Record Labels
Page: 17
Despite the music business nearing a decade of consistent annual growth, thousands of people have exited music companies in the last two years in the biggest wave of layoffs the industry has seen since the early 2000s. Spotify, Universal Music Group, Warner Music Group and BMG, to name just the biggest examples, have undergone organizational changes that restructured the companies and will collectively save them billions of dollars annually.
But the wave of layoffs of the ‘20s are vastly different than the cuts music companies made two decades earlier. The most obvious difference between then and now is the direction the industry was headed in the early ‘00s. From 1999, the year Napster introduced the world to peer-to-peer file-sharing, to 2003, the year Apple debuted the iTunes Music Store, U.S. recorded music revenues fell 18.5% from $14.6 billion to $11.9 billion, according to the RIAA. That’s a stark difference to the health of today’s business. In the last four years, the U.S. market has increased an astounding 54%.
The post-Napster years were “a matter of survival,” says Matt Pincus, co-founder/former CEO of music publisher SONGS, who at the time worked in EMI Music’s corporate development division. “That was a one-time elevator drop in the economics of the business caused by a technological innovation that fundamentally disrupted the way that people used our product.”
Trending on Billboard
The sudden arrival of both file-sharing applications and widespread internet access caused CD sales to plummet, creating a vicious cycle of layoffs, consolidation and more layoffs. Take EMI, which laid off 1,800 of its 8,000 staffers in 2002. Still reeling five years later, EMI was acquired by private equity firm Terra Firma in 2007. Terra Firma’s restructuring of EMI resulted in another 2,000 layoffs in 2008. As industry revenues continued to decline, Terra Firma was unable to keep up with its obligations to lenders. Citigroup ended up taking EMI and selling its parts to Universal Music Group and a Sony Corp.-led consortium, resulting in even more layoffs.
Continuously falling revenues created a need to cut expenses through consolidation. When labels acquired competitors or merged companies to help stop the financial bleeding, the elimination of redundant jobs created the desired cost savings. BMG laid off hundreds of staffers in 2003 when it acquired Zomba Music Group, for example, and another 50 people when it integrated J Records and RCA. The same year, UMG laid off 75 MCA employees as part of the label’s merger with Geffen Records.
Retail was being purged, too. In 2003 alone, at least 600 chain stores and 300 K-Mart stores — accounting for 5% of the prior year’s album sales — closed their doors, and Best Buy sold the 1,100-store Musicland chain to a leveraged buyout firm. Retail’s problems sent shockwaves through already struggling record labels. When Tower Records went out of business in 2006, Universal Music Group Distribution (UMGD) had to immediately lay off a dozen people, says Jim Urie, former president/CEO of UMGD.
It seemed like the job cuts would never end. When Universal Music Group cut 1,350 jobs — 11% of its workforce — in 2003, CEO Doug Morris was open to cutting more if necessary. “It depends on how fast the [digital] market gains traction and how fast the CD market continues to erode,” Morris told Billboard at the time. “If [one] doesn’t gain traction and the other erodes faster, we’ll keep trimming, because you have to run a company that way.”
Two decades later, the music industry is in a vastly better position. Many companies with solid revenue growth were still forced to reduce their staff, though, after over-hiring during the pandemic as digital platforms exploded in popularity. “People got drunk during COVID,” says one former major label executive. Digital businesses “started to have this burst,” he adds, “and we kind of caught a hangover across the business.”
Public companies — in music but also technology leaders such as Meta and Google — facing investor expectations opted to thin down. UMG, which went from an average of 8,800 full-time employees in 2020 to just under 10,000 in 2023, began laying off staff in March as part of a restructuring that will save an estimated $270 million annually. Likewise, Spotify ballooned from about 5,600 in 2020 to 8,360 in 2022 before laying off about 25% of its workforce in 2023.
Aside from the need to reduce bloat, recent layoffs reflect the normal course of business that sees companies constantly expanding, shrinking and re-tooling, says Pincus. “The music business goes through consolidation cycles where it becomes more fragmented, and then it consolidates, and then becomes more fragmented, and then it consolidates. We happen to be in a consolidation cycle at the moment. That’s the normal cyclical behavior of the industry. What was going on in the Napster time was not cyclical.”
