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Every Thursday, labels deliver all their new releases to TikTok. This is typically a mundane process, but an essential one. Just as record companies want their new tracks playable on all the streaming services at midnight, they want them on TikTok — a crucial promotional venue and driver of music discovery, especially for younger listeners.
But on Sept. 22, things began to go wrong with what’s ordinarily a relatively seamless operation. Five executives — all affiliated with Sony Music or managers with artists in the Sony Music ecosystem — told Billboard that they encountered problems getting their music on TikTok. The issues varied, as did their duration: Some songs’ delivery was temporarily delayed; some never made it; some temporarily faced copyright takedowns even though they were legitimate major-label releases that didn’t infringe on the works of others.
Two sources were told by Sony Music that even Bad Bunny‘s new single “Un Preview” — distributed by The Orchard, which Sony owns — was initially available on all streaming services when it came out Sept. 25, but not on TikTok. (A rep for Bad Bunny did not respond to a request for comment.) It does not appear that the other major label groups experienced similar problems.
While TikTok is renowned for its technical abilities, especially its algorithm, no platform is impervious to mistakes; perhaps someone accidentally pressed the wrong button at headquarters. Funny as that sounds, a version of it has happened before: Back in 2019, major labels suddenly encountered problems delivering songs containing swear words to TikTok. When asked about the platform’s unexpected turn towards the puritanical, a representative said that “due to an internal error, we inadvertently restricted explicit tracks from TikTok globally.”
But last week’s hiccups on TikTok arose against a different backdrop. Sony Music was in the process of negotiating a new deal with the ByteDance-owned company, according to multiple sources. And Sony Music executives told at least two people that they believed sudden problems with getting music onto TikTok were linked to the ongoing negotiations.
Reps for both Sony Music and TikTok declined to comment.
This bizarre episode served as a discomfiting reminder of both TikTok’s power and the music industry’s uneasy relationship with the platform. TikTok often seems like it’s the only service capable of jumpstarting a hit — “the biggest game in town,” as one manager told Billboard last year. That means a label’s music has to be on there if it hopes for commercial success.
But TikTok is also notorious for its low payouts to rights holders. And this has created tension, leading some of music’s most powerful figures to demand better rates from the platform in public remarks.
In September 2022, Universal Music Group CEO Lucian Grainge warned of a value gap “forming fast in the new iterations of short-form video.” “We will fight and determine how our artists get paid and when they get paid in the same way that we have done throughout the industry for many, many, many years,” Grainge added during a call with investors the following month.
Sony Music Group Chairman Rob Stringer echoed this sentiment during a call with investors in May. “Some of the short-form video providers are relatively new, but we are clearly monitoring their progress, and it doesn’t take a scientist to realize that we are being underpaid by some of those content providers,” he said. “As [our] negotiations go on, that will be our position until we are satisfied that we have been paid properly.”
Warner Music Group CEO Robert Kyncl has been more measured in his public comments about TikTok. Warner announced a new multi-year licensing deal with TikTok this summer.
Nearly four years ago, when TikTok said it “inadvertently restricted explicit tracks,” the problem took a number of weeks to resolve. Labels first noticed that songs containing swears were having trouble at the end of August. It was October before a TikTok rep said the company was “finally able to notify labels of the full restoration of affected tracks.”
The various issues experienced by Sony Music affiliates in September were fixed far more quickly. No one was TikTok-less for even a full week.
Still, an executive says, the experience was unnerving — a reminder that his artists’ access to a platform with more than a billion monthly active users “can be cut off overnight.”
Triller has settled a lawsuit from Sony Music accusing it of showing “brazen contempt for the intellectual property rights” of its artists by ceasing to pay license fees for the use of the company’s songs on the social video app. The deal was reached on July 21 after a federal judge overseeing the case sided […]
Marti Cuevas is the new president of the The Latin Songwriters Hall of Fame (LSHOF), Billboard can exclusively announce. Additionally, the organization said Mauricio Abaroa will serve as the chairman of the newly-established ‘Latin Angels’ La Musa Capital Funding Committee. The company’s former president, Delia Orjuela, will continue in her role of president emeritus. According to the LSHOF, the new additions and re-alignment “reflect the expansion of responsibilities commensurate with the continuing growth of the Latin Songwriters Hall Of Fame in membership, activities and stature.” The LSHOF’s main event each year is the La Musa Awards, which honors the world’s greatest Latin music creators and their memorable songs.
