In today's CMU Daily: WMG's Kyncl talks next decade; OpenAI responds to NYT lawsuit; ERA reveals stats for 2023; MSG officially drops planning application for London Sphere

Plus: AIM's CEO Silvia Montello looks at the year ahead.

CMU's virtual masterclass Music + AI In 2024 takes place on Tuesday 20 Feb. Attendees can access the session live on Zoom and then on-demand via the CMU learning platform. Click here for information on all of the upcoming CMU online masterclasses and to book your place.

Warner Music boss talks streaming model and super-fans in start-of-year memo

Warner Music boss Robert Kyncl - one year into the job - is now focused on the next ten. So much so, he’s dubbed 2024 “the year of the next ten”.

In a start-of-the-year memo to his staff, Kyncl writes: “The music business is in a very different place than it was ten years ago. Now, we’re in a position of strength. That is the time to get ahead for the future”.

To that end, 2024 will be the year when “we move at velocity to set ourselves up for a winning decade in the new world”.

His memo sets out three top level priorities: “growing the engagement with music”, “increasing the value of music” and “evolving how the team works together”.

Under the banner of engagement he talks about A&R, marketing, catalogue, distribution and administration doing what they do but, you know, better. “Geographic focus” in A&R, “best-in-class solutions” in marketing, “holistic deep and shallow catalogue management”, and distribution and admin infrastructure that is both super good and operating at scale.

On evolving how the teams work together, he talks about expertise, transparency and flexibility, and that constant holy grail for big corporations, more collaboration across the business.

However, probably the most interesting thing in the memo is what Kyncl has to say about increasing the value of music, even if that sees his forward-looking 2024 memo focusing on one of the big talking points of 2023.

“We need to align our [streaming service] relationships so that we appropriately value the contribution of our artists, songwriters and catalogues”, he writes.

That means stopping “dilution from millions of low-value and functional tracks” and maximising “price opportunity for our music”. So, basically, add another dollar to streaming subscriptions and proceed with the somewhat controversial revamp of the streaming business model that downgrades - or entirely freezes out - some grassroots artists, and functional audio.

But it’s not just about meddling with the streaming model. Kyncl also acknowledges the under-tapped potential of super-serving super fans. “We need to develop our direct artist-superfan products and experiences”, he notes. “Both artists and superfans want deeper relationships, and it’s an area that’s relatively untapped and under-monetised”.

He’s not wrong. And at least having major labels more effectively collaborating with their artists on better serving superfans shouldn’t cause any controversies by negatively impacting on other makers of music and audio content. So, a win for everyone!

Full Time Hobby Music // D2C Marketing Assistant (London)

terrible* // D2C Customer Service Representative (London)

terrible* // Logistics & Production Assistant (London)

Snapper Music // Press & Promo Coordinator (London)

Como No & La Linea // Director (London/Hybrid)

UK Music // Chief Executive (London/Hybrid)

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

Deviate Digital // Digital Marketing Assistant (London)

ONE LINERS

WMG + Red Light, Hang Your Hat Music, Miley Cyrus, Jamie xx, Korn + more

DEALS

Warner Music has formed a strategic partnership with Red Light Management to help the artist management company better build its artists’ profiles in Japan. "In recent years we have worked hard to help international artists connect with local fans as we transitioned from physical to digital”, says Warner Music Japan’s COO Kaz Shimada. “This exciting new partnership is another significant step forward, as we combine our experience promoting some of the biggest global stars in Japan with Red Light Management's super-talented managers and amazing roster of artists”.

Hang Your Hat Music - a joint venture between Concord Music Publishing and songwriter Hillary Lindsey - has signed country songwriter Chase McDaniel to a worldwide publishing deal. "It’s a dream come true to have the opportunity to work with such great creative teams”, says McDaniel.

