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Six years ago, Drake delivered a message to Apple Music’s then-global creative director Larry Jackson that would change his life.
“Someone get Larry Jackson on the phone,” Drake rapped on the first verse of Lil Wayne’s “Family Feud,” a track that Jackson heard for the first time while he was vacationing in the Maldives. “I need some ownership if we pressin’ go.”
“I really sat down and started to reflect on my life,” Jackson recalled recently at one of his regular tables on the patio at The Beverly Hills Hotel’s Polo Lounge, where the 42-year-old often spends mornings hobnobbing with music business power brokers and fielding a steady stream of calls from A-list artists seeking his counsel on everything from creative projects to sponsorship deals. Drake’s verse shook him from a “slumber” he says had been induced by his corporate, “hamster wheel” routine, and made him think: “What if there was another level to the video game?”
Jackson says that wakeup call inspired him to revisit an idea for his own venture that he’s now launching as Gamma, a one-stop-shop media company that creates, distributes, and markets content, from music to podcasts to films, offering resources and guidance to artists who want to build their brands and expand beyond music. Backed by investors that include Apple and Todd Boehly’s Eldridge (which also owns a stake in Billboard’s parent company) Gamma debuts as the “best capitalized music company competing with the major labels and signing superstars,” says Raine Group partner Fred Davis, who advised Jackson through his fundraising process, though neither he nor Jackson would disclose the amount raised to date.
“There’s a lot of private equity acquiring catalogs,” Davis tells Billboard, “but this is unprecedented.”
Jackson acquired the distribution platform Vydia in December, subsuming its 76 mostly New Jersey-based employees, and has struck deals with about a dozen of the world’s most influential creators, from Usher to Naomi Campbell to Angelica Nwandu, founder of The Shade Room, one of Instagram’s most popular news channels.
In December, Gamma also quietly acquired a stake in the Death Row Records catalog from Snoop Dogg, who had purchased the catalog last year and pulled it from streaming services. Jackson wouldn’t disclose the terms of his deal with Snoop Dogg, whose real name is Calvin Broadus, but said that it’s a long-term partnership that includes two future albums and allows rights to revert back to Broadus after “we work together to enrich the value of the IP.” Jackson released the catalog exclusively on TikTok last month without disclosing his participation, allowing fans to create their own videos using clips from classic albums like Doggystyle, and to transform themselves into various breeds of dogs using TikTok’s “What Dogg Are You?” AR filter, an effort to drive buzz and engagement for the music before it returns to streaming platforms.
Jackson is betting that with his own distribution pipeline, a bevy of big-name acts, an array of culture-driving shows and an alliance with indie film studio A24 (in which Boehly is also an investor), Gamma could give TikTok a run for its money and “become the new radio, where you could actually break records,” plus sell an array of other goods from concert tickets to beauty products.
“Having the whole thing A to Z creates kind of a farm-to-table situation,” Jackson says. “Everything can’t be about one place where you break music – I’m not going to say what that one place is, but you know what I’m talking about. For us, as a company, I’m looking to decrease our dependence on outside sources. I don’t see that being done anywhere.”
He’s also hoping that as a Black founder and CEO, his leadership will drive more diversity, inclusion and equity at the top of the music business. He wants to run Gamma with a closer focus on — and more sensitivity to — Black culture than the major labels, while structuring deals that help artists retain ownership of their work and build generational wealth.
To build intrigue, Jackson has been mysteriously teasing his new company as he might a new album, drawing on his many years working in the record business. After the Grammys in February, for instance, he hosted a party at Mr. Brainwash Art Museum in Los Angeles, inviting a mix of bankers and stars such as Lil Wayne, Leonardo DiCaprio and Madonna, making guests say “Gamma” as the password for entry. This month, he put up billboards on Los Angeles’s Sunset Boulevard and in New York’s Times Square, featuring cymbal-banging monkeys and the new company logo.
Jackson’s core team includes his co-founder and COO Ike Youssef, with whom he worked at Universal Music’s Interscope Records, where Youssef was CFO. It also includes Ben Cook, who left his post as president of Atlantic Records UK in 2019 amid controversy over an old photo in which he was dressed up as a member of Run-DMC; Cook apologized in a statement at the time, saying he realized his appearance was “offensive” and that he’d only been trying to honor his musical hero.