Recent layoffs are also about positioning labels “to move forward,” says Urie, “and there are new skill sets involved.” Bob Morelli, former president of RED Distribution, agrees. “As technology has changed, [the business is more about] social media and targeted advertising,” he says. “And now with AI coming in, and it’s harder to get bigger tours, these companies are going to make staffing adjustments.” When Warner Music Group announced in 2023 it would cut 4% of its workforce, new CEO Robert Kyncl described the layoffs as necessary “in order to evolve” and position the company for “long-term success” by hiring for tech initiatives and “new skills for artist and songwriter development.”
Labels have also revamped how they discover new artists. The stereotypical A&R rep that scours clubs looking for the next big thing has been replaced — or at least augmented — by data experts. “Most of the A&R departments are more like a data analytics thing,” says David Macias, president of Thirty Tigers, an early adopter of the distribution and label services model. “They’re scrubbing data to find spikes that they can justify chasing.” The way labels and distributors pitch music to streaming services has also changed, Macias notes, from a people-focused process to one driven by automation. “How people find the music is going to have to do less and less with people with special relationships.”
The Atlantic Music Group restructuring may reside in a different category. “That seems like a house cleaning,” says Urie, “because they blew out a lot of people that are perfectly capable.” That’s a sign of a youth movement happening at the label, says another former executive, rather than a reaction to over-hiring or a natural business cycle. Elliot Grainge, the 30-year-old founder of the label 10K Projects, took the CEO role on Oct. 1. Longtime label leader Julie Greenwald announced her resignation five days after Grainge was named CEO. Atlantic ended up cutting roughly 150 jobs — many of them experienced executives with long tenures at the company.
Regardless of the era or business cycle, music executives — and the CFO making the strategic decisions — must answer the same questions, says Morelli. “What is my company going to look like? Are we going to go after developing artists? Are we going to go after legacy artists? Are we going to do a small amount? Are we going to win with volume? And how do you accommodate getting this message out to potential fans and consumers?”
The thousands of people laid off by music companies in recent years face better prospects than music professionals faced two decades ago. Back then, many executives and artists were still viable but needed the proper infrastructure around them, says Macias, who co-founded Thirty Tigers in 2002 after being laid off from Arista Nashville. Digital startups and the burgeoning digital distribution business gave some people a way to remain in music. But the post-Napster years were followed by another decade of industry contraction as downloads replaced CD sales.
If the majors aren’t hiring in 2024, the growing independent sector could provide a refuge for the recently unemployed. In recent years, investment in independent music companies has exploded as entrepreneurs in streaming, digital distribution and social media loosened the major labels’ grip on the industry. The current No. 1 song in America, Shaboozey’s “A Bar Song (Tipsy),” comes from an independent, EMPIRE.
“It’s going to be independent labels, like it always has been, that figure out the new way to get new records in the hands of an audience that doesn’t know they like it yet,” says Pincus.
The Warner Music Group (WMG) has struck a new multiyear licensing deal with Meta, Billboard has learned. The partnership, which covers both Warner’s recorded music and Warner Chappell publishing operations, will be across all of Meta’s platforms — Facebook, Instagram, Messenger, Horizon and Threads — and will also include WhatsApp for the first time, Billboard […]
When “Ain’t No Love in Oklahoma” reached No. 1 on Billboard’s Country Airplay chart, it became Luke Combs’ 18th chart-topper on the tally. But this one was different from its 17 predecessors for the Sony Music Nashville artist. “Oklahoma” was the lead-off single from Atlantic Records’ Twisters soundtrack and his first hit spawned from a movie. Also, as the song spends its second week atop the chart, it brings Combs’ cumulative weeks spent at No. 1 on Country Airplay to 53, making him only the sixth artist in history to have spent more than a year at the summit.
Every one of those 18 No. 1s has been promoted to country radio by Sony Music Nashville senior vp of promotion Lauren Thomas, who oversees promotion for SMN’s RCA and Columbia imprints. And that feat earns the radio veteran, who joined SMN in 2009, the title of Billboard’s Executive of the Week.
