The S&P 500 sank 2.7% in its worst day since April 10. The Dow Jones Industrial Average dropped 878 points, or 1.9%, and the Nasdaq composite fell 3.6%.

Stocks had been heading for a slight gain in the morning, until Trump took to his social media platform and said he’s considering “a massive increase of tariffs” on Chinese imports. He’s upset at restrictions China has placed on exports of its rare earths, which are materials that are critical for the manufacturing of everything from consumer electronics to jet engines.

“We have been contacted by other Countries who are extremely angry at this great Trade hostility, which came out of nowhere,” Trump wrote on Truth Social. He also said “now there seems to be no reason” to meet with China’s leader, Xi Jinping, after earlier agreeing to do so as part of an upcoming trip to South Korea.

Trump’s sudden announcement of new tariffs recalled April’s big swoon in stock markets, when the president announced “Liberation Day” with a list of “reciprocal tariffs” for a large number of countries worldwide, sending global markets plunging. Within just four days, the S&P 500 fell about 12% and the Dow Jones Industrial Average lost nearly 4,600 points, but the U.S. indexes regained all the lost ground within a month or so as the tariffs played out very differently from Trump’s announcement.

Still, as of October, Federal Reserve Governor Chris Waller, who confirmed to CNBC that he had a “great interview” as a potential replacement for Chairman Jerome Powell, revealed how the tariffs had played out so far: price increases for higher-income consumers as tariffs were passed through, and companies swallowing the cost for any lower-income and price-sensitive shopper. Moody’s Analytics found that nearly 50% of consumer spending in the economy came from the top 10% of wealthiest Americans, meanwhile, and the tariff revenue is “very significant,” according to Apollo Global Management chief economist Torsten Slok.

The ratchet higher in tensions between the world’s largest economies led to widespread drops across Wall Street, with roughly six out of every seven stocks within the S&P 500 falling. Nearly everything weakened, from Big Tech companies like Nvidia and Apple to stocks of smaller companies looking to get past uncertainty about tariffs and trade.

The market may have been primed for a slide. U.S. stocks were already facing criticism that their prices had shot too high following the S&P 500’s nearly relentless 35% run from a low in April. The index, which dictates the movements for many 401(k) accounts, is still near its all-time high set earlier in the week.

Critics say the market looks too expensive after prices rose much faster than corporate profits. Worries are particularly high about companies in the artificial-intelligence industry, where pessimists see echoes of the 2000 dot-com bubble that imploded. For stocks to look less expensive, either their prices need to fall, or companies’ profits need to rise.

Levi Strauss dropped 12.6% for one of the market’s larger losses, even though it reported a stronger profit for the latest quarter than analysts expected.

Its forecast for profit over the full year was also within range of Wall Street’s estimates, but the jeans and clothing company could simply be facing the challenge of heightened expectations after a big run. Its stock price came into the day with a surge of nearly 42% for the year so far.

All told, the S&P 500 fell 182.60 points to 6,552.51. The Dow Jones Industrial Average dropped 878.82 to 45,479.60, and the Nasdaq composite sank 820.20 to 22,204.43.

Some of Friday’s strongest action was in the oil market, where the price of a barrel of benchmark U.S. crude sank 4.2% to $58.90.

It fell as a ceasefire between Israel and Hamas came into effect in Gaza. An end to the war could remove worries about disruptions to oil supplies, which had kept crude’s price higher than it otherwise would have been.

Losses accelerated following Trump’s tariff threat, which could gum up global trade and lead the economy to burn less fuel. Brent crude, the international standard, dropped 3.8% to $62.73 per barrel.

In the bond market, the yield on the 10-year Treasury sank to 4.05% from 4.14% late Thursday.

It had already been lower before Trump made his threats, as a report from the University of Michigan suggested that sentiment among U.S. consumers remains in the doldrums.

“Pocketbook issues like high prices and weakening job prospects remain at the forefront of consumers’ minds,” according to Joanne Hsu, director of the Surveys of Consumers. “At this time, consumers do not expect meaningful improvement in these factors.”

The job market has slowed so much that the Federal Reserve cut its main interest rate last month for the first time this year. Fed officials have penciled in more cuts through next year to give the economy additional breathing room. But Chair Jerome Powell has also said they may change course if inflation stays high. That’s because lower interest rates can push inflation even higher.

