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Universal Music Group is betting big on French-speaking Africa, announcing a new partnership on Wednesday with Wèrè Wèrè Music founder Binetou Sylla to lead Def Jam Africa‘s efforts in the rapidly growing music market. Working with Universal Music France and Capitol France, Sylla and her team will focus on discovering and producing French-speaking artists in […]
When licensing negotiations between TikTok and the Universal Music Group collapsed at the end of January, many official recordings from UMG artists vanished from the platform. UMG chief digital officer/executive vp Michael Nash told financial analysts in February that the company had been “providing notices to effectuate the muting of millions of videos every day for the last two weeks.” Yet a number of songs connected to UMG — or its publishing wing, Universal Music Publishing Group — remain available on TikTok anyway.
Some are user uploads, which might theoretically be harder to find and take down or mute. Others are official tracks, including recent releases from prominent stars and fast-moving viral hits. And much of Taylor Swift’s catalog returned to TikTok on Thursday (April 11), raising the question of how other artists may be able to find workarounds while the licensing dispute continues.
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One possible reason that some songs are staying on TikTok: Several artist lawyers tell Billboard they are devising contractual carve-outs to allow their clients to keep their music on the platform. Others note that even though they haven’t added these clauses to recording agreements yet, it has become a topic of conversation with their clients.
“Some labels are allowing some of their artists to exclude newly created music from the grant of rights until the label has a deal in place” with TikTok, says David Fritz, founding partner at Boyarski Fritz. “Because the issue is so new, we are developing on the fly to meet the needs of talent — songwriters and artists — that want their music on TikTok. This is an issue, and workaround, that came about solely as a result of UMG taking down its catalog from TikTok.”
Reps for UMG and TikTok declined to comment.
Some artists have invested years of their life building a following on TikTok. (Predecessor Musical.ly was acquired by Bytedance in 2017 and then relaunched in the United States as TikTok the year after.) For more than two months now, they’ve been unable to share official recordings with those fans on the platform — the same fans who may have earned them their major-label deal in the first place.
“Some artists are concerned about this,” says Josh Binder, founding partner at Rothenberg Mohr & Binder. “They don’t want to be uncompetitive, unable to use TikTok to muster up an audience.”
“TikTok is mostly used as a new-music discovery tool — discover a clip on TikTok, listen to it on a DSP,” Fritz adds. “So those who are trying to get their music discovered are the most concerned” about being unable to promote new songs on the app.
In 2022, MIDiA Research found that TikTok was the second-biggest driver of music discovery for Gen Z, after YouTube. In recent months, TikTok popularity has helped little-known acts like Dasha, Good Neighbours and the Red Clay Strays explode at streaming services — leading to major-label deals — and contributed to breakout hits for Djo, Flo Milli and Benson Boone, among others.
UMG pushed back against the idea that TikTok has a lock on discovery during its most recent earnings call. Chairman/CEO Lucian Grainge told financial analysts that TikTok was “not a material part of the multidisciplinary jigsaw where we promote and market our music globally.” And UMG CFO/executive vp Boyd Muir said that UMG would “focus on accelerating [its] partnerships” with other social media platforms, including Meta, Snap and YouTube, to provide alternative promotional avenues for its artists.
But the job of an artist lawyer — a good one, at least — is to help their client get what they want. Labels typically aim to control as many rights as they can for as long as they can. In the modern music business, artists have more ability to push back; because they can generate momentum on their own, without a record company’s help, more aspects of a record deal are negotiable. “You can cherry-pick what you want to be in your contract to some degree,” Scott Booker, the longtime manager of The Flaming Lips, recently told Billboard.
As with any negotiation, artists’ ability to get their preferred terms comes down to their leverage — for stars especially, there are few rules that can’t be bent — and the skill of the lawyers involved. “If you successfully reserve the right to license to TikTok directly in your contract with UMG, you would be able to do so directly or via a third-party service,” says Leon Morabia, a partner at Mark Music & Media Law. “It would be a difficult point to win in a deal, but it is contractually feasible.”
