Record Labels
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BMG is exiting its current distribution agreement with Warner Music Group’s ADA and taking direct control of its 80 billion-stream digital business in a move the company called “the biggest change to its recorded music strategy” yet, according to a statement released Monday. The fourth largest global music company will begin phasing in the new […]
Today we are releasing U.S. recorded music revenue data for the first half of 2023, reflecting 9.3% growth over the first half of 2022 — the ninth straight year of positive growth.
With overall first-half revenues hitting an all-time high of $8.4 billion at retail value and paid streaming subscriptions nearing 96 million, this report makes clear the strength of American recorded music’s fundamentals.
For example, this new data shows broad strength across formats — especially digital streaming, which now comprises some 84% of recorded music revenues and grew at a robust 10.3% rate this period. Looking solely at paid streaming subscriptions, that figure climbs to 11%.
In fact, paid subscription services were responsible for nearly two-thirds of total revenues and more than three-quarters of streaming revenues. And they continued to grow at an even faster rate than ad-supported revenues.
But it’s not only streaming; the new data also show the lasting power of physical formats — which grew by 5% — including growth in the value of sales of CDs and vinyl. Overall, physical revenues reached their highest level since a full decade ago, topping $880 million so far this year.
And digital and customized radio music revenues, which include SoundExchange distributions for revenues from services like SiriusXM and internet radio stations, grew 16% to $657 million for the period.
As we’re fond of saying, “Music doesn’t just happen.” This success reflects the hard work, innovation, and creative genius of the artists, songwriters, labels, publishers, and services that make up the U.S. music community.
Finally, with annual Latin music revenues in the U.S. exceeding $1 billion for the first time in 2022 and the first half of 2023 showing continued growth faster than overall revenues, Latin music continues to shine — both economically and creatively. We look forward to releasing a full report on the Latin segment during Hispanic Heritage Month and as a capstone to our upcoming RIAA Honors Celebration of Latin music where we will recognize legends Gloria and Emilio Estefan, superstar Sebastián Yatra and other Latin music trailblazers as well as the policymakers who protect it all.
RIAA is proud to develop and release this transparent data which shows the continued power and vitality of U.S. recorded music.
Mitch Glazier is chairman/CEO of the Recording Industry Association of America.
Recorded-music revenues in the United States grew 9.3% in the first half of 2023, reaching an all-time mid-year high of $8.4 billion at retail value, the RIAA said in its mid-year report released today (Sept. 18). That reflects a second year in a row of 9% increases at the mid-year mark, as growth steadies after the upheaval of the pandemic led to market unpredictability.
Once again streaming was the primary driver of both revenue and growth, increasing 10.3% over the first half of 2022 to reach $7 billion, accounting for 84% of all revenue and marking the fourth year in a row that it has accounted for 83%-84% of the overall total.
Paid subscription streaming accounted for the bulk of that number, growing 11% year over year to $5.5 billion, up from $5 billion halfway through 2022 — making up 65.4% of the total revenue figure, and 78.6% of streaming. Notably, the RIAA points out that subscription streaming revenue is growing at a faster rate than the average number of subscriptions — the latter number is up to 95.8 million, from 90 million last year, up 6% — suggesting that some of the price hikes instituted by digital service providers like Apple Music and Amazon Music have begun yielding results. (Increases from YouTube Music Premium and Spotify are too recent to be reflected in the first half of this year.)
Ad-supported streaming, however, is a different story. Total revenue from such services was essentially flat year-over-year, at $870 million, up just 0.6% from 2022. Digital and customized radio revenues were up 16% year over year, reaching $657 million; within that, SoundExchange distributions ticked up 7% to $498 million.
Overall, sales revenue reached $1.1 billion, up slightly from the same period last year, with the growth in physical sales offsetting a decline in digital downloads. Digital sales accounted for just 3% of revenues, and dropped 12% year over year to $225, with digital albums dropped 12% to $107 million and digital tracks declining 14% to $97 million.
