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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.
Is Ticketmaster a monopoly that treats customers unfairly? Problems with Taylor Swift’s record-breaking The Eras Tour onsale this week has created choruses of complaints around the ticketing giant that have now led to a reported Justice Department investigation.
On Thursday, Sen. Amy Klobuchar sent an open letter to Live Nation CEO Michael Rapino detailing her “concerns about the state of competition in the ticketing industry and its harmful impact on consumers.” The problem, wrote Klobuchar, is a lack of competition “that typically push[es] companies to innovate and improve their services. That can result in dramatic service failures, where consumers are the ones that pay the price.”
Breaking up Live Nation and Ticketmaster wouldn’t necessarily have prevented this problem. It’s likely that any ticketing platform would have struggled with such a high level of demand. StubHub crashed in 2018 after University of Georgia fans flooded the site to purchase tickets to see their team play in the NCAA football national championship game — and that was just one game.
Ticketmaster blamed the outage on a surge of unregistered fans and billions of bots. According to the company, over 3.5 million people pre-registered for Swift’s Verified Fan credentials, the largest registration in its history. Typically, only a fraction of registered fans show up to buy a ticket. This time, “a staggering number of bot attacks as well as fans who didn’t have invite codes” resulted in 3.5 billion total system requests — four times the previous record number.
One could argue Ticketmaster could have been better prepared for such a high level of demand. Perhaps the company should Swift-proof the platform in anticipation of a flood of speculators and unregistered fans — Swift said Friday (Nov. 18) that her team “asked them, multiple times, if they could handle this kind of demand and we were assured they could.” Overall, problems on the platform are relatively rare given Ticketmaster’s volume of business, but we talk about them because they happen with high-profile concerts that attract large numbers of customers. Those attract the most attention and complaints online, which in turn attracts politicians. Ticketmaster is one of the few non-partisan issues in America in 2022.
Some observers have conflated the issues surrounding Ticketmaster’s market power, though. Rep. David Cicilline, chairman of the House Judiciary Committee’s Antitrust, Commercial and Administrative Law Subcommittee, wrote about the Swift on-sale that “excessive wait times and fees are completely unacceptable … and are a symptom of a larger problem.” It’s fair for Cicilline to suggest that Ticketmaster does not invest enough in its platform to avoid the technical issues and wait times Swift fans recently experienced. That’s debatable, but it’s a defensible argument.
Fees are, however, an entirely different issue. Ticketmaster is a pioneer in the area of ticket fees but does not have a monopoly on the ability to charge them. More competition in ticketing would not prevent venues and promoters from adding to the face value of tickets. The ticket purchase is an opportunity for all parties involved to capitalize on fans’ demand for live music. As Bruce Springsteen’s controversial leap into dynamic pricing showed, leaving money on the table is an increasingly uncommon strategy in the modern music business.
Ticket prices occasionally get dragged into the argument, too. Politicians and consumers seem to want a form of price competition that doesn’t exist. Prices for an in-demand concert ticket won’t necessarily become more affordable if they’re sold at, say, StubHub rather than Ticketmaster. The laws of supply and demand say that prices for in-demand, scarce objects like a Swift concert ticket are going to be high no matter who’s selling them.
So, what tangible results might come from the calamitous The Eras Tour on-sale? Sen. Klobuchar’s letter points to customers’ desire for fair access to concert tickets. She asked Rapino, “Generally, what percentage of high-profile tour tickets are made available to the general public compared to those allocated to pre-sales, radio stations, VIPs, and other restricted opportunities?”
Klobuchar wants to know what percentage of tickets the average person has a realistic shot at getting without being the customer of a particular credit card, without buying high-priced VIP packages, without winning a radio station contest or without being a member of an artist’s fan club. In this case, Capital One is a sponsor of the Eras tour and offered a pre-sale to its customers.
But how do lawmakers regulate access? Do they establish rules that dictate what kind of marketing partnerships artists can and cannot establish? Would they tell American Express to stop giving such long-standing perks as pre-sale access and dedicated tickets to its credit card holders? If Congress really wanted to create a more level playing field for fans, they could do what the lawmakers in Victoria, Australia, did in 2021: pass a law that limits the resale value of a ticket to 110% of its face value. That could lower the number of resellers and bots clogging up Ticketmaster’s system for high-traffic on-sales like the Eras Tour. At the very least, price limits would bring a much-desired sense of fairness to the secondary market. Whether the U.S. Congress has the stomach to establish price controls on private companies remains to be seen.
A more likely outcome of the Eras Tour debacle is increased transparency. New York State legislators passed a law in June that improves transparency by requiring all-in pricing and prohibits revealing the ticket’s total cost — face value plus fees — after multiple clicks in a check-out process. The bill could have gone further: a requirement to disclose the percentage of tickets made available to pre-sales and VIPs was in an early form of the bill but not the final version.
But, again, are lawmakers willing to mandate such disclosures from private businesses? This would more likely be a voluntary disclosure done at the behest of the artist – Swift is exactly the kind of powerful artist who could persuade ticket sellers to reveal this information. Transparency wouldn’t immediately translate into greater access for the average fan, but it could fuel a larger conversation about how fans get access to concert tickets. That wouldn’t ease the pain of many Swift fans, but it would be a step forward.
Almost five years ago, I wrote a column about how Bitcoin and Blockchain might change the music business. At the time, the question seemed more about how than if: An online merchandise store had just started accepting cryptocurrency, several entrepreneurs had founded startups to use blockchain technology to pay rights holders, and entrepreneur and then-Dot Blockchain CEO Benji Rogers predicted that “Blockchain technology is coming like a tsunami.”
