Business
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Years ago, when the music business was at its low point, devastated by online piracy and struggling to sell one-dollar downloads, tech pundits used to ask why the major labels hadn’t just started their own online store. There are a few answers: They did (anyone remember PressPlay or MusicNet?), and a more serious effort would have outraged other retailers, which were still generating considerable revenue. Besides, consumers would have been reluctant to embrace a service with a limited selection, and getting too many labels together presented logistical issues (who would run it?) as well as legal ones, in the form of potential antitrust concerns. The result has been a business where technology companies have more control than rightsholders would like over pricing, promotion, and relationships with consumers.
That was then. It’s still hard to imagine any label creating its own mainstream streaming service – the kind that would compete with Spotify or Apple – but what about a smaller one, focused on a particular genre? It would be a tough sell now that consumers are used to getting all their music in one place, but the payoff – in profit, information about consumer preferences, and control of a direct marketing channel – could be significant.
As it turns out, there actually is such a service. On Nov. 21, Universal Music Group’s Deutsche Grammophon launched Stage+, which for $14.90 a month offers music from the label’s archive and that of sibling Decca Records, plus video programming and a new live performance every week. In terms of popularity, Stage+ can’t compete with mainstream platforms, but it’s not meant to – and it doesn’t even need to. It could make money with a number of subscribers in the low six figures, partly because it costs more than other services, and it gives Deutsch Grammophon a way to market other products directly to consumers.
Stage+, which was developed by Deutsche Grammophon president Dr. Clemens Trautmann under Universal Music Central Europe chairman and CEO Frank Briegmann, faces any number of challenges – consumer disinclination to subscribe to multiple services, existing specialist streaming platforms, even a rumored new project from Apple. But the product looks great, and it’s worth thinking about how a genre-focused, label-owned service might develop – and the issues it raises for the streaming model that has relatively quickly come to dominate the music business.
Right now, Stage+ only offers Universal Music content. But there’s no reason other labels couldn’t license it music. (Trautmann says he’s open to this, although he’s not seeking it out now.) Presumably, Sony Music Entertainment and Warner Music Group would be reluctant to license their classical music repertoire to a service run by their rival. But it might make financial sense to do so, since the subscription price for Stage+ would imply a better payout. Perhaps just as important, the Stage+ policy of dividing royalties according to listening time is fairer to classical performers than the standard number-of-tracks model. If you had spent decades mastering an instrument, how would you feel about hearing that your 20-minute recording was only worth a tenth as much as 10 two-minute pop songs that played for the same total amount of time.
This model could also work for other genres, which is where things really get interesting. The obvious candidate is jazz. Like classical music, it appeals to aficionados, many of whom might be willing to pay a premium price for a well-curated service that offers high-fidelity audio and video. As it happens, Universal has a substantial market share there, too: It owns Decca, Blue Note and Verve (which controls Impulse! Records) and has distribution deals with ECM Records and Concord Records (which owns the catalogs of the Prestige and Riverside labels). That’s far from everything – Sony has the important Miles Davis recordings, for example – but it would be one hell of a start. After that, who knows? Could there be room for an Americana platform, a service for independent punk, even one for jam bands?
The truth is that subscription streaming saved the music business, but the dominant model just isn’t great for some genres. Neither are the dominant services, which offer a mind-blowing selection of music but are aimed at a general audience. That has helped the music business grow, but it hasn’t always served fans focused on specific genres. Classical aficionados want better metadata to find specific performances of classic compositions, for example, while jazz devotees could use more information about which musicians play on certain recordings. Jam-band fans might want help figuring out the coolest versions of “Dark Star.”
These kinds of services probably won’t cost mainstream services many subscribers, but they could put a bit of pressure on them to reconsider some of the rules that favor pop at the expense of other genres. Why don’t services double-count songs that are more than 10 minutes long, for example, or create an easy and reliable way to search for albums based on the musicians that play on them instead of just the named artist? For the last few years, the music streaming market has been extremely competitive based on marketing and discounts – all the mainstream services offer the same music for about the same price, with a fairly similar experience. What would help record labels, as well as creators, is more competition in terms of business models, where services that offer different features face off against others that are aimed at different audiences. And who better to spark that competition than the labels themselves?
For the Record is a regular column from deputy editorial director Robert Levine analyzing news and trends in the music industry. Find more here.
The estate of Luther Vandross tapped Epic Rights — part of Universal Music Group’s merchandise and brand management company Bravado — as the global merchandise management agency to develop a multi-category worldwide retail and e-commerce program for the late singer. The agreement will see a roster of new licensing partners create branded merch and other elements to extend Vandross’ legacy in advance of multiple anniversary celebrations slated for next year. Vandross released his solo debut album, Never Too Much, in 1981; he went on to release 11 consecutive platinum albums and win a total of eight Grammys. According to a press release, over his more than 30-year career, he sold in excess of 40 million albums worldwide and also produced records for Aretha Franklin, Diana Ross and Dionne Warwick. Next year is the 20th anniversary of both his Dance With My Father album and Live at Radio City Music Hall, which marked his final live performances. Other activations will include the launch of the Luther Vandross Foundation and a remix collaboration for Black History Month.
