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Business News CMU Digest
CMU Digest 02.04.23: Warner, Sentric, BMI, SM Entertainment, Apple Music Classical
By Chris Cooke | Published on Sunday 2 April 2023
The key stories from the last week in the music business…
Warner Music announced it is downsizing its global workforce by about 4%, which means around 270 roles will go. It comes as new boss and former YouTube exec Robert Kyncl puts the focus on potential opportunities created by new and future technologies. “WMG is positioning itself for this new phase of growth at the intersection of creativity and technology”, he said in an internal memo confirming the cutbacks. “This is not a blanket cost-cutting exercise”, he insisted later in said memo, telling his staff that “every decision has been made thoughtfully by our operators around the world, who considered the specific needs, skills, and priorities of each label, division, and territory, in order to set us up for long-term success”. [READ MORE]
Music distributor and artist services company Believe announced it had bought music publisher Sentric. The deal is Believe’s “first break into building a digital-first innovative music publishing business”, it said. Sentric, perhaps best known for providing rights administration services to self-published songwriters, already has a partnership with Believe’s DIY distributor TuneCore. That partnership will now extend across the Believe group. Believe bought Sentric off Utopia Music, which only acquired the publisher in February 2022. The sale comes amid speculation about the future of Utopia Music which is facing a number of finanical challenges after a period of significant expansion through acquisition a year ago. [READ MORE]
US collecting society BMI welcomed a rate court ruling that will boost what its members receive when their songs are performed live at American gigs and concerts. It ends years of legal wrangling as BMI battled with live giants Live Nation and AEG, and the North American Concert Promoters Association, in a bid to get a better rate for its songwriters and publishers, replacing a previous rate put in place in the late 1990s. US song right societies BMI and ASCAP are both regulated by so called consent decrees which allow special rate courts to set the royalty rates each society can charge for the use of their respective repertoires. BMI didn’t get everything it wanted in the rate court ruling, however the top-line revenue share rate it will receive is now 138% higher than before, and it also now applies to some of the extra revenue streams that are routinely associated with concerts these days. [READ MORE]
South Korean internet firm Kakao confirmed it had acquired a controlling stake in K-pop powerhouse SM Entertainment. That announcement followed the brief but high profile battle for control of the SM company between Kakao and another K-pop powerhouse, that being Hybe. The latter had the support of SM founder Lee Soo-man, who sold it most of his SM shares. But ultimately Kakao offered a higher price to other SM shareholders and Hybe quickly bailed on its share-buying plan. It then announced that it would sell the SM shares it had bought – mainly those it got from Lee – to Kakao. However, the net firm only needed just under 40% of SM’s stock to control the business and, with plenty of other SM shareholders also keen to sell at the price it was offering, in the end Kakao only bought about half of Hybe’s shares. Which means Hybe still owns 8.8% of SM. [READ MORE]
Apple launched its bespoke classical music app, designed to make it easier to navigate and explore the classical music catalogue, with mainstream music streaming apps not generally set up to deal with the ways in which the classical genre differs from other genres. An official blurb noted that “classical works have multiple movements and tracks; famous pieces have hundreds of recordings with different orchestras, conductors, and soloists; and many composers have their own special catalogue classifications, from Bach’s BWV to Mozart’s K”. The new app has a search function that factors all this in. Apple Music Classical had been in development for some time, with the tech giant acquiring an existing classical music focused streaming service, Primephonic, back in 2021 to help with the evolution of the new product. The app is available on iOS devices with an Android version to follow, and is free for existing Apple Music subscribers. [READ MORE]