“I believe in redemption,” says Jackson, noting that he was grateful to get a second chance himself after being fired for cause from Sony’s RCA Records in 2010. (He had offered to personally pay Alicia Keys a sum that exceeded the amount the label had approved for the rights to have Jennifer Hudson record one of Keys’ songs, in an effort to expedite the release of Hudson’s second album.) “In retrospect, I can see how that could be perceived as disrespectful and insubordinate – but I was doing it more with a magnanimous spirit of making sure that the album came out, which would have ensured that the company made its numbers and that all 170 employees got their bonuses. I was trying to honor the artist and honor my colleagues.”
Jimmy Iovine gave Jackson another shot, hiring him almost immediately at Interscope, and it was there during a white-board brainstorming session that same year that Youssef says they came up with the initial notion for a company like Gamma.
Jackson then worked closely with Iovine and Dr. Dre to launch Beats, their headphones and streaming service company, becoming Apple Music’s global creative director when Apple acquired Beats in 2014. Youssef, meanwhile, went on to work at Yeezy, the Kanye West-Adidas venture, as CFO from 2017 to 2018, and in 2019, Jackson and Youssef started raising capital for Gamma and shopping for assets.
Jackson is “really resourceful about creating events that distinguish artists in the marketplace. There are, what, 100,000 songs uploaded to Spotify every day? You need to have someone like Larry to get people to pay attention. He is second to none in that,” Youssef says. He “knows how to cut through the clutter.”
Jackson says he learned his tricks from Iovine, who “used Best Buy to market Beats” and “partnered with artists to market the headphones.” He just plans to expand on Iovine’s ideas, using fashion and film as vehicles for exposure, keeping Iovine close as his “chief consiglieri,” and heeding his advice like “don’t get caught speeding,” “don’t spend foolishly” and “always stay at the table.”
Among Gamma’s first musical releases will be a new album by Usher, through a new joint venture between Usher and veteran music executive L.A. Reid that Gamma will distribute. (Jackson says he’s known both Usher and Reid since he was 17, so he’s been “much more involved” than a typical distributor.) He’s also developing new podcasts with Naomi Campbell, and says he’s been in close touch with Frank Ocean throughout the launch of Gamma, seeking the artist’s feedback on details like the name of the company, but wouldn’t comment on any projects they might have in the works together.
Gamma has been shopping for catalogs besides Death Row, too, bidding for instance on some of Dr. Dre’s music assets – passive income streams including his artist and producer royalties from his solo albums — that were recently on the market, though Dr. Dre ultimately sold them to Universal and Shamrock. Jackson says catalogs “were never was a part of the business plan,” and that he’s only interested in acquiring them “on terms favorable to the original creator.”
“I only make offers,” Jackson says, “on things I feel that we can enhance.”
SM Entertainment shareholders have until the end of the month to weigh two competing visions for the South Korean music company’s future before its annual general meeting on March 31 — one from SM and Korean tech company Kakao and another from K-pop rival HYBE.
Despite SM Entertainment’s announcement Monday that it had canceled plans due to a court injunction to issue new shares and give Kakao a 9.05% stake in the company, making it the leading shareholder, SM and Kakao are pushing forward with their strategy to maintain control. On Tuesday (March 7), Kakao launched a tender offer to buy a 35% stake from SM’s minority shareholders by March 26 and, if successful, could soon own nearly 40% of SM and hold significant voting power.
SM — home to such K-pop acts as NCT 127 and Aespa — has nominated a slate of independent directors and laid out a plan for adding 260 billion won ($200 million) of revenue by 2025 by setting up operations in the U.S., Japan and Southeast Asia, and making acquisitions — including a publishing company — in the coming years, according to a company presentation to shareholders. If the roadmap is successful, SM believes it can double its annual sales from an estimated 770 billion won ($690 billion) in 2023 to 1.5 trillion won ($1.14 billion) in 2025.
Much of SM’s road map stems from its battle with founder Lee Soo-man. In late 2022, an activist investor, Align Partners Capital, convinced SM’s board to appoint a new auditor and terminate a contract with Lee’s production company, Like Planning. Now, SM is attempting to remake itself under revamped corporate governance and a more decentralized organization than Lee’s hierarchical control of artist development.