Full-service B2B distributor FUGA, a division of Downtown Music, partnered with electronic label Insomniac Music Group for a deal that will see FUGA provide a range of distribution, marketing and label services for several labels under the Insomniac umbrella, providing access to over 260 DSPs globally. Insomniac will also be utilizing FUGA’s sync and audience engagement services and have access to its trends and analytics platform. Insomniac additionally reached a deal with Downtown Neighbouring Rights.
China-based online music platform NetEase Cloud Music struck a licensing renewal agreement with Japanese entertainment company Avex. Under the deal, the companies will collaborate on promoting the presence of Avex artists on the NetEase platform. Avex’s roster includes Ayumi Hamasaki, Ai Otsuka, Kumi Koda, Awesome City Club, HIRAIDAI, I Don’t Like Mondays and NAQT VANE.
Actor and singer-songwriter Reneé Rapp signed with WME in all areas. Known for her role on the HBO Max series The Sex Lives of College Girls, Rapp recently signed with Interscope Records, which released her debut EP, Everything to Everyone, on Nov. 11. She continues to be represented by Adam Mersel of Immersive Management, Lisa Socransky Austin and Sloane, Offer, Weber & Dern LLP.
Universal Music Group (UMG) partnered with Artist Partner Group (APG) on The Fast & Furious: Drift Tape (Phonk Vol 1), “a fan-first mixtape” released in conjunction with character pieces from Universal Pictures’ Fast & Furious franchise that are meant to reintroduce characters to fans. Led by APG CEO Mike Caren and UMG’s Steven Victor, the project features music and collaborations from Phonk music’s biggest artists, including Kordhell, MUPP, Kaito Shoma, SCXR Soul and more. The full mixtape will be released Dec. 16.
Montreal-based pianist and composer Alexandra Stréliski signed to XXIM Records/Sony Music Masterworks. The first release under the deal is the song “The Hills,” which is Stréliski’s first new music in four years; she’s slated to put out a new album in spring 2023. All forthcoming music will be released by XXIM Records/Sony Masterworks worldwide, excluding Canada, in partnership with Montreal-based Secret City Records, her Canadian label home since 2018.
MOBO Group welcomed The Orchard to its recruitment and mentoring platform MOBOLISE, which launched in beta in 2020. MOBOLISE “supports and connects career opportunities to empower diversity, excellence and transformation in the workplace,” according to a press release, via a jobs board, mentoring and career development events and educational resources. It aims to create a more equitable industry by overcoming systemic obstacles faced by Black professionals. “MOBOLISE directly supports The Orchard’s goal to attract diverse talent by providing resources and information to the MOBOLISE community as well as direct recruitment opportunities to add to our workforce,” said Naledi Nyahuma Seck, vp of diversity & inclusion at The Orchard.
The Tahoe Douglas Visitors Authority and Oak View Group reached an exclusive multi-year naming rights agreement with Tahoe Blue Vodka for a new live entertainment, sports and conference center on the south shore of Lake Tahoe. Located in Stateline, Nevada, the 6,000-capacity Tahoe Blue Center is projected to open in July 2023 and host 130 events annually. The deal includes prominent exterior and interior signage. This is the first naming rights sponsorship for the vodka brand.
Payton Smith (“Like I Knew You Would”) signed with Combustion Masters, which recently released his latest single “Need You To Not.” Smith is currently in the studio with Combustion president Chris Warren at the production helm. New music from the singer, who’s signed with Eclipse Music Group for publishing, is expected early next year.
Independent digital distributor IDOL signed a full-service digital distribution partnership with independent label Fire Records, which boasts acts including Black Lips, Jane Weaver, The Lemonheads and Vanishing Twin on its roster. IDOL will handle the digital distribution of Fire Records’ repertoire to its global network of DSPs, excluding South Korea. Fire Records will also work closely with IDOL’s international audience development team on marketing and release strategy for frontline releases, with a dedicated specialist working on the label’s back catalog.
Q Prime South signed singer-songwriter Paul Cauthen for management. Cauthen, who will be on tour throughout December and into early 2023, is working on new music for release next year. His most recent album, Country Coming Down, was released by Thirty Tigers.
Warner Music Latina has signed emerging Mexican singer-songwriter Arriola to “continue the development” of his career within the regional Mexican genre, according to a press release. Arriola (real name Eduardo Arriola Gómez) — who released his first single “En Eso Estoy” when the label announced his signing — is also currently working on additional new music that will be part of his first album under the label. – Griselda Flores
Synch clearance and licensing software Trevanna Tracks partnered with music and cue sheet reporting company Soundmouse. The deal will allow Trevanna users to move song metadata, including splits and usage, from Trevanna to Soundmouse in order to generate accurate cue sheets. “Trevanna’s data and documents give production teams everything needed to air a synced song, but it doesn’t take the next step to ensure ongoing downstream payments,” said Jennifer Freed, founder and CEO of Trevanna Tracks. “This process was brilliantly sorted by Soundmouse.” Added Soundmouse head of business development Mark Vermaat, “This partnership enables collaboration between music supervisors and editors, saves time, and significantly lessens the margin for error in reporting royalties.”
