Business News CMU Digest

CMU Digest 29.01.23: Spotify, Live Nation, merch commissions, Rick Astley, Warner Music

By | Published on Sunday 29 January 2023

The key stories from the last week in the music business…

Spotify announced a 6% reduction of its global workforce. It followed many other big tech companies in announcing a significant down-sizing. In a memo to staff, Spotify CEO Daniel Ek wrote: “In 2022, the growth of Spotify’s operating expenses outpaced our revenue growth by two times. That would have been unsustainable long-term in any climate, but with a challenging macro environment, it would be even more difficult to close the gap”. It was also announced that Chief Content & Advertising Business Officer Dawn Ostroff – who led Spotify’s substantial growth in the podcasting business – is leaving the company. The teams she has overseen in that role will now fall under the remit of Alex Norström, who becomes the firm’s Chief Business Officer. He, alongside Gustav Söderström, who becomes Chief Product Officer, will now run Spotify day-to-day alongside Ek, who added in this memo: “It’s my belief that because of these tough decisions, we will be better positioned for the future. We have ambitious goals and nothing has changed in our commitment to achieving them”. [READ MORE]

The market dominance of Live Nation and its Ticketmaster subsidiary in the American live sector was discussed in US Congress. The Congressional hearing on the live and ticketing sectors was prompted by the various issues that occurred last year when Taylor Swift tickets went on pre-sale via Ticketmaster’s Verified Fans system. Live Nation CFO Joe Berchtold told the hearing that the problems were caused by touts illegally trying to access tickets from the pre-sale by using ticketing bots. Therefore, he said, Congress should focus on new regulation of ticket touting in the US. However, the other people speaking at the hearing focused on Live Nation’s dominance, suggesting that that dominance stops competitors and start-ups from innovating in the live and ticketing sectors in a way that could address the issues faced by both fans and artists. Berchtold countered that the dominance of Live Nation/Ticketmaster is often exaggerated, that it competes with significant rivals in both tour promotion and ticketing, and that Ticketmaster doesn’t set the often unpopular ticketing fees. [READ MORE]

US-based Ineffable Music Group announced it was dropping merch commissions at the venues it operates. The decision followed the testimony of musician Clyde Lawrence at the Congressional hearing on the live and ticketing sectors. Lawrence ran through various challenges artists face when touring, including that some venues – especially bigger venues – taking a cut of merchandise sales. That practice has always been a grievance in the artist community, but has become a bigger deal since the pandemic because of the surging costs associated with touring. That makes merch sales all the more important for artists to ensure shows are commercially viable. In the UK, the Featured Artists Coalition launched its 100% Venues campaign a year ago calling on venues to stop taking a cut of merch income. That campaign extended into North America late last year. FAC and its North American allies are hoping that Lawrence raising the issue in Congress last week – and Ineffable Live’s immediate response – will encourage other American venues to likewise drop merch commissions. [READ MORE]

Rick Astley sued Yung Gravy claiming that the rapper infringed his publicity rights on last year’s ‘Betty (Get Money)’. That track borrows heavily from Astley’s 1987 hit and subsequent meme classic ‘Never Gonna Give You Up’. Yung Gravy’s people properly licensed the interpolation on the song side, doing a deal with the writers and publishers of ‘Never Gonna Give You Up’, that being Stock, Aiken and Waterman. However, they didn’t license the original recording of the 1987 track, instead recreating it, in part by hiring singer Popnick to do his best impression of Astley on the vocals. All of which means that, from a copyright perspective, ‘Betty (Get Money)’ was legit. However, Astley’s lawsuit claims, by getting Popnick to impersonate his distinct vocals – so that many people assumed it was Astley signing on the Yung Gravy track – his publicity rights under Californian law were infringed. Given the popularity of interpolations in pop music at the moment – and the importance of publicity rights as the metaverse and music-making AI evolves – this will be a very interesting case if it gets to court. [READ MORE]

Warner Music said that 4500 music-makers have benefited from its commitment a year ago to pay through royalties to unrecouped heritage artists. Under most record deals, artists usually have to pay back any advances they receive – and possibly other upfront costs – out of their share of future income generated by their recordings. With streaming boosting the value of catalogue, many artists have argued that unrecouped balances should be written off after a period of time, so unrecouped heritage artists can benefit from that boost too. Indies like Beggars Group were the first to start doing that, with Sony Music being the first major. Warner Music followed last year via a statement in its Environment Social And Governance report. It provided an update on that move last week in the 2023 edition of said report. Warner, like Sony, committed to pay through royalties to unrecouped artists who signed their record deals before 2000. However, Sony has since extended its commitment to any deal signed more than 20 years ago, so a new batch of artists benefit every year. Warner did not extend its commitment in that way in the new ESG report. [READ MORE]

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