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!
"The labels are in a constant tug of war with digital streaming providers, who would rather their users listen to tracks that are cheaper to license, or podcasts with zero marginal costs. Artists feel like they can’t break through. Everyone feels squeezed" - Trapital's Dan Runcie points out in his latest memo as he's thinking about the music industry’s business model. "Music is always the first tech medium to be disrupted, but its companies are often the last to adapt to the changes. It could be time to flip that narrative, and it’s better late than never... Any significant change starts with the record labels" - Runcie believes, and offers a few ideas.
uper-producer and songwriter Jack Antonoff talked to the press after his Grammy win last night, addressing soaring concert ticket prices and the sustainability of pandemic-era touring for musicians. "The whole thing is incredibly tough. There's no reason why — if I can go online and buy a car and have it delivered to my house, why can't I buy a fucking ticket at the price that the artist wants it to be?... Let artists opt out of dynamic pricing. Stop taxing merch, and let artists sell tickets at a price that they actually believe. Don't turn a live show into a free market. That's really dirty. Charge what you think is fair". He also went into the motives behind the decision to become a musician: "We're a very easy group of people — historically, and not much has changed — to take advantage of because we didn't start doing it because of money."
Hipgnosis Songs Capital has announced that they have acquired Justin Bieber’s 100% interest in his Publishing Copyrights, Master Recordings and Neighboring Rights for Bieber’s entire back catalog, comprising over 290 titles released before December 31, 2021. The deal, worth $200 million, as reported by Billboard, is the largest rights sale for any artist of Bieber’s generation. It’s also Hipgnosis’ biggest acquisition to date.
"One of the most dramatic impacts that streaming has had on the record industry is been the democratization of listening" - Music Business Worldwide underlined a phenomenon that has happened in pop music in the streaming decade. The outgoing CEO of Warner Music Group, Steve Cooper puts it clearly, in numbers: “A decade ago, our Top 5 artists generated over 15% of our recorded music physical and digital revenue. In 2022, they generated just over 5%”. It's not just a decline in share of revenue; it’s a decline in actual revenue generated - Warner Music Group’s Top 5 recorded music artists in FY2012 look likely to have cumulatively generated a larger sum of annual digital and physical royalties (≈$274.5m) than WMG’s equivalent Top 5 artists generated in FY2022 (≈$193.4m). WMG’s overall recorded music royalties more than doubled in that period - $1.83bn in FY2012 vs. $3.87bn in FY2022. "As a result, in any given year, an ever-greater share of total streams is drifting away from the Top 10 biggest hits, and towards a much wider array of ‘middle class’ artists with significant, but not necessarily chart-bursting, fanbases" - MBW points out.
The global recorded music industry saw its wholesale revenues increase by USD $4.0 billion in 2021 to $25.9 billion, according to IFPI. That sum is the largest in history, MBW reports. Also, that $4 billion year-on-year increase was much higher than in the previous years - YOY growth in 2020 was $1.5bn, and in 2019 it was $1.5bn. Annual paid-for streaming revenues bounced up by $2.2 billion to $12.3 billion last year. Revenues from physical formats – CD and vinyl combined – grew to $5.0 billion in 2021, up from $4.3 billion in 2020. Ad-funded streaming platforms or free streaming, including video services, generated $4.6 billion in 2021, up 31% year-on-year.
Employment in the UK music industry plunged by 35% from 197,000 in 2019 to 128,000, UK Music unveiled in its This Is Music 2021 annual report. The report also shows that in 2020 music industry’s economic contribution fell 46% from £5.8bn to £3.1bn in 2020. Launching the report, UK Music called on the Government to introduce tax incentives and other employment-boosting measures to help the sector rebuild after the pandemic.
A number of digital service owners – including Spotify, Apple, Amazon, and Google – are trying to cut the amount of money they pay songwriters in the US to the “lowest royalty rates in history”. The National Music Publishers’ Association, on the other side, is looking to raise the current rate up to 20% of a streaming service’s annual revenues (it's 15,1% at the time). Music Business Worldwide tries to find out whether the music streaming services can actually afford to pay artists more.
Across 70 major and independent music companies, just 13.9% of top executives across were from underrepresented racial/ethnic groups, 4.2% were Black, and 13.9% were women - an authoritative new study from the USC Annenberg Inclusion Initiative has found. Across the members of the senior management teams at nine major companies as shown on their websites, only 18.8% of executive board members were from underrepresented racial/ethnic groups, 8.5% were Black and 30.8% were women. The report notes that half of the U.S. population are women, 14% are Black, and 40% identify with an underrepresented racial/ethnic group, LAist reports.
Video games is a sector which targets fundamentally the same market as music, and has done so outrageously well over the past two decades, Music Business Worldwide argues and looks to find lessons for music. MBW picks out five potential areas:
1. Embracing technology - every great new technology ultimately expands the market for entertainment
2. Diversity of channels - the increasingly overwhelming dominance of premium streaming means music is well on its way to being effectively a single format business again
3. Proactive marketing at all demographics - music may be universal but only a minority have an active commercial relationship with it
4. Deal with the limitations of exclusive rights - copyright needs to be used to facilitate new ideas, rather than to block them
5. View the consumers as an equal - more than ever, popular culture is about the fan as much as it is about the art itself
6. Music needs to embrace its future - the example of the games business shows the benefits of developing a portfolio of channels to market
A coalition of advocacy groups representing musicians and entertainers voiced their support for a new California state bill that seeks to limit the length of contracts for recording artists to seven years, Billboard reports. The FAIR Act would remove a damages provision that commonly discourages artists from leaving record deals after seven years if they have undelivered albums, even though they are legally permitted.
