Social Media Doesn’t Want Music
Hello! A fun bit of news today. Last week, I wrote about TikTok and its shaky business model for The Baffler. Big thanks to Zach Webb, the editor, for working with me on this piece, and keep an eye out for more work as I shake off the freelance rust. Two bits of news if you’re in New York City. My friend Moistbreezy is dropping her latest album on May 5th and hosting a release party on May 13th at Trans Pecos, if you’re around. Also, Water and Music is hosting their summit on May 6th in Bushwick, which you can get 10% off with the code ‘FriendsofWM’. Hope to see you at these events! Now, it’s time to explore a topic that’s grabbed a number of recent headlines: social media licensing.
Over the last couple of years, I’ve repeatedly talked about the highly guarded deals struck between labels, publishers, collection societies, and technology firms. The reason is that allegedly the music industry is receiving millions from the likes Peleton, Facebook, and TikTok with little transparency of what’s in the deals and how this money is meant to reach musicians. When I covered the impact of monetary tightening and the downturn in tech, I suggested these deals could be affected by these economic shifts. It didn’t take long for evidence to emerge.
In December, Triller, the profitless short-form video app, took an extreme step and entirely removed major labels and Merlin music from its platform. This led to some fairly cutting public statements from the company about how it wouldn’t beholden to these particular rightsholders, Merlin in particular. Only a month later Universal Music Group sued the company for unpaid licensing fees; Sony, last summer, did the same. The public back-and-forth is notable due to the outright proclamations about how little Triller perceives a need for these major catalogs when the costs for these deals are so high. Triller’s own financials may appear pretty dodgy (that IPO is seemingly always around the corner), but the refusal to just be a piggy bank for the music industry makes sense. Again the company doesn’t make money! I fixated a bit upon Triller, as a potential trendsetting, and now others are drawing from the same playbook.
Earlier this year, TikTok announced that it was going to remove a large chunk of music from its platform in Australia. Music business press reported on this as part of the ongoing negotiations with major labels, as the company appears to be uninterested in entering into much-desired revenue-sharing agreements. I covered here and in The Baffler that TikTok’s business simply cannot sustain handing over a decent percentage of revenue to these rights holders. However that reality doesn’t sit well with record labels, and the Australian music label trade association blasted the move and berated the company for not supporting artists whatever that’s supposed to mean in this context. Again, how much working musicians benefit from these deals is hard to quantify. The Music Manager Forum, a trade organization for managers, during the United Kingdom’s inquiry into streaming, raised concern about the lack of transparency regarding how this money is moved from social media firms to labels or publishers. Bellyaching over-allocation will continue but tech firms appear to be gearing up for hardball.
In mid-March, Music Business Worldwide reported that the Italian Society of Authors and Publishers (SIAE) said that Facebook pulled music by their songwriters from the platform. Allegedly Facebook didn’t offer the SIAE enough money and refused to accept the company’s deal, and Facebook simply backed away. The International Confederation of Music Publishers (ICMP) and the Independent Music Publishers Forum (IMPF) came out with harsh words for Facebook, and the Italian Competition Authority in early April said it was looking into the tech company’s unilateral move and its potential harm on Italian songwriters.
MBW called this a “shock move” and speculated this was part of Mark Zuckerberg’s “year of efficiency” that’s hit Facebook with multiple rounds of layoffs and project cancellations (RIP to NFTs on Facebook/IG). Again the myopia of the music industry starts to ring hollow here. Facebook sits on billions of cash and can afford whatever any label, publisher, or songwriting group wants to pay, let’s not ignore that. However, the majority of Facebook's revenue comes from digital advertising; it’s not in the music business and as it looks to save money, why would it continue to subsidize an industry it’s barely related to? This is poised to become the new normal but not everyone got the memo.
Last year, Pinterest signed deals with BMG, Merlin, and Warner Music Group so they could license music for their TikTok-clone feature. This deal inspired a personal double-take, and the company’s recent deal with additional rights holders (including UnitedMasters?!) made a triple-take necessary. Why would anyone further commit to a me-too feature with properly licensed content, when the original is running away from such deals? More reporting could shed some light on what does feel like another pandemic-era misstep in resource allocation. Similar inquiries could be placed in front of Peloton and Snapchat. the fragile financial position of the companies makes me uncertain about the long-term viability of these deals. The New York Times, when covering how Twitter still hasn’t signed a single deal for licensed music, said that some of these deals can cost up to $100 million for a company. That may be chump change for Facebook but for many tech companies that barely break even that’s a high potential expense to justify, even if reduced in scale.
