International
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LONDON – Key players from the United Kingdom’s music industry have pledged to improve the digital metadata for song recordings to help ensure that artists and rightsholders are paid fairly.
Under the voluntary two-year agreement published Wednesday (May 31) by the U.K. government’s Intellectual Property Office (IPO), the U.K. industry commits to progressively improve metadata for new music recordings and to accurately award credits on streaming services.
Signatories include representatives of major and independent record labels, publishers, creators and streaming services. Trade bodes BPI —which represents more than 500 labels, including the U.K. arms of Universal Music Group, Sony Music Entertainment and Warner Music Group — and the Association of Independent Music (AIM), which acts on behalf of U.K. independent record labels and music companies, are among the music groups backing the pledge
The U.K. government also says that it will be setting up a new working group with music business stakeholders “to explore and consider industry-led actions on remuneration for existing and future creators” over the coming weeks. The working group will review a range of issues facing creators and rightsholders, says the IPO, including the impact of artificial intelligence.
“The U.K. is a hotbed for world-beating musical talent but as technology advances we need our thriving music industry to continue to offer viable career opportunities,” John Whittingdale, a U.K. government minister for the creative industries, says in a statement.
Whittingdale calls the metadata pact a “landmark agreement” that will help ensure musicians “in the digital age are fairly credited and compensated for their contributions and creativity.”
As streaming has grown to become the dominant mode of music consumption globally, the need for accurate metadata — the descriptive data underlying music recordings detailing who contributed what to a song’s creation and who owns it — has grown in importance in determining who gets paid what share of a track’s streaming royalties. But digital platforms, artists and rightsholders have complained that streaming metadata is often incomplete or inaccurate, which delays payments to songwriters and labels.
“Currently a fraction of recordings being streamed properly credit the people that wrote and published the song,” says Graham Davies, CEO of U.K. songwriters trade group The Ivors Academy, which has also signed the metadata agreement.
In 2021 the Ivors Academy estimated that at least £500 million ($625 million) in global streaming royalties a year were being wrongly allocated or not being paid at all due to missing or incomplete metadata. In a statement, Davies says the pledge “gives us the first proper step on a journey of closing the metadata gap.”
Sophie Jones, BPI interim CEO, says she hopes the agreement will lead to “immediate improvements” in the “speed and accuracy of songwriter payments.”
Other music groups and companies backing what is officially titled the United Kingdom Industry Agreement on Music Streaming Metadata include The Digital Entertainment and Retail Association (ERA), whose members include streaming services; Hipgnosis Songs Fund; the Music Publishers Association (MPA); Musicians’ Union (MU); Featured Artists Coalition (The FAC) and U.K. collecting societies PRS for Music and Phonographic Performance Limited (PPL).
Wednesday’s metadata agreement is the latest in an ongoing series of government-led interventions into the U.K. music industry that spun out of a Parliamentary inquiry into the economics of the music streaming business.
That initial review concluded in July 2021 with the Department for Digital, Culture, Media & Sport (DCMS) Select Committee calling into question the major record labels’ dominance of the industry and branding the global streaming model as unsustainable in its current form, saying it “needs a complete reset.”
Since then, the government has initiated multiple investigations and inquiries into the U.K. music industry, including a market study review of the record business by the U.K. competition regulator. That ended in November when the Competition and Markets Authority (CMA) determined that low returns from streaming for most artists “are not the result of ineffective competition” between the three major labels.
Last year the British government set up two working groups – led by the IPO and made up of industry stakeholders — looking at issues raised by the Parliament probe. One focused on metadata, which has now concluded. A second working group is looking at improving transparency around licensing and royalties for artists. The IPO says it is due to publish the second group’s findings, including a code of practice, in the coming months.
A South Korean law firm representing three members of K-pop boy band EXO says the singers are pursuing legal action against their longtime label and management agency SM Entertainment over contractual issues related to “slave contracts.”
In a press release, Lin Law Firm claims it has represented K-pop stars Baekhyun, Chen and Xiumin — who are members of EXO and also perform together in a splinter trio unit named EXO-CBX — since March over pay and contract disputes with SM Entertainment, who debuted EXO in 2012 and are home to acts like TVXQ!, Girls’ Generation, SHINee, NCT and aespa.
Baekhyun, Chen and Xiumin (whose full names are Byun Baekhyun, Kim Jongdae and Kim Minseok, respectively) claim SM has shown a lack of payment transparency and required unreasonably long contracts extending beyond 12 years, according to a five-page document reviewed by Billboard that was sent by Lin Law Firm attorney Lee Jaehak.