Michael Gudinski, the globally respected Australian music entrepreneur and founder of Mushroom Group, has died aged 68, according to Hollywood Reporter. He worked with artists including Kylie Minogue, MacKenzie Theory, the Skyhooks, the Choirboys and many more. Today, Mushroom Group comprises a collective of independent record labels, such as Liberator Music, Liberation Records, and Bloodlines.
Spotify, Apple, Amazon, YouTube, Pandora and 15 other digital service providers paid out a total of $424.38 million to the Mechanical Licensing Collective in accrued historical unmatched royalties, Forbes reports. It's 10 years of royalties DSPs have collected but couldn't match countless songs to their writers and publishers, so they just - sat on that half a billion dollars. In addition to their payments, the DSPs also delivered more than 1,800 data files, which contain in excess of 1.3 terabytes and 9 billion lines of data. The MLC is now reviewing and analyzing the data in order to find and pay the proper copyright owners.
The US music industry revenue grew to $113 billion in 2018 and generated an additional 50 cents of revenue on every dollar earned for adjacent industries such as tourism, hospitality and marketing, which means it contributed a total of $170 billion to the economy, Billboard reports. Of the total sum, employee earnings were over $88 billion.
Performers and songwriters "make all this stuff and we are last in the chain when it comes to remuneration", Blur drummer David Rowntree - now a city councillor - told BBC about unfair music streaming payments to songwriters and artists. "If something isn't done about it, that is terminal for the music industry" he said - "bands like mine will be fine, but the next generation of bands will be hit - bands living hand-to-mouth like we did for the first 10 years".
Sony’s recorded music and music publishing operations grew 13% to 187.11 billion yen in the company’s fiscal third quarter, which ended December 31, from 165.66 billion yen in the year-earlier period, Billboard reports. Additionally, Visual Media/Platform grew by 54.8% to 74.62 billion yen from 48.21 billion yen, thanks to the 'Demon Slayer' movie. The company posted 59.69 billion yen in operating income, a whopping 64.7% increase over the prior year’s total of 36.25 billion yen.
Filmmaker Jed I. Rosenberg directed a documentary 'System Shock' which provides an intriguing and insightful overview of how the MP3 set in motion a series of events that completely disrupted the music industry. The bottom line of this docu is that the MP3 technology nearly destroyed the music industry, but that its principle made much more money elsewhere.
Scottish postman Nathan Evans has signed a record label with Polydor and quit his day job, a mere month after storming TikTok with sea shanties. His rendition of 'The Wellerman' literary exploded in just a matter of weeks, and it had also made people interested in sea shanties as well. The 26-year-old said it goes to show that if you keep going anything can happen, BBC reports.
The concert industry in North America alone stands to lose more than $30 billion in 2020, Pollstar reports. Touring and live performances lost $9.7 billion, with the rest of the $30 billion deficit coming from things like sponsorships, ticketing costs, concessions, merch, and ancillary businesses like transportation, restaurants, and hotels.
"For an independent artist with a dedicated audience, the [streaming] system doesn’t work. And neither does it work for loyal fans. If you are a dance fan, jazz fan, or metal fan, the artists you love and listen to are unlikely to see a penny of your subscription. Streaming is the future, but to deliver a rich and culturally diverse musical future, non-mainstream music needs to be able to keep its head above water... Now we’re asking the government to intervene and... grant musicians rights to income from streaming, so they can earn a percentage from every stream regardless of the system" - Nadine Shah, who had to move back to her parents, writes in the Guardian about a broken system.
The current system of payment for music streaming is threatening the future of music in the UK - Elbow’s Guy Garvey said in front of the UK parliament committee on the first day of an inquiry into the impact of streaming on the music industry. Garvey, and musicians such as O’Brien of Radiohead, Tom Gray of Gomez, and Nadine Shah have put forward equitable remuneration, increased transparency and user-centric streaming models as ways in which the industry could be reformed and made fairer for artists.
"Spotify has to keep three competing interest groups - investors, audiences, rights-holders and creators - happy or it does not have a business. As it gets bigger and more established, however, it feels that it can afford to make moves that may antagonise rights-holders / creators and audiences but that will keep investors happy" - Music Industry Blog writes in an analysis of the new Discovery Mode Spotify announced this week (offers artists and labels more play for lower royalty rate). "The logic is that Spotify is getting so big that those two audiences cannot do without it (the ‘too big to fail’ stage) but that investors have many other places to put their money. So, investors are more ‘at risk’ than the others".
The excellent Cherie Hu highlights three major themes not just in how big-tech music strategies are constructed, but also when and why their execution falls short. Her latest blog post:
Vice started a series called Unpaid Royalties about the myriad ways that the music industry exploits Black artists, and what's being done to change them. They started with the three most common types of contracts an artist might sign today, offering a window into how the “bad deal” isn’t an anomaly - it’s by design.
