In today's CMU Daily: More criticism for Apple Music's spatial audio 'bonus' as sources tell the Financial Times the proposals will "literally take the money out of independent labels". Meanwhile, as Spotify signs Joe Rogan to a new deal for a rumoured $250 million, is this a sign that their podcast adventure failed?

One Liners: Iain James re-signs to Phrased Differently; Karen Vincent promoted at WMG; UD partnerships; Angelica Bell joins Hits Radio; Lizzo dancer lawsuit latest; AO Arena ups capacity; Paris Hilton working with Sia; Isle Of Wight headliners; Sleep Token and Gabrielle tour dates; new music from Kerry King

Also today: Music industry welcomes adoption of EU AI Act, and Megan Thee Stallion looks forward to a new chapter after signing "innovative" deal with Warner Music

Plus: CMU sits down with Claire O'Neill, co-founder of A Greener Future, to talk AGF certification and better sustainability in the live sector

CMU Masterclass: Music Streaming In 2024

Tomorrow's CMU Masterclass Music Streaming In 2024 guides you through everything you need to know about how the streaming business is evolving.

We'll be giving an overview of key streaming services, how and why the streaming model is changing, the ongoing economics of streaming debate, and how UGC platforms and revenues fit in. The Masterclass takes place live on Zoom at 2.30pm UK / 3.30pm CET / 9.30am Eastern Time.

We will tell you which digital services are generating the most revenue and growth in music markets across the world.

Plus we will discuss how and why the streaming business model is evolving - including reviewing the changes being made by Spotify and Deezer - and we'll explain why some people are proposing even more radical reforms.

Whatever role you have in the music industry, this masterclass will ensure that you have a full understanding of where streaming fits in the modern music business.

Book your place on this masterclass for just £59 inc VAT - or book the series of eight masterclasses for £299 inc VAT.

Indie labels say Apple's new payment model will take money from their artists to benefit the majors 

After CMU broke the news that Apple Music’s new spatial audio ‘bonus’ would skew significantly in favour of the major record companies, a number of prominent independent labels have criticised the move.

In a story published in the FT this weekend, one senior exec at a large indie says, "it’s literally going to take the money out of independent labels and their artists to benefit the biggest companies in the marketplace". 

Part of the reason why the new bonus for spatial available tracks will see more money allocated to the top end of the industry is that the majors simply have the resources to provide more of their catalogue in spatial audio. 

Independent labels, on the other hand, the FT's source said, have "found it hard to justify the expense of creating spatial masters ... we’re not in the business of chucking money just because Apple is saying you should be spending money on this". 

Apple quietly revealed to its licensing partners late last year that it was making changes to its payment model. A memo then went out last month stating that those changes were now in effect. 

As a result, when Apple calculates each record label or music distributor's share of total consumption in order to allocate it a share of revenue, each play of a spatial available track now counts for 1.1 plays. A spatial available track is any recording that is delivered to Apple in spatial audio as well as a standard format. It doesn't matter which version a user listens to, the spatial available boost will still apply.

Sources who spoke to CMU said that the bonus is triggered after an Apple licensing partner reaches a one-time threshold of 50% of their streams coming from spatial available content in a month. However, CMU has not been able to establish whether this term is equally applied to all of Apple’s licensing partners or whether, for example, the threshold is lower or removed entirely for major labels. 

Artists and labels unable to afford to deliver tracks - or enough of their tracks - in spatial audio will obviously lose out, because they will make less money per play under the new system. This is because the money used to pay the bonus is taken from the wider royalty pool. 

Where an independent label relies on a distributor’s licensing agreement with Apple Music, it may still lose out if its distribution partner is yet to reach the threshold, even if it delivers all its recordings in spatial audio. One independent distributor CMU spoke to said that it was “a long way” from reaching the 50% one-time trigger.

The FT reports that its sources have said that "some of the most influential independent record groups - including Beggars Group, Secretly and Partisan Records - have expressed concerns about Apple’s policy in recent days". One label told the newspaper that "the new deal will badly impact our revenues", while another noted that, for many labels, Apple is still the number two digital partner after Spotify. 

Apple's changes to its payment model achieves its priority of promoting spatial audio - it wants to sell the devices and headphones people need to get the full benefit of immersive audio formats. However, by skewing things in favour of the major players, the payment model changes have a similar impact to those recently introduced by Deezer and Spotify, even if the disadvantage to independent artists is less overt. 

