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G-MIX

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This time, everything really is going to be different. Americans now live in a country where neither felony convictions nor dancing to “YMCA” onstage during a medical break in a political rally are disqualifying factors for the presidency; where a member of Congress who was investigated by the House Ethics Committee for allegations of sexual misconduct is nominated for attorney general; and where proposals for reckless tariffs and magic-bean-money marketed by grifters have made the stock market go up. Oy. 

The music business has been humiliated. All those artist endorsements for Kamala Harris didn’t seem to matter, at least in part because most of them spoke to voters the way the Democrats did. (I found Bruce Springsteen’s ad for Harris moving, but I’m not sure it was all that convincing.) Taylor Swift, who endorsed Harris, is the dominant artist of this era. But Joe Rogan, who seems to be an idiot’s idea of an intellectual in the way that writer Fran Lebowitz once said that Trump is a poor person’s idea of a rich person, may have more influence. With just over 50% of the popular vote, Trump is now mainstream, at least statistically. Pop culture has changed.  

What about the music business? Amid all of this winning, the industry may stay basically the same, according to a half-dozen conversations with industry policy executives and a dozen more with other music business figures. The basics of Trump’s economic agenda are tariffs, tax cuts and deregulation. Tariffs on imports will play havoc with some businesses, but they would only affect parts of the music industry; the price of merchandise, including CDs and vinyl, could go up, probably modestly. When it comes to taxes, successful artists and executives could end up paying much less, which seems inadvisable for the country but fine for business.

The industry’s biggest regulatory issue is copyright, power over which the Constitution specifically grants to Congress. (Even the U.S. Copyright Office operates as part of the Library of Congress, in the legislative branch of government.) It’s one of the few genuinely bipartisan issues that unites Democrats who champion the arts and Republicans who want to protect property rights, and the sheer complexity of the subject — as well as the fact that it’s always easier to stop legislation than it is to pass it — makes it hard to imagine significant change happening quickly.

The music business faces other issues, of course. Chief among them is the Justice Department’s antitrust case against Live Nation Entertainment, which seeks to break up the concert and ticketing giant. It’s impossible to know what’s going to happen with the case, although speculation suggests that it’s too popular a cause to simply drop. (Many concertgoers feel certain that breaking up the company will bring down ticket prices, which is hard to imagine; there are other important issues at play, but they’re more complicated.) There’s also the fate of TikTok, the Chinese-owned short-form-video platform that Trump tried to ban when he was president, then promised to “save.” (One of the hard things about figuring out what Trump will do is that he himself doesn’t seem entirely clear, either.) Right now, the issue is in the courts. And although TikTok’s Chinese parent company has said it does not intend to sell the platform, one could imagine a compromise that allows everyone to save face, probably without addressing the original problem.  

These last two issues show just how much conflicts over media business regulation — and business regulation in general — now take place within parties as opposed to between them. Partly, this is because Republicans have been just as willing to regulate technology companies as President Barack Obama. When it comes to antitrust, for example, both traditional Republicans and corporate-leaning Democrats want to get rid of Federal Trade Commission (FTC) chair Lina Khan, who has taken an aggressive approach to antitrust enforcement, but JD Vance has said positive things about the job she’s doing.  

Antitrust isn’t the only issue that works that way. President Biden, and most traditional Democrats, understand the need to protect small investors from cryptocurrency rip-offs. (Trump was against crypto before he was for it.) Until a decade ago, how and how much the government should regulate business was the main divide between the parties. Now a libertarian, business-friendly agenda is pushed by parts of both parties, available in Silicon Valley fleece and Wall Street cashmere. 

This, more than Trump, represents the real policy risk for the music business — the libertarian side of Silicon Valley, which stands to gain from Vance’s influence over Trump. (There are other issues that are much more important, of course, including economic policy and the independence of the Federal Reserve.) Imagine that Trump and Vance want to Make Silicon Valley Great Again, which in their minds means having the U.S. take the lead in artificial intelligence. Could that mean allowing technology companies to train their software on copyrighted works without licenses? Or relaxing some of the other protections that rightsholders have? Given all the laws and treaties involved, this is actually hard to imagine. Then again, what about this situation isn’t? 

The sweeping electoral victory of Donald Trump will change the U.S. government, and the country itself, in ways that no one can yet predict. So far, though, it appears that the music industry will not be affected as dramatically as other businesses.

“I don’t think there will be that much of a change,” said a senior executive at one of the major labels. Partly that’s because music, and copyright, are no longer the hot-button issues they were a decade ago. And partly that’s because, at a time of increased partisan rancor, copyright is one of a few genuinely bipartisan issues, according to a half-dozen executives. Because it brings together Democrats who tend to look favorably on the media business and Republicans who believe in strong property rights, passing legislation often depends more on building a coalition of legislators from both parties.  

There are no music companies in Trump’s crosshairs, at least from his own public comments, and he tends to look favorably on entertainers, even when they tend not to return that respect. Indeed, right-wing Republicans have been far more critical of media companies and online platforms than of major labels and movie studios.  

