Welcome to Music Business Worldwide’s weekly round-up – where we make sure you caught the five biggest stories to hit our headlines over the past seven days. MBW’s round-up is supported by Centtrip, which helps over 500 of the world’s best-selling artists maximize their income and reduce their touring costs.
This week saw Warner Music Group report record-high revenues for the final calendar quarter of 2023. The company reported USD $1.748 billion in global revenues in calendar Q4, up 10.6% YoY on a normalized, constant currency basis.
That news came in the same 24 hours that WMG announced it is to cut around 10% of its workforce – affecting 600 employees – by the end of September this year.
We also found out this week that Tom March has been appointed Chairman and CEO of Capitol Music Group, shortly after the announcement that Michelle Jubelirer had left the position.
Plus, private equity firm New Mountain Capital completed its acquisition of performing rights org BMI, having gained shareholder and regulatory approval.
Meanwhile, after last week’s earth-shaking news that Universal Music Group‘s recordings are disappearing from TikTok due to the two companies being unable to reach a licensing agreement, it emerged that several entities in the music industry are backing UMG in the ongoing spat.
The likes of Primary Wave, Downtown, Hipgnosis, and the National Music Publishers Association have all publicly voiced their support for UMG’s refusal to re-license TikTok for the terms on offer. UMG has also earned support from A2IM, the US trade body that represents over 600 independent recorded music companies.
Elsewhere this week, Spotify announced that it paid out USD $9 billion to music rightsholders last year – and has paid out over $48 billion since the platform launched in 2008.
Here’s what happened this week…
1) As Warner Music Group posts its biggest ever quarter… WMG boss Robert Kyncl says he’s ‘confident’ that Universal and TikTok will resolve their spat
When it comes to the dispute between Universal Music Group and TikTok over royalty payments – the talk of the music industry over the past few weeks – Warner Music Group CEO Robert Kyncl is offering some cautionary advice: “Whatever you read in the press, don’t believe it.”
Kyncl made the comment on WMG’s earnings call on Thursday (February 8), in which analysts sometimes seemed as interested in talking about the UMG-TikTok situation as they were in WMG’s (rather impressive) fiscal Q1 numbers.
Kyncl noted that, in his prior role as Chief Business Officer at YouTube, he had himself experienced these types of rightsholder-vs.-platform conflicts, “so I know exactly what Lucian and Shou are feeling,” he said, referring to UMG Chairman and CEO Sir Lucian Grainge and TikTok CEO Shou Zi Chew.
Universal’s recorded music catalog (about 3 million tracks) and its publishing catalog (nearly 4 million songs) have started to disappear from TikTok, after TikTok’s licensing agreement with UMG expired on January 31, with no new agreement in place…
2) SPOTIFY PAID OUT $9 BILLION TO MUSIC RIGHTSHOLDERS IN 2023 – EQUIVALENT TO 63% OF ITS ANNUAL REVENUES
“Right now the CEO of TikTok is probably sitting at home watching this show, eating an ice-cream, crying, seeing all of his exes in one room. And you know what, TikTok? Shame on you. Shame on you for ripping off all of these artists. How dare you do that? [Pause] That’s Spotify’s job.”
Daniel Ek probably enjoyed Trevor Noah’s TikTok-focused opening monologue at The Grammys on Sunday more than most… until Spotify became the punchline.
In what we’re sure is a coincidental announcement, Spotify confirmed on Thursday (February 8) the amount of money it paid out to music rightsholders in 2023 – and it’s a whopper.
The company says it delivered USD $9 billion last year to recipients across record companies and music publishers, plus independent distributors, performance rights organizations, and collecting societies…
3) Why indie record labels are backing Universal Music Group’s action on TikTok
Last week, as if you needed reminding, Universal Music Group announced that it had not reached a deal with TikTok to re-license its catalog on the video service. As a result, UMG’s vast portfolio of music is now coming down from TikTok.
Over a third of the current Top 50 TikTok tracks in the US have – as a result of the UMG situation – already become unavailable in TikTok’s public music library.
In recent days, the likes of Primary Wave, Downtown, Hipgnosis, and the National Music Publishers Association have all publicly backed UMG’s refusal to re-license TikTok for the terms on offer – terms that Universal says do not represent fair value for its music catalog.
Now, UMG has earned another supporter in this fight: A2IM, the US trade body that represents over 600 independent recorded music companies.
Here, A2IM’s President & CEO, Dr. Richard James Burgess MBE, explains why A2IM is backing UMG’s action in its standoff with TikTok, and why he believes that “in an industry that systemically underpays artists and labels, TikTok’s payment methodology is uniquely disadvantageous“..
4) Tom March appointed Chairman & CEO of Capitol Music Group, Lillia Parsa named Co-President
Tom March has been appointed Chairman & CEO of Capitol Music Group (CMG).
The news was announced on Wednesday (February 7) by Interscope Geffen A&M Records (IGA) Chairman & CEO John Janick, to whom March reports.
In his new position, March is responsible for the overall management and direction of the company, which encompasses Capitol Records, Blue Note Records, Motown Records, Astralwerks, Harvest Records and Capitol Christian Music Group.
March’s appointment to the role of Chairman & CEO of CMG follows the prior day’s news that Michelle Jubelirer had stepped down from her role as Chair & CEO of the Universal Music Group-owned company.
Jubelirer served as Chair & CEO of Capitol Music Group since 2021, having previously served as President, COO, and EVP at CMG…
5) New Mountain Capital-led group closes acquisition of BMI
It’s official: New Mountain Capital has completed its acquisition of US performing rights organization Broadcast Music, Inc. (BMI).
NMC, which has over USD $45 billion in assets under management, confirmed in November that it will “lead a shareholder group” to acquire a majority stake in BMI.
The NMC transaction was subject to approval by BMI shareholders and customary regulatory approvals, and was expected to close by the end of this quarter (Q1 2024).
According to an update issued on Thursday (February 8), the deal has now received the necessary shareholder and regulatory approvals required for closing.