universal music group
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The estate of Luther Vandross tapped Epic Rights — part of Universal Music Group’s merchandise and brand management company Bravado — as the global merchandise management agency to develop a multi-category worldwide retail and e-commerce program for the late singer. The agreement will see a roster of new licensing partners create branded merch and other elements to extend Vandross’ legacy in advance of multiple anniversary celebrations slated for next year. Vandross released his solo debut album, Never Too Much, in 1981; he went on to release 11 consecutive platinum albums and win a total of eight Grammys. According to a press release, over his more than 30-year career, he sold in excess of 40 million albums worldwide and also produced records for Aretha Franklin, Diana Ross and Dionne Warwick. Next year is the 20th anniversary of both his Dance With My Father album and Live at Radio City Music Hall, which marked his final live performances. Other activations will include the launch of the Luther Vandross Foundation and a remix collaboration for Black History Month.
Full-service B2B distributor FUGA, a division of Downtown Music, partnered with electronic label Insomniac Music Group for a deal that will see FUGA provide a range of distribution, marketing and label services for several labels under the Insomniac umbrella, providing access to over 260 DSPs globally. Insomniac will also be utilizing FUGA’s sync and audience engagement services and have access to its trends and analytics platform. Insomniac additionally reached a deal with Downtown Neighbouring Rights.
China-based online music platform NetEase Cloud Music struck a licensing renewal agreement with Japanese entertainment company Avex. Under the deal, the companies will collaborate on promoting the presence of Avex artists on the NetEase platform. Avex’s roster includes Ayumi Hamasaki, Ai Otsuka, Kumi Koda, Awesome City Club, HIRAIDAI, I Don’t Like Mondays and NAQT VANE.
Actor and singer-songwriter Reneé Rapp signed with WME in all areas. Known for her role on the HBO Max series The Sex Lives of College Girls, Rapp recently signed with Interscope Records, which released her debut EP, Everything to Everyone, on Nov. 11. She continues to be represented by Adam Mersel of Immersive Management, Lisa Socransky Austin and Sloane, Offer, Weber & Dern LLP.
Universal Music Group (UMG) partnered with Artist Partner Group (APG) on The Fast & Furious: Drift Tape (Phonk Vol 1), “a fan-first mixtape” released in conjunction with character pieces from Universal Pictures’ Fast & Furious franchise that are meant to reintroduce characters to fans. Led by APG CEO Mike Caren and UMG’s Steven Victor, the project features music and collaborations from Phonk music’s biggest artists, including Kordhell, MUPP, Kaito Shoma, SCXR Soul and more. The full mixtape will be released Dec. 16.
Montreal-based pianist and composer Alexandra Stréliski signed to XXIM Records/Sony Music Masterworks. The first release under the deal is the song “The Hills,” which is Stréliski’s first new music in four years; she’s slated to put out a new album in spring 2023. All forthcoming music will be released by XXIM Records/Sony Masterworks worldwide, excluding Canada, in partnership with Montreal-based Secret City Records, her Canadian label home since 2018.
MOBO Group welcomed The Orchard to its recruitment and mentoring platform MOBOLISE, which launched in beta in 2020. MOBOLISE “supports and connects career opportunities to empower diversity, excellence and transformation in the workplace,” according to a press release, via a jobs board, mentoring and career development events and educational resources. It aims to create a more equitable industry by overcoming systemic obstacles faced by Black professionals. “MOBOLISE directly supports The Orchard’s goal to attract diverse talent by providing resources and information to the MOBOLISE community as well as direct recruitment opportunities to add to our workforce,” said Naledi Nyahuma Seck, vp of diversity & inclusion at The Orchard.
The Tahoe Douglas Visitors Authority and Oak View Group reached an exclusive multi-year naming rights agreement with Tahoe Blue Vodka for a new live entertainment, sports and conference center on the south shore of Lake Tahoe. Located in Stateline, Nevada, the 6,000-capacity Tahoe Blue Center is projected to open in July 2023 and host 130 events annually. The deal includes prominent exterior and interior signage. This is the first naming rights sponsorship for the vodka brand.
Payton Smith (“Like I Knew You Would”) signed with Combustion Masters, which recently released his latest single “Need You To Not.” Smith is currently in the studio with Combustion president Chris Warren at the production helm. New music from the singer, who’s signed with Eclipse Music Group for publishing, is expected early next year.
Independent digital distributor IDOL signed a full-service digital distribution partnership with independent label Fire Records, which boasts acts including Black Lips, Jane Weaver, The Lemonheads and Vanishing Twin on its roster. IDOL will handle the digital distribution of Fire Records’ repertoire to its global network of DSPs, excluding South Korea. Fire Records will also work closely with IDOL’s international audience development team on marketing and release strategy for frontline releases, with a dedicated specialist working on the label’s back catalog.
