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 a seismic shake-up in the US music rights business, with the announcement that performance rights organization BMI has been sold to private equity firm New Mountain Capital.
The price tag hasn’t been disclosed, but BMI did say it would kick $100 million of the sale’s proceeds to its songwriter and publisher “affiliates”.
Another key part of the announcement is that CapitalG – aka Google/Alphabet’s “independent growth fund” – will acquire a passive minority stake in BMI.
Also this week, Spotify confirmed details of changes coming to its payout model in 2024. Among the changes (as MBW first reported last month) is a new minimum stream threshold before any track starts generating royalties on the platform.
Meanwhile, in our MBW Explains series, we ask why Sony Music Entertainment is the only one of the three major recording companies that hasn’t signed up to YouTube‘s Dream Track experiment, which uses AI to enable creators to clone the vocals of superstar artists. Elsewhere, MBW reported on Universal Music Group‘s submission to the US Copyright Office‘s notice of inquiry about copyright and AI.
Finally, a new report from US market monitor Luminate, commissioned by TikTok, found that 62% of TikTok users in the United States pay for a music streaming subscription, compared to 43% of all consumers.
Here’s what happened this week…
1) BMI SELLS TO NEW MOUNTAIN CAPITAL-LED GROUP; GOOGLE/ALPHABET FUND TO ACQUIRE MINORITY STAKE IN PRO; $100M HANDED TO PUBLISHERS AND SONGWRITERS
For some time we’ve known that private equity firm New Mountain Capital (NMC) – majority-owner of music biz valuer Citrin Cooperman – has been in talks to acquire BMI. Now it looks like a done deal.
NMC, which has over USD $45 billion in assets under management, confirmed on Tuesday (November 21) that it will “lead a shareholder group” to acquire a majority stake in BMI.
The most surprising part of BMI’s official announcement today? NMC’s ‘shareholder group’ includes an arm of Google parent Alphabet. CapitalG – aka Google/Alphabet’s “independent growth fund” – will acquire a passive minority stake in the PRO.
Additionally, BMI’s current shareholders will allocate $100 million of the proceeds of the proposed sale to songwriter, composer and publisher affiliates “in recognition of [their] creativity” shortly after the transaction closes…
MBW broke the news last month that major changes were coming to Spotify‘s royalty model in Q1 2024. Now Spotify has confirmed precisely what those changes are.
The music streaming company has published a new blog post on Spotify for Artists introducing what it calls “new policies to better support those most dependent on streaming revenues as part of their livelihood”.
Spotify’s new policies aim to tackle three core issues: (1) To “further deter artificial streaming“; (2) To “better distribute small payments that aren’t reaching artists”; and (3) “rein in those attempting to game the system with noise”.
The streaming company claims that by addressing these issues, it will be able to drive “an additional $1 billion in revenue toward emerging and professional artists over the next five years”…
3) SONY MUSIC’S ARTISTS AREN’T INVOLVED IN YOUTUBE’S NEW VOICE-CLONING AI EXPERIMENT. NOT UNRELATED: GOOGLE’S RECENT FILING WITH THE US COPYRIGHT OFFICE.
On November 16, YouTube unveiled a revolutionary new experiment – ‘Dream Track’ – enabling creators to clone the vocals, via AI tech and with the official consent of well-known stars.
Yet something conspicuous is missing: any endorsement whatsoever from the world’s second-biggest recording company, Sony Music Entertainment, or its artists.
Sources close to Sony Music’s HQ in New York have suggested to MBW that the company is taking an “artist-led” approach to its experiments with any AI platform that can manipulate the work (or voice) of its roster.
In the case of YouTube’s ‘Dream Track‘, MBW understands, SME first offered the opportunity to participate to a number of its artists, but this group did not show enthusiasm about participating…
Universal Music Group has been one of the most outspoken advocates for the protection of copyright amid the proliferation of AI-powered voice-mimicking, and melody, chord and lyric-generating technology this year.
Recently, UMG submitted a written response to the US Copyright Office’s Notice of Inquiry concerning artificial intelligence and copyright.
In the submission, UMG stated that training AI using unlicensed songs and recordings is “anything but fair use“; that is is “adamantly opposed to an opt-out system” for training AI models on copyrighted content; and that it is “ready and willing to explore licensing content to generative AI companies”…
A new market analysis sheds some light on why ByteDance-owned short video platform TikTok has focused so intensely on expanding its services in the music world, with the firm reporting to be a major driver of music consumption and spending.
According to the analysis, commissioned by TikTok and carried out by US market monitor Luminate, 62% of US TikTok users pay for a music streaming service, compared to 43% of all consumers.
Including both paid and ad-supported streaming services, roughly nine out of 10 TikTok users in each market studied used at least one music streaming service.
In the US, 89% of TikTok users subscribed to at least one music streaming service, compared to 74% of overall consumers, while in the UK, 85% of TikTok users had a streaming service account, compared to 62% of consumers overall.
The analysis found that TikTok users are also larger spenders on music off-platform as well. By wide margins, they are more likely to buy merch and attend live shows than the average consumer…