Record Labels
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Universal Music Group (UMG) has struck a deal to acquire a 49% shareholding in PIAS Group, the leading European independent music company.
Financial terms of the arrangement, announced early Wednesday (Nov. 30), were not disclosed.
By taking a minority stake in PIAS Group, UMG, the world’s leading major music company, expands on its strategic global alliance struck with the indie powerhouse in June 2021.
PIAS, or Play It Again Sam, was founded in Belgium 1982 by Kenny Gates and Michel Lambot, both career-long advocates for the independent music sector.
Gates and Lambot will retain majority control of the company, a joint statement reads, and UMG will have no seats on the company’s board.
Headquartered in London and Brussels, PIAS is said to be one of the largest independent and privately-owned music companies in the world.
The group includes the PIAS Label Group, which oversees the business’ various record label interests, and Integral Distributions Services, which provides support to its own, in-house labels and upwards of 100 independent label partners, including ATO, Beggars Group, Bella Union, Chrysalis, Domino, Epitaph, LSO, Mute, Ninja Tune, Partisan, Secretly Group, Transgressive and Warp.
Today, PIAS boasts 16 offices around the world with 300 employees.
“The boldly independent and music-centric culture that Kenny and Michel have built over the last four decades has provided a vital creative network to so many artists,” comments UMG chairman and CEO Lucian Grainge, in a statement.
“While much of the past was focused on ‘majors versus indies,’ it’s clear that today, the important divide in our industry is about those committed to artist development versus those committed to quantity over quality. “
He continues, “We share Kenny and Michel’s passion for developing artists and moving culture, and we recognize that a healthy music ecosystem needs companies like PIAS who are committed to amplifying the best voices in independent music.”
As PIAS celebrates its 40th anniversary, Gates and Lambot insist the new arrangement will enable its artists, clients and team to flourish.
Says Lambot, one of the founders of the pan-European independent music companies’ trade body Impala, “we are still as ambitious as we were when we started out about growing our global presence and providing a world class service to the independent music community.”
Gates adds, “These days we are competing with finance and tech giants and a partner like Universal Music Group provides the additional support for us to compete and grow. Universal made it clear that they like us, they trust us and they need us, because they can’t do what we do and they value it highly.”
This move, Gates continues, “makes us stronger and secures the future of our brand, our staff and our partners while maintaining control of our destiny.”
Created in a Brussels cellar four decades ago by Gates and Lambot, PIAS began life as a distributor of independent labels. Four years, the pair launched publishing company Strictly Confidential, and PIAS continued to grow its footprint, including the opening of offices Paris and London (in 1994), Hamburg (1995), Madrid (2000), New York and Stockholm (2013), and Sydney (2017) through the acquisition of Inertia.
Universal Music Group (UMG) has purchased a 49% stake in the indie label group [PIAS], expanding on a strategic global partnership that began last year. As part of the deal, [PIAS] founders Kenny Gates and Michel Lambot will retain control of the company, “remain fully independent” and UMG will have no seats on the indie’s board.
In March 2021, [PIAS] rebranded its distribution and services arm to [Integral], bringing on a new managing director to expand its business globally. Three months later, [PIAS] entered into an agreement with UMG that gave the major label group access to the [Integral] platform, which also handles distribution services for more than 100 indie label partners including ATO, Beggars Group and Secretly Group. The newly announced minority investment is said to be an extension of that initial deal.
“We have enjoyed an excellent relationship with the Universal Music Group team since we announced our strategic global alliance with them last year,” said Lambot — who co-founded [PIAS] in Brussels, Belgium, in 1983 alongside Gates — in a statement. “Kenny and I are celebrating our company’s 40th anniversary this year and we are still as ambitious as we were when we started out about growing our global presence and providing a world class service to the independent music community.”
“These days we are competing with finance and tech giants and a partner like Universal Music Group provides the additional support for us to compete and grow,” Gates said in his own statement. “Universal made it clear that they like us, they trust us and they need us, because they can’t do what we do and they value it highly. For Michel and I this is our life’s work and an ongoing journey and I am excited about the prospect of this new chapter in the life of [PIAS]. This move makes us stronger and secures the future of our brand, our staff and our partners while maintaining control of our destiny.”
The expansion of the deal comes at a time when many major labels — Capitol Music Group, Republic, 300, Interscope and more — are increasingly launching or enhancing their distribution offerings for independent artists and labels. This deal with [PIAS] presumably expands UMG’s access to independent distribution moving forward.
“The boldly independent and music-centric culture that Kenny and Michel have built over the last four decades has provided a vital creative network to so many artists,” UMG chairman/CEO Lucian Grainge said in a statement. “While much of the past was focused on ‘majors versus indies,’ it’s clear that today, the important divide in our industry is about those committed to artist development versus those committed to quantity over quality. We share Kenny and Michel’s passion for developing artists and moving culture, and we recognize that a healthy music ecosystem needs companies like [PIAS] who are committed to amplifying the best voices in independent music.”
