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The music business review of the year 2022: Part one

By Chris Cooke and Andy Malt | Published on Monday 19 December 2022

As 2022 draws to a close, we’ve selected ten key events in music and the music business from the last year. The first five here coincide with the final edition of our Setlist podcast for this year, where we also summarise the same stories.

So, here and in the podcast, we discuss the ongoing economics of streaming debate, the resurgence (or not) of the live music industry, the continued increase in song-theft lawsuits, the growing trend of interpolation in pop, and the licensing of music on social media platforms.

Listen to the accompanying episode of Setlist here.

Meanwhile, read on for our write up of each story, and check out part two here.

01: ECONOMICS OF STREAMING
In his annual review of the wider music rights sector, Will Page declared this year that “music copyright has never had it so good”, after his study estimated that global revenues for the record industry and music publishing sector in 2021 reached almost $40 billion on the back of the ongoing streaming boom.

However, of course, many artists and songwriters argue that they are not seeing the benefit of that streaming boom – and the boost it has brought about in the music rights sector – because of the way the music streaming business is set up and how digital revenues are shared out between artists, record labels, songwriters, music publishers and the streaming services.

Those arguments from the music-maker community became all the more vocal during the COVID-19 pandemic when other music industry revenue streams started to slide or stopped entirely, while streaming revenues continued to grow. In the UK that resulted in the big Parliamentary inquiry into the economics of music streaming which saw MPs – in their final report in 2021 – call for a “complete reset” of the digital music business.

Off the back of that report, the UK government’s Intellectual Property Office instigated three strands of work which have been ongoing throughout 2022, focused on transparency, data and remuneration.

Working groups were convened to consider the lack of transparency in the streaming business and the complexities around music rights data. That work has led to two voluntary codes being drafted which could be agreed and signed in early 2023, and which would see the UK music industry at large make commitments to address the various transparency and data issues.

The third strand focused on music-maker remuneration, which for many artists and songwriters is the biggest issue of them all. Currently 50-55% of streaming money goes to the recording rights, while 10-15% goes to the song rights. How much of the money flowing to the recording rights then goes to the artist depends on each artist’s record or distribution deal.

In their report, the MPs proposed some copyright law reforms that could amend old record deals or change the way artists get paid.

They also said that the UK’s Competition & Markets Authority should look into whether the majors being dominant in both recordings and songs had resulted in more streaming money flowing to the former than the latter, because record deals often see labels keep a majority of any income, while publishing deals pay the majority over to the writers.

The IPO commissioned research on the various proposed copyright law reforms, which is set to be published very soon. Meanwhile, the CMA did undertake a study of the streaming market, but concluded in November that any issues were not the result of anti-competitive conduct, and that the recording divisions of the majors were not putting pressure on their sister publishing divisions to skew the recording/song split.

Because everyone was waiting for the IPO research and CMA study to be completed, there haven’t been any formal conversations on music-maker remuneration as part of this work to date. Which means that is likely to be a key demand of the music-maker community as we head in 2023.

CMA concludes that competition issues are not creating challenges for music-makers in the streaming economy (November 2022)

02: LIVE INDUSTRY
It’s no secret that the COVID pandemic was catastrophic for the live music sector, which was pretty much shutdown for eighteen months. And while full capacity shows did return in some countries in the latter part of 2021, with international travel restrictions still in place and COVID surging again at the end of the year, the live side of the business only really got properly into revival mode this year.

So how has it gone? Well, at the upper level of the business, quite well. The analysts at Goldman Sachs were upbeat about the revival of live in their latest ‘Music In The Air’ report in June, predicting that 2022 revenues would get close to those seen in 2019, so that the business would be operating at 94% of pre-pandemic levels. With that in mind, the bankers predicted the sector would go back into growth in the years ahead.

Live Nation, the biggest live music company in the world, was even more upbeat. It told investors in November that “ticket sales for concerts this year were up 34% for the quarter, and now stand at over 115 million tickets sold for shows this year, up 37% from this point in 2019”.

“More importantly”, Live Nation boss Michael Rapino added, “momentum is strong with early signs pointing to continued growth in 2023 across our businesses”.