Q Prime South signed singer-songwriter Paul Cauthen for management. Cauthen, who will be on tour throughout December and into early 2023, is working on new music for release next year. His most recent album, Country Coming Down, was released by Thirty Tigers.
Warner Music Latina has signed emerging Mexican singer-songwriter Arriola to “continue the development” of his career within the regional Mexican genre, according to a press release. Arriola (real name Eduardo Arriola Gómez) — who released his first single “En Eso Estoy” when the label announced his signing — is also currently working on additional new music that will be part of his first album under the label. – Griselda Flores
Synch clearance and licensing software Trevanna Tracks partnered with music and cue sheet reporting company Soundmouse. The deal will allow Trevanna users to move song metadata, including splits and usage, from Trevanna to Soundmouse in order to generate accurate cue sheets. “Trevanna’s data and documents give production teams everything needed to air a synced song, but it doesn’t take the next step to ensure ongoing downstream payments,” said Jennifer Freed, founder and CEO of Trevanna Tracks. “This process was brilliantly sorted by Soundmouse.” Added Soundmouse head of business development Mark Vermaat, “This partnership enables collaboration between music supervisors and editors, saves time, and significantly lessens the margin for error in reporting royalties.”
Irish singer-songwriter Lisa O’Neill signed with Rough Trade Records for the release of her next album, All of This Is Chance, which is slated for release Feb. 10.
Country trio Track45 signed with UTA for booking. Comprised of siblings Jenna, Ben and KK Johnson, the group will be working with UTA agent Lance Roberts as its day-to-day. Track45 is signed to BBR Music’s Group’s Stoney Creek Records and managed by T.R.U.T.H. Management’s Missi Gallimore.
Nettwerk Music Group signed several new artists: lo-fi hip-hop producer linanthem; Sun Lo, a new project from artist-producer Attlas and songwriter-vocalist Richard Walters; alt-pop duo Bestfriend; beatmaker and producer Mr. Käfer; and disco-pop artist and producer Wingtip. The label recently released linanthem’s single “wind in my sails,” Sun Lo’s debut single “Factory Gates”; Mr. Käfer’s single “Blurred”; and Wingtip’s single “Mr. 29.” On Dec. 9, the label will release Bestfriend’s new single “LEMON LIME.”
Natalie Carr signed with Dallas Austin‘s distribution company DAD, which will release her new song “Drive.”
Mailboat Records signed yacht rock group Yachtley Crew. The outfit, which is managed by Andy Gould and is revving up for a series of monthly performances at Palms Casino Resort’s KAOS, recently released their first original song, “Sex On the Beach.”
Universal Music Group (UMG) has purchased a 49% stake in the indie label group [PIAS], expanding on a strategic global partnership that began last year. As part of the deal, [PIAS] founders Kenny Gates and Michel Lambot will retain control of the company, “remain fully independent” and UMG will have no seats on the indie’s board.
In March 2021, [PIAS] rebranded its distribution and services arm to [Integral], bringing on a new managing director to expand its business globally. Three months later, [PIAS] entered into an agreement with UMG that gave the major label group access to the [Integral] platform, which also handles distribution services for more than 100 indie label partners including ATO, Beggars Group and Secretly Group. The newly announced minority investment is said to be an extension of that initial deal.
“We have enjoyed an excellent relationship with the Universal Music Group team since we announced our strategic global alliance with them last year,” said Lambot — who co-founded [PIAS] in Brussels, Belgium, in 1983 alongside Gates — in a statement. “Kenny and I are celebrating our company’s 40th anniversary this year and we are still as ambitious as we were when we started out about growing our global presence and providing a world class service to the independent music community.”
“These days we are competing with finance and tech giants and a partner like Universal Music Group provides the additional support for us to compete and grow,” Gates said in his own statement. “Universal made it clear that they like us, they trust us and they need us, because they can’t do what we do and they value it highly. For Michel and I this is our life’s work and an ongoing journey and I am excited about the prospect of this new chapter in the life of [PIAS]. This move makes us stronger and secures the future of our brand, our staff and our partners while maintaining control of our destiny.”
The expansion of the deal comes at a time when many major labels — Capitol Music Group, Republic, 300, Interscope and more — are increasingly launching or enhancing their distribution offerings for independent artists and labels. This deal with [PIAS] presumably expands UMG’s access to independent distribution moving forward.
“The boldly independent and music-centric culture that Kenny and Michel have built over the last four decades has provided a vital creative network to so many artists,” UMG chairman/CEO Lucian Grainge said in a statement. “While much of the past was focused on ‘majors versus indies,’ it’s clear that today, the important divide in our industry is about those committed to artist development versus those committed to quantity over quality. We share Kenny and Michel’s passion for developing artists and moving culture, and we recognize that a healthy music ecosystem needs companies like [PIAS] who are committed to amplifying the best voices in independent music.”
