Ticketing Ops Senior Assistant // Ambassador Theatre Group (London)

Promo Dept Coordinator // Domino (London/Hybrid)

The Ivors Academy // Chief Executive (London/Hybrid)

Broadwick Live // Senior Operations Manager (London)

Today's music business news

TOP STORY

Spotify confirms the cost of its dramatic downsizing, cancels two in-house podcasts

Spotify confirmed to its investors earlier this week that the significant downsizing that is now underway at the company will cost the business up to €145 million. However, the cutbacks will "generate meaningful operating efficiencies going forward".

The update to investors followed the announcement made by Spotify boss Daniel Ek on Monday that the company is instigating its third and most dramatic round of redundancies this year. Around 17% of the firm's global workforce - about 1500 people - will lose their jobs this time amid ongoing efforts to cut costs.

In the investor update, Spotify said that, as a result of the cutbacks, "the company estimates that it will incur approximately €130-145 million in charges” in the final quarter of this year. These charges will primarily consist of redundancy payments and costs related to reducing the company’s requirement for office space.

As a result of these charges, Spotify has updated its expected losses in this quarter to between €93 million and €108 million.

Despite declaring a small profit in its quarter three earnings, Spotify had - by the end of Q3 - lost a combined €462 million this year. If it’s going to lose another €108 million in the final quarter, that puts it on course for potential losses of €570 million this year, a substantial increase on the €430 million it lost in 2022.

However, despite the increase in losses in the short term caused by the downsizing, Spotify stresses that it “anticipates that these actions will generate meaningful operating efficiencies going forward”.

Headcount at the company has rocketed since 2020 from 5584 employees to 8359 at the end of 2022. Many tech companies “over-hired” in recent years as a result of “ZIRP” - zero interest rates policy - which allowed them to borrow money at 0% interest, running at a loss for years - and in many cases using debt to finance risky “moonshot” bets.

Despite the costs associated with the downsizing, Spotify's share price has risen since Ek's announcement on Monday. Though at around $200 per share, it remains a long way from its $364 peak in February 2021.

Of course, with investors wanting a solid strategy for how Spotify will ultimately become a profitable business, any moves to make the company more efficient will generally be welcomed by the investor community.

However, long term concerns about Spotify’s business model remain, with one analyst recently downgrading the company’s stock highlighting concerns about whether the streaming platform will be able to continue to grow its subscriber numbers and increase ARPU - ie average revenue per user.

Some investors will also be questioning whether Spotify’s executives are making the right bets for the company, having seen other significant write-offs in recent times, including the company’s extravagant spending in the podcast market. And, of course, if Spotify continues to make losses through 2024 it may need further debt financing to remain operational.

This debt is unlikely to be on the 0% terms of its last €1.2 billion debt raise, meaning continuing losses and consequent interest payments on debt to offset those losses may create an additional strain on the company’s finances.

These concerns come at a time when Spotify has also decided to demonetise a significant number of music-makers who use the platform. Spotify itself doesn’t financially benefit from that move - which is being made under pressure from the major record companies - and it has only increased criticism of the streaming business within much of the artist community.

As the specifics of the cutbacks become clearer, Spotify has also confirmed that two acclaimed podcasts made by its in-house production division will come to an end. 'Heavyweight' and 'Stolen' were both made by Gimlet Media, which Spotify acquired in 2019 and then merged into Spotify Studios as part of a downsizing of its podcasting operations earlier this year.

Both shows will complete their current series, Spotify said earlier this week, after which their makers will be free to take the podcasts elsewhere.

ONE LINERS

One Liners: Danny L Harle, Sub Pop, Ethel Cain + more

DEALS

Universal Music Publishing has signed Danny L Harle to a new global publishing administration deal. “Danny is a rare talent who can work across genres, has great musical taste and has a phenomenal rapport with all the artists that work with him”, say co-heads of A&R David Gray and Jennifer Knoepfle. “We are so excited to be part of his continued growth as a producer and an artist”.

Sub Pop Publishing has joined digital licensing grouping IMPEL. The music publisher’s VP Gareth Smith says: “What we like about IMPEL is that it’s built for independent publishers. It has a proactive, global outlook, which reflects our own. Its thorough approach to every territory, regardless of size, is imperative”.

Reservoir and Mushroom Music have jointly signed singer-songwriter grentperez. “I am incredibly honoured to have signed with Reservoir and Mushroom”, he says. “I feel like we've entered a new chapter in my career, which can be nerve-wracking, but with these teams by my side, I feel confident for what's to come. I'm eager to get this ball rolling and write some exciting new stuff”.