I was skeptical. I called Blockchain “a solution looking for a problem” and pointed out that the only person I knew who had bought anything with Bitcoin was a former neighbor in Berlin who had purchased LSD online. At that time, Bitcoin was worth $11,631 and the Dow Jones average was 25,803.
As Bitcoin shot up — to a November 2021 high of more than $56,000 — more artists and music executives became certain that cryptocurrency and Blockchain technology would change everything. Artists sold NFTs — as did Billboard — and in February Coachella sold $1.4 million of NFTs, including 10 lifetime passes to the annual festival.
Now the cryptocurrency exchange FTX is in bankruptcy, Bitcoin is down to $16,099, and the U.S. will almost certainly regulate cryptocurrency “banks” and exchanges. In economic terms, that means cryptocurrency companies might have to compete on an even playing field with traditional finance entities, which would reduce risk for consumers but eliminate some of the advantage that startups get from making their own rules. In non-economic terms, Mom and Dad are home, they’re pissed, and they’re not going to let you run your business unless you can wear your big-boy pants!
So, what about that tsunami? It has been a busy five years for the music industry: recorded music boomed, major financial players invested in publishing catalogs, two of the three major labels went public, Latin music gained a bigger global audience, and TikTok emerged as a transformative source of promotion. Blockchain and Bitcoin barely changed the industry at all, though. A few artists made an insane amount of money on NFTs and a bunch of companies announced plans to fundamentally disrupt disruption itself. But Bitcoin is still an inefficient means of exchange and a poor store of value — at best it’s a high-yield, high-risk investment — and Blockchain is still a solution in search of a problem.
A little more than a year after my column, Benji Rogers, he of the tsunami prediction, left Dot Blockchain, which in September 2019 rebranded as Verifi Media. The company still helps rights holders track ownership and use data, but it doesn’t emphasize Blockchain technology on its website. (Emails to the Verifi publicity contact came back as undeliverable.) That makes sense: The big problem with rights data has always been that it’s incorrect or incomplete. Blockchain is a distributed database that allows users to track changes, but it can’t fix incorrect or missing information.
Five years ago, the startup Choon had a plan to track music use with Blockchain and pay rights holders immediately with a digital currency called Notes. It went out of business in 2019, as Notes fell in value along with Bitcoin. The following year, Choon co-founder Bjorn Niclas launched Rocki amid the pandemic and exchanged outstanding Notes for Rocki tokens at a 50:1 ratio. (The company also lets independent musicians sell NFTs.) Since then, “Rocks” tokens have gone from being worth about 5 cents each, up to an April 2021 high of $5.45 — it peaked when Bitcoin did — and down to about a penny. That sounds exciting, and potentially profitable, but I suspect most artists prefer to get paid in currency that holds its value.
Bitcoin and NFTs aren’t going anywhere — some investors see the “crypto winter” as a buying opportunity, while others just want to HODL. (Art NFTs are performing better than most.) But the collapse of FTX will inspire investors, and hopefully government agencies, to ask more questions about whether celebrities who buy and sell NFTs are being transparent enough about their transactions — especially since the fans they influence may buy into investments in a way that help those who already own them.
Like many online technologies, Blockchain and Bitcoin offered a utopian dream of decentralization, free from government regulation and control. When it comes to finance, however, government regulation isn’t a bug, to use the technology phrase — it’s a feature. Just ask anyone who had money with FTX, which wasn’t insured by the Federal Deposit Insurance Corporation (FDIC) the way U.S. banks are. Among the assets stuck in the exchange are the Coachella Keys that offer holders access to the festival.
Coachella told Billboard that it’s confident it will handle this issue. But it’s hard not to wonder if there wasn’t an easier way to do this — say, passes with QR codes, or maybe even just spots in a database that could be sold with the cooperation of the event promoter. Blockchain is essentially a distributed database that can operate at internet scale, and it’s easy to see how exciting that is. It’s just still hard to see what use the music business might have for it.
In the wake of Ticketmaster’s disastrous sale of tickets to Taylor Swift’s upcoming tour, a report has surfaced that the U.S. Department of Justice is investigating whether parent company Live Nation has abused its huge market share in the live music industry.
According to a story Friday in the New York Times, the DOJ’s antitrust division had already been scrutinizing Live Nation for months before Tuesday’s botched rollout, 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.
The Times report said that antitrust investigators have been contacting music venues and others involved in the live music industry for months to ask about Live Nation’s practices, aiming to determine whether the company maintains an illegal monopoly over the sector. The story was sourced to “two people with knowledge of the matter”; a spokesperson for the DOJ did not immediately return a request for comment.
Though the DOJ probe reportedly predates the Swift debacle, it echoes criticism that has been leveled at Live Nation in the days since the messy Eras presale.
On Thursday, Sen. Amy Klobuchar (D-Minn.), the chair of the Senate subcommittee for antitrust issues, wrote an open letter to Live Nation, complaining that the company’s market power “insulates it from the competitive pressures that typically push companies to innovate and improve their services.” Klobuchar said the results were the kind of “dramatic service failures” that took place during Swift’s presale.
Rep. Alexandria Ocasio-Cortez (D-N.Y.), was even blunter, tweeting Tuesday: “Daily reminder that Ticketmaster is a monopoly, it’s merger with Live Nation should never have been approved, and they need to be reigned in. Break them up.”
As alluded to by Ocasio-Cortez, Ticketmaster and Live Nation have long been dogged by accusations that they exert an unfair dominance over the market for live concerts, particularly since they merged in 2010 to create their current structure.
