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A few months after film and television music supervisors kicked off a national worker organizing drive, a group that works with Netflix has filed a petition for a union election with the National Labor Relations Board.
A number of music supervisors who are currently working with or have recently worked with the streamer on a project-by-project basis are seeking to be represented in collective bargaining by IATSE, the major crew union that represents music editors, camera crews, script supervisors and other crafts. (No in-house workers are included in the current effort.) According to IATSE, “an overwhelming majority” of music supervisors recently and now affiliated with the company asked the company for voluntary recognition, which Netflix rebuffed, so the group is now seeking to join IATSE through the NLRB process.
The Hollywood Reporter has reached out to Netflix for comment.
Music supervisors at the company are seeking to “standardize pay rates,” join IATSE healthcare and retirement plans and “address structures that enable studios to delay workers’ pay for months at a time” with their unionization effort at Netflix, among other goals. As THR has previously reported, financial stresses and the craft’s dearth of union-provided healthcare during the COVID-19 pandemic helped inspire the national union drive, which had been in the works for two and a half years before it was officially launched in June.
The Netflix petition is the first time that this group of organizing workers has filed for an NLRB election. Per IATSE, the streamer “is presently the largest employer of Music Supervisors out of any studio in the AMPTP,” referring to the Alliance of Motion Picture and Television Producers, the bargaining representative for studios and streamers with unions.
Workers involved in the craft-wide unionization effort have previously said that they at one point asked the AMPTP itself for voluntary recognition, which the AMPTP declined. The Netflix election petition suggests workers will now attempt to organize their field employer by employer. If the NLRB grants an election, the Board will determine the size of the potential bargaining unit for music supervisors at the streamer.
Music supervisors curate and/or oversee the recording of music that appears in films and in television shows and manage negotiations for the use of preexisting music. The craft entered the spotlight in the late spring and early summer when several prominent appearances of Kate Bush’s “Running Up that Hill (A Deal With God)” during the fourth season of Netflix’s Stranger Things prompted a major surge in streams for the 1985 single and subsequent news coverage.
IATSE claimed in June that 75 percent of an estimated 500 working music supervisors nationwide have signed union authorization cards and therefore signaled their support for the IATSE drive.
This story was originally published on THR.com.
Apple is increasing the prices of its Apple Music subscription plans in the U.S. starting Monday (Oct. 24), the company confirmed to Billboard.
In a statement, Apple noted that the Apple Music price hike is due to an increase in licensing costs, “and in turn, artists and songwriters will earn more for the streaming of their music. We also continue to add innovative features that make Apple Music the world’s best listening experience.”
The subscription prices of Apple TV+ and Apple One plans are also being raised, the company confirmed.
Prices are increasing $1 per month for Apple Music individual plans (from $9.99 to $10.99), $2 per month for family plans (from $14.99 to $16.99) and $10 per year for annual plans (from $99 to $109). Its bundled Apple One subscriptions are increasing $2 per month for individual plans (from $14.95 to $16.95) and $3 per month for family and premier plans — from $19.95 to $22.95 and $29.95 to $32.95, respectively. Notably, Apple Music subscriptions will continue to include lossless and Spatial Audio at no additional charge.
This marks the first time Apple has raised subscription prices for these services in the U.S. The website 9to5Mac, which first reported on the increases, also reported that Apple would increase its raise prices in international markets, though the company had not confirmed that by press time.
Though Apple does not regularly report subscriber numbers, in June, J.P. Morgan estimated Apple Music could hit 110 million subscribers by 2025. The lat time the company reported subscriber numbers for Apple Music was in 2019, when it reported 60 million subscribers to the service.
The Apple Music price hike comes amid reports that Spotify could be charging $19.99 a month for its forthcoming premium HiFi subscription tier, though the company has not yet confirmed that. Earlier this month, YouTube raised the price of its YouTube Premium Family plan, which includes its music subscription service, from $17.99 to $22.99 per month.
TikTok creators will soon be handed a fresh set of tools to soundtrack their videos and potentially make hit songs when a new in-app platform created by Simon Cowell’s Syco Entertainment company, in partnership with Universal Music Group and Samsung, launches on the platform later this month.
Called StemDrop, the initiative will provide TikTok’s more than 1 billion monthly users with access to music “stems” (the isolated components of a song, such as drum tracks or individual vocal parts) from an exclusive new track composed by hit songwriters Max Martin, Savan Kotecha and Ali Payami entitled “Red Lights,” which creators can then use to record and share their own versions.