Irish singer-songwriter Lisa O’Neill signed with Rough Trade Records for the release of her next album, All of This Is Chance, which is slated for release Feb. 10.
Country trio Track45 signed with UTA for booking. Comprised of siblings Jenna, Ben and KK Johnson, the group will be working with UTA agent Lance Roberts as its day-to-day. Track45 is signed to BBR Music’s Group’s Stoney Creek Records and managed by T.R.U.T.H. Management’s Missi Gallimore.
Nettwerk Music Group signed several new artists: lo-fi hip-hop producer linanthem; Sun Lo, a new project from artist-producer Attlas and songwriter-vocalist Richard Walters; alt-pop duo Bestfriend; beatmaker and producer Mr. Käfer; and disco-pop artist and producer Wingtip. The label recently released linanthem’s single “wind in my sails,” Sun Lo’s debut single “Factory Gates”; Mr. Käfer’s single “Blurred”; and Wingtip’s single “Mr. 29.” On Dec. 9, the label will release Bestfriend’s new single “LEMON LIME.”
Natalie Carr signed with Dallas Austin‘s distribution company DAD, which will release her new song “Drive.”
Mailboat Records signed yacht rock group Yachtley Crew. The outfit, which is managed by Andy Gould and is revving up for a series of monthly performances at Palms Casino Resort’s KAOS, recently released their first original song, “Sex On the Beach.”
As streaming became the dominant mode of music consumption, fraud and “fake streams” have been regarded as a minor nuisance — generally acknowledged but seldom worried about. Most industry executives tend to see this activity as a way for aspiring acts to inflate their numbers, and thus their commercial potential, or as an avenue for grifters to steer money into their pockets by running up plays of white noise or rain sounds.
At least since this summer, however, SoundCloud has detected evidence of fraudulent streams or manipulation on multiple releases from both notable independent acts and major-label artists, including hitmakers with track records of successful singles, according to two sources familiar with the company’s operations who spoke on the condition of anonymity. And this is not unique to SoundCloud. This summer, Deezer executive Ludovic Pouilly told the French investigative publication Les Jours that it has become more common to see “artists in the top 200 who have millions of real streams” have fake streams as well.
Streaming services are increasing their effort to fight the fakes. In a statement, a spokesperson for SoundCloud said, “We take the issue of stream manipulation extremely seriously and make every effort towards identifying and mitigating inauthentic plays.” It’s not alone: Earlier this year, a Spotify spokesperson told Billboard, “Stream manipulation is an industry-wide issue that Spotify takes very seriously.” SoundCloud also works with a third-party company that “specialize[s] in bot detection” to fight stream manipulation, an executive said at a Music Biz panel in May. (The panel had a pointed title, “They’re Coming For Us: Fraudsters & How We Stop Them.”)
Streaming executives say there are a handful of ways to fraudulently boost an artist’s numbers, including harnessing bot networks or fake or stolen user accounts, and that this activity is becoming “more intense,” as Pouilly put it. At Music Biz, Napster senior vp and general counsel Matthew Eccles noted that fraud on the platform “increased over COVID.”
In fact, the current streaming business is rife with “very prevalent fraud and abuse,” according to SoundCloud vp of strategy Michael Pelczynski, who spoke at the same panel. This abuse has “cultural ramifications,” Pelczynski added: If fraudulent streams go “undetected and not policed, and [they] start influencing the way we measure the success of music, we are literally supporting inauthenticity.”
The level of fake streams detected varies by service and region. At one point, bots on Pandora were generating “a large, large fraction of spins,” according to George White, senior vp of music licensing at SiriusXM, “nearly equaling” the amount coming from human accounts. Pouilly told Les Jours that “7% of the volume of daily streams [on Deezer] is now detected as fraudulent.”
The Merlin Network, which handles digital licensing for many independent labels and distributors, used to send members a monthly report detailing the percentage of fraudulent streams from their releases on Spotify; this February, 2.5% of ad-supported streams and 1.2% of the plays from premium Spotify accounts were identified as fraudulent. (Asked about the issue, a spokesperson for the platform said that stream manipulation was “an industry-wide issue.”) The ad-supported number was nearly 10% at one point in 2020, according to one executive who received the report.
As evidence of what Pelczynski dubbed “prevalent fraud” grows, music executives worry that artists who are playing by the rules will start to feel pressure to pad their numbers in order to keep up with rivals — especially in an increasingly crowded landscape where it feels harder than ever to stand out. Paying for fraudulent streams “will become a marketing expense that everyone needs to employ if it’s left unchecked,” White warned at Music Biz.