The combined entity has operated for its entire existence under a so-called consent decree imposed by the DOJ when it approved the merger. Under the decree, Live Nation is prohibited from retaliating against venues that refuse to use Ticketmaster. Those restrictions were set to expire in 2020 but were extended by five years in 2019 after the DOJ accused Live Nation of repeatedly violating the decree.
Ticketmaster has already tried to offer explanations for what went wrong on Tuesday, publishing a since-deleted in-depth blog post that said that it had misjudged demand for presale tickets and was ill-prepared for the millions of fans that tried to log in.
“I apologize to all our fans. We are working hard on this,” Liberty Media CEO and Live Nation chairman Greg Maffei said in an appearance on CNBC on Thursday. “Building capacity for peak demand is something we attempt to do, but this exceeded every expectation.”
Whether or not that explanation satisfies federal antitrust investigators, it does not appear to have been enough for Swift. In a statement issued Friday in which the star said the calamitous presale “really pisses me off,” Swift did not call out Ticketmaster explicitly, but laid the blame on an unnamed “outside entity.”
“I’m not going to make excuses for anyone because we asked them, multiple times, if they could handle this kind of demand and we were assured they could,” Swift wrote.
In early October, Lil Yachty uploaded the 83-second track “Poland” to SoundCloud along with a grumpy message: “STOP LEAKING MY SHIT.” “Poland” consists of two keening hooks and some slack rhymes; a veteran publishing executive calls it “an idea, almost a tweet,” more than a song.
Either way, it’s a hit — it reached No. 40 on the Billboard Hot 100 — and it’s part of a larger trend: The average length of popular songs has been shrinking steadily for years. A 2018 study by San Francisco-based engineer Michael Tauberg concluded that songs on the Billboard Hot 100 shed around 40 seconds since 2000, falling from 4:10-ish to roughly 3:30. The average length of the top 50 tracks on Billboard‘s year-end Hot 100 in 2021 was even less, a mere 3:07. (Though this is a simple average, whereas Tauberg’s calculation was weighted by weeks spent on the chart.)
“Everyone’s aware of it — it’s a reaction to the culture of soundbites that we moved towards,” says Vincent “Tuff” Morgan, vp of A&R at the indie publisher peermusic. “I have producers in the studio this week just going through and making songs shorter.”
In this climate, writers are increasingly willing to ditch a third chorus and a pre-chorus — the musical alley-oop that sets up the hook’s slam dunk — according to the analytics company Hit Songs Deconstructed. And the portion of sub-three-minute top 10 hits ballooned from just 4% in 2016 to 38% so far in 2022. “Over the last two years, as I get demos back from artists, they’re consistently down to two minutes and 30 seconds or even two minutes,” says Caterina Nasr, senior manager of A&R at Elektra Entertainment. “Artists feel like they can express themselves quicker.”
Shorter songs aren’t exactly a new trend. Back in the early 1960s, little miracles of concision like The Chiffons “He’s So Fine” (1:52) topped the Hot 100 and The Beatles rose to international fame by releasing a series of snub-nosed pop missiles. More recently, Piko-Taro’s “PPAP (Pen-Pineapple-Apple-Pen)” made history as the shortest Hot 100 entry ever (45 seconds) in 2016. The following year, XXXTentacion‘s 17, which cycles through 11 songs in just 21 minutes, became a streaming sensation. In 2018, Travis Scott effectively mashed three 90-second songs into the massively successful “Sicko Mode.”
If the focus on brevity in the early 1960s was driven by the pace of AM radio, the streaming economy imposes its own pressures on song length. One theory holds that a concise track is more likely to spur multiple listens. “There’s charm to a short song because the person hits repeat — play it again, play it again,” according to Mitch Allan, a longtime writer-producer (Demi Lovato, Kelly Clarkson).
The other side of the same coin: “People are acutely aware of skip rates and how that relates to success on streaming services,” says Talya Elitzer, a former Capitol Records A&R who co-founded the indie label Godmode. Tracks with lower skip rates are prioritized by the platforms, and Elitzer believes that “a short song is less likely to be skipped.”
Most importantly, song snippets resonate with a generation of listeners used to short-form video apps. “To me this really started with the Vine era and Instagram,” says writer-producer David Harris (H.E.R., Snoh Aalegra). Brief clips have achieved a new level of commercial resonance in the music industry thanks to TikTok, where users repeatedly seize on fragments of unfinished singles and incorporate them into videos, making a mockery of the idea that a popular track must include a verse and a hook.
“Generally a song that pops off on the platform is based around a little moment,” says Elie Rizk, a writer, producer and multi-instrumentalist (Mazie, Remi Wolf). “Subconsciously you think about that: ‘Let’s pack a track with moments and try to hit the jackpot.’ I don’t feel the need to repeat a section three times — they’ve already heard that part; it doesn’t matter.”
What’s the difference between an explosive moment and a song? Since 2020, if not before, a heap of young acts have gone viral with the former and then scrambled to transform them into the latter — to build a full track around the snippet that captivated TikTok. Examples include Will Paquin’s flashy “Chandelier” (85 million), David Kushner’s woebegone “Miserable Man” (73 million), and Avenue Beat‘s goofy “F2020” (54 million).
As singles get shorter, though, the gap between a song and a hooky fragment begins to lose meaning. “To a lot of people, I think the snippet [they encounter on TikTok] is the song,” says Bart Schoudel, a longtime engineer and vocal producer (Pop Smoke, Selena Gomez).