Warner Chappell has signed Swedish band Baloget to a worldwide publishing deal. "Bolaget is a major signing for us”, says Lars Karlsson, the company’s MD for Scandinavia and Germany, Switzerland and Austria. “The band have built a huge and loyal following in Sweden, and the passion of their songwriting and energy of their performances have blown people away. We're ready to support them as they take their career to the next level both here in the Nordics and around the world”.

APPOINTMENTS

Universal Music Mexico has promoted Alfredo Delgadillo to the role of CEO and President. He previously became Managing Director in 2017. “I am deeply grateful for the opportunity and the trust that has been placed in me throughout my career and now in this new professional challenge”, he says. “The support of the entire UMG team will be integral to continuing to make history and furthering Latin music culture around the world”.

Roger Daltrey has announced that he is stepping down as curator of the annual Teenage Cancer Trust shows at the Royal Albert Hall in London after this year’s series. He has overseen the gigs since they began in 2000. From 2025, each year’s performers will be selected by a different guest curator.

Nitin Sawhney is to become the PRS Foundation’s first Patron, having been Chair of the music charity’s board of trustees for the last four years. “It has been an honour to work alongside such an inspiring, impressive and active music creator”, says CEO Joe Frankland. “I look forward to working with Nitin in this new capacity and am pleased he can continue to champion the work of the charity and the importance of funding for the music creators and organisations we support”.

Anna van Nunen has been appointed as the new General Manager of Dutch showcase festival and music conference Eurosonic Noorderslag. She will officially take up the role on 18 Mar, replacing Dago Houben, who announced his departure last June. “I am eager to strengthen the conference and festival with the team”, she says. “In the coming years, I want to ensure a future-proof organisation and a rock-solid positioning of ESNS in Europe”.

UK media regulator Ofcom has appointed five new non-executive directors to the board of Channel 4 Television. They include Warner Records UK MD Alex Burford, although he will not take up his post until June this year. The other appointees, starting immediately, are tech entrepreneur Tom Adeyoola, Boots CEO Sebastian James, Accenture Song marketing exec Annette King, and entrepreneur Debbie Wosskow.

ARTIST NEWS

The BBC has announced plans to auction off 285,000 vinyl records from its vaults over the next year and a half. They include rarities from The Beatles, David Bowie and more. The first lot - which also includes a number of pieces of old equipment - will go up for sale on 30 Jan. Peruse at your leisure here.

SoundExchange has revealed that ‘Flowers’ by Miley Cyrus was the most played track last year on non-interactive streaming services that operate under a licence from the US collecting society. Meanwhile, Mexican singer Peso Pluma has topped the organisation’s Breakout Creators list, which tracks the artists that enjoyed their first significant streaming activity on the services it licenses last year.

RELEASES

Jamie xx has released new single ‘It’s So Good’, which soundtracks the new Chanel Coco Crush marketing campaign.

Pissed Jeans have announced that they will release their sixth album ‘Half Divorced’ on 1 Mar. Out now is first single ‘Moving On’.

Benjamin Francis Leftwich has released new single ‘New York’, taken from his forthcoming album ‘Some Things Break’.

Ferris & Slyvester have released new single ‘Rain’. The track is taken from their new album ‘Otherness’, which is out on 1 Mar.

GIGS & TOURS

Korn have announced that they will play their biggest ever UK show at London’s Gunnersbury Park on 11 Aug. Support will come Denzel Curry, Spiritbox, Wargasm and Loathe. Tickets go on general sale on Friday.

A tribute concert to Sinead O’Connor and Shane MacGowan is set to take place at Carnegie Hall in New York on St Patrick’s Day, 20 Mar. Performers will include David Gray, Cat Power, Glen Hansard, Amanda Palmer, Dropkick Murphys, Eugene Hutz, The Mountain Goats and more. Find out more here.

AIM CEO Silvia Montello looks back at 2023 - and the challenges and opportunities 2024 holds

As we head into 2024, CMU has been sitting down with the bosses of many of the music industry’s trade organisations to talk about their work, the key challenges faced by their members, and what to expect in the year ahead.

