From Warner and Universal scrapping unrecouped balances to Spotify’s 180m subs: It’s MBW’s Weekly Round-Up

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 maximise their income and reduce their touring costs.


Warner Music Group kicked February into gear with some potentially life-changing news for many legacy artists and songwriters.

On Tuesday (February 1), the major announced that, starting July 1, it will scrap unrecouped balances for heritage artists as part of its new “legacy unrecouped advances program”.

The initiative will effectively see eligible artists and songwriters, signed to WMG before 2000, start receiving streaming royalty money that is currently being kept by WMG every month because they remain unrecouped on historical advances.

The news follows Sony Music Group‘s historic decision last summer to disregard unrecouped balances for thousands of heritage artists and songwriters.

When MBW broke the news about WMG’s decision to join rival Sony in axing unrecouped balances for legacy acts, we asked if Universal Music Group would be the next major music company to implement this change in policy for its catalog artists.

We got our answer that same day: Senior industry sources confirmed to MBW that Universal is expected to announce a policy in the coming weeks, that will see unrecouped balances for many heritage artists and songwriters disregarded.

This week also saw Spotify publish its eagerly awaited Q4 results and Q1 2022 guidance amidst the ongoing Joe Rogan controversy, which has seen artists – led by Neil Young – pull their music from the platform in protest against the subject matter of content broadcast on Joe Rogan’s podcast.

Spotify revealed on Wednesday (February 2) that its subscriptions grew to 180 million in Q4 2021, up by 25 million year-on-year, and that it ended 2021 with 406 million Monthly Active Users (MAUs), up 61m YoY.

As for its quarterly guidance for Q1 2022, SPOT forecasts that, by the end of March, it will have total MAUs of 418 million and total Premium Subscribers of 183m.

On the firm’s earnings call, CEO Daniel Ek responded to questions about artists pulling their music from the platform over what they deem to be the spread of Covid-19 vaccine misinformation on Joe Rogan’s podcast.

Ek is taking the official stance that “we don’t change our policies based on one creator, nor do we change it based on any media cycle or calls from anyone else”. Or in other words: Rogan stays. He also noted that SPOT’s Q1 2022 guidance doesn’t “reflect any churn from the recent Joe Rogan thing”.

Elsewhere this week, we reported  that Sony Music generated $7.5 billion across recorded music and publishing last year, up 24% YoY, while Switzerland-headquartered fintech firm Utopia Music has acquired Liverpool-based Sentric Music Group.

Here’s what happened this week…


1) NOW WARNER SCRAPS UNRECOUPED BALANCES FOR HERITAGE ARTISTS. WILL UNIVERSAL BE NEXT?

Last summer, Sony Music Group shocked the global music industry by doing something historic: announcing it was disregarding unrecouped balances for thousands of heritage artists and songwriters who had signed to the company in previous decades.

On Tuesday (February 1), in another milestone moment for the music business, one of Sony’s biggest rivals has stepped up to do the same: Warner Music Group.

WMG, the world’s third largest music rights company, has just confirmed that it is introducing a “legacy unrecouped advances program”, which will go into effect on July 1…


2) UNIVERSAL IS WIPING UNRECOUPED BALANCES FOR HERITAGE ARTISTS, SAY MBW SOURCES

On Tuesday (February 1), MBW raised a big question: With both Sony and now Warner confirming they are disregarding unrecouped balances for thousands of heritage artists and songwriters, is a similar announcement coming from the world’s biggest music rights company – Universal Music Group?

If you’ve read MBW for some time, you’ll hopefully know that we have very good, very senior sources in the global music business.

And here’s what our very good, very senior sources are telling us: yes, categorically, Universal is introducing a policy that will see unrecouped balances disregarded for eligible catalog songwriters and artists on its books…


3) SONY GENERATED $7.5BN ACROSS RECORDED MUSIC AND PUBLISHING LAST YEAR, UP 24% YOY

On Wednesday, (February 2) Sony Corp revealed its calendar Q4 (fiscal Q3) results for 2021 – enabling MBW to calculate how the Japanese giant’s music rights operation performed across the course of last year.

Short conclusion? It performed very nicely.

In terms of recorded music revenues across the calendar year of 2021, MBW calculates that Sony Music generated USD $5.77 billion – up 25.2%, or $1.16 billion, on the equivalent figure from 2020…


4) SPOTIFY ADDED 3M NEW CREATORS TO ITS PLATFORM LAST YEAR… AND 4 OTHER THINGS WE LEARNED FROM THE FIRM’S Q4 EARNINGS CALL.

Spotify revealed on Wednesday (February 2) that its subscriptions grew to 180 million in Q4 2021, up by 25 million year-on-year, and up by 8 million versus the previous quarter.

As expected, one of the main topics on the minds of analysts tuning into Spotify’s Q4 earnings call was the firm’s ongoing Joe Rogan debacle.

In the past week, led by Neil Young, a number of artists have requested to pull their music from the service due to content broadcast by Joe Rogan.

Ek was asked about the situation right out of the gate on the earnings call, and specifically whether Spotify’s response so far is a “slippery slope in censoring content on the platform”….


5) UTOPIA ACQUIRES SENTRIC MUSIC GROUP, LAUNCHES NEW ROYALTY MANAGEMENT SERVICES UNIT

Switzerland-headquartered fintech company Utopia Music has acquired Liverpool-based music publisher and publishing administration company Sentric Music Group.

In doing so, Utopia is launching a new Royalty Management Services business unit, which will be led by Sentric’s current CEO, Chris Meehan.

Meehan joins Utopia Music as Vice President of Royalty Management Services and Utopia says that he will continue to service Sentric’s existing customer base as part of Utopia….


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

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