Publishing
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Sheltered Music Publishing has acquired “significant” interest in Dennis Linde‘s musical catalog, including hit songs like “Burning Love,” (Elvis Presley) “Goodbye Earl” (The Chicks) and “Callin’ Baton Rouge” (Garth Brooks). “It is not often that a catalog as distinguished and diverse as Dennis Linde’s becomes available,” said Sheltered Music svp, Darrell Franklin. “As a music publisher, this is the quality of work we all aspire to represent. I’m honored to be able to do that with this music and to help further raise awareness and appreciation of one of Nashville’s greatest songwriting talents.”
Downtown Music Services has signed Masego to a global publishing administration deal. The new agreement includes Masego’s Grammy-nominated back catalog as well as his future works, including his upcoming album, set for release in February 2023. Masego says of the new signing, “Sarah McCann [svp, international creative at Downtown Music Services] is the reason why I chose to work with the publishing company. Through her, I saw that Downtown and me shared a similar vision of creating global, unique, and impactful art.”
Warner Chappell has signed the catalog of Scissor Sisters. A popular early aughts pop group, Scissor Sisters’ works includes hits like “Laura” “Comfortably Numb” “Take Your Mama” and “I Don’t Feel Like Dancin’.” The band, whose membership include Jake Shears and Ana Matronic (vocals), Scott ‘Babydaddy’ Hoffman (multi-instrumentalist) and Del Marquis (guitar/bass), has also appointed Fascination Management as their legacy managers.
Concord Music Publishing has signed Jennifer Wayne to a worldwide deal that includes her future works. Best known as part of the all-female country trio Runaway June, Wayne also has writing credits on songs for Keith Urban, Marie Osmond, Eric Paslay, RaeLynn, Brittney Spencer and The Shires. “I’m over the moon about signing with Concord. It’s a family and they are so passionate, creative, supportive, and work as a team to win for their writers,” says Wayne.
Bucks Music Group has signed Tom Webber to an exclusive worldwide publishing deal. The rising talent was awarded Best Demo at Glastonbury 2022, and has supported acts like Nick Lowe, Deacon Blue and Richard Hawley. Webber says of the deal, “I’m very happy to have signed with Bucks Music Group. Simon, Sarah, James and the team really helped me make the decision to join them an easy one.
Singer/songwriter Taylor Grey has signed a new worldwide publishing administration deal with Regard Music, including global sync and creative services for her existing and future catalog. She joins Regard Music’s boutique roster, which includes Robin Thicke, Lyle Lovett, Tom Kelly, meditation company Headspace, and more.
Sony Music Publishing Nashville has signed Songland season 2 champion Madeline Merlo to a publishing administration deal. The Canadian singer and songwriter caught the industry’s attention with “Champagne Night,” a country radio hit performed by Lady A, and soon after her work earned her a nomination for Canadian Country Music Association’s Songwriter of the Year Award. She also has released music of her own, including her new four-track EP Slide. “I am looking forward to working with this world class team that makes you feel like family every time you walk in the door! This is a huge next step for my career and truly is a dream come true,” says the songwriter.
On the heels of their recent Billboard cover story, in which they detailed their acquisition of much of the Whitney Houston estate and catalog, Primary Wave Music has added to their collection of Whitney-related rights by acquiring an interest in much of the publishing catalog for Houston co-writers Boy Meets Girl. The duo, made up of Shannon Rubicam and George Merrill, played a hand in penning “I Wanna Dance With Somebody (Who Loves Me)” and “How Will I Know,” both of which hit No. 1 on the Billboard Hot 100.
Included in the deal are the writer’s share of royalties from the two Houston cuts, as well as the duo’s successful self-released songs, including “Oh Girl” and “Waiting for A Star to Fall.” Under the agreement, Merrill and Rubicam will have access to Primary Wave’s marketing and branding teams, along with the company’s publishing infrastructure that includes licensing and synch opportunities.
The timing of the acquisition comes just ahead of the Dec. 21 release of the Houston biopic I Wanna Dance with Somebody, a major part of Primary Wave’s campaign to revitalize the Houston catalog. The company purchased a 50% stake in the singer’s publishing, master recording revenue, name, likeness and brand for an estimated $14 million in May 2019 and has been working on efforts to introduce or remind the public of Houston’s venerable legacy ever since, including with two new photo books, Funko! Pop dolls, Whitney-themed Peloton classes, a perfume line, a MAC makeup collection and more.
Rubicam and Merrill have worked as musical partners since the mid-1980s when both were hired to perform at a wedding. They subsequently formed Boy Meets Girl and released their first album in 1985, featuring the song “Oh Girl.” Soon after, the duo kickstarted their songwriting career by penning two of Houston’s biggest hits, earning them Grammys for song of the year in the process. The duo continued to release their own music as well, achieving top 5 success on the Hot 100 with “Waiting for a Star to Fall” in 1988 (a song originally written for Houston). By the 1990s, however, the duo was more focused on writing for others than for themselves, working on songs for OTT and Girlthing, among others. Since then, they have returned to releasing their own work as Boy Meets Girl, including the albums Wonderground (2003) and Five (2021).
“We are so pleased to have placed our songs into the capable and creative hands of the team at Primary Wave. If ever there was a perfect home for our songs at this time, without a doubt this is it. We are excited and honored to be a part of the Primary Wave family and look forward to seeing what else we might cook up together,” says Merrill and Rubicam in a statement.
“When Shannon’s and George’s songs are played – anywhere around the world – people will sing along the minute they begin,” added Justin Shukat, president of publishing at Primary Wave Music. “It’s rare for songwriters to not only see that type of response, but to write #1 hits for both themselves and for other artists. That’s what makes the two of them true songwriting legends. Their catalog of songs fit right at home at Primary Wave, the home of legends.”
Overnight sensations are largely a myth in the music business, and Brookfield Asset Management’s surprise emergence in early October as one of the biggest players in the song-catalog investment and management market was no exception.
Angelo Rufino, the managing partner behind the company’s $2 billion investment in music publisher Primary Wave, says the deal “was a real creative endeavor that took many twists and turns over six months until we both said, ‘We’ve got it. This makes complete sense.’ ”
The 41-year-old East Fishkill, N.Y., native is referring to Primary Wave founder/CEO Larry Mestel, whose business model, he says, convinced Brookfield it was time to make its first foray into the music industry. “We found, after a very long search, the manager who really spoke to how we invest as a company. Larry doesn’t buy an asset, then sit back and say, ‘Well, streaming’s growing at 18% this year. I’m going to get my beta just participating alongside that industry growth.’ He’s got a massive team of branding experts, content experts to proactively drive growth.”
Rufino predicts that strategy will be crucial to future success. “As more money comes in and as things become more competitive,” he says, “we think the ability to grow and compound these assets with a value-added component will be the single differentiator between the winners and losers.”
Rufino and Mestel worked together to craft a three-pronged structure without outside help — unusual in today’s world where investment bankers are often relied-upon go-betweens. They set up a permanent capital vehicle, which they filled partly by buying out some of the investors in Primary Wave’s first and second funds. They rolled $700 million in assets from those funds into the new structure. Brookfield threw another $1 billion on top, and Creative Artists Agency (CAA) joined as a strategic partner and minority shareholder. The result: one of the biggest single funds aimed at catalog acquisitions in the music industry.