The FT's indie label sources all spoke off the record. It remains to be seen if any labels go public. There have been public bust ups between the indies and Apple before, including when the iTunes Store first launched in the UK and when it rolled out its Apple Music streaming service, on both occasions because the indie community felt the tech giant was prioritising the interests of the majors. 

In more recent years Apple has generally avoided negative comments from the music community, with Spotify feeling most of the heat, alongside the user-generated content platforms like YouTube and TikTok. But this major-friendly meddling with its payment model may put Apple Music back in the public spotlight for the wrong reasons.

The Royal Albert Hall // Programming Manager, Hire (London)

The Royal Albert Hall // Engagement Executive (London)

SJM Concerts // PR Coordinator (Manchester)

ICE // Netsuite (ERP), Functionality/System Tester (London)

AEG Presents // Marketing Manager (London)

AEG Presents // Touring Manager (London)

ATG // Senior Regional Programmer - Music & Comedy (London)

Ninja Tune // Product Manager (London/Hybrid)

ONE LINERS

Lizzo, Isle Of Wight Festival, Sleep Token + more

DEALS 

Iain James has returned to his original publisher Phrased Differently, following deals with Sony Music Publishing, Kobalt and BMG. He was one of the company’s first signings in 2006. “I couldn’t be happier to be re-signing with Phrased Differently”, he says. “I’ve been so proud watching the team’s success from afar and have always considered myself to be ‘Raised by Phrased!”

APPOINTMENTS

Karen Vincent has been promoted to General Manager of Warner Music Denmark. "I'm so excited to be stepping up to lead Warner Music Denmark”, she says. “We're a team that consistently punches above its weight, whether that's securing a ten week run at number one here in Denmark for hip-hop legend Gobs or helping superstar Christopher become one of the best-known international artists in China”.

Talent development organisation UD has announced new partnerships with Converse, Sony Music UK’s Social Justice Fund and the Soho House Foundation to support its work in championing the next generation of black creative talent. It has also appointed Selina Wedderburn as General Manager and Cleo Amedume as Community Manager. 

TV presenter Angellica Bell is to stand in for Fleur East on the Hits Radio breakfast show while she is on maternity leave. East’s last day before taking a break will be this Friday. “I can’t believe it’s my last week, it’s honestly flown by”, says East. “The thought of taking a break is a little bit weird, but I am so pleased to say that one of my good friends, Angellica Bell, is going to be the one looking after things for me”.

LEGAL 

A Californian judge has dismissed some of the claims brought against Lizzo by a number of her former dancers, but denied a motion to have the whole lawsuit thrown out on free speech grounds. "It is dangerous for the court to weigh in, ham-fisted, into constitutionally-protected activity, but it is equally dangerous to turn a blind eye to allegations of discrimination or other forms of misconduct merely because they take place in a speech-related environment”, said Judge Mark H Epstein. "The court has tried to thread this needle, although the court, being a trial court only, is well aware that this is likely only the first stop on this case's journey”.

LIVE BUSINESS

The AO Arena in Manchester has announced that its capacity will increase from 21,000 to 23,000 as part of £50 million redevelopment work. “As part of AO Arena’s redevelopment”, says Chris Bray, President of venue owner ASM Global Europe, “we have dramatically expanded the standing floor space which means it will compete with any other venue in the UK”. Including, presumably, Manchester’s soon to open new Co-op Live arena, which has a maximum capacity of 23,500. 

ARTIST NEWS

Paris Hilton revealed on the red carpet at the Grammy Awards last night that Sia is executive producing her second album, which is set for release later this year. 

GIGS & FESTIVALS

The Isle Of Wight Festival has announced The Prodigy, Pet Shop Boys and Green Day as its 2024 headliners. The event takes place on 20-23 Jun and tickets are available now.

Sleep Token have announced UK arena shows in November, including a performance at the O2 Arena in London on 29 Nov. Tickets go on general sale on Friday. 

Gabrielle has announced UK tour dates in April 2025, including a show at the O2 Arena on 18 Apr. Tickets go on general sale this Friday. Her new album ‘A Place In Your Heart’ is out on 10 May. 

