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By the early 1990s, Fleetwood Mac was running on fumes. The group’s 1990 album, Behind the Mask, peaked at No. 18 on the Billboard 200, and Stevie Nicks and Christine McVie, who died on Nov. 30, hinted that they were done touring.
Then the band got some valuable exposure from an unlikely place: Bill Clinton’s 1992 presidential campaign. As Clinton told Billboard, a supporter who drove him to an event in Los Angeles suggested that he use the song and “I knew it was a brilliant idea.”
At the time, with George H. W. Bush in the White House after eight years of Ronald Reagan, the song was like a breath of fresh air: Upbeat, optimistic, and full of the rock n roll sensibility that Clinton symbolized as the first Baby Boomer to serve as president. Clinton himself was a musician – a saxophone player good enough to perform on The Arsenio Hall Show as well as a fan, so it made sense to have a song that reflected his perspective.
“Honestly, Bill and Hillary [Clinton], that was one of their favorite songs,” remembers Paul Begala, the chief strategist of the 1992 campaign who became a counselor to the president after he won. “He had grown up with dreams of becoming a musician and he loved that band.”
In some ways, “Don’t Stop,” which peaked at No. 3 on the Hot 100 in 1977, wasn’t an obvious choice. “Once I got in the race,” Clinton told Billboard, “some of my staff tried to get me to go with a more current song.”
But it worked.
“That song encapsulated everything,” Begala tells Billboard. “He started insisting we play it at every rally – he just loved it. He also loved that Garth Brooks song ‘We Shall Be Free,’ but he settled on ‘Don’t Stop’ because of the message.”
Some of that was the implication that the future belonged to the Baby Boomers. “His conception of Bush was that he was a good man but his time had come and gone,” Begala says. Some of that involved the concept of “future preference,” an idea Clinton learned about from his Georgetown University professor Carroll Quigley.
Quigley “said that America became the greatest nation in history because our people had always embraced two important ideas: that tomorrow can be better than today, and that every one of us has a personal, moral obligation to make it so,” Clinton said. “’Don’t Stop’ captured the sentiment perfectly with both its lyrics and its upbeat, simple melody.”
Fleetwood Mac appreciated his use of the song, and the Rumours-era lineup – Nicks, McVie, John McVie, Mick Fleetwood and Lindsey Buckingham – reunited to play its first show in six years at Clinton’s inaugural ball. That seems to have boosted the band’s sales, and the Feb. 6, 1993, issue of Billboard reported that the band’s Greatest Hits jumped from No. 30 to No. 11 on the Catalog Albums chart, while Rumours debuted on that chart at No. 36.
By 1997, the band’s classic lineup was back together again – first for a show that was recorded for the live album and TV special The Dance, then for a tour that ran through much of that year. The next year, Fleetwood Mac was inducted into the Rock and Roll Hall of Fame.
In January 2001, Fleetwood Mac reunited to perform at a farewell party for Clinton on the White House lawn. “On one of his last days as president, the staff organized a farewell party on the South Lawn and the band surprised him,” Begala remembers. “I introduced Fleetwood Mac and they started playing ‘Don’t Stop’ and there wasn’t a dry eye in the house.” The band played an 11-song set.
“It was one of the most amazing moments of my life,” Begala says.
Clinton told Billboard that he would always be grateful to Christine McVie and her bandmates for letting him use the song, reuniting to play his inaugural ball and “for giving me a lifetime of great music and memories, and, of course, for that roadmap to the future.”
Critics who complain that all country music sounds the same should check out the artist rosters at the genre’s most successful labels, teeming with what appears to be a broader range of artists than at any time in history.
Warner Music Nashville (WMN) recently signed Giovannie & The Hired Guns, a rock band with country and Tejano shadings; and Madeline Edwards, whose blend of country storytelling with pop and R&B sonics is an engaging test of stylistic boundaries. Big Machine’s 19-year-old Kidd G fuses twang and hip-hop with a rebel flare. And Universal Music Group’s Boy Named Banjo and The War and Treaty weave bluegrass/Americana and soul/gospel elements, respectively, into their own left-of-center takes on country.
The proliferation of boundary-pushing artists for the future represents a distinct philosophical change for Nashville labels who historically have played it safe, routinely stocking their rosters with acts that fit established norms. In one of the most-derided examples, country followed its golden era of the early 1990s with “hat acts,” overloading the system with male country artists whose sound and imaging were clear attempts to copy the successes of Garth Brooks, George Strait and Alan Jackson.
“We tend to chase the path of least resistance,” Universal Music Group Nashville (UMGN) president Cindy Mabe says. “A lot of times there’s money that follows that, but what happens is you end up alienating audiences that don’t want to hear just that. There has to be more than one thing happening, [with] appeal for more than one audience. That’s how we grow.”
