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.
The big news this week was, of course, the end of the months-long licensing dispute between Universal Music Group (UMG) and TikTok, which saw UMG’s recorded and publishing catalogs disappear from the short video platform.
In a note to staff, UMG Chairman and CEO Sir Lucian Grainge said the new deal with TikTok will mean more money for artists and songwriters.
Yet disagreements between TikTok and the music industry are hardly over. This week the National Music Publishers Association (NMPA)’s deal with TikTok expired.
This means that music from NMPA-represented indie publishers is now uncleared for use on TikTok, unless those publishers have made their own unilateral deals with the platform.
Meanwhile, another fight between the music biz and a major platform is brewing, this one over Spotify‘s decision to classify its Premium subscriptions as music/audiobook “bundles,” meaning the service will be paying a lower mechanical royalty rate to songwriters and publishers in the US.
And K-pop giant HYBE is embroiled in a disagreement of its own, this one involving Min Hee-jin, the CEO of HYBE sub-label ADOR, who is alleged to have plotted to sever ADOR from its parent company.
Finally, the competition between Concord and Blackstone to acquire the portfolio of Hipgnosis Songs Fund took another turn this week, with Blackstone making a $1.57 billion bid.
Here’s what happened this week…
1) SIR LUCIAN GRAINGE CONFIRMS ‘GREATER COMPENSATION’ IS COMING FROM TIKTOK FOR UMG ARTISTS AND SONGWRITERS
Thursday’s big news: Universal Music Group and TikTok, by way of a joint announcement, have confirmed that they have struck a new licensing deal – three months after UMG pulled its recordings catalog from the service.
What does this new deal mean for UMG and its artists and songwriters? Standout headline: More money.
That fact was confirmed and expanded upon in an internal memo from UMG Chairman/CEO Sir Lucian Grainge, issued to Universal employees on May 2 and obtained by MBW.
Grainge writes in the memo: “Under the new agreement, artist and songwriter compensation will be greater than under our prior TikTok deal, and the total value UMG’s artists and songwriters garner from this partnership will be more closely aligned with other platforms in the social music category.”
News of the deal broke shortly before UMG released its Q1 2024 earnings, showing total revenues of EUR €2.594 billion (USD $2.816 billion), up 7.9% YoY at constant currency. EBITDA grew 95.2% YoY at constant currency to €490 million ($532 million)…
Credit: Isaac C.P. Wong/Shutterstock
2) THE NMPA’S TIKTOK DEAL HAS OFFICIALLY ENDED. WHAT DOES THAT MEAN FOR INDEPENDENT PUBLISHERS IN THE US?
The National Music Publishers’ Association (NMPA)‘s licensing deal with TikTok – representing the music publishing rights of multiple indie music publishers – officially expired on Tuesday (April 30).
The US trade body told its members last month that it wasn’t planning to extend the deal and that if they wanted to continue to license their music to TikTok beyond the April 30 deadline, they would need to “engage directly” with the platform.
NMPA President & CEO David Israelite confirmed to MBW this week that the NMPA is “not engaging in an extension of its deal”.
This means that, as of May 1, music controlled by indie publishers represented by the trade body who haven’t unilaterally agreed a new direct agreement with TikTok, will be unlicensed for use on the platform…
3) BLACKSTONE LAUNCHES $1.57 BILLION BID FOR HIPGNOSIS SONGS FUND; HSF BOARD RECOMMENDS OFFER TO SHAREHOLDERS
Blackstone is putting its money where its mouth is.
Last week, Concord – partly financed by Apollo Global Management – launched a USD $1.511 billion cash bid for the portfolio of Hipgnosis Songs Fund. That was the equivalent of USD $1.25 per share.
On Monday (April 29), Blackstone and HSF’s board jointly announced a new offer from Blackstone worth around $60 million more than Concord’s latest bid.
Blackstone has bid USD $1.572 billion – $1.30 per share – in cash for 100% of HSF’s share capital.
The Hipgnosis Songs Fund board says it is now recommending Blackstone’s offer to its shareholders, and withdrawing its previous recommendation of Concord’s $1.25-per-share offer…
Credit: UPI / Alamy Stock Photo
4) A SHAMAN, A MANAGEMENT COUP, A TEARFUL PRESS CONFERENCE AND A $770M MARKET CAP DIP: WHAT THE HECK IS GOING ON AT HYBE?
A week before K-pop giant HYBE reported disappointing earnings (revenue down 12% YoY in Q1 2024, and net profit down 87.5%), a story emerged about a conflict between the company and Min Hee-jin, CEO of HYBE sub-label ADOR.
Disputes between record companies and their executives have happened before, but this one might take the cake for the strangeness of some of the alleged details that have been reported over the past few weeks.
South Korea’s music scene has been rocked, again and again, by a series of claims and rumors involving allegations that Min had attempted to sever ADOR from its majority owner HYBE; and that the latter company had “copied” ADOR’s star girl group, NewJeans, for its new girl group ILLIT; that Min had allowed a religious “shaman” from outside the company to influence business decisions; and, most recently, that HYBE is somehow linked to an alleged yoga cult called Dahn World…
5) SPOTIFY VS. SONGWRITERS (AGAIN): NMPA SAYS SPOT’S LATEST MOVE TO LOWER ROYALTY RATES IS ‘LIKELY TO END UP IN A LEGAL CONFLICT’
On the latest Music Business Worldwide podcast, MBW founder Tim Ingham is joined by David Israelite, the President and CEO of the National Music Publishers’ Association.
We probably don’t need to ask you to guess which particular controversial topic they discuss.
Earlier this month, Spotify announced that it was changing the way it calculates mechanical royalty payments for songwriters and publishers in the US.
Spotify has re-categorized its Premium subscription tiers in the States as ‘bundles,’ enabling it to pay out a lesser mechanical royalty rate to songwriters than it would if said Premium tiers were classified as pure music services.
As David Israelite explains on this podcast, the NMPA is currently considering legal action against Spotify that would seek to undo the newly-lowered ‘bundle’ mechanical royalty rate on the service…
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
