Welcome to Music Enterprise Worldwide’s weekly round-up – the place we be certain that you caught the 5 greatest tales to hit our headlines over the previous seven days. MBW’s round-up is supported by Centtrip, which helps over 500 of the world’s best-selling artists maximize their revenue and cut back their touring prices.
The beginning of a brand new yr is commonly a time when enterprise leaders articulate their plans for the approaching yr, as a approach of focusing their colleagues on frequent objectives, and reassuring them that there’s, certainly, a grand imaginative and prescient behind the day by day grind.
Grainge unveiled a particular imaginative and prescient for the brand new yr in his memo to workers: After final yr’s (to this point) profitable effort to shift in direction of an “artist-centric” royalty fee mannequin on the streaming companies, the approaching yr at UMG might be centered on “strengthening the artist-fan relationship by superfan experiences and merchandise”.
Kyncl, in his personal memo to WMG workers, set out a broad imaginative and prescient for the strategy Warner ought to take over the following 10 years. Among the many core areas of focus Kyncl recognized are rising engagement with music, rising the worth of music, and evolving how WMG’s staff work collectively.
The previous week additionally introduced the primary of the brand new yr’s information and statistical releases wanting again on 2023. Amongst them was market monitor Luminate’s Yr-Finish Music Report, which discovered that, of the 184 million music tracks on audio streaming companies that it tracked through ISRCs, 158.6 million of them, or 86.2%, bought fewer than 1,000 performs. And an enormous 45.6 million, or 24.8%, bought no performs in any respect.
One other information level got here from the UK’s Leisure Retailers’ Affiliation, which reported that annual shopper spending on music streaming subscriptions within the UK in 2023 rose 9.8% YoY to GBP £1.866 billion (USD $2.32bn). Spotify‘s 10% enhance within the worth of a person Premium subscription final summer time had one thing to do with that, little doubt.
Lastly, SoundCloud confirmed it could promote itself this yr, however provided that its board can discover the best “long-term” purchaser. CEO Eliah Seton advised MBW that there’s a “universe of alternatives” in entrance of the corporate, which attained profitability final yr.
For a minimum of the previous yr, music business leaders have voiced unease in regards to the flood of tracks hitting streaming companies.
Some fear that, below streaming’s dominant pro-rata royalty system, skilled and in style artists’ share of the royalty pie is being diluted by funds going to low-quality tracks.
Others are involved that high-quality artists will merely be drowned out by this tidal wave of latest materials – a worry heightened by information final yr that an estimated 120,000 new tracks are being uploaded to streaming companies every single day.
Such concerns have now impacted the insurance policies of main streaming companies – not least Spotify.
In a transfer seemingly influenced by Common Music Group’s ‘artist-centric’ technique, from this quarter (Q1 2024) onwards, Spotify will now not pay royalties to tracks which have attracted fewer than 1,000 performs on its platform within the prior 12 months.
One very related query, then: Just what number of tracks on streaming companies as we speak are receiving fewer than 1,000 performs per yr – and what number of are getting no performs in any respect?
The reply, in response to a brand new report from market monitor Luminate, is a heck of loads…
July 2023 marked the primary time in its 15-year historical past that Spotify elevated its flagship subscription worth level within the UK (and plenty of different territories).
Since that time, a person month-to-month Premium subscription to Spotify within the UK has value GBP £10.99, versus its earlier worth of £9.99; the platform’s Household Plan tariff has moved from £16.99 monthly to £17.99 monthly.
This tweak in Spotify’s pricing was sure to have a major impact on the UK market’s worth: Knowledge captured by the Competitions and Markets Authority (CMA) exhibits that in December 2021, Spotify’s market share of all music streaming’s month-to-month energetic customers (‘free’ plus ‘premium’) within the UK stood at over 50%.
Now, for the primary time, we will see the affect of Spotify’s 2023 worth rise inside official business numbers for the UK (the world’s third-largest recorded music market, in response to IFPI).
The UK’s Leisure Retailers’ Affiliation (ERA) is a commerce org whose members embody the likes of Spotify, Amazon, YouTube, and SoundCloud.
On January 9, ERA printed recent information exhibiting that annual shopper spending on music streaming subscriptions in 2023 rose 9.8% YoY to GBP £1.866 billion (USD $2.32bn)…
In the beginning of 2023, Common Music Group Chairman and CEO Sir Lucian Grainge known as for a brand new streaming payoutmannequin in his New Yr word to the corporate’s world workforce.
Over the course of final yr, that plan turned a actuality, with a UMG-approved ‘artist-centric’ mannequin introduced by Deezer in September.
The world’s largest subscription music streaming platform, Spotify, can be embracing parts of Common Music Group’s ‘artist-centric’ royalties mannequin, as a part of main adjustments coming to the service this quarter.
Seeking to the remainder of 2024, in response to Grainge, UMG’s “pioneering artist-centric technique will prolong its attain”.
His newest feedback arrive in a New Yr memo for 2024, issued to the corporate’s world workforce on Tuesday (January 9), and obtained by MBW.
In it, Grainge revealed the subsequentfocus of UMG’s technique.
“We first centered on a fairer solution to allocate the streamingpie amongst actual artists by addressing fraud and different elements that deprive artists of their simply compensation,” he defined.
“The subsequent focus of our technique might be to develop the pie for all artists, by strengthening the artist-fan relationship by superfan experiences and merchandise.”
Grainge stated that UMG is “already in superior discussions with [its] platform companions concerning this section and can have extra to announce within the coming months…”
The music business of 2024 is in a really totally different state of well being than it was a decade in the past: world recorded music commerce revenues in 2014 have been lower than half the scale that they’re as we speak, in response to IFPI information.
However what do the subsequent ten years of the worldwide music enterprise maintain for the business? And the way can its greatest gamers guarantee they’re able to benefit from it?
On Monday (January 8), Warner Music Group CEO Robert Kyncl outlined his plans for WMG to do exactly that – in an inner word despatched to the corporate’s world workforce.
Inside the memo, obtained by MBW, Kyncl highlighted three key areas that he stated WMG will give attention to in 2024, together with rising engagement with music; rising the worth of music, and evolving how WMG’s staff work collectively.
“As we begin the brand new yr, one factor I’d like us all to recollect is that our world has essentially modified,” Kyncl advised WMG’s workforce.
He added: “The music enterprise is in a really totally different place than it was ten years in the past. Now, we’re able of energy. That’s the time to get forward for the longer term…”
It’s official: SoundCloud might promote this yr – however provided that the agency’s board can discover the “proper long-term” purchaser. In any other case? It would do one thing altogether totally different.
In dialog with MBW, SoundCloud’s CEO, Eliah Seton, careworn that there’s a “universe of alternatives” now out there to the corporate he leads, after it turned worthwhile in 2023.
“Changing into a worthwhile development firm was mission-criticial to lastly realizing the chance that’s out there to SoundCloud,” stated Seton. “[By becoming profitable] we’ve put ourselves within the driver’s seat. For the primary time, we management our personal future”.
When pressed on what that ‘future’ would possibly appear like – following experiences that SoundCloud has began partaking funding banks over a possible sale – Seton added: “To understand the industrial alternative forward of us, now could be the time to think about all potential strategic options.
“Which will imply SoundCloud being acquisitive, [buying] issues ourselves. It might imply elevating new capital; it could imply [striking] new strategic or monetary partnerships, or a mixture of the 2. Or it could imply the sale of the corporate to the best long-term associate…”
