📑 CMU Digest: Hipgnosis tensions escalate; Apple’s “outrageous” payment changes + more

This week: Hipgnosis war of words ramps up; Apple’s “outrageous” payment changes have not pleased Epic or Spotify; posh lads mag GQ swallows Pitchfork; certification for ‘fairly trained’ AI; Council of Music Makers asks major label staff to lobby bosses to help fix streaming.

🤬 Tensions between Hipgnosis Songs Fund and Hipgnosis Song Management continue to build as HSF calls for an EGM

The stock-market listed investment fund HSF was founded by Merck Mercuriadis and owns a large catalogue of music rights. HSM, which is a joint venture between Mercuriadis and private equity giant Blackstone, acts as ‘investment adviser’ to HSF. The relationship between the two companies has been strained for some time, largely due to investor concerns about the fund’s underperforming share price. Things came to a head in October 2023 when the original board, viewed as sympathetic to Mercuriadis, were replaced.

That new board has now issued a statement to investors calling for an EGM and criticising a ‘call option’ in its deal with HSM, which gives the advisory firm the right to buy the fund’s assets if the agreement is terminated. HSF’s Chair, Robert Naylor, says that acts as a deterrent to other potential bidders who might want to buy HSF’s catalogue. The board also wants shareholders to give it discretion to offer up to £20 million to potential bidders because, it says, that will help “ensure that they are not deterred from seeking to engage”.

🍎 Apple accused of “bad faith” in the way it has complied with a court order relating to App Store payment rules

As part of a legal battle with Fortnite maker Epic Games, a California court said that Apple must start allowing all app-makers to link to payment options outside of an app, rather than only allowing payment via Apple’s own transactions system, which charges a 30% commission. Apple announced the change – but also that it will charge a 27% commission on those external payments.

Epic said that was “bad-faith compliance” and that it would take the matter back to court. Spotify also hit out, saying that Apple’s rule change was “outrageous” and “flies in the face” of what the court intended. 

👩🏾‍💻 Pitchfork owner Conde Nast announced that the title is being folded into GQ, which means job cuts at the music publication

Chief Content Officer Anna Wintour said the changes were being made “after a careful evaluation of Pitchfork’s performance” and are “the best path forward for the brand so that our coverage of music can continue to thrive within the company”. Conde Nast boss Roger Lynch had previously said last year that there would be redundancies across the media group, though the union representing Pitchfork employees said that they had been assured those cuts would not affect Pitchfork staff.

🤖 The former VP Of Audio at Stability AI has launched a non-profit that will certify generative AI companies that don’t rely on ‘fair use’

Many AI companies argue that the US principle of ‘fair use’ and other exceptions in copyright law mean they can use existing content to train their models without getting permission from relevant copyright owners. The copyright industries disagree, and Ed Newton Rex quit his position at Stability AI over its stance that fair use allowed for training without getting a licence from copyright owners.

His new initiative Fairly Trained – which has the support of Universal Music and Concord – will issue certificates to AI companies which can demonstrate that they only use licensed content for training. 

🥁 UK’s Council Of Music Makers published a memo directed at people working at the major music companies

Referencing the recent ‘new year’ memos written by the bosses of Universal Music and Warner Music, the organisation urged everyone working at a major to help address ongoing issues with the streaming business model that negatively impact on artists and songwriters. CMM’s memo said employees should educate themselves about the industry codes that have been agreed to address data and transparency issues, and put pressure on their bosses to properly engage with music-makers on remuneration and the changes being made to the way streaming payments are calculated. 

🎙️ Setlist Podcast: The new certification for “respectful” AI companies

Each week CMU’s Andy Malt and Chris Cooke take a look at the week in music – and the music business – with a recap of key stories and news.

In this week’s Setlist Podcast: Fairly Trained, the new non-profit offering certification for “respectful” generative AI companies; redundancies at Pitchfork as its team is merged with men’s magazine GQ; a run down of key stories from the week – and more. Click here to listen – or find Setlist wherever you get your podcasts.

ICYMI:

😱 The US Mechanical Licensing Collective has warned a long list of streaming services that it intends to carry out a detailed audit to make sure they’ve been paying royalties correctly. Sounds dramatic, but actually it’s not – and represents a huge leap forward in transparency. Of course, should it turn out that any of the DSPs being audited has significantly misreported royalties due to the MLC ‘no drama’ might turn to ‘epic drama’ in the blink of an eye.

🇮🇳 Music data company Luminate’s 2023 stats wrap (register here) said India saw an explosion in music streaming in 2023, crossing the 1 trillion streams mark for the first time – a huge increase on 2022’s numbers. The report also says there were 7.1 trillion streams globally with 1.45 trillion of them from listeners in the USA. CMU’s analysis shows huge growth still to come in India – which could quickly become the biggest market by volume in the world.

👙 The UK’s Advertising Standards Authority ruled that a Calvin Klein x FKA Twiggs ad campaign was “irresponsible” because the artist was presented as a “stereotypical sexual object”. Presumably they have not yet seen Jeremy Allen White’s campaign for the brand which has him strip down to a pair of trunks that leave very little to the imagination. In an Instagram post FKA Twiggs said “I do not see the ‘stereotypical sexual object’ that they have labelled me. I see a beautiful strong woman of colour whose incredible body has overcome more pain than you can imagine”.

🤡 Hot on the heels of Lucian Grainge’s Gordon Gekko-esque new year memo that exhaustively laid out the UMG top banana’s unremitting genius and trumpted the major as “the most successful company in the history of the music industry” Universal Music admitted that it would be creating “efficiencies” in coming months after Bloomberg reported that hundreds of jobs cuts were planned.

🍃 Remember when Snoop said he was “giving up smoke” and the world’s media went crazy? Turns out it was actually a viral campaign for US lifestyle brand group Solo Brands, purveyors of “proper length men’s shorts”, foldable kayaks, paddle boards, posh wood-fired pizza ovens and – you’ll see where this is going – smokeless fire pits. Unfortunately for Solo Brands and former CEO John Merris – who have agreed to “mutually separate” Snoop’s boost brought lots of new followers on social media but not a lot of sales.