The most immediate music business issue before the government is the Department of Justice antitrust case against Live Nation Entertainment, which seeks to break up the company. Trump will appoint a new attorney general to replace Merrick Garland, and that appointee will almost certainly replace Jonathan Kanter, who runs the antitrust division. The future of the case will depend on Kanter’s replacement, and several music executives and antitrust experts said that it’s hard to predict how that person will proceed.

“We congratulate President-elect Trump on his election,” said a spokesperson for Live Nation Entertainment. “Live Nation is proud to help bring joy to fans through concerts, sports and other live events. We look forward to working with the incoming administration to continue driving the positive impacts our industry has on American jobs and local economies.”

Several executives without direct knowledge of the matter speculated that, for optics reasons, the DOJ would be less likely to drop the case than to pursue a low-stakes settlement, but all of them made clear that there was no way to know.  

Right now, the big issue in the music business is artificial intelligence, and the industry has been lobbying for the Nurture Originals, Foster Art, and Keep Entertainment Safe (NO FAKES) Act, which would protect the voices and likenesses of human creators. The bill was introduced in the Senate in July and the House of Representatives in September. It has sponsors on both sides of the aisle, including Senators Marsha Blackburn (R-Tenn.) and Amy Klobuchar (D-Minn.). (One might presume they do not agree on much else.) The industry is going to push to pass it in the “lame-duck” Congress, before the end of the year, but it will conflict with other priorities, and several executives said that would be a long shot. Otherwise, it will be re-introduced next year, and the changes in government are not expected to affect its chances much.

Some of the policies Trump has said he will pursue, such as tariffs for imports, could be bad for U.S. business on a broader level. This could make physical goods more expensive, especially merchandise, such as T-shirts. It could also make CDs and vinyl more expensive, although only by so much, since they could also be manufactured in the U.S.

It is also possible that changes to the tax system could affect catalog sales, as well as the desirability of songs and recordings as an investment. But it is unclear how much taxes will change — and other economic factors, such as interest rates, are likely to affect investment calculations more.

Is the music business, traditionally an arbiter of cool, out of touch with U.S. consumers? It’s a tough question to ask — and a tough time to ask it. But if you compare the results of the presidential election with the politics of artists and executives, it’s hard not to.
The dominant mood among people I know is shock at the scale of Donald Trump’s victory — most expected a race so close that ballot-counting would continue all week — and an unsettling feeling that the U.S. is not the country we thought it was. What happened and why will be discussed for years. There’s also a more immediate question: Why didn’t more people see this coming?

Part of the reason is that this still seems so weird — I’m old enough to remember when talking about a professional golfer’s private parts would have been disqualifying in politics, let alone the Republican party. But part of it is that, unintentionally, many people in the media business now live in a bit of a bubble. I’m one of them: I live in Berlin and spend most of my time in the U.S. in or near New York, and I read The New York Times and The New Yorker. When it comes to music, none of my favorite artists supported Trump, and one, Bruce Springsteen, actively campaigned against him. Some of the biggest musicians in the world also supported Kamala Harris — Taylor Swift, Beyoncé, Ariana Grande, Sabrina Carpenter — as did most music executives. Many of them must share my surprise.

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Are they — are we — too detached from the mainstream?

A significant number of Trump supporters are right-wing racists — certainly enough to make one worry. But it’s hard to make the case that Trump supporters are extremists if they account for more than half the vote. By definition, they’re mainstream. Worryingly, the Democrats don’t seem to know how to talk to them in a way that addresses their concerns. Calling them deplorables didn’t work, and making the case that Trump would be a disaster for democracy didn’t, either. (Democracy means that people vote for their leaders — it doesn’t mean that they vote for the leaders you want.) The Democrats focus more on what people can do for their country at a time voters seem more interested in what their country can do for them. Ideas are important, but many people seem more focused on the affordability of groceries.

For whatever reason, it’s now clear that there are more Trump voters than many people, including musicians and music executives, thought. They are also younger and more diverse than people realized. Many of them must listen to pop music. But is the music business listening to them? The idea that it’s controversial just to endorse Trump, without echoing any of his uglier rhetoric, means turning one’s back on more than half of American voters. That’s not how mass marketing works.

The challenge Trump presents to American democracy is far more important than selling music, of course. And I suspect I will get a few emails about how crazy it is to suggest that anyone market music to people who think immigrants are eating cats. But reaching different kinds of people with different kinds of art is what the music business does.

It’s also what politics is supposed to do. Both the music business and politics need to do better at reaching large, diverse audiences. That often means connecting with existing fans, but it has to also mean reaching out to new ones. Often, people simply won’t buy what they’re being sold, whether it’s a new album or a new candidate. But it’s important to have those conversations — both for those of us who want to help elect a new president in four years and those of us who want to argue that this one is going to do a great job.