RELEASES

Former Slayer guitarist Kerry King has released his debut solo single ‘Idle Hands’. It is taken from his album ‘From Hell I Rise’, which is set for release on 17 May.

Spotify announces new Joe Rogan deal that could be worth $250 million

Spotify has entered into a new multi-year megabucks deal with its biggest and most controversial podcast partner Joe Rogan. 

The Wall Street Journal estimates that the deal could be worth up to $250 million, which Spotify denies. However, whatever the actual figure, throwing stacks of cash at Rogan at the same time as laying off significant numbers of employees and stopping payments to millions of grassroots artists isn't that good a look, especially when his podcast won't even be a Spotify exclusive anymore. 

Despite cutting back its in-house podcasting operations over the last year - and ending various other exclusivity deals that it had with prominent podcasters - Spotify said in a blog post on Friday, "today we announced our new multiyear partnership deal with Joe Rogan Experience". 

It then bragged further that "JRE remains podcasting’s king, consistently ranking as the most-listened-to podcast globally and our users have ranked the show as Spotify’s Wrapped top podcast each year since 2020". 

According to the WSJ, the multi-year deal with Rogan includes an upfront minimum guarantee and a revenue share agreement, which will see the presenter earn a cut of any advertising income the streaming firm sells alongside this podcast. 

Spotify announced its original deal with Rogan in 2020. At the time the streaming firm was pushing into podcasting in a major way and was therefore willing to spend huge sums of money to secure an exclusivity deal with the world's most successful podcast. 

Some in the music community - especially those generally critical of what artists earn from streaming - were scathing of Spotify handing so much money to a single podcaster. Further criticism followed in 2022, though less about what Rogan earns and more about the content of his programmes. 

That said, Rogan arguably is, as Spotify says, the podcasting king, and the company likely sees its ongoing partnership with him as a solid statement that - despite the cutbacks to its in-house podcasting division - as a company it remains fully committed to audio beyond music. This is crucial given how much money it has invested in podcasting and audiobooks in recent years. 

It needs to reassure its content partners and, crucially, its investors, that those investments have  not been wasted and that the opportunities it has touted in podcasts and books can still be realised. A dramatic departure from Rogan - especially if he signed up with a rival - could have impacted investor confidence, and the cost of the new deal may well be worth it just to stop that from happening. 

Spotify's bold and expensive strategy to become a major player in podcasting did work in terms of it securing significant listener share. However, it is yet to turn podcasts into a major earner, financially speaking. Under increased pressure from investors to become a profitable company, that needs to change. To do that Spotify really needs to grow its advertising business, which continues to bring in significantly less revenue than subscription sales.

That need to bring in more advertising money is possibly why, under the new deal, JRE will return to other podcast platforms. The priority is no longer using podcasts to get people to sign up to Spotify, instead it simply needs to secure big brand deals. And in that domain, the wider the reach of Rogan's podcast the better. 

Spotify has made wide-ranging cutbacks in recent months in its bid to become a profitable company. It has also changed its payment model for music, so that tracks that get less than 1000 streams a year will not be allocated any money. 

However, that doesn't actually help Spotify financially, with other artists and labels - especially the majors - getting the benefit. For Spotify, signing up more subscribers, slowly increasing subscription prices and selling lots more advertising is the aim. 

It remains to be seen if the second big Rogan deal - and indeed Spotify's entire push into podcasting - will truly pay off.

Music industry welcomes EU member states agreeing AI Act 

The music industry has welcomed the news that, on Friday, European Union member states approved the final draft of the EU AI Act. The new legislation seeks to regulate many different uses of artificial intelligence and includes some measures that are relevant to generative AI, which is of most interest to the music industry. 

Among those heralding the news was John Phelan, the Director General of the International Confederation Of Music Publishers, who says that the new legislation provides the protection creators and copyright owners need against "the recent wave of AI companies who refuse to observe laws and are illegally acquiring the world’s music to train their models". And, once in force in Europe, it will "have a ripple effect internationally”.

There were fears that some elements of the AI Act - including those around transparency - might be watered down at the final stage, with certain EU member states seeking further changes. However, the last holdout, France, dropped its opposition last week after securing some concessions. The act now needs to be ratified by the European Parliament. 

