🔵 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. Today’s 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 Apple’s 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 attention… and yet on another level, I couldn’t 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:

Source: X/Twitter

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 what’s going on; it doesn’t take this newsletter to tell you that things are bad.

So what’s my point?

It is this: change feels like it is becoming more necessary than ever.

I’ve 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 there’s 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 “real” 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 “ownable” formats. It’s 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. It’s 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

Ted Gioia

’s viral article “The State of Culture, 2024”.

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.

📺 watching “The Controversial Sound Only 2% Of People Hear”, 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.

🎶 listening to the 2007 “Rumble In the Jungle” 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 I’ll die on that hill. Buy it immediately and thank me later!

🤖 playing with Beatport Studio. Full disclosure: Beatport are a client of Motive Unknown’s, 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.

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Stories from the Music Industry:

Universal Music Group confirms cost-saving ‘redesign’, including layoffs, that will save $270m a year

UMG says this “redesign” – which includes “headcount reduction”, aka layoffs – will result in €75 million ($81 million) of cost-savings in 2024 (vs. 2023). Those annual cost savings (vs. 2023) will then expand to €125 million in 2025, before eventually reaching €250 million by the end of 2026. UMG says all of these annual run-rate savings will be “accretive to EBITDA” – i.e. will directly improve the company’s profit margins.

👆🏻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 ‘midpoint’). The problem with that is that it’s 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 Fund’s share price dipped 11% to £0.56 in early trading after the news was announced yesterday.

👆🏻Hot take: from where I am sat this can only end in Blackstone buying HSF… which, critics might argue, was always the end point here anyway.

UMPG focuses on AI fears in letter to songwriters about TikTok

“TikTok’s intentions with respect to AI are increasingly apparent,” it added, claiming that TikTok has been “refusing 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 songs”.

👆🏻Hot take: we’re moving into the “PR war” 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 UMG’s 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 Believe… but may be shut out by Denis Ladegaillerie consortium’s prior dealings

This mystery third party, according to Believe, “has indicated that it thinks it could value Believe shares at least at €17 per share“. Believe clarified that said inquiry from the third party – so far, anyway – “did not constitute an offer or constitute any obligation to make an offer”. If an official offer did come in at €17 per share, it would value Believe at EUR €1.7263 billion (USD $1.872 billion at current exchange rates) – approximately 13% higher than the Ladegaillerie consortium bid.

👆🏻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.

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More on that Apple fine…

Apple fined €1.8bn by EU for breaking streaming rules

Apple has been fined €1.8bn (£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.

👆🏻Hot take: I struggle to see Apple succeeding in any appeal here. What’s funny is that when you read back how Apple is set up on this front, relative to its App ‘tax’, it does start to look absurdly greedy.

Spotify calls Apple’s €1.84B antitrust fine a ‘powerful message,’ but cautions that the next steps matter

“Our 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,” it wrote. Spotify CEO Daniel Ek also explored this sentiment in a video post on X, where he added that “Apple has a history of skirting these rules,” 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.

👆🏻Hot take: Apple’s critics are all raising the same point now, which is that allowing Apple’s 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 giant’s DMA response ‘deceptive’

The streaming company reiterates its complaints in a company blog post, which was updated to comment on the new fine, saying that Apple’s DMA rules are an “attempt to circumvent the new regulation with an alternative to the current business term.” It points out that although Apple reduced its commission, it introduced a new fee — the Core Technology Fee — which is “excessive” and “makes it prohibitively expensive to scale any app business profitably.” As a result, Deezer said it saw no benefit in switching to Apple’s DMA rules.

👆🏻Hot take: what’s 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 Apple’s attempting to shift to a new model that, critics argue, is simply another means to fleece developers.

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Need something else to read? Here you go:

‘The internet is an alien life form’: how David Bowie created a market for digital music

Bowie’s 1999 album Hours… was the first to go on sale online before hitting regular stores – and his experimentation caused horror in the music industry

👆🏻Hot take: a terrific look at Bowie’s “Hours” 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.

👆🏻Hot take: I love articles like this. I just love that there’s always someone out there going against the grain. That always gives me hope.

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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 I’m 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? It’s the best way to see what we’re working on - such as the IDLES album that is #1 this week 😁 💪🏻

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