Motown Records chairwoman and CEO Ethiopia Habtemariam is stepping down from her position “to pursue new endeavors,” the label and parent company Universal Music Group (UMG) announced Tuesday (Nov. 29). A successor will be announced at a later date.
In a statement, Habtemariam said, “It has been the greatest honor to work with some of the most incredible artists, songwriters and partners in the world. I have always had a clear vision for the talent that I’ve had the privilege to work with, which has led Motown to global success and returned the label to the forefront of contemporary culture. I would not have been able to make that vision come to life without the support of my amazing team at Motown, my UMG colleagues around the world, and Sir Lucian. I am incredibly proud of what we have created during my tenure, and I consider this the perfect finale to my 20 years at UMG spanning publishing and recorded music.”
UMG chairman and CEO Lucian Grainge added, “Under Ethiopia’s leadership, Motown has seen strong growth, continuing its legacy of bringing important new voices to modern culture. Not only has Ethiopia been instrumental in developing and breaking incredible artists, but also she has strategically identified and amplified key partnerships that have been, and will continue to be, cornerstones of the UMG creative ecosystem. While I will miss working with Ethiopia, I know she will achieve great things going forward and she leaves with our enduring love and respect.”
Habtemariam was elevated to Motown chairman and CEO in March 2021 following six years as president, making her just the third woman and only the second woman of color ever to hold that title at a major label. During her tenure, she orchestrated creative and entrepreneurial ventures with partners including a 2015 deal with Quality Control Music, under which Motown helped shepherd the careers of QC artists including Migos, City Girls, Lil Yachty, Layton Greene and Lil Baby.
At the time of her hire as chairwoman and CEO, Habtemariam noted Motown would move forward as a standalone label with some shared services, spinning out from under the Capitol Music Group umbrella. Since that time, the label has put out music from Migos, Lil Baby, Lil Durk, Vince Staples, Tiwa Savage, Ne-Yo and Kem, among others. In addition to the Quality Control partnership, under Habtemariam’s leadership Motown has also signed joint venture deals with YoungBoy Never Broke Again and his label; singer and rapper Smino, in partnership with his Zero Fatigue and EQT (Equative Thinking) labels; and Sean “Diddy” Combs and his label Love Records.
Before joining Motown in the dual role of label president and executive vp of Capitol Music Group, Habtemariam worked at Universal Music Publishing Group for more than a decade, rising from creative manager to president of urban music & co-head of creative.
In an internal note sent to her team following the announcement, Habtemariam paid tribute to her Motown colleagues while noting her nearly 20-year run with UMG. During her tenure at the publishing division, she built a team that signed and developed songwriters including Cardo, Childish Gambino, Chris Brown, Ciara, Big Sean, Hit-Boy, J. Cole, Jhene Aiko, Justin Bieber, Miguel, Stacy Barthe and Quavo.
Habtemariam also emphasized her dedication “to bringing a renewed vision of Black excellence to Motown – rooted in the past but connected to today, global in nature and a platform for the future.”
“The business has changed so much over those twenty years but throughout its ups and downs, I’ve always felt blessed to have the opportunity to work in so many aspects of the industry,” she continued. “My hunger to learn and continue to evolve led me to the unique experience of working across publishing and recorded music simultaneously. The fact that I was empowered to this unique position reflects my passion for supporting those that are blessed with the gift of music but also speaks to the incredible opportunities I was offered here and for that I want to thank Lucian who recognized my talent as a creative in publishing and gave me the opportunity to lead at a label as well.”
Habtemariam started her career in 1994 at age 14 as an intern at L.A. Reid‘s LaFace Records, where she worked for four years before moving to Universal Music Group. She has been named to numerous Billboard lists, including the 2022 Power List in January. In September, she was honored with The Clarence Avant Trailblazer Award at the first annual BMAC Music in Action Awards.
You can read Habtermariam’s full note to her team below.
Team:
Some of you may or may not know that the top of 2023 marks my 20th year at Universal Music Group. And, after two amazing decades, I’ve made the incredibly hard decision to leave for my next adventure. I’ll address my future plans soon, but today is all about Motown, UMG and you.
First and foremost, to the Motown team, your commitment to our artists, the legacy of this label, and the community at large is not lost on me. It’s been a privilege and honor to work with each and every one of you and I’m so excited to see how you continue to move Motown forward. Over 60 years ago, Mr. Gordy forged a core for this company – one that respects and celebrates artistry and strongly supports creative entrepreneurship – and this continues to live on thanks to all of you. I couldn’t be prouder of what we’ve built.