One potentially encouraging signal from the University of Michigan’s preliminary survey said consumers’ expectations for inflation in the coming year edged down to 4.6% from 4.7% the month before. While that’s still high, the direction of change could help the Fed and limit upward pressure on inflation.

In stock markets abroad, indexes fell across much of Europe and Asia.

Hong Kong’s Hang Seng fell 1.7%, and France’s CAC 40 dropped 1.5% for two of the bigger moves. But South Korea’s Kospi leaped 1.7% after trading reopened following a holiday.

___

AP Writer Teresa Cerojano contributed.

MBW’s World Leaders is a regular series in which we turn the spotlight toward some of the most influential industry figures overseeing key international markets. In this feature, we speak to Berlin-based Konrad von Löhneysen, Founder & CEO of Embassy of Music and Co-CEO of Zebralution. World Leaders is supported by SoundExchange.

Some music industry executives talk a good game about trusting their instincts. Konrad von Löhneysen leads two successful companies on that philosophy.

The Berlin-based entrepreneur founded Embassy of Music in 2008 after a management buyout transformed what was then Ministry of Sound Germany into an independent operation.

Over the past two decades, Embassy has worked with everyone from Calvin Harris and David Guetta to Kid Cudi, Passenger, Simply Red, and Simple Minds, building a longstanding reputation as one of Germany’s most respected independent labels.

But it’s von Löhneysen’s other hat, as Co-CEO of digital distribution powerhouse Zebralution, that’s really turning heads in the industry.

With 85 employees across nine locations, the company works with over 1,000 record labels and audiobook publishers from around the world.

Zebralution has undergone significant ownership changes in recent years.

Founded by von Löhneysen, Kurt Thielen, and Sascha Lazimbat in 2004, it was acquired by Warner Music Group in 2007.

Warner then sold Zebralution in 2017 to a consortium of independent music industry execs – von Löhneysen included – as part of WMG’s post-Parlophone disposals.

The distributor then changed ownership again in December 2019 when German PRO GEMA bought a majority stake in the company.

Subsequent to GEMA’s acquisition, Von Löhneysen stepped in as Zebralution’s Co-CEO alongside Tina Jürgens, following Kurt Thielen’s departure in early 2023.

Now, under the duo’s leadership, Zebralution is on track to become a EUR €100 million revenue-a-year business, fueled by growth in audiobooks alongside its core music distribution services.

While Zebralution has traditionally operated as a B2B distribution company serving labels, von Löhneysen is also steering the business toward working directly with artists who have built substantial audiences on their own.

The company’s also eyeing expansion in the UK market, where von Löhneysen sees a significant gap for Zebralution.

Von Löhneysen cut his teeth as a label owner during the early 2000s – “basically the worst time to start from scratch” as CD sales collapsed – yet managed to build Embassy into a thriving business with a string of hits.

His approach has always been intuitive rather than algorithmic. “I’m a bit like a mini algorithm in a way,” he explains. “If I like something, maybe someone else will like it, too. Or if I like it, [I try to figure out] ways to reach like-minded people.”

“I’m a bit like a mini algorithm in a way. If I like something, maybe someone else will like it, too.”

That instinct served him well during his earlier roles at Logic Records, Jive Germany, and Universal Records. It’s also shaped his philosophy at both Embassy and Zebralution, where he’s built teams that can move quickly on opportunities while maintaining the personal touch that many artists crave from independent partners.

As the industry grapples with AI-generated content flooding streaming platforms and major consolidation reshaping the distribution landscape, von Löhneysen combines old-school music industry instincts with modern business acumen.

His companies are growing while staying true to what he calls “respect for creativity”.

Here, von Löhneysen sits down with MBW in London and recounts his journey from record shop employee to running two successful global music businesses from Germany.

He also explains why he believes the cost of streaming music is “just way too cheap,” why he’s bullish on the UK market, and why he’s “not fazed” about Universal Music Group’s proposed acquisition of Downtown Music Holdings…

WHAT WAS YOUR RELATIONSHIP LIKE WITH MUSIC EARLIER ON IN YOUR LIFE, AND WHAT DREW YOU to THE MUSIC INDUSTRY?

You always try to make your passion your job. My passions were football and music, and my football skills just weren’t good enough. So there was only music left. When I was at school, I worked in a record shop, and I was DJing. And at some point, I got a job offer from BMG and moved to Munich. I never went to university or anything. I don’t have a degree. I only know a lot about music.

