Streaming Drives U.S. Recorded Music to Record $17 Billion

U.S. recorded music revenue grew 8 percent in 2023, to an estimated record high of $17.1 billion at retail. It was the eighth consecutive year of growth, according to the RIAA, which says streaming continued to be the biggest driver, notching new heights of paid subscriptions, robust growth in ad-supported listening, and healthy increased contributions from new platforms. Streaming accounted for 84 percent of retail revenue, at $14.4 billion including from 96.8 million paid subscriptions. On the supply-side, wholesale revenue grew 7 percent to $11 billion, also a record. Continue reading Streaming Drives U.S. Recorded Music to Record $17 Billion

Spotify to Introduce New Version of Its Royalty Payout Model

Spotify will reportedly change its royalty payout formula beginning next year in an effort to cut out scammers and more equitably distribute funds among “legitimate artists” and rightsholders. As a result, it is estimated that about $1 billion in royalty payments will be redistributed over the next five years. The streamer is considering setting a minimum number of annual streams to qualify for royalty payments — which is generating controversy — as well as sanctions on distributors and labels determined to be fraudulently manipulating streams, and adding a playtime threshold that targets so called “noise tracks” designed to emulate music. Continue reading Spotify to Introduce New Version of Its Royalty Payout Model

Streaming Drives Music Revenue in the U.S. to a New Record

Recorded music revenues in the United States reached $8.4 billion for the first half of 2023, an all-time high for the period that translates to a 9.3 percent increase, according to the Recording Industry Association of America (RIAA). Streaming continued to thrive, accounting for a whopping 84 percent of the six-month revenue total, or $7 billion. Total revenue from paid subscription services grew 11 percent to $5.5 billion, nearly double the growth in the number of individual paid accounts, which rose by just over 6 percent year-over-year, to an average of 95.8 million accounts. Continue reading Streaming Drives Music Revenue in the U.S. to a New Record

Universal, Deezer to Reinvent Music Streaming Royalty Model

Universal Music Group and Deezer have set Q4 as the launch date for a new, artist-centric streaming royalty model the companies jointly developed. Indie streaming platform Deezer will launch the concept model in its native France in Q4 2023. The companies conceived the new compensation methodology as part of a previously announced collaboration, using “deep data analysis” for an outcome they say “better reflects the true value of artist-fan relationships.” Calling streaming “the most significant technology advancement in music in many years,” the partners conclude “a flood of uploads with no meaningful engagement” has necessitated reassessment. Continue reading Universal, Deezer to Reinvent Music Streaming Royalty Model

Spotify Reports Q4 Loss Despite 20 Percent Growth in Users

Spotify reported strong net growth of 33 million new monthly active users but another quarterly loss for Q4 2022, culminating a period during which the company invested heavily in podcasts. The news came amidst layoffs and an announcement that the company’s chief content and advertising officer Dawn Ostroff will depart. Spotify CEO Daniel Ek conceded with regard to the aggressive podcast growth that he “probably got a little carried away and overinvested relative to the uncertainty we saw shaping up in the market.” Given the result — 20 percent global user growth, to 489 million MAUs — Ek concluded “I would do it again.” Continue reading Spotify Reports Q4 Loss Despite 20 Percent Growth in Users

Amazon Offers Expanded Music and Podcast Catalog Ad-Free

Amazon Music has taken a major leap forward, expanding its catalog from about 2 million to 100 million songs that will be made available ad-free to Prime members as part of their existing $139 annual membership fee. Starting this week, Prime members can “shuffle play any artist, album, or playlist, plus stream a selection of All-Access playlists on demand” as well as “access the largest catalog of ad-free top podcasts,” the online retail giant said. The move underscores a new battleground for membership-focused retailers, including Costco and Walmart, who see streaming as an opportunity to add value. Continue reading Amazon Offers Expanded Music and Podcast Catalog Ad-Free

European Commission Targets Apple with Antitrust Charges

In the wake of an initial complaint from Spotify, the European Commission has levied antitrust charges against Apple for breaking EU competition rules regarding its App Store policies. More specifically, the EU focused on two rules, one requiring developers to use its in-app purchase system, for which it charges a 30 percent cut, and a second not allowing developers to let users know about other purchasing options. The Commission found that the rules “distort competition” and result in higher prices for consumers. Continue reading European Commission Targets Apple with Antitrust Charges

