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LONDON — Paid-for streaming revenues grew to a record high of £1.86 billion ($2.4 billion) in the United Kingdom last year, helping drive a 9.6% rise in overall music spending, according to year-end figures from the Digital Entertainment and Retail Association (ERA).
In 2023, British music fans spent a total of £2.2 billion ($2.8 billion) on music purchases via subscriptions to music streaming services like Spotify and Apple Music, and vinyl and CD purchases. That’s more-or-less equal to 2001’s total, the historic peak of the CD era, when U.K. music sales stood at just over £2.2 billion, reports ERA. When compared to 2019, the last full year pre-pandemic, music sales have climbed by almost 39% in the space of four years.
Driving the growth was a 9.8% year-on-year rise in subscription streaming revenues, while spending on physical formats was up 10.9% to £311 million ($395 million) the London-based organization says in its preliminary annual figures published on Tuesday (Jan. 9).
Breaking down physical music revenues, vinyl album sales grew 18% to £177 million with Taylor Swift’s 1989 (Taylor’s Version), The Rolling Stones’ Hackney Diamonds and Lana Del Rey’s Did You Know There’s A Tunnel Under Ocean Blvd among the year’s best-selling titles.
Despite CD sales falling 7% year-on-year in volume terms to 10.8 million units, revenue from the long-written-off format actually rose 2% in 2023 to £126 million ($160 million), marking the first increase in CD revenue in two decades.
ERA says the growth can be attributed to the format’s continued popularity among dedicated music fans, keen to buy their favorite artists in multiple and deluxe formats, as well as a rise in the number of Gen Z and Millennials buying CDs.
This Life by British pop group Take That was 2023’s top CD album in the U.K. with just over 127,000 units sold. Swift’s 1989 (Taylor’s Version) was the year’s second most popular CD release.
Streaming now makes up more than 88% of all music sales in the U.K., compared to 64% five years ago, with physical formats accounting for 9.4% of today’s market, according to labels trade body BPI, which released its year-end listening figures last week.
BPI reports that more than 179 billion music tracks were streamed in the U.K. in 2023, up 12.8% on the previous year’s total, with the equivalent of 182.8 million albums streamed or purchased in 2023 across digital and physical formats, up 10% on the previous 12 months.
In a statement, ERA CEO Kim Bayley said the year-end figures represented a “red letter day” for the U.K. music industry with the rise in revenues “a testament not just to the creativity of artists, but to the entrepreneurial drive of digital services and retailers.”
Although both ERA and BPI use Official Charts Company sales data as the basis for their reporting, the two organizations take different approaches to measuring the health of the recorded music business. ERA’s figures are based on retail spending in the U.K., whereas BPI’s measure music consumption levels. (ERA’s subscription streaming numbers are estimates based on information provided by digital services and label trade income reported to BPI). BPI and ERA are both due to publish their full annual reports later in the year.
Overall, revenues across the U.K. entertainment market – comprising of music, video and games retail sales – were up 7% on 2022’s total to a record high of £11.9 billion ($15.1 billion), marking the eleventh successive year of growth. Streaming and digital services accounted for almost 92% of entertainment revenue, reports ERA.
Of the three sectors, recorded music sales are in third place, trailing both games and video (comprising of video-on-demand subscription services such as Netflix and DVD sales), which totaled £4.7 billion ($6 billion) and £4.9 billion ($6.2 billion) respectively.
The U.K. is the world’s third biggest recorded music market behind the U.S. and Japan with sales of just under $1.7 billion in trade value, according to IFPI’s 2023 Global Music Report.
Luminate — which provides data to the Billboard charts — is proceeding with a previously announced plan to retire its weighted data modeling used to measure physical sales in the independent retail sector, according to a note sent Wednesday (Dec. 13) to industry partners and indie retailers.
The change will take effect Dec. 29, the first day of Luminate’s 2024 calendar; and will apply to both the U.S. and Canadian markets, which are measured separately within the Luminate system.
For over 30 years, Luminate and its predecessor companies have relied on sampling of independent stores to extrapolate sales of CDs, vinyl and cassettes for the entire U.S. marketplace.