More and more, politics seems stuck in a loop, in which ideas are marketed to, and cheered, by those who have already decided on them. In music, that’s known as a superfan strategy, and it’s very important. But building one requires reaching new people to turn into fans, or supporters, in the first place.

In the future, every technology company will have a celebrity advisor.
The latest is Timbaland, who is working with the generative AI company Suno on “day-to-day product development and strategic creative direction,” according to a late-October announcement. Timbaland is a hip-hop and R&B icon — a star songwriter, an innovative producer and a compelling performer. (His performance at the June Songwriters Hall of Fame gala was stunning.) As much of a genius as Timbaland is, however, it seems reasonable to wonder where he’s going to find the time for software development.

It also seems reasonable to wonder whether Suno hired him for more than his vision. As Suno faces controversy and litigation from rightsholders arguing that AI companies need to license the music they use to train their software, Timbaland may be there to make a case that this doesn’t matter that much. (Neither Suno nor a representative for Timbaland would comment on the nature of Timbaland’s deal.) In other words, Timbaland is there to do for Suno what Limp Bizkit and Chuck D tried to do for Napster — position the company with users but against the majority of creators and rightsholders.

It seems like ancient history now, but within a month after Metallica sued Napster in April 2000, Limp Bizkit and Chuck D stood with the company against the band, Dr. Dre (who sued a few weeks later) and most of the music business. Limp Bizkit played a few weeks of Napster-sponsored free shows, and Bizkit frontman Fred Durst said the company offered fans a great way to sample albums before buying them. Around the same time, Chuck D wrote a New York Times op-ed supporting Napster and announced that he was working with the company on a contest. The company’s subsequent bankruptcy filing contained a reference to a payment to Chuck D for “the cost of speaking engagements and support,” according to Joseph Menn’s excellent All the Rave: The Rise and Fall of Shawn Fanning’s Napster.

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Then, and perhaps now, the idea was to position a startup backed by venture capitalists as being on the side of artists. Suno is “the best tool of the future,” Timbaland has said. “It allows you to get any idea in your imagination out of your head.” Suno has already positioned itself as a disruptor, arguing in its response to the major label lawsuit that “What the major record labels really don’t want is competition.” Maybe. But the lawsuit is over Suno’s alleged ingestion of copyrighted recordings in order to train its software.

This kind of maneuvering isn’t so unusual. For decades, Silicon Valley has introduced innovations with a predictable strategy: Ask forgiveness instead of permission, then take political issues directly to users. This strategy, as much as the technology involved, allowed Uber and Airbnb to grow so big that it can be hard to remember that they are basically high-tech ways to get around local taxi and hotel regulations. Uber and Airbnb are essentially in the business of regulatory arbitrage — they face less regulation than their legacy-company competitors, so they often come out ahead. And they were able to stay in business at least partly because they very quickly grew too big to fail. No politician wants to be known for making it harder to book a car or a hotel.

Suno and other generative AI platforms are less problematic, because they would compete more fairly with other tools to make music. The only question is whether the company should compensate rightsholders — including, presumably, Timbaland himself. The lawsuit against Suno will get complicated — one of these AI cases could end up going to the Supreme Court. But creators who want to be compensated for the use of their work aren’t against AI music tools any more than Metallica was against digital distribution — they want to get paid for the use of their work.

At least one creator will almost certainly make a lot of money from Suno: Timbaland. And although it might look bad for him to be on the other side of the issue from most musicians, this has been a reliable way to make money. One of the big winners of the Early Digital Music Age — the 1999 introduction of Napster to the 2011 U.S. launch of Spotify — was Alanis Morissette.

Yes, really.

When MP3.com sponsored one of her tours, in 1999, Morissette invested $217,355 into early-stage shares of the company, which — well, it was never entirely clear how it would actually make money, but that address was really hot at the time. She made more than a million dollars selling only some of the stock.

At the same time, it’s worth remembering how these moves look years later. From a 2024 perspective, it seems smart that Metallica and Dr. Dre sued Napster, because that company’s demise paved the way for licensed, commercial streaming services. Cracker frontman David Lowery and Taylor Swift can also say they were on the right side of history when it comes to creators’ rights. In retrospect, Limp Bizkit and Chuck D seem a bit naive. Years from now, Timbaland, as talented as he is, may seem the same.

As Billboard reported Thursday (Oct. 24), global royalty collections rose 7.6% to a new high of 11.75 billion euros ($10.9 billion, based on the average exchange rate for 2023), according to the Paris-based trade organization CISAC (the Confédération Internationale des Sociétés d´Auteurs et Compositeurs). That article covers the basic news — digital collections grew 9.6% to 4.52 billion euros ($4.18 billion); radio and television collections declined 5.3% to 3.37 billion euros ($3.11 billion) after a significant jump the previous year; and live and background music collections grew 21.8% to 3.06 billion euros ($2.82 billion), fueled mostly by a resurgent concert business. There’s more detail in the news article. 
Now let’s take a longer-term look at the state of the market to see where all the recent growth has come from and what that implies about the future. Since 2019, the music collections business has grown from 8.92 billion euros ($8.24 million) to 11.75 billion euros ($10.9 billion), an increase of 31.7% over five years, which is annualized growth of more than 6%. That arguably presents a more accurate picture of market trends than year-by-year changes from this period, since the concert business was so disrupted by the pandemic.  