The current inside directors — including Lee’s nephew, Lee Sung-soo — will resign their positions “in order to take responsibility for the problems of the [Lee Soo-man] system,” the company stated. In their place, SM is recommending its own slate of three executives: CFO Jang Chul-Hyuk; Kim Ji-Won, head of marketing center; and Choi Jung-Min, head of global business center.
To ensure an independent board of directors, SM has proposed the chairperson be one of its outside directors, not one of its own executives. Among the company’s picks for outside directors are Kim Kyu-Shik, president of the Korean Governance Forum; Moon Jungbien, a professor at Korea University that specializes in environmental, social and corporate governance matters; and Sung M. Cho, CEO of music analytics company Chartmetric. For part-time directors, SM recommends Lee Changhwan, the CEO of Align Partners, and Jang Yoon-Joong, Kakao’s global strategy officer.
Lee Chang-hwan
Courtesy of Align Partners
HYBE, home to the wildly popular boy band BTS, has different ambitions for SM’s future. HYBE acquired a 14.8% stake in SM from Lee, the SM founder, on Feb. 22, and an additional 1% through a tender offer, according to a March 6 regulatory filing. It has blasted “the bias and irrationality” of the SM management that approved the Kakao partnership.
“HYBE has been considering the acquisition of SM for a long time and gave much thought into how the two companies could work together,” Jung Jinsoo, HYBE’s chief legal officer, wrote in a letter to SM shareholders on Thursday.
In the letter, Jung argues HYBE solved two problems when it acquired Lee’s equity. First, HYBE acquired Lee’s shares in two SM subsidiaries: SM Brand Marketing and Dream Maker Entertainment Limited. That solves what Jung called “leakage in SM’s profits” to Lee. Second, HYBE alleges SM still owes Lee fees for three years even though it terminated the Like Planning contract as of Dec. 31.
Jung says HYBE structured the stock purchase agreement so payments to Lee stop “upon the execution of the agreement.” HYBE also added a clause to terminate any transactions from SM to Lee that HYBE did not know about.
While SM sees Kakao as the partner for its transformation into a larger, more global entity, HYBE calls it an “unfair partnership” that would give Kakao permanent and exclusive rights to distribute SM’s music, protect SM’s equity at the expense of other shareholders and create conflict of interests that favor Kakao’s interests. “We believe that these details demonstrate the bias and irrationality of the current SM management who approved such arrangements,” Jung writes.
Beyond SM’s relationship with Kakao, HYBE is concerned with SM’s roadmap to increase the number of artists on its roster by expanding production in Korea and building overseas outposts. Jung is questioning SM leadership’s understanding of the time and resources required to develop and break successful artists.
“It goes without saying but you cannot generate profit in K-pop just by having a longer artist roster,” Jung writes. “What’s important is to nurture artists who are loved by fans and provide a creative environment.”
HYBE has submitted a competing slate of inside director recommendations featuring a handful of HYBE executives: Jung; Lee Jaesang, president of HYBE America; and Lee Jin Hwa, HYBE’s chief of management and planning.
For outside directors, HYBE has recommended Kang Namkyu, managing partner at GAON Law Group; Hong Sounman, professor of public administration at Yonsei University; and Lim Dae Woong, a representative of the United Nations Environment Program Finance Initiative. HYBE’s recommendation for part-time director is Park Byungmoo, managing partner at buyout firm VIG Partners; and Choi Kyu Dam, a former NCSOFT finance executive, for part-time auditor.
SM portrays the battle with HYBE as a fight for its independence from a large company. A HYBE takeover would put its interests over SM’s artists, SM says, and could force SM to downsize or divest assets to meet regulatory approval. What’s more, HYBE might not receive a warm welcome: 85% of SM employees who voted on the workplace app Blind oppose HYBE’s “hostile takeover” and want to “protect the culture diversity of K-pop and the unique identity of SM,” according to SM’s investor presentation.
Ultimately, the two sides have competing visions for a board of directors that will best serve SM shareholders and lead the company. To SM, HYBE’s recommended directors are either tied to Lee, employed by HYBE or hurt shareholder value in their previous corporate tenures. To HYBE, SM’s proposals could result in a board controlled by Align Partners that lacks the experience to expand SM and reach the company’s lofty targets.
“[I]t is questionable whether the current management has a sufficient understanding on these circumstances,” writes HYBE’s Jung.
