From the Desk Of
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Enter the National Arts Club, a Victorian Gothic Revival brownstone off Manhattan’s Gramercy Park; climb four winding flights of stairs; pass the Pastel Society of America; and there will be the offices of director Wes Anderson’s longtime music supervisor, Randall Poster. And though in summer 2023 Hollywood is at a strike-induced standstill, Poster, creative director of Premier Music — the advertising-focused music supervision agency — is as busy as ever.
(Update: A tentative deal has been reached between screenwriters and the studios, streaming services and production companies.)
Poster’s film projects in the next several months include music supervision for the fall’s The Wonderful Story of Henry Sugar (with Anderson), Priscilla (with Sofia Coppola), Killers of the Flower Moon (with frequent collaborator Martin Scorsese), as well as Joker: Folie á Deux (with Todd Phillips) and Hit Man (with Richard Linklater).
And that’s just his day job. Amid the pandemic, an unlikely new passion became a calling when Poster started the Birdsong Project, enlisting his diverse group of artist friends to create music inspired by or incorporating birdsong in an effort to benefit avian life. The result: For the Birds, a 20-album box set containing 172 new pieces of music and 70 works of poetry (all proceeds go to the National Audubon Society) and has led to a growing global community that’s still evolving under his leadership, one in which he hopes the music industry will take a real interest.
How has the strike affected your business?
There are some movies I’m working on that we can’t get finished because we can’t get the main actors to do [automated dialogue replacement]. And then there are movies that were meant to start in the fall that are pushing. I think everyone’s unclear about how it’s going to play out. I don’t really talk to a lot of other music supervisors, but for people who are just scraping by in music supervision, the shutdown of shows is brutal. In terms of music departments, there has been constriction at the streamers, but I’m not sure that was borne out of the strike, at least to this point. But in the short term, I’m busy. And our company, in terms of doing a lot of advertising work, thankfully, that has been very active.
A sampling of Poster’s extensive collection of musician paintings by Dan Melchior, part of an ongoing series, alongside a ceramic bird by Ginny Sims.
Nina Westervelt
Even in the music industry, I think few understand very well what a music supervisor actually does. How would you explain it?
I view my work as a filmmaker, not just a person who deals with the music — using music to best tell a story, to compensate where the story needs a bit of help and having a really candid and fluid relationship with directors and producers. People always say to me, “Oh, Randy Poster’s the guy who picks the music for the Wes Anderson movies” — but I don’t pick the music. I don’t want to be the one who does. Directors pick. I may present, we may have a conversation borne out of months of musical dialogue, but ideally, it’s the director’s medium. When people come out of the movies I work on and say, “Oh, the music was the best part,” that’s not really a victory. When people say, “I don’t really even remember the music,” sometimes that’s the best service you can do to the film — that it feels like the fabric of the movie.
What does a normal day of work look like for you?
Making sure rights are coming in; working on scenes of a movie and putting different songs up to it; making calls to record companies and publishers to see if I can narrow a price differential in terms of what we have to pay and what they’re asking us to pay; reaching out to artists and managers to see if people are interested in recording new music; looking at cues that are coming in from the composer on the movie; putting together a playlist for a director — like when starting a project, using the music to establish a dialogue. Describing what music is doing is very difficult, and words don’t necessarily mean the same things to different people, but if you can relate to songs, it gives you a sense of tempo, vibe, instrumentation they like. And then getting feedback from directors and editors: “This is working. This isn’t. Is there too much music in the movie? Is there not enough?” Sometimes it’s my role to protect the silences.
From left: A painting of country artist Jim Reeves by artist Henry Miller; a ceramic bird sculpture by Joseph Dupré; a painting of Buck Owens’ band, The Buckaroos, by Ashley Bressler (one of many artists Poster has discovered on Instagram).
Nina Westervelt
Has the catalog sales boom affected your bottom line?
When certain catalogs were held by the artist or the artist’s camp, there was a little more flexibility. If a company pays $500 million for an asset, they can’t license something at what they would say is a sort of embarrassing rate. Like, “We’re only licensing this for $10,000 a use; it’s going to take us 200 years to recoup our investment.” On the other hand, I always feel, especially with older catalogs, a movie use is going to open up a new audience to that artist, whether it’s “Oh, that’s Rod Stewart?” or “Wow, I had an idea of what Janis Joplin was like, but I’m surprised by this.”
Does it feel less personal than working with publishers and songwriters?
I wish things were more human and less corporate, but I’ve seen it throughout my whole career. You used to have 12 companies you’d license music from, and then two companies would merge and they’d cut half the staff. They’d have the catalog, but no one would know whom to talk to. A lot of times, what we have to do is convince these companies they actually own something or help them make a connection. That can also be fun — the detective work that goes into figuring out who owns the rights to something. I just wish the music companies had more of an understanding of the process of filmmaking. Oftentimes, it’s not just needing the price to be right — it’s also getting a timely answer. Name the price; just give me an answer.
A cardboard replica of the police car from the Blues Brothers movie by artist Richard Willis.
Nina Westervelt
On the flip side of that, the synch business is so huge. Do you get pitched often?
Yeah, people are pitching nonstop. There are people whom I respect and trust, and my response is always I want to listen to anything you think is great, but I just want to find the right music. This is going to sound horrible, but I don’t do anybody any favors. I’ll do you a favor in life as my friend, but I will not put music in a movie because I’m connected to somebody. I certainly do file things away for the future. I may love a song but not have the right movie for it. At the moment, I’m working on things in the ’20s, the ’50s — period pieces.
How do you seek out new music?
Every way — through social media, through traditional music press, recommendations. I have two daughters who are very into music. Artists lead you to artists a lot. I’ve been very reluctant to use an algorithm to find music. Probably at certain points I’d benefit from that, but I like to discover it myself.
A beaded African tribal hat Poster bought from a street vendor on Manhattan’s Houston Street. “As we started reaching out to artists we loved to make album covers for the box set, I found myself looking at all sorts of bird- centric pieces, and I couldn’t resist them.”
Nina Westervelt
Speaking of discovery, how did you get the idea for the Birdsong Project?
I’m a New York City kid; I’m not really a nature boy. But during the pandemic, we were all somewhat soothed by the way nature seemed to be doing its thing, unperturbed by the virus, and a lot of my friends were noticing there were so many birds. A friend I work with, Rebecca Reagan, who lives in California and is much more involved in nature causes, was like, “You should get all your musician friends to create music around birdsong. That would be a great way to joyfully draw people’s attention not only to the beauty and variety of birds but also the crises facing birds. It would be a nonpolitical way to draw people to protect the birds.” For the most part, I’ve found, no one wants to see birds die. It’s a way to bring together people in community, which seems to be so difficult otherwise. The response from artists was very positive, and it just kept going.
What do you get out of it that you don’t from your day job?
I’m usually the person who has to be a very strong editorial hand in getting what we need for a movie. Here, I just said [to artists], “Thank you.” It was very much a broad invitation to do what they feel. I didn’t really give notes, other than maybe, “Hey, this is beautiful. Can it be nine minutes versus 23 minutes?” It was liberating. I had to allow a certain kind of randomness versus how you sequence music for a movie.
What are your ambitions for the project with respect to the music industry?
I would like to see us adopted by the music community like they have the TJ Martell Foundation. But that may be a longer road. So we’re just working away. The label Erase Tapes has 10 artists on the compilation, so in 2024, they’re going to do a Birdsong album by taking their artists and remixing them, and I’d like to do collaborations with other labels so it spreads. That way I’m not the record company — we work with your artists, we curate with you. I think we’ll be ready in 2025 to hopefully do a big Birdsong concert maybe in Central Park.
At this point in your career, you’re a bit of a music supervision legend. How do you advise young people who want to do what you do?
I encourage them to find their contemporaries who want to make movies and throw in. It has never been easier to make movies. I wanted to work on movies where that one kid in the movie theater thinks, “I want to do this” — Wes and I were that kid. Do whatever you need to do to create and be creative. When people ask me the difference between how I work now and how I worked 25 years ago — well, I probably cry a little bit less, in the sense that when a director does not choose a song I feel is so right, I have more of a balanced [reaction]. I still am up for battles, though. And hopefully, people want to work with me because I’m not just a rubber stamp. We have to fight for every cue.
Were David Mamet’s Pulitzer Prize-winning play Glengarry Glen Ross adapted for the music industry, Tom Windish’s mantra — “Keep booking” — could replace the play’s motivational line “Always be closing.”
At a time when agencies are consolidating and many agents are concentrating on their next career move, Windish remains focused on the core purpose of his job as head of A&R and business development at Wasserman Music: building an impressive roster of promising acts and established stars and helping them graduate to larger and larger stages. That roster includes alt-J, M83, Tove Lo, First Aid Kit, Rina Sawayama, Bartees Strange and superstar Billie Eilish, whom Windish helps route with Wasserman Music’s Sara Bowinkle. And this year, he signed one of his first management clients, activist and attorney-turned-artist Danielle Ponder.
“I like finding bands really early and rolling my sleeves up and figuring out every opportunity we can for them,” says Windish, 50. “When I’ve got an artist that’s already established at a certain level, I like going out and finding shows for them.”
The Schenectady, N.Y., native has worked for over three decades as an agent — first as an intern at WMA, where he was fired after three weeks for not being “William Morris material,” he says. After a stint at Billions, he opened The Windish Agency, which he sold to Paradigm in 2017. Wasserman Music launched in 2021 after acquiring Paradigm’s North American live music division. In 2023, the agency earned the distinction of booking the most acts at Coachella.
Windish recently relocated from Vancouver to New York, where he lives with his wife, film producer Emma Ludbrook — actor and 30 Seconds to Mars frontman Jared Leto married the couple in 2017 — and two children.
For Windish, discovery and development remain a large part of what drives him. “I probably take on more new things than almost anyone at the company,” he says. “I’m not necessarily saying that’s a good thing, but I tend to find artists that develop slower.”
How are your artists doing post-pandemic?
Last year was hard for artists because of supply chain issues. Just getting the gear that some artists needed was difficult. But this year sales have been very strong, especially in the United States, which has been very beneficial for agents that have international rosters. In Europe, things are much messier, and you see more acts coming to the U.S. a little more often than they used to.
What is your agenting style?
I’m pretty dry. My main responsibility is to send people music and have a conversation about what’s going on and why I’m excited about it. If they react to it or they don’t, I don’t take it personally. I’ll still call them about the next thing. I look for people I can build some history with that are passionate and take chances early.
Do you rely on data to make the case for your artists?