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Most of that growth came from digital, which grew 119% — from 2.06 billion euros ($1.9 billion) in 2019 to 4.52 billion euros ($4.2 billion) last year. Perhaps more important, the 2.46 billion euros ($2.27 billion) of digital growth represents almost all the growth in the business during that time. And that growth is starting to slow. In 2023, digital growth slowed from 35.1% to 9.6%, which contributed to an overall slowing of growth from 29% to 7.6%. Some of that is inevitable — subscription streaming growth has leveled off in the U.S. and Western Europe, the biggest markets that traditionally drive the business. Together, the U.S., Western Europe and Canada account for almost 75% of collections revenue. Digital revenue will almost certainly keep growing — from price increases and new products, among other factors, but the wonder years of digital growth may be in the past.  

The state of global royalty collections offers other reasons for optimism, though. First, a caveat: These numbers don’t provide a perfect picture of the music publishing business, or even public performance royalties, since some digital royalties are paid through direct deals. These numbers represent the best global picture of the collecting business available, though, and it seems safe to say that the direct deals, for which numbers aren’t available, roughly follow these trends. This almost certainly understates the growth of the music publishing business, though, since it doesn’t include U.S. mechanical publishing royalties, any synch rights and a variety of new kinds of deals.  

The challenge for collecting societies is that the second largest source of revenue, from TV and radio play for compositions, does not seem to be growing. It was 3.4 billion euros ($3.14 billion) in 2019 and it’s now 3.37 billion euros ($3.11 billion) — a more significant decline than it seems, given inflation. Since this revenue is tied to TV and radio businesses in most markets, some of it seems to have gone to digital, which has replaced it as the most important source of revenue.  

There’s more hope in the live business. The disruption of the pandemic made this hard to see, but live and background music royalties are growing steadily — from 2.71 billion euros ($2.5 billion) in 2019 to 3.06 billion euros ($2.83 billion) last year — a rise of 12.7%. That’s not so big, divided over five years, but live is growing faster than the rest of the category, and growth in ticket prices for the biggest tours will result in more royalty revenue in territories where that’s linked to ticket prices. That trend is expected to continue, too. That could make live music an important source of growth in both established markets and new ones.  

Right now, the collecting society revenue breaks down as follows: 38.5% of money comes from digital; 28.7% from TV and radio; 26.1% from live and background music; 3.2% from CD and video sales; 2.4% from private copy levies (which the U.S. does not have); and 1.1% from other sources. How might that look five years from now? It’s hard to imagine digital climbing above half since that would imply a significant decline for TV and radio revenue. Live royalties should climb, maybe significantly, and background music revenue could climb in some markets, although it’s not likely to grow so much in the U.S. and Western Europe.  

The origins of collections revenue will also change: There’s also really impressive growth coming from parts of the world that barely generated much revenue five years ago. Collections in Latin America rose 26.2% last year but 108.2% over the last two years, driven by Mexico and Brazil and the spread of streaming throughout Latin America. Right now, that impressive growth doesn’t change the overall picture much — the region still only accounts for 5.9% of collections revenue. But if that growth pattern continues, the market could become significant soon. Over the last five years, Latin America collections went from 4.1% of the global total to the aforementioned 5.9% share.  

The same goes for some markets in Asia. Overall, there’s not much growth there — it’s down 0.3% because of Japanese currency fluctuations but up 6.8% on a constant currency basis. But Vietnam, Indonesia and the Philippines, where between 80% and 85% of collections revenue comes from digital, are up 270.4%, 111.6% and 325.8%, respectively, over the last five years. Those increases aren’t big enough in revenue terms to lift the overall business, but they’re growing fast enough that they could make a difference five years from now. Africa, hailed as having so much potential, seems to be stuck: It went from accounting for .7% of global music collections to .6%. That won’t matter much to overall revenue anytime soon. But it shows how the music business still faces serious challenges in Africa, as well as how those challenges impact real, working creators. These problems are complicated, but they are also urgent: Creators in Africa deserve better.

Growth is continuing in bigger markets, however; the top 10 markets grew 6.3% last year. Over the past five years, the U.S. and Canada grew 44.4% and 38.9% respectively, with the U.K., France and Germany up 44.5%, 34.7% and 20.2%. The strongest growth over that time took place in Korea, up 70.9%. The health and stability of the larger markets should make it easier for the fast-growing smaller ones to improve the entire business.