Angelo Ruffino’s desk plaque serves as a reminder “that contrarian thinking is required, as things tend to come full circle.”
Krista Schlueter
Rufino, who holds a seat on the company’s newly formed board, sees the music intellectual-property (IP) asset class eventually becoming a $100 billion market and Primary Wave doubling or even tripling in size — while generating returns exceeding 20% — through movies, gaming partnerships and international expansion.
“It just so happens that Brookfield is the largest private investor in Brazil — a country that has an enormous music culture,” Rufino says. “We’ve also made strong footholds in India as a company, and it’s a market we are interested in exploring with Primary Wave.”
That’s not all. Brookfield’s limited partners — clients on the side of Brookfield’s business that manages money for a fee — remain extremely interested in investing in artists’ rights, especially now that some of the frenzied buying of last year has calmed, Rufino says. “We believe music [IP] as an asset class is still in the very early innings.”
Brookfield’s investment in Primary Wave is its first in the music industry. What should people unfamiliar with your firm know about Brookfield and how it invests?
We are a 100-year-old asset manager that has its roots in a Canadian holding company. We always take a contrarian view to value investing. We want to own things that we view as the backbone of the global economy. We began as a company that owned and operated assets, as opposed to just invested in them from a financial perspective. We started in real estate [and] very quickly branched out into infrastructure, renewables, corporate private equity. We’ve ticked every box of the global ecosystem of asset classes while [building on] our heritage as owner-operator with the best of both worlds — permanent capital and third party-managed money.
Where does Primary Wave fit in Brookfield’s $750 billion portfolio of assets?
Our CEO, Bruce Flatt, wants us to own the backbone of the economy. With Primary Wave, we own the backbone of the music industry with a super-long tail and very stable cash flows. When you own Bob Marley, Whitney Houston, James Brown, these are brands. He’s the best I’ve ever seen at leveraging brand extensions to supercharge the growth of these assets. When we saw the catalogs, we said, “These are the types of assets we can own forever if we so choose.”
Who brought in CAA?
That was Larry’s relationship. He introduced us to [CAA president] Jim Burston, and it became very obvious very quickly that they would supercharge Larry’s core competency. There is an absolute grab for content at this point. Netflix, Hulu and 30 others need to keep us engaged. We are going to keep seeing these artists weave their way into our lives, and CAA has the relationships to help us do that across many entertainment venues while also providing intros to artists.
The Buddha statuette “was a gift from a friend and colleague to bring our team good luck and fortune,” says Rufino.
Krista Schlueter
The market for investing in song catalogs and other intellectual property has grown crowded over the last two years. What’s your outlook for this asset class?
I’d actually argue it’s not that crowded. Somewhere around $7 billion has been raised to go after this asset class, and we think the total addressable market is well in excess of $100 billion. We think there’s going to be a massive opportunity over the next three to four years to acquire these rights. The other thing is that the opportunity set will become much more nuanced. These are really emotional, sensitive transactions for artists, and Larry has emerged as somebody whom artists trust, and that’s important when you are selling something as incredibly important as your life’s work. We wanted to buttress that by saying, “What would be better than partnering with the best steward for my assets and a financial partner that understands this asset class and has an ability to hold the asset forever?”
Why do this deal now?
I was resigned to thinking we wouldn’t get something done in the space until we met Larry earlier this year. What we knew was that 2021 didn’t feel like a good time to do this type of transaction. 2021 was a year of madness in the markets — sky-high valuations across anything you could look at. Brookfield is patient and has the capital base and buy-in from our CEO and investors to wait until opportunities are ripe and fit our organization. So we continued studying the space, gaining conviction in the asset class and understanding that the macro environment would eventually present the opportunity to acquire these assets at a good value.
Do you expect to deploy additional capital beyond what was already committed?
If the business model plays out the way we expect, yes, this entity will just keep receiving capital from us.
As you look to scale Primary Wave, what other companies might make sense to buy?
There are many things we can look at. There are going to be things that touch future mediums of how music is disseminated. Maybe it’s channels of distribution that might make sense for us. Maybe it’s song-catalog managers — people who are doing what we’re doing but need assistance with the value-added component. It could be international opportunities where we are looking at companies that could help us fully brand some of these artists in areas outside of their home country.
What kind of return does Brookfield expect to earn?
We have a 20-year history of compounding at 20%-plus in our public top company. We think returns for this asset class can be at that level and for a very long duration.
Where do you see opportunities for growth?
There are so many ways to monetize music. Think about movies, video games. Music is going to be like the Marvel and DC comic catalogs. We started with Batman and Superman. Then Justice League and Wonder Woman and Black Panther. You think about Rocket Man, Bohemian Rhapsody, Elvis. Now Larry is bringing Whitney Houston to Hollywood. I look at our portfolio of musicians and say we’re going to have movies made on each of them. Prince, Whitney, Bob Marley.
The ability to scale streaming penetration globally is enormous, and the number of vectors that are going to occur with YouTube, TikTok, Peloton are not going to only drive music penetration and pricing, but growth in areas that we haven’t begun to realize.
Angelo Ruffino’s “Fugazi” bell is “a fun way to call out analysis, accounting or anything that doesn’t make sense as we review investment opportunities.”
Krista Schlueter
If there was one biopic you want Primary Wave to make, what would it be?
Prince. I’m a big Prince fan.
What other music do you like?
Classic rock. I love all things ’60s, ’70s and ’80s. I’m a massive Talking Heads fan. I’ve always been into music and sang a cappella at Skidmore College and for many years in New York, including in a group called The Invisible Men. We disbanded when we all started having kids. My two sons, who are 3 and 4, love Tom Petty. We don’t own that catalog. Larry’s going to have to buy it.
BMG has acquired the songbook of beloved, Grammy-winning singer-songwriter Harry Nilsson for an undisclosed amount, the company announced Monday (Nov. 14).
The deal includes Nilsson’s publishing catalog and writer revenue streams of songs including “One,” “Coconut,” “Jump Into the Fire,” “Gotta Get Up” and “Me and My Arrow” as well as songs co-written with John Lennon (“Mucho Mungo/Mt. Elga” and “Old Dirt Road”), Danny Kortchmar (“(Thursday) Here’s Why I Did Not Go to Work Today” and “Moonshine Bandit”), Dr. John (“Daylight Has Caught Me”) and Ringo Starr (“How Long Can Disco On”). The deal additionally includes artist revenue streams of Nilsson’s recordings, also including including hits he didn’t write like “Everybody’s Talkin’” and “Without You.”
Over his career, Nilsson released 18 studio albums, including his 1966 debut Spotlight on Nilsson, Harry, Nilsson Sings Newman, Nilsson Schilsson, A Little Touch of Schmilsson in the Night, the Lennon-produced Pussy Cats, Knnillssonn and Flash Harry. The list also includes soundtracks for Skidoo, Son of Dracula and Popeye, as well as the posthumous album Losst and Found. Nilsson died of a heart attack in 1994 at age 52 while recording the latter album, which was finished and released 25 years later in 2019.