“[Marti and Mauricio] will help us continue to build and expand the world’s first organization that truly honors and celebrates the lives and music of Latin music’s greatest songwriters and composers,” added Rudy Pérez chairman and CEO of LSHOF — which he co-founded in 2012 with Desmond Child. –Griselda Flores
Rami Mohsen was appointed managing director of Sony Music Middle East, where he’ll drive the label’s overall strategy and operations across the fast-growing market. Mohsen arrives at Sony following a brief stint as Spotify’s head of music for the Middle East, North Africa and South Asia — but for the bulk of the last 20 years he worked his way up to oversee operations at Cairo-based Nogoum FM, the first private radio station in Egypt and one of the largest in the Middle East. In a statement, Sony executive Shridhar Subramaniam said “Rami is well-positioned to take [SMME] to new heights,” and the company has good reason to be optimistic. A surge in recorded music revenues in the MENA market made it last year’s fastest growing region, rising by almost 24% and driven almost entirely — a 95.5% chunk — by streaming, reports the International Federation of the Phonographic Industry (IFPI).
Primary Wave Music promoted veteran creative specialist Marty Silverstone to president of global sync. Based out of their new Beachwood Canyon office in Los Angeles, Silverstone will continue to oversee a crack synch licensing department responsible for placing a number of roster songs across TV (Stranger Things, Ted Lasso), film (Elvis and The Fabelmans) and this thing called the Super Bowl (nine commercials in the three years, the company says). Silverstone is 13 years into his PWM tenure — having joined senior creative director before stepping up to svp/head of sync in 2014. Prior to Primary Wave, Marty was head of creative licensing at independent publisher North Star Media. “[Marty’s] vision for how our catalog of music can be reimagined has no bounds,” commented founder and CEO Larry Mestel. “He and his team have brought new life to our iconic and classic songs helping to usher them into the modern era.”
Veteran artist manager Christian Stavros just revived Little Operation, the Los Angeles-based agency he originally founded in 2010, bringing with him an artist roster headlined by Angel Olsen, Devendra Banhart, Best Coast, Morgan Nagler and King Tuff. Stavros’ right hand is McKenzie Rice, who’ll handle day-to-day operations while also managing Little Op client Jack Van Cleaf. The two managers previously worked together at Other Operation, the creative house Stavros co-built and launched in 2021. You can reach Stavros and Rice at info@littleoperation.com.
Other Operation’s other co-founder, Heather Kolker, announced the formation of her management company this week as well. At Dreamshop Management, she’ll continue to represent Icelandic indie folk rockers Of Monsters and Men, queer indie-pop band MUNA, and the solo projects of OMaM singer-guitarist Nanna and MUNA member Naomi MacPherson. Joining Kolker as day-to-day manager at Dreamshop is Megan Manowitz, who previously worked in booking and tour management at Ground Control Touring and most recently project managed at Mondo Mondo, a luxe brand. Kolker can be reached at heather@dreamshopmgmt.com.
ICYMI: A flurry of senior executives and staff members have left posts at Hipgnosis Song Management in recent months … The board of directors at Gibson Brands confirmed Cesar Gueikian as president and CEO.
Sony Music Nashville named Fred Rubenstein as vp of digital marketing, to be responsible for overseeing the digital marketing team and leading the strategy, execution and implementation of social media and digital marketing campaigns across the Sony Nashville roster. Rubenstein will also focus on new partner/platform opportunities to advance digital discovery, enhance artists’ brands and drive consumption. Rubenstein was most recently senior. manager of creator acquisitions & development for Amazon’s live streaming service Twitch. Prior to his role at Twitch, Rubenstein was a member of digital marketing teams at Elektra Music Group and Roadrunner Records. –Jessica Nicholson
Kobalt Music appointed Teresa Romo as senior creative director for Latin America, responsible for overseeing the independent music services company’s expansion in Mexico. She’ll remain based in Los Angeles and report to Nestor Casonu, president of Latin America, who remarked the “market is in need of someone that not only has a deep understanding of the genre but also the vibrant and fascinating Mexican culture.” Prior to joining Kobalt, Romo served as Latin head of creative for BMI, where she signed and developed a songwriter roster including Edgar Barrera, Ana Barbara, Geovani Cabrera, Kuinvi, Alemán and Carla Morrison. Earlier in her career, Romo held senior publicity and communications roles at The Recording Academy, NBCUniversal, Universal Music Latin Entertainment and Warner Music.
