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Several more players in the independent music community have called on regulators to block the acquisition of Downtown Music Holdings by Universal Music Group (UMG) announced this week, arguing the deal “would seriously distort the global music market” and “reduce competition and the independents’ bargaining power.”
Virgin Music Group, which is owned by UMG, announced Monday (Dec. 16) that it had agreed to buy Downtown Music Holdings for $775 million in a deal that would beef up the music giant’s market share by absorbing Downtown’s stable of indie distributors, publishing and rights administrators including FUGA, CB Baby, AdRev and Songtrust. The deal came just two months after UMG acquired the remaining shares of indie label group [PIAS], including its services division, Integral — an agreement that was similarly criticized by indie trade groups, who have asked regulators to launch an investigation into the pact.
In a joint release Thursday (Dec. 19), several indie music leaders said the deal, if allowed to go through, would result “in fewer options for smaller companies to negotiate fair terms and compete on equal footing, leading to higher costs and less choice.”
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“We are the global independent music community,” said Noemí Planas, CEO of Worldwide Independent Network (WIN), in a statement. “UMG trying to present this as an investment in the independent ecosystem is fooling no one. This is wealth extraction from the independents, another step in UMG’s relentless path to dominance and stifling competition. Independent music is the lifeblood of cultural innovation and market consolidation threatens the diversity that makes music so rich and compelling around the world. We call on regulatory bodies to block the deal.”
Also speaking out against the acquisition was A2IM CEO Richard James Burgess, who stated: “Universal Music Group’s acquisition of Downtown Music’s assets continues a troubling trend of consolidating independent music infrastructure, following acquisitions of InGrooves, MTheory, and PIAS. This increasing level of market concentration chips away at the competitive landscape, making it increasingly difficult for truly independent artists and companies to operate freely and equitably. These acquisitions risk silencing the independent voices that drive innovation and creativity in the music industry.”
Added Darius Van Arman, CEO of Secretly Distribution and co-founder of Secretly Group, “When near-monopolist Universal acquires Downtown, one of the largest independent music ecosystems, and does so in the name of independence, it cheapens what the word means. Market consolidation at this scale is not only anti-competitive, it is a fundamental threat to true independence.”
Virgin’s purchase of Downtown is just the latest in a string of similar acquisitions by major labels over the last several years. In 2024 alone, UMG acquired Outdustry, a label services and rights management firm that works across China, India, and other Asian markets; Thailand-based recorded music catalog RS Group; Nigerian record label Mavin Global; and a minority stake in U.S.-based Chord Music Partners, among others. Two years ago, Sony Music made a splash when it acquired AWAL and Kobalt Neighbouring Rights from Kobalt Music Group, followed by the more recent acquisitions of companies like Spanish label and distributor Altafonte and Greek independent label Cobalt Music. And Warner Music Group has snapped up minority stakes in European indie labels of late, including Dancing Bear Music (Croatia), NIKA (Slovenia) and Mascom (Serbia); it also fully acquired the Dutch label Cloud 9 Recordings in October.
“Whilst we are in favour of free enterprise, monopolies dominate market forces and remove the ability to compete,” said Maria Amato, CEO of Australian Independent Record Labels Association (AIR), in a statement on the Downtown deal. “There must be regulation to ensure that Universal who is already the largest music business in the world with a large stake in Spotify does not dictate prices and the ability for artists and labels to negotiate fair and equitable terms.”
“The recent acquisition by large corporations of companies that until recently were independent is a red alert for the entire global independent music community,” added Felippe Llerena, president of Brazilian trade association ABMI. “The Orchard, AWAL, Som Livre, Proper Music, Altafonte and now Downtown Music are examples of how multinational capital is reshaping the sector. ABMI believes that it is our duty to protect and promote an independent ecosystem, where artists, labels and companies can create freely and sustainably. Our fight is for the appreciation of music as art, culture and expression, not as a simple market product.”
In her own statement, Cecilia Crespo, GM of the association of Argentinian record labels ASIAr, said: “Concentration not only has a negative impact in the way platforms distribute royalties to artists and rights holders (based on market share), but also due to the unregulated use of data and intelligence from the analysis of the data and the behavior of all actors involved (artists, audiences, and users).”
On Tuesday (Dec. 17), several other indie music players came out in opposition to the Downtown acquisition, including indie labels trade body IMPALA, the U.K.-based Association of Independent Music (AIM) and global indie music publishers trade body IMPF.
UMG didn’t immediately respond to Billboard‘s request for comment on the latest statements of opposition.
Independent record labels and publishers are urging regulators to block the acquisition of Downtown Music Holdings by Universal Music Group (UMG) over fears that the deal weakens competition, to the “severe detriment” of artists and fans.
UMG-owned Virgin Music Group announced on Monday (Dec. 16) that it had agreed to buy Downtown Music Holdings for $775 million cash. The deal, which is subject to regulatory approval, bolsters UMG’s share of the music market by bringing a number of independent distributors, publishing and rights administration businesses owned by Downtown under its control. Those businesses include distributors CD Baby and FUGA, publishing administrator Songtrust and Los Angeles-based rights management company AdRev.
UMG’s purchase of Downtown comes two months after it acquired full ownership of European indie label group [PIAS] — a deal that also prompted indie trade groups to issue calls for regulators to intervene.