The firm alleges that despite the trio signing exclusive, long-term contracts with SM, the K-pop company has not provided full data about the artists’ payments as they recently requested. Lin Law adds that the artists have always trusted SM’s payments despite Korean law requiring entertainment companies to provide updates on payment settlements twice a year.
Lin Law Firm also claims that SM has used its position in the K-pop market to force artists to sign with the company for longer than the industry standard seven years — deals it calls “slave contracts.” The firm says that SM automatically extends artist contracts by three years if the artist works overseas, which applies to Chen and Xiumin, as the two were originally part of the China-focused group EXO-M. Meanwhile, Baekhyun has released solo music in Japan and was a part of the U.S.-focused, Billboard 200-topping “supergroup” SuperM.
The final point in Lin Law’s document includes an apologetic message to fans and a pledge to resolve the dispute.
SM Entertainment has not responded to Billboard‘s request for comment. Baekhyun, Chen and Xiumin have not publicly commented on the matter, either.
Alleged “slave contracts” are a historically sensitive spot for SM Entertainment. In 2009, three of the original five members of boy band TVXQ! asked Korean courts to examine their 13-year contracts, citing extreme length and worries about payment distribution. Over the course of three-plus years of legal battles, singers Kim Jaejoong, Park Yoochun and Kim Junsu won the right to work independent of their SM deals and formed a new boy band named JYJ. By November 2012, the two parties mutually agreed to terminate the SM contracts, which would have expired in 2016 at the earliest.
As a result, South Korea’s Fair Trade Commission created a rule in 2010 that did away with so-called “slave contracts,” requiring entertainment companies to sign individuals for a maximum of seven years initially. Lin Law does not explain how SM could legally surpass the rule.
As members of EXO, Baekhyun, Chen and Xiumin helped lead K-pop’s international expansion with the group’s dual focus on releasing music in both Korean and Chinese. In April 2015, EXO set a new record for the largest sales week for K-pop artists in America at the time when its Exodus album sold 6,000 copies, according to Luminate. It held that record until late 2016.
EXO has scored five No. 1s on Billboard‘s World Albums chart, while EXO-CBX also topped the chart with its debut record Hey Mama! from 2016. All three members have also released solo albums, with Chen releasing a new song, “Bloom,” on May 30 through SM Entertainment. After several EXO members fulfilled their South Korean military duties, the group reunited for the first time in years. SM has confirmed the group would release a new studio album together this year.
Reservoir Media on Wednesday reported that revenues grew by 13% during its most recent fiscal year, as investments in record labels and artists rights in the Middle East added to its growth from acquiring works by North American artists like Louis Prima and Dion.
Reservoir reported $122.3 million in revenue for their fiscal year 2023 ending March 31, driven by a 9% increase in music publishing revenue and an 18% increase in recorded music revenue, both helped by the digital release of De La Soul‘s first six studio albums in early March. The legendary rap trio’s catalog netted 12.5 million U.S. song streams and sold 28,000 albums in its first week streaming, according to Luminate.
Founded in 2007, Reservoir said it grew by 8% organically and finished at the top-end of its financial targets in fiscal 2023 despite a 1%-decline in fourth quarter revenue driven by lower performance, sync and other revenues in its music publishing division, which suffered from a tough comparison to a strong year-ago quarter.
Fourth quarter music publishing revenue of $23.2 million was off 8% from the year-ago quarter when Reservoir benefitted from a one-off event in Dubai. Recorded music revenue in the quarter rose 10% to $10.8 million, in part due to the outsized performance of De la Soul’s catalog.
Reservoir has made investing in emerging markets a key prong of its growth and diversification strategy, and on a call with analysts, Reservoir CEO Golnar Khosrowshahi referred to it as “highly important to our overall strategy … as we work to become the largest holder of Arabic music copyrights.”
With its partner PopArabia, an independent music company headquartered in the United Arab Emirates, Reservoir has acquired stakes in the Egyptian label 100COPIES, the Lebanese label and music publisher Voice of Beirut and signed publishing deals with Egypt’s Mohamed Ramadan, Lebanon’s Zeid Hamdan and Moroccan hip-hop star 7liwa. In January, Reservoir announced signed publishing deals for the catalogs and future works of Indian rappers MC Altaf and D’Evil and the producer Stunnah Beatz.
Funds like Reservoir also grow inorganically through acquisitions of song catalogs, and over its past fiscal year it acquired rights by “the Saxophone Colossus” Sonny Rollins and Dion, best known for “Runaround Sue” and “The Wanderer.”
Reservoir’s chief financial officer Jim Heindlmeyer told analysts that the company expects 6% revenue growth f 9% growth for adjusted earnings before interest, tax, depreciation and amortization for this fiscal year, compared to midpoint of its 2023 guidance ranges.