Josh Love, partner at Reed Smith, says he has been able to get “a carve-out” in the past that allowed an artist “to do a direct license with a DSP” — a digital service provider like TikTok or another social media or streaming service — “if the label or distributor is ever not licensed with that DSP and [the artist] wants to remain on the platform.” This is meant to act as interim coverage for an artist; if the label or distributor were to form a new licensing agreement, that would likely supersede that deal made between the artist and the DSP in the meantime.
Some clauses that are already in record deals could also be expanded by artist attorneys to ensure their clients’ music remains available on TikTok. “Release commitments,” for example, are put in place to “force the label to guarantee that a record will be released within certain months after delivery so that the artist’s record doesn’t get ’shelved,’ with the artist stuck in the deal,” says Gandhar Savur, a music attorney.
These clauses have become increasingly comprehensive, stretching “to cover commitments by the label over more specific aspects of the release — the exact countries in which the album will be distributed, formats that the album will be released in such as vinyl and digital, and even including specific major DSPs by name like Spotify and Apple Music.” After negotiations between UMG and TikTok unraveled, Savur continues, “it would be a natural response that artist attorneys will gradually start to require release commitments to cover all platforms generally so that if a label is not licensed with a particular platform for any reason, the artist can deal with that platform directly.”
Savur believes that artists who are signed to labels that are distributed by UMG, rather than signed directly, probably have more latitude to try to deal with platforms like TikTok on their own. “Although I believe that what Universal is doing overall is a good thing for the industry, Universal-distributed labels might be more sympathetic to their artists’ desire to stay on TikTok because the increased streaming and ticket sales [that] result from any tracks going viral on the platform can be a big win for the artist and label alike,” Savur says.
If the UMG-TikTok deadlock rolls on, Fritz says, “smart lawyers” with leverage will find “a workaround that enables their clients to continue to use the most popular discovery tool while the large-scale license gets worked out.”
When Ariana Grande released her latest album eternal sunshine, one of its most beloved tracks, “the boy is mine,” became an instant dance trend on TikTok. At any other moment, a viral trend around a major pop star’s new song would seem obvious, even normal. But amidst the licensing feud between TikTok and Grande’s record label Universal Music Group, it’s a surprise to find the song on TikTok at all.
Grande’s music is not alone in sticking around on the app far past the expiration of UMG’s last license, which lapsed at the end of January. Thanks to clever tactics by fans, artists and their teams, some notable UMG-affiliated songs have been able to effectively skirt the company’s TikTok boycott. While it helps promote these songs individually, trying to get around the ban also has a knock-on effect for songwriters — and supplies UMG hits to TikTok without the app paying a cent.
An Olivia Rodrigo fan under the username LouLiv recently uploaded Rodrigo’s new single “so american” to TikTok as an “original sound,” and Rodrigo herself used the sound in a few recent TikToks, helping boost the song’s visibility. Grande’s fans have also been creating various versions of “the boy is mine” on TikTok, which has helped spread the song on the app, as well as other tracks from eternal sunshine.
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These original sounds often manipulate the official recording, changing the speed, pitch and/or title of the song to help them slip past TikTok’s detection technology, which is used to automatically catch songs, like UMG’s, that are not licensed to be on the app. A source close to the matter says that TikTok’s detection technology combs for metadata provided by UMG and UMPG and then removes the content. But the remaining original sounds that don’t get automatically wiped from TikTok are so widespread that it can sometimes feel like UMG never left the app at all.
The songs are not hard to find, either. The most popular sound for Rodrigo’s “so american,” for example, is straightforwardly titled “so american” and already has 33,400 videos created with the song to date. The most-used original audio for “the boy is mine” was recently removed after weeks on TikTok, a sign that UMG is issuing takedowns for some original sounds using their catalog. But multiple other original audios for the song remain, including “the boy is mine” by star and “the boy is mine sped up” by satvrn, amounting to over 100,000 videos made to original sounds of the song on TikTok and counting.
For songwriters, there are negative consequences. In two separate text and email chains reviewed by Billboard, non-UMG recording artists that have worked on recent or upcoming releases with UMPG songwriters have asked the track’s songwriters to withhold information about who wrote the song at the time of a track’s release to try to skirt the UMG TikTok ban — and the songwriters have agreed.