According to the note to the industry on eliminating weighting, “the goal of this change is for us to present the most accurate data possible to the industry, which is always our primary goal.”
Luminate said that after discussions with all facets of the industry, including retailers, labels, distributors and industry bodies, it decided to proceed with its planned new way of counting indie store sector sales because there was “a consensus that the current weighted modeling should be retired.”
That “consensus” apparently is a new development because Billboard’s reporting over the last six weeks has so far found widespread industry resistance to Luminate’s planned changes for the indie sector.
Going forward, as of Jan. 29, Luminate will count only actual sales from indie stores without extrapolating to measure sales in the entire U.S. market. As of Nov. 15, Luminate stated that it already has 93% coverage of the total U.S. physical market; and was receiving data from 95% of U.S. independent retail stores that reach over 1,000 sales per week.
Luminate’s note says it will work with the entire music industry to find solutions that make the most sense collectively for all parties. Consequently, it said there is agreement that the industry should work to increase the number of retailers reporting sales to Luminate. The company says stores not already reporting its sales can learn more at luminatedata.com or email music.merchantservices@luminatedata.com.
Luminate said it would work with retailers and their point-of-sales systems to streamline the reporting processes; and will assign resources to liaise with indie stores to address questions and provide feedback.
Moreover, Luminate says it will share free weekly physical sales data to all indie reporting stores in the U.S. and Canada that will reflect the best-selling titles for only the indie store sector.
The Luminate note concluded that the data company is confident that its change to actual sales without weighting “is the best way for the industry to access the highest-quality data.”
Note: Luminate is an independently operated company owned by PME TopCo, a PMC subsidiary and joint venture between Penske Media Corporation and Eldridge. Billboard is an independently operated company owned by PME Holdings, a subsidiary of PME TopCo.
Ron and Angie Roloff, owners of Madison, Wis.-based record store Strictly Discs, have sold the business after 35 years.
Stepping in as the store’s new president/owner is Rick Stoner, who takes over following an 18-year marketing agency career. The Roloffs will continue in their day-to-day roles through the end of 2023 before assuming an advisory relationship with Strictly Discs starting next year as they transition into retirement.
“Angie and I are grateful to our staff and customers, who we’ve had the privilege to work with for 35 years,” said Ron in a statement.
Stoner has served in several vp-level leadership, business development and digital and event marketing roles at prominent consumer brands. He’s a 2006 University of Wisconsin-Madison graduate and a board member at Communications Arts Partners (CAPs), an alumni organization that supports the university’s communications arts department.
“I’ve been a Strictly Discs customer since I was a student here in Madison,” said Stoner in a statement. “I view the store as everything right about the culture of the Madison community and look forward to maintaining that presence. Entrepreneurship has long been a destination for me and my family. Owning Strictly Discs is a dream come true. I can’t wait to meet our dedicated and loyal customers and get to work with our team to grow the business.”
The acquisition includes nearly half a million records, carefully curated over close to four decades. The business will maintain an e-commerce presence, which Stoner views as a key area for growth initiatives such as a subscription-based record club as well as pop-up, event-based record stores.
In June 2024, Strictly Discs is slated to open a second retail location in nearby Cambridge, Wis. in a space that hosts the majority of the store’s inventory.
Several Strictly Discs employees will remain with the business following the transition. They include 14-year employee Evan Woodward, who leads the buying team and works the front counter, as well as assistant manager Mark Chaney. Joining the team are Dru Korab, a record collector, DJ, media production professional and Stoner’s college classmate who will step into a part-time operations role in addition to his minority investment in the business. Also holding a minority investment is Stoner’s friend Kyle Nakatsuji, founder/CEO of Clearcover, principal at American Family Ventures and a graduate of the University of Wisconsin-Madison Law School.
Opened in 1988, Strictly Discs was a subject of Billboard’s “In a Pandemic” series from 2020-2021. During this time, Angie discussed the challenges she and Ron faced and the creative solutions they employed at the store during the height of the COVID-19 pandemic.
Angie tells Billboard that an evaluation of Strictly Discs’ worth, performed during the pandemic, “planted the seed” that ultimately led her and Ron to sell the business. After listing it in early May, they were approached by Stoner in June; a letter of intent was signed in July. The deal finally closed on Oct. 31.