In the last decade or so, I do look at data a lot, especially global data. I have my ear really close to the ground in America and Canada. But I might not know something that’s happening in the Philippines or Korea or Australia because I’m not talking to the people there as frequently. What Spotify for Artists can reveal is interesting, and it’ll lead me to reach out and just ask other people, “Are you seeing this? What does it mean to you? Who is reaching out about it? What type of promotions are going on there? Should we have a tour strategy there? Should we go there?” I’ll also reach out to promoters at the same time.
Shows are being scheduled further and further in advance — deep into 2024. How do these long lead times affect the routing of tours?
I’m usually booking shows before new music is out. Often it’s nine months before it’s out, and I have no way of knowing how people are going to react or how likely they are to buy tickets. But one of the age-old rules of this business is don’t skip steps. So if you sold 500 tickets the last time, maybe you’ll try to sell 1,000 this time. You’re not just bumping up to 2,000 because you have this data that’s indicating there might be more [demand]. One of my strategies to deal with that is to hold a second night or a [venue] upgrade in case it goes really, really well.
Why sell to Paradigm?
I felt like the bigger we got, and the bigger the artists got, the harder it was to compete with these agencies that had a lot more resources. I felt I needed to compete and offer these things so that I wouldn’t lose out on clients. Paradigm had achieved its scale by bringing together independent agencies that all had similar backgrounds to me. Marty Diamond started in the coat closet booking bands in vans. Paul Morris started in the back of a record shop booking Tiësto.
What was that experience like for you, to sell Paradigm to Wasserman?
The sale was prompted by the pandemic. I didn’t know if the business was even going to come back. It was brutal — a lot more brutal for people in our business than others. It was an existential crisis. In terms of what it meant for the agency, I was in the dark about what was going on. There weren’t many people that I could ask because I think we were all in the dark because of the state of the business at the time. No one knew when shows were coming back. No one knew when there was going to be revenue coming back.
How does Wasserman compare with Paradigm?
They’ve been really helpful and great partners. I met [chairman/CEO] Casey Wasserman a few times over the years before it happened and while the transition was happening and was really excited about it. I mean, I was reading books about his grandfather Lew Wasserman for years because I’m a geek for that kind of stuff. I’ve read, like, every book about agents and Hollywood.
There have been complaints that labels are no longer developing and breaking acts. How does that affect the live business?
It’s hard to put it all in one bucket. I do think artist development is falling on the shoulders of the artists themselves and their managers. Labels are looking for artists to make an impact on their social media and to develop their own streaming. The labels get involved after things are moving. It’s “Don’t call us, we’ll call you.”
Have you ever signed an artist that hasn’t played a live show?
Oh, yeah. I remember a time when it was sacrilegious to sign an artist who hadn’t played a show. But if I didn’t sign artists before they had played a show, I wouldn’t be booking Billie Eilish. I wouldn’t be booking Lorde. And that’s the way it is now, and it’s OK.
What’s your perspective on Ron Burkle’s merging of the AGI and APA agencies?
When you look at all the changes that have happened in the last three or so years, it’s pretty wild. There’s a lot of things moving around, and I think that the biggest thing it shows is that we are all still trying to figure it out. We’re not done. Right now, everyone’s trying to perfect the model maybe, or at least improve their model.
What do you think of the emergence of companies like Firebird?
The interesting thing about Firebird is that we’re seeing now how much managers need to do. A lot of it is stuff that labels used to do. One of the more interesting things about Firebird is going to be how management companies evolve the services that they provide. Will there be more big management companies that are backed by groups like Firebird? Or will a bunch of different management companies share resources, like Artist Nation, where they all shared layers of infrastructure?
What genres are doing well on the road?
The thing I’m most interested in right now is just how global things are. I’ve been a student of that for a long, long time. In the old days, I was looking for artists from other countries because my competitors weren’t. So it was easier for me to sign them. There was an extra layer of a pain in the neck because of the visas and all that kind of stuff, but I was just like, “It’s fine. I’ll do it.” I signed Os Mutantes from Brazil and it was harder than booking an American rock band, but I love them. And now everybody’s signing stuff from all over the world in a lot of different genres. That is the way we now find fans. We kind of ignored these fans in the past because they liked acts we never expected. A lot of artists have been ignored because an agent decided they would never work. And looking back, many of them turned out to be wrong.
“There is a myth that at the SACEM restaurant, there are people serving food with white gloves and an orchestra playing,” the organization’s CEO, Cécile Rap-Veber, says with a hint of amusement in her voice. “It is a good story, but it is not true.”
Rap-Veber, who joined SACEM in 2013 and got the top job in 2021, is referring to what she calls its “old-fashioned” reputation. SACEM, which stands for Société des Auteurs, Compositeurs et Éditeurs de Musique, was founded in 1851 after composers Ernest Bourget, Victor Parizot and Paul Henrion refused to pay their bill at the Paris cafe Les Ambassadeurs until they got paid for the use of their compositions there. It became the first music collecting society, as well as the model for those that followed, and over the years, it grew into something of a French cultural institution: important, successful and perhaps overly aware of it.
Rap-Veber is not running your père’s SACEM, however. As a result of European Union (EU) legislation, collective management organizations (CMOs) in Europe now compete to represent and license online rights throughout the continent (and in some other countries) on behalf of songwriters and publishers. “We are now a global society,” she says.
SACEM still licenses public performance rights in France, but it now competes with other societies, most significantly ICE — a licensing hub owned and operated by the U.K. CMO PRS, the German GEMA and the Swedish STIM — to license works to online services in many international markets. (The United States is not one of them, but SACEM represents online rights in many markets for ASCAP and Universal Music Publishing Group, among others.)
Rap-Veber has pursued a “SACEM 3.0” strategy that she describes as “maximizing rates and minimizing costs,” plus offering new services like URights, which can track the use of music internationally, and MusicStart, which lets creators register their works on a blockchain-based system.
A statuette celebrating the diamond certification of the soundtrack to the 2006 movie musical Le Soldat Rose.
Matthew Avignone
These strategies appear to be working. In June, SACEM announced that 2022 was its best year ever. CMOs across Europe are benefiting from the return of live music and growth in streaming. But SACEM grew more than its peers — its collections increased 31% in 2022 to 1.4 billion euros ($1.5 billion). Even as growth boosts the entire sector, “I have to prove that we deliver the best services at the best cost,” she says. “And honestly, I think we can prove that.”
Congratulations on setting a record for SACEM.
It might be a worldwide record as well. And there is nearly 300 million euros [$328.8 million] more on top of it. In France, we collect neighboring rights [royalties for sound recordings] and private-copy levies [on blank media, which are distributed among rights holders in various businesses] for all the culture industries. So if I talk about the performance of our team, it’s not 1.4 billion euros — it’s 1.7 billion euros [$1.9 billion]. And when I look at the first quarter of 2023, that’s also very good.
Why so good?
In the first quarter of 2022, France still had some COVID-19 restrictions, and then the summer and the rest of the year were great. We also have new agreements — with Hipgnosis, with [Hungarian CMO] Artisjus to collect online, and with ASCAP — plus renewed agreements with better rates, especially for online. And now we collect [for online uses] in more than 150 countries directly.
You talk about running SACEM like a business. Is that a reflection of the competition among the various societies?
There was a time when there was a kind of monopoly in each country. There was no consciousness of the cost because there was no competition. Then the European Commission said any rights holder can withdraw his rights for online uses, and suddenly we were in competition. And we have the highest tariffs in the world.
Rap-Veber’s husband made this painting from a photo he took at a private 2007 Amy Winehouse concert booked by former Universal managing director Valery Zeiton.
Matthew Avignone
How do they compare with U.S. royalties under the new Copyright Royalty Board settlement?
They have reached 15.1%, and it will rise. We already had 15% when Apple Music released its service in 2015. And it’s not just the rate — it’s the minimum per subscriber. Ours is higher since it’s independent of discounts. When you see our effective net rate, it’s above 15%. I’m sure it’s easier for us than for a small Eastern European society: It’s the strength of your repertoire, and it’s unbelievable the repertoire we represent.
What’s your reaction to claims that streaming payouts are less fair for songwriters and publishers than recorded-music rights holders?
The highest tariff we had on CDs was 9% of the gross price. Then iTunes forced the community to agree on 8% on each download. Now we’re above 15%. Digital has become our biggest source of revenue. I think the main issue is that [the revenue is] going to very few people. There are people, especially in urban music, who are very happy.
CMOs are coming under pressure from some of the big publishers and platforms, both of which would rather strike direct deals than go through organizations like SACEM.
To go direct with one publisher? What does that mean? We represent [the publisher-led mechanical rights organization] IMPEL, [Canadian rights organization] SOCAN, Artisjus, ASCAP and Universal Music Publishing [among others], so we mutualize our cost [of operations] and we decreased our commission on digital for our members to 9%. That’s what I’m most proud of in the last [few] years. I want to use technology to process more at a lower cost. I think it’s the wrong way to think to go direct: It’s one thing for the majors, but what about the others?
You got the top job at SACEM in an interesting way. The tradition at CMOs is that the chief executive retires with a gold watch, but you basically replaced Jean-Noël Tronc as CEO in 2021.
Jean-Noël had been here for 10 years, and I was about to quit because — honestly, I had a job opportunity, OK? So I left SACEM, and Jean-Noël and the board had a discussion, and they decided to stop their relationship. The board asked me to take the interim job, but I already had this new job. And the team here said, “Are you kidding? You’re not going anywhere!” So I went back to the board and said, “I’m interested if you agree with my plan [for] SACEM 3.0,” and they did.
For a long time, there were no women running CMOs. Now there are many: Beth Matthews at ASCAP, Andrea Martin at PRS, Jennifer Brown at SOCAN and Cristina Perpiñá-Robert at SGAE. What took so long?
There was a lot of ego. It was a small circle of people: “We are so smart, ho ho ho! Let’s have lunch and a cigar.” CEOs then were more focused on an institutional view, and now we’re more focused on day-to-day matters and how to reduce costs. Women know how to reduce costs.
What’s your favorite song?
There are so many, it depends on the mood. The songs of the moment…
That’s cheating.
Serge Gainsbourg’s “Initials B.B.,” for sure. Songs by David Bowie, “Goodbye Yellow Brick Road” by Elton John, The Beatles, “Live and Let Die” from Wings. When you want to feel better, listen to “Sunny” by [German disco act] Boney M. Or Queen of the Night [the aria in “The Magic Flute”] from Mozart.
Rap-Veber says she discovered this photo of Jane Birkin and Serge Gainsbourg, which was taken for their 1969 joint album, when she was looking for ways to monetize Universal Music Group’s archives. “It had never been exploited before I found it,” she says.
Matthew Avignone
SACEM operates in a very different legal environment from the United States. France has stronger copyright laws to protect creators but also regulations that require SACEM to set aside money to fund culture.
