The Ledger: Should Music Streamers Follow Netflix’s Lead on Account Sharing?

The Ledger is a weekly newsletter about the economics of the music business sent to Billboard Pro subscribers. An abbreviated version of the newsletter is published online.

The music business should watch what Netflix is doing in select Latin American countries to bring in more revenue as painlessly as possible.

In the next few weeks, Netflix will begin testing new two features in Chile, Costa Rica and Peru:

  • “Add an extra member,” which allows subscribers to standard and premium plans to add up to two people they don’t live with for a few dollars a month;
  • And “transfer profile to a new account” for people to take their profile information — namely their viewing history and recommendations — to a new account rather than create a new account from scratch.

“We recognize that people have many entertainment choices,” the company wrote in the blog post announcing the new features,” so we want to ensure any new features are flexible and useful for members, whose subscriptions fund all our great TV and films.” To be sure, Netflix is offering carrots rather than sticks to deal with account sharing between people in different households. Previous efforts to reduce password sharing were delicately handled. Contrary to some news headlines, Netflix is not exactly cracking down on the problem. But with subscription growth slowing and its share price in decline, Netflix is not ignoring the matter, either.

What does this have to do with music subscriptions? Plenty. People share accounts to Spotify, Apple Music and other music subscription plans just as they share accounts to video subscription services. Music services are also under pressure to generate more revenue for rights holders and creators. Spotify has opted to experiment with small hikes in multi-user subscriptions such as family plans rather than broad price increases. Instead, Spotify et al. have focused on attracting more subscribers, which brings more paying customers into music streaming, and reducing churn, which has raised the average subscriber’s lifetime value. By and large, prices have stayed flat for more than a decade.

The latest data show account sharing remains widespread in the U.S.: 15.2 million people used a music streaming service log-in and knew it wasn’t for a family plan, according to the MusicWatch Annual Music Study 2021. That was down from 18.6 million in 2020 but higher 2018 (9.2 million) and 2019 (12 million). MusicWatch’s previous survey in 2019 found that about one in nine Americans using a music subscription were streaming using someone else’s password. About 30% of people who admitted using somebody else’s password said they would pay for the service. That segment would be worth $300 million annually at $9.99 per month — even something less would be an opportunity to convert non-paying users. The remaining 70% of account sharers said they would opt for the free, ad-supported version. That’s also an opportunity. Streaming services and rights holders would be better off if they could pay a few dollars a month rather than turn into low-value, advertising-based listeners.

Improving monetization doesn’t require widespread, unpopular price increases. Small tweaks can help build the marketplace and convince more people to become paying customers. Netflix’s option to transfer a profile to a new account eliminates some of the pain in starting an individual subscription. If a music streaming service followed suit, a person could start a new subscription and keep all their playlists created under a previously shared account. Giving non-family members the ability to join a shared account would result in marginally higher revenue per user without making everyone else pay more.

Music streaming services are increasingly under pressure to deliver more royalties to creators and rights holders. Tackling account sharing is a sensible option. Even gentle nudges, not heavy-handed tactics, can produce results.

 

STOCKS
Through March 18, the % change over the last week, and the year-to-date change.

Spotify: $144.78, +16.5%, -38.1% YTD
Universal Music Group: 22.78 euros, +11.7%, -8.1% YTD
Warner Music Group: $37.21, +17.0%, -13.8% YTD
Believe: 12.90 euros, +11.3%, -23.7% YTD
Reservoir Media: $8.96, +8.7%, +13.3% YTD
Live Nation: $112.98, +4.1%, -5.6% YTD
Tencent Music Entertainment: $5.06, +47.1%, -26.1% YTD

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Paul Simon Shopping Simon & Garfunkel Recorded Royalties

A year after Paul Simon sold his song catalog to Sony Music Publishing, the legendary artist is now shopping his master recording royalties from his Simon & Garfunkel recorded works, multiple sources tell Billboard.