Though the two sources who provided correspondence to Billboard wished to remain anonymous to protect their clients, Lucas Keller, founder/CEO of Milk & Honey and manager to a number of songwriters and producers, confirmed that this is happening to songwriters. “Sometimes there’s a song coming out and there’s four writers, and one of them is UMPG, and someone steps forward and says, ‘Hey, can you not get in the way of this one? Can we register this in like three months?’” Keller says. “Then the song can be used on TikTok. It’s an interesting dark corner of the business that’s emerged.”
It is common for tracks to be released without submitting the proper publishing “splits,” meaning the names of the writers and what the percentage of ownership each holds, given these negotiations can be lengthy and sometimes contentious. But in the cases Keller and the other two sources discussed with Billboard, the songs’ publishing splits were ready to go and could have been submitted on time. The only reason they weren’t was to allow the artist to promote it on TikTok.
Michelle Lewis, co-founder and CEO of Songwriters of North America (SONA), says these asks by artists put songwriters in a bad position. “Songwriters are the least equipped to negotiate, the lowest on the food chain in these discussions,” Lewis says. She worries songwriters don’t feel like they have the ability to push back on these asks if they want to. Meanwhile, leaving out this key information could threaten the songwriters’ ability to get paid royalties from streaming services on time if the parties hold out longer than a few months.
Lewis, Keller and three artist managers who wished to remain anonymous, all tell Billboard that some artists are also “thinking twice” about inviting UMPG writers to sessions. “I have also heard about Universal writers not being invited to camps,” Lewis says; while it’s unclear how often this is occurring, Keller says it “is absolutely happening.” Adds Lewis, “It’s so uncool. If you’re not including Universal writers, you’re basically crossing the picket line. You’re weakening [UMG’s position].”
A UMPG spokesperson declined to comment on its songwriters facing these specific effects from the TikTok feud, but pointed to its letter to songwriters on Feb. 29, which read in part, “We understand the disruption is difficult for some of you and your careers, and we are sensitive to how this may affect you.”
Some official recordings with UMPG writers, like “Texas Hold Em” by Beyonce, who is affiliated with Sony’s Columbia Records, still remain on TikTok for unknown reasons. That song, which is currently ranked at No. 5 on Billboard’s TikTok Viral 50, was co-written by UMPG’s Raphael Saadiq, as were other songs on Beyonce’s new album Cowboy Carter that remain on the platform.
“Texas Hold Em” and some other tracks by Beyonce have a large number of songwriters — which is one major reason why publishing information is often submitted late — so it is possible that TikTok hasn’t removed the track because it doesn’t have verification that it is in any way affiliated with UMPG. Strangely, however, this track was taken down from TikTok briefly and then reappeared days later. When asked why “Texas Hold Em” was available on TikTok despite its clear ties to UMPG, neither TikTok nor UMPG responded to Billboard’s requests for comment.
Regardless of how these songs avoided an automatic removal from TikTok, UMG could have requested that these popular tracks and original sounds be taken down by now. Rights holders are able to manually request takedowns of content on TikTok that they believe infringe on their copyrights, like the original sounds for Grande and Rodrigo and songs like “Texas Hold Em,” and TikTok is required to remove them to remain in compliance with the Digital Millennium Copyright Act.
But tracking down all infringing content and requesting takedowns, especially for a catalog of millions like UMG’s, is known to be a tedious task. As UMG put it in its original letter to artists and songwriters, it is “monumentally cumbersome” and “the digital equivalent of ‘Whack-A-Mole.’” Michael Nash, the company’s executive vp of digital strategy, also added on an earnings call on Feb. 28 that the company had sent requests to “effectuate muting of millions of videos every day.” However, it is possible to get infringing tracks removed if that is the rights holders’ wish.
“This is not a united front,” Lewis says. “It feels indicative of our industry overall. We can never get along, and the individual creator is the one who gets hurt… It’s totally not fair for songwriters, but this is all beneath the top line concern, which is that TikTok completely underpays, undervalues songwriters. That’s number one. They’re the ones who started this.”
Attorneys for Universal Music Group CEO Lucian Grainge fired back at a lawsuit that claims he and the label “aided and abetted” Sean “Diddy” Combs in his alleged sexual abuse, saying the accusations are so “offensively false” that they plan to seek legal penalties against the lawyer who filed them.
