sony music
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Music companies’ quarterly results in October and November were a bright spot amid a mostly bleak earnings season. High inflation, rising interest rates and the chance of a recession presented a triple-whammy to most sectors — particularly tech and retail — but in the music industry, those macroeconomic threats weren’t enough to dampen consumer demand and investors’ confidence.
“While the broader economy is facing challenges, the music industry as a whole remains healthy,” says Golnar Khosrowshahi, founder and CEO of Reservoir Media, which raised its full-fiscal-year forecast by 11% for both revenue and adjusted earnings before interest, tax, depreciation and amortization (EBITDA).
So what worked in music companies’ favor? In short, more people are going to concerts and buying streaming subscriptions, and revenues from those sectors helped bolster quarterly results for nearly every publicly listed music company.
Diversifiction = Fortification
The major labels, which have a piece of the market in nearly every segment of the music industry, all reported quarterly revenue gains over the third quarter last year, ranging from 16% at Warner Music Group to 6% at Sony Music Entertainment. On Universal Music Group’s third-quarter call, chairman/CEO Lucian Grainge attributed the company’s 13.3% third-quarter revenue gains to UMG’s diversification strategy. While ad-supported streaming revenue slowed significantly, only growing 5.2% (from last year’s 15.6% growth), licensing and other revenues rose by 30% due to an $84.2 million increase in touring revenue from Latin American, European and Asian markets where UMG is in that business. Merchandising and other revenue related to those tours grew by over 100% to almost $199 million. “We are better positioned to navigate the inevitable ebbs and flows of revenue of any particular business, as well as to weather any macroeconomic headwinds,” said Grainge.
Live’s Alive Again
Live Nation Entertainment had its biggest summer concert season ever, reporting that more than 44 million fans attended 11,000 events in the third quarter, as attendance for stadium shows tripled to nearly 9 million. Companywide, Live Nation reported $6.2 billion in quarterly revenue, up nearly 67% from the last-comparable quarter, which for it was the third quarter of 2019.
Streaming’s Still Strong
On a call with investors, an analyst asked Sony deputy president/CFO Hiroki Totoki what risks Sony Music Entertainment faces. His reply: “Streaming is very successful, and we don’t really have that much of a concern.” Spotify’s third-quarter results confirm that. Revenue rose 12% to roughly $3.2 billion at a constant currency, on a 13% uptick in subscription revenue from more than 195 million subscribers — 1 million more than the company targeted.
French streaming company Deezer also reported double-digit revenue growth, although it attributed the increase in part to a one-euro price hike the company instituted in France earlier this year. Deezer’s revenues rose nearly 14% to $112.5 million at the Sept. 30, 2022, exchange rate.
Price hikes, coming at a time consumers’ costs are rising across the spectrum, are the final thing working for music industry companies. After Apple said it would raise its standard individual streaming plan price by $1 to $10.99 in the U.S. and Spotify signaled it was also considering a price increase, major labels and other streaming company executives all said they expect trickle-down benefits.
It’s also worth noting that although Totoki said on the call that Sony is “taking steps to prepare for further deterioration… in each of our businesses,” the company raised its revenue and operating income targets for the full fiscal year by $9.8 billion and $1.9 billion, respectively (at Sony’s assumed exchange rate for the second half of the fiscal year).
Sony Music has added Christel Kayibi to its Africa & Continental Europe team, which she will join as director of repertoire strategy, Africa.
In her new London-based role, Kayibi will be one of the few executives to focus on both Anglophone and Francophone Africa, where she will develop Sony Music’s roster and network; identify catalog, label and other investment opportunities; and drive Sony Music’s entry into new markets across the continent. Kayibi will also work closely with the label’s regional and local Africa teams to assist with the signing of artists in partnership with Sony Music labels worldwide.