BERLIN – Subscription streaming services have ushered in a recorded music business boom, but the medium’s focus on hit singles has boosted genres like hip-hop and Latin more than some others. Starting today, Universal Music Group’s Deutsche Grammophon is offering its own service, Stage+, which will offer music from its own archive and that of sibling label Decca Records, plus video programming and a new live performance every week — at a cost of $14.90, or €14.90, a month.
Universal Music has no plans to remove its classical recordings from mainstream music streaming services like Spotify and Apple Music. Rather, the idea is to offer a specialist service that can appeal to classical music fans and create a more favorable business structure for a genre that hasn’t been well-served by mainstream services. Since many artists and orchestras record some of the same compositions, it can be difficult for aficionados to find the recording they’re looking for — and the mainstream streaming services tend to curate music for a general audience.
“There’s the urge of consumers and artists to have everything in one place, with all the right data,” says Deutsche Grammophon president Dr. Clemens Trautmann. “You can punch in a work or a recording or an artist and you’ll see the next livestream, the archive, the albums, and if there’s a documentary, behind-the-scenes footage or interviews.”
So far, no big label has managed to build its own streaming service, and it’s hard to know how many consumers will be interested in one that only offers certain recordings. But Deutsche Grammophon, with its iconic yellow logo, has culturally significant repertoire going back more than a century, as well as significant stars like Lang Lang, Anne-Sophie Mutter and Max Richter. It also has enough brand equity to get streaming rights to major live events, and its first streamed performance will be Víkingur Ólafsson’s presentation of his album From Afar in the Harpa concert hall in Reykjavík, Iceland. (Some of the live performances featured on Stage+ will be time-delayed for various reasons.)
For Universal Music, Stage+ also offers business advantages. The price is higher than the current cost of mainstream services, although it includes high-fidelity audio as well as livestreamed events. The core classical repertoire is in the public domain, which means it will not have to pay publishing royalties on about three-quarters of the music it streams. The service can also operate in a way that makes sense for the genre, and it plans to divide up the royalty pool according to the time consumers spend listening to certain recordings, rather than paying a royalty on each track, which advantages shorter songs in a way that’s arguably unfair to genres with varied or longer track lengths, like jazz and classical music.
Stage+ faces competition — from livestreaming video services like Medici TV and Carnegie Hall+ on one hand and specialist streaming services like Berlin-based classical-focused Idagio on the other. And since so many households in the U.S. and Europe now subscribe to a mainstream streaming service, in many cases Stage+ will need to have enough appeal to succeed as a second service. Apple also seems to have plans that involve a classical music service; last summer it purchased the streaming service Primephonic, whose website says, “We are working on an amazing new classical music experience from Apple for next year.” (Apple did not respond to a request to comment.)
Trautmann says that Stage+ grew out of DG Stage, which was established during the pandemic and offered ticketed livestreams of performances by Deutsche Grammophon artists. A little over a year and a half ago, he started working to develop the service with Deutsche Grammophon vp of consumer business, Robert Zimmermann, under Frank Briegmann, Universal Music chairman and CEO, Central Europe, who also serves as chairman of Deutsche Grammophon.
“DG Stage is simple and very effective, but we realized that the artist community and consumers were looking for a service where everything our artists create can be presented holistically in one place and audiences can follow their journey,” says Trautmann, who is himself a Julliard-trained musician who plays classical clarinet.
It’s hard to imagine that Stage+ will ever have enough subscribers to rival the mainstream players, but its premium price could potentially allow it to make money with a number of subscribers in the low six figures. It also offers an interesting model for genres that don’t fare as well in the streaming world as pop music — especially if they have fans who can afford a premium price.
And although no major label currently runs a streaming service, there’s no reason that Stage+ couldn’t also offer music from other labels or rightsholders — and it could potentially offer them better deal terms as a more appealing cultural and commercial environment than Spotify and Apple Music. “We’d be open to enlarge the content offering, provided it’s the right match for our curated approach,” Trautmann says, although there are no immediate plans to do so. “It might be better coming from potential partners instead of us.”
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.
Most publicly traded companies have released earnings for the latest quarter (ended Sept. 30), and most of those results have shown encouraging signs for investors and the music industry alike. Earnings by Universal Music Group, Spotify, Live Nation, SiriusXM are in the books. Notable companies yet to announce include Warner Music Group (Nov. 22) and Tencent Music Entertainment (Nov. 15).