In a motion to dismiss all claims against UMG and Grainge, the label’s lawyers blasted attorney Tyrone Blackburn for filing “knowingly false allegations” of criminal wrongdoing “without the slightest factual or legal basis.” They said they would seek so-called sanctions against him in a future filing.
“A license to practice law is a privilege,” wrote Donald Zakarin, a longtime music industry litigator who represents UMG and Grainge. “Mr. Blackburn, plaintiff’s lawyer, has misused that license to self-promote, gratuitously, falsely and recklessly accusing the UMG defendants of criminal behavior.”
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The Wednesday filing came in response to a lawsuit filed last month by a producer named Rodney “Lil Rod” Jones, who says the rapper sexually assaulted and harassed him. The lawsuit is one of several abuse cases filed against Combs, in addition to an apparent federal criminal investigation that led to raids of his homes this week. Combs has strongly denied all allegations of wrongdoing.
But the case filed by Jones went far beyond a simple assault claim, arguing that Diddy, Grainge and many others had also violated the Racketeer Influenced and Corrupt Organizations Act – the federal RICO statute that’s more often used in criminal cases against mobsters and drug cartels. He also accused the various defendants of violating federal sex trafficking laws.
In Wednesday’s filing, UMG’s lawyers said those claims were “entirely invented by Mr. Blackburn.”
“The [complaint] hurls accusations of criminal racketeering and criminal sex trafficking against the UMG defendants, respected individuals and companies having utterly nothing to do with plaintiff’s claims,” Zakarin wrote Wednesday’s filings. “These accusations are recklessly false and, but for the fact that they are embodied in a complaint, would be libelous.”
In addition to the original allegations, UMG’s lawyers also sharply criticized Blackburn for filing a second, updated complaint this week – a filing that they claim drastically altered the allegations. In his filing, Zakarin called it the worst lawyering he had seen in nearly 50 years as an attorney.
“In all that time, I have never seen any attorney display anything remotely like the utter indifference shown by Mr. Blackburn towards his obligations as an attorney,” Zakarin wrote. “I have never seen any lawyer, in any pleading, in any court, accuse people and companies of criminal conduct without the slightest basis and then try to file an amended pleading completely jettisoning every allegation underpinning the original claims and substituting completely different and irreconcilable allegations to support the very same claims.”
In a letter to the judge Thursday, he called the UMG motion a “public relations stunt” that had been filed in bad faith. “They did not have any issues marrying themselves to Mr. Combs when it was popular. Now, suddenly … they are treating Mr. Combs like he has the plague,” Blackburn wrote in the letter.
In a statement to Billboard on Thursday, Blackburn said: “UMG should produce their financial records. Let’s see what the money was used for. Stop trying to escape liability.”
A spokesman for UMG did not immediately return a request for comment on the motion.
Universal Music Group (UMG) has expanded its relationship with HYBE to include the exclusive digital and physical distribution rights to the company’s artists for the next 10 years. UMG will also continue to collaborate with HYBE’s Weverse to onboard more UMG signees to the superfan platform.
Scooter Braun, CEO of HYBE America, will take on new responsibilities with the new agreement. The SB Projects founder and former manager to Ariana Grande, Demi Lovato and J Balvin will now oversee all promotional and marketing collaborations between HYBE and UMG in North America.
Notably, this exclusive distribution deal does not include social media sites YouTube, Meta and TikTok, allowing HYBE artists to remain on the short-form video app despite UMG’s current licensing feud with TikTok.
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The announcement builds upon the already established relationship between HYBE and UMG which started in 2017 with a partnership that gave UMG distribution rights to HYBE’s BTS in Japan. In late 2021, HYBE expanded the deal to grant UMG’s Geffen Records distribution rights for BTS in the United States and other regions, moving their U.S. distribution over from Sony Music’s Columbia Records.
Geffen and HYBE also worked together via a joint venture to put together the Netflix and YouTube streaming documentary series The Debut: Dream Academy in which the two music companies work together to form an American girl group using HYBE’s K-pop methodology.
Last year, BMG also moved some of its distribution to Universal Music. In October, the company announced that it would move its physical distribution to UMG’s Commercial Services divison, starting in the second quarter of 2024. It will be fully transitioned by the end of 2024.