Starting next year, Ron will continue on with the store in an outside buying capacity, while Angie will serve as the “boots on the ground” for the Milwaukee-based Stoner when he’s not in Madison, she says. “We’re invested in his success because we’ve lent him money as part of this process,” Angie continues. “So we’re definitely not leaving and we’ll be available to him really in any capacity that he needs us for.”
Angie says Stoner brought a good mixture of knowing what made the business work while proposing solid ideas about where it could grow: “He already understood that the things that have made Strictly Discs successful are the people and the product and certainly the experience. I think he respects all of that, and he knows that there are areas that he wants to grow the business but he doesn’t want to fundamentally change what we’ve already done.”
At the heart of Strictly Discs’ more than three-decade run is a love story: Angie and Ron met at Strictly Discs in 1994, when Angie was a customer and Ron was working the front counter. In the years since, says Angie, the store has become their baby.
“We don’t have kids and so it’s kind of like Strictly Discs takes that place,” Angie says, adding that with both she and Ron being “super high-strung type A personalities,” even while on vacation, they would end up talking about the store. “That’s the part of it that I’m looking forward to having go away,” she says.
Greatest hits albums were once a key facet of the record business — a way for labels to repackage existing copyrights, for artists to make a statement about a body of commercial success and for consumers to get all their favorite hits by an artist in one collection.
The development of streaming hobbled that format. If a fan can create a playlist of all their favorite songs, why would they need to buy an album of those hits?
Best-of albums, though, are quietly hitting back — especially in the country format. MCA Nashville released Josh Turner’s Greatest Hits on Sept. 8, and Valory has Thomas Rhett’s 20 Number Ones scheduled for Sept. 29. Encore Music Group likewise issued Ricochet’s Then & Now on Aug. 18, with rerecordings of its four top 20 singles from the 1990s among the package’s 16 tracks.
“It’s kind of a milestone moment for me,” Turner says.
Indeed, in the old-school music business, hits albums carried a certain status. In their original, purest form, they signified that an artist had accrued enough successful individual titles that they could fill both sides of a vinyl release with familiar music. They sometimes expanded a fan base, too, as consumers who hadn’t necessarily kept tabs on a specific act suddenly recognized their accomplishments more fully.
“The greatest-hits aggregate, whether it’s physical or even just a digital collection, is kind of a marketing banner for the body of work,” says Fisher Entertainment Consulting founder Pete Fisher.
If the hits package has a throwback vibe, that’s appropriate since nostalgic vinyl is the format that’s most likely driving its return. Fans who want to hear the hits from the turntable at home can’t mix and match the songs for a 12-inch disc as they could on Spotify. The disc needs to be manufactured in a fixed order, and the best-of package offers real value.
“We’ve been selling a lot of vinyl on the road at my shows, so that’s a good sign to show that people really want the physical product,” Turner says. “Everybody’s familiar with the digital stuff now. Sometimes it’s kind of cool to just unplug and go to the record.”
There’s an irony to the development. Producers have been known to add programmed needle scratches to digital music to give it a ’60s or ’70s atmosphere. Avoiding those pops and crackles were one of the supposed benefits of shifting to CDs. The digital disc’s rise pretty much ended a 30-year reign for 12-inch pressings around the early 1990s. Now the sonic imperfections add a new dimension to several generations of music.
“Vinyls are making a comeback, and [they’re] making a comeback among the younger generation,” says Ricochet founder Heath Wright. “It’s the thing now.”
That shift is opening up new possibilities for most of the music from the last three decades as it appears on a warmer, less brittle configuration.
“It’ll be the first time I’ve heard Ricochet music on vinyl,” Wright says, anticipating the release of the band’s material on black and yellow plastic.
Plenty of recent hits projects marked the first time the songs were available in the format. Among the best-of collections unveiled in the last two years are Heads Carolina, Tails California: The Best of Jo Dee Messina, Luke Bryan’s #1’s Vol. 1 and Vol. 2 and a Justin Moore Greatest Hits originally offered in translucent red vinyl at Walmart. Much of Dolly Parton’s Diamonds & Rhinestones: The Greatest Hits Collection — including “Jolene,” “9 to 5” and “Coat of Many Colors” — was initially issued on vinyl back in the day.
