Music Biz 2024
NASHVILLE — In a keynote interview on the last day of the Music Business Association annual conference, SESAC CEO John Josephson easily sidestepped an early question on what he thought about the seemingly hip-hop-like feud that had recently evolved between ASCAP and BMI, over the latter’s decision to switch to a for-profit model and its subsequent acquisition by a private equity firm. But he wasn’t shy in touting the advantages his company offers songwriters and publishers over the competing U.S. performance rights organizations.
When BMI announced it was switching to a for-profit model and was acquired by New Mountain Capital, ASCAP took to social media reaffirming its commitment to pay out out all revenue it collects — minus overhead — and unlike BMI, not taking any profit.
“I have nothing to add to that conversation,” Josephson said in response to the feud characterization put forth by interviewer, Billboard editor at large Robert Levine.
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Josephson nevertheless acknowledged that it will be interesting to watch BMI’s evolution of its business model, saying it may cause indigestion but he doesn’t think it will have a big impact. Beyond that, he said it will also be notable to see “what will happen to the beef between some of the large publishers and BMI.”
When Levine observed that some rights holders say it is tricky to leave some U.S. PROs, Josephson responded, “The great thing about the U.S. market is people can choose” a PRO.
But when Levine pointed out that it isn’t always easy to leave some PROs, Josephson agreed, pointing that there has been friction in moving from one PRO to another that has even resulted in arbitration. However, at SESAC, “we don’t view our writers and publishers as captives,” he said. “If they want to leave, they are free to go. We win by delivering better service and more money. If you do that, then you don’t have to make it difficult to leave.”
In focusing on SESAC’s future, Josephson said that the company has an infrastructure that serves as an intermediary between rights holders and businesses that want to exploit music and it has been looking for ways to leverage that capability. “We think we can double or triple our market share,” Josephson said.
It has already grown considerably through the acquisitions of 11 different companies, including the Harry Fox Agency, Audiam and Audio Network, within the last decade, he said. It also has a joint venture in Mint Digital Services with the Swiss collective management organization SUISA. All in all, its multi-pronged approach has made SESAC a global company, he added.
Furthermore, he added SESAC currently has a “backlog of 7 or 8 companies” it is talking to now about acquiring. If deals are made, Josephson said SESAC can help such companies “grow at a faster rate than they already have been organically growing,” all of which will deliver “compound growth.
Beyond its PRO, SESAC divides its company into three segments, church music resourses, audio-visual licensing and music services for publishers and labels. Of the latter segment, which includes the aforementioned HFA, MINT, and Audiam, he said. “We are not interested in the long tail. We are interested in small publishers and small labels. Over time we want to broaden services that we offer to those customer groups.”
In turning to church music resources, he said Christian Copyright Licensing International (CCLI) has been “a great business for us.” In fact, he said, it was the “first extension of our business to be global,” with more than 50% of the church licensing occurring outside the U.S. He conceded that licensing to that segment is not without challenges, noting that churches tend to operate on a non-profit business and may expect to pay lower rates, “even though they are multi-million dollar commercial enterprises.”
As for SESAC’s audio-visual segment, he said it is a much bigger” business for the company that it is for ASCAP or BMI.
For the last seven years, SESAC has been majority owned by the giant private equity firm Blackstone, which he says has been a great relationship and a phenomenal capital source.
“They give us a lot of latitude to pursue our vision of where we want to take our business,” Josephson said. “It’s’ not like they tell us what we can do and can’t do. They think about what’s best for the longterm business.”
When interviewer Levine observed that most private equity often invest with the goal of cashing out within five years, Josephson said that the Blackstone fund that invested in SESAC has an investment goal of holding a company for “10-15 years, which is why we were interested in selling to them. They don’t think about what we can do to goose earnings this year,” and instead focus on the long-term.
When Levine expanded to the overall impact that private equity has had on the music business in recent years, Josephson observed that in the past private equity had sometimes disappeared from the music industry equation. But going forward, “as long as interest rates don’t go up further dramatically…private equity’s involvement in the music industry may wax and wane but I don’t think it will disappear.”
NASHVILLE — Ahead of the 2024 Music Biz conference, Music Business Association president Portia Sabin predicted that artificial intelligence would be the most hotly-discussed topic.
“AI is the big one that everyone’s talking about,” she told Billboard.