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“This is another land grab,” said Helen Smith, executive chair of independent labels trade body IMPALA — which represents more than 6,000 indie labels and music companies in Europe, including Beggars Group, Cooking Vinyl, Domino and Epitaph — in a statement about the Virgin-Downtown deal.
“We expect competition authorities in key jurisdictions to carry out thorough investigations and block these deals,” Smith added. She also pressed the European Union’s executive branch, the European Commission, “to set the standard internationally.”
“The cynical use of the Virgin brand, once synonymous with independent entrepreneurship, should not hide the fact that this is about utter dominance and control,” added Beggars Group founder Martin Mills in a statement. “This is another step on the road of UMG’s pretence to be the independents’ fairy godmother,” he continued. “But there’s a wolf under that cape.”
The acquisition of [PIAS] and Downtown in rapid succession by UMG follows a flurry of dealmaking over the past several years that has seen both traditional music companies and outside investors snap up firms, labels and distributors that cater to the fast-growing global independent sector.
Major label acquisitions in that time include Sony Music’s 2022 purchase of artist services company AWAL and Kobalt Neighbouring Rights from Kobalt Music Group. More recently, Sony acquired Spanish label and distributor Altafonte, followed last month by a deal for Greece indie label Cobalt Music.
Meanwhile, Warner Music Group has been steadily growing its recorded music interests in Central and Eastern Europe, buying minority stakes in Croatia’s Dancing Bear Music, Slovenian independent label NIKA and Serbia’s Mascom; and acquiring Dutch label Cloud 9 Recordings.
UMG’s deals for [PIAS] and Downtown followed a decade-long ban on the music giant acquiring certain music companies or catalogs in Europe that expired in September 2022. Those restrictions, imposed by the European Commission in 2012 following the company’s $1.9 billion takeover of EMI, prevented UMG from re-acquiring any of the assets it had sold or re-sign any artists who had signed with labels from which it had divested, such as Parlophone Label Group or Chrysalis, for 10 years.
Although Downtown Music Holdings was founded and is headquartered in New York, the scale of its multifaceted business, representing over 50 million songs across more than 145 countries and spanning publishing, distribution, artist and label services, and royalty administration, makes it a major player in the global indie sector. As such, the company’s acquisition by UMG would create a “fundamental shift in the competitive dynamics of the music market,” warned IMPALA chair Dario Draštata in a statement on the acquisition.
The Brussels-based trade association said the sale of Downtown and [PIAS] would further squeeze the independents in an already highly concentrated market and help UMG move further into the market for distribution and services for labels and artists.
“This means more market share and gives UMG control over the opposition,” said IMPALA in a press release. It added, “UMG suing Believe is another part of the strategy,” referencing last month’s $500 million lawsuit filed by UMG, ABKCO and Concord Music Group against Believe and its distribution company TuneCore that accused them of “massive ongoing infringements” of their sound recordings.
Other executives and organizations voicing concern over UMG’s latest acquisition include global independent music publishers trade body IMPF, which said the potential sale would “ultimately reduce choice for songwriters and publishers alike,” and the U.K. Association of Independent Music (AIM), whose CEO, Gee Davy, said the deal reduces independent routes to market.
“It is vital to uphold a true choice of partners for artists and labels and ensure that negotiating power does not become unbalanced,” said Davy in a statement.
Representatives for UMG did not respond to requests for comment when contacted by Billboard.
Three years after Downtown Music sold its 145,000-song catalog — including works performed by Aretha Franklin, David Bowie, Bruno Mars and Beyoncé — the president of its publishing division says it makes more money than it did when it owned copyrights.
That reveal comes amid Monday’s announcement that Universal Music Group’s Virgin Music Group is buying Downtown Music Holdings for $775 million in an all-cash deal expected to close by mid-next year.
Emily Stephenson, who since 2023 has been president of Downtown’s suite of publishing companies (Downtown Music Publishing, Songtrust and Sheer), says her division will generate more than $200 million in revenue in 2024, a 40% increase from last year and a higher gross than it had in 2020, the year before Concord bought its catalog.
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“We are in the middle of extreme growth mode right now,” says Stephenson, who has overseen client acquisition, business development, A&R, rights management and client services for Downtown since March 2023.
Since Stephenson took the lead, the publishing division has signed deals with indie rockers The National, Spirit Music Group and Peso Pluma’s Double P Records. According to the company, it now serves some 2 million songwriters and clients in over 60 countries — more than 40% of them outside the United States — manages over 1.5 million copyrights and has distributed over $100 million in royalties through Songtrust.
Access to additional funds has helped. In May, Downtown announced it secured another $500 million in credit from Bank of America — on top of its previous $200 million credit facility — to finance advances.
“We have been earnestly and aggressively putting that money to work,” Stephenson says, by offering competitive advances without forcing independent creators to give up any rights. As a result, “We think we’re growing at nearly twice the rate of the rest of the industry,” she says.
That growth is one of Downtown’s draws. The combined market share held by independent distribution and music companies — i.e. non-major labels and self-releasing artists — rose to 36.7% in 2023, up from 28.6% in 2015, according to MIDiA Research. As a result, the majors have made acquisitions and investments to defend their market share. Downtown’s scale and position of dominance in this segment made it an attractive way for UMG to grow.
