The Ledger: Leaving Russia Will Have Little Impact on Streaming Services, Record Labels

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.

 

Strong steps taken by Western music companies to cease operations in Russia will have a big impact on the country but will do little damage to the global market. Russia is the 16th largest recorded music market in the world with a trade value $199 million in 2020, according to the IFPI. That was on par with Sweden, which has about 7% of Russia’s population, as well as Mexico, India and Switzerland. For the largest record labels, music publishers and music streaming companies, each with multi-billion-dollar revenues, Russia is a tiny part of their worldwide businesses.

Spotify’s decision to suspend operations in Russia, where it launched in 2020, will be immaterial to its 2022 results. On Wednesday, Spotify CFO Paul Vogel said the company’s decision to shut down operations in Russia will result in about 1.5 million lapsed subscribers. By Billboard’s estimate, those 1.5 million subscriptions are worth a maximum of $40 million of revenue and $12 million of gross margin per year — negligible amounts for a company that could reach $13 billion of revenue in 2022. From a purely financial point of view, Spotify stood to lose more by not pulling out of Russia if it caused half as many customers in Western markets — with higher average revenue per user — to cancel their subscriptions in protest.

In dollar terms, Spotify’s decision was far less costly than $40 million in 2022 revenues, however. At the beginning of the year, Spotify could have expected about $40 million from its Russian subscriptions in 2022 based on an individual Spotify Premium account price of 169 rubles per month — or $2.26 at the Jan. 1 exchange rate. But Western countries’ sanctions caused the ruble to lose about 46% of its value to the dollar since the beginning of the year (as of Friday), meaning a Premium subscription would be worth the equivalent of $1.22 today. Had Spotify remained in Russia after the ruble crashed, the value of its 1.5 million subscriptions would have been worth about $1.8 million per month and $18 million for the remainder of 2022.

Global businesses such as Spotify make most of their money from developed markets in North America and Western Europe. At $2.26 per month, a 30% gross margin — meaning the remaining 70% is paid in royalties to rights holders — and a 3.75% monthly churn rate, a Premium subscription in Russia has a lifetime value of roughly $17.60, less than half the LTV for Spotify’s average global subscriber. That would put the 1.5 million lapsed Russian subscriptions at a collective lifetime value of only $26.4 million.

Other foreign companies with music subscription services in Russia have also taken actions that will impact revenues. Apple halted sales of its products in Russia on March 1. Deezer discontinued service in Russia on March 1. And on Thursday, YouTube suspended all payment-based services in the country.

If the conflict’s economic impact is contained to Russia, DSPs and labels won’t see losses of any significance, as Russia accounted for just 0.9% of the global recorded music business in 2020. The total global market share of a handful of IFPI members bordering the conflict — Poland, the Baltics, Slovakia and Hungary — was also about 0.9%.

Russia’s most established music services remain offered by homegrown tech giants: search engine and web portal Yandex and social media company VKontakte. Yandex has 12 million subscribers to its unlimited streaming service, Yandex.Plus. In Russia, Yandex.Plus is available for 169 rubles per month, although the price also covers ad-free movies, discounts on taxi and car-sharing services and free delivery on e-commerce purchases. (Yandex.Plus is also available in Kazakhstan, Armenia, Azerbaijan, Tadzhikistan, Turkmenistan, Uzbekistan, Georgia, Moldova, Kyrgyzstan, Belarus and Israel.) VKontakte’s music service, VK Music, has more than 4 million subscribers, according to Russia’s Institute of Music Initiatives, and costs 149 rubles per month.

Despite the minimal financial impact on music companies in the short term, my colleague Rob Levine suggests the exodus could also have damaging long-term effects, as music companies pulling out of Russia hurts the potential of a young, growing market for legal music where piracy has the potential to once again run rampant.

 

STOCKS
Through March 11, the % change over the last five trading days and year to date.

Spotify: $124.29, -8.0%, -46.9% YTD
Universal Music Group: 20.40 euros, +12.1%, -17.7% YTD
Warner Music Group: $31.79, -3.7%, -26.4% YTD
Live Nation: $108.55, -5.1%, -9.3% YTD
Tencent Music Entertainment: $3.44, -24.7%, -49.8% YTD
Cloud Village: 157.20 HKD, -30.3%, -51.6% YTD
Anghami: $10.57, -21.7%, +3.5% YTD
NYSE Composite: 15,753.70, -2.3%, -8.2% YTD
Nasdaq: 12,843.81, -3.5%, -17.9% YTD

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UFC Fight Night: How to Watch the ‘Santos vs. Ankalaev’ Bout Online

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Thiago Santos and Magomed Ankalaev are preparing to go head-to-head in Sin City. The UFC Fight Night: Santos vs. Ankalaev bout will take place at the UFC Apex in Las Vegas on Saturday (March 12) and will stream on ESPN+.