Eccles from Napster worried that the music industry could enter a phase like professional cycling decades ago, when cyclists felt compelled “to dope” just to compete at a high level. It is “key,” Eccles stressed, “to avoid a situation where that happens in music.”
A new lawsuit claims that CNN used more than 100 different songs in international segments without paying for them, constituting copyright infringement on a “breathtaking scale.”
Freeplay Music, a company that sells so-called production music for use in web videos, television segments and other content – and hasn’t been afraid to sue over it – claims the cable news giant used the company’s library of music as “their own personal cookie jar” for segments on CNN Philippines, CNN Indonesia, CNN Chile.
“As high-profile news media companies which strive to provide the best news product all across the world, CNN and the international parties know they must obtain a license to use other’s intellectual property,” Freeplay’s lawyers wrote in the complaint. “Despite this, they willfully and consciously did not do so here on a breathtaking scale.”
The lawsuit, filed Wednesday in California federal court, claimed that CNN used 115 songs across 283 segments. And Freeplay’s lawyers say they were “not minor uses” but rather “essential to each of the segment” – allegedly often used throughout entire segments.
Discovering the illicit use of their music in foreign media segments was like “finding a needle in a haystack,” Freeplay’s lawyers say, but that CNN knew that when it allegedly stole the music: “CNN apparently counted on the difficulty of being caught in deciding to engage in this massive willful copyright infringement.”
Freeplay is seeking at least $17 million in damages, saying anything less “would not get the attention of these media goliaths that continue to commit widespread infringement of FPM’s intellectual property.”
A spokesperson for CNN did not immediately return a request for comment on Thursday.
The case is hardly Freeplay’s first. Court records show that the company has filed dozens of similar copyright lawsuits over alleged unauthorized uses of its music, including cases against online retail giant Alibaba and guitar maker Gibson. Most recently, Freeplay sued Ford Motor Co. in 2020 over accusations that the car company had used 54 different songs in online promotional videos but was was “too cheap” to pay for them.
Ford later countersued in that case, accusing Freeplay of actively seeking out litigation with “bait-and-switch” practices. The carmaker said Freeplay falsely advertises that its music is free to lure companies and individuals to the platform, only to later sue them “to extort vast amounts of money” when they used the music.
“Freeplay has asserted copyright infringement claims in dozens of lawsuits, extracting settlements in these litigations and … in an untold number of other instances where the simple threat of litigation was enough to shake down Internet users who mistakenly thought they were getting exactly what Freeplay advertises – music that was “free” to use,” Ford’s lawyers wrote at the time.
The case between Freeplay and Ford ended in a settlement last year.
Over the last six weeks, Hipgnosis Songs Fund Ltd., the trailblazing acquirer of music publishing and recording rights, has been buying up a different kind of asset. Over seven transactions since Oct. 18, the company has been repurchasing its own stock, 250,000 shares at a time, to help support its slumping share price. So far, it has spent 1.5 million pounds ($1.8 million) to buy back 1.75 million of its shares. And while that accounts for just 0.14% of the roughly 1.21 billion issued shares, it underscores a crucial conundrum for the publicly traded company.
While, like much of the music business, Hipgnosis’ business has been steadily growing thanks mostly to booming music streaming revenues, its shares have lost 34% of their value year-to-date through Nov. 29. That decline is about six times worse than the 5.7% drop suffered by the FTSE 350 Media Index, representing 10 media companies on the London Stock Exchange. It’s more than triple the New York Stock Exchange composite index’s 10.1% deficit.
Normally, buying back shares lifts a company’s stock by both providing demand (which supports the stock price) and reducing the number of shares outstanding (which increases the per-share equity value). But since Hipgnosis began repurchasing its shares on Oct. 18, its share price has fallen 3.5% while the stock market has solidly improved: Over that time, the FTSE 350 Media index rose 6.8% and the New York Stock Exchange composite index rose 9.5%.
The share repurchases to date have been too few to move the needle. At the Sept. 21 annual general meeting, Hipgnosis’ shareholders approved a repurchase program that can buy up to 14.99% of its issued share capital through Dec. 8. So far, less than 1% of that allowable number has been bought back. And with less than 10 days left until the deadline, Hipgnosis is unlikely to make a much more meaningful dent. As of March 31, the date of Hipgnosis’ latest financial statement, the company had only $30 million in cash and about $100 million of borrowing capacity under its $700 million revolving credit facility. To buy back that full 14.99% stake at the current price and exchange rate would cost the company another $180 million.
But buying enough shares to directly impact the price isn’t necessarily the goal. The repurchase program can still act as a signal to investors that the company believes its stock is undervalued and is taking measures to address the matter. If all goes well, the decision to return cash to shareholders will end up boosting investor confidence in the music fund. That could ultimately help its share price, which is currently trading at a 46.7% discount to the company’s operative net asset value per ordinary share, according to the company’s July 13 mid-year earnings results. (Operative NAV is the fair market value of the catalog with amortization added back.) Even after considering its $570 million of debt (as of March 31), Hipgnosis shares are still trading 27.7% below the catalog’s value.