The relative newness of this industry revenue line and the obtuseness of the deals make it hard to know what the trajectory of these deals looked like in 2021 during the height of the pandemic tech mania. But the last six months of a fairly aggressive pullback from major tech firms from wanting to tie themselves at the hip to the music industry should be a warning sign. Again, Twitch’s two-step outta signing more traditional licensing deals with these companies is only looking better each passing month. The company itself already just did a round of layoffs and considering reports about a desire to turn a profit, there may be a real ebb in maintaining the value proposition of music on the platform.
Even if music industry professionals don’t like to hear it, the world doesn’t revolve around music, and for other industries, they cannot simply throw cash at rights holders indefinitely. They have their own interests to meet. Perhaps this could be a warning not only for big wigs berating social media companies for not playing ball but all smaller musicians. The largest sources of industry revenue remain tied up in complex licensing deals with companies, whose interest in music may be more precarious than assumed over the last decade. Thus demands for industry change should further foreground the role of technology in the industry’s future.
Shutdowns are rolling in the news right now. MQA, a British music technology company dedicated to higher quality music, is undergoing the British equivalent of bankruptcy. Gimme Radio, a digital startup that focused on country and metal, announced it couldn’t find more funding and will be shutting down at the end of April. Notably, the company raised $3 million led by iHeartMedia, and included The Orchard and Concord back in 2021. Last, Spotify is reportedly shutting down Heardle, a music-based Wordle clone it bought only a year ago. The write-up in Billboard is nice if only for juxtaposing the marketing blather given to the decision to buy Heardle that seemingly wasn’t realized. O, Utopia Music, a trainwreck of a company, announced another round of layoffs. Hopefully, folks attached to these projects land in a good place but certainly feels like more cuts and adjustments can be expected in these more precarious parts of the industry.
A Note of Financialization
Mannie Fresh, one of rap’s greatest musicians, sold his catalog to Reservoir Media, which likely makes me more prone to find my Cash Money CDs since he won’t be getting anything on my streams any longer. Hope that check was good though! Primary Wave, a stalwart in the catalog buying game, never gets tired and last week bought part of the catalog of the songwriter Russ Ballard. High Society Management was just bought out by ICM Crescendo Music Royalty Fund, a Canadian song rights fund, and this notably included works of Latin trap star Anuel AA. Then last Multimedia Music, again only top tier names here, paid “eight figures” for the catalog of the composer Trevor Morris.
6 Links 2 Read
Could Robert Kyncl’s ‘multiplier’ plan improve the way artists are paid from music streaming? - Music Business Worldwide
What Kyncl suggests here of potentially putting multipliers (gaming’s worst aspects continue to slip into the music business) based on search, or whatever, is kind of ridiculous. Still, record label executives are just pontificating on ways to get their artists paid more but also not sounding too greedy is fun to witness in real-time.
Against Innovation - Dada Drummer Almanach
Damon walks through a small but powerful example of what happens when technological change degrades creative expression and the rather unintuitive ways one can stand against it. If Luddism is ever needed musicians should again take up that vanguard.
Zee-Spotify Squabble: Will Music Streaming Survive in India? - The Economic Times
A tight summary of the challenges of the Indian streaming market: A strong film culture, fragmented labels, and maybe a too large market to address. This is a much more sober analysis of the prospect of streaming, than what’s typically released in the Western music business press.
Why Every App Now Feels Like TikTok, But Worse - New York Magazine / Why Would Anyone Subscribe to a Social Media Platform? - Read Max
Two excellent pieces on the stagnation of social media platforms that are producing a shitter user experience and a backward assumption people will now feel compelled to pay into that degraded offering. A worse product for more money is going to be the unspoken mantra of tech for the foreseeable future; no one wants to admit it yet.
The Esports Industry is Dying. Can We Save It? - Devin Nash
Did you know that Esports is a niche product for a small subset of nerds and that pumping millions of dollars of venture capital isn’t going to change that? Well, it would appear that many folks are learning that. Another casualty of the pandemic boom, distorting and ultimately undermining a niche market.
Finance & the Polycrisis #10: The trillion-dollar rebalancing: A new macro-financial conjuncture? - Chartbook / Drowning in Deposits - New Left Review
Another two-for-one special examines the ongoing banking stress and tries to understand the current economic paradigm. I cannot say again that even the phrase “banking crisis” that was used back in March, and is slowing getting walked back in the business press is “over” but I remain skeptical of the innominate panic and paranoia that beset certain parts of Silicon Valley, beyond self-interested whining for a government bailout.