However, Downtown’s growth has also led to customer complaints of long wait times at Songtrust and concerns that the platform is becoming more exclusive. Stephenson says there are no plans to restrict who can sign up for Songtrust, adding that over the past year, Songtrust has cut the average response time to customer complaints from 33 days to 17 hours.
Stephenson, 35, has spent more than a decade at Downtown and previously served as Downtown Music vp of business operations, and she says roughly 70% of the managers in her division have similarly long tenures.
That experience has helped with client retention and led to facilitating opportunities. This past summer, “Parade” by French composer Victor le Masne, a Downtown client, became the official theme song for the Paris Olympic and Paralympic Games. This holiday season, the team landed Griff’s cover of the Willy Wonka & The Chocolate Factory classic “Pure Imagination” in Target’s Christmas campaign.
“We are the only player doing this at scale for indie songwriters globally,” Stephenson says. “I think our future is bright.”
A version of this story appears in the Dec. 14, 2024, issue of Billboard.
Universal Music Group (UMG) signed a strategic partnership deal with global advertising and public relations giant WPP that will center around audience engagement strategies “leveraging the power of music,” according to a press release. The deal will allow WPP clients access to UMG’s music catalog, with the two companies working together to “unlock additional areas of amplification through data-driven and technological innovation” and exploring ways artificial intelligence “can better help brands and artists connect and create authentic cultural moments,” the release adds. The partnership builds on a pre-existing relationship between UMG and WPP, which have previously teamed up on initiatives including the Coke Studio and Sprite Limelight music platforms. In a statement, UMG chief digital officer and executive vp Michael Nash said that by “combining innovative new technologies with UMG’s industry-leading data insights, we can create significant new commercial opportunities for our artists and songwriters. In addition, working together with WPP, we will harness and amplify the unmatched power and reach of music for WPP’s clients and brands through new strategic initiatives and programs.”
Sony Music launched in Greece following its acquisition of Cobalt Music, one of the country’s biggest independent labels, to re-establish Sony Music Entertainment Greece. The deal will allow Cobalt artists to connect with audiences internationally. it was concurrently announced that Anna Maria Antippas will serve as MD of Sony Music Entertainment Greece after having held leadership roles in the Greek music industry for nearly 20 years. Greek music industry revenues reached $70.4 million last year, a 14.91% increase from the prior year. Streaming accounts for 63.1% of that revenue, marking year-over-year growth of 15.2%, while synch revenues have increased 49.4%, according to a press release.
Virgin Music Group struck a strategic long-term agreement with Hungama Digital Media, a leading digital entertainment company operating out of India. Through the deal, Virgin will help expand the global reach of Hungama’s music catalog, including SVF, Grassroute, OTV and numerous film soundtracks. In turn, the deal will allow Virgin to deepen its presence in India’s regional music scene. “Hungama’s expansive network will enable us to unlock incredible new opportunities for our artists,” said Amit Sharma, country manager of India for Virgin Music Group, in a statement.
CTS Eventim acquired a 17% stake in French ticketing company France Billet from Fnac Darty, making it France Billet’s majority shareholder. Fnac Darty retains a 35% stake after the transaction and will continue its involvement in the company’s governance. France Billet’s management team will remain in place following the deal.
AEG Presents assumed a partnership stake in Germany-based concert promotion company MCT Agentur. “I wanted a partner who shared my vision of how our business should run and could provide some extra muscle in my corner when needed,” said MCT Agentur founder Scumeck Sabottka in a statement on the deal. “Concert promotion is still a gamble…that’s what makes it fun, but it’s a full-contact sport at times. You need a teammate you can trust and Jay and I trust each other.”
Warner Music Japan (WMJ) entered a strategic partnership with NBCUniversal Entertainment Japan (NBCUJ) through which it will produce and promote new releases by NBCUJ’s artists. WMJ will additionally acquire the distribution rights of more than 9,000 works in NBCU’s music catalog, including anime-related tracks, and begin digitally distributing them globally starting early next year. WMJ will also handle distribution and sales of physical products. The two companies will also work to expand opportunities for music tie-ins with anime projects, exploring possibilities for WMJ artists to contribute songs to NBCUJ titles. With the deal, WMJ has also launched an anime business division, which has brought on former Aniplex president/CEO Koichiro Natsume and former TMS Entertainment Co. senior executive officer Hiroyasu Shinohara as external advisors. “This partnership will not only enable us to help bring NBCUJ’s catalog to the world through our global network, but also give our artists opportunities to further grow their careers by leveraging anime-related collaborations,” said Takeshi Okada, president/CEO of WMJ, in a statement.
Under a new strategic partnership, ADA — Warner Music Group’s indie music distribution and artist services arm — will now oversee worldwide distribution for music projects developed by FaroLatino Music, the label division of ForoLatino. “This alliance marks an important chapter for both companies as we unite to champion Latin American music on a global scale,” Javier Fainzaig, president of FaroLatino, said in a statement. ADA president Cat Kreidich added, “We’re excited to partner with FaroLatino and help lead the charge on the global growth and recognition of the many diverse artists and genres that make up Latin music.” Launched in 1995, FaroLatino offers artist services ranging from marketing and press to strategic partnerships. Some of its latest projects include Jessi Uribe and Alejandro Fernández’s collab “Tu Maniquí” and Noche de Brujas and Jorge Celedón’s cross-genre single “Vente Conmigo.” – Griselda Flores
Event management platform Events.com acquired the Wonderfront Music & Arts Festival out of San Diego. “Under our ownership, we’ll streamline operations and create more digital engagement opportunities for guests,” said Stephen Partridge, president/COO of Events.com, in a statement. Launched in 2019, Wonderfront boasted nearly 42,000 attendees at this year’s edition of the festival. “With Events.com’s expertise in event management and the innovative capabilities of its platform, we’re looking forward to creating even more memorable experiences for our guests as we enhance our operational efficiencies, including ticketing, guest engagement, and overall festival management,” added Wonderfront founder/executive producer Paul Thornton. The 2025 iteration of the festival is slated for May 16-18.
