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 sudden and very public falling-out between Universal Music Group and TikTok sent shockwaves through the music business this week.
UMG announced on Tuesday (January 30) that it wouldn’t be renewing its global licensing agreement with TikTok because, as UMG put it, the social media platform had proposed paying a rate that is “a fraction” of what other platforms pay to use music.
TikTok responded by accusing UMG of “putting their own greed above the interests of their artists and songwriters”. And UMG responded to that by accusing TikTok of “unwillingness to appropriately compensate artists and songwriters, protect human artists from the harmful effects of AI, and address online safety issues for TikTok’s users”.
All that stands in stark contrast to the relationship between the music industry and another platform that relies heavily on music, YouTube, which has surpassed the milestone of 100 million paid YouTube Music and Premium subscribers worldwide. In an interview with MBW this week, YouTube’s Global Head of Music, Lyor Cohen, declared that YouTube Music is “a musical organization that cares profoundly about the health of the music industry”.
Meanwhile, BMG‘s CEO, Thomas Coesfeld, told MBW that he sees a profound shift coming in the music industry, and he’s preparing the company he leads for that change. “Everyone can look at these streaming numbers and see declining growth rates,” he said. “Growth will look different in the next five years compared to the past five years…”
Finally, Ola Sars, the founder, CEO and Chairman of Stockholm-headquartered B2B music streaming service Soundtrack Your Brand, revealed that 78% of US small and mid-sized business are misusing personal streaming accounts to play music to customers, costing the music business some USD $1.38 billion per year.
Here’s what happened this week…
1) TikTok’s biggest headache in its fight with Universal Music Group is UMG’s publishing catalog (and 2 other observations on the feud the whole music industry is talking about)
A couple of days ago, had you asked a music-biz-head their Grammy Week thoughts about Universal Music Group, you might have got a range of responses. The company’s streaming revenues; that “cut to grow” redundancies plan; Sir Lucian Grainge‘s position on the Billboard Power 100. All may have featured.
Now, when it comes to UMG, everyone’s only talking about one thing: TikTok.
On Tuesday (January 30), Universal announced that it would not be renewing its global licensing deal with TikTok, primarily because, in UMG’s words, “TikTok proposed paying our artists and songwriters at a rate that is a fraction of the rate that similarly situated major social platforms pay”.
TikTok in response accused UMG of “putting their own greed above the interests of their artists and songwriters”.
As the accusations get meaner and the brickbats fly, it’s probably a wise idea for MBW to try and offer some clarity on what’s really going on here – via the following key points, questions, and observations…
2) As Universal Music hits begin to vanish from TikTok, UMG accuses platform of ‘unwillingness to appropriately compensate artists and songwriters, protect human artists from the harmful effects of AI, and address online safety issues’
It’s official: recordings by Universal Music Group artists are disappearing from TikTok.
The gradual removal of UMG’s catalog follows the collapse of the two parties’ licensing talks and subsequent expiration of UMG’s deal with the platform on Wednesday (January 31).
As we reported on Wednesday (January 31), MBW hears that Universal’s recordings are now fully unlicensed on TikTok; our sources indicate that UMG’s publishing catalog has a 30-day cooling-off period, which means the final D-Day for the removal of UMG’s publishing catalog may not arrive until the close of February.
As we noted on Wednesday, this potentially buys TikTok a few more weeks to try and get UMG back to the table – and a mutually agreeable deal signed – before the most devastating impact of the two companies’ dispute comes to pass.
Chartdata reports that nearly half of the Top 50 songs at TikTok this week ‘are unusable’ following the removal of UMG’s catalog…
3) As YouTube Music hits 100m paid subscribers, Lyor Cohen says the platform ‘cares profoundly about the health of the music industry’
One of the biggest topics of discussion in Los Angeles during Grammy Week has been the very public falling out between a certain video platform and the world’s largest music rightsholder.
Meanwhile, another platform born in the video space is enjoying a much more celebratory time with the music business today.
YouTube, which also operates the TikTok rival Shorts, has surpassed the significant milestone of 100 million paid YouTube Music and Premium subscribers worldwide.
(YouTube Music is available as a standalone subscription platform, or bundled into a YouTube Premium subscription.)
That subscriber figure marks a 20 million increase on the last subscriber figure to be publicly announced for YouTube Music, which was 80 million, in November 2022.
YouTube is also now available in over 100 countries and regions “with more on the horizon in 2024” according to YouTube’s Global Head of Music, Lyor Cohen…
You’ve just taken charge at a billion-ish-dollars-a-year corporation. What’s your first move?
Keep your head down, right? Figure out your email password. Maybe some cozy get-to-know-you chats with your direct reports. That kind of thing.
Thomas Coesfeld has not adopted such a softly-softly approach at BMG.
In his debut six months as CEO of the Bertelsmann company – a position he only took up on July 1, 2023 – Coesfeld has issued multiple executive orders that have completely changed the global strategy of the firm.
For Coesfeld, these and other recent gear-shifts at BMG all come in preparation for what he calls “tectonic shifts” affecting the music rights business.
Some of these “tectonic shifts”, says Coesfeld, are being driven by changes in the way young people listen to and create music. But more than anything else, they’re driven by a clear slowing in the revenue growth curve of music streaming in mature markets like the US and UK…
5) 78% of small-to-midsize businesses in the US currently misuse personal streaming accounts to play music to their customers. It’s costing the music industry $1.38 billion per year.
In the latest MBW views article, Ola Sars, Founder, CEO & Chairman of Stockholm-headquartered B2B music streaming service Soundtrack Your Brand, writes about what he says is “the rampant misuse of music in business and commercial settings”. Writes Sars:
The unparalleled ambiance of Las Vegas is crafted by decades of historic glitz and glamour and every element of the famous Strip is meant to capture guests’ attention and emotion. That’s why, when the historic Venetian came under new management by Apollo Private Equity, all eyes were on the investment in the hotel’s experience.
The biggest news came in November, however, when Apollo was hit with a $264 million lawsuit for illegally streaming songs via YouTube at its high-end karaoke lounge. It is this lack of investment – in music rights and artist ownership – that now plagues the Vegas icon.
This high-profile case is driving industry attention to massive unlicensed misuse of music in businesses and commercial spaces, and this is only the beginning. The problem is much larger than one recognizable nightclub skirting the rules, as nearly 78% of the 3.8 million small to midsize businesses in the U.S. alone are misusing music…