As part of the acquisition, BMG will collaborate with Nilsson’s family to explore opportunities around his other creative assets. These include Nilsson’s story for The Point! — the 1971 ABC TV special for which he also wrote the soundtrack — as well as his name, image and likeness, including for film, TV, stage and books.
Nilsson launched his music career in 1960s Los Angeles as a songwriter for groups including The Monkees and Three Dog Night. He broke through with his cover of Fred Neil’s “Everybody’s Talkin’” in 1969, peaking at No. 6 on the Billboard Hot 100 and netting him a Grammy for best contemporary vocal performance, male. He cemented his status as a left-field hitmaker with his seventh album, 1971’s Nilsson Schmilsson. That set was nominated for album of the year at the 1973 Grammys and ultimately went was RIAA-certified gold on the strength of hit singles, including the No. 1 smash “Without You” (a cover of the song by Badfinger), “Jump Into the Fire” and “Coconut.” He followed that with the Gold-selling Son of Schmilsson the following year. That album’s biggest hit, “Spaceman,” peaked at No. 23 on the Hot 100.
Over the decades, Nilsson’s music has found new generations of fans thanks to placements in films and TV shows like Goodfellas (“Jump Into the Fire”), Reservoir Dogs (“Coconut”), Russian Doll (“Gotta Get Up”), Forrest Gump (“Everybody’s Talkin’”) and You’ve Got Mail (“The Puppy Song”).
The Nilsson family’s team was led by John Rudolph of 1.618 Industries, Inc. (formerly Music Analytics) with counsel provided by Jason Karlov and Amanda Taber of Barnes & Thornburg.
“We are delighted to have found a partner that shares our love and reverence for Harry’s legacy,” said the Nilsson family in a statement. “We look forward to a long relationship with BMG, working together to celebrate this true genius of pop music.”
Thomas Scherer, BMG president of repertoire & marketing, Los Angeles and New York, added, “For generations, Harry Nilsson’s timeless music has captivated millions of people all around the world. A brilliant songwriter with an exceptionally beautiful and unique voice, we will ensure his spirit thrives for generations to come. We are honored the Nilsson family chose BMG to entrust as the custodians of his musical legacy and are proud to represent the cherished works of Harry Nilsson.”
Other recent acquisitions by BMG include the publishing and/or recorded music catalogs of John Legend, Mötley Crüe, John Lee Hooker and ZZ Top.
The voters who select the 2023 class of inductees into the Songwriters Hall of Fame have a highly diverse list of nominees from which to choose. The list includes rapper and entertainer Snoop Dogg, rock poet Patti Smith, Broadway writers Lynn Ahrens and Stephen Flaherty, and country pros Vince Gill, Liz Rose and Dean Dillon.
Twelve performing songwriters or songwriting teams and 12 non-performing songwriters or songwriting teams are vying to join the SHOF. Three songwriters or teams in each of these two divisions will be inducted at the SHOF’s 54th Annual Induction & Awards Gala on June 15, 2023, in New York City.
A songwriter with a notable catalog of songs qualifies for induction 20 years after the first significant commercial release of a song.
Gloria Estefan, who received the Gershwin Prize for Popular Song three years ago in tandem with her husband Emilio Estefan, is nominated. So are two songwriters who have already been voted into the Nashville Songwriters Hall of Fame – Dillon and Gill.
Most of the nominees are individuals, but eight songwriting teams are vying for induction – Ahrens and Flaherty; Tommy Boyce and Bobby Hart; Sandy Linzer and Denny Randell; Dan Penn and Spooner Oldham; and the individuals who comprise Blondie, The Doobie Brothers, Heart and REM.
Boyce is the only songwriter vying to be inducted posthumously. He died in 1994 at age 55.
Tom Snow and Dean Pitchford have written several big hits together, including “Let’s Hear It for the Boy” and “After All,” but they are vying here as individuals.
Pitchford won an Oscar for best original song for co-writing “Fame.” Another nominee, Michael McDonald, won a Grammy for song of the year for co-writing “What a Fool Believes.”
Six of the performing songwriter candidates have been inducted into the Rock and Roll Hall of Fame – Smith, Jeff Lynne and the individuals who comprise Blondie, The Doobie Brothers, Heart and REM.
Eligible voting members have until 12 p.m. ET on Dec. 28 to turn in ballots with their choices of three nominees from the non-performing songwriter category and three from the performing songwriter category.
Bios, song lists and photos of the 2023 nominees can be found on songhall.org. Note: The SHOF supplied the titles of the five songs listed after each nominee’s name, but stresses that these “are merely a representative sample of their extensive catalogs.”
Performing Songwriters
Bryan Adams – “(Everything I Do) I Do It for You,” “Heaven,” “All for Love,” “Have You Ever Really Loved a Woman?,” “Summer of ‘69”
Clem Burke / Debbie Harry / Chris Stein (p/k/a Blondie) – “Call Me,” “Heart of Glass,” “Rapture,” “One Way or Another,” “Sunday Girl”
Calvin Broadus Jr. (p/k/a Snoop Dogg) – “Drop It Like It’s Hot,” “Nuthin’ But A “G” Thang,” “Young, Wild & Free,” “Gin & Juice,” “Next Episode”
Tom Johnston / Michael McDonald / Patrick Simmons (p/k/a The Doobie Brothers) – “Listen to the Music,” “Long Train Running,” “What a Fool Believes,” “China Grove,” “Black Water”
Gloria Estefan – “Anything for You,” “Don’t Wanna Lose You,” “Words Get in the Way,” “Rhythm Is Gonna Get You,” “Let’s Get Loud”
Vince Gill – “Go Rest High on That Mountain,” “When I Call Your Name,” “I Still Believe in You,” “Don’t Let Our Love Start Slippin’ Away,” “Whenever You Come Around”
Ann Wilson / Nancy Wilson (p/k/a Heart) – “Barracuda,” “Crazy on You,” “Dog and Butterfly,” “Straight On,” “Even It Up”
Jeff Lynne (ELO – Electric Light Orchestra) – “Mr. Blue Sky,” “Don’t Bring Me Down,” “Evil Woman,” “Livin’ Thing,” “Telephone Line”
Bill Berry / Peter Buck / Mike Mills / Michael Stipe (p/k/a REM) – “Losing My Religion,” “Everybody Hurts,” “It’s the End of the World As We Know It (And I Feel Fine),” “Radio Free Europe,” “The One I Love”
Sade Adu (p/k/a Sade) – “Smooth Operator,” “No Ordinary Love,” “The Sweetest Taboo,” “By Your Side,” “Is It a Crime”
Patti Smith – “Because the Night,” “Redondo Beach,” “Dancing Barefoot,” “Frederick,” “People Have Power”
Steve Winwood – “Higher Love,” “Gimme Some Lovin’,” “I’m A Man,” “Valerie.” “Roll With It”
Non-Performing Songwriters
Lynn Ahrens / Stephen Flaherty – “Journey to the Past” (Anastasia), “Once Upon a December” (Anastasia), “At the Beginning,” “Wheels of a Dream” (Ragtime), “Make Them Hear You” (Ragtime)
Glen Ballard – “Man in the Mirror,” “You Oughta Know, “Hold On,” “The Voice Within,” “The Space Between”
Dean Dillon – “Tennessee Whiskey,” “Ocean Front Property,” “Here for a Good Time,” “The Chair,” “I’m Alive”
Franne Golde – “Nightshift,” “Dreaming of You,” “Don’t Look Any Further,” “Don’t You Want Me,” “Stickwitu”
Bobby Hart / Tommy Boyce – “Last Train To Clarksville,” “(I’m Not Your) Steppin’ Stone,” “Come a Little Bit Closer,” “(Theme From) The Monkees,” “I Wonder What She’s Doing Tonight”
Sandy Linzer / Denny Randell – “Working My Way Back to You,” “Let’s Hang On,” “Lover’s Concerto,” “Native New Yorker,” “Opus 17 (Don’t Worry ‘Bout Me)”
Roger Nichols – “We’ve Only Just Begun,” “Rainy Days and Mondays,” “I Won’t Last a Day Without You,” “Out in the Country,” “Times of Your Life”
Dan Penn / Spooner Oldham – “I’m Your Puppet,” “It Tears Me Up,” “Cry Like a Baby,” “Sweet Inspiration,” “A Woman Left Lonely”
Dean Pitchford – “Footloose,” “Fame,” Holding Out for a Hero,” “All The Man That I Need,” “Let’s Hear it for the Boy”
Teddy Riley – “Make It Last Forever,” “I Want Her,” “Just Got Paid,” “I Like,” “My Prerogative”
Liz Rose – “You Belong With Me,” “Crazy Girl,” “Girl Crush,” “All Too Well,” “White Horse”
Tom Snow – “He’s So Shy,” “Let’s Hear It for the Boy,” “Dreaming of You,” “Don’t Know Much,” “After All”
Halsey has signed a global publishing deal with BMG. The deal includes administration of future songs as well as her recently released single “So Good” and the Calvin Harris-led collaboration “Stay With Me” (also featuring Justin Timberlake and Pharrell).