UTA promoted Brandi Brammer to senior vice president of global music operations, an upgrade from her previous role as vp of people and business partnerships at the mega-agency. She’ll continue to be based out of Nashville. In her new role, Brammer will lead the day-to-day operational work of UTA Music, spanning human resources, legal and business affairs, finance, facilities and technology initiatives. Before joining UTA in 2021, Brammer served as vp of human resources at WME, leading HR for the agency’s music division.
Music and culture agency Premier Music Group promoted Winslow Bright and Aaron Mercer to co-president roles in charge of its music supervision and strategy teams across advertising, film, TV, and podcasts. They’ll both report to CEO Josh Deutsch and creative director Randall Poster. Bright joined PMG in 2020 from Search Party, the music supervision company acquired by Deutsch, and Mercer arrived in 2019 after Premier snatched up Wool & Tusk. Premiere also elevated longtime music supervisor — and former Search Party-er — Meghan Currier to executive producer. “Each of them brings a new perspective to the work we do,” commented Deutsch.
The Academy of Country Music announced a round of new hires and promotions. Kris Reyes has been hired as director, finance and operations; Kortney Toney has been hired as manager, programming & community engagement; Libby Gardner has been promoted to senior manager, content & editorial; Jesse Knutson has been promoted to senior manager, publicity & media relations; Haley Montgomery has been promoted to senior manager, awards & membership; Taylor Wolf has been promoted to senior manager, ACM Lifting Lives; and Alexis Bingham has been promoted to coordinator, events. Reyes has previous experience in operations accounting at TravelCenters of America. Toney previously worked at Opry Entertainment Group and Schermerhorn Symphony Center. Knutson is a multiple Emmy winner, having served as a TV reporter in Nashville, Seattle and Harrisburg, PA, and as a producer at Los Angeles’ KNBC. Montgomery joined the Academy in 2020 as manager of awards & membership after holding a variety of multi-discipline roles across the industry. –JN
Women in Music, a nonprofit founded in 1985 that works to empower and advance women in the music industry, recently welcomed new ambassadors and advisory board members. This year’s ambassadors include: rapper Rapsody, CD Baby executive Faryal Khan-Thompson, veteran booking agent Amy Davidman, Atlanta agency owner Dina Marto, and REBEL vp Adriana Arce. WIM 2023 advisory board is: Lauren Apolito, Nikisha Bailey, Erin Barra, Cindy Charles, Liz Cimarelli, Alex Flores, Maureen Ford, Ali Harnell, Ariel Hyatt, Lauren Iossa, Sari Kohen, Bea Koramblyum, Linda Lorence-Critelli, Molly Neuman, Mayna Nevarez, Jennifer Newman Sharpe, Jessica Sobhraj, and Monika Tashman.
Former TikTok creative licensing executive Rich Sica and commercial music industry veterans Jack Bradley and Aleena Bissett have teamed up to launch Juice, a new music company focused on “speed and the ear-worm ethos” to produce short-form social and other online content for brands and creators. Sica, Juice’s advising creative director, oversaw creative music licensing across North America and LATAM during his two-plus years at TikTok. Managing director Bradley and head of production Bissett arrive from commercial music shop HiFi Project, which they’ll continue to run.
Cade Price was promoted to general manager at Play It Again Entertainment, the label and management company founded by singer-songwriter Dallas Davidson. In his new role, Price will oversee daily operations of PIAE and its roster of artists, including rising singer Dylan Marlowe, whom Price manages. The Missouri native, who is now based in Nashville, joined Play It Again five years ago and has worn many hats across publishing, marketing and A&R. “Cade Price thinks outside of the box,” said Davidson. “I love that about him. Just look at what he did with Dylan Marlowe. He took his talent and the music Dylan was making and made sure that millions of people got to hear it.”
PR firm Shore Fire Media promoted Taylor Perry to senior account executive. The Brooklyn-based publicist joined Shore Fire in 2020 as a publicity assistant and since then was upped to account executive, leading campaigns for Samara Joy, Jewel, Rhino Records and other clients.
