On… Parrots and predictions. – Music Enterprise Worldwide
MBW Reacts is a collection of analytical commentaries from Music Enterprise Worldwide written in response to main latest leisure occasions or information tales. Solely MBW+ subscribers have limitless entry to those articles. The under article initially appeared in Tim Ingham’s newest ‘Tim’s Take’ e mail, issued completely to MBW+ subscribers.
Have you ever ever heard the story of the Hollywood maverick and the speaking parrots?
It’s an ideal parable for why forecasting something within the leisure enterprise is often a waste of vitality.
In 1934, an industrious press agent at Paramount Photos was dreaming up stunts to advertise Mae West’s upcoming theater launch, It Ain’t No Sin.
He settled on a doozy: painstakingly coaching 50 parrots to repeat the film’s title (‘It Ain’t No Sin! It Ain’t No Sin!’). The birds, he thought, can be ultimate promoters of the flick in theater lobbies.
Then, on the eleventh hour, higher-ups at Paramount bought nervous that the movie’s title may be too saucy for Hollywood censors. They modified the film’s identify to Belle Of The Nineties.
Legend has it that the 50 parrots, now ineffective as Tinseltown props, had been launched into the South American jungle – the place they could possibly be heard squawking “It Ain’t No Sin! It Ain’t No Sin!” for many years to come back.
The ethical of the story? In leisure, unexpected occasions (and company timidity) will typically bloodbath best-laid plans.
However, hey, we’re in the beginning of a brand new 12 months – so I’m gonna stick my neck out on three predictions for the music biz in 2026 regardless.
If I’m unsuitable, you’ll discover me this time subsequent 12 months within the Bolivian rainforest, wide-eyed and be-beaked, repeatedly shouting the under at passing macaws…
1. The most important ‘labels’ will lean extra closely into reside music
“I feel [major music companies] might be full service firms in [5 years]. In the present day we don’t supply administration; we don’t supply reside promotion. There are loads of providers like that we’re not within the enterprise of right here in america… And I feel that’s going to alter.”
This off-the-cuff remark from Warner Music Group boss, Robert Kyncl, in an October interview with Bloomberg, is price remembering.
The three main music firms have lengthy ceased merely being ‘music rights’ operations. The rising worth to Common, Sony, and Warner from adjoining revenue streams – significantly merch, identify & likeness licensing, and reside occasions – has been one of many tales of the previous decade.
Living proof: In Sony’s monetary accounts, its ‘Different’ class of recorded music revenue represents income generated from license income (public efficiency, broadcast, and sync) plus merch gross sales, and ticketing/reside performances.
In calendar Q3, this ‘Different’ class generated over half a billion {dollars} (USD $529M) for the primary time, up 16.8% YoY.
In actual fact, ‘Different’ generated almost 3 times the revenues of world bodily music gross sales for Sony in the identical interval ($184.9M).
As just lately as 2021, bodily gross sales generated a bigger determine at Sony than ‘Different’. Simply look how that’s modified since:
A number of the story within the chart above is defined by a post-Covid bounceback for public efficiency licensing (bars, golf equipment, eating places and many others.). However a lot of it has been pushed by ‘non-traditional’ areas for a file firm… significantly merch.
It’s no fluke that Sony acquired merch powerhouse Ceremony Of Roses – now believed to generate over $500 million yearly – in 2022, simply earlier than the ‘Different’ income determine within the chart above exploded. (Additionally think about the influence of Sony’s acquisition of 50% of the Jackson Property in 2024, and the continued revenue stream that deal supplies from the reside MJ musical.)
We’ve seen comparable reside/merch income development tales at Warner and Common Music Group, as each majors look to supply providers to artists far past the mainstay of music rights exploitation.
Common’s merch arm, Bravado, is anticipated to generate round USD $900 million this 12 months, whereas Warner’s ‘expanded rights’ enterprise (which incorporates merch, along with touring and sponsorship revenue) generated USD $639 million within the first 9 months of 2025, partly because of WMG offering merch providers for Oasis’ world tour.
As per Robert Kyncl’s suggestion, don’t be shocked to see the three majors try and construct on their success in merch by increasing additional into reside music promotion over the subsequent 12 months.
Particularly in a world the place streaming is settling into single-figure development patterns, and higher monetization of so-called ‘superfans’ turns into an rising fixation in major-land.
As WMG’s newest annual report says: “We consider that coming into into expanded-rights offers [including] areas equivalent to merchandising, VIP ticketing, fan golf equipment, live performance promotion and administration has permitted us to diversify income streams and capitalize on different income alternatives. This supplies for improved long-term relationships with our recording artists and permits us to extra successfully join recording artists and followers.”
2. Common will get Downtown – however who will get Curve?
A few months in the past on this column, I known as out Merlin for not shopping for FUGA again in 2020 — for permitting it to be acquired by Downtown and, in the end, enabling UMG to swallow it through M&A.
Properly, right here comes a second chew on the apple.
Common Music Group now appears resigned to divesting Curve Royalty Methods to get the Downtown deal permitted in Europe.
The EC flagged considerations that UMG may use Downtown-owned Curve to “achieve entry to commercially delicate knowledge” from indie labels; in response, UMG has formally dedicated to promoting it.
The proposed phrases embrace strict purchaser standards: Curve’s purchaser should be financially sturdy, genuinely impartial from UMG, with ‘confirmed experience’ to run the enterprise.
If Merlin is daring sufficient, this could possibly be its second. A collective of highly effective independents, whose major goal is licensing and royalty assortment, buying a platform that already providers lots of its members.
Then once more, would UMG — bruised by Merlin members vocally opposing the Downtown deal — look kindly on their bid?
Different potential suitors may embrace B2B service suppliers like SESAC/AudioSalad, or royalty processing specialists equivalent to Vistex or Milana Lewis’ Tone.
One wrinkle price watching: below the proposed package deal, UMG will get to maintain its personal duplicate of Curve tech — “sanitized” of third-party buyer knowledge, however absolutely purposeful and free to develop independently.
In different phrases, Common walks away with a battle-ready royalty accounting platform constructed on years of Curve’s R&D – albeit with a time-limited ban on poaching Curve’s present standalone prospects.
In the meantime, for UMG, the primary prize — Downtown’s publishing administration empire, FUGA’s B2B infrastructure — seems firmly inside grasp.
3. The Suno offers get achieved
There are issues within the WMG/Suno deal that unnerve me.
The truth that Suno’s personal fundraising pitch deck, launched earlier than the settlement, was so gentle on monetary commitments for music licensing. The truth that Suno now says it would “deprecate” its earlier fashions post-WMG license… however no-one appears to have the ability to exactly affirm what “deprecate” means. The truth that compensation for Suno’s previous infringement is unclear – a vital distinction for songwriters and artists whose work was hoovered up with out permission.
Nonetheless, two headline details from the Suno/WMG pact make me assume different key rightsholders will, ultimately, come on board.
Firstly, it units an important precedent that music should be licensed by gen-AI platforms… and that provably by-product future AI hits should ship royalty money again to the musicians they’ve ripped off (and who opted in to being ripped off).
Secondly, I’m more and more satisfied that Warner Music Group grabbed a minority fairness slice in Suno as a part of the deal. Skilled business whisperers are solely solidifying my perception that’s what’s performed out right here.
No matter considerations and brickbats are being aired between Suno and the likes of Common, Sony, and Merlin, one factor’s for positive: if a piece of possession is on the desk, all events might be that rather more motivated to put down their litigious weapons, and make the peace.
Music Enterprise Worldwide
