HITS Daily Double


THE STATE OF DISRUPTION: Hipgnosis boss Merck Mercuriadis, who has disrupted the biz over the last few years with his aggressive catalog acquisition and “song management” model, dealt with some disruption on his own board, and the breathless coverage of same in the business press reflected how some major players were rooting against him. Yet he appears to have weathered the storm quite capably, in no small part due to the call option he negotiated for himself at the outset, which gives him the option to purchase the Hipgnosis Song Fund’s assets according to a pre-set formula based either on current stock price or the price set by an independent valuer, whichever is greater.

The arrival of Elliot Grainge and his 10K Projects at WMG is part of an infusion of youthful energy at the company and a reflection of how effectively the younger Grainge has managed to cultivate a boutique-label vibe within the major-label structure, locating hits from an eclectic array of artists including Trippie Redd, Internet Money, iann dior and BNA nominee Ice Spice (who remains at Capitol). 10K’s Homemade Projects division, meanwhile, extends the reach of Grainge’s shop into merch and influencer management, among other enterprises.

Scooter Braun, another player who has challenged the prevailing models, earned similarly sensational coverage with reports that his management clients were leaving. And while some have new reps—Ariana Grande, it’s been reported, is now with Scooter’s old pal (and former partner) Brandon Creed—the narrative in general failed to see the big picture: That Braun, as head of HYBE USA, was running a much bigger and more lucrative business than his management company. In collaboration with overall HYBE boss Bang Si-Hyuk, he has piloted a number of high-profile deals, most recently establishing a beachhead for the company in hip-hop with the acquisition of QC. The company is known to be hungry for further acquisitions. Even so, it’s believed Scooter will continue to play a role in the careers of some of his longtime clients.

Larry Jackson, for his part, moved to the front of the disruptor pack in 2023 with the launch of gamma., which—as he was at pains to remind us at regular intervals—is not a label. Indeed, the multifaceted concern folds in elements of management, record company, distributor (courtesy of acquisition Vydia) and marketing machine. His branding deal with Travis Scott, whose album became huge, has thrown off major ducats. Another early coup was hooking up client Usher with the Super Bowl halftime gig. LJ’s grandiloquence as an entrepreneur is reminiscent of a previous era of music men, and it will be fascinating to watch his story unfold.

Of course, large-scale disruption is well-nigh impossible without large-scale capital. Fred Davis and Raine Group have been at the center of much of the transformative action outside the majors, participating in deals for QC, gamma., SoundCloud, Firebird, Kobalt, KKR and more. KKR, it was recently reported, has retained Raine to help evaluate options for getting out of the catalog business. As the world of catalog sales slows dramatically due to changes in interest rates, global wealth for investing in music and IP still seems boundless. Is there anything sexier for a denizen of the financial world than the cult of personality surrounding music’s biggest superstars?

NOISE CANCELLATION: Spotify has been the majors’ biggest vendor for some time. But two major moves in 2023 indicated that the DSP is determined to be an ally to rightsholders: raising its subscription fees and issuing new guidelines designed to crack down on fake streams and algorithm-juking noise tracks that dilute the royalty pool.

Is Daniel Ek’s streamery positioning itself closer to the biz in part to distinguish the company from TikTok, a highly influential platform that thus far has kept the industry at arm’s length? The company, which returned to profitability in Q3, with revenue up 11%, monthly users up 26% to 574m and its stock up going into the holiday season, has nonetheless implemented cost-cutting measures (dubbed a “strategic reorientation” by Ek), eliminating an estimated 1,500 jobs—about 17% of its staff. The Spot also parted ways with its CFO; the search for a permanent successor is underway.

FLOOR SHOW: All eyes are on BMG boss Thomas Coesfeld to see if the young exec will be able to make the Teutonic company a player—or if it will simply remain a catalog company (with the striking exception of Jon Loba’s wildly successful Broken Bow). The firm’s U.S. marketshare is furchtbar, lower than that of any other label in the business. BMG has been the butt of bottom-feeder jokes for years now; is that going to change?