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Reservoir

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Uber Eats’ commercial featuring Diddy, Montell Jordan, “The Fox (What Does the Fox Say?),” the guy who sings “What Is Love,” an oddly-timed haircut and two pineapples may be the first clue that Super Bowl ads are going lighter in 2023 — a pattern reflected in the music synchs for the big game.
After three years of the pandemic, Jordan’s 1995 smash “This Is How We Do It” and Kelis’ 2003 hit “Milkshake,” both Universal Music Publishing Group synchs used in the Uber Eats spot, represent a shift from apocalyptic and inspirational Super Bowl commercials and soundtracks starring old-timey crooners and string sections to familiar, upbeat hits and plentiful comedy.

“Humor remains the dominant theme this year,” says Tom Eaton, senior vp of music for advertising for UMPG, which represents the Jordan and Kelis tracks and suggested them to the brand’s music supervisors. “There have been a few sentimental commercials, but the vast majority have trended towards humor — and music can be such an important aspect of creating that mood.”

“I haven’t seen that heightened seriousness, which I think is a good thing,” adds Keith D’Arcy, senior vp of sync and creative services for Warner Chappell Music, whose synchs at this year’s Super Bowl include DMX‘s “What’s My Name,” for a Downy spot starring Danny McBride. “The country is in a good place where we’re more inclined to want to laugh and celebrate.”

That means lots of feel-good tracks, many of which were released in the ‘90s – from “What’s My Name” and “This is How We Do It” to a Clueless throwback ad for Rakuten starring Alicia Silverstone and Supergrass‘ 1995 U.K. hit “Alright.” The ’90s trend may have begun last year with Doja Cat‘s cover of Hole‘s “Celebrity Skin” for Taco Bell, says Rob Christensen, executive vp and head of global synch for Kobalt, whose lone synch this year is soul singer Lee Fields’ “Forever” for pet-food brand The Farmer’s Dog. “The ’90s are back,” he says. “That seems to be around pop culture everywhere right now.”

“It’s cyclical,” adds Scott Cresto, executive vp of synchronization and marketing for Reservoir Media, which has three synchs, including a Pringles spot with Meghan Trainor singing Tina Turner‘s “The Best.” “Most folks’ favorite music is from [ages] 13 to 30. They’re down the line in their careers and making the decisions and picking their favorite songs.”

Although not all final synch tallies for nationally televised spots were available at press time — publishing execs say permissions and requests for songs were unusually late this year, including a rush job that came in from an agency this past Monday — Sony Music Publishing (SMP) scored the most with 15, UMPG had seven, Warner Chappell Music had six or seven, BMG landed five, Primary Wave and Reservoir had three apiece and Kobalt had one. 

Despite inflation, layoffs, high interest rates and sporadic recession talk, synch rates were stable this year, according to publishers. “It’s in line with past Super Bowl campaigns,” says Marty Silverstone, partner/senior vp creative/head of synch for Primary Wave, whose synchs include Missy Elliott‘s “We Run This” for Google Pixel. Adds Dan Rosenbaum, vp of licensing and advertising, for BMG, whose synchs include Supergrass’ “Alright” and co-writes for Turner’s “The Best” and Elliott’s “We Run This”: “Recognizability is so important in commercial usage. If that song is going to work for them, they’ll pay the price.” 

Super Bowl LVII is the first since Kate Bush‘s “Running Up That Hill (A Deal with God)” landed on Stranger Things in May 2022, became a No. 1 hit and unexpectedly dominated the synch business. Do publishers believe the big game, for which 30-second ads cost a reported $7 million, will have a similar impact for their songs? Yes and no.

“That Kate Bush song wasn’t well-known and the show blew it up. On the Super Bowl, they play it a little more safe by using more tried-and-true hits,” says Brian Monaco, president/global chief marketing officer for SMP, which represents Len‘s “Steal My Sunshine” (for a Sam Adams spot), Sarah McLachlan‘s “Angel” (Busch) and Olivia Rodrigo‘s “Good 4 U” (Pepsi). “On a TV show, it’s a little easier, because the fees are lower. If it doesn’t work, you’re on to the next one.”

Despite SMP’s success at landing Super Bowl synchs this year, Monaco’s staff was unable to successfully pitch one key artist: Bruce Springsteen, who sold his music rights to the company for a reported $550 million in 2021. “It just didn’t fit,” he says, while noting that even for a superstar like Springsteen, getting a Super Bowl synch is a coveted career highlight: “Everyone’s hope — every writer, every artist — is the Super Bowl platform. We need more big events like this to get more music played.”

Reservoir Media’s revenues rose and profit margins expanded last quarter, as the strength of its music publishing business helped offset a $4 million net loss, the company reported Wednesday (Feb. 8).

Reservoir reported that its top-line revenues rose by 16% to $29.9 million for the third quarter of its fiscal year 2023, which ended Dec. 31. The main drivers of that jump were the music publishing division, where revenues of $22 million jumped 14% from a year ago on strong digital streaming revenues, and Reservoir’s small artist management business, which delivered a year over year revenue increase of more than 200% from touring and merchandise sales at live events.

Reservoir founder and chief executive Golnar Khosrowshahi said the firm, which recently bought Dion‘s catalog and signed publishing deals with popular Indian rappers MC Altaf and D’Evil, has $2.3 billion in prospective catalog acquisition deals in its pipeline.