When I think of my time at UMG, it occurs to me that my career really started at this company. I was a creative manager at UMPG 20 years ago, then by 2010 worked as an A&R consultant and manager while building a creative team at UMPG that signed and developed some amazing songwriters such as Cardo, Childish Gambino, Chris Brown, Ciara, Big Sean, Hit Boy, J Cole, Jhene Aiko, Justin Bieber, Miguel, Stacy Barthe and Quavo among many others. In 2014, I was promoted to the position of President of Urban & Co-Head of Creative at UMPG and appointed to President of Motown Records.
It was a busy time being in dual roles and laying the foundation for what was to come in an industry with an ever-changing landscape. While continuing to build at UMPG, I was also deeply dedicated to bringing a renewed vision of Black excellence to Motown – rooted in the past but connected to today, global in nature and a platform for the future. In 2015, we signed a landmark deal for Motown with Quality Control which included a distribution agreement ensuring support in developing the next generation of global superstars. By 2016, as that strategy brought Motown success with new groundbreaking artists, Motown became my sole focus as we continued to grow the company with artists including BJ the Chicago Kid, Brandy, Kem, Diddy, Erykah Badu, Lil Baby, Lil Yachty, Migos, Sebastian Kole, Smino, Tiana MAJOR9, YoungBoy and Vince Staples among others.
The business has changed so much over those twenty years but throughout its ups and downs, I’ve always felt blessed to have the opportunity to work in so many aspects of the industry. My hunger to learn and continue to evolve led me to the unique experience of working across publishing and recorded music simultaneously. The fact that I was empowered to this unique position reflects my passion for supporting those that are blessed with the gift of music but also speaks to the incredible opportunities I was offered here and for that I want to thank Lucian who recognized my talent as a creative in publishing and gave me the opportunity to lead at a label as well.
But one thing that has never changed is the love I have for music—and the artists, songwriters and producers that make such incredible art. That continues to drive everything I do professionally, and it always will.
This is an exciting time in music and I look forward to exploring new creative and entrepreneurial opportunities. I will share more about my future plans but for now I want to focus on winding down my role as we get to the end of the year.
Thank you for this incredible journey. Know that I will always be here to support you all.
With love, gratitude and respect,
Ethiopia
MILAN — Warner Music Group has hired Pico Cibelli, a Sony Music Italy executive involved in the global breakthrough of rock band Måneskin, to helm its Italian label.
Cibelli, who will be based in Milan, will take over as president of Warner Music Italy, which Marco Alboni led for nine years. Cibelli will start in the role “in the near future” and report to Simon Robson, president of international, recorded music for Warner Music Group, the label said in a press release.
Cibelli spent more than a decade at Sony Music Italy, where he worked in A&R and helped develop the company’s frontline domestic artists. According to Italian media reports, Cibelli’s early involvement with breaking Måneskin could have played a major role in Warner’s decision. While at Sony, he was instrumental in hiring A&R Fabrizio Ferraguzzo, who has acted as Måneskin’s manager since June 2021.
Before joining Sony in 2011, Cibelli spent 10 years at Universal Music Group, first as television marketing manager and dance music A&R, then as A&R manager. Cibelli previously worked in an independent, family-run record store; as a DJ/producer; and later as an executive at local independent distributors Dig It International and Self Distribuzione.
The announcement of Cibelli’s appointment comes in a week when Warner artists hold two spots on Italy’s Top 10 album charts: Trenches Baby by Milan-based trapper Rondodasosa, whom Alboni signed, and The Beatles Songbook from veteran singer Mina.
“The success of artists such as Måneskin,” Cibelli said in a Warner Music press release, “has shown that Italian artists can take the world by storm, something we’ll see more of in the years ahead.”
Robson, in a statement, said that Cibelli “has a proven track record of developing artists and maximizing their potential.”
As a source of domestic talent, Italy is one of the strongest markets in the world. In 2021, Italian acts accounted for 76 % of the annual Album Top 100 compiled by FIMI, the local federation for the recorded music industry with which major companies and some local independent labels are affiliated. The Italian music market regained the No. 10 spot in the world in 2021, according to FIMI, showing an 18.33% increase from 2020 and a turnover of 153 million euros ($170.8 million) in the first half of 2022, with digital sales accounting for 83% (revenues from subscription streaming rose by 13.7%).
Alboni has not indicated where he is heading next, saying only on his LinkedIn page that he will soon start a new job as a music industry executive. He has worked as an artist manager and had prior stints with EMI Music Italy, PolyGram and Virgin Music Italy before being appointed Warner Italy’s chairman and CEO in 2013 when WMG acquired EMI Music Italy.
TikTok is known for compulsively addictive short-form video, and for the past three years, much of the music industry has been hooked. By now, the platform is widely viewed as the most potent driver of streaming activity; marketing strategies often center on trying to harness the app’s users to touch off hits.