Previous to this announcement, both Halsey’s recorded music and publishing were handled by Universal Music Group’s Capitol Records and Universal Music Publishing Group (UMPG). Her compositions written prior to the new BMG deal, including the critically acclaimed If I Can’t Have Love, I Want Power (2021), will remain under UMPG’s care.
Halsey says of the deal, “I’m thrilled to announce this partnership with BMG. I was immediately drawn to their artist friendly, songwriter-first mentality and I’m looking forward to taking this journey with my new BMG family.”
One of the industry’s brightest stars today, Halsey, born Ashley Frangipane, became a cult-favorite with their debut album Badlands (2015), an alt-pop compilation that revealed their distinctive sound as both a singer and writer to her followers on Tumblr and to the world. From there, Halsey broke through to the mainstream as the top liner on Chainsmokers’ “Closer,” which reached No. 1 on the Hot 100 and stayed there for twelve weeks. The song eventually broke the record for most weeks in the Hot 100’s top five, with 26 weeks (or six months).
Halsey has remained a top-earning artist ever since, charting on Billboard’s U.S. Money Makers list for 2020, and the singer-songwriter bolstered that monetary success with the critical and artistic acclaim of Manic (2020) and If I Can’t Have Love, I Want Power (2021). Beyond the music, Halsey is also an accomplished author, activist, and entrepreneur. Their book I Would Leave Me If I Could: A Collection of Poetry debuted on the New York Times Best Seller list for 2020, and their makeup brand about-face beauty, an inclusive beauty line for all, is a top seller. Through her music and business pursuits, Halsey is known for drawing attention to important causes, including women’s rights, mental health, and LGBTQ+ rights.
Jason Aron and Anthony Li, Halsey’s co-managers at Anti-Pop, said, “BMG’s creative and refreshing approach to publishing is very exciting. Thomas and his team globally, have welcomed us with open arms. We appreciate their passion and dedication to putting artists first.”
Thomas Scherer, president of repertoire & marketing, Los Angeles and New York, said, “Halsey is an inspiration, a multi-faceted creator with a voice that hits you straight in the heart. We are prepared to present them everything we can offer, with our team’s full support around the world from Australia to Asia, Europe to LATAM, and all throughout North America. We welcome Halsey and their team to BMG and look forward to working alongside with them to elevate them to a whole new level.”
Reservoir Media reported higher quarterly profits and revenues on Tuesday (Nov. 8), as the acquisition of “Sing, Sing, Sing” legend Louis Prima’s catalog and Lebanese label Voice of Beirut helped boost the company’s full-year growth forecast.
From July to September, Reservoir’s net income rose 3% to $4.5 million, or $0.07 per share, while top-line revenues rose 10% to $33.3 million from the year-ago quarter. Executives said they now expect both revenue and adjusted EBITDA (earnings before interest, tax, depreciation and amortization) to rise by 11% for the full fiscal year of 2023. For revenue, that is a range of between $118 million and $122 million, and for adjusted EBITDA, a closely watched metric of profitability, that will range between $45 million and $47 million.
“While the broader economy is facing challenges, the music industry as a whole remains healthy,” Golnar Khosrowshahi, Reservoir founder and chief executive, said on a call with analysts.
Reservoir is mid-way through the fiscal year 2023, during which it aims to spend $100 million on strategic acquisitions. In addition to acquiring Prima’s publishing and recorded music catalogs and the Voice of Beirut, Reservoir signed publishing deals with Naughty By Nature’s KayGee, writer-producer Nick Lee and country singer-songwriter Brit Taylor.
“We are pleased by the quality and volume of deals that we have executed in the past few months,” Khosrowshahi said, adding they have a pipeline of around $2.1 billion of prospective deals “at various stages of development.”
Music publishing revenue rose 9% to $24.1 million for the quarter, driven by a 15% increase in digital revenues and a 6% increase in synchronization revenues.
Recorded music revenues rose 11% to $8.9 million, helped largely by assets under the Tommy Boy label as well as increased digital and synchronization revenues.
Within recorded music, digital revenues rose by 35% to $6.3 million, while synch revenues surged 224% to top $1 million. Physical revenues fell 66% to $900,000 as vinyl and CD sales fell on a lighter release schedule this quarter, executives said.
Operating income fell 15% to $6.6 million and OIBDA (operating income before depreciation and amortization) fell 5% to $12.0 million on higher expenses from employee compensation and running a public business.
“We are confident in our long-term ability to grow our top line at a faster past than our costs moving forward,” Jim Heindlmeyer, Reservoir’s CFO, said on the call.
Universal Music Publishing China (UMP China) has signed a global publishing agreement with RYCE Publishing, a music and entertainment company with an over 700-song catalog. RYCE will use UMP China as its publishing administrator for some of China’s biggest C-pop songs from chart-topping artists like Jackson Wang.
Through the deal, UMP China will provide global infrastructure and opportunities for RYCE’s roster as well as handle the Greater China rights for hundreds of major K-Pop hits that are under RYCE’s control including from Korean acts GOT7 and TWICE.
“We saw the rise of J-pop three decades ago and its massive influence on audiences across Asia. Now K-pop is a global phenomenon as we all know, and there has been a very key bridging force between these genres in the last two decades,” says Joe Fang, managing director of UMP China. “With China rising to become the sixth biggest music market of the world, I believe the time of C-pop is here. RYCE Publishing, with its hybrid talents and border-crossing catalogs, is a central piece of that next bridging force and I’m thrilled that UMPG will play an instrumental role in supporting these future chapters of music history.”
