Welcome to Music Enterprise Worldwide’s weekly round-up – the place we ensure 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 earnings and cut back their touring prices.
The beginning of a brand new yr is usually a time when enterprise leaders articulate their plans for the approaching yr, as a method of focusing their colleagues on widespread objectives, and reassuring them that there’s, certainly, a grand imaginative and prescient behind the every 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 cost mannequin on the streaming providers, the approaching yr at UMG will probably be centered on “strengthening the artist-fan relationship by means of superfan experiences and merchandise”.
Kyncl, in his personal memo to WMG workers, set out a broad imaginative and prescient for the method Warner ought to take over the subsequent 10 years. Among the many core areas of focus Kyncl recognized are growing engagement with music, growing 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 trying 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 providers that it tracked through ISRCs, 158.6 million of them, or 86.2%, acquired fewer than 1,000 performs. And an enormous 45.6 million, or 24.8%, acquired no performs in any respect.
One other information level got here from the UK’s Leisure Retailers’ Affiliation, which reported that annual client 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 precise “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 no less than the previous yr, music business leaders have voiced unease concerning the flood of tracks hitting streaming providers.
Some fear that, underneath streaming’s dominant pro-rata royalty system, skilled and well-liked 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 recent materials – a concern heightened by information final yr that an estimated 120,000 new tracks are being uploaded to streaming providers day by day.
Such concerns have now impacted the insurance policies of main streaming providers – 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 providers at the moment are receiving fewer than 1,000 performs per yr – and what number of are getting no performs in any respect?
The reply, in line with a brand new report from market monitor Luminate, is a heck of quite a bit…
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 price GBP £10.99, versus its earlier worth of £9.99; the platform’s Household Plan tariff has moved from £16.99 per thirty days to £17.99 per thirty days.
This tweak in Spotify’s pricing was certain 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 are able to see the impression of Spotify’s 2023 worth rise inside official business numbers for the UK (the world’s third-largest recorded music market, in line with 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 contemporary information exhibiting that annual client 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 observe to the corporate’s international 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 also be embracing parts of Common Music Group’s ‘artist-centric’ royalties mannequin, as a part of main adjustments coming to the service this quarter.
Trying to the remainder of 2024, in line with Grainge, UMG’s “pioneering artist-centric technique will lengthen its attain”.
His newest feedback arrive in a New Yr memo for 2024, issued to the corporate’s international 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 strategy to allocate the streamingpie amongst actual artists by addressing fraud and different points that deprive artists of their simply compensation,” he defined.
“The subsequent focus of our technique will probably be to develop the pie for all artists, by strengthening the artist-fan relationship by means of superfan experiences and merchandise.”
Grainge mentioned that UMG is “already in superior discussions with [its] platform companions concerning this section and may have extra to announce within the coming months…”
The music business of 2024 is in a really completely different state of well being than it was a decade in the past: international recorded music commerce revenues in 2014 had been lower than half the dimensions that they’re at the moment, in line with 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 ready to profit from it?
On Monday (January 8), Warner Music Group CEO Robert Kyncl outlined his plans for WMG to just do that – in an inner observe despatched to the corporate’s international workforce.
Inside the memo, obtained by MBW, Kyncl highlighted three key areas that he mentioned WMG will concentrate on in 2024, together with rising engagement with music; growing 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 basically modified,” Kyncl advised WMG’s workforce.
He added: “The music enterprise is in a really completely different place than it was ten years in the past. Now, we’re ready of power. That’s the time to get forward for the longer term…”
It’s official: SoundCloud could promote this yr – however provided that the agency’s board can discover the “proper long-term” purchaser. In any other case? It’d do one thing altogether completely different.
In dialog with MBW, SoundCloud’s CEO, Eliah Seton, confused 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 progress firm was mission-criticial to lastly realizing the chance that’s out there to SoundCloud,” mentioned 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’ may seem like – following reviews that SoundCloud has began participating funding banks over a possible sale – Seton added: “To appreciate the industrial alternative forward of us, now could be the time to think about all potential strategic alternate options.
“Which will imply SoundCloud being acquisitive, [buying] issues ourselves. It could 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 precise long-term associate…”