“A partnership of this magnitude only comes together when both sides are equally committed to continued growth,” says Bang Si-Hyuk, Chairman of HYBE. “UMG is an iconic music company and together with HYBE, the potential is endless. We are certain that this will expand our global footprint, while benefiting our fans, artists, and labels.”
“Chairman Bang, Scooter Braun and Jiwon Park have brought an innovative and progressive vision to the industry that underscores music’s global power,” adds Lucian Grainge, Chairman and CEO of Universal Music Group. “With the opportunities in engaging the superfan via their groundbreaking Weverse model, we’re thrilled to grow and expand our platform business collaboration as we evolve together leading the music industry’s evolution.”
“This incredible partnership between our companies will ensure mutual benefits and collaborations for the fans, teams, artists, and labels around the world,” says Braun, CEO of HYBE America. “The opportunity created here not only allows us to help our current roster, but grow opportunities for independent artists and labels globally. I’ve known and respected Sir Lucian Grainge for many years, and alongside chairman Bang and HYBE CEO Jiwon Park, we look forward to the undeniable opportunities that will come from this partnership as we together grow the music industry’s future.”
At the end of February, TikTok took down every song in which Universal Music Publishing Group owns a share, a complicated step in the escalating showdown between the two companies that started a month earlier during the week before the Grammy Awards.
We are now in uncharted territory: Never before has a major label used the “nuclear option” to withdraw both recorded music and publishing rights from a platform — an especially dramatic step because it includes any song in which UMG owns even a small share. (By Billboard‘s estimates, it affects over 60% of the most popular TikTok songs in the U.S.) What most people don’t know is that these negotiations might perhaps also be affected by a Feb. 9 decision from the Munich Regional Court about the German implementation of the 2019 European Union Directive on Copyright in the Digital Single Market — the Urheberrechts-Diensteanbieter-Gesetz (UrhDaG). It will certainly shape future negotiations like this.
The case involved the Berlin-based film distributor Nikita Ventures, which operates YouTube channels and, coincidentally, TikTok. And although it wasn’t covered much by English-language press, it shows that negotiating leverage is gradually shifting from platforms to rights holders. “This verdict,” Matthias Lausen, a founding partner of the Lausen law firm, who represented Nikita told me, “shows that there is no safe harbor in Europe anymore for platforms.”
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In the case, Nikita said that it offered to license its content to TikTok in early 2022, at a cost of three euros per thousand views, an amount based on a published rate from GEMA, the German collecting society. (Licensees often seem to pay less than this.) By summer, TikTok had not responded with a counteroffer, and Nikita said that the content it had asked TikTok to block was available until August. TikTok said in court that it was still negotiating, that its filtering system is compliant with the law and that it responded to takedown notices. The court essentially ruled that TikTok didn’t make a best effort to negotiate, though, and held the company liable for infringement, with damages to be determined, plus required it to provide information about how many times the content in question was accessed, as well as its resulting revenue and profit.
Why does this matter? Until now, the U.S. Digital Millennium Copyright Act and laws like it have limited the leverage of rights holders in negotiations. Platforms that make available content uploaded by users have been free to build audiences, and businesses, as long as they have no direct knowledge of infringement and respond promptly to takedown notices filed by copyright holders. This has given platforms what some might call a “Free Ride,” and on a Feb. 28 UMG earnings call chairman and CEO Lucian Grainge said “there must not be free rides for massive global platforms such as TikTok.”
The 2019 European Copyright Directive was intended to address this, and it requires online platforms to make their “best efforts” to license content, as well as block content they haven’t licensed once rights holders have given them the necessary information. But this is the first court decision based on it.
Nothing will change overnight. The scope of this decision is limited, platforms could potentially get around it by better documenting their negotiations with rights holders, and it’s hard to imagine it will have a substantial effect on UMG’s negotiations with TikTok. But it shows that Europe is serious about forcing online platforms to negotiate on an even playing field, which should result in more favorable deals. (Since European countries do not have class-action lawsuits or high statutory damages for copyright infringement, though, this will not lead to a gold rush of litigation.)
