Record Labels
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Superstar Pride’s breakout hit “Painting Pictures” has been one of music’s early success stories so far in 2023, as the song — part of the Mississippi MC’s 5 LBs of Pressure EP that was originally released last October — stormed onto the Hot 100, debuting at No. 99 in the week ending Feb. 25, before leaping to No. 35 the following week and No. 25 last week, reaching No. 7 on the Streaming Songs chart.
The song’s viral success — fueled in part by TikTok — caused a stir, with multiple labels coming in with offers to sign the rising rapper, who had originally uploaded the EP through independent distributor and services company UnitedMasters, launched five years ago by industry entrepreneur and Translation founder/CEO Steve Stoute.
But then, just as the song was beginning to reach new heights and seemingly poised to soar into the upper echelon of the charts, its momentum was briefly halted: The song’s production — which samples the Faith Evans song “Soon As I Get Home,” released in 1995 by Bad Boy/Arista Records — was flagged by Sony Music Publishing for not being properly cleared, the song was removed from Spotify for two days and some versions were also taken down from YouTube, though it remained available on Apple Music, Amazon Music and YouTube Music. The issue in part contributed to a 29% drop in U.S. streams over the prior week, from 14 million to 10 million, and “Painting Pictures” came in at No. 62 on the Hot 100 this week. (While the drop in placement on the Hot 100 is partially due to the streaming hiccup, the strong performance of Morgan Wallen’s new album One Thing At a Time saw its songs flood the Hot 100, meaning a placement jump would have been difficult regardless.)
That sample issue has now been cleared up, Stoute told Billboard this weekend. According to Stoute, Bad Boy chief Sean “Diddy” Combs, who also co-wrote and co-produced “Soon As I Get Home,” met Superstar Pride and “loved him,” and subsequently cleared the Faith Evans sample, paving the way for the song’s return to Spotify. Additionally, Stoute confirmed that Superstar Pride has decided to stick with UnitedMasters and remain independent for now, despite strong interest from major labels to sign him.
Now, Stoute and his UnitedMasters team are focused on re-starting the song’s momentum, with a video to be shot this week and a radio campaign that is now underway. In the past week, sales increased a modest 15% and radio airplay jumped significantly, up 270% week over week to 3.1 million in audience, according to Luminate.
“This video, more playlisting support, radio, that’s the next step to making a top 10 record,” Stoute told Billboard in a conversation last week. “It’s a phenomenal song that has been growing like wildfire. This seismic growth, I haven’t seen anything like this since Lil Nas X’s ‘Old Town Road,’ or something like that. It’s been pretty crazy when you look at the steep, hockey stick growth curve. But I give credit to the platform for being able to allow artists like Superstar Pride the opportunity to put music out, be able to track his performance and have the confidence that he’s distributing music and it’s in good hands.”
Superstar Pride originally uploaded the song on his own through UnitedMasters, before the company started to track its growth and reached out to offer support with playlisting and the TikTok campaign that eventually pushed it onto the Billboard charts. But Stoute sees the song’s success as stemming from its inherent quality — and as further evidence as to how the industry is changing.
“I think the artist should always own their music, because the biggest lift in all of this is the work that they did, which is making the song,” Stoute says. “There’s nothing a record company or anyone can do to make a non-hit a hit. And if the artist has a hit, in today’s music business, it’s less about what a record company can do and more about, how can you support the artist and what they want to do? It’s not like we have this magic silver-bullet idea that the artist doesn’t understand. What are your marketing ideas? What do you believe in? We’ll give you money and support to help accentuate what you believe in. And that’s why [artists] also get a lion’s share of the revenue — because it’s you. With the old record business, they didn’t respect that. The old record business was, ‘You make the song, and we’ll take it from here.’”
Since Stoute launched UnitedMasters in 2018, the music business at large has seen a shift as more services-oriented companies have come into the industry, and some established players shifted their business models toward a more distribution-and-services offering, giving artists more choices to chart their paths than the traditional record label model, while even the majors have increased their distribution offerings to reflect the reality of the marketplace. UnitedMasters, through Stoute’s sister company Translation, has marketed itself as an option with more brand services offerings to artists than its competitors; Translation represents clients such as the NFL, NBA, AT&T and State Farm, among others. But its path towards success also lies within the broader shifts in the industry.
“[The indie path] is much bigger than a cottage industry that is an alternative for people who can’t get a record deal; this is actually a solution that empowers the artist,” Stoute says. “[Superstar Pride’s success] is just another example of an independent artist finding tremendous success without the need to give up his rights, and ownership of his rights, to a record company. And the more successes that are happening like this much more frequently, the more people are seeing that the record companies are nothing more than just banks.”
Warner Music Group’s chief financial officer Eric Levin told staff on Tuesday that after a “transformative decade” for the company, he will retire at the end of the year, according to an internal memo viewed by Billboard.
Levin said he decided to announce his retirement early in the year to allow the company to move forward with a public search for his successor, similar to WMG’s handling of the successor search for former WMG CEO Stephen Cooper, who stepped down Feb. 1.
Levin joined WMG in 2014, overseeing the company’s global financial operations at a time when piracy and streaming were overhauling the fortunes of companies across the music industry.