That premonition proved true during the current conference (held in Nashville May 13-16), as dozens of speakers across the spectrum of music, tech, legal and more discussed AI’s uncertain future in the space, and its current impact on the industry.
One such panel was “How AI and Tech Are Shaping the Business of Music” on Monday (May 13). Moderated by Elizabeth Brooks, managing partner at Better Angels Venture, the panelists—head of artist marketing and digital strategy at Friends At Work, Jeremy Gruber; senior vp of product and technology at MAX, Jeff Rosenfeld; MADKAT founder Maddy Sundquist; and singer-songwriter Stephen Day — discussed the emergence of AI in music, some of the concerns surrounding its potential impact on artist creativity, and how artists can maintain an authentic connection to their fans.
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As the sole artist on the panel, Day kicked off the AI portion of the discussion and countered that, despite the recent uptick in the use of generative AI in popular music — most recently with Drake on “Taylor Made Freestyle,” the diss track in which he uses AI to recreate Snoop Dogg and the late Tupac Shakur’s voices, which has since been taken down after the Shakur estate threatened to take legal action — he’s not concerned about generative AI’s emergence. “Overall, I’m not really scared about it because technology has always advanced,” he said. “The human with the heart and the soul is what makes it important.”
Rosenfeld agreed, adding that “technology continually upends the business of music,” pointing to social media as an example of something that changed digital marketing strategies for artists and labels. One group that could be at risk though, he said, are artists that people don’t have a direct connection with, like film/TV composers. “It’s the personal connection [that fans are after]. It is the person and their story behind the music that people relate to,” he said. “And that’s why it’s important to have a relationship with your fans.”
Rosenfeld isn’t the first exec to note that risk for artists who make instrumental music. In a 2023 Billboard story, Oleg Stavitsky, co-founder/CEO of AI-driven functional sound company Endel, pointed to “functional music” (that is, a type of audio “not designed for conscious listening”) as an area of focus for their firm. While the company isn’t in the business of making hits, it’s focused on making music that promotes sleep or relaxation (lo-fi music, ambient electronics, etc.) with help from AI tools. Another company, LifeScore, which uses AI to “create unique, real-time soundtracks for every journey,” recruited James Blake to create an AI ambient soundtrack titled Wind Down.
While that’s a threat to that corner of the market, the panelists were largely optimistic, albeit cautiously, about AI’s future impact.
“AI is not our overlord today,” Brooks said. Added Rosenfeld, “It’s enabled small businesses to expand… It’s destabilizing, but at the same time empowering.”
At a separate panel on Wednesday (May 15) titled “How AI Is Changing the Way We Market, Promote & Sell Music,” the speakers also had a positive outlook on AI in the industry. Moderated by co-founder and CEO of 24/7 Artists, Yudu Gray, Jr., the panel featured chief product officer of SymphonyOS, Chuka Chase; head of communications & creator insights at BandLab Technologies, Dani Deahl; and Visionary Rising founder LaTecia Johnson.
Chase said that his company has used AI to streamline the process of finding and growing an audience for artists. One way has been to use AI to build a setlist for an emerging artist’s first tour. Chase explained that his team was able to harness AI by sending out emails and putting out polls in order to gain insight into what that artist should perform in each city. “We went into the CRM and blasted emails to put out polls, a microsite asking what songs [that artist] should perform. After a couple hours we got around 20,000 responses,” he said, adding that he could then plug that data into GPT and make a setlist based on the most-requested songs.
For Deahl, who’s also a DJ and music producer, AI has helped with delegating various administrative tasks. “One of the biggest hurdles that artists now have to overcome is they don’t have to just worry about the creative components… They have to worry about all these different facets of their business.” She argues that any tool that gives her the ability to “cut out the BS” and give her the time to focus on the creative process is the best way to help her amplify her work. “Not every artist is built to be an entrepreneur,” she said.
Several companies are beginning to launch similar “AI assistants” for these kinds of admin roles. Last month, for example, Venice Music launched a new tool called Co-Manager “to educate artists on the business and marketing of music, so artists can spend more time focused on their creative vision,” Suzy Ryoo, co-founder and president of the company, said in a statement at the time. The idea is to, as Deahl said, give artists more time to be artists.
To that end, as AI tools become more prominent, the humans on an artist’s team are now more crucial than ever. While AI tools perhaps shrink the size of an artist’s team due to their functionality, Deahl doesn’t envision a world in which human roles are fully replaced. “I don’t worry about replacement when it comes to the people I engage with,” she said. “It would be a really lonely road for me as an artist if the only things that I relied on were AI chatbots or tools that tell me what my strategy should be. I need human feedback.”
