) as treasurer and Heather Johnson (Ninety9Lives/Fixt) as secretary. The organization additionally announced four new board members including Mary Jurey (chief business officer at Blue Elan), Tony Kiewel (president at Sub Pop), Wilson Fuller (head of digital at Merge Records) and Dee Diaz (vp of digital strategy at Reach Records), who will join returning board members Marie Clausen (head of North America & global streaming at Ninja Tune), Steven Hill (director of North America & global projects at Warp Records) and Tony Alexander (president & managing director at Made In Memphis Entertainment). The new advisory board, meanwhile, consists of Talya Elitzer (co-founder of GodMode), Gina Miller (senior vp & general manager at MNRK), Jason Peterson (chairman & CEO at GoDigital Media Group) and Glen Barros (CEO at Exceleration Music).
Create Music Group named Brian Glover to the newly-created role of senior director of streaming. He will oversee streaming strategy for the hip-hop, R&B and pop artists that Create distributes. Based in Los Angeles, Glover arrives at the company from indie label Cinematic Music Group, where he served as director of commerce and artist marketing.
Sophia Sansone and Jarrod Holley were promoted to managing partners at Chris Kappy‘s Make Wake Artists. Sansone manages Luke Combs and his wife, Nicole Combs. Holley leads all A&R responsibilities for the company and manages Drew Parker, Jackie Lee, Cooper Alan and Colby Acuff.
Hazel Savage, music intelligence vp at SoundCloud, joined B2B streaming technology solutions company Tuned Global as a non-executive board member.
Music licensing technology company Audoo hired Matthew Fackrell as senior vp and general manager, Asia Pacific and Eric Nguyen as senior vp and general manager, North America. Based in Sydney and Toronto, respectively, and reporting to Audoo founder and CEO Ryan Edwards, the two will provide industry expertise in their respective territories to execute the adoption and rollout of Audoo’s technology. Fackrell comes from APRA AMCOS and Nguyen joins from Richter Consulting. They can be reached at matthew@audoo.com and eric@audoo.com.
A16z crypto, a venture capital fund managed by Andreessen Horowitz that invests in crypto and Web3 startups, hired Richard Rosenblatt as a senior advisor. Rosenblatt serves as the chairman of ADIM and Autograph, two a16z crypto portfolio companies.
For over a decade, Taylor Swift has been offering fans a multitude of options when it comes to purchasing her albums across physical formats with exclusive editions available through a longstanding partnership with Target. But with her new album, Midnights, out Friday (Oct. 20), she’s truly outdone herself.
There are over 20 different versions of the album available on CD, LP and cassette in various colors, with different cover artwork, censored and uncensored, with and without autographs. That plethora of options is great for fans who may want a different version than their friends, or who — as many seem to — feel driven to collect them all. It’s also great for Swift, who’s earning more money from increased sales that will impact her performance on the Billboard charts and likely add up to one of the year’s best album debut weeks.
Few artists, if any, attract as much attention as Swift does for her promotion and sales strategy, thanks largely to her close relationship with her fans. In turn, she is brilliant at developing physical goods they want to buy, in addition to just streaming her music. Last year, following the release of her re-recordings of Fearless and Red, she accounted for one out of every 50 albums sold in the U.S., according to Luminate. She knows Swifties are collectors, and is now providing not only the multiple Midnights versions but elaborate containers to put them in, like a $39 CD clock or vinyl clock for $49, which display the four albums in a timely format, or $79 faux-leather vinyl collector’s case.
In today’s streaming-centric music industry, physical albums have become collectible tokens of fandom, and artists have been responding to growing demand. BTS and other K-pop megastars regularly rack up huge numbers by selling CDs and LPs with different colors and exclusive postcards and photos sold as collectible items, with the music as a secondary benefit. When South Korean boy band Stray Kids’ MAXIDENT topped the most recent Billboard 200 chart for the week of Oct. 22, it did so with 10 CD versions, including autographed CDs and exclusive Barnes & Noble and Target releases. Increasingly, it’s becoming a mainstream strategy for acts in the U.S., too. Such disparate acts as Denzel Curry and Slipknot have recently released various physical versions of their new albums as well. It just so happens that these sales all count towards an album’s Billboard chart performances. So by offering four different versions of Midnights per format, Swift is at least quadrupling her revenue from some super fans, as well as their impact on the charts.
Based on Billboard‘s research, here is a full rundown of the different Midnights versions fans can buy:
CDs:Moonstone BlueBlood MoonMahoganyJade Green
Signed CDs:Moonstone Blue (Webstore Exclusive)Blood Moon (Webstore Exclusive)Mahogany (Webstore Exclusive)Jade Green (Webstore Exclusive)
Clean-version CDs:Moonstone BlueBlood MoonMahoganyJade Green
Vinyl LPs:Moonstone BlueBlood MoonMahoganyJade Green
Signed Vinyl LPs:Moonstone Blue (Webstore Exclusive)Blood Moon (Webstore Exclusive)Mahogany (Webstore Exclusive)Jade Green (Webstore Exclusive)
Cassettes:Moonstone Blue
Target Exclusives:Lavender Deluxe CD (With Three Bonus Tracks)Lavender Vinyl LP
Digital:Moonstone Blue (Webstore Exclusive)Moonstone Blue (Clean) (Webstore Exclusive)Standard – 13 TracksStandard – 13 Tracks (Clean)Standard – 14 TracksStandard – 14 Tracks (Clean)
Reservoir Media has acquired the catalog of Louis Prima from the Gia Maione Prima Foundation, the company announced Thursday (Oct. 20). The deal encompasses rights to both his publishing and recorded music.