Trending on Billboard
Here, Thomas explains how Sony Nashville and Atlantic worked together to promote both the song and the movie, how Combs’ previous No. 1, his remake of Tracy Chapman’s “Fast Car,” paved the way for a broader audience and how Combs integrated the song into his sold-out summer stadium tour. “Honestly, [‘Oklahoma’] is a Luke Combs song through and through and perfect for the live stage,” Thomas tells Billboard. “Luke did the perfect job of writing something for this massive film and soundtrack and making sure it was original to him as well.”
“Ain’t No Love in Oklahoma” is No. 1 for the second straight week on Billboard’s Country Airplay chart. What key decisions did you make to help that happen? We are fortunate to have a hit song along with an incredible track record with Luke at country radio. The team’s relationships paired with communication with our partners on our goals — and ultimately their support — drove this one home.
“Ain’t No Love in Oklahoma” is from the Twisters soundtrack, which Atlantic released. How did you and Atlantic work together to take “Oklahoma” to country radio, while also promoting the film? Working with Kevin [Weaver, Atlantic Records president, West Coast] and his team from the beginning was exciting. From the beginning, their team wanted to make some noise. With the teases of the trailer directly [to] moviegoers inside the theaters to the massive music video with Luke and all the film footage, we were given the ball to make this Luke’s next No. 1 single and their team trusted us to do so.
The song leans more into rock than Combs’ songs usually do. Did you receive any initial pushback from radio? Luke has a solid track record and his sound covers a wide range. Tempo from a superstar like Luke was embraced fairly quickly and given a real opportunity with immediate airplay from a world premiere across all chains.
Though written specifically for the soundtrack, what about the song do you think appealed to Combs’ existing fan base and did you work it as if it were a standard Combs’ single release or were there different elements that came into play because of the film?
Honestly, it’s a Luke Combs song through and through and perfect for the live stage. If you’ve never seen a Luke show before, it fits perfectly into his set. Whether a ballad or something more hard-hitting, they love Luke and are here for him and I think Luke did the perfect job of writing something for this massive film and soundtrack and making sure it was original to him as well.
How did you tie in with the success of the movie to help promote the song?
It was all Luke. Luke was on his massive sold out stadium tour at the time of the movie so there was an easy tie-in to have Luke talk about the song as well as what it was like to shoot the music video for such a big blockbuster — which, as Luke explained, was a very different process from a standard music video shoot, most notably having debris flying at him during filming. That, and of course the weekend the movie came out Luke invited Glen Powell and some of the cast up on stage for his shotgunning beer moments.
“Ain’t No Love in Oklahoma” is Combs’ 18th No. 1 on Billboard’s Country Airplay chart. What has been the strategy when taking him to radio in terms of picking singles and working with him and his manager, Chris Kappy? It is very much collaborative with Kappy, Sophia [Sansone] and our respective teams. Luke definitively knows his audience and speaks into the decisions we make — he leans in and always has with both his fans and our partners. It’s wild to think about the days of driving Luke around in a rental car to radio station shows and visits and now Kappy, Sophia and I get on bi-weekly calls to talk through things like multiple sold-out stadium dates. Wild.
Combs’ songs have now spent a cumulative 53 weeks at No. 1 on Country Airplay, making him only the sixth artist to have registered more than a year. Is there one thing you and your team have consistently done when taking Combs to radio that has resulted in such a huge number? It really is the perfect marriage of compelling music and communication to partners. Luke has done an incredible job of consistently delivering music that moves people in a variety of ways. The enthusiasm from Luke and his team is contagious and the Columbia promotion team carries that energy into the promotion of his music and the execution of our goals.
He took his cover of Tracy Chapman’s “Fast Car” to No. 1 in 2023 and that song also received some crossover play on pop formats. How did that increase his audience?
The whole collective team — management, marketing, press, promotion, etc. — came together to push this in front of new audiences. It really wasn’t one thing alone. The song and story behind it were everywhere and people who had never heard of Luke Combs now know who he is.
This might be a really silly example, but I have worked every Luke Combs number one. When “Fast Car” came out, it was the first time my dad spoke to me about Luke Combs’ music. He knew who Luke was but this song and story behind why Luke cut it was familiar and clearly spoke to him. In contrast, same story with my little brother. Working with [senior vp of pop promotion] Brady Bedard and the team at Columbia was a dream and opened the door for both Luke and that song to have another moment with audiences at the different formats.