For her first project, Kayibi forged a partnership between Sony Music Africa and Afrochella’s parent company, Culture Management Group, along with the streaming service Audiomack, to give unsigned African talent an opportunity to compete for global distribution deals and record contracts through the Ghana-based music festival’s expanded “Rising Star Stage” competition. She will report directly to Daniel Lieberberg, president of Continental Europe & Africa, for Sony, in coordination with Sean Watson, managing director of Sony Music Africa.
Kayibi’s hiring reinforces Africa’s position as a hotbed for global talent that all three major labels want to develop. In September, Def Jam signed an exclusive worldwide joint venture with Native Records, a Nigeria- and U.K.-based label. In June, Universal Music Group also launched Virgin Music Label & Artist Services Africa, which includes over 15,000 music titles, with more than 50 label partners from 25 countries, and releases from more than 100 of Africa’s leading artists. In the last couple of years, Warner Music Group has partnered with Chocolate City, one of Nigeria’s leading independent labels that includes Afrobeat pioneer Fela Kuti‘s son Femi Kuti and “Love Nwantiti (Ah Ah Ah)” hitmaker CKay on its roster, and appointed Temi Adeniji as managing director of Warner Music South Africa and senior vp strategy for Sub-Saharan Africa, a post — similar to Kayibi’s — that’s meant to enhance the company’s presence in the region.
Before moving up at Sony Music, which she joined in 2019, Kayibi previously worked as the senior legal and business affairs manager and A&R at Columbia Records in the U.K., where she worked closely with finance, sales and marketing to ensure successful day-to-day operations of labels, including Columbia Records, 5K Records, Robots + Humans and Dream Life Records.
Before joining Sony Music, Kayibi worked as a lawyer at Slaughter and May, White & Case and Hunton Andrews Kurth LLP.
In 2017, Kayibi became the global legal counsel for Nigerian artist and entrepreneur Mr. Eazi and worked with him on building up his label Banku Music — which expanded its roster beyond its founder with the addition of Nigerian singer Joeboy, Ghanaian singer J.Derobie and Ghanaian DJ/producer GuiltyBeatz –as well as his African talent incubator, emPawa Africa, which currently distributes audio and video content for 100 artists across the African continent. Earlier this year, Kayibi won the best lawyer award at the 2022 Young Music Boss Awards in London, which recognizes the achievements of rising music executives under the age of 35.
Try using some of your favorite songs on the short-form video app Triller, and you’ll be hard pressed to find what you’re looking for.
On Thursday, the music catalogs for Universal Music Group, Warner Music Group, Sony Music and Merlin — which provides digital licensing to many top independent labels and distributors — were removed from the platform.
A Triller spokesperson says the platform is “reassessing each of our label deals as they come due as our catalogue music usage is a small fraction of our overall business with creators.
“Some labels are more used than others and if we can make financial arrangements which make sense for the platform, on a label by label basis, we will. In other cases the usage does not justify the cost.”
The news follows a lawsuit filed by Sony Music Entertainment in August, claiming Triller had “historically failed to make payments in a timely manner” but that this issue got even worse in March 2022 when Triller “failed to make any monthly payments required under the Agreement, totaling millions of dollars.”
A source at one of the other major music companies says similar breach of contract and failure to make payments, including “millions and millions in past due royalties,” was behind Triller’s decision to pull these catalogs. The Triller spokesperson, however, called that claim “false and grossly inaccurate.”
Representatives for Universal, Warner, Sony and Merlin declined to comment.
In a Thursday morning email, Merlin’s senior director of business and legal affairs alerted members that Triller had “commenced the takedown of Merlin content.” He continued, writing “at this stage we do not believe that Merlin is the only licensor/content provider to have had content taken down. The term of our current agreement with Triller has now expired. We will update members as soon as we can regarding renewal discussions.”
Merlin members include Secretly Group, Mom + Pop, Monstercat, Symphonic, Ninja Tune, Beggars Group, FUGA, ONErpm, Domino, SubPop, Vydia and more. The Triller spokesperson told Billboard when asked about the Merlin email, “We are in active conversations with Merlin and expect to renew our relationship and continue our friendly and successful partnership.”