Blue Raincoat Artists has hired veteran artist manager Amy Frenchum, who brings along her clients Ezra Collective and Yazmin Lacey to the London-based agency. BRA is the artist management arm of Blue Raincoat Music, a Reservoir company, and has a roster including Arlo Parks, The Nova Twins, Skunk Anansie, The Mysterines, Cigarettes After Sex and Phoebe Bridgers.
Nashville Bites: Ruth Todd was appointed Bonneville executive vp/chief content officer. A former TV news anchor, she was most recently senior vp/chief reputation officer for beauty and wellness company Nu Skin. Bonneville’s country stations include KNCI Sacramento, Calif., and KYGO Denver… The Nashville Convention & Visitors Corp. established a Music City Host Committee to assist in booking events and raise funds for the city’s newly approved stadium. Eric Church is the lone artist on the 16-member panel, chaired by former Tennessee Gov. Bill Haslam. –Tom Roland
Sony Music has created a new position of executive vp of AI, and hired former BPI CEO Geoff Taylor to take up the role, according to an internal memo obtained by Billboard. Taylor, who spent 15 years as chief of the British recorded music trade body, will report to Sony Music Entertainment COO Kevin Kelleher.
In the new role, Taylor will coordinate the major label’s business efforts surrounding artificial intelligence, and coordinate across the global digital business and business and legal affairs division, according to the memo.
The move comes as the music business continues to grapple with the particular challenges that are beginning to arise through the proliferation of artificial intelligence in the digital world, particularly its effect on copyright and ability to be trained on existing musical compositions, among other issues. Battles have begun to pop up around AI-generated music on streaming services, and songs that have been released that mimic existing artists, producers and songwriters without their input or consent, with additional use cases popping up seemingly every day.
The position appears to be the first AI-specific executive-level role introduced by any of the major labels. Check out Kelleher’s memo below.
All,
Artificial Intelligence (AI) has great significance for the future of the music industry and, as a result, more focused attention on it is required.
Accordingly, we are delighted to share that Geoff Taylor will be joining us as our new Executive Vice President, Artificial Intelligence.
Reporting to me and working closely with our Global Digital Business and Business & Legal Affairs divisions, Geoff will align and help coordinate the work of every part of the business that touches AI.
Geoff brings to our company decades of music industry experience. Most recently, from 2007 to 2022 Geoff was the Chief Executive of the BPI, our UK Trade Body for recorded music, where he led the fight against piracy and fraud and advocated for the strategic importance of recorded music to jobs, investment and maintaining the UK’s global competitiveness. Prior to joining the BPI, Geoff was General Counsel and Executive Vice-President at our global recorded music trade body, the IFPI from 2005-2007.
In these roles, Geoff has worked with our company for several years and I am delighted he is joining to help us successfully navigate a key moment in the history of the music industry.
So please join me in welcoming Geoff to Sony Music and feel free to reach out to him with any questions you might have at [Sony Music Entertainment Email Redacted].
Kevin
Federal prosecutors are formally moving to seize R. Kelly’s money held by Sony Music and Universal Music Publishing Group (UMPG), saying it will be used to pay victims and fulfill outstanding fines.
Two years after they won a jury verdict convicting the disgraced singer of sex trafficking and racketeering, prosecutors in Brooklyn have asked a federal judge for so-called writs of garnishment against the label and publisher — court orders that would compel the two companies to hand over funds tied to Kelly.
Sony Music and UMPG are believed to be “in possession of property” belonging to Kelly that could be used to pay down the $504,289 that he currently owes in victim restitutions and criminal fines, the feds argued.
It’s unclear how much of Kelly’s funds each company currently holds. A court ruling in March disclosed that Kelly’s royalty account with Sony held $1,544,333 as of 2020.
Neither Sony Music nor UMPG immediately returned requests for comment on the filings.
After he was sentenced last summer to 30 years in prison on the sex trafficking and racketeering charges, Kelly was ordered to pay more than $480,000 in fines and restitution. After he was sentenced again in February on separate child pornography convictions in Illinois, another $42,000 was tacked on.
Thursday’s filings are the latest efforts by the government to collect on those judgments. Last fall, prosecutors confiscated nearly $30,000 in Kelly’s prison commissary account. But the feds have competition for that money.
R. Kelly victim Heather Williams, who won a $4 million civil judgment against the singer, is also seeking to tap into the Sony Music account — as is Midwest Commercial Funding, a property management company that won a separate $3.5 million ruling against Kelly over unpaid rent at a Chicago studio.