Meanwhile, physical revenues of $882 million marked the highest level since the first half of 2013, growing 5% year over year. Vinyl continued to dominate, accounting for 72% ($632 million) of the sector, despite growing just 1.3% year over year, while CD revenue grew 14.3%, to $236 million. Vinyl, for the third year in a row, outsold CDs. But as a window into how prices are changing, unit sales of both vinyl (down 1.8% to 23.4 million) and CDs (down 17.2% to 15.1 million) both declined, despite those increases in the revenue derived from them.
“This report describes a thriving, growing music ecosystem that continues to reach new heights and shape our culture,” RIAA chairman/CEO Mitch Glazier said in a statement accompanying the report. “And it reflects the creative human genius and hard work of all the artists, songwriters, labels, publishers and services who make the music happen and meet fans and audiences where they are in today’s forward looking and innovative music community.”
As the COO/executive vp of Sony Latin Iberia, María Fernández is one of the most powerful people in Latin music. She not only runs the operational and financial aspects of the largest Latin music company but is also an artist and management-forward executive who oversees her multiple divisions with a famously empathetic style.
This week, Fernández’s work is at the forefront, as the RIAA Honors, which is celebrating Latin music this year, announced it was recognizing her as industry executive of the year for 2023. Fernandez will be feted during a ceremony in Washington, D.C., on Tuesday (Sept. 19) alongside Gloria Estefan (Icon), Emilio Estefan (industry trailblazer), Sebastian Yatra (artist of the year) and representatives Veronica Escobar and María Elvira Salazar (policymakers of the year).
A native of Venezuela who started her career in media, Fernández is a finance whiz who joined Sony as CFO and rose to the rank of COO five years ago. Her role expanded during the pandemic when she made mentoring and training young executives a central part of her job and a personal mission. She now oversees the strategic approach of the company and all of its different operations, including finance, people experience, technology and acquisitions, and is regularly involved in big artist deals. And ahead of the RIAA Honors, Fernández is Billboard’s Executive of the Week.
Here, Fernández discusses her finance background, her role as a mentor within her community and the state of Latin music around the globe. “It’s a moment in history when you can show that Latin music is not only one genre, and the fact that we have amazing artists representing each one of those genres and seeing that on global charts is extremely fulfilling.”
You have a background in finance. How do you apply that to your job at a music company?
I think I bring to the more strategic, financial and operational areas the understanding of artists’ needs and therefore how we can organize ourselves to incorporate those needs in everything that we do. For instance, an artist will want to do a more expensive video because they have a creative vision. From a purely financial standpoint, you won’t see a return from that investment because the streaming of the video won’t compensate for the level of investment. But when you understand why that is important for the artist and how it fits into the whole strategy, not only do you understand the logic of what you want to do, but you can sell it.
That’s interesting because “Let me talk to finance” is among the more dreaded words one can hear.
Historically, the financial group is the team that says no to everything. And there’s a struggle between the creative and financial groups. One thing we’re trying to do more and more is make sure both sides understand each other’s needs. By the way, you can say exactly the same thing when we’re talking about employees because the base of the values in our region is that we have two rosters: artists and employees, and we need to take care of both of them. You need superstar employees and executives to manage superstar artists.
I think you’re unusual in that you work often and directly with managers. I cannot tell you how many times a manager has told me, “I’m meeting with Maria Fernández today.” What happens when your mutual needs don’t align?
I work with a lot of managers and maybe there’s a logic as to why a manager needs something for their artist, but that need doesn’t necessarily align with our needs in that moment. But it’s always [about] how to make sure we understand each other even if we’re not always going to be on the same page. To me, it’s the messaging. The way I see it, we are here to serve. We’re here to make things easier, [even] with all the limitations we have in a corporation and making sure we follow procedure.
What are you proud of in the last year?
The presence of our artists on the charts and the variety of genres on the charts. Right now, you have urban songs, but you have Shakira on the top of the charts with a song like “Acróstico.” Then you have regional Mexican artists like Fuerza Regida and an artist like Luísa Sonza from Brazil at the top of Spotify Brazil with a bossa nova song called “Chico.” It’s a moment in history when you can show that Latin music is not only one genre, and the fact that we have amazing artists representing each one of those genres and seeing that on global charts is extremely fulfilling. And to be honest, what I’m doing in terms of helping the next generation of executives, especially women, to make sure they’re prepared continues to be the highlight of my career at this point. I’ve dedicated a lot of time to that and I feel very proud of the accomplishments in terms of getting them ready to be promoted, changing jobs, doing new things in the organization.