“Our outlook includes strong top-line growth expectations and margin expansion across our business segments as we continue to see a positive impact on profitability from our strategic acquisitions and benefit from secular tailwinds across the music industry,” Heindlemeyer said.
The U.K. organization Women in CTRL is the second recipient of IMPALA’s Changemaker award, it was announced on Tuesday (May 30). The not-for-profit organization, founded by Nadia Khan, seeks to advance gender equality in the music industry.
Women in CTRL encourages women and non-binary persons to find their strengths, develop their own personal brands and build the tools and confidence to become leaders. The organization runs creative growth programs, community workshops, mentoring, training, organizing events and more.
Women in CTRL also publishes research and reports, such as the “Seat at the Table” report looking at the representation of women, with an intersectional focus on Black women, in the boardroom of U.K. music trade bodies. They also released the “Women in Radio” report looking into the experiences of women in the radio industry to identify the barriers women face.
Women in CTRL has also partnered with AIM and Amazon Music to launch a new apprenticeship program, “Amplify,” which aims to improve access to music industry careers for women and non-binary people.
“It’s an honor for Women in CTRL to be chosen as the second recipient of the Changemaker award,” Khan said in a statement. “This recognition affirms our work, inspires us to continue and highlights the independent community’s collective determination and passion in driving positive change within the music industry. Women in CTRL firmly believe in the transformative power of sharing best practices and learning from the exceptional organizations that IMPALA champions.”
“Women in CTRL is an inspiration to all in the sector who seek to bring change,” Helen Smith, IMPALA’s executive chair, said in a statement. “It’s an honor to be able to showcase their work through our Changemaker Award.”
The Changemaker Award puts the spotlight on projects that champion DEI work (dubbed “equity, diversity and inclusion” in Britain). The recipient is selected yearly by IMPALA’s DEI task force. Launched in May 2022, the award highlights projects that have an impact on the independent music sector. It is presented yearly during European Diversity Month.
The POWER UP initiative was the inaugural recipient last year. Launched in January 2021, POWER UP provides mentoring, support and grants for 40 Black music creators and industry professionals.
IMPALA was established in 2000 and now represents nearly 6,000 independent music companies. IMPALA’s mission is to grow the independent music sector sustainably, return more value to artists, promote diversity and entrepreneurship, improve political access, inspire change and increase access to finance.
Now that the pandemic is over, “it is anything but ‘business as usual’” at CISAC, the international trade organization for copyright collecting societies, according to director general Gadi Oron in its 2023 annual report.
In a time of change for collecting societies, which bring in a combined 9.6 billion euros a year, CISAC’s priorities include lobbying governments in support of member societies, continuing its campaign to support the ISWC code system to identify works, and navigating the challenges of AI, which Oron calls “our biggest priority now in terms of policy.”
The biggest news in the report about a particular market is the success of Autodia, the Greek collecting society that has become prominent since the 2018 dissolution of AEPI. “In 2018, I gave a presentation to the board [of CISAC and said we must do something,” Oron remembers. AEPI’s collapse was epic, complete with a 2017 police raid and a failure to pay out 42.5 million euros (more than the total amount it distributed some years), according to an audit ordered by the Greek Ministry of Culture. Oron feared the potential collapse of a market that had been worth about 50 million euros a year in the late 1990s, so he asked the CISAC’s board to support a plan to fund and help Autodia, which was then a small nonprofit society that in 2018 collected less than a million euros.
In 2022, Autodia collected 16.2 million euros, and it now collects for all three major publishers, BMG, and many of its sister societies, according to CEO Margarita Panagiotopoulou. “We are growing fast and gaining market share,” Panagiotopoulou says, “and that is on track to continue.”
Autodia now faces competition from EDEM, which mostly represents Greek repertoire and took in about 8 million euros last year.
The first phase of CISAC’s plan was to get Autodia loans from its member societies and send to Athens consultant Declan Rudden, who became interim CEO of Autodia to get the society running. He helped make reciprocal agreements with international societies and court publishers, as well as compete with EYED, a government-controlled entity that was designated as the temporary successor to AEPI. (Some major publishers originally signed with EYED but most of them are now with Autodia.) One day, as Rudden and team were putting together desks in the Autodia office, it was raided by the Greek department of labor and fined for keeping employees after 5pm without notifying them in advance. (This is illegal in Greece, but raids are uncommon.) “They did everything to make our life difficult,” remembers Rudden, who runs the consultancy SaorServices.
