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.
Add another to the music industry’s copyright lawsuits against AI developers. The latest salvo comes from German collection agency GEMA, which has taken ChatGPT maker OpenAI to court over the tech company’s alleged use of copyrighted lyrics without authorization.
Meanwhile, billionaire Bill Ackman, a major shareholder in Universal Music Group, wants to see the Amsterdam-listed company shift to the New York Stock Exchange. UMG is pushing back against the idea.
Elsewhere, Blackstone-owned Hipgnosis Songs Fund completed a $1.47-billion bond offering backed by Hipgnosis’ 45,000-strong music portfolio. It’s the latest in a growing number of asset-backed transactions involving music rights.
Also, at Live Nation‘s investor day presentation this week, CEO MichaelRapino said that part of the job of Live Nation and Ticketmaster is “to take the punch for the artist” when controversies arise over pricey tickets or sold-out shows.
Finally, MBW pointed out this week that TikTok’s SoundOn service and the ‘establishment’ record industry are quietly battling it out on the global charts.
Here’s what happened this week…
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1) CHATGPT MAKER OPENAI, VALUED AT $157BN, SUED BY GEMA IN GERMANY OVER UNLICENSED USE OF SONG LYRICS
OpenAI, the $157 billion-valued US-based AI giant behind ChatGPT, has been sued by German collection society and licensing body GEMA.
GEMA alleges that OpenAI, via its ChatGPT chatbot, “reproduce[es] protected song lyrics by German authors without having acquired licenses or paid the authors in question”.
According to the organization, the lawsuit aims “to prove that OpenAI systematically uses GEMA’s repertoire to train its systems.”
GEMA represents the copyrights of around 95,000 members in Germany (composers, lyricists, music publishers) as well as over 2 million rightsholders worldwide…
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2) BILL ACKMAN WANTS TO MOVE UNIVERSAL MUSIC GROUP’S FINANCIAL HQ FROM AMSTERDAM TO THE US. UNIVERSAL HAS WARNED IT MIGHT NOT BE POSSIBLE.
Billionaire Bill Ackman is one the most powerful behind-the-scenes players in the modern financialized music rights industry.
According to Universal Music Group‘s 2023 annual report, Ackman, via Pershing Square Holdings, controls 10.25% of the company’s stock, making him UMG’s second-largest individual shareholder behind Vincent Bolloré.
Now, Ackman is asking for a structural uprooting of UMG’s domicile and public listing in Amsterdam; Ackman wants both moved to the US.
UMG says at least some of that request could be out of the question…
Blackstone’s Hipgnosis has successfully completed a $1.47 billion music rights asset-backed securities transaction (i.e. bond offering).
The ABS deal, referred to as Lyra 24-2, sees investment giant Blackstone raise $1.47 billion in debt financing backed by royalties from the 45,000-song Hipgnosis Songs Fund portfolio it acquired in July.
Blackstone acquired Hipgnosis Songs Fund‘s assets from HSF’s then-public shareholders in a transaction worth USD $1.584 billion.
According to an announcement on Monday (November 11) confirming the completion of the ABS deal, proceeds from the issuance will predominantly be used to “repay existing debt in full and support future acquisitions”…
4) TIKTOK’S SOUNDON IS SIGNING ARTISTS… AND BATTLING LABELS ON THE CHARTS.
TikTok recently scrapped re-licensing discussions with Merlin, blaming “operational challenges with Merlin in the past where music that is not quality controlled for copyright is delivered”.
Their deal officially expired last month (October 31), with many prominent indie distro companies, including UnitedMasters and Ditto Music, inking direct deals with ByteDance.
But there’s another, much quieter tussle taking place on global charts: TikTok’s SoundOn service vs. the ‘establishment’ record industry.
Just the other week, SoundOn A&R exec Josh Mateer highlighted various recent achievements from SoundOn artists. One of those achievements: a recent No.1 position on Spotify‘s Global Daily Viral chart with the Charlie Jeer single Her Eyes…
5) LIVE NATION’S JOB IS TO ‘TAKE THE PUNCH FOR THE ARTIST’… AND 3 OTHER THINGS WE LEARNED FROM MICHAEL RAPINO DURING THE COMPANY’S INVESTOR PRESENTATION
In the popular narrative today, Live Nation’s Ticketmaster is a villain, squeezing every last penny out of concertgoers who just want to see a show.
But that narrative is misleading, because – in the view of Live Nation CEO Michael Rapino – it misunderstands what Ticketmaster, and Live Nation more broadly, really are.
“We’re a B2B business,” Rapino said during the company’s 2024 investor presentation, held on Wednesday (November 13).
“We have two B2B [business-to-business] clients, venues for Ticketmaster, and artists for the concert division”…
MBW’s Weekly Round-Up is supported by Centtrip, which helps over 500 of the world’s best-selling artists maximise their income and reduce their touring costs.Music Business Worldwide