“He helped WMG return to growth and profitability, making important contributions to its long-term strategy and the funding of its global expansion and major acquisitions,” WMG CEO Robert Kyncl wrote in a staff memo about Levin’s planned retirement. “Eric will be leaving WMG in a much better place than when he joined it.”
Prior to WMG, Levin was based in China as the North Asia CFO and regional controller for Ecolab, a leading maker of disinfectants, and prior to that he was the CFO of the Hong Kong-based English language newspaper the South China Morning Post.
Levin saw WMG through its 2020 initial public offering, which valued the company at around $12.5 billion, and managed through the leadership transition from Cooper to Kyncl. On Tuesday, Levin wrote that he is “ready to pass the baton to a new CFO.”
“It’s going to be a natural progression, at a natural time,” Levin wrote. “Whoever takes this role will be very fortunate. I’m looking forward to helping set them up for another successful decade of growth.”
Last fall, the 25-year-old English singer Raye was on the hunt for her first U.S. hit after several years of U.K. chart success. Initially, the loping hip-hop soul single “Escapism” seemed to bring her no closer. After the first week, streams of the track started to fall, according to Luminate. But in mid-November, its trajectory dramatically reversed, leaping from 185,000 streams one week to 500,000 the next to over 6 million two weeks later. “Escapism” went on to peak at No. 22 on the Billboard Hot 100.
What happened? The burgeoning popularity of a homemade sped-up remix of “Escapism” that captivated TikTok users, spurring them to incorporate it into their videos and driving streams of the original. Raye’s label, Human Re Sources, responded by releasing an official uptempo rework of the single that has over 114 million streams on Spotify alone.
“I wish that I could sit here and say, ‘We were in our marketing meeting, we decided that we were going to do a sped-up version of this particular spot in the song, and that’s going to ignite all the rest of it,’ ” says J. Erving, a longtime music manager, founder of the artist services and distribution company Human Re Sources, and executive vp of creative development at Sony Music Entertainment. “The kids are taking control of the songs, and they’re determining what part of the record is sticky and what version of it is sticky.”
Those “sticky” versions — often just sped up or slowed down, or a pair of tracks mashed together — can spark streams. “These remixes can really create careers and reignite careers,” Universal Music Group vp of A&R strategy Nima Nasseri says. “They’re great mechanisms for growth. Every label is putting them out,” often releasing official versions of the remixes that trend on short-form video platforms.
Sped-up remixes also spurred recent chart surges for Miguel’s “Sure Thing” (actually a resurge, as it first charted over a decade ago), The Weeknd’s “Die for You,” Lady Gaga’s “Bloody Mary,” and Mariah Carey’s “It’s a Wrap,” as well as boosting streams for tracks like Lizzy McAlpine‘s “Ceilings.”
Remixes — extended for club play, shortened and punched up for radio — are nothing new. And listeners taking control has been a hallmark of the shift to digital, starting with YouTube fan covers in the 2000s and progressing in the streaming era to fan response helping labels determine what tracks to focus on for promotion.
The difference today is the extent to which power has shifted to social media users. The process, says Erving, is no longer about label executives and managers deciding “this is our single, insert remix producer here, add rapper here, this is going to be the thing — those days are over.” In fact, according to a major-label A&R executive, “it’s not about the recording anymore. It’s about what you’re offering the user base to say, ‘Hey, you’re an intelligent consumer. Here are the stems [individual audio components] for our songs. Do what you want to it.’”
“Is anything in its final form now?” one major-label marketing executive asks. “Or are we just putting out clay for fans to mold?”
Part of this change is technological — it has never been simpler to manipulate audio. “These [remixes] are being made easily by fans in real time on their computer or phones,” says RCA Records COO John Fleckenstein.
Many in the music industry believe this remixing activity is also part of a generational shift. “Gen Z in particular has been raised online alongside meme culture,” says Scott Plagenhoef, global head of music programming at Apple Music. “They’re accustomed to content that is repeated but manipulated, and music is no different.”
While it’s common to encounter both sped-up and slowed-down remixes on short-form video platforms, Plagenhoef says “sped-up remixes seem considerably more popular and prevalent than slowed-down ones” at the moment. “Sped-up songs allow for more of a track to be heard within the time constraints of a TikTok video and mirror the pace at which users consume content online,” he adds. Increasing tempo can also “make the songs better — it brings out a different emotion,” according to Josh “Bru” Brubaker, a TikToker (4.5 million followers) and radio personality for Audacy.
Many remixes don’t replace or distract fans from the original track — they draw attention to it. “From a discovery standpoint, we see a large amount of referral traffic make its way back to original tracks from remixes,” says Roneil Rumburg, co-founder/CEO of Audius, a blockchain-based streaming service. For example, the original of Raye’s “Escapism” (304 million streams) is significantly out-streaming its sped-up remix on Spotify.
Since discovery is increasingly difficult to engineer in a time of content overload, the music industry is encouraging fan experimentation with songs and aiding the creation of remixes. “There’s a whole community of TikTok DJs solely making these sounds to try to make them go viral because you get so much exposure,” Brubaker says. Labels and marketers say they sometimes pay these DJs anywhere from a few hundred dollars to $20,000 to remix and post songs.