Korean tech company Kakao will launch a tender offer to acquire up to 35% of SM Entertainment’s outstanding shares. The move came a day after a court injunction forced Kakao to cancel its plan to acquire a 9.05% stake directly from SM, whose roster includes NCT 127 and Red Velvet; a court injunction scuttled SM’s plan to issue new shares and give Kakao the stake, according to reports by Bloomberg and Reuters.
Kakao and its subsidiary Kakao Entertainment are seeking to become SM’s largest shareholder and partner, to help rebuild the company after SM’s board of directors terminated a production contract with the company’s legendary founder, Lee Soo-man, on Dec. 31. Lee sold most of his SM shares to HYBE, the home of BTS, on Feb. 22 and won a court injunction Friday that prevented SM from issuing new shares to Kakao. As a result, Kakao has been forced to seek shares from existing SM shareholders instead.
HYBE had sought an additional 25% stake in SM through a tender offer but was able to purchase slightly less than 1% of outstanding shares, the company revealed in a regulatory filing Monday (March 6). That increased HYBE’s ownership stake in SM to 15.8%. With Lee’s 3.65% stake, HYBE has voting power of 19.4% of outstanding shares. The next-largest shareholder, Korea’s National Pension Service, owns 6.2% of SM’s shares.
Kakao and HYBE are locked in a battle for control of SM’s board of directors ahead of the company’s annual general meeting on March 31. “Kakao has strong trust in the excellent competitiveness of SM Entertainment’s current management, employees, and artists, and the current management’s efforts to resolve the factors that hinder SM Entertainment’s growth,” the company said in a statement.
HYBE sees itself as the more skilled, experienced company to guide SM’s global ambitions and has criticized its competitor’s “utterly irresponsible contract” with Kakao.
Kakao and its subsidiary Kakao Entertainment, which raised $966 million from the sovereign wealth funds of Saudi Arabia and Singapore in January, will offer 150,000 won ($115.46) per share — a 25% premium over the 120,000 won ($92.36) per share HYBE offered.
SM’s share price rose 13.8% to 148,100 won ($114.09) on Tuesday morning in Seoul following news of Kakao’s tender offer.
Additional reporting by Jeyup S. Kwaak.
HYBE’s plan to control competing K-pop company SM Entertainment and thwart a partnership with tech company Kakao took another step forward on Monday when Kakao, responding to a court injunction, announced it had canceled its stock purchase agreement to acquire a 9.05% stake in SM Entertainment.
Last week, the Seoul Eastern District Court granted a provisionary injunction against SM’s plan to issue new shares and convertible bonds. The judge ruled that SM had made its decision without shareholders’ consent. It was a remarkable win for SM’s controversial founder, Lee Soo-man, and for HYBE, the reigning K-pop company and home to boyband BTS.
For weeks, SM’s management has been trying to wrest control of the company from Lee, who has been found guilty of embezzlement and exercised iron-fisted control over the company he founded in 1995. After SM made a deal with Kakao, Lee turned to HYBE, which became SM’s largest shareholder on Feb. 22 after it acquired a 14.8% stake from Lee, whose production contract with SM was canceled as of Dec. 31.
On Monday, HYBE sent a letter to SM demanding that “the current [SM] Board of Directors should fulfill its duty of care and duty of loyalty towards SM and actively exercise the right to terminate the business cooperation agreement, which contains clauses that are disadvantageous to SM and advantageous to Kakao,” according to a statement that described the letter.
With the injunction in place, HYBE also called for SM to exercise its right to withdraw the recommendation of the director candidate nominated by Kakao. SM had put forward Jang Yoon-Joong, Kakao’s global strategy officer, as a part-time director.
SM and HYBE are pushing competing visions for SM’s future before shareholders vote on a new board of directors at SM’s annual general meeting on March 31. SM wants to partner with Kakao – owner of the Melon music streaming service and KakaoTalk messaging service – to better monetize its intellectual property and launch a joint venture in the U.S.
Called “SM 3.0,” the road map calls for SM to break from the single-producer system maintained by Lee until his removal. Instead, SM wants to develop artists through multiple labels and production centers in Korea, Japan, Southeast and the U.S.
HYBE calls an SM-Kakao tie-up an “unfair partnership” that would give Kakao permanent and exclusive rights to distribute SM’s music, protect SM’s equity at the expense of other shareholders and create conflict of interests that favor Kakao. “We believe that these details demonstrate the bias and irrationality of the current SM management who approved such arrangements,” Jung Jinsoo, HYBE’s chief legal officer, wrote in a letter to SM shareholders on Thursday (March 2).