The light heavyweight battle pits a veteran against a onetime title challenger. Santos, a 38-year-old Brazilian mixed martial artist, ranks at No. 5 on the UFC Light Heavyweight ranking. Ankalaev, a 29-year-old mixed martial artist from Russia, ranks just below Santos at No. 6.

The UFC Vegas 50 co-main event will feature Marlon Moraes, the No. 10-ranked Bantamweight contender, against No. 14-ranked Song Yadong. The main event kicks off at 7 p.m. ET/4 p.m. PT, while  preliminary events will start at 4 p.m. ET/1 p.m. ET.

How to Watch UFC Fight Night: Santos vs. Ankalaev Online

UFC Fight Night: Santos vs. Ankalaev will stream exclusively on ESPN+. If you’re not a member yet, the service is $6.99 a month to stream UFC fights and other live events, popular daily programs (live, or replays), sports series and other exclusive programming.

ESPN+ is your go-to destination for UFC fight nights and exclusive PPV events, along with  other programming such as Dana White’s Contender Series, Detail With Daniel Cormier, UFC Destined and archives of the greatest UFC fights.

Baseball, tennis, golf, basketball, football, college sports, combat sports and more are all available on EPSN+,  along with every 30 for 30 episode, including Al Davis vs. The NFL, Vick, Be Like Water and Breakaway. You’ll also find daily sports talk and groundbreaking originals like Man in the Arena With Tom Brady, More Than an Athlete With Michael Strahan, and Our Time Baylor Basketball.

Want to stream more than just sports? Triple your streaming options with a bundle deal that adds Disney+ and Hulu to your ESPN+ subscription for $13.99 a month.

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Here Are the Lyrics to Parker McCollum’s ‘To Be Loved by You’

Parker McCollum wants to know what it’s like “To Be Loved by You” in his latest smash, which peaked at No. 2 on Billboard‘s Country Airplay chart and No. 46 on the Billboard Hot 100 this week (dated March 12).

He was announced as the new male artist of the year winner at the 57th annual ACM Awards ahead of the awards show broadcast earlier this week, where he performed “Pretty Heart.”

Check out the lyrics below.

Hell, maybe I’m right, maybe I’m wrong
Finding out why shouldn’t take this long
Easier said than done, I guess
I’m a little bit harder to love than the rest
Why does this have to be so hard?
Doin’ my best to hold your heart
And I, I’ll never let it go again

So why are you always angry?
Why are you always quiet?
Why do you sleep alone
When I know you don’t like it?
Maybe you might be different
Would it kill you to tell me the truth
What in the hell does a man
Have to do
To be loved by you?

Well, I’ve been running as fast as I can
And you’ll never get over what you can’t understand
Pissed off, hanging up the telephone
Forever ain’t far, I’m heading home
Maybe I’m right, maybe I’m wrong
Last time you ever gonna find me gone
And I, I’ll never let you go again

So why are you always angry?
Why are you always quiet?
Why do you sleep alone
When I know you don’t like it?
Maybe you might be different
Would it kill you to tell me the truth
What in the hell does a man
Have to do
To be loved by
You?

So why are you always angry?
Why are you always quiet?
Why do you sleep alone
When I know you don’t like it?
Maybe you might be different
Would it kill you to tell me the truth
What in the hell does a man
Have to do
To be loved by you?

To be loved by you
To be loved by you
To be loved by you

Lyrics licensed & provided by LyricFind

Lyrics © Warner Chappell Music, Inc.

Written by: Parker Yancey McCollum, Rhett Akins

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Travis Scott, Astroworld Victims Battle in Court Over Rapper’s Charity Initiative

Attorneys for Astroworld victims are duking it out in Houston court with attorneys for Travis Scott, in a battle revolving around whether the star himself should be subject to a gag order that’s been imposed on lawyers working on the massive case.

Lawyers for the family of a young boy killed at the festival say Scott is using the media – specifically the launch of a charitable initiative called Project HEAL, which was announced on Tuesday (March 8) – to try to win favor with potential jurors. Scott’s lawyers say his philanthropy is genuine and that adding him to the gag order would violate his right to free speech.

In the latest filing on Friday (March 11), attorneys for the 9-year-old victim, Ezra Blount, said Scott must be prevented from carrying out a “highly sophisticated marketing campaign” and a “tone-deaf attempt to shift the narrative.”

“They only ask the defendant Scott, and his full team, consider participating in good faith in the legal process, stop the continued attempts at media marketing and reputation repair, and just let the truth be discovered through the course of the judicial process,” they wrote.

The filings came amid a massive ongoing lawsuit over the Astroworld Festival, where a Nov. 5 crowd crush incident during Scott’s performance left 10 dead and hundreds injured. More than 2,800 concertgoers are suing Scott, Live Nation and other festival organizers, claiming they’re legally negligent in how they planned and conducted the event. The plaintiffs are seeking billions in potential damages.