Gradually, the local team took over, and Autodia took in more than 4 million euros by 2019, then more than 12 million euros by 2022, as the pandemic subsided. “The contribution of CISAC was very important,” Panagiotopoulou says, in terms of funding, legitimacy and lobbying both the Greek government and songwriters themselves.
Greece is still a contested market. “Market share is a matter of disagreement,” says EDEM COO George Myzalis. (Panagiotopoulou says Autodia has more than 85% market share, but the respective royalty collection numbers imply a lower number.) Along the way, the technology company Orfium, which has some operations based in Athens, almost entered the market as well, but it ultimately withdrew. (The company operates in other sectors and did not respond to a request for comment.) Right now, venues and broadcasters in Greece need licenses from both Autodia and EDEM, especially if they want to play both the international repertoire that Autodia dominates as well as the Greek compositions that EDEM tends to have.
Some big publishers believe that the growing success of Autodia limits the possibilities for the kind of direct licensing model that they see as more efficient. One idea that at least some of them favored was to establsh EDEM as an organization that would offer more optionality by requiring less exclusive grants of rights – and a model for what they believe could be a more efficient future for the publishing business. As Autodia grows, that is becoming less likely – which some publishers see as a wasted opoortunity and other societies and some other publishers and songwriters see as a win for the current structure, which for all of its complexity offers more of a balance of power between big players and small ones.
The only things most executives seem to agree on is that the situation in Greece is far better than it was under AEPI and that it is getting better, even if it’s not where it should be. “AEPI was a disaster,” says Peermusic European president Nigel Elderton. “Autodia have their act together and they’re paying royalties through and they’re starting to grow.”
At a time when the traditional collecting society model is being challenged by direct licensing and a growing number of for-profit royalty organizations, both the other societies that supported Autodia and the publishers that favored another model agree that the implications of the society’s success go beyond Greece. Now that CISAC has showed it can help turn around a society in a market that’s perceived to be dysfunctional, it could potentially do so again.
“This was 10 times harder than I could have imagined,” Oron says. “But we’ve proven to ourselves that we can do it. Whether we can do it in other countries depends, but we have proof that we can do it.”
The European Union slapped Meta with a record $1.3 billion privacy fine Monday and ordered it to stop transferring users personal information across the Atlantic by October, the latest salvo in a decadelong case sparked by U.S. cybersnooping fears.
The penalty of 1.2 billion euros is the biggest since the EU’s strict data privacy regime took effect five years ago, surpassing Amazon’s 746 million euro fine in 2021 for data protection violations.
Meta, which had previously warned that services for its users in Europe could be cut off, vowed to appeal and ask courts to immediately put the decision on hold.
The company said “there is no immediate disruption to Facebook in Europe.” The decision applies to user data like names, email and IP addresses, messages, viewing history, geolocation data and other information that Meta — and other tech giants like Google — use for targeted online ads.
“This decision is flawed, unjustified and sets a dangerous precedent for the countless other companies transferring data between the EU and U.S.,” Nick Clegg, Meta’s president of global affairs, and chief legal officer Jennifer Newstead said in a statement.
It’s yet another twist in a legal battle that began in 2013 when Austrian lawyer and privacy activist Max Schrems filed a complaint about Facebook’s handling of his data following former National Security Agency contractor Edward Snowden’s revelations of electronic surveillance by U.S. security agencies. That included the disclosure that Facebook gave the agencies access to the personal data of Europeans.
The saga has highlighted the clash between Washington and Brussels over the differences between Europe’s strict view on data privacy and the comparatively lax regime in the U.S., which lacks a federal privacy law. The EU has been a global leader in reining in the power of Big Tech with a series of regulations forcing them police their platforms more strictly and protect users’ personal information.
An agreement covering EU-U.S. data transfers known as the Privacy Shield was struck down in 2020 by the EU’s top court, which said it didn’t do enough to protect residents from the U.S. government’s electronic prying. Monday’s decision confirmed that another tool to govern data transfers — stock legal contracts — was also invalid.
Brussels and Washington signed a deal last year on a reworked Privacy Shield that Meta could use, but the pact is awaiting a decision from European officials on whether it adequately protects data privacy.
EU institutions have been reviewing the agreement, and the bloc’s lawmakers this month called for improvements, saying the safeguards aren’t strong enough.
The Ireland’s Data Protection Commission handed down the fine as Meta’s lead privacy regulator in the 27-nation bloc because the Silicon Valley tech giant’s European headquarters is based in Dublin.
The Irish watchdog said it gave Meta five months to stop sending European user data to the U.S. and six months to bring its data operations into compliance “by ceasing the unlawful processing, including storage, in the U.S.” of European users’ personal data transferred in violation of the bloc’s privacy rules.