Kuya Magik, a producer and DJ with more than 11 million TikTok followers, agrees. “If you go to a club and you watch people dance, they only dance to the 15 seconds of a song that’s famous on TikTok,” he says. “For the rest of it, they just sit there.”
For now, platforms like Spotify count 30 seconds of listening as a full play that triggers a royalty payout, so it makes sense to expand a musical idea to that length. But a generation native to TikTok may not require even 30 seconds to engage with the music. With that in mind, it’s easy to imagine that the length of singles will continue to shrink.
When a short verse goes viral on TikTok, “if that’s what the artist wrote and that’s what’s being used [on the platform], who’s to say that’s not the song?” asks Daniel Sander, chief commercial officer for the music-technology company Feature.FM. “The question is: How do you monetize that differently?”
Spotify’s quest to improve its margins has taken another step forward, as a pilot program for billing subscribers using Google devices expands to the U.S. and additional markets. Called “user choice billing,” the system allows app developers to provide Google Android smartphone users with the option of paying the developer directly — at a reduced fee — or through Google Play.
Last week, Google’s user choice billing pilot expanded to the U.S., Brazil and South Africa, and Google announced that dating app Bumble also joined the program. Spotify was the first developer to join the pilot program in March with test markets of Australia, India, Indonesia, Japan and the European Economic Area. With the additional markets, user choice billing will be tested in most of the world’s largest smartphone markets and most valuable music markets.
With user choice billing, prospective Spotify subscribers are presented with two payment options side-by-side in an Android app: Spotify and Google Play. Choosing Spotify will take the user to a form to fill out credit card information to sign up for a subscription. Importantly, it all happens within the Spotify app, not Spotify’s external website. Choosing to pay with Google Play prompts the user to enter a password to pay with the credit card on file with Google.
Billing is an under-appreciated but important issue in the subscription music business. Because music streaming is inexorably tied to smartphones, and because consumers have come to expect simplicity when engaging in e-commerce on smartphones, in-app billing helps a company like Spotify sign up subscribers. The problem for a music service like Spotify operating on thin margins, though, is that app stores run by Apple and Google have traditionally demanded a cut of these in-app purchases. That’s left music companies either paying the app store fees themselves, without raising prices, eroding each subscription’s profitability, or raising the price to compensate for the fee, which could turn away potential subscribers. Prior to 2016, Spotify charged users 30% more for an in-app upgrade to Premium to offset Apple’s 30% fee.
There’s one other option, of course: To save on fees, a music service may disallow in-app subscriptions and encourage a customer to take a few extra steps and subscribe at its website. That process risks losing potential subscribers along the way, but nevertheless, Spotify has gone this route and not allowed in-app purchasing on its Apple app since 2016.
Companies have faced this quandary for years. In 2019, for example, Pandora raised the price for subscribers who used Apple’s in-app purchasing premium subscription service from $9.99 to $12.99 to offset the fees. Pandora reported paying $50 million in fees to Apple and Google in 2015 – 3.7% of its annual revenue.
“It certainly puts independent music services at a disadvantage where we’re paying 30% of the economics out to the platforms that distribute our apps, who also happen to be competing with us, and for the same users, and the same economics,” Pandora’s then-CFO Mike Herring told investors in 2016.
Apple typically charges a 30% fee for in-app purchases during the first year of a subscription and 15% thereafter, according to Apple’s website for developers. Neither Apple nor Spotify have said publicly what fees are paid for Spotify subscriptions. The fees that Spotify pays Google are also private.
“We’re not going to comment on the terms of our agreement with Google because they are confidential,” a Spotify spokesperson tells Billboard, “but it’s safe to say that our [user choice billing] partnership is based on commercial terms that meet our standards of fairness.”
Generally, subscription services such as Spotify pay a 15% fee for in-app purchases, but the fee can go lower. App developers in Google’s Play Media Experience Program, which integrates apps into Google’s ecosystem of wearables and other hardware products, can pay less than 15%, for example. For subscription-based services with significant licensing costs — such as music, video, books and audiobooks — fees “can be as low as 10%,” according to a Google spokesperson.
User choice billing provides additional savings for app developers on top of any other program or discount. If an Android user presented with user choice billing opts for the app developer’s payment system, Google lowers the fee by 4%. So, if an app developer were paying a 10% fee to Google, user choice billing would reduce the fee to 6%.
Small improvements to gross margin are crucial to a music service that pays more than three-quarters of its revenue to rights holders. Spotify’s gross margin on its Premium subscription service was 28% in the third quarter of 2022, meaning that Spotify paid out 72% of its subscription revenue for licensing fees and some smaller costs of sales. Every percentage point of revenue represents about $100 million in subscription revenue in 2022, based on past earnings and Spotify’s fourth-quarter guidance. If Spotify can move its gross margin by a small amount, it would greatly impact the company’s free cash flow. To put it in perspective, Spotify’s net cash flow from operations for the first three quarters of 2022 was $109 million.
While Google seems willing to consider alternative approaches to in-app billing, Apple does not. Prominent app developers, including Spotify, have been fighting for better terms for years. In 2019, Spotify filed a complaint against Apple with the European Commission for anticompetitive behavior alleging that Apple “continue to give themselves an unfair advantage at every turn.”
Additionally, Apple is currently involved in a lawsuit brought by Epic Games regarding its control over the App Store. Although the judge in the case has mostly sided with Apple, the judge did order Apple to allow apps to provide links to payment alternatives outside the App Store. The lower court’s requirement has been delayed until the appeals court rules on the case. The two sides began oral arguments in the Ninth Circuit Court of Appeals on Monday (Nov. 14).