As the music industry boomed in the 1980s and 1990s, the place to be for global business was MIDEM, the annual conference in Cannes. Over the past three years, though, an increasing amount of those deals have been made at the IMPF (Independent Music Publishers Forum) Global Music Summit in the fall in Palma de Mallorca, in Spain. I went for the first time this year, from Oct. 1 to 4, and it’s one of the best music business conferences I’ve ever attended. (I should point out that I got a press pass, but Billboard paid for my travel.) Now in its third year, the event drew 500 attendees, up from 320 last year. It’s the perfect size — small enough to see people you know, but big enough to meet people you should. 
The vibe is very different. MIDEM was like the throne room of the Imperial Music Business, where dealmakers held court at high-end hotels and the hamburgers cost 35 Euros. But most labels now control recording rights in most of the world, so the focus of dealmaking has shifted to publishing. The Global Music Summit is more relaxed. It takes place at two hotels in the Mallorca marina that are nice but not over the top, and you could walk around and see everyone easily. By day, you could take meetings on one of the hotel terraces or walk to the marina. At night, you could have cocktails at the Budde Music-sponsored Budde Bar. 

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The IMPF itself only goes back to 2014, when a dozen or so independent publishers got together to form a trade association that would focus on their needs. The International Confederation of Music Publishers, which includes both majors and indies, has many of the same members and focuses on some of the same issues and the two organizations worth together frequently. Both are international but wield more power in Europe, where countries tend to have stronger copyright laws, and where the publishing business generates more revenue.  

Much of the action took place in private meetings, but the panels were also smart — shortish and relevant, and held one at a time. The keynotes were also worthwhile. The first was from Reservoir Media founder and CEO Golnar Khosrowshahi, who spoke about how technology has helped music publishing expand. Reservoir’s first big investment was in Music Maestro, she recalled, and data tools helped the company grow. She predicted that artificial intelligence would create opportunities and efficiencies as well as challenges, a welcome message at a time when it seems like the wild elephant in the room. 

The next day’s keynote came from BMI President and CEO Mike O’Neill, who gave an audience used to dealing with traditional, nonprofit collective management organizations a look at the alternative his company represents now that it’s owned by private equity investors. He pointed out that this might not be so different from the status quo, since SESAC has a similar ownership structure and GMR is said to have an “understanding” to sell some of the company to a private equity firm. “Why is that?” O’Neill asked. “I can only speak for BMI, and for us, it means a level of investment that we simply could not have achieved before.” 

O’Neill also discussed BMI’s plan to distribute 85% of licensing revenue and retain 15% for overhead and investment and said that the company is on track to do so. “While we have not finished our audit for the last fiscal year, I’m extremely pleased with our results and how we’re tracking towards our goals,” he said. “We’ve had a series of record-breaking distributions this year and our final distribution growth will reflect that.” 

NMPA (National Music Publishers’ Association) President and CEO David Israelite closed the event with a keynote about how the publishing business is both growing and at the same time closing the gap with revenue from recorded music, plus touched on “Spotify’s war against songwriters,” the MLC database, and how transparent collective management organizations should be. Israelite ended his speech — and, really, the entire conference, with advice for the publishing business. When Israelite started at the NMPA two decades ago, “we had a cultural problem” — the major publishers and the indies often pushed different agendas, which also differed from those of songwriters. One of Israelite’s key successes was to convince these groups to work out their disagreements in private and unite behind one agenda in public. In Europe, where collecting societies and songwriters groups have more power than they do in the U.S., this could be difficult. But it could also help the entire business get the influence it needs to make sure it can benefit from AI.  

It’s never easy to get the various parts of the music business to unite behind anything, of course. But events like the IMPF summit, held in a cool place at a scale that makes sense, make it a lot easier. 

Over the last decade or two, there have been dozens of difficult licensing negotiations between rightsholders and online music platforms — some of which played out in public or even resulted in content being unavailable online.
Just this week, around the time YouTube temporarily took down music by SESAC songwriters, the digital rights licensing collective Merlin informed its member labels that TikTok “walked away” from talks to renew its license agreement and planned to deal with labels individually. This letter Merlin sent to its members says TikTok’s goal is “fragmenting the Merlin membership, in order, we believe, to minimize their pay out.” 

In one way, this is an old story. Most online platforms have so much market share that it’s hard for rightsholders to negotiate good deals: There’s just one TikTok, just like there’s just one Facebook and just one YouTube. But there are thousands of labels. Since smaller labels need giant platforms more than those platforms need labels, they need to bulk up, in order to balance market share against market share. For indie labels, that means either making a distribution deal with a major or joining Merlin, which negotiates on behalf of its members. (This same idea has fueled a merger mania throughout the media business, as movie studios and book publishers merge to better deal with Netflix or Amazon.) Sometimes, though, platforms push back. 

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In another way, this is an old story with a new twist. TikTok has suggested that part of the reason it wants to change its deal structure is that it’s concerned about fraud, specifically the alleged delivery of recordings and remixes by labels that do not own the rights to them or assert ownership incorrectly — a problem that sources say comes disproportionately from a few companies. This seems like a reasonable concern, and it’s one that’s widely shared, although the problem is hardly unique to Merlin. Plus, it should be possible to exclude a small number of bad actors from a new Merlin deal, and it’s hard to imagine that dealing with indies directly wouldn’t give TikTok a financial advantage.  

