A great show by CBC News about the future of music and the effect technology has on it. CBC News Explore’s BIG MUSIC looks at how Spotify, Ticketmaster, LiveNation, and Tik Tok are changing the very nature of music. It goes way back to the very beginning of recorded music and ownership of music, to the current moment of non-ownership. Great stuff!
There were 589 million users of paid subscription accounts at the end of 2022, according to IFPI, the organization that represents the recorded music industry worldwide, MBW reports. This means that 7% of the world's population has a paid music subscription account. Global recorded music revenues grew 9% year over year in 2022, to reach $26.2 billion, IFPI's also noted in their Global Music Report 2023. Streaming continues to be the driving force behind the overall growth. Subscription audio streaming revenues increased by 10.3% year over year to $12.7 billion in 2022, with total streaming - including both paid subscription and advertising-supported - grew by 11.5% YoY to reach $17.5 billion in 2022, and accounted for 67% of total global recorded music revenues. Last year marked the global music market’s eighth consecutive year of growth.
"A lot of the discussion on music being under-monetized has focused on streaming rates, Spotify’s pricing, and equity stakes in streaming services. It’s all valid, but it’s one piece of the broader opportunity" - Trapital's Dan Runcie points out in his latest memo, adding that artists "have more opportunities to buy and sell products at every level of the demand curve. An artist can release music on Spotify, promote their tour with AEG Presents, sell tickets on Ticketmaster, perform at Rolling Loud, sell an NFT on OpenSea, sell VIP access on Patreon, and host members-only live streams on Twitch. For most artists, each part of their demand curve is supported by a different company". Runcie sees opportunities in gamified features and collectibles, user-generated content, A.I. as a service, and in-app purchases in digital environments.
Global recorded music revenues grew 6.7% year over year in 2022 to reach $31.2 billion, according to a new report from Midia Research. This marked a significant drop in estimated 24.8% YoY growth for 2021 versus 2020, MBW reports. Streaming accounted for 64.1% of all recorded music industry revenues in 2022, with revenues estimated by Midia to have grown 8.3% YoY, or by $1.5 billion, to $20 billion in 2022.
The MBW breaks down the numbers Spotify shared in their Loud & Clear report about how much it pays in royalties, and to whom. The number of artists generating $50,000 or more a year stood at 17,800 in 2022, up by 1,300 from the prior year. However, in 2021, that same category grew year-on-year by 3,100, more than double its rate of increase in 2022. The $50k is the amount "generated" by artists, their royalties will inevitably be reduced once they’ve paid their distributor/publishing admin company/publisher/record company a fee, commission, recoupment charge, etc. Still, it's a monthly paycheck allowing the musician a decent living from cre
Recorded music revenues in the US - money spent on streaming subscriptions, as well as physical and digital music - grew 6.1% YoY in 2022 to $15.9 billion, the market’s seventh consecutive year of growth, MBW reports. Streaming grew 7.3% to a record high $13.3 billion in revenue and collectively accounts for 84% of revenues. Wholesale revenues – the money that makes its way back to record labels, distributors and artists – were $10.3 billion in 2022, the first time they exceeded $10 billion in the market. Also, retail revenues from paid subscription services (Spotify, Apple Music etc) grew 8% to $10.2 billion in 2022, exceeding the $10 billion mark annually for the first time. Revenues from vinyl records grew 17.2% to $1.2 billion – marking the format’s 16th consecutive year of growth - accounting for 71% of physical format revenues. For the first time since 1987, vinyl albums outsold CDs in units - 41 million vs 33 million.
Spotify revealed on their Stream On event that through December 31, 2022, it had paid more than €34 billion in royalties to record labels, music publishers, and other rights holders since launch, MBW reports. In 2021 the streaming giant paid €7+ billion, which was up from €5+ billion in 2020, which means it will likely reach the €40 billion benchmark this year. Spotify says that “nearly 70%” of every dollar it generates from music “is paid back as royalties to rightsholders, who then pay the artists and songwriters, based on the agreed terms”. Spotify also revealed that in 2022, as many as 10,100 artists from over 100 countries worldwide generated at least $100,000, and 1,060 artists generated more than $1 million.
"Music is one of the most valuable forms of self-expression out there" - Trapital's Dan Runcie insists in his latest memo. He also shares his thoughts on what the music industry can learn from gaming and monetize its popularity:
US satellite radio service SiriusXM is reducing its workforce by 475 roles, or 8% of its total staff. At the end of 2022, SiriusXM had 5,869 full-time and part-time employees, 5% more that the prior year. SiriusXM announced layoffs are “critical for us to take the right steps now to secure the long-term health and profitability of our business.” SiriusXM posted annual revenues of USD $9.00 billion for the year 2022, up 4% YoY. Its pre-tax profit in 2022 weighed in at $1.61 billion, up 5% year-on-year.
Music YouTuber Rick Beato shares his thoughts in his latest video about how creators crushed the music business, he himself being a creator now, and part of the music business previously. He goes back to where it all began - file-sharing services and social media. However, he insists that it's still an opportunity.