Apple’s strict rules are particularly meddlesome to Spotify’s latest attempt to improve its margins — audiobooks. In September, the streaming service began selling 300,000 audiobook titles following its acquisition of audiobook distributor Findaway in June. The plan makes sense: Audiobook purchases on its platform can provide Spotify with 60% gross margins — about twice the margin in music streaming – and audiobooks are a natural addition to its burgeoning podcast business.
But Apple’s rules for in-app purchases would make audiobooks purchased through an iOS app far less profitable — and a less straightforward process. Whereas the Google app provides “a beautiful experience,” CEO Daniel Ek said during the Oct. 25 earnings call, the process of buying an audiobook through Apple “is inherently broken because Apple decided it wanted it to be broken.” Spotify had lawyers “in the room” working with developers, but Apple rejected Spotify’s app multiple times, according to Ek. “It holds developers back and holds creators back,” he said. “And it’s bad for consumers.” Plus, there’s the added element here that Apple happens to be Spotify’s leading competitor for music streaming.
With audiobooks, Spotify currently sells titles on its website rather than inside the app to avoid fees (the user can listen using the Spotify app after the title is purchased). But just getting people to its website isn’t straightforward. As Spotify claimed on a website called Time to Play Fair, Apple does not allow Spotify to explain how to purchase an audiobook outside of the app, include a link to direct the user to a Spotify audiobook page, request or receive an email with instructions on how to purchase an audiobook or reveal an audiobook’s price in the app or in an email. Spotify’s Android app does not sell audiobooks, but the app allows users to receive an email with a link to Spotify to purchase a title.
In its June investors’ day presentation, Spotify management looked beyond music, podcasts and audiobooks. In the next ten years, Spotify will add sports, news and education to the platform and double the current average revenue per user, said Gustav Norström, chief freemium business officer. The user choice billing pilot program can only help with that goal.
A federal judge says he won’t undo his ruling that Slacker owes nearly $10 million in unpaid music royalties to SoundExchange, seemingly unmoved by the streamer’s warning that the ruling will have a “devastating” impact on the company’s finances.
SoundExchange claims Slacker’s parent LiveOne has failed to pay royalties for years, and last month won a ruling requiring the streamer to hand over $9,765,396. Slacker said last month that the huge judgment could trigger financial ruin for the company – a warning SoundExchange urged the court to disregard.
In a decision issued Wednesday, Judge André Birotte Jr. did exactly that. He ruled that the seven-figure judgment was simply the result of an agreement that Slacker itself had signed – and noted that the streamer was not actually legally disputing the terms of that deal.
“Defendants cannot argue that the judgment is a result of ‘excusable neglect’ or that it is ‘without fault,’ when the judgment was entered pursuant to stipulation that defendants negotiated for and assented to,” Judge Birotte wrote. “Because Defendants signed the stipulation, and in fact do not dispute the amount of money Plaintiff is entitled to, the court finds the judgment is fair, adequate, and reasonable.”
SoundExchange, which collects performance royalties for sound recording copyrights, sued LiveOne in June, claiming the company had stopped paying artists and labels way back in 2017. And it claimed that a subsequent audit revealed it had been underpaying for years before that.
Court records show the two sides entered into the repayment plan in 2020, which gave Slacker two years to pay off its debts. But in the June lawsuit, SoundExchange claimed that Slacker had quickly failed to live up to the terms of the agreement.
“By refusing to pay royalties for the use of protected sound recordings, Slacker and LiveOne have directly harmed creators over the years,” SoundExchange president and CEO Michael Huppe said at the time. “Today, SoundExchange is taking a stand through necessary legal action to protect the value of music and ensure creators are compensated fairly for their work.”
Just a few months into the litigation, SoundExchange played an unusual legal trump card. On Oct. 12, the group invoked a so-called consent judgment, which had been inked and pre-signed by execs at Slacker back in 2020 as part of the repayment plan. Under the terms of that earlier deal, if Slacker ever defaulted again, its executives agreed that a judge should enter a so-called judgment against the company for the full sum owed.
On Oct. 13, Judge Birotte did so, ordering the Slacker to pay $9,765,396, which covered both unpaid royalties and late fees. He also permanently barred the company from using the so-called statutory license, an important federal provision that makes copyright licenses for recorded music automatically available to internet radio companies like Slacker and Pandora at a fixed price.
A week later, Slacker asked the judge to overturn his own ruling, saying it had been procedurally improper. To support the request, Slacker warned the judge had quickly caused other creditors to call in other debts owed, threatening “economic damage” to the company that would be “unsustainable.”
“Plaintiff’s surreptitious request for entry of judgment has triggered LiveOne’s default on two substantial senior secured notes which are secured by all of LiveOne’s and their subsidiaries assets,” the streamer wrote.
SoundExchange urged the judge to deny the request, saying it had spent years “indulging” the company’s “many excuses for non-payment,” and that it had simply become time for the streamer to be legally forced to pay up: “Five years is long enough.”
In Wednesday’s decision, Judge Birotte sided with SoundExchange, ruling there was no legal wiggle room for Slacker to challenge an agreement signed by its own executives. The judge said that unless there is proof of “fraud or misconduct” – and there is none – there was no reason to undo the ruling. And he was unmoved by the company’s warnings of economic ruin.
“Defendants argue that the ‘repercussions will be devastating to LiveOne, its employees, and to its creditors,” the judge wrote. Defendants, however, have failed to explain what balance is actually due, whether defendants’ creditors have elected to require immediate payment, or how the repercussions will actually impact its business or livelihood.”