Create Music Group acquired a 50% share of the London-based dance music label and music publisher Enhanced Music, which boasts such genre brands as Enhanced Recordings, Enhanced Progressive, Colorize, Shapes of Solitude and Enhanced Chill. Enhanced has publishing rights to thousands of songs by artists including The Chainsmokers, Elley Duhé, Tiësto and Steve Aoki.
Symphonic Distribution partnered with Masterchannel to provide artists with an AI mastering tool that makes tracks release-ready and optimized for streaming. Under the deal, Symphonic artists can upload as many tracks as they want and receive unlimited free full-length master previews.
Also at Symphonic, the company signed South Korean lable EchoesInDream (EID) to a global distribution deal. Upcoming EID releases include “Swimmin’”, a collaboration between Filipino R&B artist Jay R and emerging artists PAAK and AVN, along with new music from PAAK, an Afrobeats artist. Both are slated for release in January.
Drake, by common consensus, has been a smart and savvy businessman over the course of his music career. So some in the music business have been puzzled following the megastar rapper’s widely ridiculed legal filing last week against his own label, Universal Music Group (UMG), as well as Spotify, for an illegal “scheme” to boost the popularity of Kendrick Lamar‘s May 2024 diss track “Not Like Us.” They wonder if the move was a strategy for a potential future contract negotiation.
“Drake could be creating his own leverage by filing the suit against UMG,” says Josh Binder, an attorney who represents pop and hip-hop stars including Gunna, Marshmello, Lisa of BLACKPINK and Ivan Cornejo. “Most lawsuits are settled pre-litigation. My gut says this isn’t going to a jury. Drake could be using the suit to alter his existing deal.”
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Although Binder has no inside information on Drake’s filing, which alleges UMG “launched a campaign to manipulate and saturate the streaming services and airwaves” in its effort to amplify Lamar’s Drake diss track, he says the case could drag out and cause bad publicity for both Drake and UMG: “Settling it would, at a certain point, be worthwhile to both parties.”
In the Nov. 25 filing, Drake alleged that UMG used bots and other means to boost the prominence of “Not Like Us” on streaming services; the rapper’s attorneys accused the label of giving Spotify a deal on licensing rates in exchange for recommending the song to users who’d played non-Lamar tracks. They also alleged a civil violation of the Racketeer Influenced and Corrupt Organizations Act, or RICO, frequently employed against organized crime, as well as deceptive business practices and false advertising — including allegedly paying Apple to have Siri steer users to the Lamar track. The legal action states that the label “conspired with and paid currently unknown parties to use ‘bots’ to artificially inflate the spread of ‘Not Like Us’ and deceive consumers into believing the song was more popular than it was in reality.”
In a second filing the following day, which alleged payola to iHeartMedia to boost the song at radio, he went even further, saying UMG knew Lamar was defaming Drake by “falsely” accusing him of being a “certified pedophile,” yet released the track anyway. This filing reads in part: “UMG designed, financed and then executed a plan to turn ‘Not Like Us’ into a viral mega-hit with the intent of using the spectacle of harm to Drake and his businesses to drive consumer hysteria and, of course, massive revenues.”
Of the legal filings, Universal Music released a statement saying that the “suggestion that UMG would do anything to undermine any of its artists is offensive and untrue,” and several music-business attorneys echoed that sentiment to Billboard. “I can’t believe this is anything more than a publicity stunt,” says Howard King, who has represented Metallica, Dr. Dre and Pharrell in high-profile cases. “I don’t see how Drake has standing to challenge the record industry for doing what he knows they also do for him — using all available resources to promote an artist’s profile and music.”
But others in the business agreed Drake could be using the widespread publicity he generated from last week’s legal actions as a negotiating point for a future record deal negotiation with UMG. (Drake initially signed with Young Money, an imprint distributed by Universal-owned Republic Records, then later became a Republic artist.) One source tells Billboard that Drake’s latest deal, signed in 2021 and described as “LeBron-sized” by Variety at the time, isn’t far from expiring, and the most logical explanation for Drake damaging his reputation so publicly with the legal filings was to communicate his unhappiness to UMG and aim for a lucrative new deal, or even equity in UMG.
“It’s possible that it was done to have some leverage against his label,” says Gandhar Savur, a New York music attorney, adding that he has no knowledge of Drake or UMG’s affairs. “However, my initial impression was that he’s just trying to publicly discredit the track.”
Drake is one of the streaming era’s most successful stars, having passed the 50 billion mark in 2018. Lamar’s latest album, GNX, scored 364 million Spotify streams in its first week, in late November, but Drake holds the record for first-week hip-hop albums, with 589 million for 2018’s Scorpion and 497 million for 2021’s Certified Lover Boy.