This expansive approach to rosters is part of an uphill climb for country music, which was considered a Southern-based niche genre for rural white audiences in its infancy. Over time, the size and location of that audience has changed — it remains a dominant force in farming communities across the United States, though its largest fan cluster is likely in the suburbs.
A ream of cultural, technological and organizational changes have required the business to rethink its parameters, widening the potential definition of the format as well as the makeup of its target audience.
“Things that might have been considered left of center, even just two years ago, would be considered more mainstream now,” says WMN senior director of A&R Stephanie Davenport, “because I think our fan base’s horizons have broadened quite a bit.”
Indeed, new and recently developed acts across rosters include trap-country figure Blanco Brown (Broken Bow), pop/R&B-flavored Tiera Kennedy (Valory), bilingual duo Kat & Alex (Sony Music Nashville), piano-based/pop-influenced Ingrid Andress (WMN), multigenre singer/songwriter BRELAND (Atlantic/WMN), moody and elegant music-maker Sam Williams (Mercury Nashville), rock-shaded Elvie Shane (Wheelhouse) and rock-/hip-hop-threaded Lily Rose (Big Loud).
Plenty of developments influenced that level of musical fence-busting:
• Country’s wide-ranging sound: The current chart accommodates Carrie Underwood’s arena-rockish “Hate My Heart,” Kane Brown’s slow-jammin’ “Thank God” and Parker McCollum’s solid country “Handle on You,” so there’s precedent for roster variety. “There’s been a lot of diversity of sound on country radio, and the things that you hear back-to-back-to-back are more varied than you’d hear on top 40,” says WMN senior director of A&R Rohan Kohli. “So I think the signings are a reflection of the diversity that we’ve been hearing for a while.”
• The proliferation of radio chains: When country stations were locally owned, management tended to be more provincial about the genre. Now that chains frequently have programmers overseeing four or more formats, radio is more receptive to artists such as Jelly Roll or Dan + Shay working beyond their home base. “A big hit for one of those executives is something they’re going to be aware of,” says Big Machine Label Group president/CEO Scott Borchetta. “You don’t have to go and reeducate everybody because it’s the same people.”
• DIY technology: With budding artists able to learn music-making at home and promote themselves on social media, a la UMGN’s Priscilla Block, they arrive in the business with built-in knowledge that makes them less apt to bend to accepted norms than previous generations. “We don’t try to fit any of our artists into a box,” Kohli says. “We tell them to go make the music, and we’ll follow it.”
• Digital consumption: Streaming sites have given the consumer easy access to music on country’s margins, allowing fans to find outside-the-box artists such as Corey Kent or Bailey Zimmerman, while they’re still indie acts, forcing labels to be more nimble in reacting to the marketplace.
• Precedent-setting change artists: A wide range of acts — from Willie Nelson to Chris Stapleton to Florida Georgia Line — have made the mainstream bend to their style instead of conforming to the format’s preexisting sound. The genre has been rewarded for pushing the limit in the past: Sound-alikes, as in the hat-act era or the bro-country era, have actually hurt the format, and the business is more committed to widening the playing field instead of just staying inside of it.
• Better inner-division cooperation: Music can still get lost, but the Nashville offices of major labels and publishers are generally working better with coastal pop divisions. That means greater potential for nontraditional acts, which also makes them less risky to sign.
• Expanding demographics: Music Row is more interested than ever in expanding its core audience, intent on attracting more young fans and minorities, especially Blacks and Latinos. In particular, the increase in Black artists — most of whom blend country and R&B influences — means more acts are stretching the sound of the genre.
• Faster trends: In the entire 1980s, country had two trends: the Urban Cowboy movement and New Traditionalism. The last 10 years have seen bro-country, Motown country, boyfriend country, ’90s retro country and, now, the lightly produced, gruff Yellowstone country (think Warren Zeiders and Zach Bryan). The format changes quicker than ever, and labels have to be prepared to shift with it. “If you don’t diversify in some regard, you’re going to have to scrap a whole roster really quickly,” Mabe says. “You have to have a vision of where you’re going.”
• The next big thing: While ’90s-style country and Yellowstone country are current, labels are already looking to the future, unpredictable as it is. “We always are fighting to stay on the edge of what’s next,” Borchetta says. “You want to be early, you want to figure out if there’s more to it than just a TikTok moment. You’re always looking for the next one that has all the right parts and pieces or could grow the right parts and pieces.”