It’s part of our DNA because that’s what a “collective” is. With SACEM, you have the highest rates in the world: concerts, more than 8%; broadcasters, more than 3%. If we take tiny amounts [for cultural funding], you will still get paid more than from any other CMO.
Some Americans hate this idea on principle.
Many of these cultural funds come from private copy levies that don’t exist in the Anglo-American system. By law in France, and this is typically French, 25% of this revenue must be allocated to cultural action. So we pay out the 75% that no one else in the world pays, except GEMA. The publishers benefit from it, too, because it helps them develop new creators.
According to EU regulations, I am required to ask you about artificial intelligence.
Last year, it was the metaverse, but this will last much longer. We see opportunities and dangers. Opportunities: As a tool, it can help musicians create music. The main issue for us is how we know whether or not our works have been used in a new product [and] how we can get paid. It’s a worldwide discussion, but I think Europe — and I hope France — will be at the center of it. We already have 120,000 songs uploaded a day, and 60% of the 100 million tracks on Spotify have less than 100 streams a year. Why do the platforms take all of this nothing music?
A lot of songwriting talent in Africa is turning to SACEM or other European societies to license their online rights internationally. How are you handling that?
African creators are usually with their local societies for their home countries, but many are SACEM members for the rest of the world. One problem is that many of these societies in Africa are controlled by the government. The only thing I can do is partner with them to help them improve their systems. In Senegal and Côte d’Ivoire, we just entered worldwide digital agreements so we can represent their repertoire for the world. We’re working with Morocco, too, and PRS is doing partnerships in some English-speaking countries. The idea is to be a bridge between the continents. I don’t wantto be seen as a colonialist — I want to be a partner.
Amid the sports memorabilia in Tim Leiweke’s office, there’s a small framed quote with the word “Motivation” at the top. Leiweke, the chairman/CEO of Oak View Group (OVG), is a 45-year veteran of the estimated global $25 billion concert industry who spent the pandemic building seven new arenas — five of which his company owns and operates — so he’s not one to hang inspirational thoughts from Wikiquotes on his wall. “Motivation” is followed by a question: “How does ASM differentiate itself from its main competitor, Oak View Group?”
The answer comes from Ron Bension, president/CEO of ASM Global, and the most salient part reads: “There are other companies that are noisier, but we’re managing more buildings, with more content from Live Nation and AEG than anywhere else in the world.”
Oak View Group and ASM are indeed competitors in managing facilities around the globe, and it’s important to know that ASM is co-owned by sports/live-entertainment company AEG, where Leiweke was CEO until his “mutually agreed upon departure” in 2013 from the company owned by billionaire Philip Anschutz. Leiweke, 66, says he wishes Anschutz “nothing but luck,” but he also says he carries a copy of Bension’s quote in his backpack and reads it before every presentation he makes. “Never piss off your competitor,” he says with a broad smile. “I thank Ron daily that he has decided it’s me that causes him success. Maybe that motivates me as much as it motivates him.”
In 2015, Leiweke partnered with multisector music magnate Irving Azoff to build a company that now manages approximately 500 facilities. OVG employs 5,000 people full-time (including Leiweke’s daughter, Francesca Bodie, who is president of business development), with another 35,000 part-time staffers.
The arenas OVG has built in the last 18 months include Climate Pledge Arena in Seattle; Acrisure Arena in Palm Springs, Calif.; CFG Bank Arena in Baltimore; and UBS Arena on New York’s Long Island. “We did it in the middle of COVID, inflation, rising interest rates, labor issues, political issues,” he says.
OVG is working on multibillion-dollar projects in Las Vegas; Manchester, England; and, in partnership with Live Nation, São Paulo, and Leiweke says it’s time for the music industry to recognize the crucial role companies like his play in fan satisfaction. “Everyone talks about the promoters, the agents and the managers,” he says. “The brick-and-mortars and the fan experience are equally important. We’re spending tens of millions on acoustics and air-handling systems that deal with things like COVID. And yet people underestimate our passion for how important that is to the live experience.”
“We did a lot of boxing in the AEG days,” Leiweke says. “I’ve got signed globes by Wladimir Klitschko, Lennox Lewis, Oscar De La Hoya. I don’t know how many gloves I have.”
Joel Barhamand
How did you get the Long Island Railroad to open a station at your UBS Arena?
Paid for it. Our landlord and our partner is the state of New York. We went through two governors and a lot of politics to get the deal done. If you look at all the other facilities in the New York area, except for [Madison Square] Garden, Citi Field was built with bonds issued by state and city authorities. The Meadowlands [in New Jersey] was paid for mostly by taxpayers’ dollars. Barclays Center [in Brooklyn] involved bonds. That’s the nature of many of these projects. We were private. Us and [New York] Islanders [co-owner] Scott Malkin put up $1 billion privately to build that arena. Of that billion, roughly $75 million was a cash contribution toward that light rail station. It’s about developing a private-public partnership that works for everybody, which enabled us to get a lot more done there than most anyone else.
The opening of that station has made going to UBS convenient and environmentally friendly. Did sustainability play a part?
We happen to be very sustainable around here. UBS is LEED-certified. Our goal is to make that a carbon-neutral venue within the next couple of years. Obviously, we had the first carbon-neutral arena ever in Seattle. You cannot be carbon-neutral if everyone is driving there for every event. So mass transportation was highly important to us, to get somebody from Penn Station or Grand Central [in Manhattan] in a 30-minute train ride. It was also highly important for the viability of that building in a very competitive marketplace for arenas. You’ve got Prudential Center [in New Jersey], Barclays, the Garden and you’ve got us. We’ve got to find a way to get people in and out without it having to be about the Long Island Expressway.
What is the strategy behind building in secondary and tertiary markets like Palm Springs, Calif.?
There are small markets and big markets, and a combination of those deals is smart. Partially because in North America, the majority of big arenas are owned or controlled by an NBA or NHL tenant. They’re greedy, and they have a strategic value within that market that we don’t have, which is, if you want me to keep this team here, you’ve got to help me build or take over this arena. We’re going to get a few of those — Seattle and New York are examples — but we also have to find either A markets that don’t have an anchor tenant, which are few and far between, or B markets. The business proposition in a B market is just as good as an A market because we can build an arena there for between $200 million and $300 million. I’m not going to get the 86 nights of music that I’m getting in Seattle, but Irving and I can live with 40 nights of music in Palm Springs. And then, we happen to have probably the most financially successful American Hockey League team there this year with the Coachella Valley Firebirds. The mix of those two means we get just as good a rate of return on every dollar I invested at Acrisure as we will in Seattle. We love these B markets because there’s 20 of them out there compared with half a dozen of the A markets.
You’re seeing a lot of growth right now. When does what you do plateau?
It won’t be in my lifetime. There are 50 markets in the world today that need new arenas, but only 20 of them will make sense. I’m very driven by the rate of return that we get on our investment. Irving, the employees and I own the majority of this company. I have an investment partner in Silver Lake, and I’m very driven to get them a healthy valuation on this asset one day because they put a lot of money into it.
Memorabilia from the arenas that OVG has built and the sports teams associated with them. From left: hockey pucks from Climate Pledge Arena and the Seattle Kraken; a plaque from Baltimore’s CVG Bank Arena; a shovel from the groundbreaking for UBS Arena.
Joel Barhamand
You talk a lot about the importance of “alignment” with partners before the work starts. How has that benefited OVG beyond the seven arenas you’ve built?
In Seattle, Climate Pledge Arena was a 50-50 joint venture between us, [Seattle’s NHL team] the Kraken, and [the team’s majority co-owner] David Bonderman. David and I were aligned on that vision for the arena from day one — before he got the team.
That is a city-owned facility, and we continue to be good partners and good neighbors with Mayor Bruce Harrell, Governor Jay Inslee, and county commissioner Dowe Constantine. My brother deals with them every day on our behalf. We’re jumping into Memorial Stadium there because it’s the right thing to do for the city and the county and the school district. And so that alignment with the people I just mentioned has created a hell of an asset. Even though we privatized it, they own it. It has also created all kinds of other opportunities, including our new restaurant, event center and the bid we’re making on Memorial Stadium. And we’re just getting started.
How much of an advantage is it for you that, once you build these venues, you can then bring in Harry Styles or the Eagles because of your partnership with Irving Azoff?
At the end of the day, we’ve got no chips with anybody out there. We’re not promoters, which means we get along with everyone. Louis Messina is one of my best friends. We have known each other most of our adult lives. I have a great relationship with Michael Rapino and everybody else at Live Nation. I like Jay Marciano. I hired Jay. I should be able to get along better with Jay, but there are other relationships at play there. As great as it is to have Irving as my partner, he’s only part of the equation.
Arena builds are not your only business.
We do 16 different services. I probably have 40 people in this company that work with every promoter, including some that route Irving’s tours for him. What makes us dangerous is, we are everybody that wants us to come in and bid because we’ve spent $4 billion building arenas. We’re going to do it better because we’ve got real skin in the game. We raise the debt on each of these buildings through my daughter Francesca and her division. We do the food and beverage, parking. We have a division called GOAL where we learn how to operate buildings more sustainably each year and rate them annually. We have 150 people selling naming rights and sponsorships every day.
How important are VIP packages and services?
We sell premium — suites and club seats. Premium and hospitality are still a huge growth opportunity. We’re just closing a deal on Rhubarb Hospitality Collection, RHC. They’re a high-end catering, food and beverage company based in London, New York and Berlin. They have one of the top restaurants in New York, Peak at Hudson Yards. We’ve also brought on Christian Navarro from Wally’s Wine and Spirits [in Beverly Hills]. When people come into our VIP areas, we want to create a whole different level for them. RHC is my fourth food and beverage company.
You’ve got a massive development in Las Vegas.
The biggest bet we’ve ever made is our project in Las Vegas. You could add New York and L.A. together, and they don’t do as much live entertainment as Vegas. It’s the live-entertainment capital of the world. But let’s look at the venues. There must be 10 nice theaters on the Strip. You need good arenas, too. T-Mobile was my last deal at AEG. It’s a nice arena, but it pales in comparison to what we just built in Seattle, New York and Austin. How do you have the No. 1 live-entertainment marketplace in the world and its arena is not one of the 30 nicest arenas in the country? You’ll hear about this soon, but we have a lot of world-class partners, brands and entrepreneurs who have come together to build out a 100-acre campus that will be the destination for live entertainment, culture, the arts and hospitality.
What does your overseas strategy look like?