If the new transatlantic privacy agreement takes effect before these deadlines, “our services can continue as they do today without any disruption or impact on users,” Meta said.
Schrems predicted that Meta has “no real chance” of getting the decision materially overturned. And a new privacy pact might not mean the end of Meta’s troubles, because there’s a good chance it could be tossed out by the EU’s top court, he said.
“Meta plans to rely on the new deal for transfers going forward, but this is likely not a permanent fix,” Schrems said in a statement. “Unless U.S. surveillance laws gets fixed, Meta will likely have to keep EU data in the EU.”
Meta warned in its latest earnings report that without a legal basis for data transfers, it will be forced to stop offering its products and services in Europe, “which would materially and adversely affect our business, financial condition, and results of operations.”
The social media company might have to carry out a costly and complex revamp of its operations if it’s forced to stop shipping user data across the Atlantic. Meta has a fleet of 21 data centers, according to its website, but 17 of them are in the United States. Three others are in the European nations of Denmark, Ireland and Sweden. Another is in Singapore.
Other social media giants are facing pressure over their data practices. TikTok has tried to soothe Western fears about the Chinese-owned short video sharing app’s potential cybersecurity risks with a $1.5 billion project to store U.S. user data on Oracle servers.
A transatlantic legal battle between Jimi Hendrix’s estate and his former bandmates is going to be fought primarily in London for now, after a U.S. federal judge ruled that she would defer to the British courts.
The two dueling camps — Hendrix’s estate and Sony Music on one side and the estates of bassist Noel Redding and drummer Mitch Mitchell on the other — have each filed their own lawsuit on opposite sides of the Atlantic over control of the rights to music created by the trio’s Jimi Hendrix Experience.
After a year of jockeying over which case should take precedence, a Manhattan federal judge ruled Tuesday that it should be Redding and Mitchell’s UK lawsuit. She pointed out that the English litigation had kicked off nearly a month earlier than the American case, and that a British appeals court had already ruled that their case could move forward.
“The litigation centers on estate matters in England, general release documents located in England, and copyright and intellectual property rights under English law,” Judge Ronnie Abrams wrote. “It can thus hardly be said that the courts of England are not an adequate forum.”
Hendrix teamed up with Redding and Mitchell in 1966 to form the Experience, and the trio went on to release a number of now-iconic songs before Hendrix’s death, including “All Along The Watchtower,” which spent nine weeks on the Billboard Hot 100 in 1968 and peaked at No. 20.
The current fight kicked off in 2021, when Redding and Mitchell’s heirs sent a letter in the UK claiming they own a stake in Hendrix’s music and arguing that they’re owed millions in royalties. The Hendrix estate and Sony responded a month later by filing their own lawsuit in New York federal court, arguing that Redding and Mitchell signed away their rights shortly after the legendary rocker died in 1970, in exchange for “significant monetary consideration.”
But for over a year, the two sides have been duking it out over which case should proceed first. The Hendrix estate and Sony say the contractual releases, which will play a central role in the case, were all signed in New York as part of probate proceedings in that state. But Redding and Mitchell’s heirs have claimed the estate is merely trying to “circumvent” English courts to win a friendly judge in America.
“Plaintiffs are merely trying to win the race to the courthouse because they apparently believe this court will be more sympathetic to their claim than the English court before which it is now pending,” the Redding and Mitchell heirs wrote last year. “Such blatant forum shopping is not entitled to any deference.”
Last month, a London appeals court ruled that the U.K. case could proceed, regardless of what happened in New York. That ruling said that the New York releases might indeed end up being the “central aspect in the dispute,” but that the British case also dealt with broader issues of English law.
And on Tuesday, Judge Abrams cited that April ruling as a key factor in why she had decided that the New York case could wait until the British case was resolved.
“The London High Court’s lengthy decision finding jurisdiction over the English action underscores the appropriateness of that forum, and the merits of that action are now being actively litigated in English courts,” the judge wrote. “This action is hereby stayed pending the resolution of defendants’ action in England.”
Neither side’s attorneys immediately returned requests for comment.
Read the entire ruling here:
Plans change. Dinner, vacation, date night… leadership transitions at music companies. BMG announced Wednesday it is shortening its long-term succession plan for longtime CEO Hartwig Masuch, with Thomas Coesfeld, the company’s chief financial officer, assuming the role July 1 instead of New Year’s Day.
The Bertelsmann-owned company said Masuch is leaving “at his own request and on the best of mutual terms,” with the longtime CEO explaining the handover between Coesfeld and himself has “gone so smoothly” that he decided to move up his exit date by six months. (In January, Masuch, 69, explained that he wanted to retire before turning 70.)