Ultimately, those new artists are stepping into a genre that already has consistent hitmakers with Luke Combs, Miranda Lambert and Keith Urban. Thus, predicting the format’s future direction is only part of the challenge; the new acts also have to be capable of making a difference when matched against the genre’s established voices.
“New artists are competing against artists who’ve had many, many No. 1s,” Davenport says. “It’s not enough to have a good story. You have to have the best story as new artists.”
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Global venue development company Oak View Group is expanding its DEI commitments with the new supplier diversity program. The initiative – which has launched a pilot program with Climate Pledge Arena in Seattle, Moody Center in Austin, UBS Arena in New York and Miami Beach Convention Center – will help facilitate the use of minority-owned suppliers at all 400 OVG affiliated venues in the coming year.
Starting in January, company wide OVG will work to identify and increase sourcing from suppliers that are at least 51% owned, operated and managed at least 51% by a non-white minority, a disabled person and/or a woman. OVG currently recognizes a wide range of diverse certifications that include minority businesses, women, veterans, LGBTQ+, disabled persons, and other local city certifications. The program aims to foster economic inclusivity by making OVG’s supply chain more diverse by encouraging the use of vendors that are historically overlooked.
OVG is seeking suppliers in several fields including food and beverage, security, technology, construction, marketing, public works and various forms of consulting. Suppliers can confirm their minority-owned status through over a dozen certification outlets including Minority Business Enterprise (MBE), Women Business Enterprise (WBE) and Small Business Administration 8(a).
Founded in 2015, OVG has grown to work with more 400 venues worldwide and financed over $5 billion in capital currently deployed for new development projects. The size of the growing company may seem counterintuitive to working with small businesses, but OVG’s vp of diversity, equity, inclusion Dr. Debonair Oates-Primus tells Billboard the company is rolling out toll kits to help facilitate engagement with smaller businesses around the world.
“So much of the training is mindset shift. We have to make this really intentional,” says Oates-Primus of the new requirement for OVG venues. “I have to educate [OVG staff] on the bias that diverse businesses face. We had to make some changes to our valuation process to our criteria to our expectations of diverse businesses due to things like not having as much access to capital and not having access to networking opportunities to grow at a pace that we might think they need to be in order to with a company like ours.”
The initiative will evaluate diverse businesses by their capacity and where they can succeed within the OVG chain, as well as key difference that make businesses standout such as cost savings, reduction in delivery or setup times, value-added services, product/services quality, and sustainability.
Interested suppliers can fill out a questionnaire on each venue’s site that will give the local OVG venue an idea of what each small business can provide, but Oates-Primus explains that entities that are too small to address needs with OVG could also be connected with other large companies. If a business is too small, “let’s pair them with a larger business,” says Oates-Primus. “Let’s do some mentoring and coaching. So much of supplier diversity is just we’re not going to use a one size fits all rule. We can’t. That’s how bias creeps into every structure.”
As the initiative continues to roll out to OVG venues, the company plans to create benchmarks to help it succeed. Oates-Primus is aware that some areas are less diverse and will make the recruitment more difficult for venue operators and plans to tailor the tool kit to specific regions based on data being collected by the pilot venues.
“I don’t want any of the venue operators or leaders to feel like this has been forced upon them,” Oates-Primus tells Billboard, explaining that additional resources will be allocated to train and help venues. “I am doing a tour of all our leadership meetings, vice president meetings to let the leaders know all the ins and outs of the program so they also become champions of this for their teams.”
The OVG supplier diversity form can be found here.
More than two dozen Taylor Swift fans are suing Live Nation over Ticketmaster’s botched sale of tickets to her Eras tour last month, accusing the company of “anticompetitive conduct,” fraud and other forms of wrongdoing.
In a complaint filed Friday in Los Angeles court – the first known lawsuit over the fiasco – attorneys for the Swift fans called the sale a “disaster” and pinned the blame on Ticketmaster, which they called a “monopoly that is only interested in taking every dollar it can from a captive public.”
“In markets without a singular, monopolistic company, charging prices and fees like Ticketmaster would be impossible,” lawyers for the fans wrote. “And Ticketmaster does not do anything to justify these higher costs. Ticketmaster’s service is not superior or reliable; the massive disaster of the Taylor Swift presale is evidence enough of this.”
In addition to antitrust violations, the lawsuit accused Ticketmaster of intentionally misleading fans ahead of the sale – both by offering more presale codes than it had tickets to sell, and by allowing bots and scalpers into the sale. And because of the company’s unfair control over the secondary resale market, the Taylor fans say Ticketmaster was “eager to allow this arrangement.”
