This week: France has stood firm against Spotify’s bullying - and Spotify is having a tantrum. Warner Music has thrown its hat into the ring for Believe - but can it afford the French indie giant? Apple's EU mega-fine was far larger than expected, and it says Spotify just wants a free ride. TikTok is facing double trouble in the US as it fights publishers and politicians. New retail and consumption stats from ERA suggest Apple Music could be bringing in over £500 million a year in the UK alone.
ICYMI: Advertising Standards Authority backtracks - slightly - on daft FKA Twigs ruling; Hipgnosis circus releases botched numbers after valuation haircut and share price plunges; YouTube workers laid off in middle of meeting about not being laid off; Manchester City Council's eye watering costs spent fighting Night & Day battle; Cox Communications tries to avoid billion dollar damages - but labels want their money.
And Finally! If you're sitting next to Calvin Harris on a flight and he starts cracking eggs and swallowing them raw, be kind: he's just trying to stop jetlag.
🇫🇷 Spotify released a statement lashing out - again - at France's new streaming levy, and the organisation that administers it, the Centre national de la musique
Last year the French government announced a new levy on music streaming services with the money raised by the levy going into initiatives to support the country’s music creators. At the time Spotify said the tax was a “monumental strategic error” which might result in it “disinvesting from France”, before going on to pull financial support from a number of French music festivals.
This week Spotify announced that the price of a Spotify subscription within France would now increase because it apparently can't afford to swallow the new 1.2% levy. Its statement also laid into France’s Centre national de la musique, saying that it was worried that money from the levy will “not go directly to artists”. The next day the CNM released its own statement, which said that Spotify’s criticism was misleading.
Spotify implied that the €15 million generated by the levy will go towards the CNM’s €20.2 million “administrative budget”. Not true says CNM, which explains that all €15 million will go into "financial aid programmes that sustain grassroots, diversity and international development for French music". The €20.2 million “administrative budget” was misrepresented too, says the CNM, because it includes training for artists and their teams and career resources, plus advisory and other services.
👻 Warner Music said it is interested in buying Believe, potentially sparking a bidding war with Believe CEO and Founder Denis Ladegaillerie
Earlier in the year, Believe said it was going to delist from the Paris stock market and go private, in a bid led by Ladegaillerie. Warner - listed in New York - said it had approached the distributor and artist services company on 21 Feb to "initiate discussions with respect to a potential combination of Believe with WMG". It reckons that “such a combination would be beneficial to the company and all of its other stakeholders", including shareholders and employees, and Believe's artist and label clients.
Acquiring Believe would greatly boost Warner’s market share - which, given it is the smallest of the three majors, would potentially have a lot of value. In particular the deal would grow its presence in the artist and label services business. Warner's own services division, ADA, recently lost by far its biggest client, BMG - and with it an estimated 80 billion streams a year.
If Warner proceeds to a formal bid it will be going into competition with Ladegaillerie. Warner is currently offering a higher bid price than the Believe boss and his backers, though Ladegaillerie’s consortium currently controls more than 70% of the shares and over three quarters of the “theoretical voting rights” in the company.
🇪🇺 Apple’s EU mega-fine was formally announced - and was even bigger than expected
Apple had broken EU competition law, said regulators in the European Union as they handed down a mammoth €1.8 billion fine - far bigger than rumours had suggested - concluding that Apple rules that control how app developers sign-post payment options within their iOS apps were anti-competitive. That ruling came at the end of an investigation prompted by a complaint from Spotify. As well as the mega-fine, Apple was also told to amend its rules, so that app developers can direct users to payment options outside their apps where they aren't obliged to pay a commission to the tech giant.
In response, Apple was scathing of both Spotify and EU regulators. Ungrateful Spotify just wants a free ride, it said, while the regulators had reached their conclusion despite being unable to "uncover any credible evidence of consumer harm". Meanwhile Spotify said "this decision sends a powerful message - no company, not even a monopoly like Apple, can wield power abusively to control how other companies interact with their customers".
🤳 TikTok is fighting on two fronts in the US: against both publishers and politicians
After Universal Music Group pulled both its recording and publishing catalogues from TikTok, now the National Music Publishers Association says that it doesn't anticipate renewing its licensing deal with TikTok when it expires at the end of April.
In a statement it noted that recent press has “highlighted concerns around TikTok’s licensing practices”, saying that those concerns had also been expressed to the NMPA “directly from many of our members". Independent music publishers relying on the NMPA's TikTok licence now need to decide whether to enter into a direct deal with the social media platform or to join Universal Music in demanding that all their songs be removed.
At the same time new proposals were introduced in Congress calling on TikTok’s Chinese parent company ByteDance to sell the app or face a US-wide ban. That's based of the ongoing concerns that the Chinese government has access to TikTok user-data via China-based ByteDance, something TikTok continues to deny. Previous attempts to ban TikTok in the US - at both a federal and state level - ran into legal problems in court, usually on First Amendment free speech grounds.