Lately, however, there’s been a noticeable shift in the way the music business talks about TikTok. One major-label executive with experience running campaigns on the platform recently mused to colleagues that he thought it was “dead” for breaking new songs. Another calls it “not workable.” “Does TikTok break hits now?” asks an A&R executive. “There’s a bunch of stuff going off there that’s not even a hit. We’re running on the inertia of what it was.”
“TikTok is eating itself,” declares Max Bernstein, who founded the marketing agency Muuser. “It still drives consumption if you get it right, but it’s much harder to maneuver now. Trends are siloed when they used to be community-wide, and influencer media is becoming prohibitively expensive.”
A number of A&Rs and marketers feel similarly, and they are trying to adjust strategies when it comes to signing artists and allocating marketing dollars. It’s the music business’ version of algorithmic anxiety: An industry accustomed to figuring out how to leverage promotional tools to favor its artists is learning that TikTok is increasingly tough to control.
Not everyone agrees, of course. Tyler Blatchley, co-founder of the label Black 17 Media, which has had success on TikTok, calls the idea that the platform is “not workable” “absurd.” The app’s users helped singles like Sam Smith and Kim Petras’ “Unholy” soar on streaming services; at this point, it’s hard to think of a recent hit that wasn’t aided and abetted by TikTok. “The biggest game in town is TikTok,” says Chris Anokute, an A&R exec-turned-manager. “Everyone who wants to tell you otherwise is delusional, they don’t understand it, or they missed the boat.”
But even some of those who believe, as one rap label-head puts it, that TikTok “is the main platform to focus on for marketing,” still acknowledge that the industry’s attitude towards it has shifted. “People are frustrated because they can’t finesse the system so easily anymore,” the hip-hop executive says.
This frustration relates to larger anxieties in the music industry. Managers, A&R executives and marketers say it’s harder than ever to command listener attention, and they believe TikTok’s position as the preeminent music discovery platform is partially to blame. “If we’re asking, ‘how do people find new great artists that they’re going to fall in love with,’ hearing a nine-second snippet of a song is probably not the answer that any of us would give,” says Justin Lehmann, founder of Mischief Management (Aminé, Khai Dreams).
Still, TikTok is where people are spending their time — more than 90 minutes a day, according to the data analytics company Sensor Tower, nearly twice as much as they spend on Instagram. The music industry has no choice but to try to reach those potential listeners. It’s just getting harder and harder to do.
“There are a lot of songs that pop quickly [on TikTok], but it doesn’t have the same effect,” says Talya Elitzer, co-founder of the indie label and management company Godmode. “It’s not the golden era of TikTok by any means,” confirms another veteran digital marketer. “Things aren’t performing the way they used to.”
And executives say the impact of their marketing budgets is waning. According to a recent report by music consulting agency ContraBrand, based on analysis of TikTok’s top 200 from the first half of 2022, “paid-for tactics, such as influencers and ads, accounted for success in under 12% of the platform’s viral tracks.” “You can do your best to manufacture something on [TikTok], but I haven’t seen too many people be super successful,” says Cassie Petrey, CEO of the social media company and management firm Crowd Surf. “There’s an illusion of control people think they have over TikTok because we can pay influencers and push more video usage.”
As awareness of that illusion grows, “a lot of major companies, the savvy ones, are not spending as much on TikTok as they once were,” according to Elitzer. Another marketer says that he’s cut TikTok spending in many cases by more than 50%.
Labels may be shifting their signing strategies around TikTok as well. Whereas record companies have been signing acts off a single viral explosion, hoping for quick returns on their investment, a bevy of one-hit wonders has caused some to contemplate changing course. “I’ve heard a lot more A&Rs that I’ve been speaking with go back to signing artists based on musicality, which is exciting,” says Tim Collins, co-founder of Creed Media, an entertainment marketing agency.
“Too many people got caught with empty bags — labels overpaid for these deals, and the artist never delivered a better song or couldn’t rise to the occasion,” Anokute adds. “People were making multi-million dollar offers without even meeting the artist! The race to jump on everything moving on TikTok has slowed down.”
After a period where the app seemed to overshadow everything in music, executives seem more open to the idea that focusing all resources solely on TikTok may not be a viable long-term strategy. Petrey preaches a zen attitude about it all. “You’ll have moments on social media that are big, and you’ll have other times where you thought that song was the one and it didn’t go,” she says. “Continue to make good work.”
Warner Music Group’s double-digit fourth quarter revenue growth served as the capstone in chief executive Stephen Cooper‘s long-term growth strategy, and is a signal more growth to come, Cooper said on Tuesday.
YouTube’s former chief business officer, Robert Kyncl, will replace Cooper as WMG’s new CEO on Jan. 1, though Kyncl will share the top duties with Cooper for his first month.
Cooper’s 12-year-tenure at WMG has been marked by an early embrace of digital streaming, major expansion into markets in Asia, the Middle East and Africa, and taking the company public roughly two-and-a-half years ago, among other things.