“Ticketmaster claimed that only those with codes would be able to join the presale, but millions of buyers without codes were able to get tickets,” the accusers wrote in the lawsuit. “Many of those without codes were scalpers, and Ticketmaster benefited from scalped tickets as they must be resold on Ticketmaster, who gets an additional fee.”
The new lawsuit came three weeks after the infamous Nov. 15 presale, which saw widespread service delays and website crashes as millions of fans tried – and many failed – to buy tickets for Swift’s 2023 Eras Tour.
Ticketmaster has apologized to fans and pinned the blame on a “staggering number of bot attacks” and “unprecedented traffic.” But that explanation has seemingly not been enough for many of the company’s critics, who have resurfaced longstanding complaints about the outsized power Ticketmaster and Live Nation have wielded in the market for live music since they merged in 2010.
Lawmakers in both parties on Capitol Hill have called for renewed antitrust scrutiny, and news broke days after the presale that the U.S. Department of Justice had already been investigating Live Nation for potential antitrust violations. Attorneys general in a number of states have also launched their own probes, looking to see whether any state-level consumer protection or antitrust laws were breached.
The new lawsuit echoed those gripes, saying that artists like “have no choice but to work through Ticketmaster” and that “virtually all major music concert ticket sales” are handled by the service. The company then leverages that control to dominate secondary ticket re-sales, the Taylor fans allege, giving the Ticketmaster an incentive to allow bots and scalpers into presales.
“Ticketmaster has stated that it has taken steps to address [scalping], but in reality, has taken steps to make additional profit from the scalped tickets,” lawyers for the Taylor fans wrote. “Ticketmaster forces purchases of tickets from its site to use only Ticketmaster’s Secondary Ticket Exchange for the resale of those tickets. Ticketmaster then gets the higher fees paid by fans who have no choice but to pay for the ‘right’ to use the Ticketmaster Secondary Ticket Exchange platform.”
Whether such claims will be legally successful remains to be seen. Proving that a company violates antitrust laws is no easy task, and linking those supposed violations to actual harm suffered by the spurned Swift fans will be equally difficult.
A rep for Live Nation did not immediately return a request for comment.
SoundCloud has linked up with Third & Hayden, the Atlanta management and services company founded by music exec Kei Henderson, for a joint venture, the companies announced today (Dec. 5). The new venture will see Third & Hayden signing new acts to its label and developing them with the help of SoundCloud’s services division, which will provide marketing, A&R, distribution and promotion support, as well as financial backing.
The first two acts to sign to the new venture are Los Angeles singer/songwriter Jordan Hawkins and Atlanta-based rapper Key!.
The deal is the latest for SoundCloud’s new roster initiative, which has previously inked a joint venture with Quality Control’s Solid Foundation Management to work on new acts and signed distribution deals with Lil Pump, Tekno and Aly & AJ to release forthcoming projects. Henderson, meanwhile, has an extensive background as a manager over the past decade, beginning with Key! 10 years ago, who then introduced her to 21 Savage in the mid-2010s; Henderson would go on to co-manage Savage for several years as he rose from the mixtape circuit into one of the most influential rappers of the past half-decade. Henderson then co-founded SinceThe80s, a joint venture with Motown/Capitol Music Group, where she first worked with Hawkins, and founded Third & Hayden, which also manages artists like Asiahn, Ben Reilly and Kenneth Whalun, among others.
“We want artists to find success as independents to set the foundation for long-term careers and move through their careers with leverage, and creative control. What we were able to build with 21 Savage early and again with SinceThe80s is the blueprint for the way we’re working with our artists and I’m so thankful to have been a part of both of these brands from the start,” Henderson said in a statement announcing the deal. “SoundCloud is typically one of the first touch points for indie artists and I feel a great part of my career has been brand building with artists from day zero — for this reason they’re the best partner for what we’re building. We’re being intentional on ground up development.”
In an interview with Billboard, Henderson further broke down the reasoning for going with SoundCloud, after previously working through Distrokid and then Epic Records for 21 Savage and with Motown/Capitol with SinceThe80s.
Kei Henderson
Courtesy Photo
“I think it was the understanding that building isn’t an overnight thing,” she said. “It will allow me to fund their careers from a startup level in a way that includes advances, recording budgets and marketing budgets. We’re always gonna be scrappy and resourceful, but it’s always nice to have a little bit of money to be able to do certain things with. So we’ll be able to activate digitally a little more than we would be able to as a completely unfunded independent, and I like that, and it also allows me to have access to a full team. Because the team they’re hiring at SoundCloud looks like a label, but not everybody is from a label background, so the thinking is a little bit different and the approach to how we market an artist is a little bit different.”