Joe Fang
Courtesy Photo
UMP China will now administer top tier C-Pop songs in the RYCE catalog, including “Manual to Youth” and “Adore” performed by TFBOYS; “100 Ways,” “I Love You 3000,” co-written and performed by Jackson Wang （王嘉尔）; “Jiao Huan” performed by Zhou Shen（周深), “EASIER,” performed by Amber Liu （刘逸云） featuring Jackson Wang and “Xiao Juan,” performed by Sitar Tan（谭维维）.
On the K-Pop side, UMP China will now help RYCE Publishing with the promotion of Korean hits for acts like Super Junior, EXO-CBX, GOT7, TWICE, and more in the Greater China region.
RYCE Publishing, is a division of RYCE Entertainment, an entertainment giant based in Beijing. With music publishing, agency, marketing, investing, and brand operating divisions, it specializes in managing music catalog and media resources.
UMP China’s partnership with the local company highlights Universal’s continued efforts to push deeper into China’s music business. Last year, UMP China expanded from its original Beijing headquarters to add a second office and studio space in Shanghai and has also focused on creating songwriting camps to foster the careers of local signees, including one all-female camp with She Is The Music.
China’s music market has grown in size by more than 30% in each of the past two years, according to IFPI, which said total revenues for 2020 were $791.9 million (the total for 2021 was not available). Meanwhile, royalties paid to songwriters and composers rebounded with 8.48 billion euros ($8.49 million) in 2021, a rise of 7.2% from 2020 — but still down 52% from the pre-pandemic levels of 2019, according to CISAC, the global rights management organization.
All three major labels continue to explore opportunities in China, even with the uncertainties surrounding government regulation of music and tech companies like Tencent Music Entertainment (which publishes Billboard China), which have been forced to end exclusive arrangements with the majors for their repertoire in the past two years. Those exclusive deals followed years in which China’s music industry was known for rampant piracy that made it tough to make money in the country.
“We hope that everyone respects music copyright,” says Yunyun Wang, managing director of RYCE Publishing. “If we could all do that, every artist in China music market will be motivated to work harder to make decent products, creating a healthy environment for us all.”
Daryl K, founder and CEO of RYCE Entertainment, says in a statement: “We protect and promote our writers with a vengeance and we’re excited to continue doing so with UMP China. We’re looking forward to the fruits of our partnership.”
Andrew Jenkins, president of Asia Pacific, UMPG, says that RYCE Publishing’s “remarkable creative drive has led to a huge number of hits and great commercial success for RYCE Publishing so far. I look forward to an even more successful future as both companies work together to further build on the global impact of RYCE Publishing in the coming years through this new agreement.”
Betting big runs in Evan Bogart’s family. His father, the late Casablanca Records founder Neil Bogart, was known in the 1970s for being as extravagant as the acts he worked with, including Donna Summer, The Isley Brothers, Bill Withers and Curtis Mayfield — to name a few. And his penchant for gambling both in the casino and with his label made him one of the disco era’s most successful and outsize businessmen.
The relation between father and son is obvious: Evan has his dad’s face, entrepreneurialism and golden ear. And most recently, the 44-year-old has made a gamble of his own: launching an independent music empire of catalogs and front-line publishing and label acts, Seeker Music.
Certainly, in the last few years, there has been a flurry of high-priced song-catalog acquisitions by music companies and financial institutions. Though Seeker never formally announced its dealings, it has been quietly keeping pace since its founding in 2020, winning big-ticket bids for certain rights in the master and publishing catalogs of Run the Jewels, Ginuwine and Christopher Cross, among others.
As Bogart walks through the beginnings of Seeker’s forthcoming creative campus, consisting of only exposed beams and freshly laid drywall, his excitement is palpable. “I think there’s a wide-open void right now,” he says. “I watched Big Deal, SONGS and Downtown come off the market, and I think there needs to be another great independent. We can do that.”
Bogart’s career in music began when he was in the eighth grade, promoting shows for childhood friends like Adam Levine at the Troubadour in West Hollywood. It was the start of an impressive run in the business, including a stint in the A&R department at Interscope Records when Jimmy Iovine was at the helm, a job at talent agency APA routing West Coast club tours and, in his free time, trying his hand at pop songwriting for a girl group he was putting together. Though the group never panned out, the second song he ever wrote — initially intended for the act — did. It became the Billboard Hot 100 No. 1 “S.O.S.,” a surprise hit for then-newcomer Rihanna in 2006. As Levine puts it, “It’s like he woke up one day and decided to write a smash for Rihanna. People don’t just do that.”
The success of “S.O.S.” was pivotal for Bogart’s creative career — but perhaps more importantly separated his identity from that of his father. “It was the moment when I realized I’m telling my own story now,” he says. Today, his experiences as a songwriter inform his current perspective as CEO. “My rule of thumb is only buy or sign projects I wish I wrote,” he says. “If that’s true, I’m going to treat them like they’re my own songs.”
He applies that same level of care to his management joint venture with Live Nation’s Vector and Boardwalk Music Group (a name he took over from his dad), which has signed acts like songwriter Ricky Reed’s artist project to JV deals with majors. Now a longtime friend of Bogart’s, Reed — who has most notably developed and written with Lizzo — says Bogart was “one of the first executives to believe in me and maybe more importantly, to challenge me.”
Bogart adds that being a recovered addict, after getting clean in his early 20s, has also greatly informed his outlook on the business: He now sponsors artists and others in the industry who are struggling. When Bogart first started attending Alcoholics Anonymous, he recalls being given “commitments” for meetings, like sweeping cigarette butts outside the building or setting up folding chairs. He says this kind of selfless, often unglamorous work was instilled in him at a young age. “ ‘Be of service to others’ was like a motto for AA,” he says. He guides Seeker with the same intent: “How can I be of service to a songwriter I sign or a catalog I acquire?”
Bogart holds the creative control of the catalogs and front-line talent he signs, while Downtown handles administration and M&G, a London-based private equity firm, foots the bill. He became acquainted with M&G in 2019 when former BBC executive and a consultant for the firm, John Smith, asked him to grab coffee. Smith, along with Rich Christina (svp, A&R and venture partners, Warner Chappell Music) and Ruby Marchand (chief awards and industry officer, Recording Academy), were all tapped as consultants for M&G to see if there was an opening for the firm to get into the already crowded music business. After Smith, who is now Seeker Music’s chairman, and Bogart got to know each other, the former wrote a report to M&G executives, explaining that there was in fact space for the financial firm to enter the music business — but only if they were to hire a person with the care and creativity of Bogart.
The Seeker approach more resembles the strategy of a creatively driven music publishing company like Primary Wave than a financial firm looking for a hands-off, long-term investment. “We only buy catalogs we think that, under this ownership, we can do interesting things with,” says Smith. This is part of the reason, Smith adds, that Seeker Music’s strategy is to not bid on the tip-top percentage of catalogs. “I do think there’s a danger that you can pay too much with those,” he says. “Right below that level is where we’re interested.” (The company initially focused on catalogs that sold for less than $5 million but has since moved toward much bigger deals.)