ICMP specifically welcomes three key aspects of the act. First, that "AI companies must observe EU copyright law”. Second, that "AI companies must increase transparency to the music industry as to whether music was used for training models or generative AI output". And third, "once generative AI output such as music or video hits the EU, obligations will apply to retain detailed documentation on what content was used to train the model - irrespective of where in the world the training took place". 

Commenting further, Phelan says that, while AI isn't new, "what is new is the recent wave of AI companies who refuse to observe laws and are illegally acquiring the world’s music to train their models and feed generative AI. Simply put, there isn’t a music company or music-maker anywhere unharmed by such practices". 

"ICMP has been fighting for the EU AI laws to include robust protections", he adds. The final version of the act agreed on Friday "includes those protections. The EU AI Act will reinforce the reality of the relationship between copyright laws and tech – general purpose AI companies must not use music without permission, are obliged to secure authorisation, they must stop illegal scraping and they must retain technical documentation on how they are training their models". 

Speaking for the record companies, the International Federation Of The Phonographic Industry says that last week's approval of the AI Act "marks an important step forward in helping to protect creators in the AI environment. AI offers creators both opportunities and risks, and we believe there is a path to a mutually successful outcome for both the creative and technology communities. Success requires guardrails – public policies that enable and require responsible AI. We urge the European Parliament to approve this first-of-its-kind legislation without delay". 

The Year Ahead: Claire O'Neill, co-founder of A Greener Future

Since the start of the year, CMU has been sitting down with key people from across the music industry to discuss their work, key trends and challenges, and what to expect in the year ahead.

Today we talk to Claire O’Neill, co-founder of A Greener Future, which works with and supports the live sector to improve the sustainability of events, tours, venues and festivals. That includes the AGF Certification scheme which audits and verifies how events and live music companies are reducing their environmental impact. 

Megan Thee Stallion marks “beginning of a new chapter” with Warner deal

Warner Music has signed what it calls an "innovative agreement" with Megan Thee Stallion - real name Megan Pete - which will give the rapper access to the major's infrastructure while allowing her to "maintain her independence as a musician". 

The new deal follows the announcement last October that Pete had finally parted company with independent label 1501 Certified Entertainment having settled a long-running legal dispute. 

Under the new agreement, Warner says, Pete will "release music through Hot Girl Productions – her independent music and entertainment entity – and simultaneously work with Warner Music and its international affiliates". She will own all the rights in her music and maintain full creative control, plus there is "the option to bring artists that are signed to her imprint into the WMG ecosystem". 

"This is the beginning of an exciting new chapter of my life and career", says the rapper. "I'm really focused on building an empire and growing as an entrepreneur, so I'm proud to take this next step in my journey and work with [WMG Recorded Music CEO] Max Lousada and the entire Warner Music Group team in this new capacity. I know we're going to create history together". 

Pete had various legal run-ins with 1501 while signed to the indie. She initially claimed her contract with the label did not follow industry norms and was heavily skewed in its favour. She also accused the label of stopping her from releasing new music. And, more recently, there was a dispute over whether or not she had delivered the three albums that the label was due under its deal.

The final legal dispute was settled last year, with 1501 stating "both Megan and 1501 are pleased to put this matter behind them and move forward with the next chapter of their respective businesses”.  A week before 1501 made that statement Pete herself declared on Instagram that she had "no label right now and we’re doing everything funded straight out of Megan Thee Stallion’s pocket".

Warner already had a connection with Pete because 1501 released her albums in partnership with 300 Entertainment, which the major acquired in 2021. So it's perhaps not surprising that the rapper chose Warner as a partner for her Hot Girl Productions company.

It is, of course, increasingly common for artists - especially established artists - to work with major labels in such a way that they own the rights in their music, with the label essentially operating as a service provider. In many cases those deals are done via an artist services division - such as Warner's ADA - though they are sometimes agreed with a frontline label, like with this deal. 

Commenting on the new partnership with Pete, Lousada says, "Meg is not just a superstar, she's an artistic force and a mogul in the making – authentic and unapologetic in defining her own unique place in the cultural landscape. So many relate to her remarkable story and have witnessed her come into her power on her own terms". 

"At Warner, we're creating an environment where original talents can explore both their creativity and entrepreneurialism, while building long-term careers", he goes on. "Following on her success with 300, we're excited to continue our journey with Meg through this dynamic new partnership, with our global teams, infrastructure and expertise supporting her every step of the way".