Labels have also worked to get officially released sped-up remixes visibility on streaming services. UMG started the Spotify account Speed Radio to highlight its sped-up tracks, according to Nasseri; it has more than 9 million monthly listeners. Another account, sped up nightcore, does the same for Warner Music Group releases. (A WMG representative did not respond to requests for comment on this account.) “Anytime we get one of these remixes that has traction, we tag it with ‘Speed Radio,’ and it just amplifies the growth,” says Nasseri. “That’s a very valuable tool for artists to use.”
The streaming services have created playlists for these remixes as well. Spotify’s Sped Up Songs, launched last June, now has over 1 million followers. Apple Music recently unveiled Viral Remixed. “Over the past year, the DSP partners have been really helpful,” Nasseri says. “Casey Compernolle at Apple and Lizzy Szabo at Spotify are people we work with closely who have a great understanding of the remix space.”
Even as these remixes have helped create hits, not every artist wants to participate in this economy. “I completely respect if an artist chooses not to release a sped-up version if it doesn’t suit the song,” says Ian Quay, co-manager of Cults, who have a popular sped-up version of their song “Gilded Lily.”
But much of the stigma around tempo-shifted remixes seems to be fading. “Two years ago, I’d say 5% or 10% of artists were receptive to this,” Nasseri estimates. “Now it’s probably about 70%.” Meng Ru Kuok, CEO of music technology company BandLab, adds, “rights holders understand that this process is inevitable, and it’s one of the best ways to bring new life to tracks.”
While sped-up and slowed-down versions run wild on TikTok, they haven’t penetrated the mainstream — yet. “It still feels more specific to the short-form platforms right now than ‘I heard a great sped-up version at the club last night,’ ” says Fleckenstein.
But this could change. The rock duo Cafuné broke out with “Tek It”; the sped-up version now has more Spotify streams (143 million) than the original (137 million). Fleckenstein points to young RCA act Ari Abdul, who has enjoyed streaming success with the synthwave single “Babydoll.” “Sometimes the sped-up version is actually outperforming the original,” he says.
Will these tempo-shifted remixes eventually reach all the way to radio? “If it’s good enough,” Fleckenstein adds, “you never know.”
Korean alt-rock artist LØREN has signed with 88rising, the company tells Billboard. The label will release his debut EP, Put Up a Fight, on March 24 in partnership with THEBLACKLABEL.
LØREN gained traction in 2021 with the release of three singles: “All My Friends Are Turning Blue,” “NEED (ooo-eee)” and “EMPTY TRASH.” He has also written several songs for K-pop superstars BLACKPINK and starred in one of their music videos. His social profile is also robust, with over 1.2 million followers on Instagram, and he has graced the covers of magazines including Vogue Hong Kong, DAZED Korea and i-D. He currently models for Saint Laurent.
Put Up a Fight is described as “a pop-punk-meets-indie-rock inspired project” that features “grungy” vocals by LØREN sung in both Korean and English (pre-save here). It’s preceded by the single “Folks.”
Ahead of the EP release, LØREN is set to perform his first-ever U.S. shows at SXSW on March 15 as part of the all-Asian music festival Tiger Den (performing alongside Balming Tiger) and 88rising’s Head in the Clouds New York on May 21.
“I’ve been looking forward to Put Up a Fight‘s release for a while now, and I’m thrilled to join forces with 88rising through the process,” said LØREN in a statement. “I’m a huge fan of their work, and I’m very happy to take part in their vision. It feels surreal to have SXSW, album release, and HITC New York ahead of me. To say I’m excited would be an understatement—I absolutely cannot wait for what’s to come.”
88rising’s roster also includes Jackson Wang, Warren Hue, BIBI, Joji and NIKI.
SEOUL — K-pop juggernaut HYBE has withdrawn its bid to control rival agency SM Entertainment and has instead decided to collaborate with SM as well as rival bidder Kakao, marking a sudden détente. Announced early Sunday, the resolution paves the way for K-pop agencies to not only bury the hatchet but also continue their push to monetize fandom with idol-related online content.
“Proceeding with a higher tender offer [to beat Kakao’s bid] may have in turn caused a negative impact on our shareholders and we also judged it may have further overheated the market,” HYBE said in a statement. The agency of boy band BTS had secured about 15% of SM, a former market leader, mostly by acquiring shares from SM founder Lee Soo-man, who was recently pushed out from the agency. A previous tender offer to increase HYBE’s stake in SM didn’t move the needle and a counteroffer by Kakao remains outstanding until March 26.
On Monday, the market reacted by dragging SM stock down more than 23% to 113,000 Korean won, making Kakao’s current offer at 150,000 won more attractive. A HYBE representative said Monday it has not decided whether to sell the SM shares. He added that it was studying possible avenues for collaboration with SM and/or Kakao but declined to comment further. HYBE and Kakao shares have jumped 3.21% and 4.65%, respectively.
SM, which has played a key role in K-pop’s popularity and overseas expansion, has resisted HYBE’s acquisition, slamming it as “anticompetitive.” The two agencies in recent years have dominated the charts, together accounting for nearly half of all albums sold in 2022, according to Korean chart company Circle Chart. But despite its success, shareholders have been calling for changes to the Lee-controlled single-pipeline structure, as rival agencies grew larger by delegating creative direction to mostly autonomous teams. Lee was also being paid millions of dollars a year in producer fees, though he held no managerial position there, an arrangement that shareholders have scrutinized in recent years.
