In The Know: First Week of June 2017

Welcome to SoStereo’s new weekly blog, In The Know. We cover the latest news of the week, highlighting stories from across the advertising, music, and business worlds that matter to you.

Music News

Here’s a recap of important music business news you should know.

The Robinhood of Music:

Stem makes it easy for everyone involved in the creative process to
get paid their share of earnings in a clear & timely manner.

Music tech startup, Stem, hit it big in their latest Series A fundraising round, raising $8MM, bringing the total amount raised to $12.5 million. The founders of Stem are building a new kind of distribution service that ensures artists and collaborators get paid for their work by streamlining tracking and payments to artists across a variety of digital services such as Spotify, Youtube, Apple Music, Pandora and more. So far, they’ve been off to a great start, boasting a roster of satisfied users such as Frank Ocean, Childish Gambino, DJ Jazzy Jeff, Anna Wise, Chromatics and more. Keep an eye out for this company becoming a player in the distribution space.

SiriusXM eyes acquisition of Pandora Radio:

Whatever decision they make, Pandora is in a good position.

Pandora, one of the largest music streaming platforms in the world, is mulling over a sale to SiriusXM for approximately $2.8 Billion. As confirmed by The New York Post on May 17, the deal has been in limbo for months. SiriusXM is having active conversations about an acquisition of Pandora, and sources say SiriusXM has been conducting due diligence on Pandora for the past few weeks.

“There is a very high likelihood that something happens in the next week to 10 days but you just never know…” a source close to talks said. “It makes sense for everybody… 60 percent to 65 percent it happens.”

If SiriusXM doesn’t go through with the acquisition, Verizon is looking to make a $100m investment into the streaming giant. While they show interest in Pandora, Verizon isn’t looking to acquire the 17 year old media company just yet. Verizon is still busy with integrating their recent acquisition, Yahoo, with AOL. Verizon is rumored to be interested in Pandora for their 80 million users, many of which are young.

The Orchard and Red Distribution Are Merging:

CEO of The Orchard, Brad Nevin. Photo by Guerin Blask.

The Orchard and RED are two of the three largest independent music distributors in the U.S., and they’re both owned by Sony Music Entertainment. Sony is deciding to merge the two into one global company operating under The Orchard brand. This move follows a similar acquisition Sony reached last year with Essential, a U.K. distributor, where they merged with The Orchard. They also acquired two additional indie distributors, Germany-based Finetunes and Norway’s Phonofile, and merged them into The Orchard.

The new and improved Orchard will continue to be run by CEO Brad Navin and will have over 300 employees in 30 offices around the world. It’s also set to pull in $500 million in revenue, which would make it the largest indie distributor of music in the world.

Some of the artists The Orchard represent are: Joey BadA$$, Slayer, Daya, Kelsea Ballerini, Flume, Skepta, Diet Cig, OMD, J Alvarez, Negramaro, Jorge & Mateus and Allman Brown.

Marketing News

NFL To Allow Liquor Advertising During Game Broadcasts:

Roger Goodell, Commissioner of the NFL, is hoping to boost ad revenue next season. Photo by Lisa Lake.

In a significant shift to their long-standing policy, the NFL has decided to allow liquor brands to advertise with their television partners during the season. Under the new guidelines, the League will allow up to four 30 second spots promoting distilled alcohol per match, with no more than two adverts allowed in any one quarter or during the half-time break.

The change will affect all four of the NFL’s television partners; ESPN, Fox, CBS, and NBC — The companies will also be allowed to run two additional spots in their respective pre and post-match programming. However, it’s not a full green light. The NFL included some stipulations before they would air. The ads must carry a ‘prominent’ message of social responsibility, convey a football related theme, or target underage drinkers.

The NFL looks to capitalize on the $411m spent by spirits manufacturers last year on advertising.

Apple Reveals New Smart Speaker:

The HomePod will retail for $349 and will release in December 2017.

Apple unveiled a new wireless smart speaker for the home called Homepod at their annual Worldwide Developers Conference in San Jose on June 5th. The Siri-powered speaker retails for $350, and Apple will focus its marketing efforts on highlighting the privacy benefits of the Homepod compared to competitors such as Google Home and Amazon Echo.

“They’re really focused on privacy,” said one person with knowledge of Apple’s marketing plans. “There is no bloatware, no tracking, and they’re not selling your information. That’s completely different from Google Home and Amazon Echo.”
“Apple is also starting to differentiate their approach to reassure consumers about their privacy,” said Thomas Husson, a principal analyst at Forrester. “How their data is being used is a key area moving forward where both Google and Amazon are, for now, less legitimate given their core business models.”

Apple is a latecomer to the assistant-powered wireless speaker market. According to Forrester, Amazon has already sold 15 million Echo speaker units and is about to launch its next-generation device that will include a screen to display information. Both Amazon Echo and Google Home have made their software available to outside developers and brands to build new services for their users.

Music Charts:

Numbers Don’t Lie:

It’s been an exciting week for Colombian pop megastar Shakira. Fresh off the release of her eleventh studio album, El Dorado, Shakira has just earned a major accolade. El Dorado has had the best sales week of any Latin album in over two years, placing Shakira firmly in the #1 spot on the Latin album sales and Latin Pop Albums chart. As of June 1, Shakira’s sold over 29,000 album units, making El Dorado her sixth album to take the №1 spot on the Latin Album sales chart. It doesn’t stop there, she now also holds the record for most №1 Latin Pop Albums among women, making her the most dominant woman in Latin pop music history.

Shakira’s still cranking out the hits.

Kendrick Stays #1:

Kendrick Lamar has had another fantastic week at the top of the Rap/Hip-Hop album chart with his latest release, DAMN. The Humble rapper has generated lots of buzz surrounding his fourth studio release, drawing universal acclaim and accolades from across the critic world. Kung Fu Kenny had the fastest selling album of 2017, selling over 603,000 albums in the first week of release on April 14th.

Kendrick Lamar has cemented his position as one of rap’s greatest.

Sgt. Pepper Jumps to #5:

The re-release has been met with fanfare.

Music purists, your prayers have been answered. It looks like The Beatles are back on the charts, this time capturing the №5 spot on the Billboard Artist 100 list and the №3 spot on the Billboard 200 for their 50th-anniversary re-release of Sgt. Pepper. The Beatles gained 75,000 equivalent album units in the week ending June 1, according to Nielsen Music.