Daniel Ek

Jan 27, 2023

From Justin Bieber selling his catalog to Spotify cutting 500+ jobs… it’s MBW’s Weekly Round-Up January 27, 2023 Welcome to  Music Business Worldwide ’s weekly round-up – where we make sure you caught the five biggest stories to hit our headlines over the past seven days. MBW’s round-up is supported by  Centtrip , which helps over 500 of the world’s best-selling artists maximise their income and reduce their touring costs. Spotify announced on Monday (January 23) that it’s in the process of slashing over 500 jobs worldwide. The streaming company confirmed in an SEC filing that it is reducing its employee base by “about 6% across the company”. In the same filing, Spotify confirmed that Dawn Ostroff, Chief Content & Advertising Business Officer, is to leave the company. Spotify CEO Daniel Ek told staff in a memo on Tuesday that, “I take full accountability for the moves that got us here today.” Meanwhile, a number of music rights deal announcements hit our pages this week. On Tuesday (January 24), for example, it was confirmed that Justin Bieber has agreed to sell his catalog to Blackstone-backed Hipgnosis Songs Capital (HSC). The Bieber acquisition was made on behalf of Hipgnosis Songs Capital by its investment manager, Hipgnosis Song Management (HSM). (HSM is also the investment manager for Hipgnosis Songs Fund .) According to  Merck Mercuriadis , founder and Chief Executive Officer of Hipgnosis Song Management, the deal with Bieber, whose songs have been streamed over 32 billion times on  Spotify  alone, “ranks among the biggest deals ever made for an artist under the age of 70”. Amongst the other deals announced this were included Primary Wave Music’s acquisition of the music rights of Robby Krieger and the late Ray Manzarek of legendary US rock band, The Doors, and Warner Music Group has struck what it calls a “milestone deal” with legendary British progressive rock band YES. Plus, Kobalt announced that its first-ever employee, Chief Creative Officer Sas Metcalfe, is stepping down, effective February 28, 2023. Here’s what happened this week… Credit: TT News Agency / Alamy “I take full accountability for the moves that got us here today.” And so he should. Daniel Ek’s admission that he bears personal responsibility for yesterday’s news of Spotify cutting over 500 jobs is noble. It’s also 100% justified. In my view, Ek’s loss-making company has played with fire on three key matters these past few years: (i) Spending a monstrous amount of money on staff, sales, and marketing; (ii) Spending a monstrous amount of money on Spotify’s podcasting strategy, despite podcasting burning through Spotify’s funds; and (ii) Stubbornly refusing to increase the price of Spotify’s flagship subscription service in its biggest market – not even once – over the past 12 years. Despite the fact that doing so would have likely made Spotify… a monstrous amount of revenue. These three factors have coalesced to squeeze Spotify’s gross margin figure, which missed the company’s own guidance in Q3 2022. This gross margin struggle has sent Wall Street analysts into a flap these past few months, and ultimately contributed to Ek’s decision this week to cut 6% of Spotify’s global workforce… It’s official: Justin Bieber has agreed to sell a career-spanning catalog to Blackstone-backed Hipgnosis Songs Capital (HSC) in a nine-figure deal. On Tuesday (January 24), Hipgnosis announced via a media release that HSC has acquired “Justin Bieber’s 100% interest in his Publishing Copyrights (including the Writer’s Share of Performance), Master Recordings and Neighboring Rights for Bieber’s entire back catalog, comprising over 290 titles released before December 31, 2021”. [ Universal Music Group continues to own the master recordings of Bieber’s back catalog; it appears that Hipgnosis will now receive Bieber’s artist royalty stream on those masters via Universal. UMPG will continue to administer Bieber’s publishing.] The Wall Street Journal reported in December that the Hipgnosis/Bieber deal would be worth around USD $200 million… The music rights acquisition space in 2023 is hotting up. On Monday (January 23) we reported that Warner Music Group has struck a “milestone deal” with legendary British progressive rock band YES to acquire the recorded music rights and income streams from the band’s “complete” Atlantic Records era catalog. On the same day, Primary Wave Music announced that it has acquired the music rights of Robby Krieger and the late Ray Manzarek of legendary US rock band, The Doors… Warner Music Group has struck what it calls a “milestone deal” with legendary British progressive rock band YES. The deal sees Warner acquire the recorded music rights and income streams from the band’s “complete” Atlantic Records era catalog. The company notes that the acquisition continues “a longstanding relationship” between the band and Warner Music, which now spans over a half-century, beginning with YES’ self-titled 1969 Atlantic debut album. Warner calls YES “among the most enduring, ambitious, and virtuosic bands in music history…” Kobalt has announced that after more than 20 years with the company, Chief Creative Officer Sas Metcalfe will be stepping down, effective February 28, 2023. Metcalfe was Kobalt’s first-ever employee, hired by founder and Chairman Willard Ahdritz, according to an MBW interview published in 2015. Kobalt calls Metcalfe “a true pioneer in the music industry…”