In a drive for reform, SM’s management in February said it would issue new shares to be sold to Kakao as part of a wide-ranging partnership. Lee, then-the biggest shareholder, protested but management overrode him. Lee then offloaded most of his shares to HYBE, which in turn tried to up its stake with a tender offer. Lee successfully challenged the Kakao deal in court, prompting the latter to issue a higher counteroffer.
“Kakao vows to guarantee operational independence at SM, respecting its strongest asset and impetus, the employees, artists and fans,” said Kakao chief investment officer Bae Jae-hyun in a statement on Sunday. Bae added that Kakao and SM would “create new synergies, based on SM Entertainment’s global IP and production system as well as Kakao’s IT expertise and IP value-chain business capacity.”
HYBE, SM and other rivals have in recent years pushed proprietary platforms like Weverse and Beyond Live to foster online fan communities for all fan activities, free or for-pay. Kakao’s platform and search-engine rival Naver in 2017 also inked a deal with YG Entertainment, home to girl group Blackpink, to push YG artists’ content.
SM did not return calls for comment.
Warner Records is stepping further onto the dancefloor.
On Monday (March 13), the label announced the launch of its first-ever flagship dance label, Major Recordings. The label is led by executive Sam Mobarek, a longtime figure in the global dance music scene.
The label’s first signing, in partnership with Parlophone’s FFRR, is PARISI. The duo’s recent work includes behind-the-scenes production with Fred again.. and Swedish House Mafia and an official collaboration with Buy Now, the project from Swedish House Mafia’s Steve Angello and Sebastian Ingrosso. PARISI’s signing to Major Recording marks the launch of their artist project. (“They’re the producer’s producers,” says Mobarek.)
The launch of Major Recordings expand on Warner’s recent marquee successes in the dance realm, with label trio RÜFÜS DU SOL winning the best dance/electronic recording Grammy in 2022, producer Illenium earning a Grammy nomination that same year and David Guetta and Bebe Rexha‘s “I’m Good (Blue)” becoming a major 2022 hit, with the song reaching No. 4 on the Hot 100, where it’s currently in its 27th week.
With Major Recordings, Mobarek will take this momentum and focus it on the ground level of the dance music scene by discovering, signing and developing talent that reflects the breadth, depth, diversity and roots of the sonically sprawling genre.
“I don’t want to sign a bunch of things just because they’re going to give us streams,” she says. “I want to create something focused on community and good music.” Mobarek plans to achieve this goal by creating an artist-friendly label with personality and emotion, one that’s strongly tied to the underground, which has a strong network of artists and fans, and that’s not simply driven by bottom lines.
“Term-wise,” Mobarek says, “that means being fair and exploring how to be inventive about how we do our deals. We want everyone to make money, but because it’s dance music we’re not just gunning for hits; we’re gunning for cultural importance.” Additional signings will be announced in the coming months, with these to include both full artist signings and one-off singles, in order to create flexibility. Music signed to the label will represent the wide spectrum of dance music — a genre that offers a subgenre to fit every conceivable emotion or time of day.
“It will definitely be all over the place in that someone can come to us and be like, ‘What am I in the mood to do? Am I in the mood to sleep? Am I in the mood to rage? There’s [going to be] something here for all of those moods,” says Mobarek.
The label’s focus on authenticity aligns well for Mobarek, who’s been in dance music for nearly two decades. Her previous experience includes Ultra Music — where she led the marketing department and helped propel artists like Calvin Harris and Steve Aoki during the height of the EDM boom — the digital download store Beatport and her own marketing agency, Mob Creative, where clients included house music legend MK.
This on-the-ground experience, combined with Mobarek’s genuine love for the genre, have given her a deep understanding of sounds, trends and how to break artists and tracks not just across radio and streaming, but into the furthest corners of clubland.
“It’s not just about hiring a DJ servicing company and pushing music out via them,” Mobarek says of her strategy. “It’s about using the relationships I have with artists directly, timing things correctly, knowing who would care about [new music], knowing the difference between what Diplo’s Revolution and BPM would play [on Sirius] and which DJs are playing what.” In addition to signing acts and music, she’ll also work with Warner Music Group’s director of global strategy for electronic music, Anton Partridge, to identify dance acts signed to Warner in other territories and break them in the States.
“There’s a whole roster of Warner acts that I’ve been able to be like, ‘I know what to do with them here,” she says.
Such a nuanced understanding of the scene was key in making Mobarek the right fit for this new role. “With Major Recordings, we’re doubling down [on our strong presence in the dance music community], putting renewed energy and dedicated focus on supporting even more acts from around the world,” the label’s co-chairman & COO Tom Corson and co-chairman & CEO Aaron Bay-Schuck say in a joint statement. “Sam will be the driving force behind our success, helping us ensure that this music and these artists make a true global and cultural impact.”
“I can feel it in my stomach; we’re on the cusp of something,” Mobarek says of the energy behind dance music in the U.S. at the moment. “There are all these signs that point to it coming like [David Guetta and Bebe Rexha’s success and Skrillex, Four Tet and Fred again..’s sold out Madison Square Garden show].”
“I’m not going to try and predict what it looks like,” she continues, “but I’m going make sure people see it.”