If contract negotiations with UMG were to break down, sources say, an artist of Drake’s stature could follow the lead of Kanye West, who did not renew his contract with Def Jam/Universal after it expired and has since released albums on his own label via DIY distribution services, scoring a two-week No. 1 in February with Vultures 1 and a No. 2 debut in August with Vultures 2. “He could move forward without a deal,” King says of Drake. “He can certainly distribute the music without a label, especially domestically, and would need to have a management team capable of promotion and marketing. Of course, he would give up the big advance and have to fund production costs himself.”
Drake, however, as a viable global superstar, is in a different situation from Ye, whose prior antisemitic comments made getting into business with him a publicity headache for most labels. Binder doesn’t see the dominant rapper following West’s DIY path. “I would imagine [Drake] would want the infrastructure of a label,” he says.
Even by the standards of a litigious business, Drake’s recent legal actions against Universal Music Group and other companies look like odd filings.
On Nov. 25, Drake filed an action accusing UMG and Spotify of acting to “artificially inflate” the popularity of Kendrick Lamar’s “Not Like Us”; the next day, he made a similar filing against UMG and iHeartRadio, alleging that UMG’s release of the song could also constitute defamation. The basic idea seems to be that “Not Like Us,” Lamar’s diss track against Drake, became so successful because it was rigged.
“UMG did not rely on chance, or even ordinary business practices,” Drake’s lawyers wrote in the first filing. “It instead launched a campaign to manipulate and saturate the streaming services and airwaves.” The filings accuse UMG and its partners of acting in ways that are fraudulent, including using “bots” and payola, but little proof is provided — a “whistleblower,” an “inside source known to petitioner” and an assertion that Drake “learned of at least one UMG employee making payments to an independent radio promoter” who had agreed to pay stations. (The company has said in a statement to Billboard that “the suggestion that UMG would do anything to undermine any of its artists is offensive and untrue.”)
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These filings aren’t lawsuits, but rather legal attempts to get information that might provide the basis for them. And since Lamar’s success doesn’t really come at the expense of Drake’s — at least any more than any artist becomes popular at the expense of any other — it’s hard not to wonder if Drake is just upset that, with “Not Like Us,” Lamar seems to have won the long-running feud between them. That’s a long story — well-summarized here — but Drake and Lamar basically traded diss tracks for hip-hop fans until Lamar’s scathing “Not Like Us” topped the Billboard Hot 100. Drake is essentially claiming that UMG — for which both rappers record under different labels — cheated on Lamar’s behalf. It was rigged.
Quick: What other famous person does this remind you of? Hints: When he wins, he revels in his success; when he loses, he blames it on unfairness and litigates. Yes, I’m going there: Drake has become Trumpian.
Before Team Drizzy throws bottles of Virginia Black Whiskey by Drake, Drake is a skilled rapper, a compelling performer, and a fantastic Drake — it’s hard to compare him to other artists, both because he doesn’t fit neatly into a genre and because his greatest talent is being Drake. (Drake the artist seems to be an exaggerated version of Drake the person, with the soap operatic conflict amped up and the more mundane parts edited out.)
Both Drake and Trump thrive on success and fandom — their fans root for them because they win and they win because their fans root for them. (Trump the politician seems to be an exaggerated version of Trump the person, with the cultural conflict amped up and the boring parts edited out.) Neither gets a ton of respect from critics, but they are both popular beyond belief, and they love to win and then show off that they did. Drake’s feud with Lamar became so compelling because each was a champion in his own way — Drake the unmatched entertainer, Lamar the iconic old-school lyricist. By scoring a No. 1 single with a diss track, an unusual achievement, Lamar essentially beat Drake at his own game.
Is this why Drake is filing legal actions? Most people file litigation for financial restitution, to get an injunction to stop something, or to win negotiating leverage. In this case, the first would be hard to calculate, the second involves practices that would be hard to prove and the third seems unlikely — why would Drake want out of the UMG deal he signed in 2021, which includes publishing and merchandise rights and was described as “Lebron sized.” The only thing we know about Drake’s motive is that his second filing says he “brings this action for a discrete and specific purpose: to understand whether, and how, UMG funneled payments to iHeartRadio and its radio stations as part of a pay-to-play scheme.” Perhaps, like Trump, he simply can’t imagine the possibility that he would lose a fair fight.
Does Drake have a case? If UMG really had the power to make any song a hit, wouldn’t it do so more frequently? If anyone thinks Drake hasn’t received enough marketing or promotion — and I have yet to meet such a person — it’s worth considering that some Spotify subscribers found the service’s promotion of Scorpion so extensive that they asked for a refund. This, too, has political echoes: If U.S. elections are as unfair as Trump claims, how can he trust the one in November?
Like Trump, Drake loves the one-upmanship drama of competition — but only, apparently, when he wins. Trump ran several campaigns based partly on the politics of insult comedy — his dog-whistle racism was obviously far worse — but he doesn’t like to be on the receiving end of it. (The kind of thin skin that would be a personal fault in most is terrifying in the U.S. president.)
