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.
Warner Music Group published its calendar Q1 (fiscal Q2) financial results on Tuesday (May 9), which showed the company’s overall revenues rose by 4.6% YoY in the quarter.
Speaking with analysts on the company’s quarterly earnings call after the publication of those results, WMG CEO Robert Kyncl elaborated on his proposal that music from certain types of artists – especially those who attract subscribers to streaming services in the first place – should be paid more than other types of music.
Elsewhere on the call, he discussed the topic on everyone’s lips – AI – and its potential positive (and less-than-positive) effects on the music business.
Said Kyncl: “When it comes to generative AI, it needs to be put into proper context. Framing it only as a threat is inaccurate. Our first priority is to vigorously enforce our copyrights and our rights in name, image, likeness, and voice, to defend the originality of our artists and songwriters.”
Also this week, MBW dug into Spotify’s latest SEC filings to find out who exactly owns the music streaming giant.
Via a combination of ‘Statement Of Ownership’ SEC filings plus its 20-F annual report – all filed this year – we’ve been able to paint a picture of Spotify’s ownership cap table today.
Meanwhile, at Universal Music Group‘s AGM on Thursday (May 11), UMG shareholders re-appointed Sir Lucian Grainge as UMG’s Executive Director (a position he holds in addition to being the company’s Chairman and CEO) for five more years, and also approved his new remuneration package.
Plus, Google‘s AI-powered music generator has been released publicly, while King & Prince set the record for 2023’s fastest-selling album in Japan, after their album Mr.5. sold 1.2 million physical copies in its first week in the market.
Here’s what happened this week…
1) ‘AN ED SHEERAN STREAM IS NOT WORTH THE SAME AS A STREAM OF RAIN FALLING ON A ROOF’: ROBERT KYNCL SAYS MUSIC STREAMING PAYOUT AND PRICING MODELS MUST, AND WILL, CHANGE
Warner Music Group CEO, Robert Kyncl, has previously stated his belief that music is “undervalued” compared to other forms of entertainment – and suggested that a shake-up is due for the way royalties are calculated and paid out by streaming services.
On Tuesday (May 9), on WMG’s latest quarterly earnings call, Kyncl doubled down on these views, elaborating on his proposal that music from certain types of artists – especially those who attract subscribers to streaming services in the first place – should be paid more than other types of music.
“Every stream [in music today] is valued exactly the same way,” said Kyncl, referring to the dominant ‘pro rata’ royalty model on modern streaming services.
“That doesn’t seem like something that’s aligned with the way the world works. For instance, in sports, LeBron James earns more money than some of his teammates – [and] not because he plays more hours per day. He plays exactly the same number of hours [as other players] yet he earns more…”
Spotify is having a banner year.
Not only did the digital streaming provider (DSP) add 10 million paying subscribers in the final quarter of 2022 (giving it a total of 205 million paid subs), but its stock price is up more than 75% since the start of the year, currently trading at around USD $147 per share in New York.
That marks quite a turnaround for a company whose price movements, not that long ago, would have churned the stomachs of the toughest investors.
After peaking at around $364 per share in February of 2021, Spotify followed the tech markets downward, falling more than 79%, to a bottom around $75 per share in December of 2022.
That means the company’s market capitalization reached a peak at around $70.5 billion, before falling to some $14.5 billion, then recovering to its current market cap of around $28 billion.
Notably, its share price today is close to where it stood in early April 2018, when it closed on its first day of trading at $149.01.
All in all, it’s been quite a rollercoaster ride. But who, exactly, owns this Stockholm-headquartered company that has revolutionized music consumption in our time?
3) SIR LUCIAN GRAINGE REMUNERATION PACKAGE APPROVED BY UNIVERSAL MUSIC GROUP SHAREHOLDERS
At Universal Music Group’s Annual General Meeting on Thursday (May 11), UMG’s Board tabled a proposal to reappoint Sir Lucian Grainge as its Executive Director (a position he holds in addition to being the company’s Chairman and CEO) for a five-year term (ending on May 1, 2028).
The board also sought approval to adjust a policy for Executive Directors with respect to a new remuneration package for Grainge. Both resolutions were adopted on Thursday.
This means that Sir Lucian Grainge has officially been re-appointed as UMG’s Executive Director for five more years, and it also means that his new pay package has been approved by shareholders, too…
4) GOOGLE TRAINED ‘EXPERIMENTAL AI’ TO GENERATE HIGH-FIDELITY SONGS FROM TEXT PROMPTS. NOW IT’S AVAILABLE TO THE PUBLIC
In January, Google unveiled MusicLM, an ‘experimental AI’ tool that can generate high-fidelity music from text prompts and humming.
The tool is now available for the public to test out.
Google explains that at the public-use level, the tool works by typing in a prompt like “soulful jazz for a dinner party”.
The MusicLM model will then create two versions of the requested song for the person inputting the prompt. You can then vote on which one you prefer, which Google says will “help improve the AI model”.
The model was trained on five million audio clips, amounting to 280,000 hours of music at 24 kHz…
5) KING & PRINCE SOLD 1.2M PHYSICAL COPIES OF THEIR LATEST ALBUM ‘MR.5’ IN ITS FIRST WEEK IN JAPAN, BECOMING THE MARKET’S FASTEST-SELLING ALBUM THIS YEAR
King & Prince and Universal Music Japan have set the record for 2023’s fastest-selling album in Japan.
The group’s latest album release, Mr.5 (released on April 19), achieved physical sales of more than 1.2 million in its first week.
Mr.5 marks the band’s fastest-selling album to date, achieving CD sales of more than 1.03 million copies in its first 48 hours, with 916,000 sales on its first day on sale….
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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