Much of that is in the future, and some of these deals will involve platforms that don’t even exist yet. To get a sense of how this might play out, though, imagine a video-based nano-blogging platform that allows schoolchildren to record minute-long covers of pop songs. (I’m making this up, of course, but it’s not the dumbest idea I’ve heard this year.) That platform would have to approach rightsholders about deals early and often, then take serious steps to block the content they ask it to. That means it would have to license content before it got big — not once it’s already too big to fail.
Even now, TikTok needs to make a “best effort” to take down UMG’s publishing catalog. The company took prompt action, so it’s likely to be in the clear there, although it will be interesting to see what happens with recordings that are sped up and slowed down. At a time when songs are sliced and diced by influencers, how elaborate does a best effort have to be? Could we find out in a case that involves this dispute? The odds are against it, but stranger things have happened.
For the past quarter century, rights holders have had a hard time negotiating on an even playing field, which has arguably pushed down the price of content for both online businesses and, through them, for users. That dynamic is changing — slower than rights holders want and faster than platforms prefer — but steadily all the same. It will be hard to measure this, because these big licensing deals by their nature are complicated and intransparent. Finally, though – for good or ill depending on what side you’re
Bucks Music Group has launched Chelsea Songs, a joint venture with music publishing veteran Eddie Levy. The new publisher represents works by Bill Withers, Andre Rieu, the Barton Music catalog – which contains standards such as “Ain’t That A Kick In The Head,” “Come Fly With Me” and others – and hits such as The Hues Corporation’s “Rock The Boat,” Janet Kay’s “Silly Games,” and Buscemi’s “Ole Ole We Are The Champions” for the UK at launch. As part of the agreement, Bucks will handle administration and creative sync.
Third Side Music has signed the late Alan Watts to a new worldwide publishing deal. Known as one of the defining writers and scholars of the Beat Generation, the deal with Watts is through his estate, The Alan Watts Organization. As part of the deal, Third Side Music will now foster unique creative music opportunities for Watts’ trove of 500+ house of audio commentary, lectures and radio programming for use in new songs, films, TV shows, ads, and more.
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Milk & Honey Music + Sports has signed Grammy-winning songwriter and artist Jozzy (Beyoncé, Summer Walker, 21 Savage) to a new management deal. Along with the new signing, the company’s founder and CEO, Lucas Keller, has announced the addition of manager Jason Ramos (previously of Roc Nation) to the Milk & Honey team.
Prescription Songs has extended its publishing deal with Vaughn Oliver. A multi-platinum producer, sound designer, DJ, and mix engineer, Vaughn began his partnership with Prescription in 2019 and since then, has worked on a number of top tracks, including “Super Freaky Girl” by Nicki Minaj, “Big Energy” by Latto, and “Her” by Megan Thee Stallion.
C3 Management launches C3 Publishing, a joint venture with Warner Chappell Music. Founded by Charlie Walker and Charles Attal of C3 Presents and C3 Management and led by Russell Baltera, the company will employ WCM’s help with a&r, creative, and sync. Its first signee is Natalie Jane, a rising singer-songwriter.
BMG has extended its publishing administration agreement with Too Lost, a music technology company and distributor. The companies’ partnership began in 2021, and under the terms of the deal, the two handle the rights for songs like “Jocelyn Flores” by XXXTENTACION, “BEEF” FloMix by Flo Milli and more.
Universal Music Publishing Group has signed the members of indie pop band The Wallows to global publishing deals. Known best for their song “Are You Bored Yet?” (feat. Clairo), the SoCal trio is comprised of actor Dylan Minnette, Braedon Lemasters and Cole Preston.
Spirit Music Nashville/2 Mix Music has signed Ryan Beaver to a worldwide publishing deal. Named the “Rising Songwriter of the Year” for 2023 by the AIMP Nashville Country Music Awards, Beaver recently penned the track “Pretty Little Poison” b y Warren Zeiders and “Party Mode” by Dustin Lynch. He has also written songs for Blake Shelton, Ryan Hurd, HARDY, Larry Fleet, Parker McCollum, Josh Abbott, Catie Offerman and Luke Bryan.