What did you specifically do in terms of your mentorship work?
What I’m doing personally is I am dedicating a significant amount of time to take care of the career development of employees in the U.S. and also in the region, in order to allow them to take over executive leadership positions in the future. We do mentoring, talk to them, we develop career plans, if they have an issue we discuss the issues, if they need training in a particular area, through conversations we figure out what they’re missing to get to the next level. We follow up on plans to make sure they have everything they need.
That sounds very time-consuming for a busy executive. How do you manage?
You’d be surprised. Sometimes you don’t need to do too much. Sometimes someone simply has a blind spot and the second you tell them about it, they can go in and fix it. We’re always busy. And we’re not always taking the time to analyze where you’re at, what do you like, what makes you happy. My policy is very simple. Anyone who wants to talk to me can get on my agenda. If they need to talk to me every week, I’ll be there every week.
Is this mandatory?
No. But anyone that asks me to mentor them, I do. At this point, it’s 80% women and 20% men. And the fact that I can do it, shows that others can do it too. If we can have that ripple effect that we can make a little bit of time in our very busy schedules to help someone else when they need it, I think by default this will make us a better company. Formally I started during the pandemic, around 2020. And I’m proud to say that some of the people I started mentoring at that time are now in senior positions in the organization.
I still see very few women in really senior leadership positions in our industry. How can this change?
I am very happy to report that I’m seeing it happening. I personally don’t like the idea of a woman getting the position because she’s a woman, but because she’s the best candidate. And what I’m proud of is, we’ve been able to have many more women in senior positions applying and making sure they’re the best of the best. In Sony Music, we have such talented women in the structure that I don’t think it’s going to be challenging to find very compelling female candidates when you’re trying to fill a position.
What do you see happening with Latin music now?
A big difference is people [who are not Latin] are used to equating “Latin music is urban music,” and that’s not the case. Latin music is very rich, it has a lot of genres, it has a lot of history. “Latino” is not reggaetón. Latino is 100 genres per country. And that to me means more and more artists are open to collaborating with artists from different places. Camilo collaborated with an artist from India; Luísa Sonza is on a song that features Demi Lovato, singing in Portuguese. Soon we will see what will happen with Korean music being more present in the U.S. I think it’s a new era in terms of music.
What is your biggest challenge?
The challenge for a region like ours is, how do we make sure we collaborate with everything that is happening and make sure people understand the music, the artist and what they want to accomplish? How do you create global artists when their presence in some charts is limited? For example, in Brazil, over 90% of the chart is local music, and in general, most of the countries are going back to local music. So, as a global company, how do you balance those things? The importance of the local artist, [and then] the local artist wants to be global. How do we fulfill those dreams?
BERLIN — After introducing himself in German — a daring act for a foreigner — Warner Music Group CEO Robert Kyncl said a few words about why he was so excited to be at the opening of the company’s new Berlin office. “The world is noisier than ever,” he said, just as the roar of nearby S-Bahn made it so, but there was considerable excitement about the music coming out of Germany. He shared one example: “Komet,” a recent hit by veteran rock artist Udo Lindenberg and rapper Apache 207 that has broken chart records.
While the German music business has historically been divided among its major cities, Berlin is emerging as the country’s music capital, and although Warner’s German headquarters will remain in Hamburg, it celebrated the opening of its new Berlin office with a big party. (The new office is for both Warner Music Central Europe and Warner Chappell Music Germany.) Next week, during the Reeperbahn Festival, the company will have a second “hauswarming” party at its remodeled Hamburg offices.
“We see this new space, alongside our revitalised Hamburg headquarters, as a sign of our commitment to local players in the creative and cultural scene,” said Doreen Schimk, co-president of Warner Music Central Europe, who spoke in German. “It shows the importance of Berlin as a European metropolis and a location for the music industry.”
Fabian Drebes, also co-president of Warner Music Central Europe, spoke about how the new building would serve as a “new creative hub with possibilities for events, concerts and more to support our national and international artists.”