Spotify, Universal Music Join Forces with New Licensing Pact

Spotify inked a new multi-year global licensing deal with Universal Music Group after being out-of-contract for about a year. Under the terms of the agreement, Spotify has access to UMG’s catalog for streaming and UMG will be part of Spotify’s so-called two-sided marketplace, whereby it will pay for analytics, data and marketing. Spotify, under pressure to prove to investors that it can be more consistently profitable, spends most of its revenue on licensing deals with music publishers and record labels. Continue reading Spotify, Universal Music Join Forces with New Licensing Pact

Apple Could Push Wearables, EU Okays Shazam Acquisition

Apple, which has evolved from a PC company to an iPhone company, is searching for its “next big thing.” One WSJ journalist believes a clue to what it might be came from chief executive Tim Cook’s revelation that the Apple Watch and AirPods generated $10 billion in revenue over the last four quarters. The company’s wearables sales are growing, even as smartphone and PC sales level off, and IDC said Apple is the wearables market leader, with 17 percent of the global market. Meanwhile, the European Union has approved Apple’s purchase of Shazam, which should fortify the company’s music ambitions. Continue reading Apple Could Push Wearables, EU Okays Shazam Acquisition

Nielsen Reports Major Jump in On-Demand Audio Streaming

According to Nielsen, on-demand audio streams — including music, podcasts and spoken word recordings — reached a new milestone for the U.S. market when the figure reached 7.5 billion during the week ending March 9. In its latest mid-year report, the measurement firm indicates that 184 billion on-demand audio streams this year mark a significant 62.4 percent increase over the same period last year. In addition, there has been more than 284 billion on-demand audio and video streams combined this year, a 36.4 percent jump over the same period in 2016. Continue reading Nielsen Reports Major Jump in On-Demand Audio Streaming

Westergren to Step Down as CEO of Music Service Pandora

Pandora co-founder and CEO Tim Westergren plans to step down from his position running the 17-year-old streaming music pioneer. The company has yet to select a replacement. Earlier this month, satellite company Sirius XM announced it would invest $480 million in the web radio service for a 19 percent stake in the company and three board seats. Despite a user base of 80 million, “Pandora has struggled to generate enough advertising revenue to cover the cost of the free service,” reports Recode. “Meanwhile, music listeners have begun gravitating to the on-demand subscription services of Spotify, Apple and others, which offer ad-free access.” Continue reading Westergren to Step Down as CEO of Music Service Pandora

Spotify Inks a New Licensing Deal with Universal Music Group

Spotify and Universal Music Group, the world’s biggest record company, finally inked a global, multiyear licensing deal after two years of intermittent negotiations. With this deal in place, Spotify now has a better chance of convincing Sony and Warner to follow suit, and UMG, whose artists include Drake, U2, The Weeknd and Lady Gaga, has more flexibility on how it streams its music. Spotify’s contracts with UMG, Sony and Warner had expired long ago. Spotify, valued at $8 billion, now also has a clearer path to going public. Continue reading Spotify Inks a New Licensing Deal with Universal Music Group

Snapchat’s Strategy Behind Rebuffing Influencers, Celebrities

Many social networks have thrived on creating relationships with celebrities and influencers, but Snapchat prefers to treat them like ordinary users — so much so that its terms of service prohibit users from getting paid to post. The aim is to provide users a more authentic, less product-promoting experience. It’s also Snapchat’s strategy for differentiating its platform, thus better attracting advertisers that prefer the credibility of an “authentic experience” to influencer endorsements of products. Continue reading Snapchat’s Strategy Behind Rebuffing Influencers, Celebrities

Sony, Universal Ink Deals with Pandora for Streaming Services

Sony Music, Universal Music and Merlin Network, which represents 20,000 independents, have agreed to license songs to Pandora for its two new music services. Pandora plans to offer the advertising-free Pandora Plus and an on-demand service similar to Spotify. The company is also still in talks with Warner Music in an attempt to ink a deal with this third-largest music rights holder. Pandora hopes to launch both of its new services by the end of 2016. As of June 30, Pandora says it has 78.1 million active listeners. Continue reading Sony, Universal Ink Deals with Pandora for Streaming Services

Artists, RIAA Target YouTube in Latest Round of Royalty War

In the latest battle between musicians and streaming outlets, the music industry has united to fight YouTube for higher royalties. Katy Perry, Pharrell Williams and Billy Joel signed letters requesting changes to copyright laws; high-profile manager Irving Azoff criticized YouTube in an interview and a Grammy Awards speech. Recently released annual sales statistics buttress the musicians’ point of view: statistics show that, despite huge audiences, YouTube pays less direct income to musicians than vinyl record sales. Continue reading Artists, RIAA Target YouTube in Latest Round of Royalty War