In the past few years, SoundCloud has pivoted its business model away from being solely a streaming platform and more towards becoming first a distributor, then towards full-service artist and label support, a shift that is concurrent with similar moves across the industry. The company has also introduced user-centric royalties, what it calls Fan-Powered Royalties, that pay artists based on the number of streams that they accrue rather than through market share of total streams; in July, SoundCloud struck a deal with the Warner Music Group to allow the major’s artists to get paid in that way on its platform, in addition to indie artists.
“Kei has a proven track record of finding and fostering the next generation of talent, so partnering with Third & Hayden was simply the right fit,” SoundCloud’s global senior vp/general manager Jessica Rivera said in a statement. “We’re excited about developing this joint venture with such a respected industry leader and creative who shares SoundCloud’s dedication to providing solutions and empowering artists as they take their careers to the next level on their own terms.”
In addition to the joint venture, Henderson recently opened console by 2NDBDRM in Atlanta, a record shop, listening room and retail space in the city’s Ponce City Market for artists and music fans in the city to have a community space to come together, which will feature some small-scale performances and in-store appearances, consistentl with her idea of wanting to grow artists’ careers not just digitally, but through live events and in-person experiences.
“I don’t think what works for one artist works for every single artist, so we do take into consideration how the artist wants to build their career over a long period of time,” Henderson says about the approach the label will take. “Some artists may feel like, after three projects, I want to go to a major, and that’s perfectly fine. So I want to leave it open-ended: whatever you want to do, let’s put a team around the artist that gets us to that long-term goal.”
Overall, Henderson says, the goal is to build an actual audience for artists, a prospect increasingly difficult in a TikTok world where virality can mean a record deal, but not necessarily a dedicated fan base. “I think what we’re missing in the industry as a whole is, everyone’s in such a hurry to get their money back, and I get that from a business perspective,” she says. “But from a manager perspective, it’s like, some of you want to get your money back but you’re not actually building a fan base or building a connection between the fan and the artist. And sometimes that takes a little bit longer to get it done properly.”
Universal Music Group (UMG) will expand its early career development program, Bonus Tracks, to Atlanta’s Frederick Douglass High School and through Motown Museum’s Hitsville NEXT in Detroit in the coming spring semester, the company tells Billboard. Last spring, UMG completed its first year in New York at Brooklyn’s Pathways in Technology Early College High School (P-TECH).
Bonus Tracks is dedicated to discovering and developing a diverse set of future executive talent by giving students in grades 11 and 12 the opportunity to learn about the music industry through immersive programming while being provided with transferrable skills. During the multi-week program, participants attend weekly meetings at a UMG label with executives from all areas of the company, including creative, marketing, commercial partnerships and promotion.
UMG has also created the Bonus Tracks Scholarship Award, a college scholarship that will be given to one Bonus Tracks student in each city who are recognized for their community leadership, commitment to academic excellence and completion of the program, including the presentation of their capstone project.
The Bonus Tracks program was launched in 2019 in partnership with Capitol Music Group (CMG) and the Compton Unified School District at Dominguez High School in Los Angeles. It later expanded to Nashville through Capitol Christian Music Group and Pearl-Cohn Entertainment Magnet High School. It was founded by Brian Nolan, executive vp and executive vp of marketing at Motown; Patrick Stephens, manager of brand partnerships at CMG; and Micah Ali, president emeritus of the Compton School District.
“We’re excited to see Bonus Tracks continue to expand and look forward to bringing the program to students in Detroit and Atlanta,” said Nolan. “We knew Bonus Tracks could thrive and scale in the most meaningful ways in order to reach the next generation of music industry leaders. I am grateful to Micah Ali for his partnership in this incredible journey and to UMG for fully embracing and supporting the vision of the program: inspiration, education, and pathway.”
“Bonus Tracks has always been about giving students the opportunity to learn about career pathways in a way that meets their passion for music and curiosity about the industry,” added Ali. “As this program moves into its fifth year, I’m incredibly honored to continue to expand this program to reach students across the country.”
“Motown Museum’s Hitsville NEXT is devoted to supporting creativity in today’s young artists, entrepreneurs and changemakers,” said Robin Terry, chairwoman and CEO of the Motown Museum. “Partnering with Bonus Tracks is a perfect reflection of our mission. We can’t wait to work with the entire Detroit Public School system and grow this great program in our community.”
“With Atlanta being the music capital of the south, Frederick Douglass High School has produced some of the most famous music industry icons such as T.I., Lil Jon, and Killer Mike, to name a few, said Erika Y. Mitchell, a school board member of Atlanta Public Schools. “Bonus Tracks will create pathways for our students to learn about the music industry’s business, provide mentorships with music executives, and allow our students post-graduation to have access to internships at Universal Music Group or receive a scholarship toward college.”