Republic Records: Kids & Family announced on Monday the signing of ARIA Hall of Fame inductee, singer, songwriter, actor and performer Sam Moran. His first single is to be released later this month.
“There is no other team that I would rather be working with than Republic Kids. The energy and creativity they are bringing to my debut project is exactly what I was looking for when venturing out on my own,” says Moran. “We have so many surprises in store that I know my fans are going to love so, get ready!”
Moran is an Australian-born performer best known for his work on the Wiggles television show, both as recurring characters and as Yellow Wiggle from 2006 to 2012.
“When launching Republic Kids I knew I had to sign Sam as an artist,” says Bree Bowles, vp of marketing and strategy. “He is the perfect complement to our mission of producing world-class music that can be enjoyed by both kids and their parents. Sam’s musical talents are beloved by so many and these new efforts will help to redefine the future of ‘kids’ music.”
Jonathan Shank from Terrapin Station Entertainment will manage Moran, telling Billboard: “We are so excited to be working alongside Sam and Republic for this release and know it’s the start of magical things to come.”
Moran said some of his material is meant to inspire kids who had a hard time emerging from the pandemic and that “there’s no better way to help them rediscover themselves than through music. I want to give them a voice that reflects how they see the world — with, of course, a bunch of fun along the way!”
TOKYO — A court ruling in South Korea on Friday added further confusion to K-pop’s biggest corporate shakeup in years: the rollercoaster battle for control over SM Entertainment, the once-industry leader bedeviled by corporate governance concerns, which rival HYBE is eager to take control of.
The Seoul Eastern District Court granted a provisionary injunction to block SM from issuing new shares, which Kakao, a Korean tech giant, had agreed to buy as part of a partnership deal between the two companies. The court ruled that SM’s decision was taken without shareholders’ consent, accepting the argument from SM founder Lee Soo Man, who has been battling SM’s management over the future of the company he created in 1995.
The ruling marks a win for HYBE, K-pop’s largest agency and home to boy band BTS, which in recent weeks acquired a 14.8% stake of SM shares from Lee – and announced plans to take control and overhaul SM’s management and board of directors. HYBE was offering shareholders a premium to boost its stake up to 40%, but the market price has since exceeded the offer price. SM’s management has slammed HYBE’s acquisition as a “hostile takeover.”
Following the ruling, HYBE, in a statement, thanked the court for the “appropriate” ruling. “With this result, everything should now fall back into place,” the company said.
In a statement from his lawyers, Lee said the decision “clearly confirmed that the resolution by SM’s current management to issue new shares and convertible bonds was made in an unlawful attempt to influence the company’s control and governance.” The attorneys added that “if SM’s current management further attempts to commit unlawful acts in the future, we will respond firmly by taking appropriate legal actions.”
A Kakao spokesperson said late Friday that the company didn’t immediately have a comment but “plans to issue a response after internal discussions.” A SM spokesperson couldn’t immediately be reached.
Lee and the company he founded are widely considered trailblazers, developing K-pop’s signature formula of visually driven performances and dance pop, and tirelessly knocking on overseas markets’ doors. But in recent years SM’s output has slowed, which its management has blamed on the founder-led single-pipeline structure.
SM’s co-CEO Lee Sung-su, a nephew of the founder’s late wife, has lashed out at the uncle with a litany of accusations, from using artists’ music for personal gains to tax evasion through a Hong Kong-based paper company. Shareholders in recent years have also objected to the founder’s ballooning producer fees, which he was receiving via a separate entity he owned.
Kakao in February agreed with SM’s management to buy 9.05% of SM shares, as part of a wider partnership agreement. The messenger-app-and-search-engine company, which has successfully expanded into e-finance and music, was going to distribute SM’s music and related content on its platforms. Kakao has also acquired several entertainment agencies in recent years, leading some, including HYBE, to argue Kakao was trying to gain managerial control over SM. Both SM executives and Kakao have rejected the claim.
With an annual shareholders meeting scheduled for March 31, SM and HYBE are expected to spend the coming weeks courting SM investors, which includes South Korea’s National Pension Service.