The U.S. recorded music business posted its seventh consecutive year of growth in 2022 as the industry continues to benefit from streaming services such as Spotify, Apple Music and YouTube. After spending most of the last two decades in a painful freefall — piracy devastated CD sales and the download-driven unbundling of the album didn’t make up for it — the recorded music business has enjoyed a great run. Last year, paid subscription revenues surpassed $10 billion for the first time, according to the RIAA, and overall revenues reached $15.9 billion.
Here’s the bad news: Last year’s growth, in terms of both dollar and percentage increases, was the lowest since 2016, when the recorded music business started to recover from a 15-year downturn. Happy days may be here again, but they’re not getting happier like they were.
Total recorded music revenues grew 6.1%, but that’s about a quarter of 2021’s 23.2% gain. Paid streaming revenues improved 7.2% in 2022, a third of the 22.2% growth in 2021. It was the first time that this segment’s growth rate fell into the single digits since 2010. That year paid streaming revenues rose just 2.9% to $212 million. Over the next decade, as annual paid streaming grew to 57.8% of total recorded music revenue in 2022, the segment’s annual growth often exceeded 50% and fell below 20% only twice.
Ad-supported streaming’s revenue growth rate also fell into the single digits, also for the first time in more than a decade. Slowed by an advertising malaise that has also affected companies ranging from Alphabet to iHeartMedia, streaming services’ advertising royalties to record labels grew 5.6% compared to 44.4% in 2021 and 16.8% in 2020. In dollar terms, last year’s revenue growth was the lowest since 2015.
The slowdown shouldn’t catch anybody by surprise given the industry’s reliance on streaming, subscription services’ unwillingness — until recently — to raise prices and a finite number of potential customers. The problem comes down to basic math: Fees from subscription services accounted for 57.9% of recorded music revenues in 2022. At just 2.4% of total revenues, a high-growth segment like synchronization barely moves the needle despite rising 24.8% in 2022. Vinyl sales were strong once again — up 17.2% — but accounted for just 7.7% of total recorded music revenues.
Up-and-coming revenue streams such as TikTok, Facebook and Instagram are just that — not yet ready to deliver meaningful royalties despite their popularity. Their revenues are included in the ad-supported streaming bucket that increased just 5.5% in 2022. TikTok faces high expectations but large uncertainty, too, as it faces pressure from politicians at the state and federal level that could reduce its importance. In addition, the company has installed parental controls that are likely to reduce engagement and further reduce its potential value to artists and labels.
A positive trend is subscription services’ decisions to raise prices on individual and family plan tiers. In 2022, Apple Music, Amazon Music and Deezer raised prices in the U.S. Spotify has not yet announced a price hike for standard subscription plans but has hinted it will follow suit in 2023. Labels are eagerly awaiting Spotify’s move. “We are the lowest (cost) form of entertainment,” Warner Music Group CEO Robert Kyncl said Thursday. “We have the highest …engagement, highest form of affinity and lowest per-hour price. That doesn’t seem right.”
Globally, the situation looks better. The industry in China, the world’s most populous country, is flourishing thanks to streaming companies such as Tencent Music Entertainment and Cloud Music. In Japan, the world’s second-largest recorded music market, streaming revenues increased 125% in 2022, according to the RIAJ. At Spotify, which operates in 184 markets, revenue increased 21.3% in 2022 to 11.7 billion euros ($12.4 billion), with about equal growth rates from paid and ad-supported streaming. Annual revenues of two smaller streaming companies, Europe-focused Deezer and MENA-focused Anghami, grew 13% and 36%, respectively.
In the U.S., a maturing streaming business alone cannot maintain the breakneck pace of the last seven years. Labels will need more than the status quo to return to double-digit growth.
Back in 2017, at a Universal Music Latin Entertainment convention in Miami, Jesús López played the newly-released “Despacito” by Luis Fonsi and Daddy Yankee for those in attendance. “We all thought it was a hit,” says López, the chairman/CEO of Universal Music Latin America and Iberian Peninsula. “Admittedly, never what it became, but we knew it was something special.”
That evening, López also introduced two new signings: Sebastian Yatra and Karol G. The two Colombians, he said, “are the two big new artists in the company.”
It would take “Despacito” six months to make history as it soared to the top of the Billboard Hot 100, and stayed there for a then-record 16 weeks, tying the time spent by Mariah Carey and Boyz II Men’s “One Sweet Day” at No. 1 in 1995-96. (The record would eventually be broken by Lil Nas X‘s “Old Town Road.)
It took Karol G six years to make a different kind of history, as the first woman to place an all-Spanish album at No. 1 on the Billboard 200 with her latest project, Mañana Será Bonito. The set earned 94,000 equivalent album units in the U.S. in the week ending March 2, according to Luminate, its starting sum largely powered by streaming activity and with single “TQG” with fellow Colombian Shakira as one of its driving forces.
But there was no one tipping point for Mañana, or for Karol G. Rather, the success was the result of long-term planning and a series of key actions over the years, beginning with the door that “Despacito” opened, and including a steady stream of releases — four albums total; opening a 2019 arena tour for Gloria Trevi, which expanded her Mexican-American fan base; her hit “Tusa” with Nicki Minaj; and her 2021 album, KG2516.
“We haven’t stopped,” says López, who, thanks to another history-making moment, is Billboard‘s Executive of the Week.