In March, the Illinois Supreme Court ruled that Williams had priority to the funds over Midwest Commercial Funding because she was the first to properly demand the money from Sony. But that ruling left unclear whether she’ll enjoy similar priority over a slew of additional monetary penalties that Kelly owes to victims as a result of his federal criminal convictions.
Federal prosecutors in both Illinois and New York declined to comment on that decision at the time.
In a statement Thursday (June 1), Kelly’s lead attorney, Jennifer Bonjean, told Billboard that she and her client believe that the restitution order against him is incorrect and will be overturned on appeal. But she said they have “no opinion” on prosecutors seeking to garnish funds held by Sony Music and UMPG.
Sony Music Group chairman Rob Stringer said on Tuesday (May 23) that the company is focused on the fight against low-quality content — which he called ”the lowest common denominator” — flooding top streaming platforms. “We have to look after the premium quality artists at the top of our business,” Stringer said during a company-wide […]
Sony Music Corp. is in the process of helping Bad Bunny manager Noah Assad — the CEO of Latin music label and management company Rimas Entertainment — buy out his partner, Rafael Ricardo Jiménez Dan, a former Venezuelan government official who has a 60% majority stake in the company, sources familiar with the matter tell Billboard.
Rimas — which manages, records and publishes Bad Bunny — also has a label and management roster that includes Arcángel, Eladio Carrión, Jowell & Randy and Tommy Torres. The company was founded in 2014 in Puerto Rico and now has about 100 employees.
According to sources, Sony will participate in a buyout of Jiménez, who has not been involved in running Rimas’ day-to-day operations since 2018. That will result in a reshuffling of the company’s ownership and will likely leave Bad Bunny with an equity stake in the firm— and either Assad, or the combination of Assad and Bad Bunny, with majority ownership.
However the deal is ultimately financed, Sony itself is expected to wind up with a significant minority share in Rimas, which it will assign to The Orchard, its rapidly growing music distribution and artists/label services powerhouse that currently distributes Rimas.
Billboard estimates that Rimas Entertainment — the record label and the management company — has a valuation above $300 million without including the company’s publishing assets, which sources say are not currently being considered as a part of this transaction.
Assad and Jimenez, respectively, also have the same 40–60% ownership stakes in the music publishing assets, Jiménez tells Billboard. The publishing company, which includes some Bad Bunny songs and was launched by Assad, Jiménez and lawyer Carlos Souffront, is also up for sale. The sellers are seeking a $70 million to $75 million valuation for the overall publishing company, those sources add. As on the recorded music side, Assad plans to retain his stake in the song catalog, which means that the Jiménez stake could potentially fetch $42 million to $45 million.
Assessing a valuation for the publishing deal is tricky, sources say, because many of Bad Bunny’s songs are still widely popular, which makes it harder to calculate how much their plays will decay until they level off and become a predictable income stream, likely in a decade or two from now. As it is, the Rimas publishing portfolio —which is currently being administered by Universal Music Publishing Group — has about $5 million to $7.5 million in net publisher share (gross profit after paying songwriter royalties), a level it is expected to maintain over the next few years.
The music publishing portion of Jiménez’s Rimas holdings have been shopped to private equity players, sources say, and there is currently no known buyer. That’s in contrast to the hoped-for sale of the label/management holdings, which appears to have only been offered to Sony. However, sources wonder if Assad has matching rights on the publishing assets, which means that he could also arrange a deal to buy the Jimenez publishing stake if he matches the highest offer.
Jiménez is being represented for the expected publishing sale by Brian Richards, co-founder and managing partner of the investment advisory firm Artisan. On the record label/management side of Rimas, sources say Jiménez is being advised by Mitchell, Silberberg & Krupp partner Joel Schoenfeld, the former general counsel of eMusic and BMG’s senior vp of business affairs before that; and by Colin Finkelstein, the former CFO for EMI Music, who sometimes consults with investors on music assets and also owns and runs a few artist management firms.
Both deals are said to be very complex, and sources say they have been in the works for months — with some wondering whether the deals have been stalled due to friction between the two partners, Jiménez and Assad.
Another looming issue may be how much financial capacity Sony Music Group has to close deals right now. As Sony negotiates the stake in Rimas, it is reportedly also in talks to acquire part — or possibly all — of the Michael Jackson estate in a deal that could carry a valuation of $1.5 billion to $2 billion.