The song also made history for Tracy Chapman and brought us one of the most memorable Grammy performances to date. They both just looked so happy. I will always be honored to have been a small part of that song.
What did you learn from this rollout that you can use with other songs from soundtracks, and do you think the Twisters’ soundtrack success will lead to more country artists having songs on soundtracks?
I think we always have to be open to different ways to promote music and this song helped our team do that. Having an extra bonus of a song being in a film and as the lead from the soundtrack just helps add the exposure of any song no matter the genre.
Country music is about storytelling so I think music supervisors should certainly pay more attention to the genre to help tell the stories of their films and shows. This soundtrack helped bring the genre to the forefront at a time when country music is shining. I can only hope that the music teams at these film companies realize the power a song can have to really amplify their story.
EMPIRE is not for sale, said company founder/CEO Ghazi at the Trapital Summit on Thursday (Oct. 3) in Hollywood.
While appearing on a panel titled “The Rise of Independent Music” at the inaugural edition of the conference, Trapital founder Dan Runcie played a short game of over/under with Ghazi, asking the EMPIRE head how many calls he’d recently received about selling the label/distributor.
“You run a music company that has done well from a business perspective and many companies that are your peers in this space are being acquired, they are selling, they are raising money,” Runcie said, adding that EMPIRE is an attractive company to acquire at the moment. He then asked Ghazi if he had received over or under four phone calls in the last 12 months poking around to see if he would sell or allow investment.
“I haven’t gotten any phone calls,” Ghazi said sternly to the audience. “Because everybody knows I’m not for sale. Period. I am dead serious. I am living my purpose. There’s no price on that.”
The declaration comes as independent music distributors like Stem, Downtown, ONErpm and Believe have begun fundraising and exploring acquisitions from major music companies and other investors. Earlier this year, Warner Music Group looked into acquiring Believe (talks between the two ultimately fizzled out) and later hired Goldman Sachs banker Michael Ryan-Southern to lead its search to buy a distributor.
Trending on Billboard
While EMPIRE would be an ideal acquisition target for the majors or private equity, Ghazi said that’s not an option.
“I’m one of the very few people that I don’t give a s— about money. I care about money that I can share with other people within the livelihood that I get to create,” Ghazi said at the one-day conference. “I used to tell people when I started EMPIRE, ‘I want to be the Robin Hood of the music business.’ And I think that I’ve stuck to my principles. People will always poke around and it never gets to me.”
Ghazi explained that he has brushed off any inquiries that have come his way and has tried to keep his eye on the prize. “We’re helping thousands of people. We’ve created micro-economies all across this planet we call Earth and, for me, there’s nothing more special than that,” he added.
The EMPIRE CEO’s declaration comes as client Shaboozey’s “A Bar Song (Tipsy)” continues its No. 1 streak on the Billboard Hot 100 with 12 weeks at the summit to date.
“Did you ever think that one of the biggest songs you would have would be a country song?” Runcie asked during the conversation.
“I didn’t think it wouldn’t be,” Ghazi responded. The CEO went on to explain that about five years ago, EMPIRE set out to find stars and that in every genre they explored — including hip-hop, country and Afro music — they found someone special. “A lot of it just has to do with having the right taste, your thumb on the pulse and approaching the culture with understanding what they’re trying to do,” he said.
Verve Label Group, the jazz and classical specialists at Universal Music, has promoted Jamie Krents to CEO and president, and Dawn Olejar to chief operating officer, effective immediately. They will now lead the strategy for the entire group, comprised of storied labels like Verve Records, Impulse! Records and Decca Records US, along with international label partners Decca Classics, Deutsche Grammophon and others.
They’ll continue to report to Krents’ predecessor in the top job at VLG, Dickon Stainer, who was recently elevated to chairman and CEO of Universal Music UK and is keeping his title of chairman of Verve. Both Krents and Olejar are based out of the label group’s New York City offices.
Stainer congratulated Krents and Olejar on their promotions, highlighting Krents’ “long-standing reputation and commitment to nurturing and breaking artists globally,” and Olejar’s strategic leadership. He expressed confidence in their ability to lead VLG’s roster of legendary labels into the future.