If there is one over-arching narrative, it’s that inflation and economic uncertainty haven’t ruined music’s post-pandemic recovery. Revenue growth is strong, aside from some softness related to a slowdown in advertising spending that impacts broadcast radio and ad-supported streaming. Consumer spending on everything from concerts to vinyl records is healthy – despite the around-the-clock warnings of an impending recession and the highest inflation rates in four decades eating into consumers’ wallets. When companies have raised prices for tickets and concessions at concerts, music fans, by and large, haven’t blinked. Even long-stagnant music subscription prices are on the rise, and nobody expects a consumer backlash.
Not that music companies’ stock prices reflect this optimism. Stocks in general have taken a beating in 2022. Music stocks have suffered, too, although stocks ended the week on a high note. The Billboard Global Music Index, a measure of 20 publicly traded music companies’ stocks, climbed 12.7% this week after markets rallied on Thursday and Friday on encouraging news about the slowing U.S. inflation rate.
Here are five quick takeaways from third-quarter earnings and the statements made by the companies’ management teams.
1. The subscription business model is insulating creators and rights holders from economic uncertainty. Music royalties are popular with investors in part because they are counter-cyclical, meaning their returns have little correlation with changes in the broader market. Put another way, when the economy sours, people are more likely to cut back on grocery spending or travel than cancel a Spotify subscription. Consumers might feel pinched in their pocketbooks, but Spotify and SiriusXM added 7 million and 187,000 subscribers, respectively, in the third quarter, and YouTube announced on Wednesday that it surpassed 80 million subscribers to YouTube Music and Premium, an increase of 30 million in about 14 months. Stock prices at companies more exposed to inflation pressures fared best on Thursday, as stocks surged on news that the annual change in the consumer price index in the U.S. fell to 7.7%. Shares of radio companies iHeartMedia and Audacy climbed 10.0% and 14.0%, respectively. Live entertainment companies also did well: MSG Entertainment was +5.6%, Live Nation was +5.1%, and ticketing companies Eventbrite and Vivid Seats were +8.3 and +9.2%, respectively.
2. Podcasts are a growing, stabilizing force. Spotify’s podcast business has rightly captured headlines as the company uses spoken-word content to build engagement, generate advertising revenue and improve on the gross margins of its core music business. The number of monthly users who consumed podcasts grew “in the substantial double-digits” year-over-year, the company said. But other companies’ podcast businesses get less attention despite their importance to their own futures. Radio companies – namely iHeartMedia, Cumulus Media and Audacy – have fast-growing podcast businesses. LiveOne, primarily a music streaming company, has a fast-growing podcast division, PodcastOne, that made $17.2 million of revenue in the last two quarters on the strength of such shows as The Adam Carolla Show, Cold Case Files and Uncut with Jay Cutler. The catch is that podcast growth has little direct impact on the music business outside of helping those platforms – digital and broadcast – that produce royalties for record labels and publishers. Music rights owners could better tap into this growing market if there were better systems for licensing music to podcast creators.
3. With share prices relatively low, companies are increasingly buying back shares to bolster shareholder value and help share prices. Among the companies currently engaged in stock repurchase programs are Spotify, MSG Entertainment, Cumulus Media, Audacy, SiriusXM, Townsquare Media and LiveOne. Spotify announced a $1 billion share buyback program in August 2021, and it spent $2 million and $24 million repurchasing shares in the second and third quarters, respectively. Cumulus Media has $21.1 million remaining in its $50 million share repurchase authorization announced in May. Last month, MSG Entertainment authorized $75 million for share buybacks on top of a $175 million, one-time dividend worth $7 per share paid on Oct. 31 to shareholders of record on Oct. 17. And LiveOne announced on Thursday that it will expand its share repurchase program, originally planned for 2 million shares (worth about $1.5 million at Friday’s closing price), by an additional $2 million. More buybacks could be on the way soon: Universal Music Group shareholders voted in May to give the company’s board the ability to repurchase up to 10% of the issued share capital.
4. Strong growth in “rest of world” markets. Believe’s revenue in Asia Pacific and Africa grew 61.1% to 52.3 million euros ($53.2 million), about the same as its European revenues excluding France and Germany. Spotify’s “rest of world” markets improved their share of monthly active users to 26% in the third quarter, up from 21% in the prior-year period. Also, “rest of world” and Latin America each gained a percentage point in shares of Spotify subscribers while North America and Europe both lost a percentage point of subscriber share. As Billboard’s Elizabeth Dilts Marshall reported last week, investors are increasingly eyeing companies in the Middle East and North Africa as streaming transforms those regions.
5. Spinoffs are going to separate high-growth, high-potential businesses. MSG Entertainment plans to spin off its MSG Sphere venue currently under construction in Las Vegas along with its Tao Hospitality Group. The remaining MSG Entertainment will retain the live entertainment business – namely the portfolio of venues such as Madison Square Garden and Radio City Music Hall – and MSG Networks, a sports broadcast network. Ryman Hospitality will spin off its Opry Entertainment Group – possibly within four years, based on its agreement with two new investors, Atairos and NBCUniversal. LiveOne plans to file an S-1 document with the SEC by Dec. 15 for a spin-off of its podcast division, PodcastOne, which accounted for about 37% of the company’s total revenues in the six-month period ended Sept. 30. LiveOne’s management and board believe the company’s share price undervalues the sum of its parts and spinning off PodcastOne would maximize shareholder value and better position the division for M&A and talent acquisition.