APPOINTMENTS

Sony Music’s artist services business AWAL has promoted Paul Hitchman to COO. “I’m very proud of what we have achieved, but even more excited about what’s still to come and the opportunity to continue to grow AWAL globally”, he says. “I firmly believe that AWAL’s team is a match for any other in the business and that our roster of artists is the best of any music company in the world”.

Live music firm FKP Scorpio has appointed Inga Esseling and Ben Rodenberg as co-Directors of Touring. They officially start in their new joint post on 1 Jan. “Both have often proven that they can provide new impetus and meet the high demands of this industry”, says CEO Folkert Koopmans. “I am personally very pleased that many employees have been with us for such a long time and have the opportunity to develop further as a part of our team”.

RELEASES

The Libertines have released new single ‘Night Of The Hunter’. “I started writing a riff and it ended up sounding a bit like ‘Swan Lake’, and everyone went, ‘Yeah!’”, says Carl Barat. “Then we got Peter’s theremin player in, which took about a day to get in tune, then he played that sequence and it worked beautifully”.

Nnamdi has released new single ‘Going Crazy’. “The song is about finding inspiration in the madness”, he says. “Trying not to lose your mind when so many things feel out of control. It’s about embracing those heavy emotions and channeling them into something productive and positive”.

HighSchool have signed to [PIAS] and released new single ‘August 19’.

GIGS & TOURS

Ethel Cain will play the Roundhouse in London on 5 Jun next year. Tickets go on general sale on Friday.

GIGS & FESTIVALS

Nozstock festival to end after 2024 edition, prompting new call for government support for festival sector

Organisers of the Nozstock festival have announced that their 2024 edition will be the last, because the financial risks related to staging such an event have become too great. That has prompted the Association Of Independent Festivals to again call on the UK government to provide support for the sector through a VAT reduction.

The boutique festival has been staged in Herefordshire since 1998 when it began as a barbecue at the farm of the family that own the event, the Nosworthy family. Confirming that their 2024 festival will be the final one, organisers said: "After the losses incurred over COVID, straight into a cost of living crisis, the financial risk is becoming too great".

They conceded that changing the format of the event could reduce some of those risks, but added that that would negatively impact on the experience.

"Nozstock has always been a totally independent event with a wide variety of entertainment on offer", they explained, "and although there are changes we could make to allow the festival to continue, the final product is something we don’t recognise and wouldn’t be the event you love".

Most independent festivals usually operate on tight profit margins and the cancellations caused by COVID, followed by a surge in production costs and the cost of living crisis, have made staging such events incredibly challenging.

Which is why AIF has been calling for more government support for the sector, in particular requesting a cut in the VAT on tickets, like that which was implemented during the pandemic.

Its CEO John Rostron said yesterday: "After almost three decades of great events, Nozstock has become a key fixture on the UK's independent festival calendar, and [its ending] should serve as yet another alarm bell warning of the perilous situation that many in this cultural sector are facing”.

As a result of that perilous situation, he added, Bluedot, NASS and Leopallooza will not go ahead next year, while Field Maneuvres has also said that its 2024 edition will be its last.

"The impact of COVID and high supply chain costs means the squeeze on festivals is increasing", he concluded. "It is inevitable that there will be more closures if urgent action is not taken. We again call on the government to review VAT on music festival ticket sales and lower the rate to 5% for an extended period to help support the recovery of the festival sector".

On their final event, Nozstock's organisers continue: "We intend to go out with a bang! We will be putting together a line-up of some of our favourites from over the years plus the usual exciting additions you’ve come to expect from us. We will celebrate the amazing 26 years we’ve had, the people we’ve met, the sights we’ve seen, the music we’ve heard and the moments we’ve made".

ARTIST NEWS

Shane MacGowan completed a final album before his death

Shane MacGowan completed work on a final album before his death last week, it has been revealed. Recorded with Irish band Cronin, the fifteen track LP was seven years in the making and also features Pogues members Spider Stacey and Jem Finer.

“We are beyond devastated to lose our friend, the only consolation we have is that Shane had finished all his vocals for this record”, the band’s Johnny Cronin tells The Irish Sun, adding that MacGowan was in “fine voice right to the end”.

“Shane was always in charge when we went into the studio, he was telling us what to play and where to play it”, he goes on. “If I was going to try and describe it, it’s like the recordings Johnny Cash did with producer Rick Rubin at the end of his career”.