Currently, Seeker’s business is 95% catalog and 5% frontline, a ratio that Bogart says will even out more in the next few years. COVID-19 hampered his original aim for parallel advancement with new talent and catalog deals because he says he “invests with heart before money,” which was hard to do when he was forced to meet with talent over Zoom.
But now, standing in Seeker’s soon-to-be office and studio space, Bogart rattles off some of his dreams for a long future — from hosting summer Friday showcases at the campus to enacting an “open door policy” for any creative in need of a place to work for the day. He knows this is an opportunity to create a musical empire in his own image. His pedigree alone suggests he was predestined for this, and yet it’s the biggest bet Bogart has made so far. He swears that, in good time, it will pay off: “We’re built to play the long game.”
A version of this story will appear in the Nov. 5, 2022, issue of Billboard.
High above Broadway near the southern tip of Manhattan, perched atop what’s known as the Standard Oil Building, sits a particularly privileged slice of Old New York history. The top two floors of the 31-story structure once served as sanctuary for the Rockefeller oil tycoons: The lower has 360-degree panoramic views of New York Harbor, the Statue of Liberty and Governors Island and used to house an executive conference room; the upper, known as the Tower Club, was once home to John D. Rockefeller Jr.’s squash courts, with some ball marks still scoring the walls. In the stairwell connecting the two hangs a sign: “IF WE SEE SMOKE AROUND YOU WE’LL ASSUME YOU’RE ON FIRE AND DRENCH YOU WITH WATER.” It appears to have only recently been taped to the wall.
It’s a clear mid-June morning and the place, rather than a shrine to opulence, looks more like a construction zone amid a teardown. Sun streaming in through the bare windows illuminates stripped gray walls and exposed concrete floors, with architectural renderings and white chalk outlines hinting at what’s to come. The space is being transformed into a state-of-the-art recording studio owned by Downtown Music Holdings, the umbrella group that handles distribution, publishing administration, royalty collection, neighboring rights, and label, publishing and artist services; and houses the digital rights management platform Songtrust and recently acquired companies CD Baby, FUGA, AdRev, Soundrop and DashGo. The studio — where the former squash courts will turn into one of the few loud rooms in the city large enough to accommodate a Broadway cast or symphony orchestra — will eventually become Downtown’s latest flag planted in its New York home.
But this is just a preview. About 50 people — Downtown executives, New York municipal employees and a few members of the media — mill around, slugging coffee and taking in the views as Downtown’s chief engineer, Zach Hancock, gives tours and explains the company’s vision. “As prices have skyrocketed in historic neighborhoods where recording and music making has happened, we have lost the vast majority of venues for making music,” says Manhattan borough president Mark Levine in one of the speeches made to those assembled. “To take a space that could have been vacant for years and to turn it into this hub of creativity, it’s going to become iconic in the music industry.”
Downtown outstripped its New York roots long ago to become a global company, and now has 22 offices around the world. But its home ties run deep: Founder and chairman Justin Kalifowitz grew up delivering food from his father’s luncheonette in downtown Manhattan and co-founded advocacy group New York Is Music in 2014 to promote government support of the business and culture of music in the city and state; longtime general counsel, COO and current CEO Andrew Bergman is a product of the New York public school system and has lived in every borough but the Bronx. So, having a studio in the city — and in such an iconic location — means a lot.
“The music industry has been centered in New York for more than a hundred years, and I think a lot of people took for granted, and take for granted, the fact that it is the largest music industry in the world,” says Kalifowitz. “If you’re running a business here and you don’t invest here and you’re seeing people leave for other places, I think it’s just going to be harder — harder to run your business, harder to enjoy what you’re doing here.”
Justin Kalifowitz photographed on October 19, 2022 at Downtown Music in New York City.
Wesley Mann
It’s ironic, in a sense, that Downtown got to this moment by divesting from the business on which it originally staked its name: owning publishing copyrights, which helped it become one of the most successful indie publishing companies of the past 15 years. But as the city, and the music business, have changed, Downtown has, too. And, over the past two years, the company has undergone its biggest transformation yet, morphing from a traditional publisher with 145,000 owned copyrights — including shares in songs such as Maroon 5’s “Moves Like Jagger,” Beyoncé’s “Halo,” Sam Smith’s “Stay With Me” and Lady Gaga’s “Shallow” (from A Star Is Born) — into a full-suite company that owns no rights and aims to help creators at all career levels navigate the music industry’s choppy waters.
But shifting from the traditional business — where ownership was king and hit songs could paper over any cracks — into a new digital world where scale and support are key isn’t easy, and the company’s current status is the culmination of a yearslong transition that’s not yet complete. In the process, Downtown found itself caught in some of the murky corners of the business that the digital revolution created, while trying to remain true to its service-minded core. The path hasn’t been linear, even if the goal is clear — and the transition is a true gamble on the future.
“I’d like Downtown to be this ubiquitous service provider that anyone could tap into, that’s best in class, that’s transparent and that’s easy to port in and out — that’s what we’re trying to build,” says Bergman. “That’s what everything that we’re doing is geared toward. So that all those services are available to you and that anyone, any company or individual, would want to work with us, because we’re filling a need that they have.”
The story of Downtown begins, in a way, with the story of Gnarls Barkley.
In summer 2005, Josh Deutsch and Terence Lam started indie label Downtown Records and quickly signed and starting working the duo’s single “Crazy.” Released in March 2006, “Crazy” reached No. 2 on the Billboard Hot 100 and was nominated for record of the year at the Grammys, ultimately winning for best urban/alternative performance — and giving Downtown the type of early success indies rarely see.
It also fueled a desire to expand, and in 2007, Kalifowitz joined and founded Downtown Music Publishing. Initially, the company signed a few acts affiliated with the label — Santigold, Cold War Kids, Miike Snow’s Andrew Wyatt — along with the writers behind Miley Cyrus’ Hannah Montana album and the producers of Mims’ No. 1 hit, “This Is Why I’m Hot.” But signing writers wasn’t the company’s main focus.
“The majority of what we were doing at Downtown Music Publishing was building a global, independent music publishing company,” Kalifowitz says. “The premise really was, there needed to be a young, nimble company that thought technology-first, but also had a creative hat in the business, and a more bespoke solution would make sense.”
Over its first few years, Downtown built its publishing business traditionally: writer by writer, catalog by catalog. But several early investments and partnerships also helped it grow its administration business. Downtown was an early investor in indie publisher PULSE Music, which has writers like Starrah, Brent Faiyaz and Kehlani on its roster; it also became the U.S. administrator for Trevor Horn’s Perfect Songs, a U.K.-based publisher with hits by artists like Seal, Frankie Goes to Hollywood and Marsha Ambrosius in its catalog. Rather than rely solely on an owned, or inherited, catalog, Downtown took a partnership and investment approach early on, which gave it both insight into other businesses in its sphere and a diversified income stream.
In 2011, Downtown launched Songtrust, a tech-based global administration platform to help songwriters and producers get paid for the exploitation of their works. The service soon began cutting direct deals with collection societies — today totaling 65 deals across more than 245 countries and territories, with clients in 173 countries — that allowed its clients to receive publishing royalties directly and much quicker than traditional admin deals. “When we started Songtrust it was like, ‘How come those mid-tier artists or earlier aspirational artists can’t have access to the same kinds of service that a more prominent artist would have?’ ” says Bergman, who joined Downtown as general counsel in 2008, rose to COO in 2012 and became CEO in September 2021. “We started to build that technology out as more egalitarian, and today it is essentially the backbone for all of our publishing administration activities.”