But vinyl isn’t the only point. Digital service providers have created their own playlists dedicated to specific artists. However, that same act may prefer a different set of songs as a career overview, and the makeup of those titles on a hits compilation aren’t subject to revisions by DSP managers.
“It’s a nice way to roll up an era and curate the hits from a label-centric perspective for all time,” 615 Leverage + Strategy partner John Zarling says. “Apple constantly updates their Essentials playlists and prominently features those for every artist of note. But if you think about 10, 20 years removed, are those playlists going to properly document a specific era for an artist?”
Hits projects also give the act’s team a chance to elevate a song that was overlooked publicly. “Desperado,” for example, was never a charting single for The Eagles or Linda Ronstadt, but it rose in significance after being featured on both acts’ best-of compilations.
“Think about the songs that might have been important,” says Zarling, “but were never big chart successes, that because they were placed on greatest-hits records, it became a part of that artist’s repertoire.”
Plenty of artists who would have qualified for best-of albums in a previous era have never issued one during the last 20 years. That includes Brad Paisley, Cole Swindell, Taylor Swift, Chris Stapleton and Miranda Lambert. As the hits album hits back, a template has been established that makes a best-of compilation a good bet again.
In addition to making a statement about the act, it’s also a good way to enhance the experience with fans. Turner and Rhett are both offering special packages that combine hits albums with other merchandise. Rhett’s 20 Number Ones can be purchased in two different collectible versions, including one with an autographed box set with a booklet for $125. Turner’s Greatest Hits is available in several configurations, including signed copies and/or Turner-branded clothing for up to $185.
“That’s a trend that’s not going to go away,” Fisher suggests. “The entertainment industry as a whole is just continuing to try and find very high-touch experiences and high-quality products for that premium consumer. There’s profit opportunities with the superfan, and I don’t think they’re disappointed to pay that way. It’s a way they vote in support of their favorite artists.”
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Ingram Entertainment, the second largest U.S. music wholesaler, has begun telling its accounts that it will begin shutting down its music operation, with plans to close by the end of this year, sources tell Billboard. Sources suggest that Ingram’s music operation generates about $200 million a year in revenue. Beyond music, there are indications that the […]
NAMM (the National Association of Music Merchants) will be the presenting sponsor of the 2024 She Rocks Awards, the Women’s International Music Network (the WiMN) announced on Wednesday (Sept. 6). Taking place on Thursday, Jan. 25, 2024, the event will be held in the Ballroom at the Anaheim Convention Center during the NAMM show.
The She Rocks Awards has become a premier event during the NAMM Show, bringing together industry professionals, artists, fans, and the media to celebrate the contributions of women from across the music and audio industries. 2024 will mark the event’s 12th anniversary.
“We’ve always aligned the She Rocks Awards to happen during NAMM. Now we are delighted to have NAMM support us as a partner to encourage participation in this meaningful event,” Laura B. Whitmore, founder of the She Rocks Awards and the WiMN, said in a statement.
“Our partnership with the WiMN continues to elevate and promote the tremendous achievements by so many incredible women in the music industry,” said John Mlynczak, NAMM president and CEO. “The NAMM Show will continue to provide critical platforms such as the She Rock Awards to highlight and celebrate incredible women who shape our industry’s future. Along with Women of NAMM and the WiMN, we have great potential to grow our show on a yearly basis.”
This evening includes live music, awards and speeches, dinner, a silent auction, gift bags and more. Tickets are now on sale. This event is open to the public; however, a 2024 NAMM show badge is required to attend the She Rocks Awards. Find out more and purchase tickets at sherocksawards.com.
Past honorees of the She Rocks Awards include Go-Go’s, Dionne Warwick, Nancy Wilson, Lzzy Hale, Gloria Gaynor, Judy Collins, Linda Perry, Melissa Etheridge, Pat Benatar, The B-52s, Colbie Caillat, Sheila E, Chaka Khan, Noelle Scaggs (Fitzs & the Tantrums), Ronnie Spector, Orianthi and The Bangles.