On paper, Hipgnosis should be a safe bet for investors: It buys dependable, recession-proof music intellectual property that churns out predictable royalties that are uncorrelated with the marketplace. The face of the company, founder Merck Mercuriadis, reshaped music investing by bucking the tradition of using debt to fund catalog acquisitions and launching the first publicly traded, equity-backed royalty fund that focused solely on music assets. Mercuriadis runs an investment advisory, Hipgnosis Songs Management, that collects a fee for managing the publicly traded company’s catalog. Mercuriadis declined to comment for this article.
From 2018 to 2021, Hipgnosis raised almost 1.3 billion pounds ($1.55 billion) through eight offerings on the London Stock Exchange, spending the money, and some debt, on established, proven songs — music publishing, recorded music catalogs and creator royalty streams — by the likes of Neil Young, Journey and Red Hot Chili Peppers. Mercuriadis and his team recommend catalogs for Hipgnosis Songs Fund to purchase and try to generate more revenue from its portfolio. Hipgnosis Songs Fund itself is a lean organization – it has a board of directors and a team of outside accountants, attorneys and other specialists – that collects royalties, pay dividends and operates with minimal overhead. Investors shouldn’t expect the triple-digit returns of a fast-growing tech company, but they shouldn’t face much downside risk, either. Decades-old popular music in a growing industry is a stable investment.
Hipgnosis’ pitch became particularly attractive as low interest rates encouraged investors to pour money into alternative assets like music as central banks cut rates to encourage borrowing to help combat a recession caused by the COVID-19 pandemic. But central banks have hiked interest rates in 2022 to ward off rising inflation, and Hipgnosis and companies like it have seen their share prices fall sharply. An Oct. 27 report by Trust Intelligence posits that Hipgnosis, along with other alternative asset funds, “has seen a significant share price de-rating as investors worry about the potential for valuations to fall in a rising interest rate environment.” Shares of alternative asset managers Blackstone Group – an investor in Hipgnosis Songs Management – and Franklin Resources are down 31.8% and 21.5%, respectively, this year despite the companies’ earnings beating expectations last quarter. Other music companies are having a tough year, too. Shares of Round Hill Royalty Fund Ltd., another music-backed investment trust that trades on the London Stock Exchange, are down 24.9% year to date.
The underlying business underpinning the Hipgnosis catalog and others like it, however, seems as healthy as ever. Global publishing and label revenues climbed 18% to $39.6 billion in 2021 on the strength of streaming services such as Spotify, Apple Music and YouTube. In the U.S., music publishers will enjoy a slightly larger share of subscription revenue from 2023 to 2027. Music subscription prices are rising, too – Apple Music hiked its monthly fees in October and Spotify appears ready to follow in 2023. Social media and short-form video apps such as TikTok are increasingly valuable revenue streams for both publishers and labels. Hipgnosis’s pro-forma revenue – which compares catalogs on a like-for-like basis and ignores recent acquisitions – in the second half of 2021 rose 11.6% from the first half, which was impacted by COVID-19 restrictions that hurt physical sales and performance royalties. In its latest fiscal year ended March 31, catalog additions helped gross revenue grow 24.7% to $200.4 million.
With its stock trading at a large discount to the value of its catalog, though, the company is unable to raise additional equity to expand its catalog. It certainly had plans to do so: In January 2021, Hipgnosis shareholders voted 98.6% in favor of a plan to sell 1.5 billion new shares. At the planned price of $1.68 per share, those additional shares would have raised $2.52 billion. Since then, however, Hipgnosis has sold only 199.6 million shares at an average of 1.21 pounds per share ($1.46), for a total of 241.4 million pounds ($330 million). Money has continued to pour into other funds for music acquisitions: Primary Wave took a $1.7 billion investment from Brookfield Asset Management in October; Influence Media Partners teamed up with Warner Music Group and BlackRock Alternative Investors in July; and last year, KKR partnered with BMG and Apollo Global Management backed upstart HarbourView Equity Partners to the tune of $1 billion.
The share repurchase program could have tangible results: the repurchase of 1% of shares would add 0.5% to the net asset value per share, reduce the dividend payment and “be accretive to annual income by $57,000,” according to JP Morgan Cazenove analysts. Investors could also look elsewhere to gain some confidence. In September, Hipgnosis reiterated its target annual dividend of 5.25 pence (6.34 cents) per share and announced an interim dividend of 1.3125 pence ($1.59) per share. It has also made moves to save money. In July, it reached a deal with French collection society Sacem for reduced administration expenses and collection fees. In October it procured a new revolving credit facility with a lower cost of debt and completed interest rate swaps that provide a hedge against rising rates.