Lars Karlsson, Managing Director Warner Chappell Music GSA & Nordics, Doreen Schimk, Co-President Warner Music Central Europe, Natascha Augustin, Vice President Warner Chappell Music Germany, Fabian Drebes, Co-President Warner Music Central Europe
Doering Agency
Warner occupies the top floor of the Schicklerhaus, a late-19th-century building near the Jannowitzbrücke S-Bahn stop, a block from the River Spree, not far from where the Berlin Wall once divided the city. These days, it’s about a mile from AEG’s Mercedes-Benz Arena. It’s a sleek, modern office, with prime roof space that overlooks the river. As about 500 partygoers mingled on the roof and a terrace, a drone hovered overhead taking photos. German artists attending included Peter Schilling, Katja Krasavice, and Shirin David.
“The music industry is of increasing importance for Berlin,” said Franziska Giffey, a deputy mayor for business, energy and labor. Speaking in what she called “Berlinish” — a mix of German and English that’s increasingly popular in a city filled with newcomers from all over the world – she said that music business jobs increased by 700 to about 6,800 this year, and that Warner would add another 150.
“Without the scene of such a vibrant city, we wouldn’t be the No. 1 publisher,” said Natascha Augustin, vp of Warner Chappell Music Germany. Warner Chappell leads the German music publishing business partly because of Augustin and her signings in German hip-hop. She told a story about starting out with a small Berlin office, moving to a slightly bigger one, and ending up here.
“Berlin,” said Lars Karlsson, managing director of Warner Chappell Music Germany, Switzerland and Austria, and Scandinavia, “is one of the most important cultural cities in the world.”
Universal Music Group Nashville has launched a comedy label, with the first release coming from Nashville-based comedian Nate Bargatze. Capitol Comedy Nashville will kick off with Bargatze’s Hello, World, out Friday (Sept. 15) on digital service providers (DSPs). The Grammy-nominated Bargatze has released several specials on streaming outlets, including Hello, World, which premiered on Amazon’s Prime Video earlier this […]
After netting his first No. 1 on the Heatseekers Album and Independent Albums charts last June with his acclaimed album Ganger, burgeoning Detroit star Veeze is partnering with Warner Records. The partnership also allows Veeze to launch his new label, Navy Wavy.
“What Veeze and Snake have built independently is nothing short of spectacular,” says Warner Records CEO and co-chairman Aaron-Bay Schuck. “Veeze is joining the Warner family with commercial success, real fandom, and incredible momentum, and we look forward to now adding our own expertise to make Veeze one of the most important artists in music. The relationship between Gee Roberson and Jean Nelson of Blueprint – who were instrumental in bringing Veeze into Warner – Snake, and myself goes back over 20 years, so it’s a real full circle moment for us all to now be back in business together. Tom Corson and I are over the moon that Veeze decided to join the Warner family. Now if only he will give us some golf tips.”
According to Veeze, he ultimately decided to forge a partnership with the label after a game of golf with Schuck and Warner Records COO and co-chairman Tom Corson. “Going golfing with Aaron Bay-Schuck and Tom Corson really persuaded me to do the partnership. Those guys are first-class gentlemen and I can see myself learning a lot from them,” he says.
Veeze’s manager, Terrance “Snake” Hawkins, is adamant that Veeze’s decision to jump ship and partner with a major label will change his career for the better, adding: “Veeze is the definition of how being resilient, teachable, loyal, as well as remaining true to yourself, can ultimately change your life for the better. This partnership will open doors not only for Veeze to grow as an iconic artist, but also pave the way for his Navy Wavy imprint. We are very excited about our partnership with Warner Records. We appreciate the efforts of Aaron Bay-Schuck, Tom Corson, Gee Roberson, Jean Nelson, Karen Kwak, Steven “Steve–O” Carless, Miles Gersh, Uwonda Carter-Scott and Julian Petty in getting this done, and know that together we will change the wave of music, deal structures, and the art of collaborations.”
Next month, Veeze will kick off The Ganger Tour. Check out the dates below.