In yet another way, this is a whole new kind of negotiation, the likes of which the music business hasn’t seen since the early days of YouTube. These days, most online platforms need to play nice, or at least sort of nice, since negotiations that turn ugly in public tend to be distracting from other public policy priorities, and because today’s negotiating counterparty could become tomorrow’s business partner.

TikTok seems less concerned with these issues: It went without a Universal Music deal for about three months early this year and then didn’t renew its NMPA-blessed deal with independent publishers. Partly, that could be because it’s already facing an existential policy issue in the form of a ban in the U.S., or at least a forced sale to prevent that. It also seems to think that music doesn’t drive as much value — which could be why it’s shutting down its nascent TikTok Music subscription service. Whether or not the company is right, its attitude toward rightsholders can be very different.  

TikTok is also developing a reputation, fairly or not, for being less sentimental about the culture business than other platforms. For years, most online platforms have made the case that rightsholders are better off with the deals they’re offering, because of the exposure they offer — think YouTube or Spotify. TikTok clearly has significant promotional value, but it tends to act more aggressively. Or maybe its other reputational issues are so significant that pissing off music rightsholders just isn’t as big a deal.

That could change — TikTok’s Merlin strategy has indie labels rattled because it could splinter the rights group. If the platform’s gambit works, other companies could follow and Merlin could end up in a weaker position. The bigger indies would be fine. Others might look for leverage from the major labels’ indie distribution companies, like The Orchard (Sony Music) and Virgin (UMG), which would further undermine Merlin. This would damage the whole indie ecosystem — especially the small labels run by creative founders who don’t have the infrastructure to negotiate as smartly as Merlin. 

There’s also a chance that this won’t be as easy as TikTok thinks. Going around Merlin could save it money, but if it’s so simple you wonder why no other platform has tried it. One reason is that Merlin deals cover a wide range of labels and content, some of which could be hard to get otherwise. Another is that it’s easier to do one negotiation than hundreds. Assuming, of course, that TikTok is serious about negotiating, as opposed to simply sending a letter with deal terms that it expects rigthsholders to accept.  

A few days after the Sept. 16 arrest of Sean “Diddy” Combs on racketeering and sex trafficking charges, a book said to be based on diaries and notes from his late girlfriend, Kim Porter, became a best-seller on Amazon. (It was a best-seller within a certain category, which probably means it sold well but not hardcover-bookstore-best-seller well.) What’s really impressive is that the book did so well despite the fact that Diddy and Porter’s children say she didn’t actually write any of it. 

The 60-page book, Kim’s Lost Words: A Journey for Justice, From the Other Side, was self-published under the name Jamal T. Millwood by Chris Todd, whose real name is apparently Todd Christopher Guzze. Todd has said the book is based on the contents of a flash drive, which he allegedly received from two people close to Porter and Combs, but he “didn’t ask too many questions about how they got it,” according to Rolling Stone. “If somebody put my feet to the fire and they said, ‘Life or death, is that book real?’ I have to say I don’t know,” said Todd, who says he’s a producer and journalist and hopes the book will lead other sources to come forward. (Journalists generally tend to ask too many questions.) “But it’s real enough to me.” 

It would be hard to find a more ridiculous quote to describe the very serious problem that big media platforms have created. I have no idea how the book was written, of course, but Todd knows that’s not the point and presumably so do readers — it’s real enough to me, he says, so it’s real enough for them. (The story behind the book actually sounds more interesting than the book itself.) This sounds harmless enough until you realize that — wait a minute — that’s basically what Republican vice-presidential candidate JD Vance says about the claim that Haitian immigrants are eating pets in Springfield, Ohio. He heard it, then justified it as a way to call attention to a problem. (There is no evidence that anyone is actually eating pets, and the whole idea sounds racist.) Like Todd’s book, it certainly went viral. It was real enough for people — to the point that it has become an actual political issue. 

Stories about scandals, real and exaggerated, are hardly new. (Diddy faces unrelated criminal charges; Porter died in 2018 of lobar pneumonia.) What is new, though, is the way online platforms create incentives to create and spread them. Amazon now sells more than a dozen books about Porter, including a “Kim Porter Coloring Book” and several books that use “lost words” in their titles. The speed and ease of selling books on Amazon’s open system has made Porter’s death a cottage industry. It’s gross — does anyone want to be memorialized by a coloring book? — and you can’t blame her kids for being upset. There’s money in it, though. 

It’s a useful metaphor for streaming fraud. The problem isn’t that Amazon or online music services stand behind conspiratorial books or useless music with streaming numbers pumped up by bots — it’s that they don’t stand behind anything. Open platforms like these let people distribute their own art, which is promoted as a feature but might more often be a bug — a lot of what’s online is neither professional work nor hobbyist creations but rather get-rich-quick schemes of various kinds. Which is funny until it could affect an election. 

