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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.
Universal Music Group, Hipgnosis Songs Fund and other music stocks got a much-needed boost on Tuesday (Oct. 25) following news of Apple Music’s price hike, as investors bet it would trigger a wave of streaming subscription cost increases.
Universal Music Group’s stock closed 11.6% higher, Hipgnosis Songs Fund Ltd ended up 7.8% and Korean music companies SM Entertainment and HYBE finished the trading day 4.8% and 4.4% higher, respectfully, on Tuesday. On Monday, Apple announced that it was raising the standard U.S. and U.K. individual plan price to $10.99 from $9.99.
This 10% price hike — Apple’s first — comes amid high inflation and a darkening economic environment in many global markets. If Apple can raise prices at a time like this, that is a sign the music industry can charge more without turning off consumers, Wall Street analysts said.
“We see this as a further signal of the stickiness of music streaming subscriptions even in a weaker macro environment and believe the major markets will be able to absorb higher prices without leading to meaningfully higher churn,” Lisa Yang, Goldman Sachs’s head of European media & internet technology equity research, wrote in a note to investors on Tuesday.
“We believe that other major DSPs will likely follow suit with similar price increases in the near future, implying further potential upside to our music industry forecasts.”
Competitors Spotify and Amazon Music have already raised prices in some markets. Amazon Music raised the price of its unlimited individual plan for Prime members to $8.99 from $7.99 earlier this year.
Spotify, which will report earnings later Tuesday, raised the cost of its individual plans in the Nordics in 2021, although its standard plan for U.S. subscribers remains at $9.99.
“Despite positive management commentary around churn (with regards to recent price increases on certain plans/regions) as well as management’s views on pricing power over the long term, Spotify has highlighted the broader macro environment as a key consideration in terms of implementing price increases in the near term,” Yang wrote.
Apple’s price increase could also have positive impacts on the majors because companies like UMG and Warner Music Group typically get 65% of music-related revenues from streaming companies with a “high incremental margin,” Goldman estimates.
Music stocks have suffered in 2022 as the major U.S. market indices have fallen around 20% so far this year.
UMG’s share price of 21.10 EUR ($21.01 US) is down nearly 14% year to date, Hipngosis Songs Fund Ltd traded at 91.06 penny sterling ($1.03 US) and is down 28% so far this year. Meanwhile, Warner Music Group’s stock traded at $27.16 US, off almost 37% year to date.
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.
Music companies face a multitude of pressures as 2022 comes to an end: crippling inflation, a tight labor market, a chaotic environment for breaking new artists, interest rates that are dampening catalog valuations, and high costs of touring amidst a crush of artists on the road, among other challenges. The upcoming slate of corporate earnings provides an opportunity to hear about these opportunities and challenges from leaders of publicly traded music companies who rarely go on the record.
Spotify reports third-quarter earnings after the close of trading on Tuesday (Oct. 25). Universal Music Group and Deezer follow on Thursday (Oct. 27) after the close of trading in the Netherlands and France, respectively. Cumulus Media reports Friday morning (Oct. 28). SiriusXM reports earnings on the morning of Nov. 1. Tencent Music Entertainment announces earnings on Nov. 15. The other 14 publicly traded music companies in the Billboard Global Music Index have not yet announced when they will report.
Look for executives to comment about subscription prices and digital platforms’ ability — or reservation — to raise subscription prices. It’s been a recurring theme from digital and label executives throughout the years, in part because it’s been over a decade since streamers last did it in any meaningful way. “Music is a good value” seems like a popular position when streaming video on-demand services are engaged in cut-throat competition and undercutting one another’s prices to attract new customers and prevent current customers from departing. But the industry has arguably moved past that stage, with many now interested in other means to grow revenue. Still, expect music streaming companies to be reticent to hike prices while inflation is running at a 40-year high.
On Tuesday. Spotify could offer a bevy of information and insights about its progress toward its drive to improve margins, as laid out in its June 9 investor presentation: goals for 35% gross margins in music and 30-35% gross margins in podcasting within the next three to five years. Music margins will be helped by improvements in ad monetization in developing markets as well as price increases in mature markets.
