Since then, Primary Wave has either acquired or entered into partnerships with the catalogs of Stevie Nicks, the Four Seasons, Bob Marley Whitney Houston, the Culture Club, Olivia Newton-John, Ray Charles, Burt Bacharach, Leo Sayer, K.T. Tunstall, Dan Wilson, Godsmack and Sun Records, which includes recordings by Jerry Lee Lewis, Johnny Cash, Carl Perkins and Roy Orbinson. Most of its investments are in music publishing but the company also buys artists’ recording royalties and some record masters as the deal for Sun Record shows.”The Primary Wave team is honored to have such a respected financial institution and talented team supporting our efforts,” said Primary Wave founder and CEO Larry Mestel in a statement. “[Oaktree Capital co-chairman and chief investment officer] Bruce Karsh and I have had a working relationship for over 15 years and he has the unusual combination of business savvy and creative sensibility towards music. This is an exciting new chapter for the entire company as we continue to grow and evolve our business.”With the Oaktree investment — which was first reported by Bloomberg News — Primary Wave will be able to complete its Primary Wave Music IP Fund 3, which sources say had targeted raising $700 million for music asset acquisitions. Primary Wave filed with the SEC to establish that fund on Feb. 16. The two earlier commingled funds, Primary Wave Music IP Fund 1 and 2, have combined invested $800 million in music assets.”I’ve long admired the business model and success that Larry has built for Primary Wave and saw this Partnership as a unique opportunity to diversify our investment portfolio in a growing and uncorrelated asset class,” Karsh, added in a statement. “As a true music lover myself, I’m dedicated to the company’s growth and future success.”The two companies previously partnered in 2011 when Oaktree Capital backed Primary Wave’s offer to buy Warner Chappell when the entire Warner Music Group was up for sale. (The ended with Len Blavatnik buying the entire company.)The year later, Oaktree backed Primary Wave’s bid when Sony Music Publishing had to sell off a portion of EMI’s publishing catalog. The Rosetta music publishing catalog, as it was called, contained Virgin Music Publishing and Famous Music U.K. songwriters, including song catalogs of Iggy Pop, Culture Club, Kurt Cobain and more. The deal ultimately went to BMG.”It is quite impressive how many legendary music catalogs Primary Wave has acquired over their 15 years in business and we are proud to be aligned with Larry and his team for this next chapter,” said Oaktree Capital managing director and co-head of North America Brian Laibow in a statement.Like many other owners of music publishing and recorded music assets, sources say Primary Wave is considering testing the public market at some point. That means it could do public offering to buy the music assets of its commingled funds. Already in the last year, Round Hill Music has joined Hipgnosis Songs Fund on the public markets, while Reservoir is in the midst of a reverse merger with Roth CH Acquisition II Co. that will make it a publicly-traded company.In other news, Primary Wave has cut a global distribution deal with the Virgin Music Label & Artist Services, an indie distributor under the Capitol Music Group umbrella. As part of that deal, Virgin will distribute the Sun Records catalog and other masters owned by Primary Wave, as well as records from Primary Wave Music’s strategic partner the Gaither Group, which owns the labels Gaither Music, Green Hill and Emerald Wave.
Latin Artists React to Johnny Ventura’s Death: ‘You Are a Great Defender of Merengue Music’
“The irreparable loss of Johnny Ventura for me and my work team, led by my Manager Pedro Núñez Del Risco, is totally tragic and difficult to assimilate,” Quezada, who has collaborated with Ventura multiple times, expressed on Instagram.Dominican bachata crooner Prince Royce said: “Your music will always be part of the soundtrack of our lives…
“The irreparable loss of Johnny Ventura for me and my work team, led by my Manager Pedro Núñez Del Risco, is totally tragic and difficult to assimilate,” Quezada, who has collaborated with Ventura multiple times, expressed on Instagram.Dominican bachata crooner Prince Royce said: “Your music will always be part of the soundtrack of our lives and your legacy will be a source of pride for our country and our people.”Reggaeton superstar Daddy Yankee noted that the “owner of merengue” will always be a “great inspiration.”“My admiration for you always,” Puerto Rican merengue artist Olga Tañon also wrote. “You always treated me with so much affection and respect! I made my dream of recording with you a reality! You are a great defender of merengue music for the whole world!”Born in La Vega, Dominican Republic, Ventura kicked off his career in the early ‘60s. Some of his biggest titles include tropical hits such as “Patacon Pisao,” “¿Pitaste?,” and “Merenguero Hasta la Tambora,” all of which have become a staple in any Latin household.Ventura’s timeless music has entered various Billboard charts, including Hot Latin Songs, Top Latin Albums, Tropical Airplay, and Tropical Albums.A number funeral services will take place from Thursday, July 29, to Saturday, July 31, in The Dominican Republic. See below for more information and artists’ reactions.Daddy Yankee
The Good and Bad of Spotify’s Q2 2021 Earnings: Analysis
Not that the quarter’s MAU tally was a surprise. Spotify pointedly stated in its Q4 2020 earnings that 2021 guidance would be hard to pin down because of “substantial uncertainty.” Investors didn’t like to hear that, either: Spotify’s share price fell 9% that day. It goes to show you can’t please everybody.The essence of Q2 2021 earnings can be boiled…
