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.