Andrew Bergman photographed on October 19, 2022 at Downtown Music in New York City.
Wesley Mann
Songtrust, in its early days, was essentially a Downtown side hustle, co-founded by Kalifowitz and Downtown’s chief strategy officer, Joe Conyers. But it would become important in the company’s evolution as the first true service-first, nonownership-based offering it launched. In 2013, Downtown sold its record label back to founders Deutsch and Lam and, the following year, forged a partnership between Songtrust and CD Baby to provide publishing administration and royalty collection in the same way that the indie distributor collected royalties on master recordings.
That deal was when “we started to deal with creators en masse, thousands of clients as opposed to dozens, and it fundamentally changed how we thought about the service we were offering,” says Kalifowitz, who transitioned from CEO to executive chairman in August 2021. “That was also somewhat of a watershed era for us; we started to really expand to other markets — we opened in the U.K., we opened in Amsterdam, we opened an L.A. office — and we picked up the rights to the John Lennon and Yoko Ono catalogs. It really very much cemented our plans of being a stand-alone business. That partnership taught us a tremendous amount about the growing artist services space.”
It also led the company to expand what it could offer creators, often through acquisitions. In 2015, Downtown introduced Neighboring Rights — public performance rights for sound recordings — through the purchase of London-based Eagle-I Music, and now represents artists like Justin Bieber, Ryan Tedder and Ella Fitzgerald in that area. The company also executed direct licensing deals with YouTube, Apple, Amazon and Pandora, and through Songtrust’s expansion, began aggressive international growth, buying local repertoire in Europe and Japan while inking admin deals for the Wu-Tang Clan, the Miles Davis and George Gershwin estates, Shaggy, Tori Amos and Big Yellow Dog Music, publishing home to Meghan Trainor and Maren Morris. In all, according to Kalifowitz, Downtown worked in some form with over 36 million songs, through distribution, administration, royalty processing or other offerings.
“They made really smart deals; I think Justin Kalifowitz is still regarded as probably the smartest guy in publishing,” says one manager of the company’s success as a publisher. “They were really profitable in that sense. I don’t think they overspent for anything. Just a really smart company.”
By 2019, Downtown began to shuffle the decks. Molly Neuman — the onetime drummer for riot grrrl groups Bratmobile and The Frumpies who went on to various roles in the indie music community — was promoted from head of business development to president of Songtrust. She started turning the “side project” that sat “in the back of our Soho loft space, kind of in the corner, with less than 20 people” into an educational platform for music publishing at a time when the Copyright Royalty Board rate trial and the Music Modernization Act were dominating industry headlines.
“There were all these things about publishing as a required understanding starting to accelerate, while we were marketing Songtrust with education at our core,” Neuman says. “Because it’s fundamentally confusing, people don’t know why they would need it, so we kind of peeled it back as part of our strategy.”
Molly Neuman photographed on October 19, 2022 at Downtown Music in New York City.
Wesley Mann
The same year, Downtown spent around $200 million to purchase AVL Digital Group, the umbrella company that housed CD Baby, AdRev, DashGo and Soundrop, which were collectively responsible for distributing and monetizing over 10 million tracks from nearly 1 million artists. The acquisition dramatically expanded Downtown’s offerings into digital distribution (CD Baby), YouTube monetization (AdRev), social video support (Soundrop) and digital marketing and label services (DashGo) and swelled Downtown’s headcount to north of 300 employees. Less than a year later they brought on FUGA, a business-to-business tech and distribution platform for labels that gave Downtown a twin-engine service offering — one aimed at creators themselves, the other at music business clients — and doubled the size of its staff. Steadily, Downtown had begun to morph from traditional publishing toward a more services-oriented model.
The final piece of the puzzle came in April 2021, when Downtown announced it had sold its 145,000 owned copyrights to Concord in a deal worth $350 million, according to Billboard estimates. (Billboard estimated the owned catalog generated around $30 million per year; Downtown is still in the publishing administration business.) Its remaining businesses, the company said, would pull in $600 million in revenue and collections in 2021 alone. (The company declined to disclose its 2022 revenue projections, but said it is profitable.) Just as money was flooding the catalog acquisition space, Downtown was out. But it had a different vision for its future.
“[The owned catalog] was a small minority of the revenue of the company, it was a very significant cost to run, and it was a business model — the acquisition and ownership of rights — that was incongruous with a fast-growing services business,” Kalifowitz explains. “Our view was, there’s this one aspect of our business that is very crowded, has a tremendous amount of capital and is willing to accept very low returns, and it’s quite distracting to this other thing we’re doing, which is so much bigger and growing so much faster, and that we think, as a business, has a lot more potential, and as a product-market fit, there are so many more people who need what we’re building.”
In a way, Downtown was jumping from one boiling-hot segment of the business — catalog ownership — to another: distribution and services. And it was hardly alone. In the past two years, a slew of record labels — all three major groups, in addition to Republic, 300, Interscope, Capitol, Virgin and others — either started or bolstered their distribution offerings, while companies like SoundCloud, Tencent and TikTok shifted their business models toward services or added distribution capabilities.
It’s a plan with a forward-looking view of how the music business seems to be developing. In February 2021, Spotify’s global head of music, Jeremy Erlich, said that 60,000 tracks per day were uploaded to the platform, or some 1.8 million each month. (Recent reports now put that daily number at 100,000.) Earlier this year, Spotify said that in 2021 it had 72,700 DIY artists, and that 28% of artists who made more than $10,000 per year on the service alone — a total of 15,140, up 171% from 2017 — self-distributed their music to Spotify using CD Baby, TuneCore or Distrokid.
“Catalog decays over time; granted, there’s been exponential sales on a Phil Collins or a Bob Dylan, but it feels like that bubble is beginning to burst,” says one former distribution executive. “So to invest in an infrastructure that supports the emerging, new music industry, which is the DIY music industry, which in aggregate will represent more market share than the three majors combined in the future — that’s a spot I’d want to be in. And if you have a company where you have a flat fee upfront, and you don’t have to worry about if it sells, it becomes a numbers game. Some will pop and take off and you can find different ways to upstream those through administration or label services, and you can create a very robust and lucrative business.”
With more and more companies entering that business, success becomes about differentiation. “Getting your metadata out to the [digital service providers], that’s been commoditized; it’s about everything else that you do,” says Bergman of Downtown’s philosophy. “We probably have the broadest service offering already and we’re really just getting started on that front. Instead of looking to see what’s the next catalog we can buy, it’s about, what’s the next improvement in the service offering, whether that’s international expansion, or localizing the offering, or a service we don’t currently provide or an enhancement of a service we are providing? That’s how we think about the world going forward.”
Downtown has also forged relationships and partnerships across the industry spectrum. Through its various services, the company works with labels like Sub Pop (Songtrust, Neighboring Rights); Beggars, Epitaph and Domino (FUGA); artists like Phish (publishing), Maggie Lindemann (Songtrust), Lindsey Buckingham (Neighboring Rights), Cheat Codes (distribution) and Atticus Ross (publishing); and companies like Secretly Publishing (Songtrust), Symphonic Distribution (publishing for its catalog and its clients), Concord (publishing in Africa) and Hipgnosis (video monetization). What sets it apart from other services-based companies isn’t just the range of what it offers to individual creators, but to the industry at large, allowing them to plug in to its various outlets without having to go the major-label route.