Plans for releasing the record are yet to be decided. Cronin said that MacGowan “wanted this record out, so it will come out”, but added that it is “not something we are thinking about right now”.

Following a lengthy period of ill health, MacGowan died last week, aged 65, after contracting pneumonia. His funeral is set to take place in Nenagh, County Tipperary in Ireland on Friday. His coffin will be taken on a procession through Dublin earlier in the day.

DEALS

Universal Music announced partnership with "king of Mandopop"

Universal Music Greater China has announced a new strategic partnership with "king of Mandopop" Jay Chou and his record label JVR Music. The deal covers Chou's catalogue and future projects and will also see the major support other talent on his label, including Patrick Brasca and Young.

Confirming the deal, the CEO of Universal Music Greater China, Timothy Xu, says: "It is with immense pride and excitement that we welcome Jay Chou, an icon of our times, into the Universal Music family”.

“This partnership is more than a milestone for us”, he goes on, “it's a celebration of Jay's extraordinary artistry and global appeal. We are deeply honoured to be entrusted with his musical legacy and are eager to help showcase his remarkable talent to a broader global audience".

The CEO of JVR Music, JR Yang, adds: "Aligning with UMG in this strategic partnership marks a new chapter for Jay and JVR towards our vision of elevating Mandarin pop music globally”.

“Leveraging UMG's extensive global network enables us to amplify Jay's artistic impact and the diversity of our artist roster on a global scale”, he continues. “We are excited about harnessing this alliance to transcend cultural boundaries and cement the international presence of our unique musical heritage".

LEGAL

Cloudflare says ruling in Universal dispute is an "important push-back"

Cloudflare has welcomed the recent ruling in the German courts in its legal battle with Universal Music. Well, it has welcomed half of the ruling. The half that said it doesn't have to implement web-blocks against copyright-infringing websites via its DNS resolver 1.1.1.1.

"A recent decision from the Higher Regional Court of Cologne in Germany marked important progress for Cloudflare and the internet in pushing back against misguided attempts to address online copyright infringement through the DNS system", it said in a blog post yesterday.

However, it then added, "there were other parts of the opinion that raise concerns". That relates to Cloudflare's obligations to take action to block copyright infringing websites via its CDN - or content delivery network.

For the music industry, web-blocking has become a piracy tactic of choice. Music companies usually get court orders that force internet service providers to block their customers from accessing piracy sites.

In more recent years, the music industry's lawyers have been seeking to extend those obligations to other internet services, including third party DNS resolvers like 1.1.1.1. Mainly because, when an ISP blocks access to a piracy site, its users can often circumvent the blockade if they switch to a third party DNS resolver.

The Italian music industry has successfully sought a web-blocking order against Cloudflare’s 1.1.1.1. And, in Germany, Sony Music has had some success pursuing legal action against another third party resolver, Quad9.

However, with the German case involving Universal and Cloudflare, judges decided that - while the internet firm does have a web-blocking obligation in relation to its CDN - that does not extend to the DNS resolver, because that specific service "contributes to the connection of internet domains in a purely passive, automatic and neutral manner".

Cloudflare hopes that that ruling will strengthen its arguments regarding web-blocks on 1.1.1.1, both in Germany and also elsewhere in Europe. Meanwhile, it plans to appeal the ruling regarding its CDN.

AND FINALLY

Blackpink renew deal with YG, but uncertainty over group’s future remains

K-pop talent agency YG Entertainment has renewed its deal with girl group Blackpink, allaying fan fears that they were on the verge of splitting up.

However, while the agreement assures that the group has a future, uncertainty over each member’s individual contract regarding solo projects may mean a reduction in their recording and touring activities as Blackpink.

"After careful discussions with members of Blackpink, [we] signed an exclusive contract for the group’s activities based on deep trust", said YG Entertainment in a statement this morning.

The company's last deal with Blackpink - their biggest act - expired in August. After months of negotiations, news that an agreement had finally been reached caused its share price to rise by more than 25% on the previous day. However, it remains 30% down on where it was six months ago.

The signing of the deal will be a relief for the company, which has lost a number of big name artists in recent years. However, uncertainty remains. While Blackpink have decided to stay with the YG as a group, each member is yet to sign a deal regarding their other work.

There are rumours that members will move to rivals, or even set up their own agencies, rather than continue to work with YG on their solo careers.

If that happens, then they would likely focus on their solo work, only working together as a group when all four of their schedules allow. This would obviously greatly reduce their output as Blackpink.