A representative for Slacker parent LiveOne did not immediately return a request for comment on the decision.
Read the entire decision here:
Unsigned and emerging artists in Africa will soon be able to compete for global distribution deals and record contracts with Sony Music Africa through a new collaboration between the major label and the companies behind the Afrochella Festival in Ghana.
Afrochella’s parent company, Culture Management Group, and media streaming service Audiomack, are teaming up with Sony Music Africa to expand the “Rising Star Stage” competition, which previously entitled winners to a chance to perform onstage at the festival.
With Sony’s involvement, up to 10 prize winners chosen from a short list of 25 will be signed to distribution deals with Sony Music Africa, which will take their music out to the world, Sony says in a press release.
The Grand Prize winner will secure an exclusive recording agreement with Sony Music Africa for the release of a single; marketing support (including a music video); free access to Afrochella’s recording studio as well as mentoring and training from industry executives and “leading musicians and producers,” Sony says. The top winner will also have the opportunity to perform live at Afrochella.
Five winners, including the Grand Prize winner, will also be able to perform on Afrochella’s Rising Star Stage alongside headliners on the festival’s second day, Dec. 29.
To enter the competition, artists need to upload an original song to Audiomack and create an Instagram Reel that includes an introduction about the artist, their approach to music and music-making process, and “what they want their potential audience to know about their style of music,” Sony says.
“With the strong backing of Sony Music, we now have the exciting opportunity to make an artist’s dreams come to life by providing them with a distribution deal and sustainable resources to help jumpstart their musical career,” Abdul Karim Abdullah, CEO and co-founder of Afrochella, says in a statement.
The “Rising Star Challenge” is now underway, and winners will be chosen during the two-day festival. The sixth edition of Afrochella, scheduled for Dec. 28 and 29 in Ghana’s capital Accra, features headliners Burna Boy, StoneBwoy and Fireboy DML.
Last month Coachella Music Festival sued the organizers of Afrochella, saying they infringed on Coachella’s trademarks and had allegedly tried to register the Coachella name in Ghana through the country’s intellectual property office, which was denied. Goldenvoice owns the trademark for both Coachella and the word Chella, preventing it from being added to other event titles in a way that could confuse fans.
A rebound in the live music business helped German concert promoter CTS Eventim improve its revenues to 694.4 million euros in the third quarter ($699.3 million at the average exchange rate in the quarter), 84% higher than the same period in 2019 before the COVID-19 pandemic, the company announced Thursday.
Revenue increased due to contributions from pre-sales, the staging of events and higher income from currency conversion. That was offset by a reduction in COVID-19 economic aide, received as compensation for event cancellations or events with reduced capacity, of 76.8 million euros ($77.3 million) from the prior-year period.
“These excellent results are testimony to the fact that our strategic initiatives are taking us from strength to strength following the post-pandemic restart of live entertainment,” said CEO Klaus-Peter Schulenberg in a statement. “Even in the face of new uncertainties caused by the high level of inflation and geopolitical factors, we will maintain this proven course in order to continue to drive our profitable growth, both at home and abroad.”
The live entertainment segment’s revenue was 563 million euros ($566.9 million) in the third quarter, up 103.6 from the same period in 2019, and 1.11 billion euros ($1.11 billion) in the nine-month period, a 42% improvement. Live entertainment EBITDA was 64 million euros ($64.4 million), about triple the amount in the same period of 2019.
The ticketing segment’s revenue improved to 137 million ($138 million) in the third quarter, up 28% from the same period in 2019, and to 339 million ($341.1 million) for the nine-month period, up 10.4% from 2019. CTS Eventim sold 17.2 million tickets in the quarter and 45.1 million tickets in the nine-month period, increases of 31% and 23%, respectively, from the pre-pandemic periods in 2019.
The company’s staff, including part-time workers, grew from 2,357 a year ago to 2,956 at the end of the third quarter.
The company sounded an alarm about rising costs stemming from higher personnel costs in security, catering and stage technology “induced by an increasing shortage of specialists in the event industry and at least temporarily higher demand due to the fact that both postponed and new events are currently being held at the same time,” it explained in its earnings release. The fourth-quarter results could be hampered by rising energy prices and a possible pullback of fan spending due to inflation’s impact on household purchasing power.
Still, CTS Eventim is going to have a record year in 2022. The company expects full-year revenue of 1.7 billion euros ($1.71 billion) and earnings before interest, taxes, depreciation and amortization of 330 million euros ($332.3 million). That would represent gains of 17.8% and 16.2% over 2019, which was a record year for CTS Eventim. The company’s tenor improved from a quarter ago, when management was unable to provide a precise forecast for 2022 “owing to uncertainty about the pandemic and the geopolitical situation going forward.”
CTS Eventim shares fell 0.3% to 56.00 euros on Thursday. Year to date, the share price is down 13%.
David Nieman was promoted to senior vp of sports & gaming at Interscope Geffen A&M Records (IGA), where he will continue to be the label’s chief liaison with the sports and gaming sectors. During his tenure, Nieman has helped forge partnerships with the NFL, ESPN, the NBA, the UFC, Barstool Sports, Bleacher Report, Epic Games, Ubisoft, 2K, Rockstar, EA, Nintendo and more. “David and his team have built our sports and gaming capabilities into a very important commercial driver for our artists,” said Interscope Geffen A&M vice chairman Steve Berman in a statement. “I am pleased to be able to offer him this expanded role as he continues to create important opportunities for our diverse array of artists.” Nieman can be reached at David.Nieman@umusic. com.