"With the influx of cash that’s led to a music catalog buying spree over the past few years, where does all of this money come from?" - The Bag looks at the other side of the headline. Musicians have become much richer in the past five years since Hipgnosis kicked off this catalog boom. The biggest financiers:
Blackrock, who invested hundreds of millions of dollars via Influence Media Partners,
Litmus Music launched with $500 Million in funding from Carlyle Global Credit
Hipgnosis Song Management raised $1 Billion from Blackstone
Out of the pandemic and the shutdown, Trapital's Dan Runcie looks back at the ideas and trends that have started back at the height of the isolation age. He believes that some are destined to never achieve substantial success, such as Clubhouse, Bored Ape Yacht Club, artists immersed in digital environments, Community... A few might have a future - DEI initiatives that lead to real change, Verzuz, NFTs, while some are certain to stay - music rights sales and acquisitions, TikTok and short-form video, high prices for live entertainment...
Spotify’s number of premium subscribers increased to 205 million as of December 31st, the company announced in this week's earnings release, representing a 14 percent increase year-on-year. That helped increase its monthly active users to 489 million, a 20 percent rise. On the other hand, Spotify posted €3.17 billion in revenue, up 18% from the year-earlier period, and a net loss of €270 million, Variety reports. Spotify is widely considered to be the largest music streaming service in the world, and the first one to reach 200 million subscribers.
Primary Wave Music has acquired the music rights of Robby Krieger and the late Ray Manzarek of the legendary US rock band, The Doors, Variety reports. Primary Wave says that the “monumental acquisition” includes Robby Krieger and the estate of Ray Manzarek’s interests in The Doors’ music publishing catalog, recordings, trademarks, and merchandise rights and income, among other things. Warner Music Group has struck what it calls a “milestone deal” with legendary British progressive rock band YES. The deal sees Warner acquire the recorded music rights and income streams from the band’s “complete” Atlantic Records era catalog (Variety).
Spotify has announced today (January 23) that it is in the process of reducing its employee base by “about 6% across the company”. At the end of Q3 2022, Spotify employed 9,808 full-time employees globally - six percent of 9,808 is 588, the MBW reports. In the last six months, music and tech companies have been hit with a series of layoffs. SoundCloud started reducing its global workforce by approximately 20%. BMI will lay off 10% of its workforce. Alphabet is letting 12.000 workers go, Microsoft 10,000, Amazon is cutting its workforce by 18,000...
"It’s great to see the artists who turn down deals because they have the means to maximize the asset on their own. They likely understand its full value... But keeping the asset just to 'keep it,' or shaming others who decide to sell, may be missing the forest from the trees. This isn’t about selling grandma’s house. This is about maximizing value for an asset that will inevitably lose its value 40 years from now. By then, those masters may be more valuable as family heirlooms than as consistent revenue-generating assets. But it all depends on the artist’s goals" - Trapital's Dan Runcie offers some views on (not) selling music catalogs. He gives some recent examples - Dr. Dre, Diddy, Justin Beber...
Trapital's Dan Runcie is looking into Diddy's businesses with tequila and cannabis, building upon a successful venture with Ciroc vodka. Some interesting thoughts by the entertainment/business analyst: "Tequila is a less mature liquor than vodka, but U.S. tequila sales may soon outpace vodka as the #1 spirits category. Tequila has different drinking occasions, which shifts the marketing and messaging... Cannabis is a more complex industry. Many Black business leaders want in to help reset the narrative. Historically, the criminalization of weed affects Black people disproportionately, but the legalization of weed has benefitted white business owners the most".
A very interesting interview in GQ magazine with Lyor Cohen, Google and YouTube’s global head of music, about short-form video. "Kids are being hit with the tidal wave of choice and it's unpleasant. You cannot become an adult until you find the soundtrack of your youth. You don't know what partner to hook up with, what clothes to dress in and what crew to run with. It helps curate the direction... It’s a ‘Complicated Age’, but I think short-form video is the solution for it all... It’s going to simplify everything. Kids now want to participate. When I was a kid, it was OK for me to break of record open, put a needle on, smoke a joint and listen. Now, that doesn't work for them. Short-form video means they can be part of the zeitgeist without, 'My life is great and your life sucks'. It’s the new version of rummaging through the crates, but my competition wants them in that ‘dumb stupid mode". Cohen is a businessman, but he still nurtures the passion for music: "Being surprised and blown away by music is sticky and powerful".
Music funding platform beatBread has just closed a $100 million institutional fund with asset manager Variant Investments to do so, MBW reports. Launched in November 2020, the company has made over 500 advances to artists and labels, ranging from $1,000 to as much as $2 million per artist for a limited share of revenues on catalog, and, if the artist chooses, on new unreleased music. These advances are repaid from a share of an artist’s streaming and airplay revenues, over a period of the artist’s choosing.