If rappers could pursue defamation claims for diss tracks, much less against the labels that release them, hip-hop never would have made it out of the Bronx. Lamar called Drake a certified pedophile, which is an ugly accusation, and a pun on Drake’s Certified Lover Boy, but not an actual thing; the reason Drake looks bad isn’t because people believe it but because “Not Like Us” is catchier and wittier than his own diss tracks. Drake certainly has the right to ask about music promotion practices — even in a legal filing. If no evidence of this emerges, though, he will need to seek satisfaction the old-fashioned way — by releasing a more compelling single.
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Joe Budden has made a career out of dissecting music and Hip-Hop culture with his popular eponymously named podcast, and the latest episode found him aiming his sights at Drake. After the news went wide that Drake launched a pair of lawsuits against Universal Music Group, Joe Budden proceeded to heave heavy critique upon the Canadian superstar, which has social media reacting.
On episode 779 of The Joe Budden Podcast, Budden and his cohosts bumped into a conversation regarding Drake’s lawsuits against UMG, the label he’s currently signed to and accusing of boosting Kendrick Lamar’s scathing “Not Like Us” single. Since this episode exists on a Patreon subscription service, we’ve only seen clips that surfaced online, which we’ll share from X below.
Joe Budden telling the unfiltered truth about Aubrey Drake Graham. pic.twitter.com/K2hMLZFuII
— Busby 🏁 (@MrBusby4o8) November 27, 2024
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The Joe Budden Podcast cooking again sheesh
🦉 “was disrespecting someone’s dead mom” “ idc about his dead mom tell him send a beat”
( I wonder if this why metro booming got upset)
🦉 “is more scared of Not Like Us being played at the SuperBowl”
Kendrick Lamar GNX out now pic.twitter.com/GsQ7fU141K
— Whooping feet (@WhoopingFeet) November 27, 2024
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As the clips highlight, Budden believes the industry has conspired in some regard against Drake due to alleged shady dealings with the personal affairs of his foes up to the business side of things. Fans online are taking note of Budden’s jabs as he’s been known to be friendly with Drake over the years but fell out of favor with the entertainer after Budden was critical of his musical direction For All The Dogs.
On X, formerly Twitter, the JBTV community space and others are sharing their thoughts about Joe Budden using the pod to air out his grievances against Drake. We’ve got the reactions listed below.
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Photo: JBP/Screengrab
This story was published as part of Billboard’s music technology newsletter ‘Machine Learnings.’
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Let’s get the news out of the way: on Monday (Nov. 24) Drake initiated legal action against Universal Music Group — the parent company of his record label — and Spotify over allegations that the two companies conspired to artificially inflate the popularity of Kendrick Lamar’s diss track “Not Like Us.” This, he says, was done through a variety of allegedly illegal promotional methods, like UMG — which also is the parent company to Kendrick’s label — accepting a royalty reduction in exchange for boosting streams; payola via independent radio promotions; and paid but undisclosed influencer campaigns. (For their part, Universal called these claims “offensive and untrue.”)
Longtime readers of Machine Learnings know that most of the topics presented in Drake’s case are ones we’ve covered extensively in this newsletter. I don’t take the issues of streaming fraud and shady digital marketing tactics lightly, and if these allegations are true, it would be a bombshell that one of the world’s biggest artists called out the world’s largest music company for partaking in it. (And trust me, I’d be all over reporting that!) But while Drake’s allegations could still hold some merit, this particular court document seems to be backed up with questionable evidence and — it seems — some level of misunderstanding about the way music promotion works today.
So let’s break it down. Here are a few key quotes from Monday’s court document, with commentary.
“In his memo to staff reflecting on the highlights of 2021, the CEO of UMG, Lucian Grainge, remarked on it being ‘harder than ever for artists to break through the noise: sixty thousand songs are added to Spotify every day.’”
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Maybe I’m splitting hairs by pointing this out, but I find this to be a strange way to begin laying out these allegations. Why are they citing highlights from 2021 when we get updates every year about how many songs are added to Spotify on a daily basis? It would have been far more effective to start by including the 2023 stat: 120,000 songs are uploaded to Spotify each day, according to Luminate. Or, if they want to keep the quote from Grainge in, why not tack that current number on to the end?
Throughout this document, it seems like Drake’s team is missing key, up-to-date information on the ways songs are released and marketed today. This is surprising, given Drake is one of the most successful artists in the world and one who often makes savvy marketing and business decisions. One of those marketing tactics that immediately comes to mind is when Drake graced the cover of a ton of Spotify playlists during the release of his album Scorpion in 2018 to raise awareness, and streams, for the project. It was so over the top that Billboard reported at the time that some fans were calling for Spotify to provide refunds because they were seeing too much Drake.
“On information and belief, UMG charged Spotify licensing rates 30 percent lower than its usual licensing rates for “Not Like Us” in exchange for Spotify affirmatively recommending the Song to users who are searching for other unrelated songs and artists. Neither UMG nor Spotify disclosed that Spotify had received compensation of any kind in exchange for recommending the Song.”
Rather than some nefarious back room deal, this sounds like Drake’s lawyers are referring to Spotify’s Discovery Mode feature, which is used by a wide array of labels and artists and is practically never disclosed. According to an article from Spotify’s support team, artists who want a song to receive an additional algorithmic boost on the platform can opt in to Discovery Mode which “doesn’t require an upfront budget” and instead takes a “30% commission… to recording royalties generated from all streams of selected songs in Discovery Mode contexts.”