Trending on Billboard
Krents started at Verve in 1998 as a temp and worked his way up to become executive vp in 2019 and later president of the group in 2022. He was crucial in finding and acquiring the tapes for the John Coltrane album Both Directions at Once and has been instrumental in expanding Verve’s artist roster beyond jazz, signing talents like Jon Batiste, Kurt Vile, Arooj Aftab, Joy Oladokun, Shabaka Hutchings and Samara Joy.
“For someone who grew up literally treasuring and studying Verve, Impulse! and Decca recordings, this appointment is beyond thrilling,” said Krents. “Getting to work with artists of the caliber that we have on the Verve Label Group roster is such an honor and it’s particularly exciting to get to take on this role alongside Dawn and the rest of the Verve Label Group team.”
Olejar, who has served as executive vp at VLG for the last seven years and added general manager duties two years ago, has played a key role in cementing Decca Records US as the leading label on the Billboard Classical Chart, and in recent years has led high-profile domestic campaigns for Verve artists including Andrea Bocelli, Ludovico Einaudi, Diana Ross, Lang Lang and Chad Lawson, among others. In this new role as COO, Olejar will have the continued responsibility of overseeing the team at Verve Label Group. Prior to joining Verve, she was general manager at RPM Music Productions.
“I’m thrilled to continue working with Jamie and our amazing team to build upon the great work that we’ve been doing at VLG,” Olejar said. “A very big thank you to Dickon for his endless guidance and support. We work with the most talented artists in the world and I’m excited for what’s next.”
Republic has appointed Mary Catherine Kinney as executive vp of artist & label strategy. Based in Nashville, Kinney will support artist and label strategy for the Republic Corp Collective, which includes Republic Records, Island Records, Mercury Records and Def Jam Recordings. Kinney will also lead business strategy for the group’s labels, further reinforcing their Nashville presence.
Prior to her new role at Republic, Kinney was head of artist partnerships at Spotify, having joined the company in 2018. At Spotify, she led the team responsible for artist and manager relationships, as well as genre marketing initiatives. The team’s projects included partnerships with artists including Taylor Swift, Karol G and Zach Bryan, as well as introducing Spotify House at CMA Fest, Spotify’s Billions Club series and Casa Spotify in Puerto Rico.
Prior to her work at Spotify, Kinney’s career included time at Sony Music Nashville and Universal Music Group Nashville.
Trending on Billboard
Republic Corps president/COO Jim Roppo said in a statement, “Mary Catherine is one of the music industry’s most inspiring leaders. She’s widely respected across the business and in Nashville. Her reputation and work ethic have uniquely positioned her to flourish supporting the labels at REPUBLIC. She’s the perfect executive to seamlessly facilitate our expansion in the market.”
Kinney added, “I’m thrilled to join Republic to build with each label team on their unique mission and work with such a phenomenal roster of artists. For over a decade, I’ve called Nashville home and I’m honored for the opportunity to steward Republic vision within this vibrant, ever-growing creative community. I have deeply admired Monte, Avery and Jim as visionaries and esteemed leaders for many years; I thank them for this extraordinary opportunity.”
Republic has spearheaded some of the biggest releases to dominate the Billboard 200 over the past year, among them Taylor Swift’s The Tortured Poets Department, Morgan Wallen’s One Thing at a Time (Big Loud/Mercury/Republic), Noah Kahan’s Stick Season (Mercury/Republic), and Post Malone’s F-1 Trillion (Mercury/Republic). Meanwhile, Jelly Roll and BMG recently teamed with Republic to distribute Jelly Roll’s upcoming album, Beautifully Broken, out Oct. 11.
Ten-time Grammy Award nominee Jamey Johnson has signed a label deal with Warner Music Nashville, and is set to release a new song, “Someday When I’m Old,” on Oct. 4 through Warner Music Nashville and his own label Big Gassed Records.
“Someday When I’m Old,” written by Chris Lindsey, Aimee Mayo and Troy Verges, has continued to resonate with Johnson since he first sang the song’s demo in 2004.
“It was the last demo I sang before I started working with BNA Records,” Johnson said. “Aimee called me back then and she wanted to be able to say she hired me to sing my last demo. When I heard the song, I thought, ‘Wow! That is a great song!’”
Trending on Billboard
The song follows a slate of new music from Johnson in recent months, including “21 Guns,” “Sober,” “What a View” and Trudy.”