The question is whether Sony’s corporate leadership in Japan has signed off on the funding and the completion of both deals and if the costs involved in the deals might force Sony to choose to between them.
If both deals are completed, sources suggest that they would likely still need to be approved by regulators. Under the Hart-Scott-Rodino Antitrust Improvements Act, as of Feb. 27, 2023, any merger and/or acquisition that has a transaction value of more than $111 million — or if the contemplated combined entity will have total assets of more than $445 million — must file and seek regulatory approval.
Assad, Jiménez, Sony, Finkelstein, Schoenfeld and Richards either declined to comment or didn’t respond to requests for comment.
Additional reporting by Alexei Barrionuevo
An R. Kelly victim who won a $4 million judgment against the singer will get first crack at pulling money from the singer’s royalty account with Sony Music — after the Illinois Supreme Court ruled that her claims should take priority over a Chicago landlord that’s also owed millions.
In a decision on Thursday (March 23), the state high court said Heather Williams was entitled to tap into Kelly’s account with Sony — valued at $1.5 million in 2020 — before Midwest Commercial Funding, a property manager that won its own separate $3.5 million ruling against Kelly over unpaid rent at a Chicago studio, can access it.
Williams filed a civil lawsuit against Kelly in 2019, alleging that when she was 16 years old, the singer lured her into his studio with promises that she could be in a music video and then repeatedly had sex with her as a minor. In 2020, she won a judgment of $4 million against Kelly on those accusations.
Thursday’s decision upheld a lower court’s earlier ruling that Williams — and not Midwest Commercial — should be given priority access to the royalties because she was the first to properly demand the money from Sony. That earlier ruling had ordered Sony to hand over to Williams “any funds currently in Kelly’s royalty account,” and to keep giving her his royalties until the judgment was paid off.
Disbursement of Kelly’s funds held by Sony has been paused while litigation has played out; it’s unclear how much money is now in the account. The company is not named in any lawsuits and is not accused of any wrongdoing. A rep for Sony declined to comment on the ruling or on the status of Kelly’s royalties.
Following Thursday’s ruling, Kelly’s attorney, Jennifer Bonjean, tells Billboard that she’s currently seeking to overturn the underlying $4 million judgment. She says the award to Williams — a so-called default judgment, meaning it was issued after Kelly failed to respond — “never should have been entered.”
“I’ve never in my career seen such a flouting of the rules to deny him even the opportunity to defend these civil cases, even when the courts were fully aware that Kelly was incarcerated, unrepresented at points, and facing multiple criminal indictments,” Bonjean says. “Indeed, much of these civil proceedings occurred without Kelly’s knowledge.”
But the $4 million judgment was already upheld once by an appeals court, and Bonjean said she faces an “uphill battle” to overturn the judgment because of the actions of Kelly’s prior lawyers.
An attorney for Williams declined to comment on the litigation. An attorney for Midwest Commercial Funding did not return a request for comment.
Though Thursday’s decision gave priority to Williams over Midwest Commercial Funding, it’s unclear whether she’ll enjoy similar priority over a slew of additional monetary penalties that Kelly owes to victims as a result of his federal criminal convictions.
After he was sentenced last summer to 30 years in prison for sex trafficking and racketeering in New York, Kelly was ordered to pay more than $480,000 in fines and restitution; after he was sentenced in February on child pornography charges in Illinois, another $42,000 was tacked on. Last fall, prosecutors confiscated nearly $30,000 in Kelly’s prison account in an effort to start paying those penalties.
A representative for the U.S. Attorney’s Office in New York declined to comment on the impact of Thursday’s ruling or the status of federal restitution efforts against Kelly. A rep for the Us Attorney’s Office in Illinois did not immediately return a request for comment.
Harry Styles, Mariah Carey and big streaming gains helped Sony Music Entertainment finish 2022 with a bang. Styles’ album Harry’s House and Carey’s typically strong holiday performance drove SME’s revenues up 22.9% to 363.7 billion yen ($2.57 billion at quarter’s average exchange rate) in its fiscal third quarter ended Dec. 31, 2022.
Styles’ 2022 release Harry’s House and 2019 album Fine Lines were among SME’s top performing titles of the quarter. Carey’s “All I Want for Christmas is You” topped the U.S. Hot 100 chart for four weeks (chart dates of Dec. 17, Dec. 24, Dec. 31 and Jan. 7). The company also pointed to strong sales and streams by Steve Lacy’s Gemini Rights, SZA’s SOS, Future’s I Never Liked You, Chris Brown’s Indigo, Beyonce’s Renaissance and Bruce Springsteen’s Only the Strong Survive.