The most common argument against this in the music business is that fraud takes money from artists, which is true, but it can be hard to get horrified about schemes to steam millions of fractions of pennies from thousands of artists. (Most of the book business works very differently, but dubious books do take money and attention that more legitimate books need.) Another argument is that low-quality material undermines the integrity of the system — consumers who hear lousy music and read dubious books might be less inclined to spend more money on such legitimate products.

The argument that ought to get more attention is that these kinds of products simply aren’t good for the overall experience platforms offer. Streaming services used to promote their vast selection, but at this point some of what’s uploaded just makes more popular music harder to find. The same applies on Amazon. A search for “Kim” and “Lost Words” brings up a half-dozen books — and even those who find and buy the one they want may be disappointed. Kim’s Lost Words has 98 reviews, which average out at three stars. Others have none at all. This doesn’t affect the value of other books, of course, but it could make them harder to find. 

Any serious solution to this will involve changing the incentives. The current level of curation and enforcement won’t work once AI is more widespread. It’s one thing to sell a book that may or may not contain Porter’s words, but Amazon already sells 12. Are we ready for 12,000? 

Making platforms easier to use will mean making tough choices, then pushing them down to distributors who will in turn push them down to individual uploaders. There are options, however: Platforms could hold uploaders responsible for content that hurts the user experience or pay out more to companies who have a better ratio of content users engage with compared to their total. That’s what I think — unless this all came from a flash drive someone gave me.  

You can’t say no one’s getting rich from streaming. In an indictment unsealed in early September, federal prosecutors charged musician Michael Smith with fraud and conspiracy in a scheme in which he used AI-generated songs streamed by bots to rake in $10 million in royalties. He allegedly received royalties for hundreds of thousands of songs, at least hundreds of which listed as co-writer the CEO of the AI company Boomy, which had received investment from Warner Music Group. (The CEO, Alex Mitchell, has not been charged with any crime.) 
This is the first criminal case for streaming fraud in the U.S., and its size may make it an outlier. But the frightening ease of creating so many AI songs and using bots to generate royalties with them shows how vulnerable the streaming ecosystem really is. This isn’t news to some executives, but it should come as a wake-up call to the industry as a whole. And it shows how the subscription streaming business model with pro-rata royalty distribution that now powers the recorded music industry is broken — not beyond repair, but certainly to the point where serious changes need to be made.

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One great thing about streaming music platforms, like the internet in general, is how open they are — anyone can upload music, just like anyone can make a TikTok video or write a blog. But that also means that these platforms are vulnerable to fraud, manipulation and undesirable content that erodes the value of the overall experience. (I don’t mean things I don’t like — I mean spam and attempts to manipulate people.) And while the pluses and minuses of this openness are impossible to calculate, there’s a sense in the industry and among creators that this has gradually become less of a feature and more of a bug. 

At this point, more than 100,000 new tracks are uploaded to streaming services daily. And while some of this reflects an inspiring explosion of amateur creativity, some of it is, sometimes literally, noise (not the artistic kind). Millions of those tracks are never heard, so they provide no consumer value — they just clutter up streaming service interfaces — while others are streamed a few times a year. From the point of view of some rightsholders, part of the solution may lie in a system of “artist-centric” royalties that privileges more popular artists and tracks. Even if this can be done fairly, though, this only addresses the financial issue — it does nothing for the user experience.

For users, finding the song they want can be like looking for “Silver Threads and Golden Needles” in a fast-expanding haystack. A search for that song on Apple Music brings up five listings for the same Linda Ronstadt recording, several listings of what seems to be another Ronstadt recording, and multiple versions of a few other performances. In this case, they all seem to be professional recordings, but how many of the listings are for the same one? It’s far from obvious. 

From the perspective of major labels and most indies, the problems with streaming are all about making sure consumers can filter “professional music” from tracks uploaded by amateur creators — bar bands and hobbyists. But that prioritizes sellers over consumers. The truth is that the streaming business is broken in a number of ways. The big streaming services are very effective at steering users to big new releases and mainstream pop and hip-hop, which is one reason why major labels like them so much. But they don’t do a great job of serving consumers who are not that interested in new mainstream music or old favorites. And rightsholders aren’t exactly pushing for change here. From their perspective, under the current pro-rata royalty system, it makes economic sense to focus on the mostly young users who spend hours a day streaming music. Those who listen less, who tend to be older, are literally worth less.

It shows. If you’re interested in cool new rock bands — and a substantial number of people still seem to be — the streaming experience just isn’t as good. Algorithmic recommendations aren’t great. Less popular genres aren’t served well, either. If you search for John Coltrane — hardly an obscure artist — Spotify offers icons for John Coltrane, John Coltrane & Johnny Hartman, the John Coltrane Quartet, the John Coltrane Quintet, the John Coltrane Trio and two for the John Coltrane Sextet, plus some others. It’s hard to know what this means from an accounting perspective — one entry for the Sextet has 928 monthly listeners and the other has none. If you want to listen to John Coltrane, though, it’s not a great experience.  