The majority of projects we’re working on are overseas, like São Paulo with Live Nation. Thirty million people live in São Paulo. It’s a great music market. Latin music and K-pop are the biggest industry influencers now. We are also highly focused on Singapore and Asia; Lagos, because look at the artists coming from Nigeria. That’s where you’ve got to go for live music and culture and arts. We have a partner from Nigeria to build the single best arena in all of Africa.
You’ve also got Co-op Live opening in Manchester.
That is the capital of the U.K. for live events. That arena is going to be a top five arena in the world. When I opened up Staples Center in 1999, Bruce Springsteen was my opening artist for two nights, and the first night he told everyone, “Why don’t you come out of those corporate boxes and join us.” He didn’t have a great experience. I was like, goddamn it, the Boss just ripped me a new one from the stage. What he told me after the Staples concert is, “Tim, I like hot, sweaty halls.” When he opened up the CFG Bank arena for us in April, I said to him, “You’ve been running around my brain for 25 years because I failed you miserably.” Co-op Live is going to be the first music-only arena that is a hot, sweaty hall, and yet it will have 32 points of destination — restaurants, clubs and VIP spaces. It’s the first time we said, make it about music — make the bowl perfect — and then we’ll shoehorn in whatever else is important outside the bowl. Make all of the people right on the artist so it’s a hot, sweaty hall. I think that arena is going to change our industry. We’re sniffing around in Barcelona and Madrid. We want to go to the great cultural markets of the world where they have arenas that are 30, 40 years old and make those the next flags for the company. We have $2 billion to $3 billion of additional investment coming outside of Vegas and the projects we’re building in the U.S.
What’s your perspective on the Taylor Swift ticketing issue that Live Nation encountered? What could it have done better?
Ticketmaster did nothing wrong on Taylor Swift except for handling the demand, and we all knew that was coming. In a perfect world Taylor, Louis Messina and Ticketmaster would go back, take those dates and spread out the on sales. But at the end of the day it’s the bots and the scalpers that broke that system down. Did Taylor get any money from all of those secondary companies? Not a penny. Did the arenas or stadiums? I’ve spent $4 billion. Why is it that I let a secondary company come into my arena and resell my tickets and keep those fees? It’s a crime.
What are you doing to solve scalping and secondary-market issues?
I’ve got some ideas. In Seattle, we cleansed our season ticket list, our premium list and our club seat list. We got rid of anyone that was a scalper or secondary company so they couldn’t use the right of first refusal on concerts to tie those tickets up. Second is the bots. If an artist wants to be protected, we have to create smart tickets. And one day, your tickets are going to be here. (Holds up his hand.) We use the Amazon “grab and go” using your hand system. It’s not perfected yet, but within two years, it’s going to be phenomenal. Then we’ll be able to put the ticket in there and work a deal between Ticketmaster and Amazon. Just as technology has created the problem, so technology will solve the problem.
There’s also an outcry against fees.
They want to come in and say get rid of fees, but the reality is the fees are split by everybody in the pool. The artist gets some of the fees. Yes, they do. The building gets some of the fees and the promoter gets some of the fees. The fees are shared. There is an economic universe out there of rebates and waiving rent and giving artists free nights in the arena. That’s all part of this ecosystem of sharing fees. Everyone tends to forget about that. Ticketmaster does not even make the majority of fees. It’s not the fees. Should we tell people what the fees are in advance? That’s a good idea. But at the end of the day, if we want to attack what ultimately creates the majority of problems that people like The Cure or Taylor Swift feels strongly about, then attack the secondary companies who have no skin in the game.
“Shaq is our partner,” Leiweke says of NBA star Shaquille O’Neal, whose Big Chicken franchise is among the concessions found at OVG venues.
Joel Barhamand
Do you think Congress is focusing on the right players then?
Congress can’t even get a budget passed. Can they please just go run the country. Do I think they could solve the ticketing problem? No. These are the people saying it’s all Ticketmaster’s fault. No. Come learn the business, and what we’ll tell you is that the very same lobbyists you’re listening to that wrote that bill that you want to pass — they’re the problem.
The lion’s share of an act’s income comes from live shows. How much longer can we look at the live business as this sort of unlimited resource for artists, and whose responsibility is it to foster new arena and stadium acts?
How long can we maintain this ratio? I think forever because as I said music is the essence of our life. The economics have shifted, but the demand for music, recorded music, hasn’t shifted. It’s streaming now, and the economics are different. But we now have more ability to get more music from more artists than ever before. That’s who’s developing the emerging artists, god bless them — those streaming services. Ironically, they took some of the economics out of what an artist makes but they’ve created tens of thousands of more artists now, and who would have ever guessed that today we’d be seeing these K-pop and Latino artists? I’m looking at some of the numbers we did for Grupo Firme and Rauw Alejandro. The amount of tickets that Latino artists sell is unheard of. The same with K-pop. We just did four nights of K-pop including Suga, and UBS sold out everything. We had record merchandise sales. We’re going to continue to see that, and I give a lot of credit to the streaming industry. That’s going to be the live pipeline. So, maybe the economics ultimately got kind of turned a little bit against the artist, but it’s created far more artists that can now go sell out arenas.
Will they come up through the clubs or go straight to arenas?
We have the theater alliance because I think that’s highly important. Clubs are highly important. Both Live Nation and AEG are doing a great job on clubs. I’m a huge fan of Bowery Presents, and we’d like to have a better relationship with them. We will one day when the personalities get shifted. Will we keep going at the rate we’ve been going the last two years? Probably not. We’re seeing record rates, and we see it again next year. Our bookings are very, very strong for next year. But this is going to continue for a while because people have pent-up demand and discretionary income. I also think people went through Covid and said I’m going to go live life. Well, music happens to be something that relates to everybody. So, this isn’t going to stop. We’ll continue to develop smaller venues like Acrisure, which is a huge stepping stone for a lot of Latino bands. Everyone was scared of that marketplace except for Paul Tollett. I’m like, Paul’s pretty smart. I’ll follow his lead.
The same goes for sustainability when it comes to venues and festivals. You seem to be doing a lot on that front, but whose responsibility is it?
Sustainability is the overriding factor of this company. We spent $150 million on sustainability in Seattle saving the roof. I floated that roof in the air for three years. Everyone thought build a new arena, but that is the greatest waste of our planet — new steel, new glass, new everything. I thought, what if we reuse stuff? The arena’s roof is historic. It was originally part of the Washington State Pavilion at the 1962 World’s Fair. We figured out how to float it in the air with temporary steel supports, and I reused the steel. Then we took the front of the building and built an atrium system and a people-moving system to get everyone up and down. Take the existing arena, tear it down, build a hole three times as large, go down, not up because I use less energy below ground level. I don’t have to spend as much money on heating or cooling. Then drop the roof back on. Everyone says, “Oh, the renovation.” I’m like renovation? This is $1.15 billion. Renovate my ass. The only thing that stayed was the roof, and then three of the four sides is the original glass from the 1962 World’s Fair. I preserved it, packed it, stored it for two years and then put it back on. Then I had to retrofit the glass with fiber for earthquakes because the earthquake standard has changed since 1962.
You and Irving Azoff were once rivals and now you’re partners. What does that say about the music industry?
Yo-yos. It’s up and down, up ad down. We were partners, then enemies, then partners. I’m hoping that cycle has played itself out completely. Michael Rapino and I fought aggressively against each other. We’re not best of friends, but I’d say in our business he’s one of the greatest partners I have. The music business is a unique business because everyone thinks they’ve got to be either best of friends or fighting each other. There’s no in-between. The drama in the music business is crazy. We’re drama free around here. Our job is to get along with everybody. That’s the good thing about being private. People say, “Do you get along with Phil?” I wish him nothing but the best of luck. Whatever AEG does, I’m proud that I hired the majority of those people. And guess what, whether they succeed or fail, it will have little impact on my company. The greatest drama I had in my life is when Irving and I were fighting each other because he’s formidable. I’m very happy he’s on my side of the equation.
Jimmy Humilde’s first foray into the music business was a party at his sister’s house in Venice, Calif., that he promoted with street flyers. The entrance fee was $5, and Humilde, then 13 years old, made $300. He was hooked.
It was the early 1990s, and the soundtrack of the streets was trance, techno and hip-hop. But Humilde (born Jaime Alejandro to immigrants from Michoacán, Mexico) soon started to include the music of his home in his flyer parties, adding Vicente Fernández and Mexican cumbias into the mix. Then a cousin introduced him to the music of Chalino Sánchez, the underground corrido singer from Culiacán, Mexico, who was kidnapped and murdered at 32 years old in 1992 in what presumably was a revenge killing.
“I didn’t know who Chalino Sánchez was. I didn’t know what a corrido was,” says Humilde, 43, of the songs that narrate the exploits of real and mythical heroes and antiheroes, from 19th century revolutionaries to current-day drug dealers. “But when I met his music, he became part of my soul. He wrote corridos not only for Mexican people but for people who lived in the U.S. that I could relate to.” Sánchez’s songs, combined with his swaggering attitude and combustible persona, planted a seed for Humilde: Why couldn’t there be more music like his, rooted in Mexican culture and appealing to a young, U.S.-born audience?
Nearly 20 years later, his label, Rancho Humilde, is at the forefront of a global explosion of regional Mexican music — the umbrella term for several subgenres that include brass-driven banda, accordion-inflected norteño, traditional mariachi and, increasingly, traditional music that incorporates hip-hop.
Since Rancho Humilde, which translates to “Humble Ranch,” began releasing music in 2017, the label has logged 18 titles on Billboard’s Top Latin Albums chart, including six top 10s, and 41 tracks on Hot Latin Songs. Out of those, seven reached the top 10, including the two-week champ “Bebe Dame.” The label has also placed six songs on the all-genre Billboard Hot 100. Five of them were on the May 6 chart that featured 14 regional Mexican songs, two of them in the top 10 — a breakthrough week for the genre. Fuerza Regida, Natanael Cano and Junior H are among the Rancho Humilde acts that charted.
A friend used canvas from Humilde’s Louis Vuitton travel bags to create this saddle and mount. “Just for decoration!” he says.
Michael Tyrone Delaney
Humilde and his partners, José Becerra and Rocky Venegas, built the label through unorthodox means, relying almost solely on social media over radio and TV to promote their acts and by working with multiple labels and distributors, which enabled their roster to collaborate with a wider array of artists from different genres at a time when Mexican acts were notoriously averse to the practice.
Almost six years after Rancho Humilde was founded, the label is opening new offices in Paramount, Calif., just outside Los Angeles. Not coincidentally, it’s the exact location where Sánchez once ran his own pager store.
“I’m in it for the future of our culture,” Humilde says. “From the beginning, I wanted to be the door-opener.”
What was it like growing up in Venice in the ’90s?
