Hello, readers! Happy to be back after a little birthday and early spring break. No big announcements or updates to share, just that if you’re interested in the newsletter’s publishing schedule you can always find it here. Otherwise, there’s plenty of news to cover, so let’s continue an examination of the long shadow cast by the coronavirus over the record industry.

The live music industry remains in limbo. The United States with millions of people a day getting the vaccine is starting to eye a return to touring. Meanwhile, the United Kingdom, France, Germany, and a number of other countries reimposed lockdown measures to try and suppress the virus and vaccinate with a hopeful nod towards the summer. These concerns melt away in headlines touting Live Nation is selling over 170,000 tickets for festivals in only three days, Live Nation/AEG are bringing back furloughed staff, and a number of EDM festivals and acts are gearing up to perform by purely manifesting better days ahead. 

The scattershot nature of these events and lack of consistent regulations from country to country (much less region to region) makes for an unsure time in the industry, as visions of a more permanent return enter the near future. In the United States, many venues are still waiting for federal relief to come from the Save Our Stages Act and I’ve already received emails from venues in NYC that are clearly eyeing how to pivot their spaces beyond just being a music venue while fully populated concerts are still off the table. The highly fragmented semi-closure of global live music is likely to be the norm for the rest of 2021. Now, on the recorded music side of the industry, 2021, like 2020, could be another year of record growth.  

How about this headline: ‘IFPI Global Report 2021: Music Revenues Rise for Sixth Straight Year to $21.6B’. Billboard touted this headline in a deep dive into a report put out by the International Federation of the Phonographic Industry, a global trade organization representing the likes of the Recording Industry Association of America (RIAA) and other national recording organizations. The analysis by the organization showed that despite the coronavirus crushing live music, streaming continued to grow and see more international growth, along with a stable decline, rather than a freefall, of physical sales (in particular in Japan). The IFPI’s perspective is that the global record industry experienced a couple of hiccups but revenues didn’t stumble off a cliff, and musicians may be struggling without touring, but white-collar professionals are still cashing checks. 

Last April, I devoted an entire newsletter to the topic of live music when it was still very much up-in-the-air what was about to happen with the industry. And I wanted to highlight my closing passage (emphasis mine): 

Others over the last year clearly were also reassessing the current live music political economy. Eilidh McLaughlin, Eva Fineberg, and Fallon MacWilliams wrote a report titled ‘Last Night a DJ Took a Flight’, which looks at the environmental impact of DJing on the climate, in particular via international plane travel. What’s so interesting about the document is that while it doesn’t pull punches, it can be a rallying point to look for local talent. This contrasts to many macro record business trends of increased intermeshing of now international music firms and assuming that live touring must hit the biggest, highest paying, markets. Though much of these conversations will continue at the local level, I’d be interested to see what might happen with these even if just within electronic music.

The other small, but notable, response to not only the last year but deeper worker struggles within the record industry. In March, workers at the Secretly Group announced they were unionizing with the Office and Professional Employees International Union (OPEIU) Local 174 and received voluntary recognition from management. A representative expressed to Billboard a desire for this to kick off a bigger wave of white-collar worker actions: “We absolutely hope this inspires others to unionize. For many of us, it didn’t seem like an option, so hopefully, we showed the wider independent industry that it’s possible. You don’t need to start one when things hit rock bottom.“ That last sentence is key, especially when considering the recent IFPI report. Right now record labels are racking in tons of cash and certainly, workers should make sure they’re well compensated as the industry continues to boom. The fallout from the coronavirus will continue to be felt for years to come but there are already a number of clear signs of where the industry is trending and though these two initiatives are small, it hints towards what could perhaps be a more equitable vision.

Songwriters are making their voices heard right now. Variety reported that a number of big-name songwriters including Ross Golan, Justin Tranter, and Emily Warren are asking that artists not get songwriter credits on tracks they didn’t actually write or contribute to. Certainly a more than reasonable request but highlights a fairly old industry practice and I’d guess the cash entering in from streaming and Hipgnosis Songs Fund-like firms is only further accelerating the concern. If you’d like to join the letter, go here. Then out in the United Kingdom, the Ivors Academy is starting a “pay songwriters” campaign so that musicians can be both paid a day rate and receive points on the master recording from labels. Again, a sharp request when these are all sly ways for record labels to keep squeezing extra dollars away from the actual creators. 

In New York state, the Musician Workers Alliance put out a statement in support of the PRO Act, a bill that needs additional support in the US Senate that would strengthen labor law on the side of workers. The excellent newsletter Labor Law Lite drilled deeper into the legislation but it’s something that could improve the working conditions for millions of Americans so happy to see the MWA stand behind it. And last, I just wanted to again mention the Secretly Group Union, which could open up the door for other parts of the white-collar record industry up for unionization. Certainly will be keeping close, close eyes on that union drive and any potential ripple effects. 

There’s so much news within this realm of the record industry, do forgive me for running through what is a lotta headlines. KKR and BMG announced a new joint venture to buy up song rights, which was curious since the two companies worked together towards similar goals back in 2009 when KKR bought part of BMG and eventually sold back to Bertelsmann in 2013. The Municipal Employment Retirement System of Michigan is backing Influence Media Partners with a particular eye towards buying up the catalogs of women songwriters. Sadly, public pension funds continue to invest via these private firms into songwriter catalogs but perhaps one day one of them will just handle it themselves. Then last in terms of investments, Apple along with Alphabet and Andreessen Horowitz are throwing $50 million at UnitedMasters. Part of the reason I wrote about music distributors last month was to frame that these companies, UnitedMasters in particular, really do sit as barnacles underneath the major labels and large tech firms, so this all but confirms an eventual purchase whenever folks stop pretending it’s a real business. When that expiration date hits could be next year or 2025 but hard to see this not ending up to a similar fate as AWAL. 