Masuch will remain in an advisory role after the transition until 2026, the company said.
“Hartwig has written many chapters in BMG’s success story, which Thomas will now continue,” said Bertelsmann CEO Thomas Rabe in making the updated announcement, adding that “as CFO, he got to know BMG well, drove forward its digital orientation, and invested considerable funds in the acquisition of music rights. I am certain that BMG will continue to grow under [his] leadership.”
Coesfeld was named deputy CFO at BMG in October 2021 before taking over as CFO the following spring. He previously served as chief strategy officer on the executive committee of the Bertelsmann Printing Group, a division of BMG’s parent company Bertelsmann. He began his career in 2014 as a management consultant at McKinsey in Munich.
Upon taking the top office at BMG, Coesfeld will also become a member of Bertelsmann’s Group Management Committee (GMC), which advises the Group Executive Board.
Replacing Coesfeld as CFO will be Mathis Wolter, who joins from Bertelsmann-owned RTL Group, where he has been senior vice president of controlling and investment for over three years. Prior to that, Coesfeld was svp of controlling and reporting at BMG. Joining Coesfeld and Wolter on the BMG Executive Board will be Sebastian Hentzschel (promoted from chief technology officer to chief operations officer), Dominique Casimir (chief content officer) and Nikola Holle-Spiegel (chief human resources officer).
Also joining BMG’s top management team is Alberto Chullen Llamas, arriving from Bertelsmann Education Group to be executive vp of investments to focus on future catalog acquisitions at the label. “After 45 acquisitions in 2022 alone, acquisitions remain central to BMG’s growth into 2023 and beyond,” said Coesfeld. “We are delighted to have secured the services of such a heavy-hitter as Alberto from within the Bertelsmann family, and one who knows BMG well.”
Coesfeld added, “We have a strong team at the helm of BMG… Together we will drive the company’s progress, and I very much look forward to working with them all. I would like to thank Hartwig Masuch for handing over a company which is both highly creative and successful. Hartwig’s clear focus on building a company which works for artists and songwriters has resulted in a globally relevant music company which has redefined what a music company can be in the streaming age.”
Hartwig Masuch
Barbara Dietl
Masuch joined Bertelsmann in 1991, overseeing Germany, Switzerland and Austria as part of BMG Music Publishing’s first incarnation. In 2008, he advised Bertelsmann when the company sold its share of Sony BMG Music Entertainment to Sony in 2008, and soon, helped start BMG Rights Management — which later became BMG.
Under Masuch’s leadership, BMG has grown to be the fourth-biggest recorded music and publishing company in terms of revenue, trailing only the three majors.
In March, the label and publisher reported that it generated 866 million euros ($912.6 million) in 2022 compared to 663 million euros in 2021 ($784 million) — an increase of 30% year-over-year. The company’s publishing division, which makes up 60% of BMG’s revenues, grew by 26% to 518 million euros ($546 million) on new hits by Bebe Rexha and Lewis Capaldi, and catalog works by Blondie and Nirvana.
In recent years, BMG has acquired music rights from The Pointer Sisters, Peter Frampton, Harry Nilsson, Simple Minds, Tina Turner and Mötley Crüe, among others, and through a partnership with KKR the company has acquired catalogs from John Legend and ZZ Top. On the label side, BMG has signed Duran Duran, Santana, Bryan Adams, Maxwell and Louis Tomlinson. BMG has also moved into the live business, first by acquiring a majority stake in German live music promoter Undercover GmbH in 2020 and later with a similar alliance with KARO Konzert-Agentur Rothenburg GmbH, the organizer of the German Taubertal-Festival. The company also oversees Berlin’s historic 1,600-capacity Theater des Westens.
“BMG has set sales records in recent months, signed outstanding artists, acquired iconic music rights catalogs and developed new lines of business,” Hartwig said. “The values of transparency, service, and fairness are now an inseparable part of what has become the company’s DNA, much respected by the entire music industry. So I’m leaving on a high note – and in the firm conviction that with Thomas Coesfeld and his management team, a new generation will successfully lead the music company into a new era.”
TOKYO — The traditional path to financial independence through music creation has been evolving for years. While there was once a clear-cut approach that included labels, publishers, touring, and CD sales, now the vast majority of artists need to find a different way to make it. The world is bigger now, and the borders and boundaries of music are being torn down piece by piece. Not only are more and more people listening to music from outside their markets, even in once more locally focused countries like Japan, Korea and India, but more and more people are watching how other music pros operate and taking notes.
This means that new markets are opening up to creators in the United States and that, simultaneously, Asian artists are rethinking their whole approach to the business. Together, these dynamics are leading to new career paths and new sounds.
