MBW Reacts is a series of analytical commentaries from Music Business Worldwide written in response to major recent entertainment events or news stories. Only MBW+ subscribers have unlimited access to these articles. The below article originally appeared within Tim Ingham’s latest MBW+ Review email, issued exclusively to MBW+ subscribers.
Well, I’m disgusted.
Seven years ago, I uploaded my musical masterpiece, Pinky Hue, to streaming sites.
You may have assumed that Pinky Hue was merely a cheap journalistic stunt; a tool for Music Business Worldwide to prove how simple it was to buy streams on Spotify.
If so, shame on you. Pinky Hue was actually my Bohemian Rhapsody.
Yet other than the 10,000 streams I purchased (easy peasy!), Spotify’s users completely ignored it.
No one listened. No one cared.
No one wanted Pinky Hue.
For years, I’ve assumed this was because Pinky Hue was a borderline-unlistenable DIY racket made in a few minutes on an iPhone.
But now, my perspective has changed. Now, I’ve read Drake’s fresh pair of legal petitions against Universal Music Group.
I’m shocked and appalled.
“Streaming and licensing is a zero-sum game,” reads one of Drake’s legal filings (issued via his Frozen Moments LLC). “Every time a song ‘breaks through’, it means another artist does not.”
Drake’s filing then blames Universal for choosing to “saturate the market with [Kendrick Lamar’s Drake diss track] Not Like Us“.
This action apparently came “at the expense of other artists, like Drake” who “suffered economic harm as a result”.
Oh, mate: I. Am. With. You.
On June 29, 2018 – just a few months after I released Pinky Hue – Spotify’s entire playlist ecosystem looked like this ⬇️.
Evidently, someone at Universal Music Group, in tandem with someone at Spotify, was using dastardly hands to pull dastardly strings.
On the day of its release, Drake’s then-new album, Scorpion, claimed the entire Top 12 of Spotify’s biggest global tracks.
As the man’s lawyers just confirmed: Streaming and licensing is a zero-sum game.
People playing Drake were not playing Pinky Hue.
Reader, I suffered economic harm as a result.
Yes, I’m being facetious and, yes, some of the other claims in Drake’s petitions may yet end up changing the face of the business. (One in particular, which I’ll come back to.)
But first, let me just reiterate: Drake’s core accusation – that Universal paid a bunch of money to boost a rival artist, lessening Drake’s “zero-sum” streaming income – is something the 8.99 million artists on Spotify who aren’t Drake could easily level at Aubrey Graham himself.
The fact Drake’s doing so shortly after getting scorched in a diss track from said rival artist… well, it doesn’t do much to dissuade one’s mind from this image: An entitled kid getting into a fight in the playground, getting smacked on his arse, then running home and asking his parents to sue the school.
Now, let’s discuss a couple of specifics about Drake’s latest legal action.
Namely, why it’s actually flat-out weird that UMG is in the crosshairs… but also why Drake might just be keen to put it there.
Why it’s actually weird UMG is at the center of Drake’s legal action
The most important accusation in Drake’s pair of petitions, certainly in terms of the economics of today’s music business, focuses on streaming fraud and bots.
Drake’s first petition, filed in New York on November 25, claims: “UMG, directly or through Interscope… conspired with and paid currently unknown parties to use ‘bots’ to artificially inflate the spread of Not Like Us and deceive consumers into believing the Song was more popular than it was in reality.”
Drake’s petition ⬇️ then alleges that a specific (but unnamed) professional stream-inflater “revealed publicly on a popular podcast that [Kendrick Lamar’s] “label” (i.e., Interscope) paid him via third parties to use ‘bots’ to achieve 30,000,000 streams on Spotify in the first days of the release of Not Like Us with the goal of ‘jumpstarting’ the song’s spread and turning it into ‘a crazy hit’ on the platform.”
The “popular podcast” referenced is an episode of DJ Akademiks’ live-stream show that first aired in June On it, our anonymous pro fraudster (‘Epic‘) claims to have received an initial payment of $2,500 to boost Not Like Us’s Spotify streams via bots.
I’ve watched the 40-minute discussion, directly sourced in Drake’s petition, and it’s left me stumped. Because:
(a) The anonymous whistleblower says he was contacted/contracted by a “third party” marketing agency, rather than a record company like Interscope; and (b) Most importantly, said whistleblower actually alleges he was paid – directly, via bank transfer – by an individual connected to Kendrick Lamar’s management team. This individual, it’s made clear by certain statements, does not work for Interscope.
Now. Anyone can accuse anyone of anything on the internet… it doesn’t make it true. That probably goes double for an anonymous figure who makes their money faking music streams online.
But considering Drake’s petition (RE: bots) cites the Akademiks podcast discussion as its source, it seems downright bizarre that Universal/Interscope, rather than anyone connected to Kendrick Lamar’s own camp, is cited as the defendant on this matter.
Why it’s also perhaps not weird that UMG is at the center of Drake’s petition
Look, I’m no Pollyanna.
I wouldn’t be shocked if a frontline major label employed an, ahem, ‘digital marketing agency’ to artificially, ahem-ahem, ‘enhance’ the early streams of a priority track. (DJ Akademiks says much the same when talking to the whistleblower: “It’s like the steroid era. It’s baked into the cake already… Every label does the same thing.”)
