📑 CMU Digest: SXSW London, Lucian's pay + more

This week: SXSW is coming to London - but that may not be an entirely positive thing; Pressure for Lucian Grainge over "excessive pay" ahead of Universal Music's shareholder AGM; TikTok begins its battle over US ban, while getting back to business with Universal; Goldman Sachs publishes latest 'Music In The Air' report; Spotify publishes UK-specific data; MPs say an arena show ticket levy system to support grassroots venues should be launched by September

ICYMI: Astroworld lawsuits settled; FKA Twigs and the Senate's discussion of vocal clones; Digital Music Europe vs Apple; Miles Davis tattoo ruling; Supreme Court rules on copyright damages limitation timeframe

Plus: Apple put out a new iPad advert this week, which showed musical instruments, books, pots paint and more being crushed in a hydraulic press. It was supposed to depict the amazing creative things you can do on an iPad, but people just saw it as a metaphor for the tech industry’s attitude to creators

Prefer to read this online? Head to cmu.fyi/digest

SXSW is coming to London - but that may not be an entirely positive thing

SXSW Is coming to London in 2025, with the event organisers saying SXSW London will take place in “early June”. However, this puts the event in the same window as - and direct competition with - four of the UK’s long-established home grown industry showcase and networking events, Wide Days (Edinburgh), Sound City (Liverpool), Focus Wales (Wrexham), and The Great Escape (Brighton), all of which usually take place in May.

The announcement drew a number of positive responses on social media from some quarters of the music industry. However, it became clear to CMU over the course of wide ranging conversations with senior representatives of industry stakeholders that SXSW’s proposed entry into London was not regarded as a wholly positive move. One senior executive told CMU “they need to pick a different date”.

the SXSW London event itself will be “produced under licence from SXSW LLC by Panarise, a live entertainment company established and owned by Panarae”. Documents obtained by CMU show that Panarae is associated with Ali Munir, an investor and director of Penske Media Corporation, SXSW’s majority owner. Quite why it was necessary for SXSW LLC to license its brand to a company ultimately controlled by a director of its parent is unclear. Why that company is located in Jersey - a jurisdiction named as one of the most “aggressive” tax havens in the world - is also unclear.

Penske - which also owns Luminate, Rolling Stone, Variety, Billboard and 50% of Music Business Worldwide - controversially raised a sum reported to be $200 million in 2018 from the Saudi Research and Media Group or SRMG, a Saudi company described as "so closely tied to the Saudi regime of Mohammed bin Salman that it is widely considered an organ of soft power propaganda".

Pressure for Lucian Grainge over "excessive pay" ahead of Universal Music's shareholder AGM

Universal Music Group CEO Lucian Grainge is facing renewed pressure from investors over his “excessive” compensation package, with leading proxy research firm Glass Lewis saying that it has “severe reservations” about Grainge’s compensation which UMG shareholders will vote on - as part of an agenda item relating to executive remuneration - at the company’s AGM this week, on 16 May.

Between 2020 and 2022, Grainge received a total of around €138.5 million in salary and other benefits, with his base salary coming in at €13.6 million in 2020, €13.2 million in 2021 and €15.4 million in 2022. On top of this, according to Glass Lewis, Grainge “received three payments” totalling €258,096,561” from Vivendi in 2021 “for achieving certain milestones pre-IPO and securing strategic investors”.

Late last year, Universal announced a swathe of lay-offs across its business, described by Grainge to investors as a “cut to grow” strategy which would see hundreds of UMG employees lose their jobs as part of a drive to “cut overheads in order to grow elsewhere”. That said, with UMG’s share price up considerably from the IPO “reference price” of €18.50 per share, some may argue that Grainge’s compensation is justified. Whether or not shareholders agree at the AGM on 16 May remains to be seen.

TikTok begins its battle over US ban, while getting back to business with Universal

TikTok sued the US government over the sell-or-be-banned law recently passed by Congress. Based on concerns that the Chinese government has access to TikTok user-data via its China-based owner ByteDance, that law gives ByteDance 270 days to sell TikTok otherwise the app will be banned in the US. In its legal filing, TikTok said that ByteDance selling the app is impractical. Any sale would face legal challenges in China, and splitting off TikTok in the US would create commercial and practical challenges. Therefore, it argued, the new law is basically a ban, and that is unconstitutional on free speech grounds.

TikTok has successfully employed constitutional arguments in the American courts before, when seeking to block former President Donald Trump’s attempts to ban the app, and more recently when lawmakers in Montana voted through a TikTok ban. That state's Attorney General is fighting back, arguing that the Montana ban is about regulating “conduct” not “speech”, and therefore the free speech arguments are irrelevant. But that, TikTok said in a new court filing earlier this month, is a “false premise”.

All this legal wrangling comes as recordings and songs from Universal Music return to TikTok after a three month stand-off, the major having agreed a new licensing deal with the social media firm earlier this month. Terms of the new UMG/TikTok deal are not known, though Universal said its three grievances had been dealt with, which would mean more money as well as commitments around harmful content and AI. On the AI front, this week TikTok announced it was expanding the labelling of AI-generated content within its app, so that it will automatically label content generated by third party AI platforms.

Goldman Sachs publishes latest 'Music In The Air' report; Spotify publishes UK-specific data

The 'Music In The Air' report was generally positive about recent developments in the music industry, including the first major round of price increases at the streaming services; changes to the way streaming revenues are allocated to tracks and catalogues; the evolution of generative AI; the potential of the superfan opportunity; and “a stronger outlook for the live music and music publishing segments”. With all that in mind, the Goldman Sachs analysts have increased their predicted compound annual growth rate for the wider music sector through to 2030 to 7.6% - up from 7.3% in last year’s report.