Quarterly operating income improved 14.3% to 63 billion yen ($445 million). Adjusted earnings before interest, taxes, depreciation and amortization were 80 billion yen ($565 million).
The recorded music division’s revenues improved 30.1% to 239 billion yen ($1.69 billion). Streaming revenue grew 33.2% to 159.1 billion yen ($1.12 billion) and accounted for 66.6% of recorded music revenue, up from 65% in the prior-year period. Download revenue, up 14.3%, accounted for just 4.7% of digital revenues compared to 5.5% a year earlier. Physical sales declined 6% to 31.1 billion yen ($219.1 million) and accounted for 13% of total recorded music revenue, down from 18%.
Publishing revenues increased 42.9% to 74.2 billion yen ($523.4 million) in the quarter. Within publishing, streaming revenue improved 59.8% to 41.6 billion yen ($293.3 million). Streaming’s share of publishing revenue grew to 56% from 50.1% in the prior-year period. Other publishing income rose 25.9% to 32.6 billion yen ($230.1 million).
Excluding foreign exchange and the visual media and platform segment, SME’s recorded music and publishing divisions grew 10% in the quarter. That is a smaller improvement because changes in foreign exchange rates helped SME’s yen-denominated results. From the end of 2021 to 2022, the value of the yen declined against the three main foreign currencies: -10% against the U.S. dollar, -6.9% against the euro and -1.8% against the pound.
The visual media and platform segment was a drag on earnings due to lower anime sales, however. The segment’s revenue fell 16.3% to 47.4 billion yen ($334.7 million).
Looking ahead, the company maintained its forecast for full-year revenue at 1.37 billion yen (approximately $9.7 billion) at operating income at 265 billion yen (approximately $1.87 billion).
With 2022 now officially in the books, the U.S. market share report is in: with Bad Bunny, Lil Nas X and Harry Styles leading the way, it was a banner year for Sony Music, as it gained in both overall market share and, more drastically, in current market share on the leading Universal Music Group, narrowing the gap among releases less than 18 months old to 6.58% in 2022 — a chasm that stood at 13.7% at the end of 2021.
But there was good news for UMG, too, as Republic Records rode a red-hot fourth quarter — led by Taylor Swift’s Midnights, the No. 2 album of all of 2022 despite only being released in October — to rank No. 1 among labels in current market share for the entirety of 2022, coming in at 10.38%. That makes it the only label to top double digits in the final ranking of the year. And UMG maintained a double-digit lead in overall market share over second-place Sony, leading 37.54% to 26.87% despite the latter’s gains throughout the year. Interscope Geffen A&M finished the year as the No. 1 label in overall market share once again, coming in at 9.63%, though it was down from the 10.08% share it held at the end of 2021.
Sony’s overall market share grew 0.76% year over year — up to 26.87% in 2022 from 26.11% in 2021 — marking a big stride forward for the music group. That gain was largely at the expense of Universal Music Group, which dropped 0.66% year over year, from 38.20% in 2021 to 37.54% at the end of 2022. Meanwhile, Warner Music Group’s market share grew from 16.06% in 2021 to 19.05% in 2022, though that is not an apples-to-apples comparison; this year, Warner-owned distributor ADA — which distributes dozens of independent labels — was factored into WMG’s market share, adding 2.96% to its total and accounting for almost all of Warner’s jump. (The move more accurately aligns Warner’s distributed market share with the other majors, which also include their distribution wings in their totals.) That switch also explains the commensurate dip for the indie sector, which fell from 19.63% in 2021 to 16.54% in 2022.
In current market share, Universal fell more than 4%, from 37.89% in 2021 to 33.57% in 2022, with all three other major players picking up that slack, led by Sony, which ballooned significantly almost 3 percentage points to 26.99% in 2022 — up from 24.19% in 2021. Warner — even taking into account the 3.32% in current share added by ADA — was also up, from 14.42% in 2021 to 18.30% in 2022 (an increase of 0.56% beyond the ADA bump), while the indie sector went from 23.50% last year to 21.14% in 2022, which is up 0.96% year over year when taking into account the loss of the ADA labels. Universal did, however, raise its catalog percentage from 38.33% in 2021 to 38.94% in 2022, while the other three all fell slightly.