10/10 – Gramercy Theatre – New York, NY
10/11 – Webster Theater – Hartford, CT
10/12 – The Middle East Restaurant And Nightclub – Cambridge, MA
10/14 – Union Stage – DC – Southwest, DC
10/15 – The Fillmore Philadelphia – Philadelphia, PA
10/19 – Hell At The Masquerade – Atlanta, GA
10/21 – HENAO Contemporary Center – Orlando, FL
10/22 – Underbelly – Jacksonville, FL
10/26 – Come And Take It Live – Austin, TX
10/27 – The Secret Group – Houston, TX
10/29 – The Cambridge Room At House of Blues – Dallas, TX
11/01 – Cervantes’ Masterpiece Ballroom & Other Side – Denver, CO
11/03 – The Underground – Mesa, AZ
11/04 – The Echo – Los Angeles, CA
11/05 – The Catalyst – Santa Cruz, CA
11/07 – August Hall – San Francisco, CA
11/08 – Harlow’s – Sacramento, CA
11/11 – Hawthorne Theatre – Portland, OR
11/17 – Fine Line – Minneapolis, MN
11/18 – The Rave / Eagles Club – Milwaukee, WI
11/19 – Avondale Music Hall – Chicago, IL
11/21 – The Shelter – Detroit, MI
As Big Loud Records experiences global successes with its artists, the Nashville-based label is expanding its footprint by opening offices in Australia and the United Kingdom and bolstering its presence in its Toronto office, which opened in 2015.
Big Loud senior vp of global marketing and strategy Brianne Deslippe will oversee the effort. Reporting to her will be newly named label managers Cayleigh Shepherd in London, who joins from U.K.-based imprint Snakefarm Records; and Johnno Keetels in Brisbane, Australia, where he most recently worked in Universal Music Australia’s media and editorial department. Meanwhile, Toronto-based employee Justin Clark rises from international coordinator to manager of national promotion/associate label manager.
“We started in year one with our Canadian office, and it has been a long-term goal of ours to have direct Big Loud representation in both Australia and the U.K.,” Big Loud CEO Seth England tells Billboard. “We waited for the best strategic time, but now makes the most sense with how we’ve grown as a company. We continue to keep an eye on other emerging markets as well.”
Deslippe adds, “With 25-plus artists now across multiple imprints and genres, it was important for us to have strong voices on the front lines, finding opportunities and making connections for them around the world. Having key experts in the field will be a valuable resource for our wider teams, staff and managers as well.”
Over the last few years, Big Loud has ramped up its global presence with artists including Morgan Wallen, HARDY, ERNEST, Hailey Whitters, MacKenzie Porter, Stephen Wilson Jr., Lauren Alaina and Griffen Palmer all playing dates outside the United States.
Cayleigh Shepherd
Courtesy Photo
A number of Big Loud artists are experiencing faster gains globally as they build domestically, including a handful of Canadian artists that label has signed.
“[MacKenzie] had multiple No. 1s in Canada and Australia before breaking through in the U.S.,” notes Deslippe of the Medicine Hat, Canada native. “Ashley Cooke, Hailey Whitters, and MacKenzie have also made inroads in the U.K. over the past 18 months, playing C2C Festival and receiving mainstream radio, press, and DSP support. Stephen Wilson Jr. has done four U.K. visits in the past year. Morgan, HARDY and ERNEST did a sold-out run this spring in Australia/New Zealand, and Morgan celebrated his first #1 ARIA album and single while we were in market. [Canadian artist] Dallas Smith continues to break every country record in Canada and will also spend more time in the U.S. during this next album cycle.”
Big Loud may sign artists specifically for release in Australia and the United Kingdom, but England adds, “It needs to be fantastic, something we love and where we see growth.”
Johnno Keetels
Courtesy Photo
While Big Loud has a global partnership with Republic/UMG for Wallen and Lily Rose, the rest of its releases are distributed internationally by Stem. This move will enhance the label’s strength in Australia and England, where they have also relied on third parties to help promote their artists.
With leaders in place in the three territories, Deslippe says Big Loud will continue to scale up as needed. “There is so much growth potential in these markets, I feel like we’ve just scratched the surface,” she says. “For a long time, I was the only international team member having moved to Nashville from Canada, but I’ve always been made to feel like a valued member of the core team. I’m excited to pay this sentiment forward and invite some more unique and different voices to the table.”