The project was conceived by British music mogul Cowell and entertainment executive Tim Van Rongen in partnership with Universal Music imprint Republic Records and Samsung.
“With tens of thousands of songs uploaded every day this idea will give aspiring artists the opportunity to collaborate with some of the most successful songwriters in the world,” said Cowell in a statement announcing the project.
Sir Lucian Grainge, chairman and CEO of Universal Music Group, paid tribute to the “incredible team” Cowell has assembled to launch the platform, “harnessing the scale of TikTok, to leverage the artistry of creators worldwide.”
StemDrop debuts on Oct. 26, when 60 seconds of “Red Lights” will be exclusively released on TikTok, along with individual “stems” from the track which can be accessed through a dedicated micro-site or an in-app StemDrop Mixer, enabling users to play with production effects and create new versions of the song.
A spokesperson for StemDrop tells Billboard that Universal/Republic Records retain ownership of the master recording of “Red Lights”, the publishers own their share and with any future versions, the contribution of any new creator will be added to the royalty split.
It’s not clear if Martin — who co-wrote and produced multiple Billboard Hot 100 No. 1s, including Britney Spears’ “…Baby One More Time,” Taylor Swift’s “Shake It Off” and The Weeknd’s “Blinding Lights” – or “Red Lights” co-writers Kotecha and Payami will be involved with the platform beyond its first phase, which is officially titled “’StemDrop’ – A Song for the World.”
Following its launch, a StemDrop profile on TikTok will share new versions of the track from around the world, curated by the platform, Syco, Republic Records and Universal Music Group. TikTok music curator Ari Elkins, singer-songwriter Astrid S and digital creator Your Boy Moyo will act as global ambassadors for StemDrop and host daily content on the @StemDrop TikTok channel. Syco Entertainment and Republic Records will provide creative direction and drive the StemDrop talent discovery program going forward, according to a press release from TikTok.
“Every day, brilliant, undiscovered artists and songwriters turn to TikTok to share their music and find a global audience,” said Ole Obermann, Global Head of Music at TikTok. “StemDrop will put a spotlight on this talent and act as a springboard to help them build their careers.”
Over the past two weeks, Ye — the artist and and entrepreneur formally known as Kanye West — has worn a “White Lives Matter” T-shirt, spread antisemitic conspiracy theories on a popular Revolt podcast and falsely blamed George Floyd’s death on fentanyl. That could cost him some fashion and branding deals – Adidas has said its partnership with the rapper is “under review.” So far, though, in the United States his music remains just as popular as it was on audio and video streaming services, although on terrestrial radio his daily spins and average daily audience were down about 21% since Meta and Twitter restricted his social accounts, according to Luminate.
West’s streaming numbers haven’t changed much over the last few weeks. For the seven days after Oct. 3, when West wore a “White Lives Matter” shirt at the Paris Fashion Week show for his Yeezy line, his catalog had an average daily streaming tally of 13.1 million in the U.S., according to Luminate, compared to 13 million in the seven days before that. A change like that — less than 1% — would seem to reflect the normal fluctuations of the streaming business.
West’s daily streaming numbers also stayed steady before and after the antisemitic tweets starting on Oct. 7, which resulted in restrictions being placed on his Instagram and Twitter accounts. In the week following the restrictions placed on West’s social accounts, his average daily on-demand audio and video streams in the U.S. was 13.1 million, just 3.5% lower than the previous week — a negligible difference that’s also best explained by normal fluctuations in streaming activity.
West’s radio airplay is a different story, however. There was a noticeable decline in the artist’s radio spins and audience size following Twitter and Meta’s decisions on Oct. 9 to restrict access to his social media accounts, leaving West’s controversial posts but preventing him from publishing additional posts or comments. West’s daily spins declined 21.1%, from 325 in the eight days preceding his social account restrictions to 258 in the eight days following them; and his average daily radio audience fell 21.4%. Representatives for iHeartMedia and Cumulus Media, two of the country’s largest radio companies, did not comment.
Last week’s radio audience was West’s lowest in more than two years — lower than levels seen before the radio promotion push for his 2021 album Donda, which sent the songs “Hurricane” (No. 6) and “Off the Grid” (No. 11) onto the Billboard Hot 100 chart — and lower than anything since a brief spike in airplay in June around the release of the third single from Donda 2, “True Love.”