The 2024 She Rocks Awards is sponsored by NAMM (presenting), Sweetwater, PRS Guitars, Positive Grid, Rock ‘n’ Roll Fantasy Camp Foundation, Reverb.com, Fishman, Shure, Berklee Online, M.A.C Cosmetics, Exploration.io, 108 Rock Star Guitars, Roland, Taylor Guitars, Earthquaker Devices, dw Drums, Cuccio, DiGiCo, Seymour Duncan, Monster Energy, Guitar Girl Magazine, Music Connection, AXS TV and more. For information regarding She Rocks Awards sponsorship opportunities, contact info@thewimn.com
Learn more about the She Rocks Awards and get tickets at sherocksawards.com.
The 2024 NAMM Show will be held at the Anaheim Convention Center Jan. 25-28, 2024 with online registration at registration@namm.org.
Founded in 2012, the WiMN unites women who work within all facets of the music and audio industries. The organization produces and hosts events such as the WiMN She Rocks Showcase series, the She Rocks Awards, and a variety of workshops and panels throughout the year. For more information, visit www.TheWiMN.com.
NAMM is a not-for-profit association with a mission to strengthen the $17 billion music products industry. NAMM is comprised of 15,000 global member companies and individual professionals. For more information, visit www.namm.org.
LONDON — Located around 65 miles outside London, Bicester in leafy Oxfordshire is far removed from the bustling world of rock and roll. Despite its lack of star power, the historic market town is nevertheless set to play a key role in the British record industry as home to the United Kingdom’s biggest distribution warehouse for physical music and home entertainment.
Due to begin trading today (Aug. 29), the new 25,000-square meter facility is being opened by Swiss-based Utopia Music as part of a £100 million ($125 million) long-term deal with international logistics company DP World. With handling capacity of up to 250,000 units per day, operators say the state-of-the-art warehouse will distribute over 30 million CDs, vinyl records and Blu-ray discs a year across the United Kingdom and export markets on behalf of clients, including Universal Music Group, Sony Music Entertainment and [PIAS].
For Utopia Music, the opening of the Bicester site provides a much-needed boost after a troubled 12 months that has seen the company undergo multiple rounds of job cuts, executive departures, office closures, legal action over a stalled acquisition deal and the offloading of three of its businesses — Absolute Label Services, U.S.-based music database platform ROSTR and U.K.-based publisher Sentric.
For the wider music industry, the new warehouse facility acts as further proof of the continued demand for physical music formats, driven by the ongoing vinyl boom.
Last year, vinyl sales climbed 2.9% to 5.5 million units in the United Kingdom, marking the 15th consecutive year of growth, according to labels trade body BPI. In contrast, CD sales fell 19% year-on-year to 11.6 million units in 2022, though the format still accounted for more than two-thirds (67%) of all physical music purchases. Total revenue from physical music sales stood at £280 million ($352 million) in the United Kingdom last year — down 3.8% versus 2021 but up £9 million ($11 million) on 2020’s total, according to trade organization the Entertainment Retailers Association (ERA).
The latest year-to-date figures from BPI, meanwhile, show slight growth across the U.K. physical music market in 2023 compared to last year, while vinyl sales are up by around 15% versus the first 33 weeks of 2022 in volume terms. The trade body says that physical music revenues are on track to record double-digit percentage growth in 2023.
“A lot of people were too quick to write off physical and maybe now realize there is still a large and viable business here,” says Utopia Music vp of distribution Drew Hill on the eve of the new facility opening.
Fintech firm Utopia Music has owned a large stake in the U.K. physical music distribution business since January 2022, when it acquired Proper Music Group, the United Kingdom’s biggest independent physical music distributor, for an undisclosed sum. Eight months later, Utopia bought up the assets of Cinram Novum — which provides warehouse, fulfillment and distribution services to music labels and home entertainment companies — and renamed it Utopia Distribution Services (UDS).