“I’m very proud of the progress we’ve made over the past 10 years,” Cooper said on a call with analysts Tuesday. “As I look out on the next 10 years, I believe we’re at the doorstep of a new golden age of music. As the ecosystem becomes more complex and exciting new business models emerge, our role as the connective tissue between artists and fans will only become more prominent and important.”
WMG reported quarterly revenues rose 16% at constant currency to $1.5 billion in the fiscal fourth quarter ended Sept. 30, with solid growth across all business lines, including a 39% and a 48% jump in digital and performance revenues respectively. Investors welcomed the news, pushing Warner’s stock up 15.2% to $31.08 as of 10:30 a.m. in New York.
Cooper said he sees the company’s future momentum coming from continued growth in the number and price of streaming subscriptions, penetrating deeper into new emerging markets and investing more in new digital technologies.
WMG now has partnerships with more than 200 streaming services and operates in 70 countries around the world. While executives decline to put a number on how much WMG may make from recent subscription price hikes by Apple Music and Deezer, they said they expect it to result in other streaming companies raising prices.
“I’ve consistently told you that streaming revenue would continue to have significant runway, that we would have price increases and ongoing subscriber growth, and that emerging platforms would continue to expand,” Cooper said. “We’re now seeing all these come to fruition.”
WMG’s annualized revenue from emerging streaming platforms, include deals like the recent one reached with Meta, topped $370 million this quarter, Cooper said.
The fourth quarter saw big releases Lizzo, whose album Special was her first to hit No. 1 on Billboard’s Top Album Sales chart, as well strong carry-over sucess from some of WMG’s superstars like Ed Sheeran, Dua Lipa and Silk Sonic.
The company’s pipeline remains strong, Cooper said, with first quarter releases expected from Paramore, Aya Nakamura, Cardi B, Roddy Ricch and others.
However, Cooper said he expects the outsized monetary impact of hit singles and albums to continue to decrease in the coming years as the company works with talent in more geographic markets and diversifies its revenue streams.
“As we’ve broadened and deepened our artist roster and prioritized a global approach to domestic music, our revenue composition has evolved,” Cooper said. “A decade ago, our top 5 artists generated over 15% of our recorded music physical and digital revenue. In 2022, they generated just over 5%.”
One new geographic market where Cooper said WMG plans to expand is in Eastern Europe. In recent months, WMG invested in the Polish concert and festival promoter BIG Idea, the Serbian record company Mascom Records, and participated in launching OUT OF ORDER, a new label for Eastern European artists.
Warner Music Group, helped by digital revenue growth across recorded music and publishing, reported quarterly revenues rose 16% at constant currency (9% as reported) to $1.5 billion in the fiscal fourth quarter ended Sept. 30, the company announced Tuesday (Nov. 22). Adjusted earnings before interest, taxes, amortization and depreciation (EBITDA) grew by 16% to $276 million.
In his final quarterly earnings after 12 years as Warner Music’s chief executive, Steve Cooper said, “Against the backdrop of a challenging macro environment, we once again proved music’s resilience, with new commercial opportunities emerging all the time. We’re very well positioned for long-term creative success, and continued top and bottom line growth. We’re excited to have Robert Kyncl joining next year as WMG’s new CEO, as we enter the next dynamic phase of our evolution.”
WMG’s share price edged slightly lower in pre-market trading, down 0.88% to $26.98 on Tuesday at 8:19 a.m. New York time. Warner Music executives will discuss the company’s quarterly and full year results on a call with analysts at 8:30 a.m. ET.
Digital revenue grew 12.3% at constant currency or 6.8% as reported to $989 million, including a $38 million settlement related to certain copyright infringement cases. Total streaming revenue increased by 8.9% at constant currency (3.5% as reported) due primarily to driven by music publishing streaming revenue, which rose by 37.0% at constant currency (or 29.8% as reported).
Recorded music streaming revenue increased by 4.7% at constant currency, but decreased by 0.4% as reported. Digital’s share of total revenue comprised 66.1%, compared to 67.3% in the prior-year quarter, due to the double-digit growth of recorded music artist services and expanded-rights and licensing revenue.
Music publishing revenue improved 32.3% at a constant currency (23.9% as reported) to $254 million on the strength of digital and performance revenue. Digital revenues jumped 39.5% at constant currency (32.5% as reported) to $159 million. Streaming revenue increased 37.0% in constant currency (29.8% as reported) helped by streaming services and new digital deals.
In WMG’s recorded music segment, revenues rose 13.1% at constant currency (6.1% as reported) to $1.25 billion. Expanded rights revenue improved 33% to $204 million at constant currency (21.4% as reported) due to an increase in concert promotion revenue following the disruption of the touring business in 2021.