Karol G has been on an upward trajectory that’s only accelerated the past year. Regardless, hitting No. 1 on the Billboard 200 is remarkable. Short-term, when did the road to No. 1 begin?
We began in April 2022 with Coachella. We started to have meetings to plan the launch of [new single] “Provenza,” and that’s when we began to plan the next album. I wanted February 2023, but Karol was aiming for November 2022 to coincide with the Latin Grammys. Then, between production and her tour, the date moved. Beginning in Coachella we designed a truly clear strategy to release singles one after another with a story for each single. Remember, singles now have a narrative behind them. We started climbing step by step. Clearly there was no tipping point, but rather different important moments.
Was the No. 1 a goal, and why did you see it possible?
Once we saw those first-day numbers we thought we could be No. 1, and we worked every campaign we thought could help. Initially, we were aiming to beat Bad Bunny’s numbers at that moment. If we hit 40,000 to 50,000 equivalent album units, we would place higher. Then the data started coming in. The weekend after release we knew we were in the battle for the No. 1, and by Monday I thought it would happen. My team was a little more reticent, and I was more optimistic, which is usually not the case. But I’m also more analytical and I crunched my numbers and it looked like we would be No. 1. Karol was all over it and she’d ask every day if we need more posts or more tweets. The artists and the company all came together because we knew what this meant. It was once again a very big statement for Universal Music.
Karol took up painting in the past couple of years, and the album cover, as well as the merch generated around it, uses her artwork. Was the merch important in this release?
Yes. All that began last year with Coachella, and we started to experiment when we released [singles] “Provenza” and “Gatubela,” designing merch that would bring her fans closer. The cover of Mañana Será Bonito, for example, will be a mythical cover, and it represents Latinidad and colombianidad 100%. I love Karol’s integral approach to things. And she’s very persistent. She works each detail very thoroughly. She has her ideas, and then she truly executes them very well.
How important was TikTok in the album’s success?
It’s not essential to the album, but it is for the singles. TikTok is the new radio; it breaks songs, and that’s how we’re using it. It’s been very important in this stage for singles like “Provenza,” “Gatubela,” “Cairo,” and right now our focus is to have “TQG” break records as well. The number of creations that fans are making with the music on TikTok is astronomical. It has to do with the storyline of empowerment around the song, and the collaboration between a legend [Karol G] and a legend legend [Shakira].
Shakira is signed to Sony. Was it complex to close the collab with her?
No. Not at all. We already have rules in place amongst ourselves [labels]. When we bring two names together, we know what we have to do. If two artists want to work together, we don’t put obstacles [in the way].
Given her No. 1, I have to think some of Karol’s consumption comes from the mainstream and not necessarily from Latins. Have you been working that market as well?
Yes. Since “Tusa,” everything we do we also work on the mainstream. We have PR teams, radio teams. But overall, it’s about people communicating differently today. There are no barriers. If you sell 12,000 tickets in a city that doesn’t have a big Latin population, clearly you’re reaching non-Latins. At school, a Latin girl sits next to her non-Latin friend. And since Latin is hot right now, there’s greater consumption. But, there’s still much to do in the mainstream, and I believe her tours and endorsements, as well as this single, will allow us to continue growing that market. The single and the album are already big hits in countries like Italy and France, but we need to do more work in England, for example.
In your opinion, what’s Karol’s appeal?
She’s a mix of many things. Obviously, getting here is not just about singing well or being clever. She is, first and foremost, a workaholic, meticulous, takes care of every detail. In the urban world, she’s a woman who sings very well, and that allows her to both rap and phrase beautifully; her songs have more range. And she’s very good at grasping where she wants to be, and she’s a natural role model for women who didn’t have role models. She’s very confident in who she is and that has allowed millions of women to identify with her and feel valued. She’s the girl next door. Karol is a diamond. Really, it’s not easy to find all these qualities in a person.
How important was this No. 1? And what’s next?
I don’t want people to always think ours is the company of “Despacito” or J Balvin or “Mi Gente” or even “Macarena.” Sometimes we forget what we’ve done. This success was very important to Latin women overall, to Karol G, but also to Universal Music Latino. The point is to write the next story. And the next, next, next great one will be Feid. I think he’ll be the biggest artist of 2023.
Previous Executive of the Week: Val Pensa of RCA
LONDON – Vinyl sales generated more money for record labels and artists than CDs for the first time in more than three decades in the United Kingdom last year, helping drive a 4.7% rise in overall music revenue, according to annual figures from labels trade body BPI published Thursday (March 9).
In 2022, sales of vinyl LPs climbed 3.1% year-on-year in the U.K. to £119.5 million ($142.4 million) and now account for over half (55%) of all trade revenues from physical sales. The last time vinyl revenues eclipsed CD sales in the United Kingdom, BPI says, was in 1987 when Michael Jackson’s Bad was the year’s best-selling album and Rick Astley had the best-selling single of the year with “Never Gonna Give You Up.”
In total, 5.5 million vinyl LPs were sold in the United Kingdom last year. That marks the highest level of vinyl purchases in the country since 1990, according to BPI figures released in January measuring music consumption. The best-selling vinyl titles in the U.K. in 2022 were Taylor Swift’s Midnights, Harry Styles’ Harry’s House and Arctic Monkeys’ The Car.
