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In this newsletter:

Latin music hit a record $685M in revenue during the first half of 2024, according to the RIAA’s latest report, marking a 7% increase from the same period in 2023.

TikTok’s European and international business saw significant revenue growth in 2023, with turnover reaching $4.5BN, a 74.6% increase from the previous year. However, the company’s operating losses also surged, doubling to $1.37BN compared to $512.1M in 2022.

Universal Music Group (UMG) could owe Limp Bizkit north of $200 million – at least according to the 30-year-old band, which is suing for unpaid royalties, copyright infringement, breach of contract, and more.

Now, the details...


Exploration Weekly - October 11, 2024
Compiled by Ana Berberana

Latin Music Revenue Sets Mid-Year Record of $685 Million: RIAA

Latin music revenue hit a record high of $685 million in the first half of 2024, according to the RIAA’s mid-year Latin music report released Thursday (Oct. 10). According to the analysis, Latin increased 7% compared to the first half of 2023, led by paid streaming subscriptions, which account for two-thirds of U.S. Latin revenue. Furthermore, Latin music revenues in the first half of the year once again grew faster than the overall recorded music market. While the report doesn’t specify which artists or genres are directly driving this mid-year record high, Latin music’s bump can be attributed to a number of artists who are fueling a movement. From Karol G to Peso Pluma, who are still riding high from a historic 2023, and newcomers like Xavi, it’s safe to say that a diverse collective of acts have helped usher another record year for Latin music. “Latin music keeps soaring to new heights — setting US revenue records as we report today and driving the culture forward across the globe,” Michele Ballantyne, RIAA president & chief operating officer, said in a statement. “There’s a reason Latin is the fastest-growing genre on US streaming services. Fans just can’t get enough of its undeniable energy, emotion, power and joy.” The RIAA’s mid-year report explains that paid streaming subscriptions contributed more than two-thirds of total revenues. Overall, U.S. paid subscriptions reached a record average of 99 million in 2024 and delivered 68% of total revenues for US Latin music. Combined revenues from ad-supported, on-demand streaming services (including YouTube, Vevo, the free version of Spotify and social media platforms) provide nearly 25% of the total value of Latin music, compared to 10% for overall recorded music revenues. Meanwhile, digital services (including paid and ad-supported streaming, online radio options, and digital downloads) provided 98% of total Latin music revenues in the first half of 2024. Physical revenues experienced a growth, up 21% compared to the same period in 2022.

In Key Markets Outside the US, TikTok’s Revenues Soared 75% to $4.6BN Last Year, But Losses Widened Amid $1BN in Legal Costs

TikTok recorded a massive increase in revenue in its European/international business last year – but the jump in turnover came with a similarly large increase in the company’s operating losses. TikTok Information Technologies UK posted $4.57 billion in turnover in 2023, according to the company’s annual accounts filed with the UK’s Companies House on Tuesday (October 8). That’s a 74.6% YoY increase in revenue. However, the company posted an even larger increase in its operating loss, which came in at $1.37 billion, more than double the $512.1 million loss it recorded in 2022. The company’s negative operating margin grew to 29.9%, from 19.6% the year before. While revenue grew rapidly, TikTok UK’s costs grew even faster. Cost of sales jumped 85.6% YoY to $3.38 billion. Administrative expenses more than tripled, to $1.57 billion from $448 million the year before. Staffing costs rose 22%, to $805 million from $660 million the year before. The filing is for a group of companies comprising parent company TikTok Information Technologies UK Ltd. and its subsidiaries. TikTok Information Technologies UK Ltd owns TikTok’s business across the European Economic Area (EEA), the United Kingdom and Switzerland. In addition, it collects revenues from TikTok operations in South and Central America (exclusively via Brazil and Mexico), and a handful of other territories. TikTok Information Technologies UK Ltd. is a separate entity to TikTok’s operating companies in the US (TikTok Inc via TikTok LLC), Australia/New Zealand (TikTok Australia Pty Ltd), and Singapore (TikTok Pte Ltd, which owns TikTok’s operating entities in India and South-East Asia). TikTok’s sister platform in China, Douyin, is also owned and operated separately. In previous years, TikTok UK broke down its numbers by region, including for the UK and Europe, but this year it didn’t “because, in the opinion of the directors, it would be seriously prejudicial to the interests of the company to do so,” the report stated.

Limp Bizkit Sues Universal Music for Unpaid Royalties, Breach of Contract, and More — $200 Million+ in Potential Damages

Limp Bizkit, frontman Fred Durst, and his Flawless Records label fired off the sweeping 60-page complaint today, alleging massive royalties underpayments, the misrepresentation of various accounts as unrecouped, “fraudulent accounting practices,” and a whole lot else. As recapped in the legal text, these and other allegations can be traced to an initial 1996 agreement between Limp Bizkit and Flip Records, which, besides having a JV deal in place with Interscope, would later sell half its stake in the band’s royalties to UMG. Thus, the leading label is said to be responsible for paying the relevant royalties to Flip and the plaintiffs alike. Amended multiple times before being replaced by a fresh Interscope agreement in late 2000, the Flip contracts (the royalty terms of which have allegedly been left in place) cover Limp Bizkit’s first three albums. Meanwhile, among several additional things, the UMG/Interscope pact rather unsurprisingly compels the major label to provide the band with bi-annual royalty statements, the suit describes. Lastly, in terms of pertinent background details, the late 90s also delivered a JV deal between Durst’s aforementioned Flawless Records and Interscope; Durst, seemingly part of Interscope for a time, signed acts (like Puddle of Mudd) in exchange for a stake in the profits and the masters at hand, the document shows. Fast forward to April of 2024, when Durst voiced royalties-related concerns upon hiring new reps. (The action doesn’t appear to dive into the artist’s possibly questionable prior team.) “Durst retained new representation and explained that he had not received any money for any Limp Bizkit exploitations—ever,” the text reads. These new reps were “shocked” upon learning as much, including because of the band’s apparent commercial comeback (referring in part to an expected 793 million streams for Limp Bizkit by 2024’s end).

Naxos sues Chinese classical music platform Kuke

Classical music company Naxos has sued Kuke Music, which operates a classical subscription service and licensing business in China, over allegations it has breached a digital distribution agreement, missed numerous payments and now owes nearly $2 million. The legal dispute is presumably problematic for the Beijing-based New York-listed Kuke, which has struggled to comply with New York Stock Exchange rules of late due to its slumping share price. Although it also has education and event divisions, its subscription service and licensing business seems very dependent on its partnership with Naxos. The ‘about’ section in its own corporate press releases says, “by collaborating with its strategic global business partner Naxos, the largest independent classical music content provider in the world, the foundation of Kuke’s extensive classical music content library is its unparalleled access to more than 900 top-tier labels and record companies”. That said, despite the legal bust up, back in May, Kuke announced it was in talks to buy a majority stake in the companies that control Naxos, adding that “a director of Kuke is the controlling shareholder” of parent company Naxos One. It’s not clear how the litigation relates to those talks, given the lawsuit makes it clear that issues over missing payments have been rumbling on since the end of 2021. In a lawsuit filed with the courts in Tennessee, Naxos explains that it entered into an eight year digital distribution agreement with Kuke in 2018, which gave the Chinese company “access to certain Naxos digital music services and content”, and allowed it make available and distribute within China recordings released and distributed by the Naxos group. Kuke would then share revenue generated by its activities in China with Naxos. Things went well at the start, with Kuke making the monthly payments required by the digital distribution agreement through to November 2021. But then Kuke started to fall behind on the payments that were due under the deal.


Random Ramblings


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