“My passions were football and music, and my football skills just weren’t good enough. So there was only music left.”

Working in a record shop and as a DJ, I always thought that I had an idea of what people like, or if they like this, they might also like that – what we now call curation. I’m a bit like a mini algorithm in a way.

With that knowledge, when I worked for a record company, I always kept in mind that, if I like something, maybe someone else will like it, too. Or if I like it, what are the ways to reach like-minded people? And this has been at the root of what I’m doing my whole life.

WHO WERE SOME OF YOUR EARLY MENTORS, OR INDUSTRY EXECUTIVES THAT YOU WERE WATCHING FROM AFAR?

I didn’t have a mentor, but I looked up to iconic label heads, like Terry Ellis from Chrysalis, Chris Blackwell from Island, or Seymour Stein from Sire Records.

I got to meet these people at music seminars in the late 1980s in New York or the Winter Music Conference in Miami. I’ve always had quite a strong international focus. I was very interested in what was going on in America.

HOW DID YOUR  EXPERIENCE ACROSS DIFFERENT LABELS SHAPE YOUR APPROACH TO RUNNING AN INDEPENDENT MUSIC COMPANY?

Leadership is about making decisions. I make a lot of decisions per day, per hour, whatever. You just try to make more right than wrong decisions. But it’s also about how you communicate the decisions you make to your partners, to the artist and manager, to your own staff. You make a decision because you think it’s right, so everybody backs it.

“Leadership is about making decisions. You just try to make more right than wrong decisions.”

In terms of our business, it’s still the drive, the excitement for listening to music, hearing new songs, meeting new people, and having an idea of why you want to be involved in something. How do I reach people who could like that kind of music? I think that’s always been at the core.

EMBASSY OF MUSIC EMERGED FROM MINISTRY OF SOUND GERMANY AFTER A MANAGEMENT BUYOUT IN 2009. WHAT LED TO THAT DECISION?

First, the company from Frankfurt that was supposed to [invest] money went bust. They were a publicly listed company, but a whole segment of the Frankfurt Stock Exchange called Neuer Markt was under a lot of pressure, so they couldn’t cough up the money they were supposed to provide, and they went bankrupt.

So we basically seized the shares. Ministry of Sound also changed direction. Matt Jagger was gone at that point; he went on to run Mercury Records with Steve Lillywhite in London.

And the new regime at Ministry wasn’t really that interested in having a company in Germany. So I just bought it from them. To this day, I am still very grateful that Ministry’s CEO Lohan [Presencer] helped me to accomplish this.

THOSE EARLY 2000S WERE INCREDIBLY CHALLENGING FOR THE MUSIC INDUSTRY. WHAT WERE THE ENTREPRENEURIAL RISKS OF RUNNING AN INDEPENDENT BUSINESS DURING THAT PERIOD?

Yes, CD sales tanked. It was basically the worst time to start from scratch. But I had nothing else, and I made that commitment that this is what I wanted to do. In the first two years, we already had five, six, seven Top 10 hits, plus we had albums by Simply Red, Carla Bruni and Crazy Frog, even though the market was under a lot of pressure, we did okay.

“It was basically the worst time to start from scratch. But I had nothing else.”

We also did a lot of work for FIFA and UEFA, resulting in two No.1 hits from Bob Sinclar, Love Generation, and Shaggy’s Feel the rush.

But it was very stressful because of what was going on with the record business.

The market was contracting. The people who remained in the business were the ones who really knew what they were doing. A lot of people just got pushed out.

YOUR ROSTER AT EMBASSY IS VERY DIVERSE. HOW DO YOU DECIDE WHAT KIND OF ARTISTS YOU WANT TO WORK WITH?

It comes back to what I said in the beginning – do I like it? Do I see where this fits? Who else would like it? What’s the way to get there? There’s a lot of my personal taste included in it, the people that work for me, their taste, but then at the end of the day, it’s also an economic decision as well.

We worked with Avicii before he became big. And then he had that track Levels, and he got a massive advance for one track from Universal.

That’s when we knew we were out. Dance music became very corporate all of a sudden. That sector of the market just became too overhyped and too expensive. I couldn’t compete with advances of that size..

HOW DO YOU APPROACH ARTIST DEVELOPMENT, AND IS THERE ENOUGH HAPPENING TODAY?