“As Triller has grown and expanded its portfolio of services for creators as an open-garden platform, we are recalibrating some of our partnerships with a focus towards showcasing talent and maximizing their monetization,” that statement continued.
A glance at Triller’s Discover Music page shows that there are now few official music options available after the takedowns, and the promoted new releases and top picks are largely artists with no label affiliation. The only traces left of some label-signed artists are available through searching “OG Sounds,” which are typically user-created soundtracks like remixes that sometimes contain copyrighted material, or if a signed artist collaborated as a feature on a song released independently.
The public rift between Triller and the music business dates back to about 2020, when chairman and CEO of the National Music Publishers’ Association (NMPA) David Israelite criticized the app in an Instagram post, saying Triller needed to fully license its members works. “It’s a simple proposition – license songs before you use them,” he wrote.
In November of that year, Wixen Music Publishing filed a 15-page lawsuit against Triller, suing the company for $50 million dollars, stating in the complaint that Wixen felt encouraged when Triller’s CEO appeared to agree with the NMPA’s criticism that summer, but then, after months with no agreement reached, Wixen opted to file the lawsuit.
In the indictment, Wixen alleged Triller had “brazenly disregarded copyright law and committed willful and ongoing copyright infringement,” of its more than 1,000 song catalog. The lawsuit was dismissed in February 2021.
Eventually, in March 2021, Triller came to an agreement with the NMPA on behalf of its members.
Also in early 2021, Universal Music abruptly pulled its catalog from Triller, saying the app “shamefully withheld” artist payments. A source familiar with the matter told Billboard at the time that the payments UMG claims Triller is withholding went back several months. Three months later, the two companies announced a new, worldwide licensing agreement, spanning recorded music and publishing and restoring the UMG catalog to the app.
This August, Timbaland and Swizz Beatz also sued Triller for failing to make payments due on the sale of their popular Verzuz livestream series the year prior. They claimed the platform still owed them $28 million from the deal 18 months later. That lawsuit was settled in September.
Outside of music, there have been other claims against Triller for allegedly failing to make owed payments. Boxing journalist Dan Rafael reported that Triller had not fully paid several fighters and crew members from a May 2022 fight. In August, the Washington Post reported that Triller “promised millions to Black creators” to use the app as part of a paid influencer program, but “nearly a year after…its payments to many creators have been erratic — and in some cases, nonexistent.” In September, it was also sued by a smartphone app consulting firm that said it was owed more than $132,000 in unpaid fees.
Over the past two years, Triller has repeatedly announced plans to go public but has so far failed to do so — initially through the formerly-popular ‘SPAC’ merger process, and then in June this year filed paperwork with the U.S. Securities and Exchange Commission indicating that it plans to take a more traditional IPO route. In late September, the company announced it had secured $310 million from Luxembourg-based private alternative investment group for a 36-month term following a public listing of Triller’s common stock and would aim for a public listing by early in the fourth fiscal quarter (October-December).
Singer-songwriter Megan Moroney has inked a label deal with Sony Music Nashville and Columbia Records. During her opening performance slot for Warren Zeiders: The Up to No Good Tour on Wednesday evening (Nov. 16) at Nashville’s Brooklyn Bowl, Moroney announced her label signing, and also told the audience that her song “Tennessee Orange” will be sent to country radio.
According to Moroney’s manager, Punch Bowl Entertainment’s Juli Griffith, Moroney and her team were in talks with 18 record labels before signing with Sony Music Nashville and the NYC-based Columbia.
“We picked this combination because they understand exactly who Megan is and what she has already created,” Griffith tells Billboard. “Their plan is to come in and enhance what we are already doing under her creative vision.”
