The Five Most Powerful People in the Music Industry Don’t Work in the Music Industry
In just under two weeks, the people making the biggest decisions in the modern music business will, inevitably, feel their blood pressure rise.
At a Los Angeles location, a few days before Grammy night, Billboard will reveal its annual Power 100 — a countdown of “the most influential individuals in the music industry.” The list, as ever, will cause a ripple of music-biz perturbation, not least for its inevitable domination by white men of a certain age.
The fallout from the Power 100 won’t end there, either: Status-hungry execs will be left gnashing their teeth at being placed at No. 16 rather than No. 11, etc., while some cooler cats will be irked just to be associated with the list, and its appendage-measuring analogues.
Expect a well-worn conversation to bounce around L.A. in the aftermath: In a post-Weinstein world, hasn’t corporate “power” become a rather tainted thing to revel in?
All of the above being true, if you’re gonna go there, you may as well go there.
Music’s strongest captains of industry will undoubtedly land in the upper echelons of the new Power 100; the heads of companies like Universal Music Group, Sony Music Entertainment, Warner Music Group, Sony/ATV, Spotify, Pandora and Live Nation will all be prominently represented. Yet this cavalcade of influencers isn’t likely to extend to the individuals whom these CEOs call “sir.”
Here, then, is an alternative, alphabetical “Power 5” of today’s worldwide music industry.
These are the bosses of music’s bosses, the people whose right it is to categorize titans of today’s entertainment industry as mere “employees” — and who, arguably, hold the power behind the throne(s).
They might not work directly with artists, songwriters, charts or hit records. But they can sure change the course of the global music industry just by hitting “send” on an email. . . .
1) LEN BLAVATNIK, OWNER, ACCESS INDUSTRIES
Warner Music Group owns the world’s third-biggest recorded-music company, Warner Music, and its third-biggest publisher, Warner/Chappell. Stars signed to WMG include Ed Sheeran, Bruno Mars, Cardi B and 21 Savage.
Warner’s recorded-music boss, Max Lousada, and its recently appointed new leadership team at Warner/Chappell, Guy Moot and Carianne Marshall, all report to the CEO of the wider Warner Music Group, Steve Cooper. As for Cooper? He reports to the USA’s 27th-richest individual: Len Blavatnik, founder of Access Industries.
Access started out focused on Russian investments, amassing a fortune through betting on real estate, natural resources and media/telco companies. In 2011, Blavatnik splashed $3.3 billion to buy Warner Music Group, which he followed up with the purchase of Parlophone in 2013 for £487 million ($760 million). Both of these buys happened amid a distressed post-Napster music business, and raised eyebrows. Blavatnik, though, has triumphed: Warner Music Group just enjoyed yet another record financial year, turning over more than $4 billion for the first time.
WMG has recently become very acquisitive, buying the likes of Dutch-based dance label Spinnin’ Records (for $100 million-plus); influential online media hub UPROXX; and Germany-based merch/e-commerce powerhouse EMP (for just over $180 million).
Warner might be making these deals, but Len Blavatnik is inking the checks.
Outside Warner, Access’ additional power in music is significant. The company co-owns talent management outfit First Access Entertainment, run by British exec Sarah Stennett, and home to the likes of Rita Ora and Bebe Rexha. Access is also a controlling shareholder in streaming service Deezer, while its venture arm, ATV, has acquired interests in the likes of Alibaba, Facebook, Spotify, Amazon, Snap, Tencent Music Entertainment and Beats By Dre.
2) VINCENT BOLLORÉ, SHAREHOLDER, VIVENDI
Universal Music Group CEO and chairman Sir Lucian Grainge has a good shot at topping any music-industry power list in 2019. UMG-signed artists claimed no less than eight of the top 10 most-streamed albums in the U.S. last year, thanks to the likes of Drake, Post Malone, Migos, Juice WRLD and Maroon 5. Grainge is also leading UMG to all-time record revenues, with his company — owner of labels such as Republic, Capitol and Interscope, as well as Universal Music Publishing Group — expected to hit around $7 billion in annual sales for 2018.
As a result, UMG has become the jewel in the crown at its parent, Paris-based Vivendi, which is set to sell up to 50 percent of UMG by the end of this year. With UMG currently being valued at $33 billion — some 38 times bigger than its EBITA profit in 2017 — it’s no shock why Grainge has been publicly heralded as “amazing” by Vivendi’s leadership team.
Despite this sterling commercial performance, there is one individual at Vivendi of whom Grainge has always known to stay on the right side.
Vincent Bolloré is the ex-chairman of Vivendi, but, in reality, that “ex” is ornamental. When Vincent stood down as chairman after four years, in 2017, he passed the Vivendi hot seat on to his son, Yannick. Or, at least, he recommended to Vivendi’s super-advisory board that they appoint Yannick in the role.
Vincent Bolloré’s investment vehicle, the Bolloré Group, is the single biggest shareholder in Vivendi, owning more than 20 percent of ordinary shares and close to a third of the firm’s voting rights. Needless to say, the Frenchman will be watching (not to mention prodding) the imminent Universal sale process intently.
3) MA HUATENG, TENCENT
It was important to find a place on this list for the boss of a streaming-music giant. It could have gone to Daniel Ek or Martin Lorentzon, the co-founders of Spotify, who still jointly retain majority voting rights in the world’s biggest music subscription platform. It could also have gone, for obvious reasons, to Jeff Bezos at Amazon or Tim Cook at Apple.