RCA kicked off 2023 on a hot streak — this week, SZA’s album S.O.S. spent its 10th week on the Billboard 200, dominating the early part of the year (and she was also named Woman of the Year at Billboard’s Women in Music event this week as well). And this week RCA also landed a double feat atop the charts as P!nk’s latest album, Trustfall, debuted at No. 2 on the Billboard 200, with the majority of its first-week units coming from sales.
It’s the ninth top 10 album of P!nk’s career, and her first since 2019’s Hurts 2B Human, while the single “Never Gonna Not Dance Again” became the artist’s 30th Pop Airplay hit and 35th entry on the Hot 100, milestone marks for a decorated career. And the continued success of P!nk and her latest project help earn RCA Records’ senior vp/head of marketing Val Pensa the title of Billboard’s Executive of the Week.
Here, Pensa discusses the marketing effort behind the latest P!nk album, the importance of setting up a worldwide campaign for an artist with such a global reach and fan base, and her long history of working with the artist, which stretches back years. “I learned very early on that P!nk is a fierce competitor who is willing to take risks,” Pensa says. “She is always open to evolving and growing based on the ever-changing marketplace and has a hunger to learn. I often joke that she could teach a masterclass in how to be a global superstar, but all jokes aside, she is one of the smartest, hardest-working, businesswomen out there and that shows in everything she does.”
This week, P!nk’s Trustfall debuted at No. 2 on the Billboard 200, her ninth top 10 album on the chart. What key decision did you make to help make that happen?
P!nk is a global superstar, so one of the key elements in her campaign is always to make sure that the album is set up properly in every single market around the world to leverage the best of the best in terms of global opportunities and exposure. We have an amazing partner in Roger Davies, who manages P!nk, and puts in a great deal of work to help us make sure that all partners around the world have access to music, understand P!nk’s vision and to ensure we have the right activations in place to support the music. This is a project that every single department at RCA touches, and my job, along with that of my marketing partner in crime on this project, Aaron Stern, is to work to ensure that timelines, assets and vision are communicated to the team at large to allow everyone to deliver top-notch plans within their respective fields.
This is her first album since 2019. How did you approach the marketing campaign for this album?
We had the exciting task of creating a well-rounded campaign that incorporated traditional media, digital activations, in-person activations and a lot of fan-focused events. We really honed in on creating a campaign that would reach P!nk’s massive audience and then from there developed a marketing strategy that would engage and bring in new fans. Shortform content is a sweet spot for P!nk and we had a lot of fun getting creative in that space. Aaron and I worked with the team at large to develop ideas around the “Never Gonna Not Dance Again” music video which lead to us creating the hotline and infomercial for Vicious Bitches Chipses, which was a fun companion piece for the music video and generated additional excitement upon launch.
One of P!nk’s most notable and memorable qualities is her ability to move people through her songwriting and vocal performances. Alex John, who spearhead’s P!nk’s press here, crafted an incredible campaign that allowed P!nk to touch viewers through traditional television performances and interviews, which in addition to reaching her core audience, also served as the catalyst for additional conversation around the album.
Her single “Never Not Gonna Dance Again” also became her 30th Pop Airplay chart entry and 35th song to reach the Hot 100. How big is radio to the full campaign and rollout?
Radio has historically always been super supportive of P!nk and is a major way for us to reach her audience around the world. The RCA radio team put together an incredible radio strategy to support this campaign. We always engage with radio early on; in this case the radio programmers were among the first to get to hear the album — we hosted a playback at our RCA Studio space and P!nk got the opportunity to see the programmers in person and share her vision for the album and her influences and meaning behind her songs with them directly.
This album also debuted with 59,000 of its 74,500 units coming from sales. In a streaming-dominant business, how do you still make sure that record sales are prioritized in a campaign?
For a campaign like this we spend a lot of time thinking about who the audience is and how to reach them and give them what they want. In this case, we had every physical configuration on a global scale that was possible and put a long pre-order window into place that allowed us to really double down on marketing the album date, the creative and the configurations with all the various retail partners. The support has been incredible, which speaks to the long-standing relationships that P!nk has made across the industry throughout her career.
You’ve worked with P!nk for years. What have you learned over that period working with her that you applied to the rollout of this album?
I learned very early on that P!nk is a fierce competitor who is willing to take risks. She is always open to evolving and growing based on the ever-changing marketplace and has a hunger to learn. I often joke that she could teach a masterclass in how to be a global superstar, but all jokes aside, she is one of the smartest, hardest-working, businesswomen out there and that shows in everything she does. As it relates to our marketing approach in the rollout, we worked to present a plan where P!nk is undeniably everywhere, knowing full well that she will always bring her A game and deliver.