Mitchell added that she’s “looking forward to expanding” the Bonus Tracks program to Atlanta’s Benjamin E. Mays High School “in the near future.”
“It is critically important for UMG to provide early career opportunities as an investment in the future of this industry, both from a business and fan perspective,” said Natoya Brown, senior vp of people inclusion and culture at UMG. “Bonus Tracks is a way to begin discovering and cultivating the next generation of music industry leaders.”
FBI Director Chris Wray is raising national security concerns about TikTok, warning Friday that control of the popular video sharing app is in the hands of a Chinese government “that doesn’t share our values.”
Wray said the FBI was concerned that the Chinese had the ability to control the app’s recommendation algorithm, “which allows them to manipulate content, and if they want to, to use it for influence operations.” He also asserted that China could use the app to collect data on its users that could be used for traditional espionage operations.
“All of these things are in the hands of a government that doesn’t share our values, and that has a mission that’s very much at odds with what’s in the best interests of the United States. That should concern us,” Wray told an audience at the University of Michigan’s Gerald R. Ford School of Public Policy.
Those concerns are similar to ones he raised during congressional appearances last month when the issue came up. And they’re being voiced during ongoing dialogue in Washington about the app.
Concerned about China’s influence over TikTok, the Trump administration in 2020 threatened to ban the app within the U.S. and pressured ByteDance to sell TikTok to a U.S. company. U.S. officials and the company are now in talks over a possible agreement that would resolve American security concerns, a process that Wray said was taking place across U.S. government agencies.
“As Director Wray has previously said, the FBI’s input is being considered as part of our ongoing negotiations with the U.S. Government,” TikTok spokesperson Brooke Oberwetter said in an emailed statement. “While we can’t comment on the specifics of those confidential discussions, we are confident that we are on a path to fully satisfy all reasonable U.S. national security concerns and have already made significant strides toward implementing those solutions.”
TikTok is owned by Beijing-based ByteDance. The TikTok statement Friday noted that ByteDance is a private company and that “TikTok Inc., which offers the TikTok service in the United States, is a U.S. company bound by U.S. laws.”
At a Senate hearing in September, TikTok Chief Operating Officer Vanessa Pappas responded to questions from members of both parties by saying that the company protects all data from American users and that Chinese government officials have no access to it.
“We will never share data, period,” Pappas said.
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.
After a miserable year for music stocks — and stocks in general — 2022 could end on a string of positive notes.
As rising interest rates have hammered stocks and erased big gains made during the pandemic, the Billboard Global Music Index, a float-adjusted group of 20 publicly traded music companies, is down 36.1% in 2022, and shares of vital companies such as Spotify and Warner Music Group are down 65.7% and 20.5%, respectively.
But in recent weeks, the momentum has reversed dramatically. The Billboard Global Music Index is up 12.6% over the last two weeks and 14.6% in the five weeks since Oct. 28.
Since Oct. 28, the week when music companies began to release third-quarter financial results, the stocks of major labels rose an average of 23.1%. Indie music companies — Reservoir Media, Believe, Hipgnosis Songs Fund and Round Hill Music Royal Fund — rose an average of 8.2% over that time period. K-pop companies from South Korea averaged a 16.1% improvement.
Part of music stocks’ rebound can be attributed to overall market sentiment. Stocks have improved in recent weeks — the New York Stock Exchange composite index is up 6.6% in the last five weeks and the S&P 500 is up 4.4% over that time. This week, stocks surged on Wednesday (Nov. 30) after Federal Reserve chairman Jerome Powell said upcoming interest rate hikes will be smaller following “promising developments” in the Fed’s efforts to slow inflation. Stocks gave back some of those gains on Friday, however, after a solid U.S. jobs report showed a combination of strong hourly earnings and lower labor force participation. Higher wages erode corporations’ profits and persistent inflation could mean more rate hikes by the Federal Reserve.
But music companies have outperformed the broader stock markets thanks to solid third-quarter earnings results that met and occasionally exceeded expectations. In addition, many companies increased their fourth-quarter guidance when they announced third-quarter results. That tends to increase share prices as investors adjust upward their expectations for future performance.
Among the best performers of late has been Warner Music Group, whose shares improved 31.1% in the last five weeks. Last week, Warner beat analysts’ expectations for both revenue and earnings per share in the fiscal fourth quarter ended Sept. 30 and announced on Nov. 22. It posted revenue of $1.5 billion, up 16% year-over-year at constant currency (+9% as reported). Adjusted earnings before interest, taxes, amortization and depreciation grew by 16% to $276 million.