Physical revenue of $123 million was up 6% at constant currency but down 3.1% as reported, primarily due to volatility in exchange rates that offset higher vinyl sales and strong sales in Japan. Digital revenues of $830 million rose 8.1% in constant currency (up 2.9% as reported), and now represents 66.7% of total recorded music revenue compared to 68.9% in the prior-year quarter.
Music publishing contributed nearly 17% of overall company revenues in the quarter, up slightly from the year-ago quarter when music publishing made up 15% of overall revenues. Recorded music revenue contributed 83% of overall revenues in the quarter, down slightly from the year-ago quarter when recorded music revenues comprised 85% of overall company revenues.
Looking to grow its share of the fast-developing Middle East music market, Warner Music Group has signed Saudi singer Dalia Mubarak, one of the country’s biggest female stars and a leading voice among a new generation of progressive Arabic artists.
Terms of the deal were not disclosed. The signing — Warner Music’s first Saudi artist signing since it began investing in the Middle East region about four years ago — caps a breakthrough year for 31-year-old Mubarak, who earlier this month won Best Saudi Arabian Artist at the Distinctive International Arab Festivals Awards (DIAFA) in Dubai and was featured this summer on the cover of Vogue Arabia.
Since releasing her debut single, “Turn The Table,” in 2014, the singer’s career has flourished in line with the gradual opening up of Saudi society following the appointment of Saudi Crown Prince Mohammed bin Salman in 2017, making him the de facto ruler of the oil-rich Gulf state. His reforms have helped modernize the country of 35 million people, where, up until a few years ago, concerts were banned and ultraconservative norms prevailed, including the segregation of unmarried men and women in public spaces.
Historically rife with piracy, the Middle East and North Africa (MENA) market nearly doubled between 2019 and 2021, and it was the fastest-growing region in the world last year, with recorded music revenues up 35% to $89.5 million, according to IFPI. More than 95% of MENA revenues came from streaming, helping draw the interest of major record companies, which are increasingly looking to emerging markets to find new talent and, in turn, extend their labels’ global reach. MENA’s potential is vast, with a total population of about 430 million people, of which 55% are under the age of 30, according to the Organisation for Economic Co-operation and Development (OECD).
The Mubarak signing follows a series of investments and acquisitions Warner Music has made recently in the Gulf region. Last year, the company acquired a minority stake — reportedly worth around $200 million — in Rotana Music, the Arab world’s leading independent record label, which is part of Rotana Group, owned by Saudi billionaire Prince Al Waleed Bin Talal.
In March, Warner completed the acquisition of Qanawat Music, a leading distributor across the Middle East and North Africa. WMG put roots down in the region in 2018 when it created Warner Music Middle East and opened an office in Beirut, Lebanon.
Mubarak, who mostly sings in Arabic and has previously released music on Rotana, says she fulfilled a childhood dream by signing with Warner Music because of the opportunities and exposure it provides not just in her home country, but internationally as well.
“Everyone is now looking to what’s going on in Saudi Arabia, how it’s changed, and I want to be part of that change and show the world that we have good artists,” Mubarak tells Billboard. “I want to be the bridge [between Saudi Arabia] and the international world.”
Mubarak’s music mixes contemporary R&B and Western-style pop with traditional Khaleeji music, incorporating Arabic instruments like duff drums and mirwas. She says the music, which promotes positive messages of female empowerment, reflects the progressive changes that have occurred in her home country.
The singer has built a large following in Saudi Arabia and the wider Arab diaspora with total YouTube views surpassing 350 million, according to Billboard’s calculations (subscribers to her official YouTube channel stand at just over 600,000). Her most popular song is 2020’s “Elly Yemshy 3ady,” which was the artist’s first single sung in the Egyptian dialect; it has generated more than 66 million views on YouTube.
The singer has just under 700,000 followers on Anghami, the most popular music streaming service in the Middle East with around 20 million active users, according to company filings. (Warner was unable to provide comprehensive streaming numbers for Mubarak.)
Mubarak has also performed at many of Saudi Arabia’s biggest music festivals, including 2019’s Jeddah World Fest, where she joined DJ Steve Aoki onstage at the event’s close. (The festival also featured performances from Janet Jackson, 50 Cent and Chris Brown, and saw Nicki Minaj make international headlines when she pulled out of a scheduled appearance in protest against the Kingdom’s treatment of women.)
Dalia Mubarak with Max Lousada and Simon Robson, Warner Music UK, Nov 2022.
Warner Music
Max Lousada, CEO of Warner Recorded Music, calls Mubarak a “trailblazer for change,” saying in a press release that she symbolizes “a new generation of female artists from the country who are rewriting the rules and winning fans across the region and beyond.”
The singer, who has an American husband, divides her time between the Saudi capital city Riyadh and Dubai. “Other singers in the past were not as lucky to have this freedom and these opportunities that I’m now grateful for,” she says.