Despite West getting skewered on late-night television and criticized by everybody from actress Jamie Lee Curtis to singer Ariana Grande, there is some evidence that West’s latest outbursts have spurred greater engagement online: his Twitter following grew by 182,000 on Oct. 8, to 31.28 million, according to Chartmetric, an online analytics platform that measures artists’ social and streaming activities. At the same time, West’s Chartmetric rank — an overall measure of fan engagement online — improved four spots to No. 30 in the past month (meaning only 29 artists rank higher). Based on that, “I would say consumers see controversy as a source of entertainment and not concern,” says Rutger Rosenborg, marketing manager at Chartmetric.
West’s streaming activity may just be on autopilot as a result of placement on playlists on music streaming platforms. As of Wednesday (Oct. 19), West’s music is featured on 1,270 and 1,951 in-house playlists at Spotify and Apple Music, respectively, according to Chartmetric. Additionally, West can be found on 1.3 million user-generated playlists on Spotify. (Not all of these playlists result in streams within the U.S., however.) Significant streaming activity also comes from personalized, algorithmically generated playlists such as Spotify’s Your Time Capsule. The only significant week-to-week changes in West’s streaming numbers come when he releases a new track or album.
Radio play depends more on human decision-making. Radio programmers remain powerful gatekeepers in an increasingly decentralized, automated world of streaming platforms less affected by the decisions of corporate executives under the influence of advertising clients. Country singer Morgan Wallen saw radio programmers’ power in February 2021 after a video surfaced online of him using a racist epithet. In the two weeks following the incident, weekly radio spins and audience dropped 95.7% and 97.2%, respectively, according to Luminate. At the same time, Wallen’s streaming numbers remained strong enough that Dangerous spent 10 straight weeks atop the Billboard 200 album chart.
Controversies tend to blow over eventually. Wallen’s radio spins recovered to pre-controversy levels within 15 months and in September Dangerous set a new record for longevity with 86 non-consecutive weeks in the top 10 of the Billboard 200. “Even if DSPs remove an artist from editorial playlists for a period of time, that doesn’t stop users from adding that artist to their own playlists,” Rosenborg says. “Once everything blows over, those artists are added back to editorial playlists by DSPs as well.”
TikTok’s former U.S. head of content partnerships, Bryan Thoensen, has joined Spotify to oversee the company’s content strategy and partnerships with individual audio creators, known as the talk creator content and partnerships team.
Thoensen will report up to Max Cutler, who was promoted earlier this year to lead Spotify’s partnerships with creators and now holds the title of vp of talk creator content. In his new role at Spotify, Thoensen will also oversee the team’s business development and acquisitions as part of the audio giant’s larger exclusive podcast strategy.
“Bryan’s knowledge of the creator landscape will be critical as we build out our platform strategy with the goal of becoming a true platform beyond distribution, and reinforce our mission of building trust with creators,” Cutler wrote in a memo to staff.
Prior to joining Spotify, where the executive began meeting with the talk creator content and partnerships team in the past few weeks, Thoensen oversaw TikTok’s relationships with top public figures and managed relationships with brands like the NFL, NBA, Condé Nast and NBC. He was also formerly a svp for original entertainment at Fullscreen and a director of content for Hulu’s original programming following a roughly six-year career at WME.
Thoensen will remain based in Los Angeles.
This article was originally published by The Hollywood Reporter.
The Ledger is a weekly newsletter about the economics of the music business sent to Billboard Pro subscribers. An abbreviated version of the newsletter is published online.
The 2004 documentary Super Size Me took a humorous look at the health consequences of fast-food restaurants’ practice of up-selling customers to higher-priced, larger-portioned items – a super-sized cup of Coca-Cola rather than a large, for example. To the customer, up-selling looked like a good deal: the additional soda or food cost only a few cents more. For restaurants, the tactic padded margins because the difference in price dwarfed the cost of goods.
Super Size Me comes to mind when looking at music subscription services and their quest to improve their margins. Those services have the equivalent of a super-sized option: the family plan, which generally costs 50% more than an individual subscription and includes up to six subscribers on a single plan. But unlike up-selling in the fast-food business, super-sizing a music subscription service doesn’t pay off in the short term. The family plan may help retention, which can improve subscribers’ lifetime value – that, not average revenue per user, is the key metric in the subscription business – but it does nothing to boost margins.