Despite the ongoing vinyl revival, overall revenue from physical formats was down 10.5% to £216 million ($258 million), with CD sales slipping 24% to £89 million ($107 million).
Offsetting that decline was 6.3% year-on-year growth in streaming revenues, which climbed to £885 million ($1 billion) and accounted for 67% of U.K. recorded music revenues in 2022 — up from 66.2% the 12 months prior. Vinyl sales made up 9% of the market in terms of annual trade revenues, while CDs accounted for 7%.
Breaking down streaming revenue, paid subscriptions generated £763 million ($910 million), up 4.8% on 2021, while ad-funded revenue grew by more than a fifth (22%) to £63 million ($75 million). Digital download sales fell 17.5% to £28 million ($33 million).
Synch revenues were up even more sharply, rising 39% year-on-year to £43 million ($51 million), while public performance income spiked 23% to £143 million ($170 million).
Total U.K. recorded music sales — comprising digital and physical revenues, public performance rights and synch — climbed 4.7% to £1.32 billion ($1.57 billion) in 2022. That marks a rise of 36% over the past five years, according to BPI, as well as the eighth-consecutive year of growth.
The United Kingdom is the world’s third biggest recorded music market behind the United States and Japan with sales of just over $1.8 billion in trade value, according to IFPI’s 2022 Global Music Report. (BPI’s year-end sales figures are based on pound sterling, rather than the far stronger U.S. dollar, hence the perceived decline in overall revenues when BPI’s figures are converted into dollars at a constant currency basis).
“2022 was another great year for British music, but we must guard against any complacency in the face of growing challenges and keep promoting and protecting the value of music,” BPI chief strategy officer and interim CEO Sophie Jones said in a statement. She also called upon the U.K. music community to work together to “create the impetus” for further growth and “futureproof the success of British music in an increasingly competitive global music market.”
As previously reported, British artists accounted for the top 10 biggest-selling singles in the U.K. last year (either as the lead or as a featured artist) for the first time since year-end charts were introduced more than 50 years ago. Leading the pack was Harry Styles’ “As It Was,” which topped the U.K. singles chart for 10 consecutive weeks (it also spent 15 weeks atop the Billboard Hot 100) and was streamed more than 180 million times in the country.
Joining Styles in the U.K. top 10 was Ed Sheeran, Cat Burns, Glass Animals, Lost Frequencies & Calum Scott, LF System, Sam Fender and Kate Bush, whose 1985 track “Running Up That Hill” spent three weeks at No. 1 following its high-profile Stranger Things synch; it was streamed 124 million times in her home country last year.
Styles also landed the year’s best-selling album with his third studio set, Harry’s House, making him the first artist to have both the United Kingdom’s top single and top album since Lewis Capaldi in 2019. Sheeran’s = (Equals) and Swift’s Midnights were the year’s second and third-best-selling albums.
On Thursday (March 9), the RIAA released its annual year-end report on recorded music revenues in the U.S., with an encouraging top line: In 2022, total revenue was up 6% to $15.9 billion, with paid subscription and wholesale revenues each surpassing $10 billion for the first time. That marks the seventh straight year of growth for an industry that at this point is far removed from the doldrums of the early part of the century.
In fact, the industry could credibly be a little underwhelmed by the rate of growth, as the 6% figure is the lowest percent increase across those seven years — and the only time other than pandemic-affected 2020 (+9.2%) that growth has fallen below double digits during that period. In actual figures, it’s the smallest increase ($900 million) year over year since 2016, when the business grew 11.4% and added $700 million.
There are plenty of other interesting takeaways to discern from digging through the RIAA’s report. Here are four (plus one bonus item!) that stand out.
Paid Subscriptions — Anything to Worry About?
Both the average number of paid subscribers (those subscribing to full-catalog services like Apple Music or Spotify’s paid tier) and the revenue from full-catalog paid subscriptions grew at much slower rates, both in percentage terms and in actual numbers, than in recent years. The former metric showed an increase of 8 million subscribers (9.5%; 84 million in 2021 to 92 million in 2022), while the latter metric reflected an increase of $600 million (7.2%; $8.56 billion to $9.17 billion). As with the overall growth rate for the industry, that’s the first time in several years that those figures grew by less than double-digit percentages. So, is it anything to worry about, when looking at how much growth there is left in the paid streaming business?
Not necessarily. For one thing, between 2018 and 2022, paid subscribers (up 96.2%) and revenue from full-catalog subscriptions (up 93.6%) have grown fairly in line with each other, and the revenue per subscriber has averaged $98.92 over that period of time (pandemic-affected 2020 was an outlier year, at $92.35). In 2022, the average revenue per subscriber was $99.77, which was down from $101.94 in 2021 but not out of line with the overall average.
That number should be expected to grow, given price increases by Apple Music, Amazon Music and Deezer in the past year and the increasing pressure on Spotify to boost its price higher than $9.99/month, where it has stayed since entering the U.S. in 2011. This will be something to keep an eye on as the year progresses, as strategies shift from gaining subscribers to getting more out of those who do subscribe, given that a ceiling on the number of subscribers could be coming into view (for context, the U.S. government counted 124 million households in the latest census).