And yet, an increasing number of artists have gone public this year about just how difficult touring has become, commercially speaking. Rather than cancelling shows with the customary vague statements about “conflicting schedules” and “other commitments”, several artists told fans that touring at the moment was simply not economically viable.

Santigold explained that – on returning to touring post-pandemic – artists “were met with the height of inflation. Gas, tour buses, hotels and flight costs skyrocketed – many of our tried-and-true venues [were] unavailable due to a flooded market of artists trying to book shows in the same cities, and positive [COVID] test results constantly halt[ed] schedules with devastating financial consequences”.

Animal Collective told fans of cancelled European dates: “Preparing for this tour, we were looking at an economic reality that simply does not work and is not sustainable. From inflation, to currency devaluation, to bloated shipping and transportation costs, and much much more, we simply could not make a budget for this tour that did not lose money even if everything went as well as it could”.

And Lorde told fans that, while she was operating at a level where touring was still viable, “for pretty much every artist selling less tickets than I am, touring has become a demented struggle to break even or face debt. For some, touring is completely out of the question, even if they were to sell the whole thing out!”

Which means the picture for live music is very different depending on the level you are operating at. Surging costs mean those operating at the mid-tier – where profit margins were always quite tight – are now struggling to break even. Therefore ticket prices need to go up, but the marketplace is so saturated and competitive following the COVID shutdown, and with the cost of living crisis on everyone’s minds, artists and promoters are nervous about increasing the price of tickets.

Meanwhile at the grassroots end of live – where artists, venues and promoters often make only nominal profits, if that, even in the good times – the pressure is as high now as during the pandemic itself, if not higher. It will be interesting to see how artist community and the live sector deal with these various challenges as we work our way through 2023.

Live Nation Q3 2022 results (November 2022)

Santigold cancels US tour: “I will not continue to sacrifice myself for an industry that has become unsustainable” (September 2022)

Animal Collective cancel European shows after concluding that international touring in 2022 isn’t economically viable (October 2022)

Lorde is the latest artist to discuss the challenges of touring in 2022 (November 2022)

03: SONG-THEFT LAWSUITS
Another stack of song-theft lawsuits were filed in 2022, even though arguably recent legal precedent in both the US and the UK is reducing the scope of such claims.

These are the legal battles where one artist accuses another artist of ripping off their work – ie that a later release has lifted musical elements and/or lyrics from an earlier release, and in doing so infringed the copyright in that earlier song.

Disputes of this kind have always existed in the music industry, of course. Though some would argue that the big ‘Blurred Lines’ ruling in the US in 2015 – in which it was concluded that Robin Thicke and Pharrell Williams did infringe the copyright in Marvin Gaye’s ‘Got To Give It Up’ when writing their hit – resulted in many more song-theft lawsuits being filed.

That said, subsequent cases have generally not gone the way of those claiming that the copyright in an earlier song has been infringed. And that’s what also happened in the big headline-grabbing song-theft case of 2022 as well. However, interestingly, whereas most of these lawsuits are pursued through the US courts, this one happened in the UK, with Ed Sheeran accused of ripping off a track called ‘Oh Why’ by Sami Chokri when writing his 2017 release ‘Shape Of You’.

Despite being fought on this side of the Atlantic, the key topics for discussion in the ‘Shape Of You’ case were similar to those debated in the American courts. First, if the track that has supposedly been ripped off is not well known, is the fact it was available to stream enough to claim that the defendants had access to the earlier work before writing their song?

And secondly, if – as is often the case – the element shared by the newer song and the older song is a relatively short and pretty common place musical segment (or, in lyric cases, a relatively short line with pretty generic themes), can that allegedly borrowed element be protected by copyright in isolation?

In more recent disputes, US courts have been nervous about granting copyright protection to short common place musical segments. And where, unlike in the ‘Blurred Lines case’, the earlier song isn’t well known, courts have generally concluded that the fact the earlier track was available to stream is not enough to prove access.

The judge overseeing the ‘Shape Of You’ lawsuit in the UK showed similar caution, ultimately ruling in favour of Sheeran and his songwriting collaborators. And in doing so he arguably setting a precedent that – as in the US – UK courts need to see solid proof of access and copying of substance to conclude that two similar sounding songs mean the newer work has infringed the older one.

