📑 CMU Digest: TikTok Music closing + all change at top of Universal UK

CMU Digest is our weekly round-up of the most interesting music business news stories from the last seven days.

This week: TikTok is closing down its standalone music app at the end of November. It’s all change at the top of Universal Music UK, with David Joseph standing down as CEO and Dickon Stainer, boss of Universal’s classical and jazz division, taking over. Proper Group AG, the Swiss company formerly known as Utopia Music AG, has been hit with bankruptcy proceedings in Switzerland. Two music festivals have sued ticketing company Lyte, which ceased operations earlier this month. Belgium’s plan to introduce performer equitable remuneration on streaming has been referred to the EU courts. 

ICMYI: Concerns radio rules might be applied to streaming in Canada; Live Nation’s latest filing in its legal battle with US government; The MLC v Spotify continues; another Diddy lawsuit; Michael Jackson estate sues former associate of the star; Faroe Islands dropped as TGE lead country partner after protests; more HYBE/Ador shenanigans in South Korea; Quavo sued for song-theft; Mariah Carey hits back at song-theft claim; Labour conference passes AI motion; Apple removes Musi from App Store. 

TikTok Music is closing down

TikTok has announced that it is closing TikTok Music, its standalone music streaming service, at the end of November. The exact reason is unclear, although the company says its current focus is integrating the main TikTok app with other music services via the Add To Music App feature. According to Ole Obermann, Global Head Of Music Business, that feature “has already enabled hundreds of millions of track saves to playlists on partner music streaming services”.

CMU’s own analysis shows that, after an initial flurry of downloads, the TikTok Music app struggled to make much impact. According to data from AppFigures.com, the app was downloaded just 7.2 million times since its launch in July 2023. A significant number of those downloads took place in the first few weeks, suggesting an initial flurry of interest may not have converted into sustained use or listening. 

TikTok Music morphed out of Resso, the music service originally launched by TikTok owner Bytedance, and operates in Indonesia, Brazil, Mexico, Singapore and Australia. 

All change at the majors as Atlantic announces its new top team, and Universal gets a new UK CEO

After a significant downsizing earlier this month at Warner Music’s Atlantic Music Group in the US, the new CEO of the division, Elliot Grainge, announced his top team, adding, “This great label has moved through a meaningful transition, and emerged with a world-class team, made up of ambitious innovators and veteran visionaries”. There were new appointments within Atlantic Records and 300 Entertainment, which are both part of the division, while at a group level there were promotions for Zach Friedman, Tony Talamo, Erica Bellarosa and Dave Rocco.

Meanwhile the long-serving CEO of Universal Music UK, David Joseph, last week announced he was standing down. While future plans in the music industry are not known, in the short term he will be attending Kings College London to study religion and theology. Joseph will be replaced in the CEO role by Dickon Stainer, most recently CEO of the major’s Global Classics & Jazz division, where he oversaw labels in both Europe and the US. 

Proper Group AG facing bankruptcy proceedings

Proper Group AG, the Swiss company formerly known as Utopia Music AG, has been hit with bankruptcy proceedings in Switzerland after it failed to attend a court hearing in relation to a lawsuit filed by MME Legal, which is owed CHF 23,000. CMU understands that recent downsizing at Utopia meant there were no appropriate staff in place to respond to the court proceedings in time to stop the litigation.

A spokesperson said that the debt has now been settled, adding, “We are disappointed that bankruptcy proceedings have been triggered. We are of course appealing this decision. Recent positive developments in the business have placed us on track to near-term cash flow positivity, with clear prospects of profitability by 2025, so we expect to reach a favourable outcome”. In order to appeal the bankruptcy, the company will have to demonstrate to the Swiss courts that it is generally solvent – and must do that by 4 Oct.

Two music festivals sued collapsed ticketing company Lyte

Lyte ceased operations earlier this month with reports that its board is trying to find a buyer for the business. It’s not clear how many promoters will be impacted, but two festivals have already sued for money they are owed. Ohio’s Lost Lands Music Festival and Chicago’s North Coast Music Festival are together owed nearly $700,000. The lawsuits provide more insight into recent events at Lyte and also how promoters were making use of the company’s services. 