“We will continue to benefit from the overall momentum in the music industry,” Khosrowshahi said on a conference call discussing the quarterly results. “We are approaching the last fiscal quarter of the year with confidence.”

Reservoir raised its guidance for the fiscal year 2023, which ends March 31, for the second straight quarter. Executives said they now expect to report full-year revenue in the range of $120 million to $122 million and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in the range of $46 million to $47 million.

The company reported that its adjusted EBITDA for the third quarter rose 24% to $10.9 million.

“While we are happy with our continued strength in the top line and operating margins, we did experience some pressure on the bottom line due to elevated costs during the quarter,” said Reservoir CFO Jim Heindlmeyer during the earnings call.

Reservoir reported a net loss of $4.1 million, stemming from a one-time non-cash tax expense related to the higher U.K. tax rate for 2023 and the extinguishment of some existing debt. That resulted in a diluted loss of 7 cents for the quarter compared to earnings of 2 cents per share for the quarter.

Depreciation and amortization costs also rose due to catalog acquisitions, while company administration expenses rose 19%, mainly due to Reservoir’s expanding management business division.

In the recorded music division, Reservoir reported revenue of $7.6 million, up just 1% over last year. While digital revenues in the division rose 17% to $5.3 million, declines in physical and synchronization revenue resulted in roughly flat growth year over year.

Reservoir Media has purchased the catalog of Bronx-born talent Dion Francis DiMucci, better known as Dion. The deal includes his publishing catalog and future works as well as synchronization rights to his master recordings.
Best known for releasing defining, R&B-infused rock in the 1950s and ’60s, Dion’s catalog includes “Runaround Sue,” “The Wanderer,” “Ruby Baby” and “Dream Lover,” which he released with his band Dion and the Belmonts. Over the course of his career, he has accrued 11 top 10 Billboard Hot 100 hits and was inducted into the Rock and Roll Hall of Fame in 1989 and the Grammy Hall of Fame in 2002.

Despite his many decades of success, Dion continues to tour and release music today. In 2021, he released the album Stomping Ground featuring Eric Clapton, Peter Frampton, Bruce Springsteen, Mark Knopfler and more.

Dion’s songs have continued to permeate pop culture, particularly via their placement in films and TV shows, including Diner, Peggy Sue Got Married, Little Big League, The Sopranos, Behind Enemy Lines, The West Wing, The Wire and Ozark. Additionally, his life and songbook inspired the creation of The Wanderer, a musical that had a successful pre-Broadway run at Paper Mill Playhouse in April 2022.

“I am most pleased to enter into this great new relationship with Reservoir,” Dion said in a statement. “I know how much the Reservoir team appreciates my work, and I am looking forward to some exciting times ahead with them. I want to thank the entire Reservoir team for helping to make it happen, particularly Rell Lafargue, Jonathan Sturges and Faith Newman. I also want to thank Marvin Katz, my attorney, who introduced me to Reservoir and represented me in the transaction.”

Reservoir’s executive vp of A&R and catalog development, Faith Newman, added, “Dion is a pillar of early rock and roll music and wrote and recorded songs that are universally loved and recognized. He continues to make music with and inspire the genre’s biggest names today. It’s an honor to support both his evergreen catalog and future hits.”

Reservoir Media reported higher quarterly profits and revenues on Tuesday (Nov. 8), as the acquisition of “Sing, Sing, Sing” legend Louis Prima’s catalog and Lebanese label Voice of Beirut helped boost the company’s full-year growth forecast.
From July to September, Reservoir’s net income rose 3% to $4.5 million, or $0.07 per share, while top-line revenues rose 10% to $33.3 million from the year-ago quarter. Executives said they now expect both revenue and adjusted EBITDA (earnings before interest, tax, depreciation and amortization) to rise by 11% for the full fiscal year of 2023. For revenue, that is a range of between $118 million and $122 million, and for adjusted EBITDA, a closely watched metric of profitability, that will range between $45 million and $47 million.

“While the broader economy is facing challenges, the music industry as a whole remains healthy,” Golnar Khosrowshahi, Reservoir founder and chief executive, said on a call with analysts.

Reservoir is mid-way through the fiscal year 2023, during which it aims to spend $100 million on strategic acquisitions. In addition to acquiring Prima’s publishing and recorded music catalogs and the Voice of Beirut, Reservoir signed publishing deals with Naughty By Nature’s KayGee, writer-producer Nick Lee and country singer-songwriter Brit Taylor.

“We are pleased by the quality and volume of deals that we have executed in the past few months,” Khosrowshahi said, adding they have a pipeline of around $2.1 billion of prospective deals “at various stages of development.”

Music publishing revenue rose 9% to $24.1 million for the quarter, driven by a 15% increase in digital revenues and a 6% increase in synchronization revenues.

Recorded music revenues rose 11% to $8.9 million, helped largely by assets under the Tommy Boy label as well as increased digital and synchronization revenues.

Within recorded music, digital revenues rose by 35% to $6.3 million, while synch revenues surged 224% to top $1 million. Physical revenues fell 66% to $900,000 as vinyl and CD sales fell on a lighter release schedule this quarter, executives said.

Operating income fell 15% to $6.6 million and OIBDA (operating income before depreciation and amortization) fell 5% to $12.0 million on higher expenses from employee compensation and running a public business.

“We are confident in our long-term ability to grow our top line at a faster past than our costs moving forward,” Jim Heindlmeyer, Reservoir’s CFO, said on the call.