But from what I can hear in that podcast – again, crucially, a podcast cited as a source of information in Drake’s legal filings – Interscope/Universal simply isn’t the party being fingered by the accuser.
So let’s zoom out from the granular detail and consider this: why might Drake, one of Universal Music Group’s biggest-ever artists, want to take a swipe at UMG, above and beyond any diss-track beef with Kendrick Lamar?
I have no inside knowledge. But try this for a crackpot theory.
Drake’s first run of classic studio albums – including evergreen streaming monsters Scorpion, More Life, Views, Nothing Was The Same, and Take Care – are credited as being owned by Cash Money/Young Money Records.
Drake signed a multi-album deal with Young Money some 15 years ago, back when the artist-empowering streaming era was barely off the ground. (This was 2009; Spotify wouldn’t launch in the US for two more years.)
Obviously details of that deal are locked in a confidential contract, but it saw Young Money secure long-term ownership of Drake’s recordings. (There are parallels here to Taylor Swift, who signed a multi-year deal with Big Machine in the same ‘download era’ and… well, you know the rest.)
Whatever happened to Young Money’s masters catalog? Why, Universal Music Group bought it in 2020; UMG confirmed it had bought both Cash Money and Young Money an investor update a couple of years later ⬇️. (Young Money was co-owned by Wayne and Cash Money.)
Around the same time, Young Money founder Lil Wayne’s ex-manager claimed that UMG’s acquisition of YM was for a sum north of $100 million… which, if true, four years on already looks like a bargain.
Drake then inked a new go-forward deal with UMG/Republic Records in 2021 for Certified Lover Boy and other future albums.
That agreement saw ownership of these masters stay with Drake (via his label, OVO), likely with an artist-friendly royalty split. It reportedly involved a “Lebron-sized” advance check, with some insiders estimating the deal enriched Drake to the tune of $400 million.
However, Drake’s hugest hits – that 2009-2018 Young Money catalog, including everything from One Dance to Started From The Bottom to God’s Plan – remain the fully-owned property of Universal.
Perhaps Drake was thinking about the inherent tension in this dynamic when he filed his petitions last month, throwing mud in Universal’s direction over bots and streaming fraud, despite questionable evidence.
I mean, it must have crossed his mind when his diss track spat with Kendrick Lamar (a rival priority Universal artist) escalated.
Especially when Not Like Us (with lyrics about Drake so vicious, I’d risk defamation just by repeating them here) was then heavily marketed by Interscope… a Universal company.
But didn’t you say Drake’s petition could ‘end up changing the face of the business’?
Yes, I did. Here’s why.
Firstly, some important context: ‘pre-action petitions’ like those filed by Drake in certain US states are not lawsuits. In essence, they are a legal demand for evidence from defendants, relating to allegations made by a petitioner (in this case, Drake/Frozen Moments LLC). If that petitioner can force defendants to hand over credible evidence, said evidence can then form the basis of full-blown legal action.
Speaking personally, I think Drake’s case against UMG on streaming fraud/bots is slim, as – to my ears, at least – a ‘smoking gun’ simply isn’t there in the DJ Akademiks podcast.
However, Drake’s first petition (filed in New York vs. UMG and Spotify) contains one other allegation that I think could have more far-reaching consequences.
The petition argues ⬇️ that UMG and Spotify colluded so that Not Like Us generated payouts that were “30 percent lower than [Spotify’s] usual licensing rates… in exchange for Spotify… recommending the song to users searching for other unrelated songs and artists”.
That sounds pretty scandalous on paper, but it’s nothing that Spotify is ashamed of. Quite the opposite: it’s central to the platform’s modern business model
Drake’s team is clearly referring to ‘Discovery Mode’, where artists and labels can opt-in to accept a 30% lower royalty rate on streams that have been ‘pushed’ by Spotify to listeners via ‘personalized’ playlists.
So you might be playing Drake one minute… and then, without asking for it, be served Kendrick.
According to Spotify’s 2022 Investor Day presentation, “over 50 labels and distributors” had already indulged in ‘Discovery Mode’ at that point.
The company said that “in early testing… artists with tracks in Discovery Mode increased their listenership by an average of 40%… and almost half of that growth [came] from listeners who had never listened to the artist before”.
Others in the music industry have been… somewhat less enthusiastic about the program. (Not least about Spotify handing major music companies a stack of ‘Discovery Mode’ credits as part of multi-year licensing agreements.)
Back in 2020, the US Recording Academy blasted ‘Discovery Mode’ as a “predatory tool that can be likened to payola”, while indie labels slammed it for “creating the conditions for a race to the bottom, reducing the overall royalties paid to artists”.
Since these outbursts, clamor over the perceived unfairness of Spotify’s ‘Discovery Mode’ has somewhat subsided. Various corners of the music business have – sometimes begrudgingly – accepted it as all part of the “zero-sum” streaming game.
But here comes Drake.
Two years ago, concerned members of US Congress demanded in a letter to Daniel Ek that Spotify “publish, on a monthly basis, the name of every track enrolled in the [Discovery Mode] program and the royalty discount agreed upon”.
It didn’t happen.
Now, Drake is making similar demands – but for one track in particular.
Thing is, to satisfy his request, you have to open the very same can of worms.Music Business Worldwide