The master royalties include the five Simon & Garfunkel studio albums that the duo recorded for Columbia/Sony starting in 1964, including 1971 Grammy album of the year Bridge Over Troubled Water. The duo has sold more than 100 million records, according to Sony. “The Sound of Silence,” “Mrs. Robinson,” “America,” “Homeward Bound,” “The 59th Street Bridge Song (Feelin’ Groovy)” and “The Boxer” are among the classic recordings on these albums.

A source says Art Garfunkel is not selling his master recording royalties.

Simon, one of the most revered singer-songwriters in modern American history, launched his career as a member of Simon & Garfunkel before going on to have a lauded solo career. Simon’s current recorded music contract is with Sony Music Entertainment. Since 2010, Sony has also controlled the masters of the solo albums he recorded for Warner Brothers.

Billboard estimates that the Simon & Garfunkel catalog, which also includes a number of live albums, brings in around $8.3 million a year. Using a hybrid formula to calculate artist royalty rates, backing out Garfunkel’s share and using a 20 times multiple, Billboard estimates Simon’s income stream range is between $20 million and $30 million. Sources say the asking price is in the eight figures.

A number of private-equity backed independent publishing companies have expressed interest in acquiring the passive income stream and one source says the deal has not yet closed.

Simon’s attorney declined to comment. His manager did not respond to a request for comment.

Ed Christman assisted in preparing this article.

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MSG Names Lucas Watson President of Sphere Venues

Business brand veteran Lucas Watson has been tapped to lead Madison Square Garden Entertainment Sphere venues. Watson will officially join the company on March 28 as president, MSG Sphere.

The first MSG Sphere venue – MSG Sphere at The Venetian in Las Vegas – is currently under construction and is scheduled to open in the second half of 2023. The final cost for the venue is expected to come in at $1.66 billion.

With over 25 years of global experience accelerating growth and building brands, Watson is set to drive various aspects of MSG Sphere’s commercial strategy including go-to-market planning and bookings, which will feature a wide range of bespoke “only in Sphere” attractions, residencies, conventions and product launches. He will work closely with his colleagues across MSG Entertainment in various aspects of MSG Sphere development, including technology, content, sponsorship and hospitality.

“I am pleased to welcome Lucas to MSG Entertainment, where his expertise will be an asset as we prepare to open our first MSG Sphere venue and further develop the global MSG Sphere brand,” said MSG Entertainment executive chairman and CEO James Dolan in a release. “MSG Sphere will provide a next-generation experience unlike anything that exists in the world, and Lucas’ proven track record of delivering global growth and scale will help us realize our long-term vision for these venues – starting with MSG Sphere at The Venetian.”

Watson will be based in Burbank, Calif. and report directly to Dolan. As part of his responsibilities, Watson will look to expand the MSG Sphere brand into new markets (MSG is already planning to build an additional Sphere venue in London).

“I am excited to join MSG Entertainment at such an important time for MSG Sphere,” said Watson in a release. “Throughout my career I have focused on building world-class brands and scaling emerging companies with disruptive technologies to deliver growth. The opportunity to revolutionize entertainment with MSG Sphere is thrilling. I look forward to working with my colleagues across the Company to bring this first-of-its-kind venue to life.”

Watson most recently served as senior vp, commercial operations at Cruise, where he was responsible for leading the development of the commercial strategy and go-to-market operations plan for the self-driving car technology company. Prior to that, he served as Cruise’s general manager, rideshare business unit and chief marketing officer. In those roles, he built the company’s rideshare business, including developing its market entry strategy and leading its brand positioning.

Before joining Cruise, Watson served as executive vp, global chief marketing and sales officer at Intuit, a global provider of business and financial management solutions. Watson has also held leadership positions at Google and Procter & Gamble.

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OVG360 Names Gregory A. O’Dell President, Venue Management

Venue management and hospitality company OVG360 named Gregory A. O’Dell president, venue management. OVG360 – a division of global sports and entertainment company Oak View Group – will welcome O’Dell to his new role in April after he departs his position at the helm of Events DC, the official convention and sports authority for the District of Columbia. He’ll report directly to OVG360 CEO Chris Granger.

O’Dell, who brings over 25 years of experience to the role, will lead the venue management line of business within OVG360, overseeing venue operations for more than 230 properties across the globe, including stadiums, arenas, convention centers, performing arts centers, cultural institutions and state fairgrounds.