Hip-hop was my heart. I was a huge fan of LL Cool J, Kool Moe Dee, EPMD — old-school hip-hop. To this day, I still listen to hip-hop a lot. I grew up in a multiracial area. There were a lot of Mexicans, but also a lot of Asians and whites. Corridos and Mexican music were not it. They called me “Jimmy the Paisa,” which in our neighborhood meant “straight Mexican.” So while I did raves and hip-hop events for many years, I was the only one in Venice listening to Mexican music. I was the guy known for tejanas.
This Kobe Bryant bobblehead “is the only one in the world” in its size, says Humilde. “I love Dodgers, Lakers, Raiders and Rams memorabilia.”
Michael Tyrone Delaney
With that multicultural atmosphere, why did you enter the regional Mexican business?
I’ve been in the business since I was 14, when I started working as a gopher with another Mexican artist who sang corridos, Jessie Morales, El Original de la Sierra. I realized that we were losing our Mexican culture. The kids weren’t speaking Spanish. It wasn’t cool. I’ve always thought it’s so cool to be Mexican, to have immigrant parents and to speak both languages. I thought I could introduce others to this life. I had to find a way to mix my culture, my Chicano culture, with the Mexican culture. And I did.
What was Rancho Humilde’s breakthrough moment?
“De Periódico un Gallito,” a song by LEGADO 7 we released in 2017. [It peaked at No. 38 on the Regional Mexican Airplay chart.] That corrido talks about a guy who grew up on the streets of Los Angeles and was a drug dealer. That’s the corrido that opened the doors to our music. We basically did a hip-hop song in Spanish. Then we signed Arsenal Efectivo, El de la Guitarra, Fuerza Regida, then Natanael Cano.
Peso Pluma is dominating the charts. He sounds very similar to Cano, with whom he has collaborated.
Peso Pluma calls Natanael “The GOAT.” Natanael Cano opened the lane for everyone. If Nata, Junior H, Fuerza Regida hadn’t existed, this wouldn’t be where it’s at today. Natanael brought swag. He brought that kid that didn’t give a fuck. He brought that, “I’m going to do whatever the fuck I want, and I don’t care” attitude. When I first asked Nata what tumbao was, he said: “I am tumbao.” Before, corridos were listened to by fans with cowboy hats and boots. Today, you’ll see 13-, 14-year-old kids in Jordans listening to corridos tumbaos.
Humilde explains that the liquor store, which was built as a prop “for our music videos,” is a replica of a corner from his old Venice neighborhood.
Michael Tyrone Delaney
Your artists weren’t the first to blend Mexican and hip-hop sounds, but acts like Akwid in the 2000s didn’t reach the level of success that Rancho Humilde’s artists are having now. Is it simply a matter of timing?
It didn’t work before because the people behind it weren’t real. They weren’t from the streets. They were copying what other people were doing. Akwid is from the streets, but the people behind them weren’t.
What is your strategy for working with multiple distributors? Most labels usually strike a deal with just one. For example, Cano with Warner; Fuerza Regida with Sony.
I’m not committed to just one. Me, along with my attorneys — George Prajin and Anthony Lopez — structured our own contract and our own way of doing business. I don’t have exclusivity with anyone. I don’t think anyone should have exclusivity with anyone. I don’t believe in licenses because there’s only one person that owns our music, and it’s [us]. And I’m also business partners with our artists. We restructured our whole company, and we don’t sign artists to a royalty fee. We sign artists as business partners, we help them build their own labels and businesses, and we do a [joint venture] between labels.
You’re so indie-minded. Why distribute with Warner’s Alternative Distribution Alliance and Sony’s Orchard versus another indie?
My whole goal was to [go global]. And I finally realized that the only people I was going to be able to do it with was with a global company. That’s why I chose Warner at first, then Sony, then Universal; I did a one-off deal with Republic and Universal. I needed the reach. I needed people to learn about this and realize it was different. It wasn’t only about us being banda.
Medals given to the owners of Rancho Humilde when they visited the White House.
Michael Tyrone Delaney
How important is social media to Rancho Humilde’s success?
Social media is Rancho Humilde. We were born in social media. We started with Myspace all the way down to Facebook, all the way down to Instagram and TikTok. But our biggest [avenue] was YouTube. YouTube is huge for us revenuewise, bigger than the other platforms. Facebook, Instagram and TikTok are our main marketing channels. We were never on radio until the most recent hit by Fuerza Regida. The only work we outsource is with our publicist, Monica Escobar, who does everything we don’t do on marketing on our end.
One of the biggest challenges facing successful industries in Mexico are the drug cartels. In recent years, they’ve taken over the trade of limes, avocados and other produce. As music becomes an exponentially more valuable export, how do you protect your business from that influence?
I just feel that certain people got their help as they could. That’s one of the things that kept Rancho Humilde from becoming the most successful label [quickly], because we never had any investors. It was always JB, Rocky and myself. I don’t care who it is. I just don’t believe in investors. Have other companies used that? I don’t know. I’ve never asked. I know drug cartels exist, and my dad always told me the biggest cartel was the government and the church. I agree with that. I don’t fight it. I don’t criticize anyone for what they do. I don’t care what they do.
Rancho Humilde’s 2019 release of Cano’s “Soy el Diablo” remix with Bad Bunny was groundbreaking at the time. Now mainstream labels are signing Mexican acts. What do you think of that?
I don’t see why they wouldn’t, but it’s going to be hard for them to catch up to all the indies already performing at a high level.
What does it mean to you that this music is now popular in places far from Mexico?
I knew this was going to happen. Right before Peso Pluma came in, Nata was already a global artist. He was known in Spain, Chile, Argentina, but the music wasn’t charting as high as it is today. Peso Pluma won’t be the biggest artist. There’s a whole lot coming who will be huge. [But] Peso is like the Daddy Yankee of our genre. He went and opened the doors worldwide, but here come more monsters. If you’re not focused on Mexican music right now, I suggest you do.
Beatdapp co-founders and co-CEOs Morgan Hayduk and Andrew Batey were not initially focused on fighting streaming manipulation. Batey spent years in digital marketing, while Hayduk formerly worked as a lobbyist for the Canadian music industry in the area of copyright protection. At first, they teamed to build an auditing tool that would enable labels to evaluate inconsistencies between their sales reports and streaming services’ server logs. Conversations with label executives indicated that “there were pretty often material discrepancies,” Hayduk says.
As he and Batey tried to understand those inconsistencies, it became clear that streaming manipulation was causing some of them, and Beatdapp embarked on developing a tool to detect fraudulent streams — which Hayduk defines as the leveraging of “bots, stolen accounts or manipulated platform features” to steal streaming income — and prevent them from impacting payouts.
According to a recent report from the Centre National de la Musique (CNM), a government-backed organization that supports France’s music industry, in 2021, over 1 billion music streams — between 1% and 3% of all streams generated in the country that year — were fraudulent. “The methods used by fraudsters are constantly evolving and improving,” the report noted, “and fraud seems to be getting easier and easier to commit.” If that percentage was applied to IFPI’s estimate that global streaming revenue totaled $17.5 billion in 2022, fraudulent streams would amount to $350 million in potential lost income for legitimate rights holders.
Beatdapp’s software sifts through massive amounts of data from partners — including labels, distributors and streaming services — to identify and investigate suspicious patterns. In one case, it identified 10,000 accounts all playing the same 63 tracks. The pair say the company now analyzes hundreds of billions of streams, and while they declined to identify partners, they recently started working with SoundCloud and Napster, according to two sources.
“If we can make this industry less attractive for financial fraudsters, that will make a positive difference for everybody who’s working on music,” Hayduk says. “That’s what animates us.”
Why is streaming fraud an important issue?
MORGAN HAYDUK: It hurts everyone who makes a living in the music industry and, left unchecked, creates this promotional race to the bottom where everyone believes they have to cheat to succeed. In cybersecurity terms, it’s important to shrink the attack surface of the industry.
ANDREW BATEY: In an industry where it’s already hard to make something and then promote something and then get paid, you should at least get paid correctly.
How much data is Beatdapp analyzing at this point?
HAYDUK: We’re looking at about 320 billion streams now. That’s about 13 trillion individualized streaming data points when you account for all of the metadata associated with each of those streams. We expect to add data in the neighborhood of another 50 billion streams in [the second quarter] and about another 2 trillion data points on that.
BATEY: It’s not just the individual stream. You might make 12 decisions in an app, such as how you search — if you clicked on the artist first and then you looked at their song list. We’re capturing all of that, anonymized across users. All of that context helps us because if somebody consistently hits, let’s say, the exact 11 things for every song they play, that’s a pretty obvious case of fraud if they’ve done that 3,000 times in a week.
How has the industry’s perception of streaming fraud changed since you started Beatdapp?
HAYDUK: Just hearing people acknowledge the issue is probably the biggest shift. It used to be verboten to speak publicly about streaming fraud. It was all behind closed doors. But I don’t think you can fix a problem until you accept its existence. We’re starting to get there now and [are] seeing a more widespread willingness to put in place solutions.
How has your perception of the problem changed as your data set has expanded?
HAYDUK: The biggest revelation to us has to be that this is way closer to death by a thousand paper cuts than it is a top-of-the-market problem. If you asked us where most of the fraud came from 18 months ago, we probably would have pointed the finger at bigger artists because we would have thought they had the most to gain. But we were missing the point of most of this activity. It’s not about changing perception; it’s about making money. This isn’t a phenomenon that’s driven by major labels and major independent label artists or their top artists. The overwhelming majority, like upwards of 80% of what we see is fraud, is coming from — call it non-music content. It’s not being released for popular consumption or because these are artists who are trying to get noticed. These are releases that have no commercial purpose except as [instruments of] fraud.
BATEY: When we first started, we genuinely thought fraud would be 1% to 3%. Now we think it’s closer to 10% [though some of this is caught]. Also we would have guessed that most of the fraud would occur on the platforms where people were — Spotify, Apple, YouTube. But because it’s a lot of financially motivated fraud, what we actually see is that it’s easier for the fraudsters to attack all the mid- and long-tail [digital service providers] as well, where they’re less likely to get caught and they’ll get a similar or better per-stream payout. Why not target all of these smaller DSPs with zero protections in place and get paid across all of them?
France’s CNM recently came to the conclusion that fraud is getting easier to commit.
BATEY: I 100% agree with that. There are so many ways to exploit platforms. If your job is to deliver the best user experience possible, it often means making it easy for them to access that content and creating really cool ways for them to experience or engage with that content. [When that happens,] there are more ways to manipulate that content for the purpose of exploiting it for a payout.
