From the 5 stats that will define the music business in 2023 to UMG being sued over its Spotify equity ownership… it’s MBW’s Weekly Round-Up
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 maximise their income and reduce their touring costs.
We’re a week into the new year, and the music business is picking up the pace again after some well-deserved Holiday OOO’s and ZZZ’s.
In the M&A space, Downtown acquired London-headquartered music technology company Curve Royalty Systems.
Meanwhile, Round Hill acquired a catalog of producer royalties and related rights from legendary rock producer Steve Lillywhite.
Elsewhere, it was announced that the back catalog of Grammy-winning hip-hop trio De La Soul is set to roll out on digital streaming services for the first time on March 3, through a new partnership with Reservoir Media and Reservoir-owned Chrysalis Records.
We also learned this week that Hip-hop duo Black Sheep, best known for the 1991 album A Wolf in Sheep’s Clothing, are suing Universal Music Group over its Spotify equity ownership in a class action lawsuit.
TikTok rival Triller, meanwhile, which didn’t IPO in Q4 2022, is reportedly being sued by Universal over unpaid license fees.
Plus, MBW explored five stats that will set the scene for some of the standout happenings, tensions, and hopes of the music business in 2023.
Here’s what happened this week…
1) 5 NUMBERS THAT WILL COME TO DEFINE THE MUSIC BUSINESS IN 2023
Here we go again. The music business is gently ushering itself back into action following some much-needed Holiday respite.
But what does 2023 hold in store for the industry and its key players?
Well, to be completely honest with you, we don’t exactly know. How on earth could we?
(That’s one of the key flaws, isn’t it, about this wonderful industry? Amongst its many, many attributes: Too many people pretending they know what couldn’t possibly be known about the future of the music business, when the future of the music business has shown itself – time and time again – to be one of the least predictable things in the commercial universe.)
Anyway, here’s what we do know. We do know that the following five stats really set the scene for some of the standout happenings, tensions, and hopes of the music biz in 2023.
And we do know that you’re probably going to be better armed for whatever this year throws at the music rights industry if you understand why each of them is so important…
2) UNIVERSAL MUSIC GROUP SUED OVER ITS SPOTIFY EQUITY OWNERSHIP BY ARTIST IN CLASS ACTION LAWSUIT
It’s not often that Music Business Worldwide is itself cited in a significant lawsuit in the music business, but that’s the case today.
Before we get into the weeds on how that happened, here’s the skinny on the suit: Hip-hop duo Black Sheep, best known the 1991 album A Wolf in Sheep’s Clothing, are suing Universal Music Group in a class action lawsuit, filed yesterday (January 4) in New York.
NYC-based Andres Titus and William McLean, via their attorneys, make three main claims:
(i) That Black Sheep and other artists signed to Universal should have been paid 50% of royalties from Spotify since 2011 due to a clause in their contracts pertaining to “net receipts”;
(ii) That UMG agreed to accept lower royalty rates from Spotify in exchange for receiving equity in the streaming service back in 2008; and
(iii) That Black Sheep and other artists should also have received 50% of UMG’s Spotify equity (or the value of it) because, according to the duo’s suit, this would be “proportional” to their royalty contract.
Black Sheep argue that Universal owes it and other artists approximately $750 million in unpaid royalties as a result of these three claims.
Universal has called Titus and McLean’s claim that it accepted lower royalty rates in exchange for Spotify equity “patently false and absurd”. UMG added in a statement that it has “a well-established track record of fighting for artist compensation…”
3) U2, THE KILLERS PRODUCER STEVE LILLYWHITE SELLS MUSIC RIGHTS TO ROUND HILL
The music rights space has been kicked into action this week with the news that Round Hill Music has acquired a catalog of producer royalties and related rights from legendary rock producer Steve Lillywhite.
The company says that Lillywhite’s production work includes “some of the most successful songs and albums of all time” spanning artists from U2, The Killers and Morrissey, to The Talking Heads and The Rolling Stones.
Round Hill announced the deal this week, just weeks after MBW reported that it had spent more than $200 million across 40 acquisitions in 2022.
Round Hill did not disclose the size of the deal with Lillywhite, although industry sources estimate that, based on the royalties’ annual earnings, the price-tag would likely have been in the region of $10 million…
4) TRILLER DIDN’T END UP COMPLETING AN IPO IN 2022. NOW IT’S BEING SUED BY UNIVERSAL MUSIC GROUP
Triller has been hit with a lawsuit from Universal Music Group over unpaid licensing fees.
On Thursday (January 5), UMG filed a lawsuit against the US-based TikTok rival claiming that it has not paid licensing fees for the past three quarters.
The suit also claims that the company hasn’t provided quarterly usage reports outlining the use of the major’s music on the Triller app.
This news was first reported by Variety, which reports that UMG says in its complaint that it has also terminated its agreement with Triller.…
5) DOWNTOWN MUSIC HOLDINGS ACQUIRES CURVE ROYALTY SYSTEMS
Downtown Music Holdings has acquired London-headquartered music technology company Curve Royalty Systems.
The latter company was founded in 2019 by Tom Allen, Richard Leach and Ray Bush, all veterans of music companies such as Cooking Vinyl, Essential Music and ADA.
Curve is the latest in a series of strategic acquisitions made by Downtown in recent years.
In addition to Curve, New York-based Downtown has acquired companies including B2B music tech and services platform FUGA and indie distributor CD Baby. Downtown has also made investments in the likes of Beatbread and Vampr…