Still, complexities remain in disputes of this kind. And, in the US at least, plenty of new lawsuits are still being filed. Though, of the high profile ongoing US cases, the big one due in court in early 2023 – a lyric dispute over Taylor Swift’s ‘Shake It Off’ – was recently settled.

But another high profile US case is still going through the motions – and that also involves Ed Sheeran, this time in relation to his track ‘Thinking Out Loud’.

04: INTERPOLATION
If you’ve listened to any amount of pop radio in the last year, you can’t have failed to notice the rise of interpolation in popular music. Interpolation is the incorporation of a portion or portions of an existing song into a new one. Unlike sampling – which actually integrates part of an existing recording – interpolation is part of the songwriting process, and may, for example, involve using a melody but changing lyrics, creating something new but leaving the original source recognisable.

This is nothing new, of course. Borrowing from old songs to make new ones is a practice that has been around pretty much ever since there was more than one song. But it is undeniable that right now we are living through an interpolation boom.

There are various reasons for this. One is simply that some songs that have interpolated others are proving successful. Pop is a trend-based genre and, once something becomes popular, everyone starts doing it. But what triggered it in the first place? Arguably, it all goes back in no small part to those song-theft lawsuits.

Following the ‘Blurred Lines’ case, and the subsequent increase in song-theft legal challenges, artists and labels have become a lot more cautious. If it’s noticed before – or even after – a track is released that it sounds a bit like another, then other songwriters can find themselves credited on songs they had no actual hand in writing, as the new work’s label and publisher cover their backs to ensure they don’t get sued down the line.

Last year, Paramore’s Hayley Williams and Joshua Farro were added as songwriters on Olivia Rodrigo’s ‘Good 4 U’, months after it came out. It had been widely pointed out that the new track bore a (fairly vague) similarity to Paramore song ‘Misery Business’. When this happens, you never know whether it’s a reaction to a complaint from the writers of the earlier song, or the result of proactive licensing on behalf of the label and publisher of the new work.

Though it’s perhaps notable that Elvis Costello wasn’t given a credit after he said he didn’t care that Rodrigo’s track ‘Brutal’ bore some similarity to his 1978 song ‘Pump It Up’.

Either way, as publishers have seen more requests to license interpolations come in, some have spotted an opportunity and are now actively shopping songs to artists to rework. After all, a publisher’s job is to maximise income from their catalogue, and inserting an old song that has perhaps waned in popularity and giving it a fresh spin in a new pop song is a great way to do that.

When they were added as co-writers of ‘Good 4 U’, Paramore posted on Instragram: “Our publishing is wild right now”. Then there’s the bizarre sub-trend for Right Said Fred’s ‘I’m Too Sexy’ being re-used (we’ll come back to that later). And if you turn on Radio 1 for more than two minutes at the moment, you’re pretty much guaranteed to hear Anne-Marie’s ‘Psycho’, which fashions cheesy 90s hit ‘Mambo Number Five’ into an edgy retort to a partner’s infidelity and gaslighting.

While the interpolation boom possibly first began as a result of increased caution within the music industry, that doesn’t mean the cautious pre-release licensing of interpolations always goes to plan. Beyonce’s latest album, ‘Renaissance’, which leans heavily on interpolation, threw up a number of issues with the practice, even when her team tried to do everything properly.

Least controversial, but most interesting, regarding ‘Renaissance’ is lead single ‘Break My Soul’, which credits Allen George and Fred McFarlane as co-writers. Why? Because they wrote ‘Show Me Love’, performed by Robyn S. The Beyonce track has synths similar (although arguably not actually that similar) to said 90s hit.

However, the hit version of ‘Show Me Love’ was a remix by Stonebridge. It was on that remix that the synths in question were added. So Allen and McFarlane have not only got credit on a Beyonce track they played no active part in, but also for a synth part they didn’t write either. Such is the nature of how songs and remixes are often credited.

More actually controversial was the song ‘Energy’, which borrowed elements of ‘Milkshake’ by Kelis. This got The Neptunes – aka Pharrell Williams and Chad Hugo – songwriter credits on the Beyonce track. But not Kelis. She is not credited as a writer on the original song either, but has long claimed that she was in fact a co-writer and that her collaborators backtracked on commitments about who would share in the copyright on that and other songs they worked on together.