Today, at the start of the organisation's 25th anniversary year, we talk to Silvia Montello, CEO of the UK’s Association Of Independent Music.

Approved: Mizu

Classically trained cellist Issei Herr - aka Mizu - released her debut album ‘Distant Intervals’ to much acclaim in 2023. Less than a year later she is set to follow it up with stunning new LP ‘Forest Scenes’.

The new record mixes classical instrumentation, looping, electronic music and spoken word samples, densely layered but with a light touch. Written as a sonic representation of self-discovery, the music does - as the title suggests - feel like wandering into a forest, discovering a world ever more magical the deeper you get.

‘Forest Scenes’ is set for release on 22 Mar. Out now is its first single ‘Pavane’, which couples a discordant synth line with euphoric strings that gradually build and expand.

Watch the video for ‘Pavane’ here.

CMU GUIDE: AI + MUSIC

Artificial intelligence + the music business: CMU's guide to (nearly) everything that mattered in 2023

There was a lot of discussion in 2023 within the music community about how AI will impact on music creation, music marketing, and the music business more generally.

There are clearly opportunities created by AI, and many ways that AI technologies will enhance the business.

An increasing number of music creators and music companies are exploring and identifying way to capitalise on those opportunities, and figuring out which AI products and services may offer ways to enhance their work.

Read CMU's (very) deep dive guide to the deals, disputes and debates, lawsuits and lobbying, and innovation and exploration that informed the conversation.

OpenAI responds to NYT lawsuit - says training is fair use, "regurgitations" are rare

OpenAI has responded to the recent copyright infringement lawsuit filed by the New York Times in a blog post in which it again insists that the training of generative AI models with existing content is fair use. However, as a good corporate citizen, the AI firm says it is happy to provide publishers with the option to opt-out, which - it adds - the NYT took in August 2023.

It also responds to claims in the NYT lawsuit that, with “minimal prompting”, OpenAI’s models will “recite large portions” of the newspaper’s articles “verbatim”. Such “regurgitation”, OpenAI insists, is “a rare bug that we are working to drive to zero”, adding: “We have measures in place to limit inadvertent memorisation and prevent regurgitation in model outputs”.

The battle between the technology sector and the content industries over the copyright obligations of AI companies is gaining momentum, of course. Copyright owners insist that AI firms must get permission before using existing content to train generative AI models. But most tech companies argue that they don’t need permission because of exceptions in copyright law or, in the context of American law, the always tricky principle of fair use.

Therefore, Open AI reckons, NYT’s allegations of copyright infringement are unfounded. “Training AI models using publicly available internet materials is fair use, as supported by long-standing and widely accepted precedents”, its blog post argues. “We view this principle as fair to creators, necessary for innovators and critical for US competitiveness”.

“That being said”, it goes on, “legal right is less important to us than being good citizens. We have led the AI industry in providing a simple opt-out process for publishers to prevent our tools from accessing their sites”. In the European Union, a data mining copyright exception in law has an inbuilt opt-out for copyright owners, so basically OpenAI is applying that more generally.

The AI company is also very keen to stress that it is working in partnership with many copyright owners, including in the news business. And, indeed, it thought talks about such a partnership with NYT were going well until the newspaper company suddenly went legal in late December.

As for the NYT’s complaints about regurgitation, Open AI says that the newspaper firm “repeatedly refused to share any examples, despite our commitment to investigate and fix any issues”. Also, it reckons, regurgitations induced by NYT on its platform generally related to articles that had been widely published on third-party websites, and even then those articles were likely only heavily cited by its model as a result of very specific prompts.

None of which is likely to placate NYT or any other critics of the AI firm within the copyright industries. Though blog posts like this demonstrate the template increasingly employed by AI companies on copyright matters: “It’s all fair use, but hey, were collaborating with the savvy content owners, and anyway, were in this for the good of humanity, let us innovate otherwise, you know, big bad China will end up owning AI, and nobody wants that”.