HAYDUK: And the tools that you need to commit fraud effectively and at scale are easier to access now than ever before. The tools that facilitate fraud in e-commerce or ticketing or financial services are also repackaged and repurposed to commit streaming fraud. You can generate fully automated online bot farms using cloud computing in a way you couldn’t 10 years ago.
How do you avoid generating false positives when you’re hunting for fraud?
HAYDUK: We know that a false positive is worth considerably more in the loss column than a false negative, so we adjust our models to account for the fact that they need to be conservative in the right ways.
BATEY: You can’t get it wrong. If you miss a fraudster, it’s OK. We hope we catch them later. If we call something fraud that’s not, that’s way worse.
Some have suggested that a user-centric payout system might mitigate fraud.
HAYDUK: Our view is that it’s not going to make that big a difference. It’ll change the tactics, but it won’t change the motivation. It’s a big pot of money on the internet, and generally speaking, the DSPs are still fairly soft targets. A different payout structure will just change the tactics that fraudsters use to aggregate money and divert it their way. Obviously, there’s a whole different case for the merits of payout systems if you’re an artist or you’re a label.
There’s a lot of industry concern about artificial intelligence right now. To what extent does AI make it even easier to commit these types of fraudulent activities?
HAYDUK: It’s a tool. We work for some good AI companies that care about not being a tool for fraudsters. That said, the new models are incredibly powerful, and you can create content at scale. There’s no putting the genie back in the bottle when some of these tools emerge. The tougher we make it to get away with fraud, the less valuable the tool becomes in the hands of someone who’s wielding it for a bad purpose.
How incentivized are DSPs to care about fraud?
HAYDUK: Their biggest partners care, especially in light of what we said earlier: Market share shifts matter to the partners and, therefore, it matters to the DSPs. I think consumers also care because bad recommendations on the DSP side make for bad user experience. And given that every platform is offering roughly the same catalog to the consumer, if your recommendations are substandard, that makes consumers more inclined to choose your competitor.
Some music industry executives worry that public discussions of fraud undermine user confidence.
HAYDUK: How many times a week does your bank email you about the extra efforts they’re taking to protect you from fraud in the financial sector? It doesn’t make me want to boycott my bank when they tell me that. Fans probably want to hear that, as an industry, we’re taking steps so that the artists they care about are paid correctly.
BATEY: If you’re the consumer, your account was hijacked, and now you’re getting a bunch of recommended songs that don’t make any sense, you’re not blaming the fraudster — you’re blaming the platform.
What is your dream scenario for fraud mitigation in the industry?
HAYDUK: Our view is there are some things you can’t do in a vacuum. DSP A can’t look at the data from DSP B to help inform its own detection models. It’s way too competitive between the platforms to give up the level of data required to do fraud detection at the highest levels. Having a platform in the middle acting as Switzerland, working for the collective benefit of everyone without minimizing the level of competitiveness between the platforms, is the right approach. And it’s also an approach that we’ve seen play out in other verticals with similar dynamics.
The music industry, like investment banking, is built largely on relationships, and Fred Davis and Joe Puthenveetil have built their careers on being relationship brokers to both worlds.
Partners at merchant bank The Raine Group, Davis — who is the son of music industry icon Clive Davis — and Puthenveetil are two of the most influential financial power brokers in the business. Since one of Raine’s earliest music deals advising Abu Dhabi, United Arab Emirates-based Mubadala Investment on its acquisition of EMI, it has advised on or invested in billions of dollars of transactions. In recent years, the pair managed the $230 million sale of CD Baby’s digital operation to Downtown Music Holdings, helped Antonio “L.A.” Reid and Charles Goldstuck raise $75 million to launch the HitCo label and led SoundCloud’s $170 million emergency investment round in 2017, which included recruiting Singapore state fund Temasek to invest alongside it. (Concord acquired Hitco’s entire sound recording catalog and certain additional releases but not the label or brand name in 2022.)
In the past year alone, Davis says the partners have had a hand in more than $1 billion in transactions, including advising Quality Control in its sale to HYBE America, advising private equity firm Francisco Partners in its acquisition of Kobalt and helping Larry Jackson raise $1 billion in capital for his new venture, gamma.
Raine remains an investor in SoundCloud and also helped create Firebird, a conglomerate of independent music labels, publishers and artist management groups that develop and advise artists and help them with business opportunities outside of music.
From left: A photo of Davis’
sons, a memento of Raine’s representation of Providence Equity in its deal with online music technology/instrument retailer Sweetwater, a family portrait with patriarch Clive Davis and a plaque commemorating Raine’s work with Downtown Music to sell its publishing company to Concord.
Paul Stuart
Puthenveetil, a graduate of Georgetown University’s Edmund A. Walsh School of Foreign Service, joined Raine in 2010 and was a driving force behind the CD Baby sale and HitCo fundraising, as well Raine’s investments in SoundCloud, concert/festival producer Blackbird Presents and promoter C3 Presents, which was sold to Live Nation. He sits on SoundCloud’s board of directors, with Davis, and on Blackbird’s board.
Fordham University School of Law-educated Davis (who launched his own law firm, Davis Shapiro & Lewit, before joining Raine) says one of the starkest trends shaping music today is that more money from more sources is flowing into the industry than ever before.
“When I was coming up as a music lawyer, there were maybe three, maybe four check writers,” he says. “The diversity of capital is so enormous in this industry right now. You have HYBE investing in Quality Control from South Korea. Eldridge Capital investing in gamma, along with Apple. Francisco Partners acquiring Kobalt. It’s strategic, private equity, high net worth, sovereign wealth.
“This is a new generation of capital investing in the music industry, “Davis adds. “We’ve never had an era like this ever.” Other investors that Raine has recently advised include pro wrestling giant WWE on its $21 billion combination with Endeavor, Japan’s Softbank Group and the crypto exchange Binance.
For those who aren’t familiar with The Raine Group, please provide some background on the firm and its network of investors.
Fred Davis Raine has nine offices around the world and is very global by its DNA. The network we have now in private equity, sovereign wealth, high net worth, family offices and strategic investors is so complementary to the network a traditional music lawyer has. We can collaborate and do what’s best for the client.
Part of a collection of Nike Air Jordans that Puthenveetil’s wife gifted him.
Paul Stuart
Describe what you do and how your services differ from, say, a music lawyer’s.
Joe Puthenveetil While Fred and I specialize in music, our firm specializes in everything around media and technology. For a lot of our clients, a big part of why they work with us is to access unconventional buyers and pools of capital. Being able to leverage that global expertise and global investors, we’ve got a pretty unique and broad set of relationships across the firm.
How did HYBE America’s acquisition of Quality Control happen?
Davis Last September, we took a trip to South Korea, set up a number of meetings with the best music companies in Korea and went there to uncover opportunities. From that trip, we made the connection between HYBE and our preexisting client Quality Control. We work best with the client’s music lawyer. Quality Control is represented by Damian Granderson, with whom we work extremely well.
A plaque commemorating Davis’ inclusion on Billboard’s 2022 Power List.
Paul Stuart
What does scaling Quality Control look like?
Puthenveetil Quality Control has taken its place in music and expanded it across culture to film and TV, sports, branding, and that’s how we think of the modern music industry. Talent is more than just their music. They are real brands and businesses. And the Quality Control team [COO Kevin “Coach K” Lee and CEO Pierre “P” Thomas] understands that better than anyone. Coach and P have been public about their ambitions to make Quality Control one of the biggest businesses in hip-hop and broader Black culture. Having a partner that can help them do that with capital and expertise, they may scale further into film, TV and video games.
Davis One of the visions that Coach and P have shared with us over the years is how they want to make Atlanta the home of hip-hop and street music the way Nashville is the home of country. HYBE will help them accomplish that vision.
Are Quality Control and gamma similar in that they are both trying to take artists beyond music? What are your views on that?
Puthenveetil One hundred percent. They both approach it in slightly different ways, but fundamentally, it’s driving at the same thesis and reality that artists build their careers through music, but build their brands and communities through everything else they do. That is where we see the industry going more and more. Thinking back to our trip to Korea last September, they have fundamentally understood that for a lot longer than we have in the U.S. On the investing side, we helped create a business called Firebird that has a similar belief and is partnering with the best labels, managers and publishing companies to help them expand beyond music and touring.
What is Firebird building?
Davis We invested in [as opposed to simply advising] Firebird. They are in the process of building a new-generation music company that will be a combination of managers and independent record labels as its core. They’ve done about a dozen transactions and are well on their path to building a great new music company.
How is Firebird different from gamma, which also calls itself a new music company?
Davis Gamma will not be in the management business the same way Firebird is. There will be some elements of crossover, but the essence of each company will be different.
What role did Raine play in the launch of Larry Jackson’s gamma?
Davis We’ve known Larry for many years. Larry approached us with an idea many years ago of what he wanted to build. Our role was to find the capital to invest in gamma. We negotiated the Apple investment, and we sourced the Eldridge investment and negotiated the terms of the deal. Raine represented Chelsea Football Club, which Todd Boehly and Eldridge acquired. Through our partner Joe Ravitch’s relationship with Eldridge, we introduced Eldridge to Larry. [Eldridge is an investor in Billboard.]
Puthenveetil We also helped [Jackson] translate his vision into a business plan and marketing materials and helped educate the investors on what this all means.
Paul Stuart
Why do you think investing in the music industry will be resilient even if market conditions worsen?
Davis Simple metrics of supply and demand. There is an incredible amount of capital that wants to get into music. There are not that many great companies. That market dynamic will keep valuations high and opportunities exciting.
Puthenveetil The reason everyone is excited about music is that, structurally, it is healthy. Companies are growing, they’re profitable. There are a lot of opportunities to invest, to acquire. When you look around at the broader landscape, sure, there are a lot of challenging sectors of the broader market. But everyone is still streaming music, everyone is still attending concerts. These companies are all still making record profits.
Historically, periods of economic downturn trigger a risk-off approach to alternative investment areas, which is what music is considered.
Puthenveetil Over the past six to nine months, we have gotten more calls from investors looking to enter this space than ever before.
Where do sovereign wealth funds want to invest in the music industry?
Puthenveetil Because of the growth of these funds, they have more people looking at spaces that might not have fallen in their purview before. That has resulted in GIC [in Singapore] investing in [Universal Music Group]. We brought Temasek into SoundCloud alongside us. We’ve seen sovereign funds in the Middle East looking at this space. In every process and transaction, we see more and more of that and expect it to continue. One of the early deals we did in the music space was advising Mubadala when they acquired EMI. At that time, very few people knew who Mubadala was, let alone expected them to buy that asset.
Globally, where do you see the opportunities?
Puthenveetil All of the developing markets. That’s where streaming growth is, and the audiences are younger. But it’s the innovation we see coming out of those markets that is exciting.