None of these individuals, however, are in a better position to control the global music-streaming landscape over the next decade than Tencent. For starters, Tencent is one of the most significant shareholders in Spotify: According to an SEC filing from April 3rd last year, Tencent — via its majority stake in Tencent Music Entertainment, as well as its ownership of Image Frame — possessed 9.1 percent of Spotify equity. Tencent’s stakeholding was arranged as part of a pact with Spotify, with the latter seemingly agreeing not to launch in the burgeoning Chinese music market, which contributed $292.3 million to the record industry in 2017.
Elsewhere, Tencent led a $115m investment last year in Indian music-streaming service Gaana, which currently claims to have over 80 million active users. (Gaana will soon become a direct rival to Spotify, with the latter likely to launch in India on January 31st.)
And then there’s Tencent Music Entertainment, in which Tencent owns 58.1 percent. TME is the owner of China’s biggest music services, including QQ Music, Kugou Music, Kuwo Music and WeSing — which, combined, boast more than 800 million monthly users (four times the equivalent audience serviced by Spotify). TME floated on the New York Stock Exchange in December, raising more than $1 billion, and the likes of JP Morgan and HSBC recently upgraded their expectations for the company.
Sitting at the top of Tencent’s vast media empire is its CEO, Ma Huateng. Known as “Pony Ma,” the Shenzhen-based executive oversees a company worth more than $400 billion, in which he owns a reported nine percent. With a personal net worth in excess of $40 billion, Huateng has previously been labeled the richest person in China.
Some suggest that Tencent could take a stranglehold on the global music business in 2019 via a strategic buyout of that available 50 percent stake in Universal Music Group. But they’ll have to get past our next two entrants first. . . .
4) JOHN MALONE & GREG MAFFEI, CHAIRMAN & CEO (RESPECTIVELY), LIBERTY MEDIA
Rolling Stone connected the dots on Liberty Media’s potential ‘full stack’ music-industry domination last week (read it here). The Denver-based firm already owns more than a third of Live Nation as well as a majority stake in SiriusXM, which itself will soon own the entirety of streaming service Pandora.
Liberty is now expected to make a play for iHeartMedia, which reaches 250 million Americans every month, when the broadcast giant emerges from bankruptcy in the first half of this year. Analysts suggest that Liberty may also eventually increase its interest in Live Nation, more meaningfully connecting the world’s biggest concerts company with that Sirius/Pandora tie-up — which Liberty already describes as “the world’s largest audio entertainment company.”
Liberty is also rumored to be making a play for talent super-agency CAA, while it has told investors that it will “absolutely” look into Universal Music Group’s 50 percent sell-off when the time is right.
The gentlemen overseeing this trail of music industry interests are Liberty’s chairman and founder, John Malone, plus its CEO, Greg Maffei. Maffei, who has in the past questioned the long-term business model of stand-alone streaming-music companies like Spotify, is also the chairman of SiriusXM and Live Nation, and showed himself to be a ruthless public negotiator in Sirius’ pursuit of Pandora.
Malone, meanwhile, a veteran cable/telco exec with a penchant for headline-grabbing media acquisitions, is the USA’s 67th-richest individual, with a net worth of more than $7 billion.
5) KENICHIRO YOSHIDA, CEO & CHAIRMAN, SONY CORPORATION
Many of the biggest music-industry headlines last year belonged to Sony. First, in May, came the news that the Japanese giant had spent $2.3 billion in order to acquire a 60 percent stake in EMI Music Publishing, home to more than 2 million songs by writers including Kanye West, Queen, Carole King and Calvin Harris. Sony then wrapped up this EMI buyout by acquiring the final 10 percent in the company it didn’t already own for $287.5 million, this time from the Jackson estate.
These power moves came just two years after Sony splashed $750 million in a deal, again with the Jackson estate, to acquire 50 percent of Sony/ATV — another mega-sized global music publisher — and take full control of that company.
With this massive combined asset (Sony/ATV plus EMI Music Publishing) in the bag, Sony decided to headhunt the perfect executive to run it, and found him: In September last year, it was announced that Jon Platt, one of the most respected figures working in publishing today, was to become CEO and chairman of Sony/ATV at the end of Q1 2019. Sony poached Platt from rival Warner/Chappell.
Sony’s U.S.-based music team is now made up of Platt on the publishing side and Rob Stringer, CEO of Sony Music, on the recorded-music side. Once Platt is in place at Sony/ATV, both music executives appear likely to report in to Ken Yoshida, who signed off on the $2.5 billion-plus EMI buyouts.
Yoshida must be a big believer in the value of music because, before taking the CEO role at Sony in February last year, he was best known for saving, rather than spending, money. Yoshida was drafted in to Sony Corp by ex-CEO Kaz Hirai, who appointed him CFO in 2014. Yoshida was initially tasked with making Sony operationally leaner — selling off its Vaio laptop business, as well as cutting jobs and spinning out the firm’s television unit.
Yoshida’s bullishness on the value of music, then, spells good news for Platt and Stringer. Yet what happens if Sony’s biggest rival in the music space, Universal Music Group, obtains a crazy multiple when 50 percent of it is sold later this year? Things could get interesting.
A massive valuation for Universal at the sale table means a comparatively massive valuation will be thrust upon its closest competitors. In this scenario, whether Yoshida sticks (or twists) with Sony’s music division could become the biggest music-industry story of 2020 and beyond. . . .
Tim Ingham is the founder and publisher of Music Business Worldwide, which has serviced the global industry with news, analysis and jobs since 2015. He writes a weekly column for “Rolling Stone.”