UK music retail brought in £2.2 billion in 2023 says ERA

The UK entertainment retail sector - which includes retailers and digital platforms in music, video and games - saw total revenues grow by 7% in 2023 hitting £11.87 billion, according to new figures from trade group ERA.

Music was up 9.6% to £2.22 billion, but video scored the highest level of growth at 10%. So much so, video - with total revenues of £4.92 billion - is now the most lucrative strand of entertainment retail once again, gaming having been on top for a decade.

Digital platforms dominate in all three strands, although - in percentage terms - physical product sales are strongest in music. Vinyl album sales generated £177.3 million last year, up 17.8% on 2022. And while CD sales were down in terms of units sold - according to the recent BPI stats - revenues were actually up 2% to £126.2 million. Total physical sales in music were up 10.9%.

Nevertheless, streaming accounted for 84% of music retail revenues in 2023. Streaming services generated £1.87 billion, up 9.8% on 2022. And that helped music retail revenues at large grow 9.6% to £2.22 billion, the highest achieved since 2002, just before the 2000s slump.

In video, digital platforms now account for 96% of revenue, with DVD and Blu-ray sales down again, together generating £169.7 million, while digital brought in £4.74 billion. Those digital revenues were up 11.6%, meaning video revenues overall grew 10% to £4.92 billion.

Although the gaming sector also saw growth in 2023, again thanks to digital, revenues were growing at the slower rate of 2.9%. This means - with total revenues of £4.74 billion - gaming is now behind video, after many years of outperforming the other strands of entertainment retail.

Across all of entertainment retail, revenues topped £11.87 billion. And, having now achieved eleven consecutive years of growth, despite challenging economic conditions, the sector is “defying gravity”. Or so says ERA Chairman Ben Drury.

“Due credit should go to the amazing creative talent behind the movies, music and games we all love”, he adds. “But we should also recognise the huge contribution of the digital services and retailers who have reinvented the entertainment experience for consumers over the past fifteen years. The overwhelming majority of the money raised by digital services and retailers goes direct to the content owners, and their success is directly benefiting creators”.

MSG formally withdraws application to build “political football” Sphere venue in London

MSG Entertainment has formally withdrawn its planning application to build its next Sphere venue in East London. The company said that the project had become “a political football”. And not just because of its shape.

London Mayor Sadiq Khan last year overruled a previous decision to allow the huge spherical building with an LED screen covering its outer surface to go ahead.

The UK government’s Housing Secretary, Michael Gove, then ‘called in’ the planning application, allowing him to make a final ruling. However, the MSG company has now written to Gove saying that it will not be taking the project any further.

In a letter, the company wrote that it had spent “millions of pounds acquiring our site in Stratford and collaboratively engaging in a five year planning process with numerous governmental bodies”. Those bodies, it noted, included “the local planning authority who approved our plans following careful review”.

Declining to participate in Gove’s latest review of the application, MSG said that it “cannot continue to participate in a process that is merely a political football between rival parties”.

To suggest that the various different reviews of the London Sphere project are simply political posturing ignores the significant wider opposition to it - not least from local residents.

Khan rejected the plans on the grounds that the light pollution caused by the 300 foot tall, LED covered building would have a number of negative impacts on neighbouring residents - not least being “detrimental to human health”. He also criticised the venue’s likely environmental impact, saying that it did not “constitute good and sustainable design”.

In addition to this, campaigners and rival live company AEG also noted that there are already two large scale venues nearby - the O2 Arena and London Stadium. Adding a third, they argued, would put significant pressure on local transport systems.

MSG CEO James Dolan already indicated last year that the company was no longer interested in building a Sphere venue in London - effectively rendering Gove’s review redundant anyway. It was always possible that Dolan was doing some political posturing of his own. But now the company’s London withdrawal has been formalised, it does indeed seem that this is the end for anyone hoping that a big, bright blob would be placed on the London skyline.

The company is currently moving ahead with efforts to build Spheres in Abu Dhabi and South Korea.