Monthly Archives: February 2017
Monthly Archives: February 2017
David Bock is the founder of Soundelux Microphones and Bock Audio and there are few people as obsessed or knowledgeable about microphones as he is.
His mics exude quality, not only in the way they sound but in the build quality. Put one up against a cheap Chinese clone and it becomes obvious very quickly.
Every time I speak with him I learn something new, and you will too, as we get into a deep discussion about new versus NOS tubes, the peak years of microphone design, and how Neumann’s flat in 1960 is different from the flat frequency response of today.
In the intro I’ll look at why many artists are complaining about the Grammy’s not caring enough about a young audience, and the 50th anniversary of both SIR and Clair Brothers.
There have been some pretty crazy plagiarism lawsuits brought against some of the biggest stars in the last few years. These have had a chilling effect on artists, songwriters, labels and publishers everywhere.
This funny video from the stars of Portlandia kind of says it all on the subject, at least from an artistic perspective. Do you have an attorney that’s so good he should “get a Grammy for suing”?
The part I like the best is the fact that the attorney in the video “owns the key of G.”
Here’s the Music Industry News Roundup for the week of February 10th, 2017. It’s been a busy week in the music world this week. Let’s get into it.
Google and YouTube merge their music teams. There’s confusion between Google Play and YouTube Red services, so look for these to become just a single service soon.
Warner Music joined the $1 billion streaming club. Now all 3 major labels make more than a bill from streaming.
FM radio is now enabled in half the smartphones in the US. The question is, how many are actually listening?
Ticketing is a broken industry that needs to be fixed. The latest incident with Ed Sheeran may bring things to a head in the UK.
Trump’s presidency will affect music in some way. Here are 5 scenarios of what could happen.
Chance the Rapper gives all his music away for free and still does pretty well. So he doesn’t need a label as a result. Here’s how he does it.
Thanks to the Super Bowl, Lady Gaga’s sales surge over 1,000%. In the grand scheme of things, her sales still aren’t that great though.
A million plays isn’t enough to break an artist any more. I keep saying that the metrics have changed. You need at least 10 million to even get in the ballgame, and 50 mil for a minor hit.
The reason why so many music tech startups fail. They don’t analyze the market to see if there’s really one there. But they’re musicians, what else do you expect (musicians know what I’m talking about)?
Sir Paul McCartney is suing Sony/ATV publishing to get his Beatles songs back. And there’s a good reason why he’s done it in the US, according to this article.
The New York Times is bundling a free Spotify account with a subscription. That should push Spotify over 50 million paid users soon.
That’s the Music News Roundup of what went on in the music industry last week. Have a great week ahead!
YouTube just launched it’s long anticipated Mobile Live Streaming along with a monetization tool called Super Chat. There’s a catch though. You need at least 10,000 followers to have access to these features right now, although the company says it will be available to everyone at some point and baked into the mobile app.
While it’s cool that Mobile Live Streaming if finally here, YouTube has some catching up to do, since Facebook Live, Periscope, and Instagram Live have already established themselves with users, and you don’t need 10k followers to access them either. YouTube should have been dominating this space for a while, but instead will be playing catchup.
One interesting add-on to Mobile Live Streaming is Super Chat, which allows broadcasters to monetize the chat during a broadcast. What happens is that if a viewer wants to get the attention of the broadcaster, they’ll make a payment (there’s not much info about how that’s set up yet) which will then highlight the message and keep it pinned to the top of the page (see the graphic on the right). This remains there for up to 5 hours.
Many YouTube broadcasters are complaining that there are no filters yet supplied with Super Chat in order to keep some of the more vile comments that frequently happen now during a live stream at bay. Remember this is an early iteration of the feature though, so hopefully it will improve over time. You can see how this would be useful to a broadcaster with a lot of followers though.
Again, the big problem with Mobile Live Streaming and Super Chat is that they’re so late to be launched. Facebook is making a substantial dent in YouTube usage, which may turn into a landslide when it gets its monetization features online. In the meantime, if you have 10,000 followers, give Live Streaming a try.
It was assumed that Spotify would final go public in 2017 not only because the timing was right in its growth, but mostly because of pressure from investors to get their money back. Rumor has it that the company is considering delaying its IPO until 2018, and that could cause the company a world of financial hurt if MBW and Techcrunch has it right.
The company feels that the extra time would allow it look better financially on paper than it does now. Plus, since it’s still negotiating license renewals from the major labels, there’s a cost uncertainty that could potentially decrease its stock price.
That’s easier said than done, according to the article. Spotify raised around $1 billion last year from a number of investors, but the terms were harsh, especially if an IPO is delayed.
According to the sources, the company is paying a 5% interest rate on the investment, in addition to a 20% discount on shares should the company IPO. That’s all well and good, but the interest increases by 1% every six months that the company fails to go public. That’s not all; the discount on the IPO shares increase by 2.5% every extra six months after the first year.