Many music companies’ stocks soared on Thursday (Nov. 10) on news that U.S. inflation was less than expected in October. The Bureau of Labor Statistics revealed the consumer price index rose 0.4% last month, less than the 0.6% Dow Jones estimate. Although the annual inflation is still high at 7.7%, it had been as high as 9.1% in June and hadn’t been below 7.5% since January.
Spotify shares jumped 9.9% to $78.44. Universal Music Group shares rose 3.3% to 20.81 euros. Sony shares spiked 6.6% to $44.15.
Live music companies fared especially well: U.S.-based Live Nation and MSG Entertainment improved 5.1% and 6.6%, respectively, while German promoter CTS Eventim climbed 3.8%. Ticketing companies Eventbrite and Vivid Seats rose 8.3% and 9.2%, respectively.
Radio company stocks, recently hurt by the softening advertising market, enjoyed the biggest gains as iHeartMedia was up 10.0% and Audacy rose 14.0%. Cumulus Media and Townsquare Media had smaller gains of 3.3% and 2.5%, respectively.
U.S. stocks had their biggest single days since 2020. The Dow Jones Industrial Average, a group of 30 prominent stocks, rose 3.7%. The S&P 500 improved 5.5% and the tech-heavy Nasdaq climbed 7.4%.
The good news quickly spread to Asia after U.S. markets closed. Shares of South Korean music companies HYBE and SM Entertainment were up 8.3% and 4.5%, respectively, early on Friday morning. Likewise, the Hang Seng Index, a selection of companies on the Hong Kong Exchange, was up 5.0% in early trading Friday.
Persistently high prices have had damaging effects to economies of the U.S. and other countries re-opening from COVID-19 restrictions. Businesses have encountered higher costs for labor, manufacturing and services, and often pass them along to consumers rather than absorb them. Everything from vinyl manufacturing costs to tour buses have soared. Some bands, such as Anthrax and Cold, pulled out of tours because of logistical issues and high costs. “There are tours being canceled left and right,” Jamie Streetman, operations manager for Nashville-based Coach Quarters, told Billboard in Sept.
To tame inflation, the U.S. Federal Reserve Bank, which targets 2% annual inflation, has raised the federal funds rate six times in 2022 to tame inflation. That has made borrowing more expensive for everyone from investors in music publishing catalogs to consumers with credit card bills.
The pairing of high interest-high inflation has wreaked havoc on stock prices, too. Year to date, the Dow index is down 7.2% and the S&P 500 is off 17.0%. Music companies that are otherwise having a solid year have seen their share prices sink, too. UMG shares are down 16.0% and Spotify shares are off 66.5% this year.
While investors celebrated the improvement in the CPI, inflation is still abnormally high and energy costs – a significant cost for touring musicians – were up 17.6% year-over-year in October. Presidents of the Federal Reserve indicated on Thursday that more rate hikes would probably be forthcoming, although at a slower pace.
Universal Music Publishing China (UMP China) has signed a global publishing agreement with RYCE Publishing, a music and entertainment company with an over 700-song catalog. RYCE will use UMP China as its publishing administrator for some of China’s biggest C-pop songs from chart-topping artists like Jackson Wang.
Through the deal, UMP China will provide global infrastructure and opportunities for RYCE’s roster as well as handle the Greater China rights for hundreds of major K-Pop hits that are under RYCE’s control including from Korean acts GOT7 and TWICE.
“We saw the rise of J-pop three decades ago and its massive influence on audiences across Asia. Now K-pop is a global phenomenon as we all know, and there has been a very key bridging force between these genres in the last two decades,” says Joe Fang, managing director of UMP China. “With China rising to become the sixth biggest music market of the world, I believe the time of C-pop is here. RYCE Publishing, with its hybrid talents and border-crossing catalogs, is a central piece of that next bridging force and I’m thrilled that UMPG will play an instrumental role in supporting these future chapters of music history.”
Joe Fang
Courtesy Photo
UMP China will now administer top tier C-Pop songs in the RYCE catalog, including “Manual to Youth” and “Adore” performed by TFBOYS; “100 Ways,” “I Love You 3000,” co-written and performed by Jackson Wang （王嘉尔）; “Jiao Huan” performed by Zhou Shen（周深), “EASIER,” performed by Amber Liu （刘逸云） featuring Jackson Wang and “Xiao Juan,” performed by Sitar Tan（谭维维）.