In Japan, we’ve witnessed a huge change in the incentive structure. I’ve worked for years in the Japanese market as a producer and have watched things change firsthand. One of the biggest sources of change came not from our market, but from South Korea. BTS broke the world charts and now everyone’s looking outside of Japan. Korea opened their eyes.
BTS, BLACKPINK, and other K-pop groups set a precedent and demonstrated what’s possible. Before, everyone assumed you had to change for export, to sing in English, to adjust your look and feel. But these young Korean stars didn’t initially feel a need to sing in English; instead their fans learned Korean. Korean artists and producers were able to prove that an Asian person who doesn’t know English or even have perfect pronunciation can top charts and win a Grammy. The most important factor is entertainment. Are you entertained? If so, that’s all you care about as a fan.
Watching BTS take the world by storm, Japanese artists began to expand their ambitions, and the industry has had to respond. Music professionals used to be focused on monetizing this island and that alone, but now younger artists are looking outside and considering their options. The entire ecosystem of labels and publishers has come into question, as young artists are asking why they should sign to a label. Talented musicians who sign to a major are a huge deal now. Artists know they have to pull through all their fanbase themselves.
As young Japanese creators think globally, the market is starting to open up more and more to new global talent. Yet creating the relationships to make this openness work has proven a slow evolution, not a quick pivot. The first and foremost reason that there’s a disconnect is the language barrier, as not everyone in the Japanese industry feels comfortable conducting business in English. They can’t communicate the way they’d like.
This further enhances local skepticism about working with foreign producers. Instead of a set deal, things change as the project evolves, terms change, as, say, three more writers start asking for advances out of the blue, all problems that I’ve heard about from A&Rs I’ve talked to. Relationships with people in Japan make project management easy. Because of the way publishing works in Japan, local producers cost less and everyone knows the terms of a standard contract. No negotiation is required. It’s safe and administratively simple, by comparison.
Yet if a Japanese A&R exec turns to a producer who isn’t big in Japan, they can feel shocked by higher prices and more complex terms, with international publishers and other parties involved. They have to put out their neck personally and that’s a major risk. As things change at home, however, and Japanese creators rethink their strategies, this risk can feel worth taking, and more and more tools and services are working to enable better communication and collaboration.
This has implications for artists far from our corner of the world. Artists in the United States are fighting for attention for percentages of pennies—this is not new information to anyone. In Japan, however, one play of an artist’s track in a karaoke booth can generate a hundred times as much revenue as a Spotify stream. Write, produce, or perform a hit that gets played regularly in karaoke rooms across Tokyo, especially if it’s a song that works for weddings, birthdays, or graduation, and you could receive a comfortable check for life. Yet even as artists continue to search for new ways to stand out from their peers, opportunities in East Asia often get overlooked as viable options. I see this changing, as both Japanese and non-Japanese players understand one another better, and it’s thrilling.
We’ve entered a space without borders, where business practices as well as sounds cross and blend. We can look at each other, communicate and share information any time, even across languages. The quicker that moves, the quicker the trends flow. We don’t go through decades of rock; it’s a one-month period of rock, until someone comes up with a new crazy sound. This is often happening on platforms with global reach, key gateways to new music and to what kids are making right now. How the next steps unfold–how labels, publishers, and established players react to this new global exchange–are still being determined. But once distant markets are growing closer, and the entire business stands to benefit.
Kenneth Kobori, CEO of SURF Music, is a songwriter and producer in Japan as 2SOUL. He achieved early success with “Story” by AI in 2005, which charted in Oricon’s top 10 for 73 weeks. He’s worked with Earth, Wind & Fire and Little Glee Monster, among others, and is also a former executive and startup member of Breaker, Inc.
LIVERPOOL, U.K. — On Saturday, 26 music acts from Europe, Israel and Australia — many dressed in a dazzling display of outlandish outfits — will take the stage at Liverpool’s M&S Bank Arena to compete in the Grand Final of what can justifiably call itself the biggest music competition in the world: the Eurovision Song Contest.
When it comes to music television shows, Eurovision, taking place this year in Liverpool on behalf of war-torn Ukraine, dwarfs them all. More than 161 million people across 34 countries watched last year’s show, held in Turin, Italy and won by Ukrainian rap-folk band Kalush Orchestra, an increase of 7 million viewers (4.5%) from 2021, according to organizers the European Broadcasting Union (EBU).
In audience terms, that puts Eurovision ahead of the Super Bowl, the biggest annual U.S. television event, which drew 113 million TV and online viewers for February’s contest. Comparing to awards shows, 12.5 million viewers tuned into this year’s Grammy Awards, a rise of 31% year-on-year, while 2022’s MTV Video Music Awards averaged 3.9 million viewers, up 3% on the prior edition. This year’s Brit Awards, the U.K.’s biggest music awards show, also drew a television audience of just under 4 million.