When Spotify debuted this feature in November 2020, it immediately drew controversy. In June 2021, Reps. Jerry Nadler (D-NY) and Hank Johnson Jr. (D-GA) sent a letter to Spotify’s CEO/founder Daniel Ek voicing worries that the feature “may set in motion a ‘race to the bottom’ in which artists and labels feel compelled to accept lower royalties as a necessary way to break through an extremely crowded and competitive music environment.”
Again, in March 2022, Reps. Yvette D. Clarke (D-NY), Judy Chu (D-CA) and Tony Cardenas (D-CA) — co-chairs of the Congressional Caucus on Multicultural Media — expressed concerns that Discovery Mode “lack[ed] transparency” for both artists and consumers. The representatives then asked the company to publish “on a monthly basis the name of every track enrolled in the program” and the agreed-upon discounted royalty rate for each, calling Discovery Mode “a serious risk for musicians.”
That said, it’s not clear if “Not Like Us” was part of Spotify’s Discovery Mode program, and historically, Universal Music Group has not been known to use the feature for any of its frontline releases — including any Kendrick Lamar or Drake songs.
“UMG, directly or through Interscope, also conspired with and paid currently unknown parties to use ‘bots’ to artificially inflate the spread of ‘Not Like Us’ and deceive consumers into believing the Song was more popular than it was in reality… One individual unknown to Petitioner revealed publicly on a popular podcast that Mr. Kendrick Lamar Duckworth’s ‘label’ (i.e., Interscope) paid him via third parties to use ‘bots’ to achieve 30,000,000 streams on Spotify in the first days of the release of ‘Not Like Us’”
If this is true, this is streaming fraud and would be a serious offense. Just a few months ago, a man named Michael Anthony Smith was indicted by federal prosecutors on charges of wire fraud, wire fraud conspiracy and money laundering conspiracy for allegedly using bots to boost the streams of his catalog and to help him siphon $10 million out of the royalty pool.
But the evidence here is sketchy. Drake’s lawyers admit that the “individual” who was allegedly solicited to artificially drive up Kendrick’s streams is “unknown to [Drake]” but that this anonymous person went on DJ Akademiks’ podcast to talk about this alleged scheme. DJ Akademiks is a podcaster who is known to be close with Drake, and he has played a significant role in backing up Drake during the beef earlier this year. Even if this ended up being true, which seems like a stretch, it feels quite biased.
“While historically payola has been thought of in terms of paying radio stations to play songs, in February 2020, the Federal Trade Commission released guidance stating that ‘by paying an influencer to pretend that their endorsement or review is untainted by a financial relationship, this is illegal payola.’ On information and belief, UMG employed a similar scheme by paying social media influencers to promote and endorse the Song and Video. For example, Petitioner understands that UMG paid the popular NFR Podcast — which has nearly 300,000 subscribers on YouTube and over 330,000 followers on X — to promote ‘Not Like Us’”
Drake’s team is citing a quote from February 2020 by the FTC that has been removed from the agency’s website. I do not know if that means it is no longer their current rule, or if there was another reason.
What I do know is that just a few months ago, I wrote a story on the topic of influencers receiving undisclosed payments to play songs in the background of TikTok videos. I went into the reporting believing, as Drake’s team seems to, that this was definitely against FTC guidelines, but the FTC told me that wasn’t necessarily the case.
“While we can’t comment on any particular example, that practice seems somewhat analogous to a product placement,” the FTC told me. “When there are songs playing in the backgrounds of videos, there are no objective claims made about the songs. The video creator may be communicating implicitly that they like the song, but viewers can judge the song themselves when they listen to it playing in the video. For these reasons, it may not be necessary for a video to disclose that the content creator was compensated for using a particular song in the background in the video.”
Some of the examples from NFR that Drake cites here are not exactly the same type of pay-to-play content I researched for my story, but I could see these examples being acceptable by the FTC based on what they told me. One example of UMG’s alleged influencer payola cited by Drake’s lawyers was a tweet by NFR that says that Kendrick Lamar’s new music video was released. Another was NFR saying “Kids rapping Kendrick Lamar’s ‘Not Like Us’ word for word at a birthday party.” Another: “Kendrick Lamar’s ‘Not Like Us’ becomes the FASTEST rap song to reach 300M Spotify streams.”
All three of these examples are objective statements about one of the biggest artists in the world. Referring back to the statement I got from the FTC, “There are no objective claims made about the songs…viewers can judge the songs themselves.” (I say all this while also acknowledging that some of the other examples listed might be in more of a gray area with the FTC).
The practice of paying influencers to post about new songs is nothing new, and one major label marketer told me he estimated “75% of popular songs on TikTok started with a creator marketing campaign.” According to digital marketing experts, influencer campaigns have been the go-to marketing strategy at every major label since TikTok took off in 2020. With that in mind, it is hard for me to imagine that Drake’s team has never run a similar campaign for any of his own viral hits, which would undermine his entire argument.
“Streaming and licensing is a zero-sum game. Every time a song ‘breaks through,’ it means another artist does not. UMG’s choice to saturate the music market with ‘Not Like Us’ comes at the expense of its other artists, like Drake. As Drake is Petitioner’s sole owner, and Petitioner owns the copyright to Drake’s entire catalogue, Petitioner suffered economic harm as a result of UMG’s scheme.”