On the K-Pop side, UMP China will now help RYCE Publishing with the promotion of Korean hits for acts like Super Junior, EXO-CBX, GOT7, TWICE, and more in the Greater China region.
RYCE Publishing, is a division of RYCE Entertainment, an entertainment giant based in Beijing. With music publishing, agency, marketing, investing, and brand operating divisions, it specializes in managing music catalog and media resources.
UMP China’s partnership with the local company highlights Universal’s continued efforts to push deeper into China’s music business. Last year, UMP China expanded from its original Beijing headquarters to add a second office and studio space in Shanghai and has also focused on creating songwriting camps to foster the careers of local signees, including one all-female camp with She Is The Music.
China’s music market has grown in size by more than 30% in each of the past two years, according to IFPI, which said total revenues for 2020 were $791.9 million (the total for 2021 was not available). Meanwhile, royalties paid to songwriters and composers rebounded with 8.48 billion euros ($8.49 million) in 2021, a rise of 7.2% from 2020 — but still down 52% from the pre-pandemic levels of 2019, according to CISAC, the global rights management organization.
All three major labels continue to explore opportunities in China, even with the uncertainties surrounding government regulation of music and tech companies like Tencent Music Entertainment (which publishes Billboard China), which have been forced to end exclusive arrangements with the majors for their repertoire in the past two years. Those exclusive deals followed years in which China’s music industry was known for rampant piracy that made it tough to make money in the country.
“We hope that everyone respects music copyright,” says Yunyun Wang, managing director of RYCE Publishing. “If we could all do that, every artist in China music market will be motivated to work harder to make decent products, creating a healthy environment for us all.”
Daryl K, founder and CEO of RYCE Entertainment, says in a statement: “We protect and promote our writers with a vengeance and we’re excited to continue doing so with UMP China. We’re looking forward to the fruits of our partnership.”
Andrew Jenkins, president of Asia Pacific, UMPG, says that RYCE Publishing’s “remarkable creative drive has led to a huge number of hits and great commercial success for RYCE Publishing so far. I look forward to an even more successful future as both companies work together to further build on the global impact of RYCE Publishing in the coming years through this new agreement.”
For evidence that California’s Prop 28 — which seeks to provide nearly $1 billion in new funding annually for arts and music education in all K-12 public schools — has become a pet cause among music luminaries, one need look no further than the industry’s most famous structure. The Capitol Tower in Hollywood, whose cylindrical shape has long drawn comparisons to a stack of records, currently has a “Yes on 28” flag flying prominently from its roof.
Universal Music Group, which owns the famed building and has given $25,000 to support the measure, isn’t the only high-profile supporter of Prop 28, which voters will weigh in on Nov. 8. Authored by former Los Angeles Unified School District superintendent Austin Beutner, the proposition has been endorsed by more than 350 individuals and organizations, including companies like Fender Music and CAA; legendary executives such as Quincy Jones and Irving Azoff; and A-list artists like Dr. Dre, will.i.am, Lil Baby and Katy Perry. In mid-October, Christina Aguilera and her fiancé Matthew Rutler (investor and founding executive of MasterClass) hosted an event at their home in support of the proposition that featured performances by musicians Lady Bri, One Republic’s Tim Myers and Aloe Blacc.
So why has the music industry, which Prop 28 does not directly support, come out to endorse it so heavily? As advocates put it, the money invested in students now will benefit the music business down the road.
“The most important beneficiaries are the kids themselves,” says Andy Mooney, CEO of Fender Music, which provided $100,000 in seed money for the proposition and donated another $1 million to collect signatures and market the proposition. But, he adds, “the benefit for companies like ourselves, or anybody who’s in the music and arts business in California, is the long-term investment that may yield dividends beyond my tenure.”
Currently, according to proposition authors, “barely one in five public schools has a full time arts or music teacher” and “arts and music programs have often been the first to get cut” at California public schools – a problem Prop 28 is designed to fix. The money allocated by the measure – which must be spent on arts and music education such as teachers, supplies, arts partnerships, training and materials – would include accountability and require schools to publish annual reports on how they spend funds, including specific programs and how students benefited.
Important in garnering support from voters is the fact that Prop 28 “is not taking any money away from existing school funding,” says Beutner, who retired as superintendent last year and has spent his newfound free time focusing on the measure. The money provided by Prop 28 would be 1% of the California school funding budget, which is currently 40% of the state’s general fund. But instead of siphoning that 1% from other school needs, it increases the school budget from 40% to 40.4% of the state’s general fund. Based on the current year, that would amount to $950 million – 1% of the state’s $95 billion school budget.