Not that the quarter’s MAU tally was a surprise. Spotify pointedly stated in its Q4 2020 earnings that 2021 guidance would be hard to pin down because of “substantial uncertainty.” Investors didn’t like to hear that, either: Spotify’s share price fell 9% that day. It goes to show you can’t please everybody.The essence of Q2 2021 earnings can be boiled down to these six topics.MAUsThe standout metric in Spotify’s Q2 earnings was monthly average users, which grew 9 million from 356 to 365 million — with 7 million of those coming from new subscribers. Though paid subs were on the high end of guidance, ad-supported listeners were below expectations — and the same thing happened in the first quarter. This can be interpreted in a couple ways. On one hand, free listeners are worth a fraction of subscribers and so a high ratio of subscribers to MAUs is desirable. On the other hand, fewer free listeners today could mean Spotify has fewer listeners to convert to paying subscribers in the future. MAU growth was also weak in Q1, suggesting investors tend to have the second interpretation. MAU shortfalls in India, Brazil and parts of Southeast Asia and slower adoption rates in some newly launched markets. “All of these regions were hard hit by COVID,” said CEO Daniel Ek, and Spotify “lost about a quarter of growth between Q1 and Q2.”Engagement!Ek said Spotify’s strategy “is really focused on increasing engagement.” More engagement equals more subscribers that stay with the service longer (resulting in lower churn). Unfortunately, Spotify doesn’t release metrics for engagement such as listening hours per user or time spent listening per session. But Ek provides some evidence that engagement is increasing. Ek said Spotify released “more than 20 significant new features over the last few months,” from collaborative listening to Greenroom, Spotify’s answer to Clubhouse. Spotify also wants to create engagement between listeners and creators by launching tools that increase the number of creators from 8 million to 50 million and build bonds between them. Ek added that engagement with podcasts (which number 2.9 million, up from 2.6 million in Q1) was up 95% y/y and up 30% on a per-user basis. One has to wonder how long Spotify can keep up this engagement arms race with a dizzying pace of new feature launches, investments in podcasts and acquisitions.Raising PricesSpotify’s price hikes in 42 markets were a hot topic in the Q1 earnings call and Ek addressed the topic again on Wednesday. The increases were modest at $1 in the U.S. family plan, for example, and a similar amount for three discount plans in the United Kingdom. The company is comfortable raising prices in 42 markets because engagement has remained high and signals a “very loyal customer base,” said Ek, and explains “why subscriber growth has been so strong as well.” That suggests Spotify could hesitate to raise prices again if engagement slips. So, again, engagement is crucial.MarginsEven though Spotify focuses on engagement and listener growth, it doesn’t overlook key financial metrics such as gross margin. Q2’s improvement in gross margin was mostly a mirage but still noteworthy. Gross margin shows how much revenue is left over after paying royalties and other cost of sales. Spotify had on its books accrued publishing royalties but in Q2 determined to reverse some of the accruals, thus reducing royalties and increasing revenue in the quarter. With the help of that one-time event, gross margin improved from 25.5% in Q1 to 28.4% in Q2. Removing the one-time release of accrued royalties, gross margin would have been 26.5% — lower but still ahead of the 23.6 to 25.6% guidance. (Gross margin was also 26.5% in Q4 2020 and had averaged 25.6% over the previous 8 quarters.) Spotify said Q2 margins were also boosted by podcast revenue and the two-sided marketplace.ARPU and ChurnARPU and churn usually move in opposite directions — and can produce positive results. As Billboard wrote in June, falling churn improves a subscriber’s lifetime value even if ARPU falls. It’s notable that both moved in the same direction in Q2. ARPU has fallen 11.7% from 4.86 euros in Q2 2019 to 4.12 euros in Q1. But in Q2, ARPU rose to 4.29 euros, the highest mark since 4.41 euros in Q2 2020. This happened because Spotify claims to have successfully raised prices in 40 markets in Q1 without hurting churn or engagement. Also, new, sticky product features and family plans helped reduce churn by 23 basis points (0.23 percentage points y/y and “down modestly” from Q1).The Long GameRather than focus on Spotify’s growth in any one- or two-quarter span, consider whether where it’s headed in the next two or three years. Year-over-year growth in 2021 is misleading because Spotify exceeded expectations during the first year of the pandemic, Ek said. “We’re still on track to outpacing the average growth from the past two years in this year. We’re just comparing it to an exceptional 2020.” That said, Spotify’s goal of becoming the leading audio platform — music and podcasts — is increasingly pressured by major players such as Apple Music, Amazon, iHeartRadio and SiriusXM. Ek’s goal of reaching 2 billion users won’t be easy.
Liz Phair Exits Summer Tour With Alanis Morissette & Garbage
As Phair shared, Cat Power is joining the lineup for the U.S. leg of the trek, which kicks off on Aug. 12 in Austin and runs through early October.Morissette is celebrating the delayed 25th anniversary of 1995’s Jagged Little Pill. The tour was originally scheduled for summer 2020 but postponed due to the pandemic.”When she asked…
As Phair shared, Cat Power is joining the lineup for the U.S. leg of the trek, which kicks off on Aug. 12 in Austin and runs through early October.Morissette is celebrating the delayed 25th anniversary of 1995’s Jagged Little Pill. The tour was originally scheduled for summer 2020 but postponed due to the pandemic.”When she asked me [to do this tour], it was at a difficult point for me, where I was trying to come back as an artist, and the industry powers that be are like, ‘You’ve already done your thing, we’re focusing on younger artists we can build and then reap the rewards for a long time,'” Phair, who released the album Soberish this year, told Billboard in May. “I found it really hard, harder than I expected, to break back in, and for s—– reasons — the same gross reasons the music industry was always gross. When she came in with this offer, I was like, ‘What a f—ing supportive awesome gesture,’ again. She’s great.”See Phair’s tweet about the tour below. Tour dates and ticket information are available on Morissette’s website.