NASHVILLE – The Music Business Association conference kicked off successfully in Nashville this week, with the annual gathering bringing together more than 2,100 music industry professionals representing attendance from over 750 companies and more than 30 countries, the trade group’s president, Portia Sabin, announced on Tuesday (May 14) in her annual address on the state of the Music Biz organization.
What’s more, Sabin said proposals for programming at the conference, which is crowd-sourced from industry executives, saw a 30% increase this year, “reflective of everything our industry wants to discuss — from hot topics like AI, gaming, and social impact, to perennial favorites like synch, music and money, and marketing. And don’t worry, we still have the critical but non-sexy topics like metadata and neighboring rights.”
With a full-court press of panels and seminars on many of the industry’s challenges and opportunities, Sabin also reported that about 325 speakers/panelists are set to take part in this year’s conference. She additionally noted the the trade group’s membership has grown by 106 companies and organizations since last year’s gathering, with Deezer, Audiomack, Pirames International, SonoSuite, the NMPA (National Music Publisher’s Association) Louisiana Entertainment (a division of Louisiana Economic Development) and Toronto Metropolitan University joining the fold.
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Beyond the convention, Sabin reported that the organization continues to stage its Music Biz Roadshow event series in places like Dallas, Miami and Huntsville, Ala., with programs for local indie musicians that have included topics like “Tech Solutions in Music,” “The State of Independent Distribution” and “Where’s My Money and How Do I Get It?” Those events have featured companies like the Mechanical Licensing Collective, CD Baby, Bandcamp, TropiSounds, Songtrust, Symphonic Distribution, Syntax Creative, Switchchord and Music Audience Exchange. “If your company wants to be a part of a Roadshow this year, please let my team know – they are some of the most fun and inspirational events we do and we’d love to have you join us,” Sabin said.
Besides going on the road, the trade group has also created a new virtual series, Music Biz Passport, which explores a different international market each time. “These events are meant to connect music business executives from the U.S. with international trendsetters so they may both learn what does and doesn’t work in these communities, and build new partnerships that will ultimately make our industry stronger,” Sabin elaborated, adding that upcoming events will focus on local music industries in Finland, Latin America, Southeast Asia, the Middle East and North Africa.
On the good works front, Sabin reported that Music Biz has partnered with the Music Health Alliance to set up the MHA Mental Health Fund. Since its launch, backed by a $50,000 contribution from the SCARS Foundation — an organization created by Sully Erna and the band Godsmack to support mental health initiatives — the fund has grown to $355,000 and served more than 500 music industry professionals through 5,246 outpatient counseling and psychiatry visits.
Meanwhile, the organization’s scholarship foundation has raised $60,000 and given out 12 scholarships to deserving music business students to the tune of $5,000 each, Sabin reported, thanking the scholarship committee for their hard work as well as “Lisa Robinson and Aaron Tochini for going above and beyond.”
Finally, Sabin celebrated another big accomplishment the trade group achieved during the year: persuading Luminate to abandon its implemented plan to unweight physical sales data, thus changing the chart methodology. Following the initial change to unweight sales data, Sabin, the retail coalitions and other stakeholders pulled together to partner with Streetpulse to collect that data from indie stores. After indie music retailers began boycotting reporting to Luminate, Music Biz worked with the coalitions to negotiate a deal that brought indie store data back into the Luminate system. As a result of that effort, the number of stores reporting to Luminate has more than doubled to 315 stores, up from the 140 retailers that previously reported to Luminate before the imbroglio.
“I want to thank everyone who was invested and made their voices heard on this issue, from retail stores to labels to distributors to individual artists – and of course to Rob Jonas and Luminate for coming to the table and being good partners,” Sabin said. “Those who’ve been around since the NARM days know that physical retailers are the original heart of Music Biz, and this year’s Record Store Day was another off-the-charts success… proving yet again that physical is a vital part of our industry.”
Sabin closed by noting that the conference is moving to Atlanta next year and will take place May 12 to May 15 at the city’s Renaissance Waverly Hotel. “It’s a great property that’s close to The Battery and Braves Stadium; and we’re especially excited that we were able to buy out the entire hotel, meaning everyone there will be a Music Biz attendee,” she said. “Sounds like sleepaway camp, right?”
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