Moroney’s “Tennessee Orange” made its Billboard Hot 100 debut in October, entering the chart at No. 94. The song is currently at No. 19 on Billboard’s Hot Country Songs chart. Moroney wrote “Tennessee Orange” with Ben Williams, David Fanning and Paul Jenkins, with production from Kristian Bush. Moroney released her six-song EP Pistol Made of Roses in July.
A portion of the early appeal of “Tennessee Orange” lies in its backstory, with many fans believing Moroney wrote it about country singer-songwriter Morgan Wallen. In the song, Savannah, Georgia, native Moroney sings of being a University of Georgia fan (Moroney’s alma mater), but she is so besotted with a love interest that she is even willing to wear the University of Tennessee’s trademark orange color (Wallen is a UT fan).
In addition to her new label deal, Moroney’s team includes Griffith’s Punch Bowl Entertainment for management, as well as UTA booking agent Elisa Vazzana, and tour manager Alexandra Kolea.
“We are so happy to have built what we did with a small group of four amazing women (Team Lasso as we call ourselves). The time has come that we need to expand, and we are thankful to have been able to hand pick an amazing team to help us go forward in this journey,” Griffith adds.
Sony Music has set up a joint venture with label ONEWAY. Records focused on English-language repertoire from Israel.
ONEWAY. Records, which was founded by music executives and brothers Josh and Sam Fluxgold, who formerly managed Dennis Lloyd, the Israeli indie-pop artist known for his 2016 single “Nevermind” (released by Warner Italy).
The new venture will work to discover and develop new artists from Israel with “international appeal,” Sony says in a press release.
The Fluxgolds discovered Lloyd and helped guide his international success, which has featured Gold and Platinum records across several markets and sold-out world tours in the U.S., Europe and Australia. “Nevermind” peaked at No. 86 on the Billboard Hot 100 in August 2018 and reached No. 3 on Billboard’s Alternative Airplay chart.
“Josh and Sam have a proven track record for breaking Israeli talent abroad,” said Daniel Lieberberg, president of Sony Music Entertainment Continental Europe and Africa, in a statement.
The Fluxgolds will remain in Toronto, Canada, where they run ONEWAY., a Sony Music spokesperson confirms.
“During our time working in the Israeli market, we recognized the substantial talent that is being overlooked and underrepresented in the region,” the Fluxgold brothers said in a joint statement. “Together with our partners at Sony Music, we look forward to showcasing the unique Israeli sound and artists that the world has been missing.”
Sony will continue to lead its Israel business from its Continental Europe and Africa Head Office in Berlin, a spokesperson says, in contrast to its two main rivals, which have set up operations there over the past three years. Universal Music Group opened an office in Tel Aviv in 2020, becoming the first major label to set up standalone operations in the country; it is led by Yoram Mokady, a lawyer and entertainment executive. Universal Music Publishing Group followed suit in 2021, hiring Itamar Shafrir as general manager of the new outpost.
Warner Music Group said in May that it was launching Warner Music Israel and would open an office in Tel Aviv. Running the new imprint is Mariah Mochiach, general manager of Warner Music Israel, a veteran A&R and artist manager who worked for more than 10 years at Lev Group Media, which has acted as an Israeli distributor for Warner Music.
While still a relatively small market, Israel is a growing territory that ranked 27th in global music collections in 2021, with 35.6 million euros ($35.2 million), up 5.5% from 2020, according to international collections body CISAC. Pop artists like Noa Kirel, who is signed to Warner Music imprint Atlantic Records, are big at home but have struggled to cross over, though that could change for Kirel, who is slated to represent Israel at the 2023 Eurovision Song Contest in Liverpool, U.K. (Israel has won the contest four times since 1978.)
Last year, UMG and Simon Cowell’s Syco Entertainment said they would award an international recording deal to the winner of the upcoming season of The X Factor Israel, something previously unheard of in the Israeli music market. Cowell was set to be a judge on the fourth season of the show but pulled out in May of 2021, Variety reported.