From Sir Lucian Grainge on music’s streaming payout model to Kakao Entertainment’s $966m investment… it’s MBW’s Weekly Round-Up

Welcome to Global Music Businessour weekly roundup – where we make sure you’ve captured our five biggest headlines over the past seven days. MBW rounding is supported by Centtriphelping more than 500 of the world’s best-selling artists maximize their income and reduce their touring expenses.

This week, writing in a New Year’s note to employees, Popular music group President and CEO Sir Lucian Grainge shows how the way music streaming services pay today’s labels and artists must change.

In a note obtained by MBW, Grainge said: “What became clear to us as well as to so many artists and musicians—those both growing and established—is the economic model. for streaming needs to evolve.”

He added: “As technology advances and platforms evolve, it is not surprising that the need for business model innovation is also needed to keep pace with change.”

Also this week, the US market supervisor Luminate (formerly MRC Data / Nielsen Music) released its End of 2022 report revealing that on-demand service sound US song streams have increased 12.1% last year, reached 1.1 trillion.

However, MBW’s analysis of Luminate’s latest figures has revealed that the Top 10 Audio Streams in the US are becoming less popular.

Elsewhere, South Korea-based Kakao Entertainment, a subsidiary of Kakao Corp, has secured 1.2 trillion Korean Won (about 966 million USD) investments from sovereign wealth funds.

The company’s music division operates the Melon streaming platform, which Kakao claims has a “dominant market share of domestic music distribution rights”. Kakao also operates what it calls a “multi-label management system for globally loved K-pop artists” including IVE, Monsta X and others.

In addition, Dr. Dre is said to be about to sell some of his musical assets in two separate transactions worth $200 million, while sony Music filed a copyright infringement lawsuit against Trefuego, the rapper behind the TikTok hit called 90mh.

Here’s what happened this week…

1) SIR Lucian GRIGE: MUSIC NEED A NEW ONLINE PAYMENT MODEL… AND WE ARE WORKING ON IT.

Sir Lucian Grainge, President and CEO of Universal Music Group, has said that the way music streaming services pay labels and artists today must change.

Writing in a New Year’s letter to employees on Wednesday (January 11), which was obtained by MBW, Grainge said: “It became clear to us as well as to so many artists and musicians. —developers as well as established—is the economic model for streaming demand to evolve. As technology advances and platforms evolve, it is not surprising that the need to innovate business models to keep up with change is also necessary.

“On the one hand, there is a growing disconnect between devotion to artists whom fans appreciate and seek to support, and on the other, how platforms pay subscription fees. Under the current model, the important contributions of too many artists, as well as the involvement of too many fans, are underestimated…”

In Grainge’s vision, there is: A ‘proportional’ payment system used by services like Spotifywhereby most of the subscriptions and advertising dollars generated each month are pooled into a central ‘pot’, which is then paid to labels and artists based on their share of total plays.

Also in Grainge’s sights: Companies and entrepreneurs seek to exploit this ‘proportional’ system for their own ill-gotten gains. (As well as, potentially, streaming services that make low-royalty direct deals with music production companies, then deliberately push music fans toward the mainstream. This is to save money on total royalty costs.)

2) Top 10 Visits in the US Last YEAR HAS LESS ONE IN 200 Streams

As MBW reported yesterday, total on-demand audio streams in the US last year grew strongly – up 12.1% to 1.1 trillion.

According to figures revealed in Luminate’s year-end report, this streaming volume also accelerated year-on-year in 2021 (total streams increase by 121.8 billion YoY in 2022, larger than the increase of 111.0 billion that we’ve seen in 2021).

A deeper dive into Luminate’s numbers, however, confirms that long-standing trends in the modern music business will become even clearer in 2022: Top 10 Biggest Hits in the U.S. Annual periods are becoming less common…

3) HUGE ENTERTAINMENT OF K-POP AND MEDIA KAKAO GUARANTEE $966M INVESTMENT FROM THE OWNER’S FUNDS

South Korea-based Kakao Entertainment, a subsidiary of Kakao Corp, just received an investment of 1.2 trillion Korean Won ($966 million) from what it calls “national investment funds” leading family”.

It plans to use the proceeds to drive global growth across its three business divisions. Those divisions include ‘Story’, which includes webtoons and web novels, then Media, as well as Music.

Kakao hasn’t revealed the names of the funds backing the company, but TechCrunch reports that the investment comes from the Public Investment Fund of Saudi Arabia (PIF) and Singapore-based PWARP Investment.

The Korea Herald reported that “the amount injected is the largest amount a content company has ever received” in South Korea.

4) Dr. DRE SELL MUSIC PROPERTY TO SHAMROCK AND UNIVERSAL FOR $200M or more (REPORT)

Dr Dre is reportedly close to selling some of his musical assets in two separate deals, with Shamrock Holdings and Universal Music Group, for up to $200 million.

According to a report from billboards on Wednesday (January 11).

Citing sources, Billboard reports that Dr. Dre is selling his artist royalties from two of his solo albums and his artist royalties from hip hop group NWA, which he founded along with Ice Cube, Arabian Prince and Eazy-E in 1987.

He’s also selling producer royalties, a writer’s share of a catalog of songs he doesn’t own the publishing rights to, such as a share of songs on the album The Chronic (1992) his, published by Music Publisher SonyBillboard added…

5) TREFUEGO HIT 90MH’s TIKTOK STORY – AND SONY BID TO REMOVE IT FROM INTERNET

“Does anyone know why this song is banned on Spotify?”

“WHY NOT 90MH ON SPOTIFY NA:'((((((“

“why 90mh was removed from spotify”

All comments are posted on Twitter and YouTube at various times in late 2022 by fans of the viral TikTok hit.

Said hit, originally released in September 2019, is 90mh by independent rapper Trefuego from Arizona.

Each of these three comments offers the same explanation: Because Sony Music issued a strict 90mh piracy takedown notice for Spotify and other important platforms on August 9, 2022.

That incident was disclosed in a lawsuit, obtained by MBW, by Sony Music Entertainment and Sony Music Publishing against Trefuego in Arizona County in December…

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