Lyte operated both a primary ticketing service and a secondary ticketing marketplace that some festivals used as their official resale platform. Billboard reported that both of the festivals now suing Lyte had been directly selling tickets on the secondary ticketing marketplace. However, both events have denied that they were touting their own tickets for profit, saying they used the marketplace to sell returned tickets or to combat touts marking prices up on other platforms.

Belgium’s streaming ER referred to EU court 

When implementing the 2019 EU Copyright Directive, Belgium introduced a performer equitable remuneration right on streaming into its copyright laws. It means a portion of streaming revenue will flow directly to performers – including session musicians – via the collective licensing system. ER applies in most countries with radio and public performance revenues. However, with streaming, revenue usually flows to artists via their labels and distributors, subject to the terms of their record or distribution deals, with sessions musicians receiving nothing. 

Although ER does already apply to streaming in a small number of countries, extending that principle into more markets is opposed by both labels and streaming services. They sought to block the new ER right through the Belgian courts, which have now asked the European Court Of Justice thirteen questions to ascertain whether the new right violates any EU laws. IMPALA, speaking for indie labels, welcomed the move, while AEPO-ARTIS, which represents performer collecting societies, said it was disappointed by the development, though added that the EU court now has “a once in a lifetime opportunity to confirm that the EU copyright framework is there to provide authors and performers with the highest possible protection possible”. 

ICYMI:

🇨🇦 Canadian broadcasting regulator the CRTC is implementing the elements of Canada’s Online Streaming Act that aim to promote Canadian content. That has led to concerns that radio industry rules will now be applied to streaming platforms, prompting an open letter from the major labels and digital services opposing any such moves. 

🗽 Live Nation has made another filing with the New York court where it has been sued by the US government over allegations of anticompetitive conduct. It wants two elements of the lawsuit dismissed, saying “this case will be complicated enough” without having to deal with claims that are defective.

📚 The back and forth in the big bundling dispute between Spotify and US collecting society The MLC continues. Last month Spotify urged the court to dismiss The MLC’s lawsuit. In a new legal filing, The MLC argues that the legal standard for dismissal at this stage has not been met

🔒 Sean ‘Diddy’ Combs – currently in jail after being charged with sex trafficking and racketeering – has been sued for an eleventh time over allegations of sexual assault. In the new lawsuit, he is accused of violently raping the girlfriend of one of his employees at his label’s studio in 2001.

💰 With a new biopic coming out next year, the Michael Jackson estate has begun legal action after a former associate of the pop star reportedly demanded a payment of $213 million to stop him going public with new abuse allegations. The man signed an NDA with the estate in 2020.

🐬 A recent announcement that the Faroe Islands would be lead country partner at 2025’s Great Escape prompted criticism from the Sussex Dolphin Project because of the islands’ involvement in whaling. In response, the Brighton showcase festival has decided to “withdraw the Faroe Islands as our lead country partner”.

🇰🇷 NewJeans recently demanded that their label, HYBE subsidiary Ador, reappoint Min Hee-jin as CEO by 25 Sep. Min was pushed out of that role last month after months of feuding with HYBE. Ador says it will reappoint Min as a director but not CEO. That seems unlikely to placate NewJeans, who could now sue.

👩‍⚖️ The latest song-theft lawsuit filed with the US courts targets former Migos member Quavo. A rapper called L.Mont says that Quavo’s 2018 track ‘Bubblegum’ rips off a record of the same title that he released three years earlier. L.Mont gave Quavo a CD of his music in 2016.

🎄 Meanwhile Mariah Carey is trying to get a song-theft lawsuit filed against her over ‘All I Want For Christmas Is You’ dismissed. She argues that the only similarities between her hit and an earlier song of the same title are “commonplace words”, “Christmas tropes” and “unprotectable pitches and chords”.

🌹 It was the Labour Party conference last week and delegates passed a motion on AI that was backed by the Musicians’ Union. It calls on government to ensure that AI policies balance the interests of workers and businesses, which, for the MU, also means balancing the interests of musicians and labels.

❌ Apple has removed the free music app Musi from its App Store. IFPI has been calling for the app to be removed since last year, because Musi pulls in music from YouTube rather than negotiating licensing deals with labels. However, it is possible that an intervention by YouTube prompted Apple to act.