The Recording Industry Association of America (RIAA) promoted Jackie Jones to senior vp of artist & industry relations. Based in Nashville, Jones will remain the RIAA’s chief representative in the market. She reports to RIAA chief policy officer Morna Willens and can be reached at jackie.jones@riaa.com.
ASM Global promoted Alex Merchán from executive vp of marketing to CMO. He will spearhead the company’s branding and positioning across key areas including global partnerships, digital and CRM strategy, business development and advisory and investing efforts in the U.S. and internationally. Merchán can be reached at amerchan@asmglobal.com.
Bob Workman was promoted to the dual role of senior vp of international brand partnerships, Warner Music and general manager of WMX UK. In his new international role — which coincides with Warner Music’s UK brand partnerships team becoming part of the global WMX division — Workman will coordinate the work of brand partnership teams outside the U.S. and establish them in emerging markets where Warner Music operates. Workman will keep his place on the Warner Music UK senior management team to ensure close alignment between WMX and the U.K. recorded music business. He reports to WMX president Maria Weaver and will work closely with Warner Music Group president of international, recorded music Simon Robson. He’ll also be working alongside Atlantic Records U.S. chief partnerships officer Camille Hackney and Warner Records U.S. executive vp of brand partnerships and sync Claudia Butzky.
ADA Worldwide named MaryLynne Drexler head of business & legal affairs. Drexler, who arrives at the company from Sony Music’s The Orchard, will help craft ADA’s global strategy while overseeing artist and distribution deals along with acquisitions, JVs, investments, new technologies and partnerships. Also hired is Bryan Roberts, who was named vp of A&R and label acquisition. The New York-based Roberts joined ADA earlier this summer from The Orchard, where he was senior director of A&R. He will spearhead ADA’s development and growth while bringing in new talent and partners. Both Drexler and Roberts report to ADA Worldwide president Cat Kreidich.
Kazuhiro Shimada was named COO of Warner Music Japan. Joining from Amazon Music Japan where he served as director & general manager, the Tokyo-based Shimada will be responsible for the company’s daily business operations, including by leading key initiatives, while also implementing organization-wide strategies and policies. He reports to Warner Music Japan CEO Kaz Kobayashi.
Ulf Zick will return to Universal Music Germany as president of international repertoire on Jan. 1, 2023. He re-joins the label from Utopia Music, where he was hired in March as chief marketing officer. He will take over management of Universal Music International in Germany and oversee the Virgin Music Label & Artist Services operations in the country. Zick previously helmed Universal Music Germany’s international division between 2018 and March 2022.
Tizita Makuria was appointed vp of A&R at Pulse Music Group. Makuria joins the company from Artist Publishing Group (APG), where she served as senior director of A&R. Based in Los Angeles, her responsibilities will include signing and developing Pulse’s roster of artists, songwriters and producers.
Blue Raincoat Music/Chrysalis Records hired James Meadows as senior vp of marketing, Rachel Forde as campaign marketing manager and Aaron Skates as catalogue marketing manager. Meadows joins the company from BMG, where he served as head of marketing. He reports to COO Alison Wenham and CEO Jeremy Lascelles. Forde comes to Blue Raincoat/Chrysalis from Warner Music Group, where she worked at Parlophone Records. In her new role, she will oversee campaigns for Chrysalis Records releases including Emeli Sande‘s album Let’s Say For Instance and Ben Harper‘s album Bloodline Maintenance. Finally, the London-based Skates joins from indie distributor state51, where he served in marketing, A&R and production roles. At Blue Raincoat/Chrysalis, he will coordinate marketing activities for the company’s catalog release schedule while also driving engagement on key releases. He reports to Dermot James, senior vp of Chrysalis Catalogue.
RECORDS hired Jordan Sargent as director of A&R and Jeff Juin as senior vp of A&R. Sargent, a former journalist, joins from Capitol Records. Juin previously signed and developed Shordie Shordie and also signed “Whoopty” singer CJ, among other accomplishments. Sargent can be reached at jsargent@recordsco.com and Juin can be reached at jjuin@recordsco.com.
Mara Frankel was named CEO of companyX, a new brand strategy agency launched by independent music booking agency Arrival Artists and ATC Management. The agency will represent artists on both Arrival and ATC, including Santigold, Hayley Kiyoko, Yaeji, Mayer Hawthorne, David Archuleta, Khruangbin, Mt. Joy and Goose. In her new role, Frankel will oversee strategic brand partnerships for music artists across categories including name and likeness campaigns, ambassador programs, branded editorial content, paid social media, video product placement and other third-party revenue opportunities. She arrives at companyX from Atlantic Records, where she most recently served as senior creative director, brand partnerships.
Chris Schuler departed his role as vp of promotion at Arista Nashville, Billboard has confirmed. Schuler joined the company in April from Universal Music Group Nashville. During his tenure, he was responsible for developing, implementing and supervising the strategic and tactical radio promotional plans for artists on the Arista Nashville roster.
YMU appointed Mike Kadziulis as executive manager & head of radio. Based between Los Angeles and Chicago, Kadziulis joins YMU from his own artist management company Mad Ones. He brings clients Aluna, Kacy Hill and Brevin Kim with him to YMU. In the new role, he will foster the careers of his clients while bringing his marketing and radio promo experience to the wider YMU roster.