🎧 ERA released its 2024 Yearbook - a much-anticipated stats pack for music retail and consumption in the UK
The yearbook revealed that Millennials are the most likely to subscribe to digital entertainment platforms, including music services - but are also the most likely to cut back their entertainment subscriptions - interesting info for streaming services as growth levels off in the UK and services focus on retention initiatives.
CMU’s analysis also puts a figure on Apple Music’s revenues in the UK, cross referencing with IFPI’s ‘Engaging With Music’ report. By combining data from the two reports with other data sources, it looks likely that Apple Music may be bringing in around £500 million or more in the UK each year.
Other key stats revealed by ERA’s report show changing habits in podcast and audiobook consumption. The average amount of time people spend listening to podcasts has grown by 13.5% - from 222 minutes a month to 252 minutes. At the same time, monthly average audiobook consumption declined from 192 minutes in 2022 to 162 minutes in 2023. That is just five and a half minutes audiobook listening each day.
With Spotify’s disastrous over-investment in podcasts and new focus on audiobooks, this may make sobering reading for CEO Daniel Ek and his team, with the ERA stats suggesting that the audiobook opportunity may not be as strong as Spotify is hoping.
ICYMI:
🙄 In January the UK’s Advertising Standards Authority criticised a FKA Twigs x Calvin Klein campaign saying that one of the ads “presented her as a stereotypical sexual object” and was “irresponsible and likely to cause serious offence”. Following “strength of public feeling” and “views expressed by FKA Twigs”, it has - slightly - rowed back on its original decision. It now agrees that the image “was not sexually explicit” and “presented a woman who appeared to be confident and in control”. The ASA still thinks that the “seductive gaze, pouting lips” and the fact that you could see “the side of one breast and the side of her bottom” meant the image was “overtly sexual” and should not have been on billboards that children could see.
✂️ The Hipgnosis Songs Fund circus never fails to disappoint, and this week it released a statement after a new valuation was carried out on the catalogues of songs it owns by Baltimore-based Shot Tower Capital, as part SONG’s ongoing ‘strategic review’. In its initial 7am statement SONG told investors that the fund’s assets (or ‘NAV’) were worth just 0.92p a share - a fairly startling discount from the share price of 63p. Decimals, as we all know, are difficult. The correct figure was 92.08p - or £0.92 - but even that was a significant mark down from the previous Citrin Cooperman assessed NAV of 142p a share. Youch.
🤡 A group of YouTube contractors in Austin were laid off - right in the middle of speaking at a meeting with the city’s council. The workers were contractors working for professional services company Cognizant, which in turn provided services under a contract to YouTube. The National Labor Relations Board had previously found that Google and Cognizant were jointly responsible for employing the workers, who were trying to get YouTube to deal with union reps. Speaking to city councillors, one of the team, Jack Benedict, a data analyst for YouTube’s music service, thanked council members for sponsoring a resolution that called on YouTube to bargain with the union. In the middle of a subsequent point, one of Benedict’s colleagues stepped forward and told him their entire team had been laid off.
🤯 In November 2021 Manchester City Council served a noise abatement order on long-established Oldham Street music venue the Night & Day Café, in the city’s cultural heartland, the Northern Quarter. With the court case still rumbling on a Freedom Of Information request to the council shows it has spent nearly £90,000 fighting the venue - enough to employ three people full time on the living wage to support the city’s cultural sector and night-time economy.
💸 In 2019 the music industry won a billion dollars in damages against US ISP Cox Communications. That ruling was partly overturned on appeal, with damages due to be recalculated. Cox has now filed new legal papers trying to overturn the judgement entirely, saying that the case sets a precedent that means ISPs would have to disconnect all customers on a connection if a single complaint of copyright infringement is made. Meanwhile, the record companies want their billion dollars and have also filed new papers saying a previous jury instruction means the damages bill should stand.
🎙 Setlist Podcast: Apple blames Spotify for €1.8 billion fine
In this week's Setlist Podcast: Chris Cooke and Andy Malt discuss the €1.8 billion fine Apple has been ordered to pay by the EU following an investigation into claims of anti-competitive behaviour made by Spotify, Live Nation's explanation of why everyone else in the music industry is to blame for rising ticket prices, and more. Click here to listen - or search for 'Setlist Podcast' on your platform of choice.
And Finally! Calvin Harris chugs raw eggs to beat jet lag. Horrifying? Yes. Smart? Possibly
Everyone reckons they have a cure for jet lag. I’ve got one. You’ve got one. It seemed to work once and the fact that it’s never worked again doesn’t dissuade you from telling anyone about to embark on a flight somewhere about it. It worked once, damn it.
Next time you’re sat on a Ryanair flight next to Calvin Harris, be warned that he’ll probably start cracking eggs and swallowing down the raw yolks at some point. It’s the best way to avoid jet lag, he reckons. Find out if he’s right and check out more of this week’s funniest music news stories.