More dramatic steps are available to raise cash, too. JP Morgan Cazenove analysts suggested in an Oct. 24 report that the company could sell “non-core assets” such as the Kobalt fund — 42 catalogs of more than 33,000 songs — it bought in Nov. 2020 for $323 million. The analysts also suggest Hipgnosis could sell part of its catalog to Blackstone, which took an ownership stake in Mercuriadis’ song management operation in Oct. 2021 and provided $1 billion for catalog acquisitions. That would allow Hipgnosis to reduce its debt and free up capital to repurchase shares or invest in new catalogs. Or Hipgnosis Songs Management could seek funding from Blackstone to acquire the entire Hipgnosis Songs Fund portfolio. Another option not mentioned in the report is to sell Big Deal Music, the independent music publisher that Hipgnosis Songs Fund acquired in 2020 and rebranded as Hipgnosis Songs Group, and focus solely on managing its catalog instead of signing and developing songwriters.
Following years of headline-grabbing moves, this has been a relatively quiet one for the publicly traded Hipgnsosis Songs Fund — there have been no acquisitions and no capital raised through stock offerings in 2022. In contrast, the other side of the business, Hipgnosis Songs Management, purchased the catalogs of Kenny Chesney, Justin Timberlake and Leonard Cohen through its venture with Blackstone, Hipgnosis Songs Capital ICAV. In addition, in August Hipgnosis Songs Management raised $222 million from a securitization backed by the royalties of 950 songs from Timberlake, Cohen and others.
Glimpses of what comes next, and how else Mercuriadis plans to address the stock price, could come soon. Dec. 8, the final day of the share repurchase program, is also the day Hipgnosis will release mid-year financial results and host a Capital Markets Day.
Marketing and media company Loud And Live has signed a partnership with booking agency Tesa Entertainment, Billboard has learned. The global partnership deal will include “exclusive touring and booking rights,” according to a press release, with efforts to “elevate the Latin urban genre to the next level.”
The first artist signed under the deal is Panamanian singer-songwriter Boza, who broke out in 2020 with his hit song “Hecha Pa’ Mí” and was nominated for best new artist at the 2021 Latin Grammys.
“We’re very happy with the evolution we’ve had with Boza, and we believe that this partnership will continue to help develop our artist’s career in a positive way,” said Boza’s managers Alberto Gaitan and Andrés Castro. “We’re proud to become part of the Loud and Live and Tesa family.”
“For me, it’s an honor to become part of Boza’s growth, moving forward,” said Giovanna Pérez, CEO and founder of Tesa Entertainment. “Unity is strength and with this new partnership deal alongside Loud And Live, we’ll complement each other perfectly with resources that will offer the Artist the best live show experience globally.”
Launched in 2017, the Miami-based Loud and Live has enjoyed a strong return to touring in 2021, with more than 400 shows and tours for clients including Carlos Vives, Ruben Blades, Camilo and Prince Royce. Tesa Entertainment was founded in 2021 by Pérez, previously at Rich Music and CMN, after working with artists such as Nicky Jam, Sech and Manuel Turizo.
“Loud And Live is honored to join efforts with Tesa Entertainment under the leadership of Giovanna, who brings unmatched experience in the Urban genre booking business,” said Nelson Albareda, CEO of Loud And Live. “This alliance expands the offering of both companies, and we’re proud to be able to offer an added value to the artists with whom we work.”
Esteemed law firms Mark Music & Media Law and Roberts & Hafitz have merged to create one bicoastal entity under the name Mark Music & Media Law, P.C. The combined firm will host 15 lawyers, based out of offices in Los Angeles, New York, and Nashville.
Courtesy Photo
Over the years, attorneys under the newly merged MMML have represented clients like Billie Eilish, Guns N’ Roses, The Chainsmokers, Tool, Smokey Robinson, Benny Blanco, Amy Allen, Andrew Watt, New Kids on the Block, Pink Sweat$, Ice Spice, Danny Elfman, Atticus Ross, Lauren Spencer-Smith, Finneas, among many others. They have acted as advisors for film companies’ in-house music divisions, including Warner Bros. for its A Star is Born, Elvis, Space Jam: A New Legacy, and Suicide Squad and MGM for No Time to Die, Respect. Members of the team have also worked with Arthouse Entertainment, Loma Vista, and Epitaph Records.
The New York-based Roberts & Hafitz is helmed by father-son duo Jaimie Roberts and Harry Roberts as well as Michael Hafitz. Now the two films have merged, the MMML New York bureau will comprise of the three leaders as well as Katelyn Wicks, Marisa Masters, Stephen Goldstein, and Leon Morabia.
The Los Angeles hub will host longtime Angelenos Doug Mark and David Ferreria — both partners at MMML — as well as Jared Tankel, Marisa Novak, Eric Morris, Todd Thorson, and Blake Leeper. Elizabeth Gregory will be Of Counsel out of Nashville.