Drew Hill
Utopia Music
Over the summer, stock has been transported from UDS’ previous warehouse in Aylesbury to the new Bicester site, which will handle 70% of all U.K. physical music sales, as well as 35% of domestic physical video (DVD and Blu-ray discs) sales each year, according to Utopia. Proper Music Group, which trades as a standalone entity within the Utopia group and provides distribution to over 5,000 indie labels and service companies, will continue to operate from its existing warehouse in Dartford.
Hill says the multi-million-pound investment that UDS is making in physical music will help ensure the survival of CD and vinyl formats for future generations. “Lots of other distributors have either gone to the wall or they have been massively underfunded. The physical music business is still a quarter of a billion-pound industry, and it really needed someone to come in and upgrade the infrastructure to be able to support that,” he says.
Utopia Music co-founder and interim CEO Mattias Hjelmstedt says the Bicester facility “marks a new beginning for the U.K.’s physical distribution market.”
The continuing shift away from physical formats toward streaming does, however, present considerable challenges to any company operating in the physical market. In 2022, Proper Music Group recorded revenue of £30.1 million ($38 million) for the nine-month period ending Dec. 31, down from £42 million ($53 million) in the prior 12-month accounting period, according to its latest financial records. The company says lower sales and increased operating costs were behind the £1.9 million ($2.4 million) net loss it posted last year.
In response to inflationary pressures, Proper raised its prices for the first time in over 15 years in late 2022, with UDS also increasing prices on what Cinram Novum was previously charging clients. Hill declines to reveal how much prices have increased but is confident that the measures taken will help Proper return to profitability in 2024, while the new Bicester facility will enable UDS to grow its client base through increased capacity and a greater focus on direct-to-consumer sales.
By tapping into DP World’s global network, which spans 75 countries on six continents, UDS will also be looking to grow physical music exports outside the United Kingdom. It also, says Hill, has long-term plans to replicate its centralized distribution model overseas, possibly in North America or Europe.
Commenting on Utopia’s well-publicized recent difficulties, Hill says support from the Swiss-based tech firm has been “unwavering” and both Proper and UDS have been “ring-fenced” from the cuts Utopia has implemented elsewhere over the past year.
“[CEO] Mattias [Hjelmstedt] has talked internally about how physical distribution is the engine room of Utopia. We provide a funnel through which it can present and sell its other products and services,” says Hill, who has worked for Proper for more than 15 years.
Hill adds that he has no concerns about the financial stability of Utopia and points to the growing popularity of vinyl, deluxe boxsets and special edition releases among music fans as a thriving growth area for the physical music business.
“Over time, maybe we will start to shift fewer units, but they will be units of higher value,” he says. “As long as you create a beautiful package with valuable content in it, people will always want to buy it.”
Jerry Moss once spent a day in Athens, Greece, screaming at the heads of the world’s top electronics companies during a Billboard music-industry convention. It was 1981. Sony’s Norio Ohga and Philips’ Jan Timmer were trying to persuade record executives to switch from their beloved LP to this new, high-tech “compact disc,” and Moss, co-founder of storied indie A&M Records, which would break Janet Jackson, Sting, Soundgarden and Blues Traveler, led the opposition.
Moss, who died Thursday at 88, believed CDs “would kill the industry because the perfect digital master would invite and facilitate piracy,” according to John Nathan‘s 1999 book, Sony.
As I was researching this subject for my own book, Appetite for Self-Destruction: The Spectacular Crash of the Record Industry in the Digital Age, I had to verify this claim. Nathan described a mob of outraged record execs chanting, like soccer hooligans, a “slogan that sounded like a Madison Avenue nightmare”: “The truth is in the grooves!”
This was the generous and magnanimous sales expert who was endlessly patient with his artists, willing to lose money on an album to advance a long-term career, whom Sting would describe as an “elder brother, a wise head, a man’s man and a mensch”?
I was sure Moss would be too embarrassed to rehash this history, because, eventually, the CD helped him and his partner, trumpeter Herb Alpert, become super rich, selling A&M to PolyGram for $500 million in 1989. (That’s $1.23 billion in today’s dollars.) But the exec who co-founded A&M with Alpert in a garage in 1962, after selling the master for Alpert’s Tijuana Brass instrumental “Tell It to the Birds” for $750, quickly agreed to a phone interview – and a wonkier follow-up later.