More pressing will be Spotify’s opinions on macroeconomic forces that could affect its growth. The company’s advertising business was roiled by an advertising slowdown during the first year of the pandemic, and now many experts are predicting a recession in 2023 that could again dampen online advertising. On Alphabet’s July 26 earnings call, the company repeatedly used the word “uncertain” when talking about the economy, while reporting that YouTube ad sales grew at their slowest pace since the company started disclosing metrics in 2018. Meta’s second-quarter revenue, meanwhile, was 1% lower than a year earlier — its first decline in a decade. If the same market conditions affect Spotify, how will it react? Even though advertising accounted for only 12.6% of the company’s total revenues in the second quarter, it’s critical to the podcasting business that’s expected to deliver margin relief in the coming years.
If social media company Snap’s third-quarter results Thursday are any indication, a weak advertising market will be a recurring theme throughout October and November earnings reports. In a letter to shareholders, Snap warned its “advertising partners across many industries are decreasing their marketing budgets, especially in the face of operating environment headwinds, inflation-driven cost pressures and rising costs of capital.” At the same time, Snap announced a stock repurchase program of up to $500 million “to protect shareholder value from the impact of dilution.” Investors reacted quickly and decisively by sending Snap shares down as far as 32% to $7.33 on Friday — 87.9% below its 52-week high of $60.78.
Also, expect questions about Spotify’s long-awaited HiFi subscription tier. Last week, reports surfaced that Spotify could be prepping a “platinum” subscription plan that bundles high-fidelity audio with other products. The reports were based on an online survey that sought consumers’ opinions on various product bundles, not hard evidence of an upcoming product launch. But the fact that Spotify would sweeten the offer with reduced advertising in podcasts and other items could suggest it realized demand for a standalone HiFi tier is weaker than hoped — especially when Apple Music and Amazon Music are offering it at no additional cost. What CEO Daniel Ek will say is another matter, however, as Spotify is unlikely to discuss details about a product before an official announcement.
High-fidelity audio is pertinent to Spotify investors because it could help improve gross margins. The June 16 acquisition of audiobook distributor Findaway led to the Sept. 20 launch of an audiobook download store. As both retailer and distributor, Spotify can get 60% margin in audiobook purchases, more than double its current gross margin. Of course, the more important question is how many margin dollars audiobooks will ultimately deliver. With only a few weeks of audiobook sales under its belt, and no audiobook sales in the third quarter earnings, Spotify will have few tangible results for a progress report.
Universal Music Group reports earnings on Thursday (Oct. 27) after the end of the trading day in Amsterdam, where UMG shares are listed. UMG’s share of the U.S. recorded music market dropped slightly from 38.3% in the first half of 2022 to 37.1% at the end of the third quarter, which was lower than its 38.4% share in the prior-year period. UMG’s biggest competitor, Sony Music Entertainment, meanwhile, saw its share boosted from 26.3% to 26.7% thanks to the runaway success of Bad Bunny‘s Un Verano Sin Ti, the biggest album of 2022. UMG biggest releases were Kendrick Lamar’s Mr. Morale and the Big Steppers and The Weeknd’s Dawn FM (Republic). A handful of albums released in 2021 were also in the top 10 in total consumption: Morgan Wallen‘s Dangerous (Jan. 8, 2021), The Weeknd’s The Highlights (Feb. 5, 2021) Olivia Rodrigo’s Sour (May 21, 2021) and Drake‘s Certified Lover Boy (Sept. 21, 2021).
During UMG’s last earnings call, on July 27, CEO Lucian Grainge recounted a string of recent releases (Drake’s Honestly, Nevermind got off to a great start), partnerships (HYBE’s first release through its deal with UMG’s Ingrooves/Geffen), how it planned to get a return on investment on some recent acquisitions (Frank Zappa and Neil Diamond) and how the new Mercury Studios (which produced documentary films on The Rolling Stones and Shania Twain) had helped lift catalog streams.
More important to investors and industry professionals are concrete examples of UMG moving its business forward. Last quarter, Grainge announced UMG’s new licensing deal with Meta and revealed the company had become one of its top 10 revenue-generating digital platforms. He also announced the creation of the New Music Media Network, a service that connects brands and partners with proprietary data and exclusive media from UMG. Given the vital role advertising plays in today’s streaming-led music business and the platforms of tomorrow, a progress update on the New Music Media Network would be helpful.
