HITS Daily Double


Downtown Music CEO Justin Kalifowitz has been busy on multiple fronts of late as the company expands its considerable catalog holdings and continues to build out its various other units. So we're as surprised as you are that he took the time to answer a few of our pestering questions.

Downtown has grown significantly in recent years, with a reach that extends well beyond publishing; how do you anticipate the company will evolve further in the next period?
We’re building a global business to service the needs of the modern music industry at scale, which includes music publishing, recorded music and the independent-artist sectors. While these three segments are completely unique, they are equally important within the industry—especially when you consider the impact of technology on how music is created, distributed and consumed. In the near term, our immediate priorities include continuing to localize our platforms, develop vertical-specific products, services and features and, of course, continuing to recruit and retain extraordinary talent from all corners of the world.

What do you see as some of the biggest opportunities on the music landscape going into 2021?
I see tremendous opportunity in artists and entrepreneurs—whether managers, label owners or otherwise—embracing independence. Without question, the independent-artist sector is growing at an extraordinary rate—roughly four times the rate of the rest of the industry. The democratization of music creation and distribution is only going to accelerate that growth. Yet the inner-workings of the modern music industry are still largely framed around the concept of Top 40 radio, despite the fact there are 60 million tracks on most major DSPs.

Much of the industry focus has been on how technology has altered consumer behavior—which, to be clear, has been significant. But at Downtown, we’re also obsessively attuned to how technology has completely transformed the music-industry supply chain. There’s no greater evidence that this is the next wave of innovation for the music industry than the millions of creators around the world who are not only able to record and distribute their work but are also finding and connecting with their audience.

With the global growth of streaming, which emerging markets/territories are particularly in focus for you?
The adoption of streaming is without a doubt the backbone of the music industry’s growth globally. It has also led to a dramatic increase in the diversity of music being consumed, particularly at the local and regional level. We’re incredibly excited about the possibilities across Latin America but especially in Brazil. We’ve been making investments in the independent-artist sector but see significant opportunities for all of our businesses. Certainly, Sub-Saharan Africa is also a focus for us and is one of the reasons we acquired Sheer Music Africa earlier this year. And, of course, we’re looking very closely at China and the opportunities that platforms like TikTok have revealed around user-generated and short-form audiovisual content.

You mention TikTok, which is obviously not just about music or audio. Outside of pure audio ventures, where do you see music and music-related revenue growing?
The way in which both people and businesses engage with music is being completely transformed. While we think there’s tremendous growth potential in pure-play streaming services, we know that we are really only in the first inning of the music industry realizing revenues from a much broader array of partners. The explosive growth of social video through services like TikTok, the way gaming is fundamentally altering how fans interact with music and the use of music in fitness through businesses like Peloton are unquestionably going to drive significant revenue to the music industry.