In a statement, Johnson named WMN co-chair and co-president Cris Lacy as a key factor in his signing. “The reason I signed with Warner Music Nashville is Cris Lacy. She is one of my longest-term friends I’ve had in the music business. We started our careers around the same time. She has been a friend to me and has only ever tried to help,” Johnson said.
He added, “She cares about me being able to put out music. She cares that I’m able to participate in my own career. Our conversations are unlike any other conversations I have had with any other label person.”
“For 14 years, those of us in the industry, and fans outside of it, have been begging Jamey Johnson to release another solo studio album,” Lacy said. “From day one, we heard the voice of a man driven by conviction, not commerciality. We saw in him our heroes like Johnny, Waylon and Merle. Warner Music Nashville has the great honor of reintroducing this incomparable artist to a worldwide audience…on his terms…proof that great things are worth waiting for!”
Johnson, a Grand Ole Opry member, is also known for his exemplary talent as a songwriter, having won song of the year accolades from both the Academy of Country Music and the Country Music Association in the same year. Johnson earned song of the year from the ACM and CMA for “Give It Away” in 2007 and “In Color” in 2009.
Universal Music Group Nashville and Timbaland‘s Mosley Music have signed singer-songwriter Colt Graves as the first signee to the previously-announced partnership. Graves’s first major label debut release under UMGN and Mosley Music, the song “Burning House,” will release Oct. 18.
Kentucky native Graves was influenced by his grandfather, Bluegrass Music Hall of Fame member Josh Graves. Graves’ own music melds country, folk and influences from pop and hip-hop. Last year, he teamed with Timbaland on the song “Cowboy Capone,” and last year released the song “Dirt on Me,” which rose up the iTunes Country chart.
“Colt Graves is the perfect artist for our first collaboration with Timbaland’s Mosley Music,” UMGN chair and CEO Cindy Mabe said in a statement. “He’s simply electric and speaks from a unique and overlooked musical fusion growing up in the bluegrass heartland and taught by his legendary bluegrass hall of fame grandfather Josh Graves. Colt is a gifted storyteller who mixes the backdrop and musical influences of his Owensboro, Kentucky lifestyle with a gritty fusion of country, hip-hop, rock and folk. His edgy vocals and musical fusion is magnetic and I’m so excited to share his musical vision with the world. He’s really a special artist.”
Trending on Billboard
Timbaland added, “From the moment I heard Colt, I knew he was special. He crosses the boundaries of a specific format of music which I believe is what makes him stand out as an artist.”
“It’s been a hell of a journey to get to this point and I’m so grateful to Timbaland, my team, and the UMG Nashville team for believing in me and being part of this journey. Thank you, Cindy, Chelsea, and team,” Graves said.
UMGN’s artist roster includes Luke Bryan, Eric Church, Mickey Guyton, Alan Jackson, Brad Paisley, Keith Urban, Carrie Underwood and more. The UMGN label group includes imprints Capitol Records Nashville, EMI Records Nashville, MCA Nashville and Mercury Nashville, as well as the comedy label Capitol Comedy Nashville, the distribution arm Silver Wings Records and the film/tv production unit Sing Me Back Home Productions.
Alicia Arauzo and Luis Fernández have been appointed co-managing directors of Universal Music Spain, the label announced on Tuesday (Oct. 1).
According to a press release, Arauzo and Fernández will “work closely” in shaping and implementing the company’s business strategy and creative direction, “focusing on the nurturing of the division’s solid artist roster,” as well as the development of new talent. Both executives will be based in Madrid, reporting directly to Jesús López, chairman/CEO of Universal Music Latin America & Iberian Peninsula.
“It is an honor for me to take on this new role, alongside such a great team of professionals,” Arauzo said in a statement. “Luis and I have many challenges ahead of us and I am sure that as a team we will work tirelessly to achieve new milestones for Universal Music Spain, especially in artistic development, which is the DNA of UMG globally. I would like to thank Jesús López for his trust, leadership, and constant encouragement to pursue new goals.”