What does this have to do with streaming fraud? Not much — but also everything. If the goal of streaming services is to offer as much music as possible, they’re kicking ass. But most consumers would prefer an experience that’s easier to navigate. This ought to mean less music, with a limit on what can be uploaded, which some services already have; the sheer amount of music Smith had online ought to have suggested a problem, and it seems to have done so after some time. It should mean rethinking the pro-rata royalty system to make everyone’s listening habits generate money for their favorite artists. And it needs to mean spending some money to make streaming services look more like a record store and less like a swap-meet table. 

These ideas may not be popular — streaming services don’t want the burden or expense of curating what they offer, and most of the labels so eager to fight fraud also fear the loss of the pro-rata system that disproportionately benefits their biggest artists. (In this industry, one illegitimate play for one song is fraud but a system that pays unpopular artists less is a business model.) But the industry needs to think about what consumers want — easy ways to find the song they want, music discovery that works in different genres, and a royalty system that benefits the artists they listen to. Shouldn’t they get it? 

By some measures, the recorded music business has never been better. U.S. sales grew 8% in 2023 to hit a record high $17.1 billion; streaming continues to grow around the world; and revenue and operating income are rising at the three major labels and many smaller companies as well. The subscription streaming model is appealingly predictable, and the explosion of other forms of online media, from video games to virtual exercise programs, is creating plenty of opportunities for growth.
By other measures, the industry is in a tough spot. The flood of new music pouring into streaming services — both legitimate and not — is diluting the royalty pool for professional musicians. (This, and some other things, might be good for some players, but it seems to be bad for the business.) Although comparisons are complicated, it seems harder than ever to break new acts. Underneath all of this is the part of the iceberg most people don’t see: The deals labels sign with acts are generally less advantageous, because artists have more leverage than ever.

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The numbers say it’s the best of times. Layoffs at Universal Music Group and Warner Music Group say otherwise. And although the recorded music business isn’t in any real danger — the only question is how fast it’s going to grow — it’s hard to escape the idea that something just feels off.

Welcome to the music business version of the “vibecession” that’s affecting the U.S. economy as a whole. The term, coined in June 2022 by the financial analyst Kyla Scanlon, describes the apparent disconnect between positive economic indicators and negative public perceptions. In layman’s terms, if the numbers look so good, why do things feel so bad?

Outside the music business, most of the economic news is good, or at least good-ish by the standards of the dismal science. Inflation is down and the economy seems to be growing again. The problem, in industry terms, is that people just aren’t feeling it. One example: Job loss concerns are high at a time when the level of layoffs is low, according to Marketplace. The article compares the current situation to a doctor talking to a healthy patient who thinks he’s sick. There are explanations for this: Perhaps our minds are still adjusting to higher prices, which continue to rise even as the rate of inflation declines, or maybe troubling political news just makes more of an impression than economic indicators.

This could be more than a feeling, as a Boston economist might say, since people and companies that believe the economy will decline might cut back their spending and, inadvertently, contribute to making it happen. Although the music business is much harder to measure, the same thing could happen there. The pessimism that has already led to layoffs and restructuring means there will be fewer A&R executives signing fewer acts and then spending less money on marketing and promotion. That might be necessary. But it’s unlikely to help.

What’s killing the vibe in music? Partly, expectations have changed. The hypergrowth phase of streaming is ending, but big music companies, especially UMG and WMG, are under some pressure to grow faster than the overall business. Subscription streaming is going from the savior of the music business to another new format that boosts some kinds of music at the expense of others. There aren’t many new stars — one of the big hip-hop stories this year was the feud between Drake and Kendrick Lamar. (This is both the winter of our discontent and the season of diss content.) And new albums by established stars like Ariana Grande and Dua Lipa are off to a slow start (although it’s hard to know what that means in a streaming-driven business).

There may also be a sense, both in the music business and in the economy as a whole, that the foundation is not as solid as it seems. There’s more talk of quick fixes, both in the overall economy (Blockchain!) and in the music business (NFTs!). But there’s not much effort to get at the heart of the problems: The economy seems increasingly rigged toward finance and the pro-rata royalty distribution of streaming services prizes viral sensations in a way that may make it hard for different kinds of artists to build careers.

In the meantime, the numbers keep going up. The stock market has skyrocketed, undeterred by COVID, inflation and conflict in the Middle East — but that can’t last forever. The recorded music business keeps growing, too, and it will almost certainly continue to do so — just perhaps not in the ways we have come to expect. Over the past few years, labels have spent fortunes signing viral superstars who win big — but how many of them will be around in a decade? Meanwhile, popular tastes are harder than ever to predict. Two years ago, when it seemed like the future belonged to hip-hop, could anyone have predicted such a big country comeback? Giving people what they want is a fine strategy — but only if they keep wanting it.

It’s a good time to toast the good times — but it’s tempting to ask for a strong drink, too. Both the music industry and the broader economy keep climbing over problems to reach new peaks. And they’re great places to be — until you realize that it’s all downhill from there.