Alfonso Perez-Soto, Warner Recorded Music’s president of emerging markets, tells Billboard that the label intends for Mubarak to be the first of many artists Warner signs from the MENA region as part of its overall long-term strategy. Previously, WMG’s focus has been on establishing itself in the region, “building the access to catalogs and distribution and gaining resources” so it is fully equipped to provide “the best tools” to help break and build lasting careers for Arabic artists like Mubarak.
Perez-Soto says the best of Warner Music’s worldwide resources are being made available to help Mubarak establish an international career. That includes teaming the artist up with English producers and songwriters for a short run of demo recording sessions in London earlier this month.
The plan, says Perez-Soto, is that they will “create product and songs that will be appealing to the Western market,” as well as cater to Mubarak’s existing local fanbase by drawing on the Middle East’s rich cultural heritage. Going forward, releases will vary between English-language songs and Arabic-focused repertoire.
Perez-Soto says he hopes giving Saudi artists like Mubarak a global platform will help bring about further change in a country that, while rapidly developing, still draws widespread condemnation for human rights abuses, including a ban on political protest and discrimination against women and marginalized groups.
“The situation is nowhere near close to perfect, but the country is making a very sincere effort [to change] in the right direction and we have to be part of enabling that effort and help that to happen,” says the Miami-based executive.
“There is no hate in music,” says Mubarak. “Music is something beautiful and it creates peace and hopefully we’re going to be part of that.” She wants to inspire other females in the Arab States, including her two young daughters, to follow in her footsteps. “I hope to be their voice,” she says, “to motivate them and make their dreams happen.”
Unsigned and emerging artists in Africa will soon be able to compete for global distribution deals and record contracts with Sony Music Africa through a new collaboration between the major label and the companies behind the Afrochella Festival in Ghana.
Afrochella’s parent company, Culture Management Group, and media streaming service Audiomack, are teaming up with Sony Music Africa to expand the “Rising Star Stage” competition, which previously entitled winners to a chance to perform onstage at the festival.
With Sony’s involvement, up to 10 prize winners chosen from a short list of 25 will be signed to distribution deals with Sony Music Africa, which will take their music out to the world, Sony says in a press release.
The Grand Prize winner will secure an exclusive recording agreement with Sony Music Africa for the release of a single; marketing support (including a music video); free access to Afrochella’s recording studio as well as mentoring and training from industry executives and “leading musicians and producers,” Sony says. The top winner will also have the opportunity to perform live at Afrochella.
Five winners, including the Grand Prize winner, will also be able to perform on Afrochella’s Rising Star Stage alongside headliners on the festival’s second day, Dec. 29.
To enter the competition, artists need to upload an original song to Audiomack and create an Instagram Reel that includes an introduction about the artist, their approach to music and music-making process, and “what they want their potential audience to know about their style of music,” Sony says.
“With the strong backing of Sony Music, we now have the exciting opportunity to make an artist’s dreams come to life by providing them with a distribution deal and sustainable resources to help jumpstart their musical career,” Abdul Karim Abdullah, CEO and co-founder of Afrochella, says in a statement.
The “Rising Star Challenge” is now underway, and winners will be chosen during the two-day festival. The sixth edition of Afrochella, scheduled for Dec. 28 and 29 in Ghana’s capital Accra, features headliners Burna Boy, StoneBwoy and Fireboy DML.
Last month Coachella Music Festival sued the organizers of Afrochella, saying they infringed on Coachella’s trademarks and had allegedly tried to register the Coachella name in Ghana through the country’s intellectual property office, which was denied. Goldenvoice owns the trademark for both Coachella and the word Chella, preventing it from being added to other event titles in a way that could confuse fans.
TOKYO — This summer, the Japanese entertainment company Avex launched the seven-member girl group XG on a weekly music TV show — in South Korea, instead of Japan. The move was strategic. Rather than promote the group, which was five years in the making, at home, Avex leveraged Korea’s K-pop-rich media market to make an international splash.
It’s a prime example of the newest chapter in K-pop’s globalization: non-Korean acts tapping into the training, promotion, styles and strategies that made the genre an international success.
Korean networks’ many music programs showcase dozens of bands and live performances, which are readily available on YouTube — a key factor in K-pop’s international expansion, according to industry experts. In stark contrast, Japanese TV networks have been slow to embrace YouTube because sharing original content there often leads to unauthorized reuse. “Japanese TV shows are really inside — we can’t really reach to the global fans,” says Reina Aiguchi, a manager in Avex’s digital marketing group who works with XG. “In order to gain the global fans, we had to go on Korean TV shows.”
XG — like JO1 from Japan and boy band SB19 from the Philippines — followed the K-pop star incubation model, drawing their members from thousands of auditioning hopefuls and undergoing yearslong training regimens. Thanks to instruction from K-pop vocal coaches and choreographers, they appear to be gaining traction, accumulating millions of audio streams and YouTube views. What remains unclear, though, is whether they will lure non-Korean listeners away from Korean bands or grow the genre’s fan base by having lesser-known artists attract more listeners.