England says he’s taking a page from music executive Clive Calder, who in the ‘80s and ‘90s built Jive Records into an independent powerhouse before selling it to Bertelsmann Music Group in 2002.
Justin Clark
James Ramsay / skytography
“[Calder] expanded internationally and made it to where all their records were being worked globally by them,” England says. “And Jive, to my understanding, was the last great label who did this level of international expansion as an independent. And you know it’s no secret we’ve been a fan of studying those who have come before us.”
He also hints that there’s more to come with more partnerships down the road. “That’s why getting these international pipes, if you will, set up now, has never been more important or timelier for us,” England says. “This is the next logical step; be ready for the ones to come and stay prepared for the ones we have.”
Triple Tigers, the Nashville-based label home to chart-topping country artists Scotty McCreery and Russell Dickerson, has named Kevin Herring and Annie Ortmeier co-presidents, while former president Norbert Nix has left the company.
Herring had served as the label’s senior vp of radio promotion. Ortmeier joins from Universal Music Group Nashville where she was senior vp of streaming marketing. They will report to George Couri, Triple Tigers co-founder and Triple 8 Management co-founder. The moves align with Triple Tigers’ focus on terrestrial radio and digital media, such as streaming and social platforms.
“Triple Tigers 2.0 is here,” Couri said in a statement. “I look forward to stepping into a more active role, as well as having Kevin and Annie form a dual attack in the worlds of both radio and streaming & digital. Kevin’s radio singles batting average here is unmatched in the industry, and Annie comes from leading streaming and digital strategies at the biggest label in the business. With our company intentionally focused on maintaining a very small group of artists who benefit from dedicated attention, there will be tremendous impact on our roster.”
Launched in 2016 as a joint venture between Thirty Tigers, Sony Music Entertainment-owned distributor The Orchard and Couri’s Triple 8 Management (whose clients include McCreery, Eli Young Band and Corey Kent), the label has had tremendous success right from the start with McCreery’s first five singles and Dickerson’s first four singles going to No. 1 on Billboard’s Country Airplay chart. Dickerson’s current single, “God Gave Me a Girl,” is bulleted at No. 11 on the chart, while McCreery’s new single, “Cab in a Solo,” is bulleted at No. 40. Jordan Fletcher is also on the boutique roster. Couri is now Triple Tigers’ remaining managing partner.
A representative declined to comment on whether Triple Tigers co-founder David Macias had sold his stake in the company.
“I am very proud and honored to be entrusted with a leadership role at Triple Tigers,” said Herring, in a statement. “This is an amazing group of people and artists who are dedicated to making world class country music and lifting up the artists, songwriters, format and community.”
Ortmeier added, “I am excited to be joining George, Kevin and the team at Triple Tigers. I have admired Triple Tigers and the incredible success they have had thus far and am looking forward to being able to build upon that success with Scotty, Russell, Jordan and the team!”
Nix, who was also a partner in the label, is set to launch VISCYRL, a new artist development company in partnership with the Orchard. He leaves with fond memories. “It was us against the world. A David vs. Goliath story,” he says. “The most exciting thing for me was being able to bring in this team of people who were dedicated to the music and understood the vision. We came out of the chute with a string of No. 1 singles. It was an honor to lead that group of people.”
In August, Travis Scott fans on Reddit sprang into action. “$5 VINYL GO!” one user wrote in r/travisscott (234,000 members). The call-to-arms post came with a photo of a discount code that made buying the rapper’s double-LP Utopia — once $50 — about as costly as a gallon of milk in New York City. That price point proved irresistible: “This gon be my first vinyl why tf not,” one devotee responded. “Travis … gonna be selling 100k [in] his 4th week,” another added.
That fan wasn’t far off: Scott sold 88,500 vinyl copies of Utopia — 161,000 album-equivalent units overall — in the U.S. through his web-store in his fourth week atop the Billboard 200 albums chart, according to Luminate. Between the July 28 release of Utopia and Sept. 7, fans have snapped up more than 331,000 double LPs.