Warner Chappell Music has signed Brazilian producer Zerb to a global publishing deal. News of the deal arrives just the rise of Zerb’s biggest hit to date: “Mwaki” featuring Kenyan vocalist Sofiya Nzau, which has gained even more traction with recent remixes by Major Lazer and Tiësto.
Warner Chappell Music has signed emerging singer-songwriter Evan Bartels to a global publishing deal.
Wise Music Group‘s Bosworth Music has signed a new long-term administration agreement to represent the publishing catalog of Random Noize Musick. The roster includes German electronic talents like as Markus Popp (Oval), Annika Henderson (Anika), Pilocka Krach, T.Raumschmiere, Apparat, Moderat, and Sascha Ring.
Downtown Music Publishing has signed French artists Boombass and Étienne de Crécy to worldwide publishing agreements. Boombass is best known as one half of the renowned duo Cassius and and de Crécy has gained acclaim as a DJ and producer.
Universal Music Group’s revenue reached 3.21 billion euros ($3.45 billion) in the final period of 2023, up 9% year-over-year (up 15.6% in constant currency) as the company’s non-subscription streaming growth slowed again and its record labels got a boost from strong physical sales and licensing.
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Spotify’s price increase helped drive the recorded music division’s subscription revenue up 8.9% (up 15% at constant currency, which removes the effects of foreign exchange rates) to 1.14 billion euros ($1.22 billion). As a percent of recorded music revenue, subscription revenue increased to 47% from 46.7% in the prior-year quarter.
Non-subscription streaming revenue declined 1.3% as reported (increased 5.6% at constant currency) in the quarter, however. That followed a 1.4% decline (a 5% gain at constant currency) in ad-supported streaming revenue in the third quarter. Ad-supported streaming “remains strong” but the ad market recovery “has not been uniform” and UMG is “cautious” about near-term growth, CFO Boyd Muir said during Wednesday’s earnings call. The soft streaming revenue was not affected by UMG’s decision in early February to pull its catalog from TikTok, which accounts for 1% of UMG’s annual revenue.
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Sales were strong elsewhere in the recorded music division, though. Physical revenue of 447 million euros ($481 million) was up 10.6% (up 17.0% at constant currency). Licensing and other revenue of 410 million euros ($441 million) was up 26.5% (up 34.0% at constant currency). Downloads and other digital revenue declined by 49.2% (45.8% at constant currency), but at 32 million euros ($34) accounted for just 1.3% of recorded music revenue in the quarter.
Universal Music Publishing Group’s fourth-quarter revenue of 576 million euros ($620 million) was up 8.7% (up 15.4% at constant currency). Digital revenue of 339 million euros ($365 million) was up 26.0% (36.1% at constant currency). Sync revenue of 70 million euros ($75 million) was up 18.6% (up 25.0% at constant currency). Mechanical revenue of 31 million euros ($33 million) was up 24.0% (up 29.2%). Performance revenue fell 19.1% (15.8%) to 123 million euros ($132 million).
Top sellers in the quarter were Taylor Swift, The Rolling Stones, Drake, Jung Kook and Stray Kids.
For the full year, UMG’s revenue of 11.1 billion euros ($12 billion at the average exchange rate for the year), up 7.4% as reported and a 11.1% increase at constant currency that removes the effects of foreign exchange rates. That’s similar to the 13.6% revenue growth at constant currency reported in 2022, but well below the as-reported growth of 21.6% that includes foreign currency exchange.
Adjusted EBITDA of 2.37 billion euros ($2.6 billion) was up 11% (up 14.6% at constant currency). Unadjusted EBITDA of 1.81 billion euros ($2 billion) was down 10.8% (down 7.8% at constant currency.) Unadjusted EBITDA eliminates the effects of the Copyright Royalty Board’s Phonorecords III ruling and a 15-million euro ($16 million) legal provision.
In the recorded music division, full-year revenue of 5.7 billion euros ($6.2 billion) was up 6.6% (up 10.2% at constant currency) and physical revenue of 1.38 billion euros ($1.49 billion) was up 14.3% (up 19.4% at constant currency). Licensing revenue of 1.17 billion euros ($1.27 billion) was up 9.5% (up 13.6% at constant currency).
