I.B. BAD ASSESSES A MEMORABLE WEEK IN A CHALLENGING YEAR

FAREWELL TO ROYALTY: The industry and the nation are still reeling from the 4/21 death of Prince, one of the most wildly original, charismatic and beloved figures in music history. Like the brilliance of his artistry, the magnitude of his loss can’t be overstated. In recent, days, Prince’s music has been everywhere, as America and much of the world celebrate his life and marvels at the musical treasure he's left us with.

HAIL TO THE QUEEN: In the days prior to the Saturday, 4/23, release of Beyoncé’s sixth album, Lemonade, on Rob Stringer’s Columbia, only Team Bey had full knowledge of the details of the rollout—further evidencing the shift in the balance of power from the major labels to the superstars. Those details included a Tidal streaming exclusive in perpetuity, taking Spotify and Apple Music out of the picture, digital downloads on iTunes and Amazon, and the arrival of physical product on 5/6, just under two weeks after release date. The album is expected to debut with 400-500k, but it remains to be seen whether it contains a pop hit single along the lines of “Crazy in Love” or “Single Ladies (Put a Ring on It)” that would likely catapult sales beyond 3m. Beyoncé hasn’t had a smash in some time. And because her brand hasn’t depended on pop hits, she may not feel the need to focus her energies on creating them—not when she’s raking in mountains of money from her sold-out stadium tour and branding ops; e.g., Ivy Park. Sony Music has reportedly offered Beyoncé a three-album deal with an advance believed to be just south of $10m per album. Will her new album be the final one in her old deal or the first LP in her new one?

TIPPING POINT: The erosion of sales resulting from the adoption of streaming appears to be nearing a critical juncture this year, as the graphic below listing 2016’s chart-toppers through the week ending 4/14 demonstrates. Thus far, only six of the eight #1 debuts have hit six figures, and the sales week just ended would have represented a troubling new low had it not been for Prince's posthumous sales explosion, though it came on the heels of a reassuring 106k #1 bow from The Lumineers, on Scott Robinson and Paul Roper’s Dualtone, a big win for the indie sector. And things are even worse in the U.K., further ratcheting up the general distress level. The releases from Beyoncé and Drake, through Monte Lipman’s Republic, as well as the Prince sales explosion, will temporarily ease industry fears, with some projections on Views From the Six at 1m; that’s assuming the presence of physical product in week one—and also assuming that the proliferation of streaming hasn’t eaten into his consumer base. But until premium streaming subscriptions have grown exponentially—100m is the most commonly referenced figure—the music business will remain in a twilight zone wherein streaming revenues fall short of compensating for lost sales. The chief culprit is ad-supported unlimited free streaming, the black hole in the streaming universe. At Daniel Ek’s Spotify, freemium still accounts for north of 40% of total streams, while 45m of the service’s estimated 75m users aren’t paying for it. While dramatic growth on the part of Apple Music would certainly make a difference, the primary offender by far in terms of freemium is YouTube, whose on-demand streams are so enormous that they dwarf the rest of the sector, but the royalty rate is shockingly low compared to the other carriers. A modest rate increase would make a difference in the economics—but to this point, the Google overlords have shown no interest in fairly compensating the providers of much of YouTube’s content. Do the rights holders have any leverage whatsoever against this goliath as their deals run out?

STAR POWER: Kanye West’s latest foray dramatizes the issue. Since his career-high debut of 957k for Graduation in 2007—which seems like an eternity ago—Kanye’s first-week sales have declined in parallel with the contraction of the business as a whole, bottoming out with 327k on 2013’s Yeezus. But The Life of Pablo represents a precipitous new low—after becoming available on other streaming services on 4/1 following a six-week Tidal exclusive, the album debuted with the sales-plus-streaming equivalent of 95k, a fraction of his previous first weeks. Album sales accounted for more than a quarter of that total, and 23% of the 67k streaming-equivalent albums were freemium streams. While Pablo was hailed for being the first album to top the consumption charts with minimal actual sales, Kanye’s decision to forgo a conventional setup and release has been economically calamitous not just for him but for those who hold the rights to his music.

Did the botched launch of Rihanna’s album dilute enthusiasm about her tour? Ticket sales have been soft—the demand is such that she’s only booked for one night in most of the arenas on the North American leg, while European stadiums are even softer. The Weeknd had been installed as special guest star for Rihanna’s European tour, but pulled out when he found out he would not be co-headlining and had to go onstage before dark. By contrast, upper-demo U.S. summer tours including Paul Simon, Sting, Don Henley and David Gilmour are doing strong business. Given the interest in these heritage artists, Goldenvoice/AEG’s plan to bring together Bob Dylan, Neil Young, The Rolling Stones, Paul McCartney, The Who and Roger Waters on the Coachella site in October could be a massive success, assuming the creature comforts are significantly ramped up to accommodate the affluent oldsters. Insiders say Goldenvoice head Paul Tollett and AEG’s Jay Marciano were livid that their planned classic-rock fest, popularly known as “Old-chella,” was leaked prematurely to the L.A. Times, stealing the thunder from weekend one of Coachella and complicating negotiations for the forthcoming fest of aging icons. Tollett and Marciano would very much like to know the exact source of the leak, which supposedly came from within AEG.

SIGNS OF THE TIMES: The level of competition between UMG and Sony has never been more intense than it is now, as the recent dustup between the respective U.K. companies over conflicting Q1 marketshare percentages posted on the HITS website indicated. In the U.S., the rivalry manifests itself most intensely between Steve Barnett’s Capitol and Stringer’s Columbia, as the two labels battle over executives and artist signings. Those in the know believe Harry Styles will wind up signing with one or the other. Look for that deal to go down within the next 30-60 days.

Greg Thompson’s recent move to the presidency of Guy Oseary’s Maverick/Live Nation from his longtime position as Capitol EVP means a big-time label exec with no personal-management experience will have a top post at a heavyweight management company. How big a role will Thompson play at Maverick? His replacement at the Tower is a highly regarded promotion executive who is said to be locked up.

Doug Morris-led Sony Music’s fiscal 2016 is in the books, and company execs across the board are expecting fat bonuses in June as a result of the company’s banner year. The amounts of those bonuses are common knowledge as a result of the WikiLeaks hack. Adele’s 25 (XL/Columbia) was obviously a huge contributor to Sony’s bottom line. The album has sold 9.3m in the U.S. on just one hit single, which hasn’t been achieved since Norah Jones’ 2002 LP Come Away With Me sold 10m-plus, while its lone charting single, “Don’t Know Why,” peaked at #30.

NAMES IN THE RUMOR MILL: Cavallo, Ruffalo & Fargnoli, Mo Ostin, Lenny Waronker, Stan Cornyn, Bob Regehr, Russ Thyret and Owen Husney.