Another reason for optimism: The above numbers don’t include limited-tier subscription revenue — things like Amazon Prime and fitness apps like Peloton — which crossed the $1 billion mark for the first time in 2022. Since 2020, when the pandemic led to a home fitness app craze and resulted in additional areas of limited music subscription beyond the traditional paid streaming realm, limited-tier subscription revenue has grown 47.7%. As more licensing opportunities arise, that sector should continue to contribute meaningful revenue moving forward.
Ad-Supported Streaming Takes a Hit
Ad-supported on-demand streaming revenue reached $1.8 billion in 2022, accounting for 11% of the overall revenues for the business last year. But growth was just 5.5% over 2021 — a big reality check after the category grew 46.7% in 2021 over pandemic-affected 2020 and 16.4% at the mid-year mark of 2022. Even in 2020, when the world essentially came to a standstill for several months, year-end ad-supported streaming revenues grew 16.8%, up $170 million — higher than the $95 million gain seen in 2022.
The advertising slump last year was certainly a blow to U.S. industries, with layoffs across the music and tech landscapes in particular. Many companies cited “economic headwinds” due to a combination of factors, including the war in Ukraine, rising interest rates, inflation and the threat of recession as companies scaled back spending that had ballooned coming out of the pandemic and readjusted forecasts for an uncertain future. All of that certainly played a part. But since 2018, ad-supported on-demand streaming revenue grew 137%, becoming an increasingly large part of the overall pie. In comparison, 5.5% is likely a disappointing number to many in the industry.
Vinyl, Vinyl, Vinyl
Another year, another big headline involving vinyl’s 16-year winning streak: For the first time since 1987, the number of vinyl LPs sold in the United States (41 million) surpassed the number of CDs sold in the calendar year (33 million). Vinyl sales reached $1.2 billion in 2022, up 17.2%, while CD sales plummeted once again, decreasing 17.6% to $482 million. Despite the eye-popping vinyl revenue numbers, however, actual unit sales only rose 3%, meaning that the price of vinyl is getting more expensive. In 2021, the average vinyl record cost $26.12; in 2022, that number rose to $29.65. There’s plenty to unpack there, including increased production costs and inflation.
Another notable development in the vinyl craze that has sharpened in recent years is the shifting market share among vinyl retailers. As far back as 2015, when the industry started to emerge from its nadir, the market was dominated by indie records stores (45.42%), internet/mail order sellers like Amazon (32.88%) and chain stores like Best Buy (15%), according to Luminate. By 2018, indie stores and Amazon sales had essentially settled into a market share tie — each at 41% — while the Best Buys of the world had shrunk to just north of 10%.
But beginning in 2019, a fourth player began to emerge: Mass merchant stores like Walmart and Target, which dramatically expanded their inventories. As a result, their market share went from less than 1% in 2015 — accounting for some 7,000 sales — to 10.19% in 2019 and 14.75% in 2021, with sales of 6.1 million units. While the market share economics have shifted during that time, sales have continued to increase for each sector across the board. In short, part of what has been driving the boom has been sheer visibility in some of the biggest stores in the country, which has correlated to more sales, and thus more visibility, and around and around we’ve gone. (For those curious, in 2022 indie stores accounted for 48.1% of the market, having reclaimed their dominant position as the country emerged from the pandemic.)
The Synch Explosion
In the past few years, more and more songs have caught huge waves due to synchs in popular TV shows and films. Think Kate Bush’s “Running Up That Hill” following its Stranger Things placement, The Cramps’ “Goo Goo Muck” following its Wednesday placement and Gerry Rafferty’s “Right Down The Line” from Euphoria, to name a few. That seems to have stemmed from the explosion of content, as the streaming wars in TV/film world heated up during that time — with Netflix, Disney+, Hulu, Peacock, Paramount+, Apple TV+ and the rest all throwing money around to reel in subscribers. The RIAA numbers back that up: In 2022, synch revenue grew 24.8%, from $306.5 million to $382.5 million, marking a gigantic jump. In fact, from 2020 to 2022, synch revenue jumped 44.2%, outpacing the industry at large (which was up 30.3% in that span).
Will that upward trend continue? It’s unclear. The TV/film streamers have publicly cut back their content spends in the past six months as the battle for market share and subscribers veered into profligacy and waste, while corporations looked to reel in costs amid the broader economic landscape. But it’s possible those gains are here to stay, even if they regress a bit. One music group executive recently told Billboard that in addition to the big four streamers (Spotify, Apple, Amazon and YouTube), Netflix was quickly becoming a fifth major source of revenue thanks to a combination of direct synch payments and the long tail of streams that result from a high-profile placement. That’s something to keep an eye on moving forward.
Bonus Takeaway — Ringtones!
Finally, a small bonus addition from a personal favorite aspect of the RIAA report. The mid-to-late-2000s were, of course, a time of great uncertainty and anxiety in the recorded music business, as piracy and digital music chipped away at a once-dominant physical sales format. At their height in 2007, ringtones and ringbacks were able to plug the gap to the tune of $1.1 billion, according to the RIAA. (That would be around $1.6 billion today.) So, how much money did ringtones and ringbacks generate in 2022?
$11 million!
Please, RIAA, continue printing this as a line in every report, no matter how small the figure gets. While it’s currently the smallest line item by revenue in the entire report, I cherish it more than all the others.