I.B. BAD ON THE YEAR IN THE MUSIC BIZ: MAJOR STORYLINES
BIZ FILLS UP WITH PREMIUM: The music industry this year firmly positioned itself behind the proposition that the premium subscription model is a sustainable road to success, so it’s little wonder that practically everyone is praying that Apple Music succeeds. The brainchild of Jimmy Iovine and his Beats Music team, working closely with Eddy Cue, Apple’s premium streaming service has made some headway during its first six months, picking up a reported 6.5m subscribers at the end of the initial 90-day free trial period. Taylor Swift has played a key role in the narrative, convincing Cue to change his stance on not paying royalties to the rights holders during the trial, while making a deal with Apple for a concert film that stands as the biggest exclusive yet for the nascent service.
Apple Music is engaged in an uphill battle for dominance with established but problematic two-tiered service Spotify, which the rights holders feel has failed to convert free users to subscribers quickly enough. As they continue in their efforts to hammer out more favorable new deals with the Daniel Ek-led company, the rights holders have been using the threat of removing their music content from the service as leverage to force Spotify to modify its unwavering stance against withholding some big artists’ albums from the free tier for a period of time, and/or setting some sort of time/usage limit in order to motivate super-users to convert. Artists have been pressuring Spotify as well, getting in line behind Taylor, who made headlines when she yanked her music from the service in 2014. As 2015 nears its end, Spotify appears to have just blinked on freemium, under pressure from holdout Adele and Coldplay, whose new LP went on the service after a one-week window. The company now seems likely to change its hardline policy toward premium-only.
Although it looks like a misfire, Jay Z’s premium-streaming service Tidal has served to advance the freemium narrative and underscore the artists’ frustration over that hot-button issue. Many believe that Jay Z is looking to get out of Tidal, which has failed to gain traction. This high-profile undertaking has cost him millions of his own money, and he still hasn’t paid the licensing fees to the rights holders. How will the situation be resolved? Will he find a buyer or figure out a way to monetize it?
TUG OF WAR AT SONY/ATV: The initiation of the buy/sell by Sony’s leadership in Tokyo reportedly blindsided Sony Entertainment chief Michael Lynton, Estate executor John Branca and Sony/ATV ruler Marty Bandier, creating a major disruption for everyone involved. Sony/ATV’s estimated value is around $2 billion, and is expected to appreciate in the coming years. Sony will buy out the Jackson Estate or vice versa, depending on which party is more highly motivated and willing to write the bigger check. Branca is expected to aggressively pursue the acquisition, and most believe he’ll have no trouble building a war chest through investment banks, sovereign funds or a combination of the two. Either way, it’s a win-win for the Estate, which will wind up with the world’s most valuable publishing company or a huge check. The Jackson Estate and Sony are both presently doing valuations of Sony/ATV assets in a developing story that is likely to stretch well into 2016.
THE GRAMMYS: Recording Academy head Neil Portnow surprised many in the business by shedding light on the machinations of the top-secret Grammy cabal with the shocking revelation elsewhere in this issue that they’re choosing the Grammy nominees from the top 20 vote-getters in each category. This committee is clearly not a democracy, and people want to know who its members are. The rationale for this approach is that they want to avoid embarrassing nominations and major oversights. If this the case, how did they whiff on Justin Timberlake two years ago? But it’s Portnow and longtime Grammys producer Ken Ehrlich who choose the performers for the show, an equally important process. Which of the artists now prepping their performances under Ehrlich’s watchful eye—including Taylor Swift, The Weeknd, Little Big Town, Alabama Shakes and Adele—will get the biggest liftoff from Music’s Biggest Night next February, triggering legitimately memorable Grammy Moments? UMG is well positioned, having swept the 2016 Album of Year nominations.
Capitol hit for the cycle at the 2015 Grammys, as Sam Smith took three of the four major categories, while Album of the Year winner Beck became the first domestically signed act of the Barnett era to hit a home run. Rob Stringer’s Columbia, with wins from Jack White, Pharrell, Tony Bennett and Beyoncé, along with a memorable performance from Hozier, made a strong move as well, while John Janick’s Interscope registered double wins for Eminem and Kendrick Lamar. In the capable hands of Ehrlich and CBS’ Jack Sussman, the power of the Grammys is instant, significant and all-inclusive.
AN UNHOLY MESS: Billboard has suffered through a miserable year. Its Hot 100 Festival, organized by BB prexy John Amato, turned into a PR and financial disaster that will go down in the books as the Bible’s “Nightmare on Jones Beach.” That fiasco was coupled with Irving Azoff’s attack on the trade’s confidential executive survey in the New York Post, calling the whole thing “a new low, even for them.” The survey was finally scuttled in favor of a mock version after Sony Music threatened the Bible with Armageddon if they published the results. What’s more, BB’s 2015 Power 100 once again evidenced the cluelessness of its compilers. The Bible brain trust also seems baffled about how to handle the label realignments inside UMG and Sony; consequently, it hasn’t published label marketshare at all this year. Because the mag’s present regime doesn’t understand the business, they don’t know how to respond to the mess they’ve made, a situation that has resulted in anger from some quarters and unmitigated delight from those with no skin in the game who enjoy watching the Bible brass squirm. The problem that top execs across the industry are having is that the decision-makers at the Bible don't know the difference between a stream and a one-stop, and many believe they've made their hallowed Top 200 album chart a mockery and far less important by including TEAs and streams.