I find this to be a strange claim — that if Kendrick’s song streams well it directly takes away from Drake or other artists. It feels like a stretch to blame Kendrick for other artists not succeeding with their songs at the same time. I imagine Drake faced more “economic harm” from the reputational damage this song did to him (by calling him a “pedophile”) than it did by being a “zero-sum” streaming game. Plus, with UMG the parent company distributing both artists — and thus making money from their success — it makes no business sense for them to be deliberately harming his career and prospects.
This zero-sum claim seems to be what he’s getting at in his second legal filing, released Tuesday (Nov. 26). In it, he claims UMG should have stopped Kendrick from releasing a song with “false” claims that defamed his character.
“UMG … could have refused to release or distribute the song or required the offending material to be edited and/or removed,” Drake’s lawyers write in the court document. “But UMG chose to do the opposite. UMG designed, financed and then executed a plan to turn ‘Not Like Us’ into a viral mega-hit with the intent of using the spectacle of harm to Drake and his businesses to drive consumer hysteria and, of course, massive revenues. That plan succeeded, likely beyond UMG’s wildest expectations.”
By saying this, Drake is essentially advocating for labels to censor their artists, which is a very slippery slope — I’d wager most people would find it troublesome if a billion-dollar corporation started preemptively censoring art. Not to mention, Drake has levied plenty of his own unsubstantiated claims against Kendrick this year, most notably on also-UMG-released diss track “Family Matters.”
The hip-hop industry has fought for years to remind the judicial system in the U.S. that not everything a rapper says in a song is a cold hard fact, and it should not be used as evidence against a rapper in a criminal sense. As top music attorney Dina Lapolt once put it to Variety, “[these] attempts to put all rap lyrics into the categories of historical fact and fiction [are] failing to understand that hip-hop, like most art, is more complex than that… lyrics are not to be taken literally.”
Drake has launched a second bombshell legal action against Universal Music Group over Kendrick Lamar’s “Not Like Us,” accusing the music giant of defamation and claiming it could have halted the release of a song “falsely accusing him of being a sex offender.”
A day after filing an action in New York accusing UMG of illegally boosting Lamar’s track with payments to Spotify, Drake’s company leveled similar claims in Texas court regarding radio giant iHeartRadio. The new filing, filed late Monday and made public on Tuesday, claims UMG “funneled payments” to iHeart as part of a “pay-to-play scheme” to promote the song on radio.
But the filing also offers key new details about Drake’s grievances toward UMG, the label where he has spent his entire career. In it, he says UMG knew that Kendrick’s song “falsely” accused him of being a “certified pedophile” and “predator” but chose to release it anyway.
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“UMG … could have refused to release or distribute the song or required the offending material to be edited and/or removed,” Drake’s lawyers write. “But UMG chose to do the opposite. UMG designed, financed and then executed a plan to turn ‘Not Like Us’ into a viral mega-hit with the intent of using the spectacle of harm to Drake and his businesses to drive consumer hysteria and, of course, massive revenues. That plan succeeded, likely beyond UMG’s wildest expectations.”
Like the New York filing on Monday, the new petition isn’t quite a lawsuit. Instead, it’s so-called pre-action filing aimed taking depositions from key figures at UMG and iHeart in order to obtain more information that might support Drake’s accusations in a future lawsuit.
In seeking that information, Drake’s lawyers say they already have enough evidence to pursue a “claim for defamation” against UMG, but that they might also tack on claims of civil fraud and racketeering based on what they discover from the depositions.
UMG and iHeartRadio did not immediately return requests for comment on the new filing. Lamar is not named as a respondent in the filing and is not legally accused of any wrongdoing.
Universal Music Group responded to yesterday’s filing with a statement provided to Billboard. “The suggestion that UMG would do anything to undermine any of its artists is offensive and untrue,” the company said. “We employ the highest ethical practices in our marketing and promotional campaigns. No amount of contrived and absurd legal arguments in this pre-action submission can mask the fact that fans choose the music they want to hear.”
Like Monday’s bombshell petition, the new filing in Texas is another remarkable escalation in the high-profile beef between the two stars, which saw Drake and Lamar exchange stinging diss tracks over a period of months earlier this year. Such beefs happen frequently in the world of hip-hop, but few thought either side would file legal actions over the insults.
It also represents a deepening of the rift between Drake and UMG, where the star has spent his entire career — first through signing a deal with Lil Wayne’s Young Money imprint, which was distributed by Republic Records, then by signing directly to Republic. Lamar, too, has spent his entire career associated with UMG and is currently signed to a licensing deal with Interscope.
In Tuesday’s new petition, Drake essentially accused the music giant of using illegal means to unfairly prioritize one of its artists over the other.
“Before it approved the release of the song, UMG knew that the song itself, as well as its accompanying album art and music video, attacked the character of another one of UMG’s most prominent artists, Drake, by falsely accusing him of being a sex offender, engaging in pedophilic acts, harboring sex offenders and committing other criminal sexual acts,” his lawyers write.
Universal Music Group (UMG) has responded to allegations by UMG artist Drake that it conspired with Spotify to artificially boost the popularity of Kendrick Lamar’s “Not Like Us” in a blockbuster legal filing on Monday (Nov. 25). “The suggestion that UMG would do anything to undermine any of its artists is offensive and untrue,” to […]