There have always been two different ways of attracting talent. One is just sniffing it out somewhere – whatever was big in the clubs 25 years ago, everybody would try to sign. Now it’s whenever a big track is going viral on TikTok. It’s the same mechanism. Something is bubbling up, and everybody is trying to run after it.

So there has always been that [part of the A&R] world which has nothing to do with artist development.

But then there’s also the artist development side, and that has always been done by a combination of people. Sometimes people in both big and smaller labels sign people from scratch and develop them. I think it always goes in parallel – this “Okay, there’s something bubbling up, let’s throw money at it,” like Levels from Avicii, or “Yeah, I can see something in you, and let’s go a long way together.” I’ve always done both.

YOU’RE WEARING TWO LEADERSHIP HATS BETWEEN ZEBRALUTION AND EMBASSY MUSIC. HOW DO YOU BALANCE THESE ROLES?

I have a really good team within both companies. With my experience, I can make decisions a lot quicker and also have an idea of what we should not do. There are certain things we just don’t do, where sometimes people take forever to discuss something or revisit it again.

For example, for Zebralution, I think the UK is definitely a market where we should invest more time. So that’s why I’m here [in London] now.

We hired another person to do DSP Relations, because there’s no real independent digital distribution company in the UK anymore. They all got bought up, or they’re doing something else. So I think there’s really room for us.

In terms of digital distribution, we’re completely independent. We have our own supply chain.

FOR A MODERN DISTRIBUTION COMPANY, HOW IMPORTANT IS GEOGRAPHIC SPECIALIZATION VERSUS GLOBAL SCALE?

I don’t think having affiliates in every territory is necessary. From the beginning of a career, is it helpful for an artist or a smaller label? If you say, “I’m gonna be signed to a major in Finland or Portugal,” and the major has an office in every country – are they all gonna work on my release because I sing in English? No. If you don’t have any success in your home territory, no one at an affiliate in another country will look at it.

Whereas at an independent, they say, “Yeah, it’s great. It works internationally. I’m gonna hire a promoter in England or in France, because we want to make this record at least a little bit successful in these territories.”

SO IS IT IMPORTANT FOR AN ARTIST TO BREAK IN THEIR HOME MARKET BEFORE THEY CAN BREAK THEM GLOBALLY?

Absolutely instrumental. If it’s in a local language, the market [for that release] is only in that territory most of the time. But if it’s an international record, if it doesn’t work in your home market, no one would touch it anywhere else. There are exceptions, especially with talent from the UK coming to Germany. My wife signed Passenger, and that broke through . . Holland and Germany were the first markets, and he’s English.

“The UK market is sometimes a little bit too nervous about FOMO.”

I think the UK market is sometimes a little bit too nervous about FOMO. So sometimes music that is a little bit more mainstream gets neglected in the UK. That’s why some of these acts took the detour via continental Europe.

ZEBRALUTION IS ON TRACK TO BECOME A €100 MILLION-A-YEAR BUSINESS. WHAT GROWTH DRIVERS ARE FUELING THIS TRAJECTORY?

What drives it is that the market is still growing worldwide. In the more saturated traditional music markets, the growth this year is a lot slower than the last two, three years. So the higher growth comes from developing markets in Southeast Asia, like South Korea. Japan is also big.

“There will be price increases coming. Music is just way too cheap.”

We are growing in terms of signing new labels, signing artists directly, and also in the second half of our business, audiobooks. That business is really on fire. It’s growing by double digits. More people are willing to pay a certain amount for a subscription.

In Germany, close to 30  million people use a paid subscription. But there will be price increases coming. Music is just way too cheap. Of course, we had to come in cheap at the beginning of streaming when we were under fire from piracy.   Today the competition is more digital entertainment like gaming or Netflix, rather than piracy, so we can expect price rises.

YOUR BUSINESS MODEL HAS EVOLVED FROM WORKING WITH LABELS TO WORKING directly WITH ARTISTS. CAN YOU TELL US ABOUT THAT SHIFT?

When we started Zebralution, we always saw it as a distribution company for labels. But now the market is different, and artists do artist development first. So they come to a certain point where they just say, “Oh no, I don’t want to go and give my rights away. I just want distribution.”

For example, I have one guy right now that we signed. He’s 20 years old. He’s got 6.7 million followers on TikTok, 3.5 million followers on YouTube. Why would he go license his masters?