Audacy named Seema Kumar senior vp of advertising platforms. Kumar will lead the team members responsible for the tech platforms for Audacy’s revenue organization, ensuring that roadmaps and requirements are prioritized for vendors and IT ad tech engineers, aligned with ad product strategy and revenue goals and optimized to meet business operational needs. She arrives at Audacy from WarnerMedia, where she served as vp of advertising technology.
Shauni Caballero was appointed senior A&R manager at Sony Music Publishing UK. Based in London, Caballero is responsible for developing the company’s songwriters, fostering collaborations and more.
Capitol Christian Music Group promoted Karrie Dawley to senior vp of A&R (previously vp of publishing), David Gutekunst to senior vp of publishing (previously vp of church resources), Joe Brazil to senior vp of business affairs (previously vp of marketing and operations) and David Sylvester to senior vp of operations (previously head of business affairs). Dawley can be reached at karrie.dawley@umusic.com, Gutekunst can be reached at david.gutekunst@umusic.com, Brazil can be reached at joe.brazil@umusic.com and Sylvester can be reached at david.sylvester@umusic.com.
Ryan Fleming and Victoria Sou launched Disruptive Vision, a creative studio designed to provide artists with services including creative direction, apparel design and production, art direction, brand development, brand partnership strategy, experiential events, marketing strategy, photography, social media management, videography, wardrobe styling and more. Fleming can be reached at Ryan@disruptive-vision.com and Sou can be reached at Victoria@disruptive-vision.com.
Mikaela Duhs and Grace Fleisher were promoted to senior account executives at Shore Fire Media. Both were previously account executives.
A man charged with arranging the killing of Young Dolph pleaded not guilty Thursday (Nov. 18) — one year after the rapper and record label owner was ambushed and shot to death while buying cookies at a bakery in his hometown of Memphis, Tennessee.
Hernandez Govan, 43, made a brief appearance in Shelby County Criminal Court in Memphis. He was arrested last week after he was indicted on charges including first-degree murder and conspiracy to commit first-degree murder in the killing of the rapper, who was 36 when he died. The judge scheduled Govan’s next hearing for Dec. 16.
Govan is the third man charged in the Nov. 17, 2021, slaying of Young Dolph, whose real name was Adolph Thornton Jr. The killing in broad daylight stunned Memphis and shocked the entertainment world. Police said two men exited a white Mercedes-Benz and fired shots into Makeda’s Homemade Cookies, which is near the rapper’s boyhood home in the Castalia neighborhood. Police released photos taken from surveillance video that captured the shooting, and authorities later found the car abandoned.
Justin Johnson and Cornelius Smith Jr., have pleaded not guilty to first-degree murder and other charges in the shooting and are being held in jail without bond. They are scheduled to appear in court on Jan. 20.
In a weekly newsletter, Shelby County District Attorney Steve Mulroy said Govan “solicited the murder and put it in motion.” But no evidence has been made public to support that statement, and a suspected motive has not been disclosed. The investigation is ongoing.
“I know that you all are wanting details, you’re wanting facts, you’re wanting sort of answers to some of these mysteries and things like that,” prosecutor Paul Hagerman told reporters after Thursday’s hearing. “Even if we knew them, we couldn’t tell you. As a matter of ethics and our requirements under the law, we’ve got to confine ourselves to what’s made public.”
Govan’s lawyer, Bill Massey, said he was seeking the prosecution’s evidence in the case, which Massey said may not go to trial until after next year due to the amount of evidence and the number of defendants.
Known for his depictions of tough street life and his independent approach to the music business, Young Dolph was admired for charitable works in Memphis. He organized Thanksgiving turkey giveaways, donated thousands of dollars to high schools, and paid rent and covered funeral costs for people in the Castalia Heights neighborhood where he was raised.
His work as a rapper, producer and owner of the independent label Paper Route Empire took him away from Memphis, but the father of two had returned to the city days before his killing to visit a sick relative and organize a turkey giveaway that took place without him.
After Young Dolph’s death, a section of a street near his boyhood home was renamed for him. A private funeral was held and he was honored during a public celebration at FedExForum, the home of the Memphis Grizzles of the NBA and the University of Memphis men’s basketball team.
City officials and community activists also pointed to the killing as a symbol of the scourge of gun violence in Memphis. Since the rapper’s death, Memphis has seen several other high-profile killings this year, including the shooting of a United Methodist Church pastor during a carjacking in her driveway; the kidnapping and shooting of an elementary school teacher who police said was abducted during an early morning run; and a man’s daylong shooting rampage that was partially livestreamed and led to the death of three people.
Young Dolph is one of several prominent hip-hop artists to be killed in recent years. His independent approach to the music business drew comparisons to Los Angeles rapper Nipsey Hussle, who was fatally shot in 2019. Other rappers who have lost their lives to gun violence since 2018 include XXXTentacion, Pop Smoke and, most recently, Takeoff, who was killed outside of a bowling alley after a party in Houston on Nov. 1.
In an article in The Atlantic dated Tuesday, rappers Too Short and E-40 called for the hip-hop community to find ways to come together and support each other amid the spate of gun deaths in the industry.
Young Dolph was born in Chicago and moved to Memphis with his parents when he was 2. He released numerous mixtapes, starting with 2008′s Paper Route Campaign, and multiple studio albums, including his 2016 debut King of Memphis. He also collaborated on other mixtapes and albums with fellow rappers Key Glock, Megan Thee Stallion, T.I., Gucci Mane, 2 Chainz and others.
He had three albums reach the top 10 on the Billboard 200, with 2020′s “Rich Slave” peaking at No. 4. Makeda’s, the bakery where he was shot, was boarded up and closed before it reopened in September.