Kelis was not just angry about this, but also that Beyonce hadn’t contacted her before releasing the new track – saying that she learned about its existence at the same time as the public. Shortly afterwards, a new version of ‘Energy’ was pushed out to streaming services with the ‘Milkshake’ interpolation removed. The difference, it has to be said, was hard to spot.

Another act to complain about their appearance on Beyonce’s album were (I did promise) Right Said Fred. Having previously been used in singles by Drake, Taylor Swift and Sugababes, their song ‘I’m Too Sexy’ was interpolated by Beyonce on ‘Alien Superstar’ and – they claimed in an interview with The Sun – this was done without permission.

They accused Beyonce of being “arrogant” and assuming that they were too small to be able to come after her. She responded with a statement saying that the song had, in fact, been properly licensed, listing the dates of the licensing request, approval and payment. The statement also said that as a duo, Right Said Fred have a bigger cut of her song than any other writer on the track.

The question now is, how long will this last? It seems likely that, in a more cautious music industry, we’ll see songwriters routinely added as co-writers on songs they influenced in some way, in order to avoid possible litigation, for some time to come. The practice of actively and overtly building a new song out of parts of an old one seems more like something that will lose its shine though, as whatever new pop trend moves in to take its place.

Beyonce removes ‘Milkshake’ interpolation from new track following criticism from Kelis (August 2022)

Beyonce denies interpolating Right Said Fred track without permission (October 2022)

05: LICENSING ON SOCIAL MEDIA
For the music industry, it has always been pretty clear that when brands use music in promotional videos posted to platforms like YouTube, Instagram and TikTok, they need to secure bespoke sync licences. Because the music licensing deals secured by those social media and user-upload platforms themselves only cover user-generated content.

Nevertheless, some brands have in the past posted videos containing music to those platforms assuming – unwisely – that the YouTube, Instagram or TikTok music licences would apply. This year we got clarification in the US courts that those brands are wrong and the music industry is correct, with energy drink Bang being found liable for copyright infringement for failing to secure bespoke licences for the music in its social media videos.

Though, what about influencer content? At what point does an individual user uploading videos to a social platform cease to be a ‘user’ in the context of those platform’s ‘user-generated content’ music licences? Arguably in that domain, things are slightly more ambiguous.

The music industry would likely argue that if an influencer is being paid by a brand to make a video, they definitely need a bespoke music licence. Though in the legal battle between the major record companies and Bang, the judgements were slightly less conclusive on whether the brand can also be held liable if the influencer fails to secure such a licence.

One challenge for influencers and other online creators is how they would even go about securing a bespoke licence, especially when they are not working with a big brand, given that they are often operating on low budgets. Sufficiently low, in fact, that in many cases it wouldn’t be worth the while of a label or publisher to negotiate a bespoke sync deal.

YouTube creators tend to be more savvy when it comes to music licensing, because if they put commercially released music in their videos it is likely to be spotted by the Google’s platform’s Content ID system. Once spotted the label that released the music can either block the video or – more likely – take the creator’s share of any ad income YouTube generates. But for any YouTube creator monetising their content, that’s a problem, because they want that money.

That has created a huge opportunity for production music companies that offer the kind of one-stop global licences that YouTube creators need – companies like Epidemic Sound. Though it’s also a lost opportunity for the more conventional music industry because, while any one sync deal with a YouTube creator won’t be worth much, a huge number of videos are being created every day.

Start-ups like Lickd have been building micro-licensing services for the music industry that allow online creators to more easily license commercially released music for their videos at affordable prices, creating a potentially lucrative new revenue stream for labels and publishers.

And that kind of micro-licensing could really surge in 2023, not least because YouTube itself this year start piloting its own platform that allows creators to more easily license music from labels and publishers for use in their videos.

So, 2022 was a year where we got confirmation that brands – and online creators operating at a certain level – need to sort out bespoke music licences for their social media content. However, the music industry is slowly making it easier to secure such licences, including for more grassroots creators.

Bang infringed Sony Music’s rights in social media videos, court confirms (September 2022)

Now Warner Music sues Bang over the unlicensed music in its TikTok videos September 2022)

YouTube launches new music micro-licensing service for its video creators (September 2022)

You can read the second part of our review of the year here.