Shares of Universal Music Group have risen 16.1% since Oct. 28. The day prior, UMG’s third-quarter earnings showed a 13.3% jump in revenue at constant currency. Sony Corp., the parent company of Sony Music Group, climbed 23.7% over the same period. Sony Music’s quarterly earnings, released on Nov. 1, showed 5.9% year-over-year revenue growth. Sony’s music division accounts for just 11.4% of the company’s consolidated revenue and 16.7% of its operating income while UMG and WMG are pure-play music companies.
Smaller labels and publishing companies have improved, too. Reservoir Media shares have climbed 14.9% over the five weeks, while shares of Believe rose 19.1% over five weeks but stumbled 7.8% in the last two weeks. Both companies raised guidance for their fourth quarter results. Korean music companies have also fared well: the shares of four K-pop-focused companies — HYBE, SM Entertainment, YG Entertainment and JYP Entertainment — rose an average of 16.1% in the last five weeks.
Labels’ and publishers’ financial results were augmented by positive news that suggests even stronger streaming revenue in 2023. According to WMG CEO Stephen Cooper during the company’s Nov. 22 earnings call, announcements of price increases by Apple Music [on Oct. 24] and Deezer “in the current economic environment shows that music subscription services offer amazing value to consumers. Music remains undervalued, but we’re optimistic that there will be other increases to come.”
Cooper was also encouraged by subscriber growth reported by streaming companies. Spotify exceeded expectations in the third quarter by adding seven million subscribers — 1 million more than its guidance. YouTube announced on Nov. 11 it had reached 80 million subscribers of YouTube Music and Premium just 14 months after surpassing the 50-million mark. “Developed markets continue to grow in the double digits while emerging markets are growing at higher percentages,” said Cooper. “With global smartphone penetration expected to increase meaningfully in the coming years, our conviction in streaming growth remains strong.”
While labels and publishers have surged, streaming companies have been mixed. On average, streaming companies’ stocks rose 24.4% over the last five weeks. The biggest gains came from much smaller Tencent Music Group and Cloud Music, up 101.6% and 28.4%, respectively — but both have relatively small floats and remain majority owned by Tencent and NetEase, respectively. Even smaller yet are Anghami (-3.1%) and Deezer (-1.5%). Spotify, one of the largest companies in the index, declined 3.7%.
Companies in the live and ticketing space haven’t fared as well as others, however. Live Nation shares are down 7.7% in the last five weeks, due mainly to a 7.5% drop following its third-quarter earnings release and a 10.3% decline on Nov. 18 following reports that the company was being investigated by the Department of Justice after its controversial presale for Taylor Swift’s upcoming tour. The latter was a short-lived dip, however, and Live Nation shares have reclaimed that lost ground and more by rising 11.6% in the last two weeks. Over five weeks, MSG Entertainment shares rose just 2% and Vivid Seats shares are off 1.2%. On the other hand, shares of German concert promoter CTS Eventim rose 27.7% over five weeks after posting strong third-quarter results and sounding more confident about full-year results than comments it made in its second-quarter earnings release.
Four radio companies — iHeartMedia, Cumulus Media, Audacy and Townsquare Media — have fared the worst, falling an average of 6.8% since Oct. 28. IHeartMedia, the largest radio company and a member of the Billboard Global Stock Index, fell 9% over that time.
A talent manager who allegedly helped artists like Vampire Weekend and Marshmello gain access to $200 million in COVID-19 relief funds is the target of a new lawsuit that claims he stole the idea to tap those government funds — aimed primarily at helping venues, not artists — from somebody else.
In a complaint filed Wednesday (Nov. 30) in Los Angeles court, longtime music agent Laurence Leader says he was the first to realize that artists might also be able to access Shuttered Venue Operators Grants, a COVID-era federal program that gave out more than $14 billion to help live venues shuttered by the pandemic.
But Leader claims his “novel idea” was quickly stolen by talent manager Michael Oppenheim, who then allegedly used the same scheme to secure more than $200 million in SVOG funds for his own clients at the talent firm NKSFB, including Vampire Weekend, Marshmello, Common, Lil Wayne and many others.
In a complaint seeking more than $30 million in damages, Leader called Oppenheim’s conduct “despicable” and an “outright betrayal” of his trust.
“This lawsuit is brought due to the blatant and brazen theft by defendants of [Leader]’s novel idea for popular mainstream artist and band clients to obtain a grant under a specific government program,” wrote attorneys for Leader’s company, London Calling Entertainment.
Oppenheim did not immediately return a request for comment. Leader’s lawsuit, filed by veteran music litigator Richard Busch, was first reported by the news outlet Puck.
