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Business News CMU Digest
CMU Digest 11.09.22: Kobalt, energy prices, vinyl sales, Nirvana, GEMA
By Chris Cooke | Published on Sunday 11 September 2022
The key stories from the last week in the music business…
Private equity firm Francisco Partners confirmed it is acquiring a majority stake in Kobalt. It’s thought the new deal, which is subject to regulatory approval, will see Francisco control 90% of the music rights firm. The remaining 10% will be shared between Kobalt founder Willard Ahdritz; investment fund Dundee Partners; and Music, the music investment outfit founded by Matt Pincus, who is better known as the founder of music publisher Songs, the catalogue of which was previously acquired by Kobalt’s now defunct investment unit. Pincus will join the Kobalt board. Meanwhile the company will continue to be run by the same management team with Ahdritz as Chair and Laurent Hubert as CEO. [READ MORE]
There was a mixed response from the music and night-time sectors to the UK government’s latest plan to combat surging energy prices. Industry organisations previously warned that many venues, clubs and studios were facing closure because of increased energy costs. The UK’s newly appointed Prime Minister Liz Truss announced the introduction of a cap on energy prices for businesses for the first time, though only for six months. That might help struggling music businesses in the short-term, but doesn’t provide long-term security. The Music Venue Trust said the plan “only goes some way in alleviating the challenge”, urging ministers to find “a long-term solution for energy provision for grassroots music venues providing an energy supply which is affordable, reliable and sustainable”. Meanwhile the Night Time Industries Association said it was “extremely disappointed” at the government’s “half measure package”. [READ MORE]
Vinyl sales in the UK are now bringing in significantly more money than the sale of CDs. This is according to stats for 2022 so far from the UK’s Entertainment Retailers Association. Whereas CD sales were still slightly ahead in 2021, for the year so far vinyl has brought in £12 million more than CDs, with vinyl sales up 12.2% while CD sales have fallen 8.1%. The ongoing vinyl revival means the format is now also bringing in more revenue than the sale of physical discs for PlayStation consoles, though the sale of physical games for the Nintendo Switch is still generating more cash. Meanwhile, both vinyl and CD sales are now out-performing DVD sales. [READ MORE]
A US judge dismissed the lawsuit over the artwork on Nirvana’s ‘Nevermind’ album. The band and their label were sued by the man who, as a baby, appeared nude on that artwork, Spencer Elden. His lawsuit claimed that the defendants “knowingly produced, possessed, and advertised commercial child pornography depicting Spencer, and they knowingly received value in exchange for doing so”. But the judge said that, under the statute of limitations for the laws Nirvana are accused of violating, Elden should have filed his lawsuit no later than 2019. He didn’t go legal until 2021. Elden’s lawyers had argued that the statute of limitations should not apply because Nirvana continue to distribute the album with the original artwork, so the alleged harm continues. Standing by that argument, the Elden side vowed to appeal, stating that the judge’s decision to dismiss the lawsuit was based on “a misunderstanding of the statute of limitations”. [READ MORE]
German collecting society GEMA published a new study about the streaming market in Germany which included the results of a survey of more than 4000 of its members. It put the spotlight back on how digital income is shared out across the music community. Responding to the study, the European Composer & Songwriter Alliance said it “further demonstrates that composers and songwriters, who are at the source of all music, are the fifth wheel on the wagon for revenue distribution, with less than 10% of the revenues generated by streaming”. The pan-European group added that: “The music industry and policy makers must look at the majors’ dominance in the streaming market, and act now to strengthen the value of songs, evaluate and reform the per stream revenues model and put transparency at the cornerstone of those discussions”. [READ MORE]