Full-year publishing revenue of 1.96 billion euros ($2.12 billion) was up 8.7% (up 12.3% at constant currency). Digital revenue of 1.13 billion euros ($1.22 billion) was up 8.5% (up 12.5% at constant currency). Mechanical revenue of 108 million euros ($117 million) was up 11.3% (up 14.9% at constant currency). Performance revenue of 416 million euros ($450 million) was up 12.1% (up 15.9% at constant currency).
At constant currency, UMG’s fourth quarter improvement was similar to the other two major music groups. Warner Music Group was up 17.5% to $1.75 billion and Sony Music was up 16% to 358.2 billion yen ($2.5 billion). Smaller companies have also posted similar growth rates.
When Uber Eats used mazie‘s “Dumb Dumb” in a commercial that played during the last Super Bowl, she ordinarily would have used the sought-after synch to promote the 2021 song relentlessly to her 375,000 TikTok followers. But her label, Goodbye Records, is distributed through Universal’s Virgin Music Group, which pulled its music from the social media platform at the beginning of February after negotiations for a new licensing deal fell apart. “It’s insane,” mazie says. “My song was just in a Super Bowl commercial, and I have to repromote it [by] using other people’s ripped versions of my song on the platform.”
The singer-songwriter, whose track went viral last year and says it “changed my life in every single way,” is one of many frustrated developing artists signed to or distributed by the world’s largest music company. They all have similar complaints: Their label contacts have spent years instructing them to focus the bulk of their marketing efforts on TikTok and its 1 billion-plus monthly active users. With their music no longer on the platform, they are scrambling for alternate ways to be heard.
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“A lot of us are left at the drawing board again, especially when we’ve gotten an artist over the anxiety of putting themselves out there on TikTok,” says Sabrina Finkelstein, manager of Los Angeles singer Kristiane. “Now that that’s gone, it brings you almost to square one.”
Kristiane is signed to Fader, a label distributed by UMG’s Virgin Music Group, so she’s building buzz for her upcoming Stray Dog EP by deemphasizing TikTok and talking to fans on Instagram Broadcast Channels and other platforms. “We’re putting up lost-dog posters all over New York and other cities,” says Finkelstein, who is also A&R director for the Sony Music-owned RECORDS label. “Small things you can do to bring it off TikTok and into the real world.”
Springfield, Mo., folk-country band Pawns or Kings can no longer post its 2022 track “Anymore” on TikTok, because Universal bought its distributor, Ingrooves, and merged it with Virgin Music Group — even after singer Edward Stengel spent $7,000 of his own money on a video. “That song was always our spearhead song,” says Stengel, who is still promoting the track on YouTube, Facebook and Instagram while posting older material released through independent label ONErpm on TikTok. But Pawns or Kings’ early music is darker than its current work, Stengel says, which makes the stopgap strategy “an abrupt pivot” for the band’s image.
Canadian rapper bbno$ says his 2021 track “Edamame,” which has nearly 426 million Spotify plays, was “having a moment” on TikTok when the UMG ban took effect. The artist had licensed the song to mTheory’s distribution division for a five-year period — the same mTheory that UMG acquired in 2022 (putting its top executives in charge of Virgin). “I’m actually fully independent. It was just this one deal that looped all the songs together, and I got fucked,” says bbno$, who is considering altering the song with pitch-correction and wild sound effects — such as the voice of SpongeBob SquarePants repeating, “I’m ready!” — to avoid detection from digital sweeps.
L.A. rock band Dead Posey, which released its single “Zombies” just days before the ban, sped up its songs on TikTok by 5% — an effective solution, although artists can’t link unofficial songs to official Spotify streams. “It has not been taken down,” says singer Danyell Souza, whose label, Position Music, has a Virgin distribution deal. Adds guitarist Tony Fagenson: “We’re hopeful this resolves soon in a favorable way to artists. In the meantime, we have to play some tricks to keep using this platform.”
UMG-signed and -distributed artists are also turning to their most potent asset on TikTok: fans. One of Kristiane’s followers recently posted a lip-sync video to a concert track, declaring, “At least UMG can’t take away my live audios.” Finkelstein is supportive of this approach. “No matter what, the fans are going to find a way to share their artists’ music and support them,” she says. “There are ways around it.”
This story will appear in the March 2, 2024, issue of Billboard.
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