šµ Universal, TikTok, Apple, Spotify: the giants continue to battle
And in the meantime, the artists remain stuck in the middle
It is sometimes interesting to sit back and contemplate the state of the industry. Todayās dominant news stories both involve massive corporations being at loggerheads. One is the ongoing Universal/TikTok dispute, where all works under Universal Publishing are now off the platform. The other story involveds Appleās practices around its App Store, with both Spotify and Deezer stepping up to further criticise the business after a gigantic fine was levied by the EU.
All of these arguments are valid and warrant your attentionā¦ and yet on another level, I couldnāt help but consider them in the context of recent tweets from musician James Blake, who is the latest large star to speak out against the state of the industry:
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Blake, to me anyway, just feels like the latest in a long line of artists increasingly unhappy with how things are.
Perhaps the issue is that this is becoming a battle on multiple fronts. The situation feels the same whether it is streaming or live; things are becoming highly polarised, such that the biggest artists are fine, but everyone else is struggling. Live is a perfect case in point: small venues are closing up and down the UK (the iconic Bush Hall in West London is the latest case in point), yet the biggest artists are selling more tickets than ever.
Of course, none of this will come as news to regular readers - hell, you only have to look around you to see whatās going on; it doesnāt take this newsletter to tell you that things are bad.
So whatās my point?
It is this: change feels like it is becoming more necessary than ever.
Iāve said for some time now that change does not need to be a bad thing, provided you can be adaptable. Right now, the need for change feels like it is growing every day, and that - perversely - is a positive thing. Why? Because this might speed up innovation and the delivery of solutions that speak to a fairer set up for artists.
The Web3 space continues to develop, and whilst I still feel thereās a chasm of sorts between these services and any kind of wider adoption point, the logic around their construct - in which artists and creators see a more direct compensation for their work - holds up.
On the live side it also feels like there is some kind of overhaul or evolution to come. Perhaps people simply crave bigger experiences now, hence the leaning toward arena/stadium gigs. Maybe the very nature of that first contact with an artist needs to be reviewed.
I do see glimmers of hope though. Whilst I accept that in an algorithmic world this could be confirmation bias, I am increasingly seeing more and more chatter around the celebration of ārealā things. The latest buzzy camera, for example, is not some high tech DSLR; it is a digital point-and-shoot that might well give you ropey pics at points - but which are valued all the more because they feel authentic. Equally I am seeing more and more talk celebrating MP3s and āownableā formats. Itās almost like people are simply getting tired of tech dominating their lives.
These things might be trends, but even then, if they reconnect people with more authentic experiences, that is no bad thing. Music is art. It is a powerful thing indeed. Itās power and impact has diminished as tech has reduced it to little more than a stream of bits from a cloud server somewhere, but maybe, just maybe, that might start to change.
Heaven knows if culture is to survive, it needs to. Just read
ās viral article āThe State of Culture, 2024ā.This, then, is why I am only mildly interested by the spats involving Universal and TikTok, or Apple and the likes of Spotify and Deezer. These companies are all giants, and whilst they continue their disputes, the people left on the sideline remain the artists.
Something has to change - and I sincerely hope that change will come soon.
Have a great evening,
D.
šŗ watching āThe Controversial Sound Only 2% Of People Hearā, which looks at the phenomenon of low frequency hums, so low that only a certain percentage of the population can hear - but for whom it can be life-threateningly maddening. Oil and gas pipes? Tinnitus? Psychosis? This doc looks into it all - fine work from Benn Jordan.
š¶ listening to the 2007 āRumble In the Jungleā comp on Soul Jazz, which pulls together a ridiculously great array of ragga jungle tracks from the 90s. This is the greatest jungle comp out there and Iāll die on that hill. Buy it immediately and thank me later!
š¤ playing with Beatport Studio. Full disclosure: Beatport are a client of Motive Unknownās, but this is a terrific new product that basically gives you a DAW and a raft of FX and instruments, all for a monthly fee. Best bit for producers: unlike other subscription services out there, this one simply freezes FX in their last-used state within a song, so that you could still use them but cannot tweak them. Very smart.
Stories from the Music Industry:
Universal Music Group confirms cost-saving āredesignā, including layoffs, that will save $270m a year
UMG says this āredesignā ā which includes āheadcount reductionā, aka layoffs ā will result in ā¬75 million ($81 million) of cost-savings in 2024 (vs. 2023). Those annual cost savings (vs. 2023) will then expand to ā¬125 million in 2025, before eventually reaching ā¬250 million by the end of 2026. UMG says all of these annual run-rate savings will be āaccretive to EBITDAā ā i.e. will directly improve the companyās profit margins.
šš»Hot take: I tend to view this as an acceptance that the market is shifting in fairly fundamental ways. The real insight will come when it is confirmed where these cuts are being made.
Hipgnosis Songs Fund shares fall after catalogue revaluation
A new preliminary valuation of its portfolio of songs estimated that it was worth between $1.8bn and $2.06bn (so $1.93bn as a āmidpointā). The problem with that is that itās 26.3% lower than a previous valuation last September, amid tensions between the publicly-listed company and its founder and former investment advisor Merck Mercuriadis. Hipgnosis Songs Fundās share priceĀ dipped 11% to Ā£0.56Ā in early trading afterĀ the news was announced yesterday.
šš»Hot take: from where I am sat this can only end in Blackstone buying HSFā¦ which, critics might argue, was always the end point here anyway.