You’ve been head of marketing at RCA for around 18 months now. What is your marketing philosophy for the label? Are there any good examples you can point to that illustrate that?
The marketing team constantly hears me talking about “the art of the campaign.” Every song, every album, every artist deserves a fully thought-out campaign that is targeted to support both the artists’ vision and tailored to reach their audience. One of the best examples of that is Doja Cat’s Planet Her campaign that helped us to keep the album in the top 10 well over a year after album release.
Previous Executive of the Week: Lallie Jones of 300 Entertainment
Universal Music Group’s revenues surged 21.6% to 10.34 billion euros ($10.96 billion) for all of 2022, boosted by strong returns from recorded music subscriptions and streaming.
The world’s biggest music company reported the revenue its recorded music division gets from subscriptions and streaming rose by nearly 19% to over 5.3 billion euros ($5.6 billion), while digital revenues in its music publishing division rose by nearly 50% to over 1 billion euros ($1.05 billion) in 2022, all helping it achieve a nearly 15% uptick in operating profit.
UMG chairman and chief executive Lucian Grainge said the earnings were evidence the company’s diversified revenue streams has made it an example of the music business’ steady strength amid a darkening economic outlook.
“We continue to successfully manage the company for long term growth while driving strong results in our core business — developing great artists and introducing their music to fans around the world,” said Grainge. “Our roster … achieved enormous commercial and creative success in markets around the world. We also worked to evolve and expand relationships with our existing DSP partners as well as establish new ones in fitness, health, gaming and the metaverse, driving the industry forward though leadership, creativity, innovation and collaboration.”
UMG was home to seven of the top 10 albums on the Billboard 200, 15 of the International Federation of the Phonographic Industry’s (IFPI) top 20 global artists and four of Spotify’s top five global artists in 2022.
UMG reported adjusted earnings before interest, taxes, depreciation and amortization rose 19.4% to 2.14 million euros ($2.26 billion) for 2022 from a year ago. Adjusted EBIDTA margin fell by 0.4 percentage points to 20.6%.
The company’s free cash flow increased by a whopping 70.2% to 638 million euros ($675 million) largely from the growth in adjusted EBITDA, according to the company’s filings.
UMG’s Earnings Highlights:
Revenue rose 21.6%, or 13.6% in constant currency, to 10.34 billion euros ($10.96 billion) for 2022 from 8.5 billion euros ($9 billion) in 2021
EBIDTA rose 20.3%, or 12.5% in constant currency, to 2.03 billion euros ($2.15 billion) in 2022 from 1.69 billion euros ($1.78 billion) in 2021
EBITDA margin fell to 19.6% in 2022 from 19.8% in 2021
Adjusted EBITDA rose 19.4%, or 11.7% in constant currency, to 2.14 billion euros ($2.26 billion) in 2022 from 1.79 billion euros ($1.93 billion) in 2021
Operating profit rose 14.8%, or 7.9% in constant currency, to 1.6 billion euros ($1.69 billion) in 2022 from 1.39 billion euros ($1.48 billion) in 2021
Net debt fell 10% to 1.8 billion euros ($1.9 billion) in 2022 from 2 billion euros ($2.1 billion) in 2021
Free cash flow rose 70.2% to 1.09 billion euros ($1.15 billion) in 2022 from 638 million euros ($675 million) in 2021
Recorded Music Division Highlights:
Recorded music revenue overall rose 16.3%, or 8.8% in constant currency, to 7.9 billion euros in 2022 from 6.8 billion in 2021
Subscriptions and streaming revenue rose 18.7%, or 9.8% in constant currency, to 5.3 billion euros in 2022 from 4.5 billion euros in 2021
Physical revenues rose 7.7%, or 4.1% in constant currency, to 1.2 billion euros in 2022 from 1.12 billion in 2021
License and other revenue rose 19.6%, or 13.4% in constant currency, to 1 billion euros in 2022 from 896 million in 2021
Downloads and other digital revenue rose 4%, or fell 2.9% in constant currency, to 337 million euros in 2022 compared to 324 million in 2021
Music Publishing Highlights:
Music publishing revenues overall rose 34.8%, 26.3% in constant currency, to 1.8 billion euros in 2022 from 1.3 billion euros in 2021
Performance revenues rose 24.9%, or 18.2% in constant currency, to 371 million euros in 2022 from 297 million euros in 2021
Synchronization revenues rose 18.6%, or 10.3% in constant currency, to 236 million euros in 2022 from 199 million euros in 2021
Digital revenues rose 49%, or 38.7% in constant currency, to 1.04 billion euros in 2022 from 698 million euros in 2021
Women in Music honoree Doreen Schimk has one of the more interesting backstories in the music business: She escaped from the former East Germany as a teenager.