One of the greatest artists, trumpetists and songwriters of the big band era, New Orleans-born Prima’s catalog includes decade-defining songs like “Sing, Sing, Sing,” which he both wrote and recorded. His catalog also includes famous renditions of standards like “I’m Just a Gigolo (I Ain’t Got Nobody),” “Pennies from Heaven,” “Let’s Call the Whole Thing Off” and “Buona Sera (Good Night).” “Pennies from Heaven,” in particular, has had a recent renaissance thanks to TikTok users, with nearly 300,000 short videos having been created to the song to date, reestablishing it with a new generation of music fans.
Prima’s prominence in popular culture was also immortalized through his voice role as King Louie, the orangutan from Disney’s 1967 animated film The Jungle Book, which features Prima’s classic track “I Wan’na Be Like You (The Monkey Song).”
In the intervening years, Prima’s songs have been covered and re-recorded countless times, including by the Charlie Calello Orchestra (“Sing, Sing, Sing”), Reba McEntire (“Sunday Kind of Love”) and The Brian Setzer Orchestra (“Jump, Jive an’ Wail”). In 2018, Kids See Ghosts — the rap project comprised of Kanye West and Kid Cudi — sampled Prima’s “What Will Santa Claus Say (When He Finds Everybody Swingin’)” on their song “4th Dimension.”
Rell Lafargue, Reservoir president and COO, commented of the acquisition, “Louis Prima composed and recorded some of the most iconic swing music of all time – his name and the genre are practically synonymous. We are honored to represent his catalog, working to drive deeper recognition of his legacy for generations to come.” He added, “Born and raised in Louisiana myself, I am proud to partner with Tony Sylvester from the Gia Maione Prima Foundation, particularly to further support their impactful work in the city of New Orleans.”
While HarbourView Equity Partners has acquired the publishing or master recording royalties of an array of big-name artists such as Brad Paisley, Florida Georgia Line and Luis Fonsi since founder and CEO Sherrese Clark Soares launched the firm a year ago, her likely biggest deal to date—and one of the biggest deals by any acquirer in 2022— was for a bundle of music assets with far less star power but with a large economic punch.
Earlier this year, HarbourView Equity Partners, launched in October 2021, bought the little known but economically large SoundHouse Acquisitions LLC catalog, which includes some rights to some master recordings by the likes of Tech N9ne, Trey Songz, George Jones, Tenth Avenue North, Whiskey Myers and a heavy Latin music presence through the likes of Eslabon Armado, Natti Natasha, Lenin Ramirez and other Latin artists, sources say. Billboard estimates the deal went for about $325 million.
While that catalog consists mainly of royalty income payments for streams of sound recordings, the catalog is said to contain recordings from over 100 artists, consisting of about 10,000 songs that generate more than 10 billion streams annually. All told, SoundHouse’s 2021 income was put at about $24 million. Sources say that Shot Tower Capital shopped the catalog.
Prior to its acquisition by HarbourView, SoundHouse, founded in 2016, was known for approaching distressed labels and offering to buy their royalty income, mainly from the streaming of master recordings, at bargain-basement prices, sources say. SoundHouse also did deals with artists as well, but mainly by buying their streaming revenue from master recordings, leaving the artists to retain other income streams associated with their records. SoundHouse also sometimes only acquired income streams from some of the songs in an artist’s catalog, not all of them, one source suggested.
In addition, SoundHouse also acquired the assets of InPop Records, an indie contemporary Christian label based in Nashville. At the time of that deal, in February 2018, a press release said InPop was SoundHouse’s 15th acquisition and brought its catalog to over 3,500 recordings. MusicRow.com reported that deal represented SoundHouse’s third Christian music acquisition, and added that SoundHouse was backed by Spark Capital, Columbia Capital and Pinnacle Bank.
In any event, sources suggest that the HarbourView deal for SoundHouse carried a price tag that ranged anywhere from $250 million to $400 million. These days, master recording rights are trading for a 12-15 times multiple, although superstar recordings have been known to reach a 20-times multiple of net income, also known as net label share. Considering the catalog’s annual income and artist caliber, a 12-times multiple would price the catalog at $288 million, while a 15-times multiple would price it at $360 million. Consequently, Billboard estimates that the catalog sold for about $325 million.
That price puts it in the same size area as the deal for the Genesis/Phil Collins et al. master recordings/publishing catalog acquired by Concord in September. However, unlike that deal, the SoundHouse deal doesn’t include any publishing revenue, so that puts the SoundHouse deal up there as possibly the biggest deal of 2022 for recorded master assets, at least so far this year.
SoundHouse was founded by Michael Rosenblatt, an executive producer of 20 feature films such as Valley Girl and Teen Wolf. With the sale of the SoundHouse catalog, the company principals have started a new vehicle, with apparently the same mission of buying music income streams. That company is named round2media, and aside from CEO and president Rosenblatt, it also lists among its leadership team COO/CFO Jeff Patterson, formerly with Columbia Capital; senior vp of finance, accounting and administration Vanessa Jolie, who held a similar position at SoundHouse; and vp of business affairs Shara Yolkut, whose background includes a stint at EMI Music Publishing as vp of product operations.
Clarke Soares declined to comment for this story. Likewise, round2media’s Rosenblatt declined to comment for his story, beyond emailing a statement: “As a company, SoundHouse, and now round2media, considers the confidentiality of our transactions to be one of our ethical cornerstones. I can confirm that round2media is in the business of acquiring rights and royalties and has made multiple acquisitions to date. Please visit our website to learn more.”