When the cases were combined before a single judge last month – Judge Kristen Brauchle Hawkins – one of her first moves was to issue a so-called publicity order, barring attorneys involved in the lawsuit from talking about the case in ways that could potentially sway jurors.

On Wednesday, the Blount family’s attorneys filed an emergency motion demanding that Scott be added to that publicity order. In the motion, they cited widespread media coverage the day before of Project HEAL, a $5 million charitable initiative launched by Scott to, among other things, “address the safety challenges faced by future large-scale events.”

Blount’s family, repped by attorney Benjamin Crump, said the promotion around Project HEAL was “designed to gain goodwill” and to hurt the victims’ “ability obtain a fair trial in this case.” They said the gag order must apply to everyone involved in the case to ensure “a level playing field.”

Tony Buzbee, another prominent local attorney who represents scores more victims in the case, later filed a motion joining Crump’s petition and throwing his weight behind the motion to impose the gag order on Scott.

Scott’s attorneys fired back on Thursday, arguing that his philanthropic efforts had begun long before Astroworld – and that banning him from talking about them would violate his free speech rights under the First Amendment.

“Rather than welcome Mr. Scott’s continued commitment to charitable causes in Houston, one of the lawyers representing Mr. Blount decided to publicly disparage him,” wrote Daniel Petrocelli, Scott’s lead counsel. “Plaintiffs’ motion … is a transparent and vexatious effort to restrain parties like Mr. Scott from exercising their constitutional rights.”

That filing led to the strongly-worded reply that arrived on Friday, in which Crump accused Scott’s side of “faux-outrage” over being called out for their “highly sophisticated marketing campaign.”

“Though defendant Scott’s motion both lauds his own self-serving check writing, as well as personally attacks those lawyers hired to protect the victims who were left unprotected and dying at his concert, the family of the dead and injured will not be bullied into silence,” Crump wrote.

There is no timetable for when Judge Hawkins will rule on the motions.

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South Florida tennis star Coco Gauff speaks against Florida ‘Don’t Say Gay’ bill

South Florida tennis star Coco Gauff spoke out against the recent Florida bill that prohibits classroom discussion on sexual orientation and gender identity for young students in the state. “I’m … Click to Continue »
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How Florida law makes it hard for Miami tenants to get a break from rent hikes

Miami tenants are hoping for relief from escalating rents and the county is considering freezing housing costs. But Florida law will not make that easy. On Thursday, the housing committee … Click to Continue »
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Cyclist’s body found by family more than 24 hours after he died in a Tamarac hit-and-run

Broward detectives are seeking the public’s help finding a driver involved in a hit-and-run that killed a cyclist in Tamarac earlier this week after his family found the man’s body … Click to Continue »
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Miami Beach issues demolition permit to take down historic Deauville Beach Resort

The historic Deauville Beach Resort in Miami Beach will be demolished after the city’s building official issued a final demolition permit Wednesday. The shuttered hotel, at 6701 Collins Ave., will … Click to Continue »
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Legislature changes publishing requirement for government legal notices

For the second time in 11 months, the Florida House voted on Thursday to send a bill to Gov. Ron DeSantis that would strip Florida’s newspapers of revenue from legal … Click to Continue »
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Ruben Blades Gives Advice to Pal Residente on J Balvin Feud: ‘Sometimes It’s Best to Let the Baby Cry’

It takes one brilliant lyricist to tackle another brilliant lyricist.

And so, iconic salsa star, actor and songwriter Ruben Blades became the first and only person to respond to Residente’s tiradera, or diss, against J Balvin with words of his own, in a video posted on his Instagram account Thursday (March 11).

“My name has appeared in social media and newspapers, and although it’s someone else’s conflict, today I’m forced to answer,” Blades raps over a salsa tumbao. “Make no mistake about it, I want to be clear: I give advice to René because I love him like a brother.”

Blades’ “advice” comes in the wake of the “Residente: Bzrp Music Sessions No. 49,” which features Residente rapping over DJ Bizarrap’s beats. The track, released March 4, is notable because five of its eight minutes are devoted to Residente (real name René Pérez Joglar) raking Balvin through the coals, calling him, among many other things, a “racist,” a “failure” and a “fake.”

The track also invokes Blades, a good friend of Residente’s, who was unwittingly put into the middle of the controversy. After Balvin called for a boycott of the Latin Grammys last fall, Residente posted a video blasting him because, among other things, that year’s ceremony would honor Blades, the ultimate songwriter.

But in his video, Blades appealed for calm with humor and style, basically telling Residente to simmer down and ignore Balvin.

“Sometimes it’s best to let the baby cry,” he raps. “There’s an old truth that only the good learn: That gold can never buy he whose soul is not for sale.”

And then, the grand finale with a wink and a smile: “All those ruffled feelings, I recommend putting them to bed. Relax listening to the album of the year: Salswing!” he finishes with a flourish, with a shout-out to his Latin Grammy album of the year.

Check out Blades’ rap here:

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