Less important are comments made about Web3, NFTs and metaverse initiatives. Despite initial enthusiasm around NFTs, these businesses are a work-in-progress and represent an immaterial amount of revenue to a major music company. Conversation about these businesses merely shows that a company is looking ahead and taking the proper steps to capitalize — somehow — on them in the future. That requires hiring the right people, making investments, striking partnerships and trying new things to learn and gain experience. But as of now, Web3, NFTs and the metaverse are solidly in the experiment phase.
Universal Music Group divisions Decca Records, Verve Label Group and Globe Soundtrack & Score joined forces to launch Mercury Classics Soundtrack & Score, a new boutique record label “dedicated to the art of soundtrack & score” and designed to “support today’s leading score composers and artists as they undertake major audio-visual projects globally,” according to a press release. Lana Thompson has been appointed as label manager. The label’s first major releases, slated for this year, include scores for Orion Pictures films Till, composed by Abel Korzeniowski, and Women Talking, composed by Hildur Guðnadóttir. Releases set for 2023 include the soundtrack to MGM’s A Good Person.
Republic Records promoted Tim Hrycyshyn to senior vp of digital strategy; he was previously vp of digital marketing. He is based in New York.
Epidemic Sound named Rikard Herlitz chief technology officer and Julian Persaud chief commercial officer. Both will start in January. Herlitz, who joins from Google, where he served as engineering director for Google Meet, will provide tech leadership and strategic direction across all Epidemic Sound markets. Persaud, who joins from European travel platform Omio, where he was chief commercial officer, will lead the company’s commercial strategy.
°1824, Universal Music Group’s youth-driven creative solutions division, named Possum Hill vp of content. Hill will oversee °1824’s content creation efforts while also working to scale UMG’s livestreaming capabilities. Hill, who joins °1824 from Capitol Music Group, where she was senior director of video production, will be based in Santa Monica and report to °1824 senior vp and head Todd Goodwin.
The College of Music and Media at Loyola University New Orleans — recently named a top music business school by Billboard — appointed music supervisor, music executive and independent film and TV producer and director Jonathan McHugh as its new Hilton-Baldridge eminent scholar and chair. McHugh will enjoy an endowed professorship, steering the university’s music industry studies program. His first initiative at Loyola is the launch of a “Composing for Video Games and Visual Media” major. “Since our student population is 55% diverse and the studios are having trouble filling the diverse hiring quotas and we have so much amazing talent, it makes perfect sense to do it next year,” says McHugh. “I am excited about helping to build next generation of entertainment and music stars at Loyola College of Music and get connected into internships and jobs in the entertainment business.” McHugh will continue in his various other roles outside the school. He recently directed two documentary films — Long Live Rock…Celebrate the Chaos and Cosplay Universe — and is music supervising season two of the animated series Freak Brothers (Lionsgate/Fox/Tubi). He is a member of the Television Academy and the Producers Guild documentary jury.
A2IM announced its 2022-23 executive committee, including Victor Zaraya (Concord Records) as chair, Louis Posen (Hopeless Records) as vice chair, Mariah Czap (Yep Roc Music Group) as treasurer and Heather Johnson (Ninety9Lives/Fixt) as secretary. The organization additionally announced four new board members including Mary Jurey (chief business officer at Blue Elan), Tony Kiewel (president at Sub Pop), Wilson Fuller (head of digital at Merge Records) and Dee Diaz (vp of digital strategy at Reach Records), who will join returning board members Marie Clausen (head of North America & global streaming at Ninja Tune), Steven Hill (director of North America & global projects at Warp Records) and Tony Alexander (president & managing director at Made In Memphis Entertainment). The new advisory board, meanwhile, consists of Talya Elitzer (co-founder of GodMode), Gina Miller (senior vp & general manager at MNRK), Jason Peterson (chairman & CEO at GoDigital Media Group) and Glen Barros (CEO at Exceleration Music).