In 2021, music copyright was worth $39.6bn, up 18 percent from 2020, and considerably more than 2011, when global value of recorded music was $28.3bn. Labels are seeing 65% of all the value, whereas publishers are at 35%. Another number - streaming is making up 55% of the total. Tarzan Economics has all the numbers.
If you run a business that depends on creativity, you can’t punish the creators without consequences. Sometimes it takes a while for the cycle to play out, but it always plays out the same way - music writer Ted Gioia points out in his latest, optimistic post about the future of the creative economy. He believes things are about to change for the better for musicians, writers, and other creative professionals.
Here are a few of his predictions:
- Record labels are offering far more attractive terms to musicians than ever before
- Artist-friendly platforms are the future of music
- Single individuals will have more impact in launching new artists than major record labels or streaming platforms
musicians: "One is left with the impression of live music very quickly switching from a wheel that raises artists to a wheel that razes them. The paradox of live is that it is squeezing the very life out of musicians. Live = death... Previously the bulk of what the live business had to worry about was breaking even; now everybody in live must be focused on preventing everything and everyone in the ecosystem from breaking down"
Approximately 100,000 fresh tracks are now being uploaded to music streaming platforms every day, according to Universal Music Group CEO and Chairman, Sir Lucian Grainge, and the outgoing CEO of Warner Music Group, Steve Cooper, the Music Business Worldwide reports. Another big milestone - Apple Music confirmed that the total number of tracks on its platform has now surpassed 100 million.
Music rights company Concord has bought the publishing and recorded music catalogs of Tony Banks, Phil Collins and Mike Rutherford, as well as the publishing and recorded music catalog from their years in the band Genesis. The Wall Street Journal reports that the ‘megadeal’ is ‘valued at over $300 million’. These catalogs contain songs such as 'The Lamb Lies Down On Broadway', 'Sussudio', 'Against All Odds', 'All I Need is a Miracle', 'In the Air Tonight', 'I Can’t Dance', 'That’s All', 'Land of Confusion', 'The Living Years', 'Invisible Touch' and other hits.
Justin Timberlake has sold his song catalog - copyrights on musical compositions he wrote - to Hipgnosis Song Management. Hypgnosis bought 100 percent of Timberlake’s catalog, which includes hits such as 'SexyBack', 'Cry me a River', 'Rock Your Body', 'Suit and Tie' and 'Can’t Stop the Feeling', MBW reports. Justin Timberlake's sales are currently in excess of over 150 million, including 88 million as a solo artist and 70 million with NSYNC. He has 26.5 million monthly Spotify listeners, over 6.4 billion video views, and his total YouTube subscribers fast approaching 10 million.
The biggest music streaming providers in China, Tencent Music and NetEase Cloud Music, added 4.0 million paying music users quarter-on-quarter in Q1 2022, and 7.8 million respectively. TME’s official ‘paying online music’ user-base now stands at 80.2 million customers, while NetEase now stands at 36.7 million customers. Spotify net-added 2 million paying customers to its service in Q1 2022, and now stands at 182 million Premium subscribers outside of China. When it comes to finance, however, the numbers go in the Swedish company's direction - its Premium subs business generated €2.379 billion (USD $2.67bn) in the first quarter of 2022. Tencent Music online music services revenue fell to USD $413 million, while NetEase Cloud Music’s online music services generated USD $140m. MBW has all the numbers and comparisons.
Drake has generated more U.S. on-demand streams in 2021 than the total number of pre-1980 records combine, according to Billboard. The Luminate numbers show that tracks from the ’50s to 1979 made up only 0.6% of streams last year, whereas Drake, whose first album came out 15 years ago, was responsible for 0.8% of all streams in 2021. Across the 988.154 billion U.S. streams from 2021, the catalog business made up 69.8% of the album consumption units in 2021, a 4.1% increase from 2020. Of that number, 90% of these units were from records relea
Last year 52,600 artists generated over $10,000 on Spotify, the platform has announced, the MBW reports. 15,140 of these 52,600 artists – around 28% – uploaded their own music. Of the 52,600 artists who generated more than $10k last year:
Spotify paid out $7 billion (across publishing and recorded music) to music industry rights-holders.
Spotify has struck a major four-year sponsorship agreement with Barcelona worth $310 million. MBW calculated that in order for an artist to generate $310 million in recorded music royalties on the Spotify platform – at $0.00348 per-stream average rate – they would need to rack up a gigantic 89.08 billion plays on the service. No artist in the history of Spotify has ever, across their entire catalog, attracted that many plays. The most cumulative streams ever recorded by a single artist on Spotify is Drake with 62.84 billion.
Universal Music Group saw its overall annual revenues across publishing, records, and merch hit €8.50 billion ($10.03 billion) last year, surpassing the USD $10 billion mark for the first time in history, Music Business Worldwide reports. That figure was up 17.0% year-over-year in constant currency. Also, Universal’s total revenues on a Euro basis in 2021 (€8.50bn) were more than double the size of UMG’s annua