Launched by the U.S. Small Business Administration in April 2021, Shuttered Venue Operators Grants were designed to do exactly what they sound like — provide financial aid to live venues and others companies closely related to them, like vendors that provide services for live events. According to the last report issued by the SBA in July, more than $14 billion was handed out to more than 20,000 businesses.
Though the SVOG funds were a lifeline during COVID for many venues, some have argued they were left out. Dozens of venues have filed lawsuits against SBA over the past two years, claiming they were unfairly denied millions in aid.
In his lawsuit, Leader claims he was the first to discover that touring artists might also qualify for the program. Even though he says others doubted him, he believed that one definition of SVOG eligibility — “performing arts organization operators” — sounded “precisely” like the so-called loan-out companies that artists use to handle their touring businesses.
When Leader used that approach and tried applying for an unnamed jazz musician in June 2021, it was an immediate success: He says his client was quickly awarded nearly $10 million in SVOG money.
Leader says he soon shared his grant idea with Oppenheim, whom he says he’s known professionally for more than 40 years. But Leader claims he shared the SVOG concept “confidentially,” with the clear understanding that he could only be used if Leader was paid a 15 percent commission on grants secured.
Oppenheim initially believe the plan would not work and voiced “skepticism,” Leader’s lawyers say, and eventually went “radio silent” on the entire thing. But Leader claims he later discovered that the talent manager and his firm NKSFB had in fact boldly embraced the idea — allegedly filing successful SVOG applications for more than 70 of their client artists.
“As a direct and proximate result of defendant’s misuse of plaintiff London Calling’s idea … defendants obtained SVOG program grants totaling well in excess of $200 million,” Leader’s lawyers wrote.
Leader doesn’t claim that his idea is a piece of intellectual property, like a patent, copyright or trade secret, since it almost certainly wouldn’t qualify for any such formal protection. As the case is litigated, Oppenheim’s attorneys might argue back that no single person should be able to claim proprietary rights to the process of merely applying for a public government aid program.
But Leader says he and Oppenheim forged an “implied contract” that his valuable idea — helping artists access an otherwise off-limits program — would remain confidential unless Leader was compensated. By using the same scheme for his own ends without payment, Leader says Oppenheim breached that contract.
In monetary terms, he’s seeking $30 million in damages — or a 15 percent cut of the $200 million that Oppenheim allegedly secured in grants. Leader also wants an unspecified amount of “punitive” damages on the grounds that the breach of contract was “willful and malicious.”
Read Leader’s entire lawsuit here:
SiriusXM is planning cost-cutting measures for the new year — including, potentially, job cuts, the satellite radio service told staff during a company-wide Zoom meeting this week.
SiriusXM CEO Jennifer Witz said the company is reviewing “where there is room for improved efficiency,” as it weighs how to handle macroeconomic challenges like declining advertising budgets and auto manufacturer delays while still investing in a near-total rebuild of its technology infrastructure.
“The results of this review will highlight the other areas where we may need to reduce spending, and it may indicate the need for staff reductions,” Witz said on the Nov. 28 call, according to notes from the call reviewed by Billboard and verified by a spokesperson.
“In the meantime, we need to closely evaluate our hiring needs and be purposeful in prioritizing roles that align with our strategic initiatives.”
This comes amid a wave of music companies announcing layoffs, including Spotify, SoundCloud, BMI and Anghami, as all prepare for a possible economic downturn.
SiriusXM said its cost-cutting review is currently underway. While it has not finalized any decisions on how many jobs would be cut or from what divisions, Witz said the results of the review are expected in the new year.
During Witz’s roughly two years as CEO, SiriusXM has hired about 1,500 new employees, bringing the company’s total headcount to just under 5,700, according to filings.
SiriusXM reported last month that profits fell in the third quarter from a year ago due to a slowdown in Pandora subscriber revenue and higher expenses from investments in podcasting and technology. Third quarter revenues were up overall, as the company’s total subscribers rose to 34.2 million.
The company is in the process of updating the back-end technology and user-friendliness of its SiriusXM app, Witz said during a presentation at the investor day for SiriusXM’s parent company Liberty Media on Nov. 17. Updating the app’s infrastructure so that the company can bring new products to the app quickly is a key part of the company’s growth strategy.
“[The new app] takes the ease and connection we have in-car and extends it everywhere our subscribers go while inviting new listeners in as our standalone streaming business continues to grow,” Witz said at the investor day. She also acknowledged the “challenging macroeconomic environment where we are seeing headwinds in both the ad market and auto industry,” and said those issues are forcing the company to run leaner in certain areas in order to prioritize investing in growing SiriusXM’s audiences.