“I made a bit of a small statement at the meeting,” understated Moss, who at the time of our interview was running his post-A&M label, Almo Sounds, which had signed Gillian Welch as well as Garbage and Imogen Heap. “I liked the hardware and the whole ease of the CD, and I generally applauded the idea that Sony and Philips were getting together on this one piece of machinery.
“But,” he added, “I thought they could have done something to stop piracy.”
On Second Thought…
What finally turned Moss around was the economics of the CD. The price of vinyl records was stuck at $8.98 — and after Tom Petty threatened to affix a huge “$8.98!” sticker on his 1981 album, Hard Promises, his own label, MCA, and the rest of the industry were blocked from raising prices. The CD allowed A&M to “charge a multiple for this thing,” Moss said. Also, retail stores were charging labels for advertising — a “mighty blow,” Moss called it. After disco crashed in 1979, LP sales plunged. “Retailing and selling became very pinched,” he added.
“The retailers wanted more and artists and producers wanted more for what they were doing. The record companies were getting squeezed further and further,” Moss went on. “And here comes the CD.”
The shiny, futuristic format was in high demand, and retailers were willing to buy it from labels for $10 wholesale, far higher than the LP, then sell it to customers for $16.
“So A&M, after just a tiny bit of study, decided this was going to be our future,” Moss said.
Like the bigger labels, A&M had to find plants to manufacture the CD, quickly making a deal with a German company. And the CD, to which Moss had been so screamingly opposed in 1981, made A&M profitable beyond anything Alpert and Moss had once imagined: “The company was a different company from 1979 to 1989, certainly.”
A Bittersweet Sale
Alongside Alpert and the late Gil Friesen, then the day-to-day operations exec who referred to himself as the ampersand in A&M, Moss decided they had no choice but to sell the company they loved. Music stars in the late ’80s and early ’90s were demanding multimillion-dollar advances, and, as an indie, A&M couldn’t compete with bigger labels for the up-front guarantees. The trio stayed on for a couple of years after the sale, but PolyGram had a mandatory retirement age of 61. In 1991, Moss found himself with a new boss, Alain Levy, who became PolyGram’s worldwide president and CEO, and, Moss recalled, “wasn’t laughing at my jokes.”
(In 1998, PolyGram was sold to Seagram, which merged it with Universal Music Group, today the world’s biggest label.)
“I don’t regret selling, because I felt we had nothing but to do that. There was no alternative. We would have had to have gotten a lot smaller, and gotten our investment in different, other ways,” Moss told me. “I can’t say I’m sorry I sold A&M. I will say I’m sorry I had to leave.”
Adidas brought in 400 million euros ($437 million) from the first release of Yeezy sneakers left over after breaking ties with Ye, the rapper formerly known as Kanye West, as the German sportswear maker tries to offload the unsold shoes and donate part of the proceeds to groups fighting antisemitism and other forms of hate.
The first batch of shoes released in June, which sold out, helped the company reach an operating profit of 176 million euros in the second quarter, better than it originally planned, Adidas said Thursday. A second sale started Wednesday.
After Ye’s antisemitic and other offensive comments led the company to end its partnership with the rapper in October, Adidas said it had sought a way to dispose of 1.2 billion euros worth of the high-end shoes in a responsible way.
“We will continue to carefully sell off more of the existing Yeezy inventory,” said CEO Bjørn Gulden, who took over in January.
“This is much better than destroying and writing off the inventory and allows us to make substantial donations to organizations like the Anti-Defamation League, the Philonise & Keeta Floyd Institute for Social Change and Robert Kraft’s Foundation to Combat Antisemitism,” Gulden said.
Adidas has already handed over 10 million euros to the groups and expected to give an additional 100 million euros, with further donations possible depending on how future sales go, Chief Financial Officer Harm Ohlmeyer said.
Several Jewish civic leaders contacted by The Associated Press said they weren’t planning to buy a pair of Yeezys themselves but generally welcomed the plan to support anti-hate organizations, saying the company is trying to make the best of a bad situation.
The Adidas CEO said the Yeezy sales are “of course also helping both our cash flow and general financial strength.”