Arauzo began her career in 1982 working at Spanish record label Hispavox and joined Universal Music Spain in 1996, where she started as manager of international marketing. Her most recent role was general manager. Meanwhile, Fernández joined Universal Music Spain in 2023 as head of A&R. Prior to joining UMG, he was CEO & founder of Sonido Muchacho, the independent record and music publishing company he launched in 2014.
Trending on Billboard
“It is a great opportunity to assume this new position at UMS, where I have grown professionally, and where I have felt so supported since my arrival,” added Fernández. “It is a wonderful challenge to take on this responsibility alongside people I have known since I started in the industry, as we all grow towards a promising future. I would like to thank Jesús, Narcís, and, above all, Alicia, for the trust they have placed in me, as well as the entire A&R team, with whom I have shared the last year of learning and professional growth.”
About the new appointments, López expressed: “Alicia possesses extensive experience, knowledge, immense work capacity and an unquestionable love for Universal Music, among many other qualities, while Luis brings innovation, entrepreneurship, and a deep artistic knowledge. Together, they are the perfect team to lead the continued development of our artists and take Universal Music Spain to the next level of success, that the music market demands of us. I wish them both huge success in this new stage of their careers, and I am certain that the entire team will join me in these wishes.”
Merlin, which negotiates digital licenses for a coalition of more than 30,000 independent labels around the world, told its members in a letter on Friday (Sept. 27) that TikTok “walked away” from talks to renew their TikTok license “before negotiations even began.”
“[TikTok] informed us that they do not want to renew our deal,” the letter, obtained by Billboard, states. “They informed us that… they intend to license some of our members directly.” The current Merlin-TikTok license is set to expire on Oct. 31.
“Their approach [to pursue direct deals with Merlin members] suggests that [TikTok] believe[s] their objectives can be better served by fragmenting the Merlin membership, in order, we believe, to minimize their pay out,” states the letter. “As you know, Merlin was founded to stand up for and champion its members. We will not support an approach that devalues our community.”
Trending on Billboard
A TikTok spokesperson says that “TikTok would like to offer all of the world’s music to our users. We are committed to working with the independent sector as well as the major labels and publishers. We know that our community of over a billion music fans value the diversity and richness that independent music brings to our platform. We are committed to entering into direct deals with Merlin members in order to keep their music on TikTok.”
Founded in 2008, Merlin represents 15% of the global recorded music market, and it uses that collective market power to negotiate with digital partners on behalf of its members on a similar footing as the bigger major labels. The end of its license with TikTok would mean that top songs from artists like Coolio, Diplo, Faye Webster, J Dilla, The Lumineers, Mac Demarco, Madlib, Mitski, Nirvana, Phoebe Bridgers, Thundercat, Wet Leg and more will leave the platform after Halloween, unless their respective labels are able to reach agreements with TikTok. Each label individually would have to agree to terms with the platform, negotiating with a much smaller market footprint than they would have collectively.
Merlin is the third music organization this year, after Universal Music Group and National Music Publishers’ Association (NMPA), to express challenges in renewing music licenses with TikTok. In February, UMG’s failure to reach a deal with TikTok led to the removal of its entire catalog of hits from TikTok for about three months. In April, after publicly supporting UMG’s position against TikTok, the NMPA allowed its TikTok license, which was used by a number of indie publishers, to lapse as well. It has not been renewed.
“We believe the most likely reason that TikTok did this is that TikTok does not want to pay a fair rate for the music that powers their platform,” Merlin’s letter to members continues. “If this is right, then TikTok does not value independent music, the independent labels and distributors who support that music, nor the diverse artists who create it. They are unlike every other partner that Merlin works with.”
Along with negotiating digital deals for indie labels on TikTok, Merlin also licenses members’ catalogs to 40 services around the world, including platforms like YouTube, Meta, Spotify, Apple Music, Amazon Music, Tidal, SoundCloud, Deezer and more.
Separately, Billboard obtained an email TikTok sent out to some Merlin members, stating that the short-form video app “decided not to renew [its] license agreements with Merlin” and that TikTok “may be able to do direct deals” with the labels, provided that they agree to sign a non-disclosure agreement (NDA). “The purpose of the NDA is to enable us to discuss direct licensing agreements with you.” The deadline to sign and return the NDA is Oct. 4. A source familiar with TikTok said, however, that any Merlin label that wishes to stay on TikTok after Oct. 31 can review and sign the TikTok and CapCut agreements anytime before Oct. 25.