Mark, MMML Founding Partner says of the merger, “we wanted to further build an exciting presence in New York to complement our West Coast group, and now with Harry and his team together with Leon, our firm further establishes itself as the “go-to” for the next generation of superstar talent and entrepreneurs looking for counsel in this ever-changing industry.”
Roberts, MMML Partner adds, “having gotten to know Doug, David, and the MMML team in both a personal and professional capacity, it was clear that they shared the same values and vision as we do. The synergy that the joining of our two practices creates, particularly in terms of resources and firepower, will instantly benefit our clients and colleagues as we continue to build a progressive and modern entertainment legal practice.”
A task force formed in the aftermath of the Astroworld tragedy unveiled a new agreement on Tuesday (Nov. 29) designed to ensure event safety at NRG Park, the former home of the Travis Scott-helmed festival.
The interlocal agreement — put forth by the City of Houston-Harris County Special Events Task Force, formed in February — is meant to streamline safety protocols, permitting requirements and communication for large-scale events at NRG Park, the trade show, convention, sports and entertainment complex where a crowd crush during Scott’s headlining performance last November led to the deaths of 10 people and injured hundreds more. The document is an update to an existing interlocal agreement that was last amended in 2018.
Under the new agreement, any event hosting more than 6,000 people at the complex will require an on-site unified command center staffed by the Houston Fire Department (HFD), Houston Police Department (HPD), Mayor’s Office of Special Events (MOSE), Harris County Sheriff’s Office (HCSO), Harris County Fire Marshal’s Office (HCFMO), NRG Park and the event organizer. Going forward, review and approval of event capacity as well as site, security and medical plans will fall on the HFD chief or a designee. The HFD will also be tasked with clarifying requirements with event organizers to ensure they meet safety, medical and site planning requirements at the venue. Security plans will require additional sign-off by the HPD, while event plans will need sign-off from MOSE. Ideally, having a designated authority will lessen the likelihood of confusion and inaction during events. Permits for NRG Park will continue to be issued by the City of Houston.
The interlocal agreement “defines rules of responsibility and communication and makes us a better county to deal with whatever comes up,” said Houston police chief Troy Finner at a hearing Tuesday.
Mayor’s Office of Special Events director and task force co-chair Susan Christian tells Billboard that the new agreement is designed to ensure all parties are aligned when it comes to planning and executing large-scale events at NRG Park. “We’re much closer with this new [interlocal agreement] in achieving a more communicative process, as well as a process that involves peoples’ input,” she says.
In April, a report by the Texas Task Force on Concert Safety (TFCS) — created by Texas governor Gregg Abbott in the wake of the Astroworld tragedy — concluded that establishing standardized safety procedures could help prevent a similar mass casualty event from happening in the future. According to that report, the lack of communication around permitting, the failure to determine a chain of command and the absence of a capacity limit all contributed to the deadly crowd crush. It recommended the implementation of a universal permitting template that would help clarify the murky permitting process across the state. The Texas Music Office, which led the TFCS report, previously released an online Event Production Guide so as to centralize information around permitting guidelines and the penalties for not complying with them.
The new agreement is designed to help alleviate that confusion, but it’s only a first step in a long process to ensure safety for future events throughout Houston and Harris County, including the 2026 World Cup, which will be partially hosted in the city. “It is a thing of moving forward,” said Finner, “but also it is a work in progress. This is a great start.”
The City of Houston-Harris County Special Events Task Force will continue to meet quarterly to review and expand safety protocols. The agreement — which the Harris County Commissioners Court unanimously voted to approve — will now need signatures from Houston mayor Sylvester Turner, Harris County Judge Lina Hidalgo, the Mayor’s Office of Special Events, the Harris County Sheriff’s Office, the Houston Police Department and the Houston Fire Department, among others. All signatures are expected by next week, says Christian.
On Nov. 5, 2021, 10 people died from compression asphyxia due to a massive crowd surge during Scott’s headlining performance at the 2021 Astroworld festival. In the wake of the tragedy — which resulted in thousands of lawsuits being filed against Live Nation, Scott and other event organizers that were eventually consolidated into a single giant case — the City of Houston-Harris County Special Events Task Force and the TFCS were formed in order to prevent similar mass casualty events in the future.
In addition to the aforementioned task forces, in Dec. 2021 Scott’s charitable entity Cactus Jack Foundation joined forces with The United States Conference of Mayors (USCM) on an initiative designed to put new safety protocols in place in the festival industry. At the time, a draft USCM agreement stated that a comprehensive report based on discussions and research conducted by a working group comprised of individuals across multiple sectors along with outside experts would be compiled between January and June 2022. Billboard reached out to USCM and representatives for Scott but did not hear back on the task force’s progress.
Independent music company Concord is the latest to tap into a growing market for music royalty-backed securities with Concord Music Royalties, LLC, Series 2022-1, a $1.65 billion asset-backed security. The bond will be supported by mechanical, performance and synchronization royalties from more than 1 million assets.
The proceeds will be used to fund reserve accounts, pay transaction expenses, repay debt and for other general corporate purposes, according to a report by ratings agency KBRA.