UMPG focuses on AI fears in letter to songwriters about TikTok
āTikTokās intentions with respect to AI are increasingly apparent,ā it added, claiming that TikTok has been ārefusing to respond to our concerns about AI depriving songwriters from fair compensation, or provide assurances that they will not train their AI models on your songsā.
šš»Hot take: weāre moving into the āPR warā phase now. UMG is sharing its messaging to songwriters, whilst TikTok is claiming usage has not dropped since catalogue was pulled from the platform. I think the danger for TikTok is still that its contribution to UMGās bottom line was so small that the latter has no great motivation to budge here.
A mystery company is mulling a $1.8 billion+ bid for Believeā¦ but may be shut out by Denis Ladegaillerie consortiumās prior dealings
This mystery third party, according to Believe, āhas indicated that it thinks it could value Believe shares at least at ā¬17 per shareā. Believe clarified that said inquiry from the third party ā so far, anyway ā ādid not constitute an offer or constitute any obligation to make an offerā. If an official offer did come in at ā¬17 per share, it would value Believe at EUR ā¬1.7263 billion (USD $1.872 billion at current exchange rates) ā approximately 13% higher than the Ladegaillerie consortium bid.
šš»Hot take: I can only wince at the notion of another major buying Believe, just as I do when contemplating Universal buying BMG. We need a few more big players in the marketplace, not everything being swallowed up by the same three majors.
More on that Apple fineā¦
Apple fined ā¬1.8bn by EU for breaking streaming rules
Apple has been fined ā¬1.8bn (Ā£1.5bn) by the EU for breaking competition laws over music streaming. The firm had prevented streaming services from informing users of payment options outside the Apple app store, the European Commission said. Competition commissioner Margrethe Vestager said Apple abused its dominant position in the market for a decade. She ordered the US tech giant to remove all the restrictions. Apple has said it will appeal against the decision.
šš»Hot take: I struggle to see Apple succeeding in any appeal here. Whatās funny is that when you read back how Apple is set up on this front, relative to its App ātaxā, it does start to look absurdly greedy.
Spotify calls Appleās ā¬1.84B antitrust fine a āpowerful message,ā but cautions that the next steps matter
āOur work will not be done until we succeed in securing a truly fair digital marketplace everywhere and our commitment to helping to make this a reality remains unwavering,ā it wrote. Spotify CEO Daniel Ek also explored this sentiment in a video post on X, where he added that āApple has a history of skirting these rules,ā referring to other cases, like the antitrust order in the Netherlands, where Apple ignored the penalty and allowed the fine to increase for half a year before resolving its concerns.
šš»Hot take: Appleās critics are all raising the same point now, which is that allowing Appleās response to the DMA move from the EU is merely changing one financial gouge for another.
Streamer Deezer cheers Apple antitrust fine but calls tech giantās DMA response ādeceptiveā
The streaming company reiterates its complaints in a company blog post, which was updated to comment on the new fine, saying that Appleās DMA rules are an āattempt to circumvent the new regulation with an alternative to the current business term.ā It points out that although Apple reduced its commission, it introduced a new fee ā the Core Technology Fee ā which is āexcessiveā and āmakes it prohibitively expensive to scale any app business profitably.ā As a result, Deezer said it saw no benefit in switching to Appleās DMA rules.
šš»Hot take: whatās interesting here is that I *think* Deezer might be the first to confirm that under the new post-DMA setup, it would not be any better off thanks to Appleās attempting to shift to a new model that, critics argue, is simply another means to fleece developers.
Need something else to read? Here you go:
āThe internet is an alien life formā: how David Bowie created a market for digital music
Bowieās 1999 album Hoursā¦ was the first to go on sale online before hitting regular stores ā and his experimentation caused horror in the music industry
šš»Hot take: a terrific look at Bowieās āHoursā album, the first major label to be commercially released in full online as release prior to its physical drop. I feel duty bound to point out that this album also creates one of his greatest later period songs: the incredible Seven.
Flop rock: inside the underground floppy disk music scene
Floppy disks are facing extinction, but musicians are still pumping out DIY music projects.
šš»Hot take: I love articles like this. I just love that thereās always someone out there going against the grain. That always gives me hope.
Exit Notes:
This is the only edition of Network Notes this week. Same issue as last week: not enough time to really put something together of the quality I feel you all expect, and so Iām electing to just deliver one good edition rather than two average ones. Hoping normal service will resume soon though.
Why not follow Motive Unknown on Instagram? Itās the best way to see what weāre working on - such as the IDLES album that is #1 this week š šŖš»
The large concert experience has become a nightmare in the US- extortionate 'dynamic' , fee-laden ticket prices, expensive parking/rideshare options, onerous bag-checks and phone rules; all for an increasingly remote, prefabricated experience one might as well watch at home on a screen where the beers aren't $15 each.
Yet thousands of people still go; and not 1% of them can be bothered to cross a street to a possibly life-changing $10 small venue show, where the action is a shirts-throw away and the night is alive with possibility.
Who can tell these people, so they'd listen, that they'd get so much more value for their money at the small place than being one atom among thousands in the big shed?
All very true. Even though it's not the main point of your post āĀ what continues to baffle me is music fans, even ones that are not into pop music, leaning toward arena/stadium gigs these days. I have always enjoyed small club gigs so much more. I'm actually leaning towards microvenues now!