Create Music Group named Brian Glover to the newly-created role of senior director of streaming. He will oversee streaming strategy for the hip-hop, R&B and pop artists that Create distributes. Based in Los Angeles, Glover arrives at the company from indie label Cinematic Music Group, where he served as director of commerce and artist marketing.
Sophia Sansone and Jarrod Holley were promoted to managing partners at Chris Kappy‘s Make Wake Artists. Sansone manages Luke Combs and his wife, Nicole Combs. Holley leads all A&R responsibilities for the company and manages Drew Parker, Jackie Lee, Cooper Alan and Colby Acuff.
Hazel Savage, music intelligence vp at SoundCloud, joined B2B streaming technology solutions company Tuned Global as a non-executive board member.
Music licensing technology company Audoo hired Matthew Fackrell as senior vp and general manager, Asia Pacific and Eric Nguyen as senior vp and general manager, North America. Based in Sydney and Toronto, respectively, and reporting to Audoo founder and CEO Ryan Edwards, the two will provide industry expertise in their respective territories to execute the adoption and rollout of Audoo’s technology. Fackrell comes from APRA AMCOS and Nguyen joins from Richter Consulting. They can be reached at matthew@audoo.com and eric@audoo.com.
A16z crypto, a venture capital fund managed by Andreessen Horowitz that invests in crypto and Web3 startups, hired Richard Rosenblatt as a senior advisor. Rosenblatt serves as the chairman of ADIM and Autograph, two a16z crypto portfolio companies.
TikTok creators will soon be handed a fresh set of tools to soundtrack their videos and potentially make hit songs when a new in-app platform created by Simon Cowell’s Syco Entertainment company, in partnership with Universal Music Group and Samsung, launches on the platform later this month.
Called StemDrop, the initiative will provide TikTok’s more than 1 billion monthly users with access to music “stems” (the isolated components of a song, such as drum tracks or individual vocal parts) from an exclusive new track composed by hit songwriters Max Martin, Savan Kotecha and Ali Payami entitled “Red Lights,” which creators can then use to record and share their own versions.
The project was conceived by British music mogul Cowell and entertainment executive Tim Van Rongen in partnership with Universal Music imprint Republic Records and Samsung.
“With tens of thousands of songs uploaded every day this idea will give aspiring artists the opportunity to collaborate with some of the most successful songwriters in the world,” said Cowell in a statement announcing the project.
Sir Lucian Grainge, chairman and CEO of Universal Music Group, paid tribute to the “incredible team” Cowell has assembled to launch the platform, “harnessing the scale of TikTok, to leverage the artistry of creators worldwide.”
StemDrop debuts on Oct. 26, when 60 seconds of “Red Lights” will be exclusively released on TikTok, along with individual “stems” from the track which can be accessed through a dedicated micro-site or an in-app StemDrop Mixer, enabling users to play with production effects and create new versions of the song.
A spokesperson for StemDrop tells Billboard that Universal/Republic Records retain ownership of the master recording of “Red Lights”, the publishers own their share and with any future versions, the contribution of any new creator will be added to the royalty split.
It’s not clear if Martin — who co-wrote and produced multiple Billboard Hot 100 No. 1s, including Britney Spears’ “…Baby One More Time,” Taylor Swift’s “Shake It Off” and The Weeknd’s “Blinding Lights” – or “Red Lights” co-writers Kotecha and Payami will be involved with the platform beyond its first phase, which is officially titled “’StemDrop’ – A Song for the World.”
Following its launch, a StemDrop profile on TikTok will share new versions of the track from around the world, curated by the platform, Syco, Republic Records and Universal Music Group. TikTok music curator Ari Elkins, singer-songwriter Astrid S and digital creator Your Boy Moyo will act as global ambassadors for StemDrop and host daily content on the @StemDrop TikTok channel. Syco Entertainment and Republic Records will provide creative direction and drive the StemDrop talent discovery program going forward, according to a press release from TikTok.
“Every day, brilliant, undiscovered artists and songwriters turn to TikTok to share their music and find a global audience,” said Ole Obermann, Global Head of Music at TikTok. “StemDrop will put a spotlight on this talent and act as a springboard to help them build their careers.”