Are there any pockets of vulnerability in the music industry?
Davis From a major label’s perspective, the area of vulnerability is the incredible growth of regional music. The percentage of regional music that non-major labels represent around the world in multiple territories is at an all-time high, whether it’s K-pop in South Korea, Afrobeats in Africa or native music to France that’s not on major labels. This is a huge generational trend. From that perspective, it is a vulnerability for major labels.
While working as a partner and manager at Emagen Entertainment Group, Ebonie Ward watched #MeToo gain momentum and #TheShowMustBePaused bring the music industry to a halt in the name of racial justice. In the wake of these movements, “there have been all these indications of putting women of color into leadership positions,” she says, but little in the way of sustained action.
“I’ve seen a lot of Black women, especially in hip-hop and R&B, who are the backbones at many companies. I’ve also seen a lot of women who are actually running these companies, but they’re still not the face,” adds the 2023 Women in Music honoree. “It was time to do something different.
“During COVID-19, I realized that I was limiting myself by not being forward-moving or thinking out of the box,” Ward recalls. So after five years at Emagen, she has opened the doors to her own full-service management firm, 11th & Co (pronounced “co”) — the first management company to be led entirely by women and, specifically, Black women.
In addition to Ward, who’s chairwoman/CEO, 11th & Co’s seven-member executive team includes CFO Alexandria Kindle, chief marketing officer Jenna Magee-Tyson, chief legal advisor Zita Brack, executive vp of lifestyle promotions Imaine Molo, executive vp of tour marketing Krishna Lee and head of A&R operations and administration Asha “DJ Osh” Holland.
“The one thing I love about the women on my team is that they’ve done a multitude of different things: from working in politics, finance, entertainment law and marketing to fashion, DJing, touring and restaurant ownership,” says Ward. “It was important to have a diverse group of experienced people who might not necessarily work with each other traditionally but would be able to come together and bring out the best in each other.”
Based in Atlanta and with plans to open a Los Angeles office, the 11th & Co roster includes Ward’s longtime clients Future, Gunna and Flo Milli, as well as its newest client, NBA player James Harden. “In its own way, sports is very similar to music because a lot of athletes want to get into lifestyle,” she says. “They want marketing.” Ward says she’s also looking forward to working with the Italian fashion house Pucci. (Ward and her executive team are all wearing Pucci in the group photo.)
What was the inspiration for your firm’s name?
My birthday is Sept. 11. And my executive board, staff and client roster now total 11. I’ve always had this synergy around the number 11; it has always felt powerful to me. Plus, I wanted something timeless. Something that would make people ask more about it.
What is your vision for the firm?
I want to do something that is very unorthodox, not one-dimensional. In addition to our music clients, we’ve just added James Harden of the NBA’s Philadelphia 76ers. James has an agent with whom I work very closely, but I’m more like James’ lifestyle manager. He’s his own brand. I went to him and asked if he’d thought about life after basketball. I wanted to help him understand and realize that he needed to pay attention to how he’s perceived off the court. People don’t know his story. He’s very humble and gracious. He’s a board member and minority investor in Saks Fifth Avenue’s e-commerce business [known simply as Saks] and is doing things in the alcoholic beverage world with wine and tequila. And there are other things that we’re helping him build and navigate.
Future, meanwhile, is touring the rest of this spring with Don Toliver and other artists and has a new album coming in 2023 [teased earlier by the rapper as a collaboration with Metro Boomin]. Flo Milli will be performing at Coachella, with her second album due later this year.
From left: Krishna Lee, Imaine Molo, Jenna Magee-Tyson, Ebonie Ward, Asha “DJ OSH” Holland, Alexandria Kindle, and Zita Brack photographed on February 22, 2023 in Los Angeles.
Yuri Hasegawa
What are the challenges of being a Black, female C-suite executive in the music industry?
The first challenge is to be received and respected. Even working with my previous partner [Emagen founder/CEO Anthony Saleh], I’ve walked into rooms and not been addressed, let alone been respected, for knowing this business inside and out. You don’t want to say you didn’t get a deal because you’re a woman. And you don’t want to use your Black card. That’s something a lot of women in this business have to deal with. At the same time, you have to have a level of stamina to sustain yourself through the joys and pains, to be able to accept the word “no,” which can feel defeating. Many of us women don’t protect or advocate for each other. When someone invites you to something, go; get someone’s phone number and call them. Get real information and learn from it. Please tell me when I’m wrong or I didn’t do enough. And then we must be able to take that information gracefully. More women need to do that for each other, especially Black women, because we can be each other’s harshest critics.
Why are there still so few female managers and C-suite executives — especially those of color — in the industry?
More work needs to be done. Aside from holding other people accountable, we need to hold ourselves accountable. As soon as everything came back after the show was paused, a lot of those efforts stopped. Going back into our offices, we need to still have that same hunger and that same fight to hold the industry accountable for what they said they were championing.
In the wake of Gunna’s plea deal before the Young Stoner Life Records RICO trial, does he have new music projects in the pipeline?
Because of the ongoing trial, I really can’t speak to that. But the time will come. Having been incarcerated for seven months, he’s really just getting acclimated to being out of a cell. Sometimes people need to give people an opportunity just to be human. In the meantime, myself and all of my clients have signed [300 Elektra Entertainment chairman/CEO] Kevin Liles’ “Art on Trial: Protect Black Art” petition. People need to understand that this issue affects not just the people who are dealing with it personally, but all of us. It’s a very serious issue that we need everyone’s support to rally behind.
You moved into artist management after meeting Future while operating your own men’s boutique. And you were featured in Emilio Pucci’s recent collection celebration in Switzerland. Will 11th & Co be collaborating with Pucci on other projects?
I have built an amazing relationship with fashion house Emilio Pucci’s new designer, Camille Miceli. I was so honored to be a part of their collection celebration in Switzerland and look forward to us continuing our relationship. 11th & Co will be working with Emilio Pucci to integrate new life to the brand, and I cannot wait to share more once everything is finalized.
As North America’s largest independent promoter, Gregg Perloff, the co-founder/CEO of Another Planet Entertainment, isn’t the type to ask for permission from the majors before making his next move.
Perloff has learned since selling Bill Graham Presents in the 1990s to the company that would become Live Nation that stealth can be a strategic advantage in the live-music business. That’s especially true when competing against Live Nation and AEG, which each have hundreds of millions of dollars in capital.
So, after three years of secretly negotiating, leasing and remodeling a 45,000-square-foot venue in downtown Los Angeles — AEG and Live Nation turf — Perloff and The Bowery Presents co-founder Michael Swier are about to open The Bellwether. The two-story venue is located west of the 110 Freeway between Third and Fourth streets. The one-city-block-long space is anchored by a 1,600-capacity general-admission theater and features a street-level bar and restaurant, plus a 600-capacity private event space. The venue also comes with provenance: It was once owned by Prince, who named it after his 1992 song “Glam Slam.”
Prince moved out in 1995, and a parade of lesser-known club operators followed. Months before the 2020 shutdown of live music, Swier found it. Instead of buying the building from its current owner, Perloff and Swier — who owns L.A.’s Teragram Ballroom and Moroccan Lounge — quietly worked out a long-term lease and started preparing the building for a 2023 opening. The Bellwether will be booked by long-time Another Planet Talent buyer Nick Barrie.
Perloff pulled off a similar coup in 2007 when he engaged in under-the-radar negotiations with San Francisco officials to secure a permit for the first multiday, after-sundown private festival in Golden Gate Park. Knowing the city badly needed revenue due to budget shortfalls, Perloff and his team kept the talks under wraps and got the agreement signed despite the last-minute protests of his competitors in San Francisco’s Live Nation office. That event, Outside Lands, is today one of the highest-grossing independently owned festivals in the United States.
Basketballs signed by late UCLA Bruins coach John Wooden and Golden State Warriors point guard Steph Curry. Former San Francisco Giants catcher Buster Posey autographed the miniature bat.
Karen Santos
Perloff, who has six decades of experience in the live-music business, sat down with Billboard to discuss his new L.A. venue, his thoughts on the Taylor Swift ticketing debacle, the U.S. Senate’s subsequent grilling of Ticketmaster, and the effectiveness of the U.S. Department of Justice’s 2010 consent decree and the protections put in place to protect Ticketmaster customers.
Let’s hear the big news about your new music venue.
We will be opening our first venue in L.A. in decades: a 1,600-seat music venue just west of downtown. We’re partnering with Michael Swier, who owns some of New York’s most iconic rooms like Bowery Ballroom and the Mercury Lounge. The new venue will have an open floor plan that can host any type of contemporary music act or genre. It’s got perfect sight lines with a wraparound balcony and side lounge where people can relax. We’ve got a d&b [audiotechnik] sound system custom-built for this particular room. When we saw this new space, every one of us said, “Oh, my God. We have to do this.”
Perloff says he bought this sculpture by glass artist Dale Chihuly “at an Oakland children’s hospital music therapy event.”
Karen Santos
Did 2022 meet your expectations in terms of sales?
It was a really good year for us, and our sales in 2023 are so much better than they’ve ever been. I don’t think I’m alone in this. While everyone’s saying there aren’t enough acts out there, the other side of the coin is sales are spectacular. When the end of 2021 came, there seemed to be this built-up demand after the pandemic, and we had a burst of great sales including for our festivals Outside Lands and Life Is Beautiful, both of which sold out. We had a really great 2022 as well. [Billboard parent company PMC Media is a majority owner of Life Is Beautiful.]
Why is sales momentum continuing to build?
Maybe it’s that half the people going to shows right now were ready the day the doors opened back up, and the other half now have joined in. I literally have never seen a situation like this.
Do you worry about business cooling off in late summer?
Not for Outside Lands. It was held during the first week of August and had its best year in 2022. But to your point, I’ve always said that it would be better for everyone if we could figure out how to convince artists to play all year round and go from a six- or seven-month business where everyone’s compressed together to one where artists go out earlier in the year.
Another Planet was one of the few concert companies that did not lay off any of its staff during the pandemic. Why was that important to you?
We were the only concert company that kept 100% of our employees on payroll with no salary reduction during the entire pandemic. It was important that people could continue their lifestyle. I didn’t understand why these big companies didn’t do the same. There was plenty of work to be done from home: new venues, different ways to tell people about our shows and production and building maintenance. When the pandemic ended, we were ready to go.
You’ve been a Ticketmaster client for a long time and stayed with the company after its merger with Live Nation. Over a decade later, do you think the Department of Justice got it right?