In the late 1980s, she and her sister Susann, both promising athletes, went to an East German training camp where she met a teenage boy she liked. Schimk took a bigger step than most girls her age, though, sneaking across the border in his car and moving to Hamburg in what was then West Germany. In 2011, this journey became the subject of the fictionalized German film Westwind.
In 1990, not long after the fall of the Berlin Wall, Schimk moved to London, and later New York, where she says she “picked up English on the street.” “But I was obsessed with music – I was a DJ for a few years – and I thought this was the place I could get into the business, but I didn’t know the difference between an agent and a manager and a label.”
Then a friend from back home called about an opening for an internship at the German indie label Edel Records. Schimk moved back within 48 hours and then spent six years learning about promotions before taking a job at Sony Music Germany – and then, eventually, at Warner Music.
In August 2021, she and Fabian Drebes were named co-presidents of Warner Music Central Europe, which oversees operations in Germany, Austria and Switzerland. One priority is “cultural change,” she says. “There’s a huge opportunity to create a new way of working in terms of changing the mindset and breaking these barriers in terms of hierarchies.” Another is focusing more on dance music and German language hip-hop.
“With dance and EDM we have a huge opportunity to grow globally,” she says. For hip-hop, she and Drebes founded Atlantic Records Germany “to be a new door for German rap artists,” she says. “It’s based in Berlin” – Warner Music’s German headquarters is in Hamburg – “and it’s growing out of the culture there.” Change takes time, she says, but Warner Germany has shown strength this year on the singles chart.
As for the movie, she recalls, “I was in my 30s, sitting with my twin sister Susann on a balcony in Berlin, having a drink, and one of the guys we were with said, ‘Why don’t you make a movie about it?’ — [Her sister is a movie producer] — “From such a young age when I made that decision,” she says, “being fearless has always been a driver for me.”
The 2023 Billboard Women in Music Awards take place tonight (March 1) at the YouTube Theater at Hollywood Park in Los Angeles. The event will livestream here on Billboard.com and via Billboard’s YouTube account.
Fadia Kader has joined Troy Carter and Suzy Ryoo‘s Venice Music as executive vp and GM, the company announced Wednesday (Mar. 1).
“The team at Venice Music and I share a passion for changing the perception of what it takes to be successful as a DIY artist,” Kader said in a statement. “I’m excited to partner with Troy, Suzy and the team as we continue the dedicated work of educating, empowering and elevating the independent artist experience.”
Kader previously held the position of global head of strategic partnerships at Clubhouse. Before that, she was part of Instagram’s music partnerships team, and she has also worked at Twitter and Def Jam Records. She was named to Billboard‘s 40 Under 40 list in 2019.
Her new role will be wide-ranging, according to Venice Music’s announcement: “Leading teams across A&R, artist marketing, sync and community, streaming/commerce, and Web3” as well as helping to “drive the global A&R strategy, source and secure key music partnerships, and provide counsel on the products and tools [necessary] to help artists build and grow their careers.”
“Fadia has built a reputation as a trusted leader and trailblazer within the artist community,” said Venice co-founder and CEO Carter in a statement. “She’s a unique bridge between music culture and technology and will be a valuable leader within Venice.”
“We are thrilled to welcome Fadia to our team and community,” added Venice Music co-founder and president Ryoo. “Her choice to join Venice Music is a resounding vote of confidence towards artist ownership, creative freedom and the clear opportunity to make a generational impact in music.”
Carter and Ryoo founded Venice Music in 2021. “Our goal has been to help independent artists succeed on par with major label counterparts,” Carter said last year. “To sustain that success, artists need to feel educated, informed, and supported. Over the last 18 months, we’ve attracted high-quality partners and have begun to make a real impact in the independent community.”