Welcome to Music Business Worldwide’s weekly round-up – the place we make sure that you caught the 5 largest tales to hit our headlines over the previous seven days. MBW’s round-up is supported by Centtrip, which helps over 500 of the world’s best-selling artists maximize their earnings and cut back their touring prices.
It was one other week dominated by information centered on Universal Music Group, and never solely on its licensing feud with TikTok (though, sure, that did play a task).
In one more signal that Afrobeats has develop into a significant international phenomenon, UMG acquired a majority stake in Lagos-headquartered Mavin International, a label credited with bringing many Afrobeats artists to international prominence.
A couple of days later, UMG confirmed its plans for a “re-design” of its organizational construction, which is able to embody layoffs and save the corporate some $270 million by the tip of 2026, all of it going in direction of EBITDA.
In the meantime, UMG’s spat with TikTok appeared to escalate this week, as TikTok started eradicating UMG’s publishing catalog days earlier than the license expired (versus UMG’s recordings catalog, which began disappearing from the platform over the previous month).
On UMG’s newest earnings name, feedback from UMG Chairman and CEO Sir Lucian Grainge and EVP/Chief Digital Officer Michael Nash didn’t counsel the potential for a fast decision, with Grainge asserting that “there should not be a free journey” for TikTok, and Nash indicating {that a} shift of customers from TikTok to different platforms would profit UMG financially.
UMG additionally reported that it generated revenues of EUR €11.108 billion in FY 2023 throughout all of its divisions (together with recorded music, publishing and extra). That FY income determine was up 11.1%YoY at fixed foreign money, and converts to USD $12.011 billion on the common annual change charge revealed by the European Central Financial institution.
Lastly, in non-Common information (and in one other signal that the majors are getting severe about monetizing superfans), Warner Music Group CEO Robert Kyncl introduced throughout an look at a convention in Doha, Qatar, that WMG is engaged on a “superfan app.”
Common Music Group (UMG) has acquired a majority stake in Lagos, Nigeria-based music firm Mavin International (Mavin).
UMG describes Mavin as “the driving drive behind lots of the continent’s Afrobeats artists”.
Based in 2012 by artist, producer, music government and entrepreneur, Michael Collins Ajereh (aka Don Jazzy), Mavin has performed a outstanding function in breaking Afrobeats artists inside Africa, and globally.
Based on UMG, Mavin will “preserve autonomy” over its technique and future expertise improvement. As a part of the settlement, founder and CEO Don Jazzy and COO Tega Oghenejobo will proceed main the corporate.
The deal stays topic to regulatory approval and is anticipated to shut by the tip of Q3 2024…
The battle between TikTok and Common Music Group simply entered a big new section.
TikTok confirmed on February 27 that it’s already begun eradicating Universal Music Publishing Group (UMPG) songs from its platform – three complete days earlier than the UMPG catalog turns into unlicensed to be used on TikTok.
As if you could be reminded, UMG’s distributed recordings catalog (comprised of round 3 million tracks) turned unlicensed to be used on TikTok on February 1 after UMG’s settlement with the ByteDance-owned platform expired very publicly on January 31, 2024.
Megahits by UMG-affiliated megastars together with Taylor Swift, Olivia Rodrigo, Billie Eilish, and extra have gone quiet on TikTok over the previous few weeks on account of that copyrighted content material being eliminated…
“He’s acquired my quantity… name us! They know the place we’re. Cease speaking on the f*****g web and let’s see what you’ve acquired to say.”
Sir Lucian Grainge didn’t say this about TikTok CEO, Shou Zi Chew immediately. It’s truly a remark from Noel Gallagher about his brother’s hopes for an Oasis reunion.
However what Grainge did say about UMG’s escalating licensing spat with TikTok, on Common’s This fall 2023 earnings name this week, wasn’t one million miles away.
Grainge was requested by Guggenheim analyst Michael Morris whether or not UMG and TikTok have been getting nearer, or additional away, from a renewed licensing deal that will fulfill UMG’s notorious considerations over the present phrases being provided by ByteDance.
“Particularly [on the subject of] TikTok… we’re pleasant individuals,” mentioned the UMG boss. “My telephone is open, sadly, 24 hours a day. We hope that we can discover options.”
Proper now, nevertheless, these “options” don’t look prone to arrive anytime quickly…
Common Music Group confirmed on February 28 the main points of a “re-designing” of its organizational construction, which it says will generate EUR €250 million (USD $270 million) in annual value financial savings.
UMG says this “redesign” – which incorporates “headcount discount”, aka layoffs – will end in €75 million ($81 million) of cost-savings in 2024 (vs. 2023).
These annual value financial savings (vs. 2023) will then broaden to €125 million in 2025, earlier than ultimately reaching €250 million by the tip of 2026.
UMG says all of those annual run-rate financial savings can be “accretive to EBITDA” – i.e. will straight enhance the corporate’s revenue margins.
In a be aware to buyers on Wednesday, UMG mentioned that it’s going to obtain its €250 million annual cost-savings goal by way of “a mix of headcount discount and different operational efficiencies”…
On Tuesday (February 27), Warner Music Group CEO Robert Kyncl appeared on the Net Summit tech convention in Doha, Qatar.
Kyncl took half in a session titled ‘The artist, the CEO, and the way forward for music’ and was joined onstage by actress and singer, Nora Fatehi – who’s reported to be the most-followed Moroccan artist on this planet, and who has simply signed a world recordings take care of Warner Music Group.
Nora Fatehi can be a significant Bollywood star, and was the primary Arab-African artist to hit one billion views with a single music video on YouTube.
Through the dialogue, Kyncl and Fatehi talked about developments round synthetic intelligence, the worth of a document label, and the function that expertise will play within the music business sooner or later.
Kyncl additionally revealed that WMG is constructing its personal ‘superfan app‘…