While many viewers in the United States and United Kingdom have long regarded Eurovision as little more than a kitsch joke with novelty costumes, the song contest’s enormous audience gives it an unrivaled reach as a marketing platform, making the competition – famous for introducing ABBA to the world — an increasingly attractive launching pad for record labels to develop artists.
Netflix 2020 musical comedy film “Eurovision Song Contest: The Story of Fire Saga,” starring Will Ferrell and Rachel McAdams, further elevated the event’s international profile, introducing its idiosyncrasies to a wider global audience.
But it was the success of Italian rock band Måneskin, whose international career exploded after winning 2021’s contest with “Zitti e buoni” (Shut up and behave) that “changed the game completely” in how executives and labels approach the competition, says Andrea Rosi, CEO of Sony Music Italy, which counts Måneskin on its roster.
Earlier this week, the Italian act played a sold-out show at London’s 20,000-capacity The O2 arena, while the band’s most recent album, Rush!, topped the charts in multiple countries and debuted at No. 18 on the Billboard 200 in January – Måneskin’s highest ever U.S. chart placing.
In the past, Eurovision “was not so important for the Italian market,” and there were some years when it was not televised in Italy at all, says Rosi. “Now the picture is completely different. National television is giving much more space to the [competition] and it brings massive exposure to the artists [taking part] across the world.”
Italy’s entry in Eurovision’s 67th edition, which wraps up Saturday, is Marco Mengoni, already an established star in his home country, who came seventh in the competition 10 years ago and is signed to Sony Music Italy. Rosi is confident that Mengoni’s song, “Due Vite” (Two Lives), a soaring orchestral ballad sung in Italian, will help open up new markets for the artist.
Ahead of the competition, which kicked off Tuesday with the first of two semi-finals, Sony Music Italy worked with its international label partners to devise an extensive marketing campaign to build Mengoni’s profile in Europe. Last month, he played club dates in France, Germany, Belgium and Switzerland. A larger follow-up European tour, promoted by Live Nation, is scheduled for the fall. This summer, Mengoni will play a series of sold-out stadium shows in Italy, wrapping July 15 at Rome’s Circus Maximus.
Since being selected in February to represent his home nation at Eurovision, Mengoni’s “Due Vite” has topped the charts in Italy and, says Rosi, is now “starting to have traction” in other European countries, including Germany and Switzerland. “It’s been a long time [since] an Italian pop artist has been successful outside Italy,” he says. “We have big hopes for Marco.”
As one of the so-called ‘big five’ countries taking part in Eurovision, Italy’s entry automatically qualifies for a place in Saturday’s grand final because of their broadcaster’s financial contributions to the event. The rest of the big five is made up of the United Kingdom, France, Germany and Spain, while Ukraine also receives a free pass as last year’s winner. In total, 37 countries are taking part in Liverpool across two semi-finals and the main show.
Among this year’s favorites to win is Sweden’s Loreen, who won the competition in 2012. Her 2023 Eurovision entry “Tattoo” has earned around 20 million combined views on YouTube. (The singer’s official Eurovision video has 3.8 million views).
Another hotly tipped act is Finnish rapper Käärijä, whose catchy entry “Cha Cha Cha” has generated around 15 million combined views on YouTube, by Billboard’s calculations. Since being first released in January, the song has been streamed more than 18 million times and has become “the biggest phenomenon ever in Eurovision history in Finland,” says a spokesperson for Warner Music Finland.
The publicity has given a massive boost to Käärijä’s profile. At the start of the year, the artist had around 1,500 followers on TikTok. Following the first semi-final on Tuesday, that number had grown to just under 100,000. Monthly listens on Spotify have jumped from just under 50,000 in January to 1.2 million.
Käärijä is one of four Warner Music entries in this year’s contest – the others being Austria’s Teya & Salena’s “Who The Hell Is Edgar?”, Reiley’s “Breaking My Heart representing Denmark and Polish singer and model Blanka, whose song “Solo” marks her debut for the label. Since its release in November, “Solo’s official video has had 23 million views, while Spotify streams have crossed 10 million — largely fueled by the publicity from Eurovision.
Hubert Augustyniak, head of non-urban A&R at Warner Music Poland, is confident that competing in the competition can help break Blanka outside her home market, where, he says, Eurovision has already made her a “really well-known” star.
“It is not easy to do international marketing when you are a Polish label,” says Augustyniak, “so this is a huge opportunity for us.”