KBRA gave Series 2022-1 a preliminary rating of A+ (on a scale ranging from AAA to D), citing the “large, diversified catalog with globally recognized songs and artists” such as R.E.M., Plain White T’s, Creed, Evanescence, Genesis, Phill Collins and Mike + The Mechanics — the latter three being purchased just two months ago.
The catalog generated $344.7 million in 2021, with 63% coming from recorded music and 37% from music publishing. More than 41% of the catalog’s assets were released more than 20 years ago and 23% are between 10 and 20 years old. About 3.5% of the catalog is comprised of frontline releases, defined by KBRA as “recently recorded and released music with little or no history,” and option rights that Concord can exercise for rights to future recorded music or publishing from artists in the catalog.
FTI Consulting put a $4.1 billion valuation on the catalog, according to the KBRA report. That’s about the same amount Billboard estimated Concord’s price tag would be when the company was exploring a sale in 2021 — before the purchase of the Genesis, Phil Collins and Mike + The Mechanics catalogs that Billboard estimated were worth at least $335 million and its acquisition of Australian music publisher Native Tongue. Concord had sought additional equity from its majority owner, the Michigan Retirement Systems pension fund, but turned to debt in 2020 to raise $600 million, which it used to pay down existing debt.
Among the offering’s sound recordings, Concord Music Group administers a majority and Universal Music Group distributes a majority. Concord Music Publishing administers most of the music publishing rights and ICE, ASCAP and BMI are the collective management organizations for most of the publishing rights.
Series 2022-1 contains two components: Class A-1 VFN, with a principal balance of $150 million and an anticipated repayment date of January 2026; and Class A-2, with a principal balance of $1.5 billion and an anticipated repayment date of January 2029. Class A-1 VFN will have a variable interest rate — the secured overnight financing rate plus a margin — and Class A-2 will have a fixed interest rate. The notes will pay interest quarterly.
Concord’s offering is the largest of the music royalty-backed offerings rated by KBRA in the last 12 months. KKR’s Hi-Fi Music IP Issuer II, backed by about 62,000 songs, raised $732.5 million in February. Crescendo Royalty Funding, a joint effort of Lyric Capital Group and Northleaf Capital Partners and backed by over 52,000 songs owned by Spirit Music Group, raised $303.8 million in Dec. 2021. Hipgnosis Music Assets 2022-1, backed by the Kobalt Music Copyrights Fund 1 that Hipgnosis Songs Fund acquired in 2020, raised $221.7 million in Dec. 2021.
More than a year into litigation over the deadly Astroworld music festival, attorneys for the event’s organizers say that nearly 1,000 fans who sued over their alleged injuries have ignored deadlines and failed to hand over “critical evidence.”
In a filing last week, attorneys for the defendants in the case — Live Nation, Travis Scott, Apple and many others involved in the festival — alerted Judge Kristen Brauchle Hawkins that 956 alleged victims had “not provided any response whatsoever” to basic requests for information.
“There is no excuse for the non-responsive plaintiffs’ complete disregard of their discovery obligations,” the lawyers for the organizers wrote in the Nov. 23 filing. “They should be compelled to comply immediately.”
Some lawyers for victims quickly pushed back, though. In responses on Monday (Nov. 28), attorneys repping dozens of purported non-responders said many of their clients had in fact filed the necessary papers — or had been dropped from the case entirely. Others said their clients had “experienced serious trauma” and that lawyers were “working diligently with them to complete their discovery response.”
The dueling filings came in sprawling litigation over Astroworld, in which a crowd crush during Scott’s Nov. 5, 2021 performance left 10 dead and hundreds physically injured. Thousands of alleged victims are seeking billions in total damages, claiming the organizers were legally negligent in how they planned and conducted the event.
As of May, court filings said that more than 4,900 alleged victims had filed claims in the case. But the latest filings this week suggest that number has now been winnowed down to around 2,500.
The two sides are currently in the midst of what is known as discovery, the legal process in which each side hands over evidence to their opponents. Earlier this year, Live Nation, Scott and other defendants had sought a variety of information about each plaintiff, including details about their particular injury, documentary evidence that they attended the festival and any messages or other digital records related to the festival.
In the filing last week, attorneys for the Astroworld organizers said a huge number of alleged victims had “wholly failed to respond,” despite the fact that the questions had been heavily negotiated with the legal team for the concertgoers.
“It has now been more than six months since defendants served their original discovery requests and more than a month since all extensions have expired,” the Astroworld lawyers wrote. “Yet approximately 38% of the Plaintiffs … have provided absolutely zero response.”
Failing to hand over this “critical evidence” soon could hamper the litigation in ways that cannot be undone, the organizers warned.
“The longer the non-responsive plaintiffs delay, the higher the risk that critical evidence or information in their possession will be lost, destroyed, or forgotten,” they wrote. “Cell phones get lost or destroyed, and the photographs and videos on them get deleted.”