“Greg is truly a unicorn in the live events industry in that his immense leadership experience spans both sports and entertainment and conventions and meetings,” Granger said in a release. “Bringing on Greg as our new head of venue management aligns with our commitment to hiring and developing the most talented, innovative, and values-driven people to grow the OVG360 team.”

In his current role as president and CEO of Events DC, O’Dell oversees three lines of business: conventions and meetings, sports and entertainment and special events. His primary responsibilities include oversight of the creation and promotion of hospitality, athletic, entertainment and cultural activities that generate economic and community benefits for the residents and businesses of the District of Columbia.

He also manages Events DC’s development portfolio, with active projects that include a new multi-purpose entertainment and sports arena on the campus of St. Elizabeths East in Congress Heights, the redevelopment of the RFK Stadium/Armory campus, a comprehensive streetscaping project around the 9-block exterior of the Convention Center and the redevelopment of the Carnegie Library, inclusive of a primary tenant lease for Apple’s global flagship store.

Prior to Events DC, O’Dell served as chief executive officer and general manager of the Washington Convention Center Authority, where he was responsible for the operations of the 2.3-million-square-foot Convention Center.  He also spearheaded the Authority’s development efforts, leading negotiations with the selected private developer and providing oversight throughout the project lifecycle of a $520 million public-private partnership for the 1,175-room, 37-suite Marriott Marquis Washington, DC hotel.

“I could not be more excited to join the OVG360 team. Under Chris’ leadership, we have a bold vision for how we will deliver customized venue solutions to our clients, creating indelible experiences for the communities we serve,” O’Dell said in a release. “I am so fortunate as this role is the perfect fit – a culmination of my experience in sports and entertainment, hospitality and development, coupled with my passion for growth, through building culture and embracing innovation.”

O’Dell’s appointment follows OVG’s acquisition of Spectra, one of the industry’s leading venue management and hospitality providers, to create a leading full-service live events company.

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Nat King Cole Recordings Sold to Universal Music Group

Universal Music Group quietly acquired about 200 recordings by Nat King Cole from the iconic singer’s estate in January 2021, the company revealed Thursday (March 17), bringing all of his recordings under UMG ownership.

The songs, recorded between 1961 and 1964, were previously licensed to Capitol Records — now owned by UMG — under a deal Cole negotiated following his rise to fame. His earlier recordings, also of about 200 songs, were all originally released on Capitol Records as well.

The agreement was first reported by Forbes to be in the range of $10 to $20 million – a price range Billboard confirmed with a source familiar with the deal. Recordings included in the acquisition include such iconic songs as “Nature Boy,” “Mona Lisa,” “Unforgettable,” “The Christmas Song (Merry Christmas To You),” “L-O-V-E,” “Smile” and “When I Fall In Love.”

Also on Thursday, UMG revealed that on Friday (March 18) it will release Capitol Rarities (Vol. 1), a collection of 14 tracks by Cole. The set includes five Cole recordings that were previously unavailable on streaming platforms: “The Magic Tree,” “Early American,” “The Day Isn’t Long Enough,” “My First and My Last Love” and “Easter Sunday Morning.”

The UMG deal follows last week’s announcement that Irving Azoff’s Iconic Artists Group purchased rights to all assets from Cole’s estate, including his recorded music, publishing, TV shows and name and likeness. That deal and the UMG acquisition are being billed as part of an effort to expand Cole’s legacy to new generations. Last year, UMG released an album of the singer’s classic Christmas songs featuring “duets” with contemporary artists including John Legend, Kristin Chenoweth and Gloria Estefan.

Cole started his career as a jazz and classical piano player and signed his first record deal with Capitol in 1943. His debut album with The King Cole Trio was released in 1945 and hit No. 1 on Billboard’s very first album chart. His success helped lead to the construction of the iconic Capitol Records Tower in Hollywood, which became colloquially known as “The House That Nat Built.” His other hits include “The Very Thought of You,” “Straighten Up and Fly Right” and “Stardust.”