One area where the analysts were slightly less positive was ad funded streaming, both the free tiers of the music services, and the social media and short-form video platforms. “We have reduced our 2024-30 ad-supported growth forecasts to +11.6% from +14.6% previously”, they wrote. Among other things, they suggested that the music services consider introducing mid-level options - similar to those introduced by video streaming platforms - where users pay a lower price subscription fee and are still exposed to ads.

Elsewhere in stats this week, Spotify released a UK specific version of its Loud & Clear facts and figures. They revealed that, in 2023, Spotify payments to the UK music industry exceeded £750 million, with 75% of that revenue stemming from streams outside the UK. More than 40% of UK Spotify payouts went to independent artists and labels, although that does include music released with the distribution and services divisions of the three majors.

MPs say an arena show ticket levy system to support grassroots venues should be launched by September

That recommendation came in a new report on ‘Grassroots Music Venues’ published by the UK Parliament's Culture, Media & Sport Select Committee. It followed an inquiry during which MPs heard about the crisis currently being experienced by artists, promoters and venues in the grassroots music community, who are facing major financial challenges while the upper end of the live sector - especially arena and stadium shows - is booming.

The Music Venue Trust has proposed a levy being added to tickets of large-scale shows, money from which would support the grassroots community. The committee called on the industry to get a levy system in place by September, otherwise government should look into introducing a mandatory levy into law.

The report made other recommendations, including that the government should introduce a temporary VAT cut on tickets for shows at grassroots venues and then assess the impact of the tax break. The live industry has repeatedly called for a VAT cut, but so far the government has ignored those demands.

The new report came as Music Venue Properties - the charitable community benefit society set up as part of Music Venue Trust’s Own Our Venues initiative - announced it had bought its second venue. The Ferret in Preston is now owned by MVP, meaning the venue's operators have a landlord that exists to support local grassroots music communities.

ICMYI:

All but one of the ten wrongful death lawsuits filed by families of victims of the 2021 Astroworld tragedy have now been settled, a lawyer for promoter Live Nation told a court in Houston yesterday. That includes a case that was due to go to trial this week, but which was postponed as a result of Apple’s ongoing efforts to be removed as a defendant.

Representatives from the entertainment industry provided their perspectives to US Senators, as part of a discussion relating to proposed new laws that would allow people to control the use of their voice and likeness. Warner Music boss Robert Kyncl saying that “the truth is, everyone is vulnerable” as generative AI technologies rapidly evolve. Giving an artist viewpoint, FKA Twigs said that the potential use of AI tools to replicate her voice or likeness “leaves me very vulnerable”.

A trade group representing Spotify, Deezer and other music streaming services based in Europe has urged the European Union to reject Apple’s plan for complying with a recent regulator demand regarding in-app linking on iOS devices. Spotify has already hit out at that new condition, and now trade group Digital Music Europe has sent a letter to the Commission urging it to “reject this solution and take immediate action to bring Apple to compliance, including daily penalties”.

Earlier this year, a jury ruled that celebrity tattooist Kat Von D had not infringed the copyright in a Miles Davis photo that she had used as a guide when creating a tattoo of the musician. The photographer hoped to overturn that ruling, but the presiding judge has knocked back his request for a new trial. “The standard for overturning a jury verdict is ‘very high’”, writes Judge Dale S Fischer in her new judgement, adding that photographer Jeffrey B Sedlik needed to demonstrate that there was “no legally sufficient basis for a reasonable jury” to reach the conclusion reached in the original trial.

A dispute centred around a Flo Rida sample has seen the US Supreme Court rule that if a copyright owner sues over an infringement that took place years or even decades ago, then providing their claim meets the requirements of the statute of limitations, they can claim damages all the way back to the day of infringement.

🎙 Setlist Podcast: Arena ticket levy by September, MPs demand

In this week's Setlist Podcast: Chris Cooke and Andy Malt discuss the UK Parliament’s Culture, Media and Sport Committee recommending that the government implement a levy on ticket sales for large scale shows and cut VAT for grassroots music venues, and the concerns surrounding the launch of a new SXSW festival in London.

Click here to listen - or search for 'Setlist Podcast'

And Finally! Apple finds out the hard way that not everyone thinks destruction is a form of creation

This week Apple launched a new advert attempting to harness the viral power of hydraulic press videos by creating one of its own on a massive scale.

The premise is simple, really. The new iPad Pro is the thinnest Apple has ever made. Also, there are loads of things you can do on an iPad. Watch TV, make music, draw, play games, read books. What better way to show that than to take physical representations of all those things and then show them being crushed down into a brand new iPad? How exciting!

Just imagine all of those amazing tools packed into one little iPad. This video is all about celebrating creativity. Everyone involved in the marketing of the Apple tablet must have been slapping themselves heartily on the backs all through the making of this video.

But it turns out that many people see videos of things being crushed in hydraulic presses as being more about destruction than creation. And so Apple found itself having to apologise for a video that filmmaker Asif Kapadia called “the most honest metaphor for what tech companies do to the arts, to artists, musicians, creators, writers, filmmakers: squeeze them, use them, not pay well, take everything then say it’s all created by them”.

Check out this and more of this week’s funniest music news stories in this week's And Finally!