Merlin told its members that it is doing “all [it] can to re-engage with TikTok… we have already made it clear to them that we are ready to hold an actual negotiation and address any concerns they may have.”
While Merlin believes TikTok’s move is an attempt to keep the price tag for indie music lower than it would like, the organization’s letter to members also says that TikTok has “suggested” they are walking away “because of concerns about ‘fraud.’” “As we have told them on numerous occasions, we are incredibly proactive on this issue,” the letter states.
“TikTok’s refusal to negotiate a deal with Merlin isn’t just a setback — it’s a threat to the whole music ecosystem,” Dr. Richard Burgess, president of the American Association of Independent Music (A2IM), says of the situation. “This isn’t just about Merlin; it’s about properly recognizing the value of artists and their music.”
Merlin declined Billboard’s request for comment. In an interview with Billboard published last week, Merlin CEO Jeremy Sirota discussed his approach to renewing partnerships with platforms such as Meta and YouTube, with which Merlin has struck new deals of late. “We don’t think of it as, ‘Let’s come back and kick the tires every few years,’” Sirota said. “We want to help shape their thinking about music and their understanding of what independents need at an operational level. We want to do the same thing with our partners to create this continual feedback loop and conversation.”
Merlin’s membership includes, but is not limited to, independent labels like 4AD, Brain Feeder, Captured Tracks, Domino, Dualtone, Empire, Higher Ground, Matador, Ninja Tune, Secretly Group, Stones Throw, Subpop, Tommy Boy, XL and thousands more.
Read Merlin’s letter to members below in full:
Dear Merlin Member,
On August 5th, we informed you that we expected a difficult negotiation with TikTok.
This past Wednesday, with no warning, TikTok walked away before negotiations even began. They informed us that (1) they do not want to renew our deal, which expires on October 31st, and (2) they intend to license some of our members directly. To be even more clear, unfortunately, as of now, there will not be a Merlin-TikTok deal after October 31st.
We believe the most likely reason that TikTok did this is that TikTok does not want to pay a fair rate for the music that powers their platform. If this is right, then TikTok does not value independent music, the independent labels and distributors who support that music, nor the diverse artists who create it. They are unlike every other partner that Merlin works with.
TikTok pays substantially less for your music than other services, apparently relying on the perception that artists cannot afford to have their music unavailable on the platform. We made a good faith proposal to narrow this gap, but rather than negotiate, TikTok chose to simply walk away.
Given that TikTok refused to negotiate with us, our view is that they must see the obligation to pay fair royalties as a nuisance. They must view Merlin – with its mission to protect and maximize the value of our members’ music – as too strong a negotiating partner for their liking. Their approach suggests that they believe their objectives can be better served by fragmenting the Merlin membership, in order, we believe, to minimize their pay out.
TikTok has asked us for an “orderly transition” to do direct deals with those members they deem worthy. As you know, Merlin was founded to stand up for and champion its members. We will not support an approach that devalues our community.
The Merlin team remains dedicated to forging meaningful relationships between our members and partners, as well as driving value into every partnership. This includes dedicated teams to answer member inquiries across every aspect of our partnerships, operational support, best practices guides, partner-led and Merlin-led webinars, consolidated pitch forms, and so much more.
We are doing all we can to re-engage with TikTok to secure a renewal agreement for our members. We have already made it clear to them that we are ready to hold an actual negotiation and address any concerns they may have. TikTok has also suggested that they are walking away because of concerns about “fraud,” but as we have told them on numerous occasions, we are incredibly pro-active on this issue.
We recognized early on, and communicated with TikTok, the concerning growth and impact of stream manipulation and fraudulent content both on TikTok and across the marketplace. We have worked productively and collaboratively with TikTok on this issue, and until now, no concerns have been raised about the approach Merlin is taking. We have implemented measures to address illegitimate activity and content; automated systems to detect suspicious activity; and a dedicated team to address issues and impose sanctions, including ultimately, termination of membership for bad actors.
Members must, as ever, make their own decisions on how to deal with TikTok. For our part, we will never stop fighting for the value that our members bring, regardless of how this situation resolves itself.
We will follow-up by separate email with whatever answers we might have on your operational questions.