Vinyl album sales have been growing for 17 straight years, and in 2022 they accounted for $1.2 billion in revenue in the U.S., according to the RIAA. As the format has become more popular, a growing number of stars have moved to capture fan demand by releasing LPs of their own, often leading to eye-popping first-week numbers. What made Scott’s record rollout unusual was that some Utopia vinyl was available for $5 — both through bundle deals, where fans could get a record at that low price if they bought more than $120 worth of merchandise, and some stand-alone copies via discount codes.
At that price, many in the industry believe the rapper was not making a profit. One manager who spoke on the condition of anonymity says he was recently quoted around $7 a unit to manufacture an order of double vinyl. In a senior executive’s experience, “it costs $4 to make a single LP if it’s super bare-bones and you’re making a high quantity,” and more for a double LP. Throw in mechanical royalties, typically paid out on records at a rate of 12 cents per song, and it’s hard to imagine that a $5 double-record could make any money.
Even if Scott were selling some records at a loss, he’s not losing money overall: The rapper is famous for moving mountains of merch, some of which goes for a good deal more than $50. But the ability to offer up some records at $5 — $4.99 is the lowest price an album can be sold at and still count towards the Billboard 200 — shows the extent to which stars with fervent fan bases and formidable merch operations operate in a different world than most artists. And since an album’s streaming numbers usually dip as listener enthusiasm begins to wane after debut week, it’s possible that more artists might start to mark down records to help bolster demand and chart placement.
Luminate only receives data on total record sales, not the number of Utopia LPs sold at different price points. Scott’s label partner, Epic Records, directed questions about the rollout to the rapper’s manager, David Stromberg. Stromberg declined to comment on the record about vinyl pricing or sales strategy.
Executives say that selling some copies of Utopia at a 90% discount makes sense in certain circumstances. “We’ve lost money on individual album sales for chart position,” notes one marketer at a rival major label. A star could “spend $200,000 on ads and hope they convert [into streams],” the marketer continues. Alternatively, he suggests, “sell discounted albums, you lose money on those, figure it out on the back end, and hope the chart visibility helps with the overall story.”
“It’s a marketing exercise: In a genre [hip-hop] where streams dominate, be the only one to have a huge physical number,” adds another senior label executive not involved with Scott’s rollout. The price cut leads to a “sales bump and fan engagement.”
Sure enough, many rappers have ignored the vinyl wave. Steve Harkins, vp of sales and marketing at the distributor Ingram Entertainment, told Billboard earlier this year that “labels have said they’ve had challenges convincing artists and management to release their titles physically in some cases,” leading to a shortage of new albums on vinyl from rappers.
There are exceptions to this rule: Tyler, the Creator, has sold more than 360,000 LPs from across his catalog already this year, according to Luminate, while Kendrick Lamar has sold close to 270,000. But Luminate data show that at more than half a dozen rap albums that earned more than 500,000 album-equivalent units in 2022 had no vinyl component, including a pair of Drake releases, Lil Durk’s 7220, and Polo G’s Hall of Fame.
In August, Stromberg explained to Billboard that rap faces “inherent disadvantages” when it comes to “manufacturing physical music product.” “Due to the fluid nature of rap collaboration, leak culture and last-minute changes, vinyl lead time always far exceeds album delivery dates for rap,” he continued. “Pop artists are usually able to turn in their albums five to six months early and manufacture a significant amount of vinyl with a robust retail plan in place. Vinyl often ends up accounting for well over 50% of these pop artists’ first-week totals, whereas hip-hop is judged entirely on streaming.”
Key components of the Utopia rollout, Stromberg added, were “manufactur[ing] our own vinyl” and crafting “an e-com plan to leverage day-and-date physical music for the first time in modern mainstream rap.” So far, so good: Utopia recently passed Taylor Swift‘s Midnights (around 318,000 copies) to become the second biggest-selling vinyl album of 2023, behind only another Swift release, Speak Now (Taylor’s Version) (roughly 368,000).
And the big discount on Utopia helped some first-time vinyl buyers pull the trigger, according to their Reddit comments. “I am such a cheap ass,” one fan wrote on r/travisscott, “… but I actually bought a vinyl today because you can’t even get crappy vinyls for $5 nowadays. What a steal.”
“I don’t even buy vinyls,” another fan responded. “But $5 is $5.”