The first sale unloaded roughly 20% to 25% of the Yeezy sneakers that were left stacked up in warehouses, contributing 150 million euros of Adidas’ 176 million euros in operating earnings in the April-to-June quarter.
Ohlmeyer, however, cautioned that the Yeezy contribution was smaller than the number made it seem because it did not include many of the company’s costs.
Adidas also warned that the first sale included the highest-priced shoes and sold out completely but that it wasn’t clear whether the remaining releases would see similar price levels and demand.
The blow-up of the Ye partnership put Adidas in a precarious position because of the popularity of the Yeezy line, and it faced growing pressure to end ties last year as other companies cut off the rapper.
The torn-up contract was now in arbitration, “a process that is being taken care of by legal people” for both sides and was surrounded “by a lot of uncertainty,” said Gulden, the Adidas CEO.
Asked whether it must pay Ye royalties on the shoes, the company has said only that it will observe all its contractual obligations.
Yeezy revenue from June was “largely in line” with sales seen in the second quarter of last year, Adidas said. The boost has allowed the company to cut its expectations for this year’s operating loss to 450 million euros from 700 million euros predicted previously.
On the amount of money given to anti-hate groups, Adidas said the donations were not a fixed percentage of sales but that it had discussed with the recipients what an appropriate amount would be.
LONDON — Global hit records by Harry Styles, Glass Animals and Ed Sheeran, coupled with the popularity of U.K. acts in emerging markets like the Middle East and Africa, helped British music exports climb to a record high of £709 million ($910 million) in 2022, according to new figures released by labels trade body BPI.
The London-based organization says 2022’s export tally is the highest annual total since BPI began analyzing labels’ overseas income in 2000. Last year also marked the ninth consecutive year of growth in U.K. music export trade revenues, which slumped to just over £200 million ($254 million at today’s exchange rates) in 2007.
BPI, which represents over 500 independent labels, as well as the U.K. arms of Universal Music Group, Sony Music Entertainment and Warner Music Group, says the consistent year-on-year rise puts the country’s record industry on track to exceed £1 billion ($1.27 billion) in annual music exports by the end of the decade.
Driving last year’s 20% growth was a combination of globally successful British artists and the strong value of the U.S. dollar and other foreign currencies against the pound sterling.
British singer-songwriter Harry Styles’ hit single “As It Was” was the world’s most-streamed song in 2022, according to Luminate data cited by BPI, while Glass Animals’ “Heat Waves” was number two. Other songs by U.K. artists in the year-end global top 10 included Elton John and Dua Lipa’s “Cold Heart (PNAU Remix)” and Ed Sheeran’s “Shivers.”
In total, around 450 U.K. artists accumulated more than 100 million global streams last year, up from almost 400 in 2021, BPI reports. That list includes Adele, Arctic Monkeys, Calvin Harris, Coldplay, Dave and Sam Smith, as well as veteran acts The Beatles, Pink Floyd and Queen. Overall, British artists claimed more than a quarter of the 50 most-streamed songs on Spotify in 2022.
Worldwide, consumption of British music increased in every region last year, says BPI, with export revenues rising 11% in Europe and up 28% in North America (equivalent trade values were not provided). The fastest-growing regions for U.K. music exports were Africa (up 48%) and the Middle East (up 59%).
On a country-by-country basis, all but one of the U.K.’s leading music export markets recorded a rise in export sales, including the U.S. – the leading international market for British acts – where revenues grew 28% to £292 million ($371 million). The second biggest country for U.K. music sales is Germany, where revenues climbed 4% to £58 million ($74 million), followed by France (up 15% to $54 million).
In line with the past several years, the U.K.’s share of the global recorded music market remains around 10%, reports BPI, despite the growing international popularity of music acts from Latin America and Asia, particularly South Korea.
In a statement, BPI interim chief executive Sophie Jones said the continued success of U.K. labels and artists overseas was “an exceptional achievement in the face of unprecedented competition on the global music stage, both from long-established and rapidly-expanding new music markets.”
The U.K. is the world’s third biggest recorded music market behind the U.S. and Japan with sales of just over $1.8 billion in trade value, according to IFPI’s 2022 Global Music Report.