Let’s run through some recent catalog purchases. Primary Wave bought a majority stake in “Return of the Mack” singer Mark Morrison’s publishing catalog. The Hipgnosis Songs Fund reportedly bought the catalog of Carole Bayer Sager for nearly $10 million, which is again a rare time we see any specific dollar amount attached to one of these deals. Round Hill Music also picked up the publishing catalog and neighboring rights of country songwriter Zach Crowell.  

Linda Ronstadt sold her catalog to Irving Azoff’s Iconic Artists Group. Another sign, like their Beach Boys deal, that baby boomers can rest easier knowing the music of their youth will collect corporate checks. Speaking of legacy acts, Paul Simon announced he was selling his catalog for reportedly “nine-figures” to new-minted Sony Music Publishing. Just continuing on the Bob Dylan UMPG deal of major legacy songwriters throwing their catalog to the major publishing houses that are now willing to spend cash. 

Now, here are a couple of updates on music-adjacent special-purpose acquisition companies. Edgar Bronfman Jr., the former CEO of Warner Music Group, is looking to launch a SPAC valued at $300 million with a number of other former television and media executives. What exactly this company will purchase or do is still unknown, such is the way with SPACs, but I’m sure it’ll be a great way for no-name suits to pad their pockets. Then, Reservoir Media, a song rights company that’s been in the game before the recent post-Round Hill/Hipgnosis boom, is looking to go public via SPAC with a valuation of $700 million. Founded by Golnar Khosrowshahi, the daughter of Hassan Khosrowshahi, who himself came from a long line of Iranian wealth, is also the cousin of Dara Khsrowshahi, Uber’s current CEO. 

Last, but certainly not least Scooter Braun sold Ithaca Holdings to HYBE America, a subsidiary of HYBE formally Big Hit Entertainment, which is a pretty big merger of management and publishing firms. This falls in with South Korean music business trends where management holds a lot of keys of power within its record industry but also just another transaction for music’s premier wealth hoarders to keep collecting bigger checks. 

An Open Invitation for Unity as CRB Rate Battle Drags On (Guest Op-Ed) - Billboard (Subscription) 

I plan to write about a little history of the Copyright Royalty Board next month, so I thought I’d give a couple of comments on this recent op-ed by Chris Harrison, a VP at both SiriusXM and Pandora, two companies with long histories of fighting against songwriter compensation. Harrison’s main argument is that since the Music Modernization Act passed it shows that publishers, streaming platforms, and labels should be able to come to some agreement over these recent CRB ruling on how much platforms must pay for songwriters. His point that it’s absurd the latest Phonorecords III is still in court, while the next round is beginning to start in only two years is fair. However, rather than compromise, I’d suggest streaming platforms need to accept the CRB ruling and that there should be far more outcry over Spotify and others, except Apple, appealing the previous decision. The profits Harrison cites as a reason for compromise should be pulled from middleman streaming platforms, not the artists providing the music people enjoy. 

Is Universal Music Worth $29 Billion? $49 Billion? Even $100 Billion?  - Rolling Stone (Subscription) / Universal Music Group is raising $3.5 billion in financing. Will a spending spree follow? - Music Business Worldwide 

Tim Ingham’s commentary and reporting point out that UMG is right now raising money and looking to go public on the Dutch stock market later this year points towards it potentially leaning even heavier into song rights investment. Surely someone, anyone, at a national level might wanna ask if it’s good that the world’s largest record label appears ready to morph itself even more into owning song rights. 

Big Music Needs to Be Broken Up to Save the Industry - Wired / Break up the Telecom Giants - The New Republic 

Cannot be overstated that a movement to break up major labels and major telecommunications companies could drastically remake the record industry for the better. Certainly always eager to hear and follow up on any potential demands in that direction. 

Meet the Experimental Musicians Who Built Their Own Streaming Service - Pitchfork 

A cool profile of a few dozen musicians, who built their own alternative streaming platform with its own unique payment structure. Good luck to the folks here and I hope someone reached out to them about moving off Patreon! 

What the Spotify/K-Pop Showdown Underscores About the Future of Streaming - Pitchfork 

An interesting deep dive into the public tiff between Spotify and the Korean digital media conglomerate Kakao. The piece highlights that Spotify is likely not going to make a huge dent in an already mature South Korean market but Kakao was flexing its own muscles to let the company know it’s willing to play hardball with outside competitors. 

Web3 As An Interdependent Economy: A Conversation With Mat Dryhurst - Forbes 

Forbes interviewed Mat Dryhurst, who provides useful historical context to recent conversations around NFTs, social tokens, and other emerging tech trends bouncing on the periphery of the music world.

Ampled 

Art and Labor 

Buy Music Club  

Interdependence 

Notes on the Crises  

Resonate  

Strikewave 

WBAI

My name is David Turner and I started Penny Fractions back in November 2017, as a way to think through various topics within the world of music streaming. Since then, the newsletter, which is delivered on Wednesday mornings (EST), has grown to reach over four thousand subscribers with an archive that can be found right here. I’m currently a Program Manager at SoundCloud, so all thoughts here represent me, not my employer. Prior I wrote for Music Business Worldwide, Pitchfork, the New Yorker, Noisey, Rolling Stone, and Spin. There is a Patreon one can support to help cover email billing costs and to compensate my copy editors, Mariana Carvalho and Taylor Curry. Artwork is produced by graphic designer Kurt Woerpel. If curious, here is the newsletter’s budget sheet, tentative publishing schedule, and a research database. Any comments or concerns can be sent to pennyfractions@gmail.com.