I’ll say this: There is supposed to be a firewall in place so that Ticketmaster won’t share your data with the concert promotion side of Live Nation. If anyone believes that Live Nation can’t get numbers from Ticketmaster, they’re very naive. Somehow people seem to know what everybody else’s ticket sales are.
A tambourine depicting legendary concert promoter Bill Graham that Perloff got at an event thrown by his late boss’ memorial foundation.
Karen Santos
Do you agree with the argument that Ticketmaster leverages Live Nation content to land ticketing contracts?
No, and I can’t believe that the Senate keeps fixating on something that is irrelevant. They don’t do it. That isn’t an issue. To listen to the Senate talking about arenas when Live Nation doesn’t even own an arena in this country is just crazy. Secondly, when the Department of Justice said it was going to subsidize AEG’s AXS ticketing to be a competitor to Ticketmaster [in 2010], we all saw how that went — not very good. I’m not sure that most people would pick AXS over Ticketmaster.
Because of Ticketmaster’s dominance?
No. What I’m saying is that it’s hard for me to take the government seriously when they say they want to stop monopolies when there are monopolies in every part of business, from telecom to transportation.
What are your reasons for sticking with Ticketmaster?
I thought Ticketmaster was doing a good job for us. I have nothing bad to say about my competitors. Everyone wants to pick on AEG and Live Nation, but most people have no idea how hard it is to produce a tour. I toured Star Wars: In Concert with LucasFilm around the world for five years and worked on tours with Bill Graham; it’s a completely different game than being a local promoter. AEG and Live Nation do an incredible job and should be applauded for the work they do with Taylor Swift and Bruce Springsteen. Every five years, you get an artist that’s so popular that you just can’t make everyone happy.
Do you think the Swift ticket sale was mishandled?
I think there were a number of problems with the Taylor Swift on-sale. This might be the first controversial thing I’ll say in this interview: Bands really want to put the whole tour on sale at once because they can advertise the whole tour at once and make a bigger splash.
Fender guitar cases containing instruments won at a benefit auction for The Bridge School, which was co-founded by Pegi Young, the first wife of Neil Young.
Karen Santos
Right, and for Swift, something like 2.2 million tickets went on sale simultaneously.
If someone’s touring for six months, it might make some sense to maybe break the tour into two segments and go on sale with the second part of the tour closer to the dates. But there’s no system in the world — and this is where I have to defend Ticketmaster — that could have handled the onslaught.
Do you think the Senate understands that?
My question for them is, “Why are you picking on Ticketmaster and Live Nation when you should be outlawing brokers?” They are the ones who screw up everything. Does every promoter take a few tickets? Does every venue have a few tickets? Sure. But it’s the scalpers that make it so no one can get a decent seat except the rich. The Senate didn’t do the research they should have done before they started pontificating and acting like they knew what they were talking about.
What’s the best way to stop scalping?
Many years ago, my business partner, Sherry Wasserman, came up with a brilliant system for Prince at the Wilshire in Los Angeles back when I ran the theater. We wanted to completely stop brokering for the show, and we made people line up the day before the show and present an ID when buying tickets. It was foolproof, we thought. And then the next day as people are walking in, here comes Muhammad Ali with tickets and a matching ID. Muhammad Ali certainly wasn’t in line the day before when we sold the tickets, but here he was with a ticket and ID. We didn’t know how, but he managed to beat the system. We just laughed and thought, “We did the best we could do.”
Jangwon Lee‘s life in music began in typical Korean fashion. “All the kids in my generation grew up with the piano at some point in their lives,” Lee says over the phone from Seoul. His love of the instrument continued beyond childhood with a piano duo, The Serendipity, but has taken a back seat to serial entrepreneurism.
While studying business administration at Seoul National University, Lee co-founded Campusdal, a food delivery app. Then, after two years in the Korean air force, he founded Mapiacompany, a technology firm that operates three online platforms for independent musicians to sell digital sheet music. The experience set the stage for Lee’s remaking of Korea’s music intellectual property (IP) business.
“It gave me the legal knowledge that was necessary to start my new business — the publishing, the copyright laws, how to monetize, how to distribute the royalties,” Lee says.
Now, Lee is the CEO of two-year-old Beyond Music, a music investment firm with 26,000 copyrights and about $250 million under management. In 2021, Beyond Music created Asia’s first song fund with support from institutional investors including KB Securities, Base Investment and Maven Growth Partners. Last year, it added funding from the electronics and entertainment company Dreamus.
In 2022, Lee doubled down on Korean content by launching an exchange-traded fund focused on Korean entertainment companies, the KPOP and Korean Entertainment ETF. Prominent Korean music companies HYBE, SM Entertainment and JYP Entertainment are in its portfolio, but it also includes Studio Dragon, a TV studio; Naver, owner of messaging app Line; and Kakao, owner of Korea’s largest music subscription service, Melon.
In the West, investment money has been flowing heavily into music IP for more than a decade, especially in the last five years. It seems like the practice took root in Korea much later. Why do you think that is?
In 2017-18, when Hipgnosis started, there were very few precedents for Korean capital markets. You’ve got to understand the market, the nomenclature, the industry network. You have to know the nooks and crannies of the IP business. And also, you need to have a financial grasp, the understanding of capital markets, how to raise capital, how to structure the company, how to build, how to do tax-efficient modeling, IRR [internal rate of return] predictions, quantitative valuations. This is very much a quantitative business, whereas the understanding of the IP business is a relatively qualitative business. So, these are polar opposites in terms of business characteristics. In the past, I don’t think in Korea there was a team that really embodied these polar opposites.
We have people from PwC, KPMG, KKR and Morgan Stanley on our team. We have producers and someone who used to be a top-level executive of the largest music value chain company in Korea. I think that was why we were first to scale, to be able to build and raise funds from the very conservative institutional capital of Korean or Asian private equity and limited partner network.
Streaming is driving growth in global recorded music and publishing revenue, and that growth has helped attract new investors and more investment in general. Is streaming also the main factor behind increased investor interest in music IP in Korea?
Yes. I think it’s twofold. No. 1: streaming in the domestic market. Korea ranked [at] No. 6 in terms of market size for music globally. Japan is No. 2. Add Japan and Korea together, it almost equals the European Union. So it is a big market on its own, and local growth here is definitely driving part of it. Another part is Korean content’s market share in the global music industry. In the past, Korean music rights’ primary source of revenue was domestic usage, and therefore domestic growth was the only tailwind. But now we see the market share of Korean music growing exponentially year over year in other parts of Asia and moreover in Latin America, the Middle East and North Africa regions, Europe, North America. Not just BTS and BLACKPINK, but more midtier artists. You become fans of Korean music through those more hallmark artists, but you end up trickling down to other more long-tail or indie artists as well. And all the markets have been benefiting.
You have a large catalog. Do some of your less popular songs have commercial potential outside of Korea?
We have a mix of more global, more well-received catalogs and older, Korean-focused catalogs. The former obviously is a direct beneficiary of such a market growth trend. The latter, to a lesser degree, is also benefiting. It’s surprising that songs on Spotify that are not as famous as BTS at all are getting relative hype from other parts of Asia, and we see it for some of our older catalog as well. I don’t know how they were discovered, but on YouTube playlists, on YouTube comments, we see Spanish, we see French, we see it with Southeast Asian languages for songs we own that are 10 to 15 years old.
Multiples and valuations have risen a lot over the last few years. What’s the Korean market like right now? Is it as heated as other markets?
It is more heated than before, but to my knowledge, the blended multiple acquisition average used to be between 20 and 30 times. Now with the higher interest rate, multiples are still within the high teens, like 17, 18, 19, or at least like 15. But in Korea, or at least for us, our acquisition multiple, the blended average, is still below 10. So, we have been able to acquire very good assets. We think they are not lesser than their U.S. or U.K. counterparts at all. So, from a quantitative viewpoint, these don’t necessarily have to be valued at such a discrepancy. But I think it’s a newer market here, and therefore there’s less competition.
Is it safe to assume that you’ll encounter more competition in the coming years?
I’m hoping not. But from a reasonable standpoint, I do see that may be unavoidable. But it’s a good thing for us, because it will also help with our existing catalog valuing up.
What do you do to create additional value for the IP you purchase? Do you actively manage, market and promote the catalog — what Hipgnosis calls “song management”?
Whatever Hipgnosis is doing, we’re doing it essentially, whether it be synch, remixes, copyright, better revenue collection techniques. We put our methodologies into two main categories: active management and passive management. We define passive as collecting what was already ours but was somehow being lost due to Content ID not being perfectly managed by YouTube itself. So we employ additional music-pattern recognition — tech companies around the world — to do better collection for our existing catalog, which I know Hipgnosis is also doing. We try to find and mix a better lineup of distribution companies — intermediary publishers, etc. — to maximize our revenue while minimizing the middleman fee. For active, we’re doing remakes. We’ve already done a dozen remakes of our songs. I think two are now in the top 100 charts for Korean music. These are songs that were published 16 years ago, so after acquisition, we made remakes of the songs with new, up-and-rising artists in Korea. By remaking the songs, we hold the new assets as well as our existing assets. We’ve also worked with media channels in Korea to do music-related shows.
You recently purchased your first major U.S. acquisition: the catalog of producer-songwriter Greg Wells. To do this, you set up a U.S. subsidiary. Do you plan on creating subsidiaries in other countries to pursue acquisitions elsewhere?
Yes, for sure. The U.S. was a symbolic move for us. Our targets, however, lie toward lower-multiple opportunities. So, basically, Asia. We might set up subsidiaries. We might get direct acquisition from our Korean entity. But positioning ourselves as a more Asia-focused, Asia-Pacific music aggregator is our next step.
What might surprise people about the Korean music market?
The market size. For starters, it’s larger than most European countries — larger than Canada, Mexico or most Latin American countries, or even countries with more population like Indonesia. I think it’s bigger than Italy. Korea is really an advanced country. I can say that with more certainty now than I would have been able to seven or eight years ago.
How much of South Korea’s music market depends on the ability of K-pop to keep growing as much as it has in recent years?
That is a topic of interest for Korean media and Korean industry specialists as well — whether this is a one-hit wonder, a short-lived irregularity or a trend. People have been internally questioning, or doubting, the longevity of the trend. This issue has been raised for five, six years. Every year, there’s someone who says, “OK, you know, this cannot sustain. Maybe this is the peak. The next year, it might be difficult.” But the last five or six years have seen more growth every year, surpassing everyone’s expectation. This does have a kind of faith component, and I do have faith. I’m biased. But I think my bias stands with multiple consecutive years of a proven record. There’s no other country, outside of the U.S., that spends and reinvests as much money for better-quality music production as Korea. I’m very, very optimistic that this is not a one-time thing, but is a trend that will stick around at least for the next 10 years.