Also important to many supporters is the fact that Prop 28 offers a route to diversify the creative sector. While all 6 million public school students in California would have access to the new funding proposed by the measure – which will come from the state’s general fund without raising taxes – 30% would go to schools based on their share of low-income students enrolled statewide (with the remaining 70% going to schools based on their share of statewide enrollment).
UMG’s chief people and inclusion officer and co-chair of the Taskforce for Meaningful Change Eric Hutcherson, who says this is the first proposition UMG has officially gotten behind as a company, notes that by exposing more kids to music education, the new funding will inevitably inspire future leaders in a variety of music industry roles that go beyond just being an artist or producer. “What you find is that these industries have all of those opportunities available,” he says.
Entertainment veteran Tim Sexton, who executive produced the Emmy-winning Live 8 benefit concert and has been working with Beutner to drum up artist support, adds that for media companies “worried about diversity, equity and inclusion, you don’t need to look further than our public schools to see that’s the population looks like that’s what the workforce ought to look like.”
The proposition would ideally be investing nearly $1 billion into California’s creative economy as well. According to Bloomberg, the state of California is on the verge of becoming the fourth largest economy in the world by overtaking Germany and, according to a study conducted by Otis College of Art and Design, nearly a quarter of the state’s economy comes from the entertainment sector.
“Companies like ours, that moved to California to be at the nexus of entertainment and technology, rely on a skilled workforce to fill the high-quality jobs we create here,” said Universal Music Group chairman and CEO Sir Lucian Grainge in release in April. “If enacted, this initiative will ensure a future job-ready workforce and secure California’s position as the global epicenter of music and the arts.”
Informal opposition to the measure argues that the increased usage of general funds should be used to address other issues like homelessness or paying down state debt, but the Official Voter Information Guide for California residents – which provides arguments in favor and against each proposition – states that “no argument against Proposition 28 was submitted.”
“I’m not a ballot initiative expert, but I have asked some and no one can recall the last time [an argument against wasn’t submitted,” says Beutner. “It’s truly a unicorn.”
The impact of Prop 28 could be felt far wider than California. If the initiative is successful this election cycle, supporters say they would be interested in taking tailored versions of Prop 28 to other states.
“The money that we spent in support of this initiative is one of the best investments the company has ever made for the future,” says Mooney. “We can replicate that investment in other states where music and art is also really important. Think of Tennessee or Florida with Miami, which is the heart of Latin music in the U.S. these days. There’s a lot of opportunities.”
A new New York City law requiring employers to disclose salary ranges in job postings has officially gone into effect this week, with music companies hiring in the city mandated to comply. On the first day of the law, a picture of at least one of the major music companies’ salary ranges has come into focus.
The day the law went into effect, several companies were criticized for overly-broad salary ranges that effectively subverted the point of the regulation, which was designed to give prospective employees insight into what they could be expected to earn at different companies in the city and address salary discrepancies between men and women and for people of color. The Wall Street Journal, for instance, posted reporting and producing jobs with ranges between $40,000 to $160,000; tech jobs at Amazon were anywhere from $88,400 to $185,000; while Citigroup initially posted some job openings as between $0 and $2 million, before revising them to a range of $59,340 to $149,320.
Among the three major labels, only Warner Music Group (WMG) seems to have complied with the law as of yet. The company has 11 listed job openings on its website across its three locations in New York City, though 10 of them relate to its Spring 2023 WMG Emerging Talent Associate Program, a part-time paid internship program that lists a range from $15 to $30 an hour for between 20 and 25 hours per week. Its final opening, for a digital marketing and content creation manager, is listed at between $58,500 and $70,000 annually.
Sony, meanwhile, has more than 40 openings in its New York locations across all its operations, though not all positions appear to have salary ranges listed; most appear to ask the applicants for a desired salary target, as part of a standard-issue form through LinkedIn. (The law allows companies 30 days to comply after a complaint is registered before facing penalties. A rep for Sony tells Billboard the company will be complying.) It does list starting salaries for its fellowship program, a 24-month position with a starting salary of $70,000 per year.
Universal Music Group has some 16 openings across various divisions in New York, many at its merchandising division Bravado. Though each posting promises a “competitive compensation package including salary, benefits and generous 401k savings plan with company matching,” none lists a salary range. (A rep for UMG did not respond to a request for comment.)
In the independent sector, several New York-based companies have also listed ranges. Concord, for example, has three non-internship positions available in New York: a publishing paralegal ($70K-$80K); a publishing sync manager ($55K-$65K); and a director of business and legal affairs for publishing ($100K-$125K). BMG has two open New York-based positions: an investments/M&A manager ($80K-$90K) and a senior marketing manager ($70K-$80K). Roc Nation has two music-related New York-based openings: one for a senior director of event sponsorships ($135K-$180K) and one for a senior director of music partnerships ($135K-$170K). A senior coordinator position overseeing royalties and income tracking at Kobalt pays between $45,600 and $57,000 in New York City.