“Organizations like Downtown, through services like CD Baby and FUGA and their admin business, make it possible for independent companies to grow globally without being put into that local bucket that the majors scale, but are unable to deliver the services on, because it’s a 1-inch pipe with 8 inches of water going through it,” says Allen Kovac, CEO of Better Noise Music, label home to artists like Five Finger Death Punch and AWOLnation, and a client of FUGA, Downtown Music Services and Downtown Neighboring Rights. “They offer a workaround — the ability for an indie company that may not have offices to be able to get focus from another independent company.”
Adding these capabilities through acquisitions is one matter; incorporating them into a broader company structure — one that grew fivefold in just a few years — is another. So Downtown underwent a major restructuring in the past few months, aligning itself into two distinct divisions, one business-facing, the other for creators. Neuman was promoted to chief marketing officer, in charge of spreading the gospel of what Downtown offers to the masses; FUGA chief Pieter van Rijn was named president of its new business unit, which includes FUGA, Downtown Neighboring Rights, AdRev and Downtown Music Services’ artist, label services and publishing administration units. Its remaining businesses, including CD Baby, Soundrop and DashGo, fall under its creator unit, overseen by the Downtown Holdings executive leadership team. Currently, Downtown says it works with 1.7 million creators and businesses across 30 million tracks and 14 million YouTube assets and continues to be a strategic investor, most recently in the $34 million funding round for alternative funding platform beatBread, and opened a $200 million fund intended for artist advances for the indie community in partnership with Bank of America in March.
“We have everything already there through various operating companies, and successful businesses, profitable businesses, but because of the acquisition spree that Downtown went on, there is room for opportunity to really create a few very clear business lines that determine how we’re going to go to market,” says van Rijn. “Over time, we want to be the best and most reliable and most forward-thinking service provider for the professional music industry, combining music DNA — which we all have — with technology and services. And understanding that we are a services business means you really have to understand your clients and how to develop with them, how to be innovative, but at the same time be practical about what are today’s needs of our clients.”
Peter van Rijn photographed on October 19, 2022 at Downtown Music in New York City.
Wesley Mann
“Downtown was always seen as a good, have-their-sh-t-together publishing administrator: They seemed very like-minded in caring about the sector that they were in, caring about the artists and putting together an infrastructure that put the artist and the songwriter first, as opposed to an ROI,” says the label-services executive. “And it allowed the company to grow in a very fastidious, credible way.” But growth can also, in turn, reveal unexpected problems. “It’s happened so recently — the catalog sale wasn’t that long ago,” the manager says. “So I think Downtown 2.0 has a lot to prove.”
In just a few short years, Downtown had completely transformed its model and its staff, if not its core philosophy, from the relatively stable publishing world to the constantly evolving services realm. But such rapid growth, as well as the rapid evolution of the digital music business, isn’t always smooth — and Downtown soon ran into a particularly rough speed bump.
In August 2022, Billboard published an investigation into MediaMuv, a company that took advantage of a loophole in YouTube’s royalty collection system to defraud artists and songwriters of $23 million in unclaimed royalties for which it did not own the rights. MediaMuv claimed these royalties between May 2017 and November 2021, when its owners were indicted by the IRS, and used AdRev to claim the money.
Investigators charged the two owners with 30 counts of conspiracy, wire fraud, money laundering and aggravated identity theft, and while neither YouTube nor AdRev were charged with wrongdoing, the story was met with incredulity by some who questioned how AdRev could allow fraud of that scale on its platform. In a plea deal, one of MediaMuv’s founders admitted to falsifying several documents submitted to AdRev “for the purpose of deceiving [them],” and sources tell Billboard that the complexity of the fabrications helped MediaMuv skate through AdRev’s regular monitoring processes.
Much of the fraud — though not all of it — took place prior to Downtown’s acquisition of AdRev, but its scale still put Downtown on the defensive. AdRev’s longtime president, Noah Becker, left the company, though Downtown said the move predated the indictment. In some respects, AdRev’s issues in this particular case reflect the increasingly complicated nature of royalty collections online, particularly on user-generated content platforms like YouTube, and point to real concern the business model presents to services-oriented companies: the sheer number of artists and copyrights companies are dealing with, and the cost-benefit analysis and likelihood of fraud that comes with that much volume.
“It’s an activity that’s growing quickly and the people who are committing the fraud are getting much more sophisticated,” says one distribution executive, who stresses it will take an industrywide campaign to shut down, or just get ahead of, the practice. “It’s not as easy to catch them anymore; their tactics are not as obvious anymore. Unfortunately, we’re playing catch-up with the technology that the people who are committing the fraud have access to, and a lot of what the aggregators do today is reactive.”
Downtown has moved to be proactive in combating this type of fraud: In April 2020, it acquired Simbals, a France-based audio fingerprinting company whose technology Downtown uses to better track its copyrights across the digital spectrum. Downtown has also developed a continuously evolving quality control program over the past several years, which is involved in both onboarding and continual checks for red flags, and in the spring implemented an assurance process to help codify that quality control process across its business units. It has internally developed tools to check for fraud patterns in streaming data prior to distribution, in-house data teams and fraud examiners to monitor for fraud patterns and third-party tools to prevent fraud at scale. (The company also notes that it began working with MediaMuv on a recommendation from YouTube, which referred it to AdRev.)
MediaMuv’s fraud, however, evaded several of those protections, while other safeguards have been strengthened since AdRev was acquired and the fraud was exposed. And it is unlikely to be the only or last issue that Downtown has to deal with in the services space, where fraud can be rampant and rights not always clear. But in a sector of the business where relationships and trust are paramount for adding and retaining clients, it’s been a tough storm to weather.
“We’re a known quantity in the business, so I think that the bulk of the industry will recognize that Downtown and its constituent businesses and people are known as ethical, well-run businesses that are all about trying to connect creators with their rightful share of the pie,” Bergman says. “That is why we exist. So I’m not naive about this sort of stuff, but I expect that our reputation for all the good work that we do — our attention to detail and all the systems and the technology that we provide to do that — will remind people that that’s what Downtown is.”
Moving forward, Downtown plans to continue to build out additional services to help clients navigate the ever-changing digital ecosystem, with social music and Web3 constantly evolving and new platforms continuously reshaping music consumption online. Predicting how the world will look in five years is not always simple, and certainly not static. But creating tools for the future — whether a simplified global publishing admin business, an all-in-one suite of services or even a new, state-of-the-art studio high above Manhattan — has always been in Downtown’s DNA.
“I’ve always believed that we were building a forever company,” says Kalifowitz. “I think the future for us is a continued streamlining of what we do and continued expansion of what we do, primarily geographically. And then continue to build out our platform. That’s critical. One of the things you learn as a service provider is that there’s no ‘build it and you’re done.’ It’s continuous improvement. So I think the future holds continuous improvement.”
This story will appear in the Nov. 5, 2022, issue of Billboard.