For years, high-fidelity audio was presumed to be music’s version of super-sized food portions: an up-sell product that carried a higher price without a commensurate increase in costs to the platform. But high-fidelity audio now appears to be a standard option for most streaming platforms, another carrot to entice people to sign up rather than a means to segment consumers based on willingness to pay. That means music licensed from record labels and distributors doesn’t provide a path to better margins. In fact, there’s only a small amount of upside left to wring out of licensors: Spotify expects it can get its music margins to 30% and eventually to 35%, up from the 28.1% margin it reported for 2021.
The future of the music streaming business looks more like gas stations than fast food. Gas stations have turned into convenience stores that sell junk food, beverages and household staples. Gas itself is almost a loss leader. Stations make their margins on everything else – a $3 bottle of Coca-Cola, a $2 candy bar or a $6 package of Ibuprofen pills. According to an examination of the economics of gas stations at The Hustle, stations earn a 1.4% profit margin on fuel compared to 200% on soda machines and 100% on lottery tickets.
We’re seeing more examples of streaming services looking for margin relief outside of their core products. On Sept. 20, Spotify, which acquired audiobook distributor Findaway in June, launched a la carte audiobook sales, putting it directly in competition with Amazon-owned Audible. Audiobook downloads provide better margins than Spotify can get from music. As the retailer, Spotify keeps 50% of the audiobook purchase sale proceeds. Findaway’s distributor fee is 20% of the author’s royalties – which works out to 10% of sale proceeds after Spotify takes its 50% cut. In aggregate, Spotify gets a 60% margin in audiobook sales on its platform – double the typical margin in both music streaming and music downloads and more than double Spotify’s gross margin on music last year.
One notable hiccup to Spotify’s foray into audiobooks is the buying process. Spotify sells audiobooks only at its website, not within the Spotify app. That allows it to keep its cushy margins without giving a significant portion to either Apple or Google for in-app purchase fees. Not offering audiobook sales within the app creates an extra step in the buying process, and even a small amount of friction can become a drag on purchase activity. But Spotify could also be a boost to the format, says Tony van Veen, CEO of DIY Media Group, which owns BookBaby, a distributor for independent book authors. “If Spotify offers it and lowers the barrier, will there be more adoption? Yeah, I think so,” he says. Spotify CEO Daniel Ek believes audibooks could eventually achieve 50% of book sales in mature markets compared to their current 6-7% share.
Spotify has already made a big push into podcasts in a search for better margins. Podcasts have been a money-loser with a –57% gross margin but have potential at scale. At a June 8 investor presentation, Spotify CFO Paul Vogel said podcast margins could reach 40% to 50% in the future. Tightening the belt could help get there: news broke on Oct. 7 that Spotify laid off “at least” 38 employees and will shutter 11 podcasts created by Gimlet and Parcast, two content studios Spotify acquired in 2019 for a combined $286 million.
Also searching for better margins, French music streamer Deezer is planning a new product called Zen by Deezer. Expected to debut in France in the first quarter of 2023, the product offers “exclusive music relaxation, sounds, expert tips and guided exercises,” according to the company’s Oct. 4 investor presentation. It’s a sensible product extension given the explosion of apps for meditation, yoga, sleeping and mental health. In the wake of COVID-19, McKinsey put the size of the global wellness industry at a staggering $1.5 trillion.
When Zen by Deezer is running at scale, Deezer believes, its content costs will run about 10% of revenue. That’s compared to roughly 70% for a standard on-demand streaming service that licenses music from record labels, music publishers and performance rights organizations. The difference, the presentation explains, is “one-off content production,” rather than music licensed at standard rates. Whether created in-house or acquired on a one-time, royalty-free basis, Zen by Deezer won’t pay most of its subscription fees to license music.
Elsewhere, music is increasingly a means to hook customers before giving them another product. Abu Dhabi-based Anghami is looking to diversify through podcasts, branded content and live concerts. In June, it purchased Spotlight Events, a concerts company based in the Middle East-North Africa region. Tencent Music Entertainment, China’s largest music streamer, also made a concerted push into spoken-word audio when it acquired audiobook distributor Lazy Audio in 2021. TME also has a growing podcast business.
Using a gas station metaphor for Spotify only goes so far – or does it? Consumers’ reliance on their automobiles makes them dependent on gas stations for transportation. Until electric cars see widespread adoption, most people will be regular customers at gas stations’ convenience stores. Music isn’t quite as entrenched as the automobile, but there’s a growing belief that a music subscription is a basic utility – like internet, gas or water – that most people will carry continuously. That gives streaming services on ongoing billing relationship with hundreds of millions of customers and an opportunity to make better margins on something other than music.