Either way, experts say the development could help boost K-pop’s long-term viability worldwide. Non-Korean K-pop bands may displease some existing fans, but this expansion evolves the genre beyond Korean pop. “If globalizing Korean acts was the model in the past, now the mindset is to create global-level groups around the world,” says Kim Young-dae, a Seoul-based music critic. “It didn’t happen overnight. This has been the goal that [the industry] has been working on for the last two decades.”
K-pop acts with members from outside Korea aren’t a new phenomenon. Starting in the 1990s, agencies recruited from the Korean diaspora and later expanded the talent pool to such key target markets as Japan and China. From Super Junior to TWICE to Aespa, bands have benefited from members who communicate with fans and media in relevant markets in their own languages.
But this latest wave of K-pop groups has no Korean members. Instead, they are working within Korea to take advantage of the know-how, distribution channels and global attention K-pop has established. They were often exposed to K-pop from childhood and see Korea as a platform for international stardom.
XG
Courtesy of XGALX
XG, for example, is produced by an agency led by Simon Jakops, a former K-pop idol who was born in the United States to Korean and Japanese parents. Avex selected XG’s members from a pool of 15,000 Japanese girls in 2017 and put them through five years of training — starting when they were ages 10 to 15 — to master hip-hop and R&B music, as well as English and Korean. They lived together in a dormitory in Tokyo and moved to Seoul during the pandemic. Singing and rapping in English — with the occasional Japanese word thrown in — the group made 14 appearances on six different Korean TV shows in June and July to promote its first two singles, “Tippy Toes” and “Mascara,” Aiguchi says. The group is marketed by XGALX, an agency overseen in Tokyo by Avex, which, in recent years, has struggled to repeat its J-pop idol successes from the 1990s and 2000s.
“We wanted to refer to K-pop and have those methods for XG,” says Yudai Hasegawa, manager for XGALX, speaking through Aiguchi’s translation. “Second is, we wanted to shoot those music videos in Korea, where they have good music video directors.” Such strategies appear to be making a difference: XG has about 700,000 subscribers on YouTube and around 600,000 on TikTok, while “Mascara” reached No. 14 on the Billboard Japan Hot 100, spending 11 weeks on the chart. In addition, the group won the Rising Star award at the MTV Video Music Awards Japan in November. Comments below the group’s videoclips contain English, Bahasa (Indonesia) and Spanish, alongside Japanese.
JO1, a Japanese boy band formed from the 11 winners of the 2019 reality TV contest Produce 101 Japan, also received training in South Korea. Their music, often a collaboration between Japanese and Korean producers, is sung in Japanese with English words peppered into the mix, a K-pop formula for upping the songs’ global appeal. The members have appeared on Korean variety shows and K-pop-focused YouTube channels. (Their latest single, “SuperCali,” borrows the famous compound word from Mary Poppins.) JO1 has racked up several No. 1s on the Billboard Japan Hot 100, including “Bokura no Kisetsu” (“Our Season”), which topped the chart last December and has nearly 420 million combined views on YouTube.
Korean agencies in recent years have also launched non-Korean bands that perform K-pop-like music — notably SM Entertainment’s China-geared boy band WayV, as well as NiziU, an all-Japanese girl group from JYP Entertainment and Sony Music Entertainment Japan.
After an open call for auditions beginning in 2014 involving hundreds of Filipino boys, SB19 was formed by ShowBT Philippines, a subsidiary of Korean agency ShowBT Group. The five-member boy band, which sings in English and Tagalog, trained in South Korea for three years before signing with Sony Music Philippines in December of 2019. They recently have begun cracking the Billboard charts and touring overseas, including a show at Los Angeles’ Avalon nightclub this past Saturday (Nov. 12). “They’ve really raised the bar, the Koreans,” Roslyn Pineda, general manager, Sony Music Entertainment Philippines, said in September. “Number one is the discipline” SB19 members learned in Korea, which led to a “sharpness of [dance] movements…that doesn’t lie,” she says.
“We can’t deny the K-pop influence [on JO1],” says Choi Shin-hwa, CEO of Lapone Entertainment, a joint venture between entertainment conglomerates CJ ENM of South Korea and Yoshimoto Kogyo of Japan that produces JO1. He doesn’t describe Lapone artists as K-pop, but rather envisions “a new genre that is a hybrid of K-pop and Japanese culture.”
In an interview in Tokyo, some members of JO1 told Billboard they grew up listening to K-pop CDs from boy band TVXQ and pop rock band CNBLUE, which their respective mothers, as fans, had played around the house. The members nervously denied they were already stars. “We keep on working with the hopes of catching up with all the awesome K-pop artists who are active today,” says member Issei Mamehara.
Additional reporting by Alexei Barrionuevo