Businesses with three or fewer employees and temp agencies are not subject to the new requirement.
Universal Music Group on Thursday reported its fifth-straight quarter of revenue gains since its public spinoff from Vivendi last year, increasing revenue 13.3% as its many, varied business divisions helped offset slow-downs in areas sensitive to global economic uncertainty.
On a call with analysts, UMG chairman and chief executive Lucian Grainge attributed the company’s strong quarter — coming amid a downturn in the advertising market — to its diversification strategy. Over Grainge’s 17-years at the helm, UMG has built dominant positions in multiple geographic markets and across nearly every major segment in music, making it less susceptible to “the inevitable ebbs and flows in revenue of any particular business,” he said.
That helped UMG offset a slowdown in ad-supported streaming revenues, which have been hampered by companies spending less amid fears of a recession. Ad-supported streaming revenues for the quarter grew by 5.2% in constant currency compared to the third quarter last year. That’s a slowdown from the second quarter this year when ad-supported revenues grew by 15.6% in constant currency compared to second quarter 2021.
“We noted we would not be immune to a downturn in the advertising market, which is indeed what happened,” Grainge said on the call discussing the company’s earnings for the third quarter, which ended Sept. 30. “The slower growth in the third quarter in ad-supported streaming revenue was offset by growth in so many other areas of our business. From subscription to licensing, live touring to merchandising, to continued growth throughout music publishing.”
Subscription revenues grew by 8.7% from a year ago in constant currency — a measure UMG uses to strip out fluctuations in foreign exchange markets. UMG chief financial officer Boyd Muir said subscriber growth among the digital streaming providers remains healthy and “we have not seen any signs of economic related slowdowns.”
Licensing and other revenue grew by 30.2% in constant currency due to the recovery of live touring in certain European, Latin American and Asian markets where UMG is involved in that business. Merchandising and other revenue grew by over 100% in constant currency compared to the year ago quarter, also helped by growth in touring.
The company saw an $80 million increase in touring revenues in the quarter compared to last year from top selling acts like BTS, BLACKPINK, Ado, INI and Morgan Wallen, executives said.
While a significant contributor to the company’s quarter, touring earns UMG a lower profit margin compared to its other businesses, Muir said.
“As I’ve mentioned before, that’s a very low-margin business — let’s call it, the 8% to 10% kind of area,” Muir said. “Nevertheless, it’s an incredibly important part of our business. And it means that we can actually connect the fan with the artists. So it’s of increasing importance to us as we address the requirements of the super fans.”
Looking to the next quarter, the executives said to expect the company’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) margin, a closely watched metric of profitability, to be flat for the year at around 20.8%.
The company’s stock price closed down 5.61% on Friday (Oct. 28).
Universal Music Group said revenues rose 13.3% to 2.66 billion euros in the third quarter at constant currency, as sales from BTS, BLACKPINK and Ado helped the world’s largest record label report growth across all segments on Thursday. Without considering changes in foreign currency exchange rates, revenues were up 23.7%.
The first of the major labels to report earnings this season, UMG said recorded music revenue grew 10.1%, music publishing revenues grew 6.9% and merchandise and other revenues grew 101.1% in the third quarter ending compared to a year ago based on constant currency conversion.
“Through our innovation, global reach, and unique understanding of the evolution of the market, we are continually improving the monetization of music and music-related content, generating high-quality revenue and recurring income from more sources than ever before,” UMG Chairman and Chief Executive Sir Lucian Grainge said in a statement.
UMG’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 9.1% compared to the year ago quarter, driven by the strong increase in revenue.
Included in the revenue growth for the quarter was a 71 million euro benefit from the settlement of a copyright infringement lawsuit with an internet service provider, the company said. UMG also said the quarter included a 21 million euro hit in its music publishing division from a change in accounting policy. These factors also provided a 52 million benefit and a 7 million euro drag respectfully to the company’s EBITDA and Adjusted EBITDA for the third quarter.
Q3 Results:
Company-wide revenues rose 13.3% to $2.664 million in constant currency for the third quarter ending Sept. 30 from a year ago.Recorded Music revenues rose 10.1% to €2,060 million in constant currency.Subscription and streaming revenue grew 7.7% in constant currency, with subscription revenue up 8.7% in constant currency.Ad-supported streaming revenue grew 5.2% in constant currency.Physical revenue declined 9.6% in constant currency, which the company attributed to a weaker release schedule compared to the prior year.Downloads and other digital revenue were up 55.7% in constant currency in large part due to the settlement of the copyright infringement lawsuit.License and other revenue rose 30.2% in constant currency helped by strong touring revenues.Merchandising and other revenue of 189 million euros was up 101.1% in constant currency due to a rebound in touring-related merchandise revenue.