Every Sunday CMU sends a summary of five key music business stories from the past week. | This week: It's Q4 earnings time - and both Warner Music and Spotify released their financials and held earnings calls with analysts and investors; the UK ditched a proposed voluntary code for AI + copyright; commercial radio groups are unhappy at the BBC's plans for new stations, which they see as direct competition; and dodgy distributor 3tone is at it again - this time desperately trying to find a new-back end distribution partner.
ICMYI: Big news at UK physical music specialists Key Production; (more) Apple spatial ructions; the image problem that's blocking industry talent; LGBTQ+ discrimination highlighted in new report; Kakao x SM Entertainment drama; Hipgnosis board's big bung gets overwhelming shareholder approval.
And Finally... Everyone loves golf (OK, not everyone) and golfiest of all the golfs are Eddy "The Niblick" Cue and Irving "Birdie" Azoff who golf so much golf they've only gone and bogeyed up their dream golf course together. | | | Get an expert overview of the topics that will define the music business in 2024, including copyright, streaming and AI, as well as economics of streaming developments with our latest CMU Masterclass sessions.
👉 Book all 8 masterclasses today for just £299 including VAT
Book now to get access to Music Copyright In 2024 which takes place live on Tuesday 12 February 2.30pm UK / 3.30pm CET / 9.30am Eastern Time - plus on-demand access to the two sessions we've already delivered.
Music Copyright In 2024 will give you a detailed understanding of the latest commercial trends and legal developments in music copyright, including how music rights are monetised, protected and traded in 2024.
Delivered live on Zoom and available on-demand afterwards, sessions include guides to the current music business landscape including streaming, copyright and AI, as well as taking an in-depth look at the economics of streaming, including money + allocation, data + transparency, and rights + innovation.
👉 Click through to see the full schedule and book your place
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📈 Warner Music CEO Robert Kyncl said that the major music companies are growing ever more relevant | |
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Speaking to investors, Kyncl said that the ability of a business like Warner to "aggregate large volumes of rights across recorded music and publishing" gives it - and the artists and songwriters it works with - greater bargaining power when negotiating with new and existing digital platforms, and this will be even more important with AI. He also spoke positively about the changes being made by streaming services to their payment models, and the role TikTok plays as both a marketing channel and revenue generator.
Before the investor call, Kyncl outlined in a memo to employees “a plan to free up more funds to invest in music and accelerate our growth for the next decade”. This, he admitted, “includes reducing our workforce by approximately 10%, or 600 people – the majority of which will relate to our owned and operated media properties, corporate and various support functions”.
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🤡 Spotify boss Daniel Ek discussed the recent job cuts at the company and hinted at more to come | |
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In an investor call, Ek said the company would get better at focusing its efforts on products and projects that "really drive value", which means being “more diligent in shutting down things that have sort of worked but that may not work as well going forward into the future”. The cutbacks are part of Spotify's bid to become profitable. Its latest financial figures showed further growth in subscriber numbers but revealed losses in the final quarter of 2023 of €75 million, with a total loss for the year of €446 million.
As part of its cost-saving efforts, there have been significant cuts in Spotify's podcasting operations, though that didn't stop it signing a new mega-bucks deal with its most famous podcaster, Joe Rogan. Under the new arrangement, Rogan’s podcast will no longer be exclusive to the Spotify platform. However, with the streaming firm needing to grow its advertising revenues, having the Joe Rogan Experience available on more platforms will probably be a good thing.
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| | ⛔️ Plans for a voluntary UK code on copyright and AI were shelved | |
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The Intellectual Property Office said that a working group of representatives from the creative and tech sectors had failed to agree a code of practice. The government said it would “now lead a period of engagement” so that the copyright and AI industries can “grow together in partnership”.
But the Chair of Parliament’s culture select committee, Caroline Dinenage MP, said that “wooly words” from ministers won’t provide rightsholders with the certainty that they need, and that the government should "urgently reconsider" its approach to copyright and AI.
Meanwhile in the EU, member states agreed the final text of an AI Act to regulate artificial intelligence across Europe. The music industry welcomed what the act has to say about copyright and transparency.
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| | 📻 The UK commercial radio sector said that plans to launch four new BBC radio stations should be blocked | |
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It also called on the UK government to clarify the copyright obligations of AI companies, rather than relying on test court cases between copyright owners and tech firms, which will drag on for years. Otherwise “contested business practices will become normalised".
The music industry will welcome those demands. Earlier in the week collecting societies GEMA and SACEM published a report which estimated that the market for AI music tools will increase tenfold in the next five years, generating $3 billion in revenues by 2028. That could result in 27% of music creators losing revenue unless AI companies respect copyright as they grow.
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| | 💩 Dodgy distributor 3tone desperately needs a new deal - but no one wants to take on its business |
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| Bristol-based distributor 3tone has been surrounded by controversy for failing to pay its artist and label clients, as well as its own staff. It emerged earlier this month that it had been cut off by the company it previously relied on to actually deliver music to the digital platforms. As a result it could no longer distribute music and its clients’ tracks would disappear from the streaming services.
SonoSuite - which previously provided back-end distribution for 3tone in 2020 and 2021 - admitted that it had been approached by the company again. This followed information from CMU's sources that SonoSuite had been reaching out to digital platforms on 3tone's behalf. A spokesperson confirmed that that outreach had started before the company completed 'know your customer' checks on 3tone. Those checks then highlighted all the recent controversies and SonosSuite opted to not enter into a new deal.
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