From Create buying Monstercat to WMG earnings… it’s MBW’s Weekly Round-Up

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 maximize their income and reduce their touring costs.

This week we learned that $1 billion-valued Create Music Group has acquired again, this time snapping up indie electronic music label Monstercat.

Warner Music Group released its calendar Q1 earnings, showing revenue growth of 1.2% YoY, while subscription streaming revenue grew 3.2% YoY.

Meanwhile, Universal Music Group filed a motion to dismiss Drake‘s amended defamation complaint against the company, calling Drake’s legal action an “attempt to save face” after losing a rap battle against Kendrick Lamar.

We also learned this week that Google has teamed up with Range Media Partners to launch a film and TV production company called 100 Zeros. Google moving into the entertainment IP space could have implications for the music industry.

Finally, MBW founder Tim Ingham‘s latest column casts an eye on the irony of AI music-making platform Udio teaming up with Audible Magic for “content identification,” and why UMG may be “confident” about its acquisition of Downtown Music, despite an EU investigation.

Here’s what happened this week…

1) CREATE MUSIC GROUP ACQUIRES AGAIN, SWOOPING FOR INDIE ELECTRONIC LABEL MONSTERCAT

Create Music Group has acquired again.

The company, which was valued at $1 billion following a $165-million investment round last year, has swooped for independent electronic music label Monstercat.

As part of the deal, Create said it has committed to investing an additional $50 million over the next two years in artist development, advances, and platform support across Monstercat’s roster, “to accelerate both new signings and long-term career growth”.

Financial terms beyond the $50 million investment commitment weren’t disclosed.

Monstercat has staff based in Vancouver, Toronto and Los Angeles…

2) ROBERT KYNCL TALKS M&A STRATEGY, A&R SPEND, AI REGULATION, AND MORE ON WARNER MUSIC’S LATEST EARNINGS CALL

Warner Music Group published its calendar Q1 (fiscal Q2) results on Thursday (May 8), with CEO Robert Kyncl acknowledging industry-wide challenges on the company’s earnings call.

“We recognize this is a moment of transition in the industry and for our company,” Kyncl stated on the call, while maintaining his outlook for future growth.

WMG reported company-wide revenue growth of 1.2% YoY at constant currency for calendar Q1, with recorded music revenues increasing 0.7% YoY, and music publishing revenue growing 3% YoY. Subscription streaming grew 3.2% YoY, compared to double-digit growth in the same quarter last year.

In his opening remarks, Kyncl identified specific factors behind these results: “Our results in [calendar Q1] reflect a lighter release schedule, market share pressure in China and a tough year-over-year comparison in subscription streaming, where we saw strong double-digit growth in the prior year quarter…”

3) UNIVERSAL MUSIC GROUP SLAMS ‘WILD CONSPIRACIES’ FROM DRAKE LAWYERS, MOVES TO DISMISS LAWSUIT

Universal Music Group has filed a motion to dismiss Drake’s amended defamation lawsuit over Kendrick Lamar’s hit track Not Like Us, arguing that the lyrics are “nonactionable opinion and rhetorical hyperbole” rather than assertions of fact.

Drake filed an amended complaint last month that added new allegations regarding Lamar‘s performance during the Super Bowl LIX halftime show in February.

In a legal memorandum filed on May 7, and obtained by MBW, UMG asks the court to dismiss Drake’s amended complaint with prejudice.

The memorandum characterizes the lawsuit as “Drake’s attempt to save face for his unsuccessful rap battle with Lamar” and describes the “new allegations” as “astonishing…”

4) GOOGLE HAS LAUNCHED A FILM AND TV PRODUCTION HOUSE WITH RANGE MEDIA PARTNERS. WHAT DOES THAT MEAN FOR THE FUTURE OF MUSIC RIGHTSHOLDERS?

The integration of Big Tech and the entertainment industry has taken another step, this time with news that Google has launched a film and TV production company.

Business Insider reported this week that Google has quietly launched 100 Zeros, a film and TV production initiative that won’t be producing content for YouTube (a la YouTube Originals), instead offering it for sale to traditional studios and streaming services like Netflix.

(“100 Zeros” is a cryptic way of saying Google. A one with 100 zeros after it is a googol, the quantity for which Google was named).

For those in the music industry, one detail about 100 Zeros stands out: It’s part of a multi-year partnership with Range Media Partners, a management and production company known for its involvement in music…

5) ON… UDIO, FUGA, UNIVERSAL, MERLIN, AND MISSED OPPORTUNITIES

Tim Ingham‘s latest MBW+ Review column is now online for subscribers. It covers:

1) The comedy of Udio partnering with Audible Magic for “content identification” while simultaneously being sued by majors for copyright infringement. As Udio churns out AI-generated songs with lyrics from Yesterday and Wonderwall, its so-called “commitment to content provenance” rather sticks in the throat.

2) Why UMG might be remaining “confident” about closing the $775M Downtown acquisition despite an EC investigation.

3) The FUGA factor: While indies protest UMG’s potential ownership of distribution powerhouse FUGA, where were they in 2020 when Downtown’s Justin Kalifowitz acquired it for a reported ~$40M? Considering Merlin‘s $1.48B in annual revenues, could the independent sector have secured this crucial infrastructure themselves…?

MBW’s Weekly 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.Music Business Worldwide