Following Interscope in overall market share, Atlantic remained in second, at 8.89%, although it, too, was down slightly from 2021, when it posted a 9.17% overall share of the market. Republic ended the year in third — the only label in the top five to grow its overall market share year over year — with an 8.44% mark, up from 8.28% through the end of 2021, while Columbia (6.98%) and Capitol Music Group (6.40%) rounded out the top five. (A note on these labels: Interscope’s market share includes Verve [0.85%]; Atlantic’s includes the now-combined 300 Elektra Entertainment Group [2.35%], which would have been good enough for ninth place on its own; Republic’s includes Island [1.51%], Cash Money [0.71%], Big Loud, Imperial and Mercury; Columbia includes some indie labels from distributor RED; and Capitol includes Virgin [1.78%], Motown/Quality Control [1.05%], Capitol Christian Music Group [0.61%], Astralwerks and Blue Note.)
In sixth, Warner Records — which includes Rhino, Warner Latin and a chunk of Warner Nashville in its market share — grew year over year, from 6.16% in 2021 to 6.35% in 2022, having steadily increased its share each quarter of the year. RCA, whose market share stands alone, did the same; the label came in seventh, growing in each quarter to a finish of 5.12% — up from 4.89% in 2021 — wrapping the year strongly with the four-week No. 1 run of SZA’s S.O.S. In eighth, Epic Records also picked up market share, rising to 2.63% in 2022 from a 2.38% share in 2021. Def Jam, in ninth, faltered to 2.07%, down from 2.25% in 2021; while Sony Nashville jumped into 10th, leapfrogging UMG Nashville by growing its market share from 1.99% to 2.04% year over year.
UMG Nashville dropped to 11th, slipping from 2.04% in 2021 to 1.85% in 2022, while Concord jumped from 13th (1.68%) in 2021 to 12th (1.73%) in 2022. Disney — with its early-year Encanto boost — was up to 1.60% in 2022 from 1.40% the year before, good for 13th, while Universal Latin (1.47%) and Sony Latin (1.24%) rounded out the top 15, both up from the year prior as well.
Republic had a big fourth quarter (9.57%), with four major releases — Stray Kids’ Maxident, Swift’s Midnights, Drake and 21 Savage’s Her Loss and Metro Boomin’s Heroes & Villains, all of which debuted at No. 1 on the Billboard 200 — collectively topping the Billboard 200 for eight weeks. That helped boost its current market share from 8.77% through the first three quarters of the year to 10.38% by year’s end, with that late push taking it to No. 1 among all labels in terms of current market share in 2022.
Atlantic, in second place in current share, essentially maintained its level from last year, coming in at 9.15% (from 9.16% in 2021), though it moved up one spot from third place; while Interscope dropped sharply, from a stellar 11.05% in 2021 to 8.72% in 2022, falling from first to third. Columbia and Capitol, in fourth and fifth, respectively, both fell in share, the former from 6.83% to 6.67% and the latter from 5.64% to 4.97%; while Warner and RCA, in sixth and seventh, both grew in share, the former from 4.48% to 4.86% and the latter from 4.37% to 4.65%.
Outside the top seven labels, there was a bigger shakeup in current market share. Epic Records moved up to eighth place, gaining from a 2.04% current share in 2021 to 2.23% in 2022, while Sony Nashville jumped up to ninth, growing to 1.89% from 1.59% in 2021. Alamo made the biggest leap, all the way up to 10th in current share in 2021 at 1.56% in its first full year as a standalone Sony Music label; in 2021, its share was split between UMG and Sony as it was sold midway through the year, making an apples-to-apples comparison difficult. BMG, in 11th, held steady at 1.42%, while Disney, perhaps unsurprisingly, surged into 12th, up to 1.36% year over year from 0.52% in 2021. Def Jam, however, saw its current share sink from 2.21% in 2021 to 1.27% in 2022, finishing 13th, while Sony Latin (1.24%) and UMG Nashville (1.23%) rounded out the top 15.
As is generally the case, catalog market share tracked similarly to overall market share, as older titles generally perform consistently as a percentage of the market year over year. But both UMG and the indie sector grew year over year, while Sony and Warner, the latter accounting for the ADA switch, were both down slightly as well.