We’re now a distribution company for labels, but also individually for certain artists where they just wouldn’t want to sign to a label because they don’t need it.

DO YOU HAVE CONCERNS THAT UNIVERSAL’S ACQUISITION OF DOWNTOWN AND FUGA WILL IMPACT COMPETITION IN THE MARKET?

I think there’s a lot of competition. If you look at Merlin, there’s definitely a lot of capable, good distribution companies out there. Coming to Fuga… Fuga is a competitor to us, but they are more just a supply chain, a platform that delivers to the DSPs. We have our own supply chain, so we’re not fazed about Fuga being taken up by Universal, because we control our own delivery.

I know it will be tough for a lot of independents, asking, “Do I really want this to go through Universal? Do I want a Universal-owned company to do my royalties?”

WOULD THAT NOT BE A POTENTIAL BIG OPPORTUNITY FOR ZEBRALUTION  – THAT CLIENTS WHO DON’T WANT TO GO THROUGH A UNIVERSAL COMPANY WOULD LOOK TO OTHER OPTIONS?

Yes, absolutely. If the Fuga/Virgin/Downtown setup isn’t an appealing offering for independent labels, some might say, “That’s great, I’ll continue because I like the people,” but there will definitely be people out there who aren’t happy about it. We’ll make sure they know about us.

It’s not a secret – people are approaching us who are currently there, and we’re talking to them. They’re in situations where they don’t know if that new setup is right for them.

You know how it always is when a bigger company acquires a smaller one: The smaller clients are afraid they’ll just fall through the cracks. They say, “In this new big setup, I might only be client number 189, whereas in the small unit, I was a top 50 client.” So they might look for new opportunities.

AI IS POTENTIALLY FLOODING PLATFORMS WITH AI-GENERATED CONTENT. HOW IS ZEBRALUTION PREPARING FOR THIS SHIFT?

We get approached all the time by companies that say, “Oh, we want to do more Afrobeats music and start a YouTube channel with Afrobeats or with chill house sleep music.” We can spot it right away: If this is only AI music, we don’t enter into a contract.

“We don’t distribute labels where music is generated purely by AI.”

We’re pretty clear with that. We don’t distribute labels where music is generated purely by AI. Now, on a broader perspective, I don’t get the point of this status quo from the DSPs. Why do they let all that content in? Why isn’t there a bouncer at the door? In the physical world, just imagine that you have 400 trucks pulling up in front of your record shop every day and dumping 4 million CDs. A record shop owner would say : No, I don’t want these CDs. I don’t know who’s going to buy that.”

I think the pushback has to come from the DSPs, because then the business model for the companies that are flooding the market with this kind of music is gone.

IF YOU HAD UNLIMITED CAPITAL, WHAT WOULD YOU INVEST IN THE MUSIC BUSINESS?

From a label perspective, it’s acquiring rights.  I think I would like to buy some of the music that I adore. I would have signed Levels because we knew it was going to be a hit, but we didn’t have the money.

On the distribution side, I think I would [expand] faster, and I would go into markets like here in England, with a bigger UK team right away.

IF YOU COULD CHANGE ONE THING ABOUT THE MUSIC INDUSTRY, WHAT WOULD IT BE AND WHY?

I would definitely exclude a lot of content from the DSPs. What we also need is more real curation for music.

ON A PERSONAL LEVEL, WHAT DRIVES YOU IN THIS INDUSTRY TODAY, AND WHAT LEGACY DO YOU WANT TO BUILD?

What drives me now is not much different than what drove me 25 years ago: making records happen, having success with something that wasn’t super obvious. That hasn’t changed. Legacy is a very big word. Richard Branson had Virgin Records. He built a legacy.

For me, the legacy is that my companies deal with people with respect, with a lot of integrity, with respect to creativity.

I always compare myself to a gallerist. We need to bring people into the room, and they need to see the art. We don’t tell the artist, “Why don’t you paint a sunset? Because I can sell sunsets.”

It’s about having respect for creativity. That’s the legacy.

SoundExchange was independently formed in 2003 to build a fairer, simpler, and more efficient music industry through technology, data, and advocacy. The only organization designated by the U.S. government to administer the Section 114 sound recording license, SoundExchange collects and distributes digital performance royalties on behalf of 700,000 music creators and growing.

Music Business Worldwide

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