In 1959, Cole won the Grammy for best performance by a “Top 40” Artist for the song “Midnight Flyer.” Following his death in 1965 at age 45, he was posthumously honored with a lifetime achievement award from the National Academy of Recording Arts and Sciences and inducted into the Rock and Roll Hall of Fame.

Other recent catalog purchases by UMG include the entirety of Neil Diamond’s song and master recording catalogs and Sting’s song catalog, both in February. In December 2020, in what is widely believed to be the biggest deal ever for a single songwriter, the company purchased Bob Dylan’s entire song catalog, including both publishing rights and Dylan’s writer’s share.

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Want Showtime? This Special Promo Gets You 30 Days Free for a Limited Time Only

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Everyone likes to save money. As big-league streamers like Netflix continue with price hikes, those monthly subscriptions that were supposed to be cheaper than a cable bill are really starting to add up. No need to panic though, if you’re looking for an affordable streaming option, Showtime offers groundbreaking movies, addictive original series and sports content that you can watch for free.

For a limited time only, new subscribers can test out Showtime free of charge for the first 30 days. After the free trial, the service will cost just $3.99 a month for three months and you can cancel anytime.

Another excellent way to save? Try a bundle deal and get Showtime and Paramount+ for $11.99 a month (28% savings) after a free 30-day trial.

What’s Streaming on Showtime?

From award-winning series to cult classic films, Showtime has a bit of everything. Subscribers can stream original series such as Super Pumped: The Battle for Uber starring Joseph Gordon Levitt, Kyle Chandler and Uma Thurman. The miniseries, which premiered last month, follows the meteoric rise and fall of Uber founder Travis Kalanick.

Also on Showtime: Yellowjackets, Billions, Dexter: New Blood, Desus & Mero, The Affair, Couples Therapy, Work in Progress, The Chi, and Ziwe. Catch up on episodes and full seasons of must-watch shows, along with documentaries, boxing, MMA fights and more from one streaming platform. You can also download full episodes and watch them offline from a laptop, smartphone, iPad, smart TV, Xbox and other compatible devices on the Showtime app or at Showtime.com.

Other ways to land a free trial, add Showtime to your Hulu account for an additional $10.99 a month after a free seven-day trial. Additionally, Amazon Prime members can subscribe to Showtime as a Prime Video channel and receive a free weeklong trial ($10.99 month after the trial ends).

Some of the movies and documentaries and other content streaming on Showtime include The Green Knight, Outcry, Zola, Queenpins, Outcry, Passion Play: Russell Westbrook, Shut Up and Dribble and Below the Belt With Brendan Schaub.

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Justin Bieber Speaks Out After Hailey’s Medical Scare: ‘She’s Strong, But It’s Been Scary’

Justin Bieber spoke out about life’s curveballs during his Justice World Tour stop in Denver, Colorado on Wednesday (Mar. 16).

The speech came after an electrical fire caused the power to go out in the middle of JB’s show and days after his wife, Hailey Bieber, revealed that she was hospitalized after experiencing stroke-like symptoms caused by a “very small blood clot” to her brain.

“You know, it’s kind of crazy how life randomly throws you curveballs,” the “Peaches” singer told the crowd once the show resumed, per a video shared by social media user @angiebeebs. “You know, we can’t really control much. You know, tonight the power cutting out. Obviously, you guys know, most of you probably know or seen the news about my wife.”

He assured that she’s doing better, adding, “But she’s OK, she’s good, she’s strong. But it’s been scary, you know? Like, it’s been really scary. But I know for a fact that God has her in the palm of his hands and that’s a good thing.”

Hailey took to her Instagram Stories on Saturday (Mar. 12) to share the news of her hospitalization with her fans. “On Thursday morning, I was sitting at breakfast with my husband when I started having stroke like symptoms and was taken to the hospital,” the 25-year-old model wrote. “They found I had suffered a very small blood clot to my brain, which caused a small lack of oxygen, but my body had passed it on its own and I recovered completely within a few hours.”

She added, “Although this was definitely one of the scariest moments I’ve ever been through, I’m home now and doing well, and I’m so grateful and thankful to all the amazing doctors and nurses who took care of me!”

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