What does this mean in real numbers? If Spotify delays its IPO until the beginning of 2018, it would cost the company another $115 million just in interest. Not only that, it will cost the company another $250 million in shares, or another 3% of the company as well.
Spotify is caught between a rock and hard place financially. If it goes public now, its share price will suffer because its balance sheet won’t look as good. If it delays the IPO until the balance sheet looks better, it will cost the company in terms of increased interest (which the IPO revenue will presumably cover) and losing additional equity in the company.
This is the stuff that financial engineers live for. The public just wants it cheaper. Artists, labels and publishers just want a bigger piece of the pie. The investors and insiders just want a big payday. In the end, who do you think wins?
Richard Gibbs has composed the music for over 60 films as well as some great television shows like The Simpsons and Battlestar Galactica. He’s a good friend and a great story teller, so it was time to have him back on the podcast (he was on Episode #38 a couple of years ago).
In Part 1 of the latest interview with him we take a deep dive into the politics of today’s film scoring, and how the job has changed from the way it was in the past. If you ever wanted to get into film composition you don’t want to miss this.
You’ll also hear some great stories that you won’t get anywhere else about producers changing composers mid-film, and the the many versions of the Battlestar Galactica opening theme. In the upcoming Part 2 we’ll talk about his unique one-of-a-kind studio overlooking the glorious Pacific ocean in Malibu (but there’s a lot more to it than that to make it special).
In the intro I’ll look at the new financing coming into the music business that may change the fortunes of artists and hedge funds alike going forward, and at the new generation of do-it-yourself audio kits.
The Super Bowl is one of the most viewed events in the world, and the coveted halftime performance is what many A list artists dream of. But does an artist get much of a visibility bounce as a result? When it comes to videos on YouTube, yes they do, although some get a bigger one than others.
According to YouTube and as seen on the chart on the right, every halftime artist of the past 4 years received a substantial bounce in YouTube channel subscribers in the 7 days after their performance, with the reunited Destiny’s Child getting by far the greatest at 427% in 2013.
And channel subscribers aren’t the only thing that sees an increase. Halftime performers also see a rise in video views, although that number isn’t quite as high as the one for channel subscribers.
There are other factors at work though. It’s thought that Coldplay got a big bump last year because it had a recently released album and the band was touring, so their pre-Super Bowl exposure was already high.
The real test is yesterday’s Lady Gaga performance though. Even though her recent album Joanne debuted at #1 on the Billboard charts, it hasn’t had nearly the success as Gaga’s previous releases. It looks like she’ll get a huge halftime bounce (she had more viewers than the game itself!) and she’s already announced a new tour. It’s hard to pass up than kind of visibility.
Here’s the Music Industry News Roundup for the week of February 3rd, 2017. This has been a big week for social media changes, but there are still some interesting record label-related developments. Let’s get into it.
Sony earned $1.2 billion from streaming last year. It still made more from physical sales, but not by much.
Streaming is changing music consumption, but is that good? Well, the measurements are no different, and this article doesn’t think they’re as fair and equal as they should be.
Investors are putting more money in the music business. That’s because they believe it’s finally coming back, and owning music publishing is an appreciating asset (which it’s always proven to be).
Vevo has now reached 100 million users. The music video network partially owned my Universal Music was seen by 43% of all viewers who watched YouTube in December. The funny thing is, most of them aren’t even aware that they’re watching it.
Speaking of Vevo, MBW thinks Facebook should poach it from YouTube. The article says that it could make approximately $32 billion a year if it did, which sounds a bit far-fetched to me. Still a good idea though.
Soundcloud’s getting deeper into advertising. Users don’t want to hear this, but the company is trying to increase revenue to look like a better acquisition target.
Snapchat is adding augmented reality. A new lense will allow users to identify environmental elements and superimpose digital effects on top. It’s still experimental so we won’t see it for a while, but it’s cool that it’s in development.
Hulu launched its virtual reality show On Stage. You need the service’s VR app in order to get the full effect, but it’s good to see the technology getting off the ground in music.
Facebook is going to start paying for videos. Both up front and revenue sharing from ads will make video content creators happy. It’s also a shot across the bow of YouTube.
People are upset that Instagram now does groups of photos. They feel it’s trying to become all things to all people and losing its focus.
That’s the Music News Roundup of what went on in the music industry last week. Have a great week ahead!
The concert ticket you buy today is more expensive than ever, but that doesn’t seem to hinder music lovers from shelling out their cash anyway. With a typical ticket going for well over $100 and VIP tickets going in the thousands, it begs the question – where does the money I just spent for my ticket go? The Guardian just ran a comprehensive article on the subject and the numbers might surprise you.
While many concertgoers assume that their $150 is going exclusively to the artist, that’s not the case at all. Here’s approximately how it breaks down:
Taxes – Right off the top, 5% is taken off the top in the US, but it can be as high as 35% in some European countries.
Licenses – PRO’s like ASCAP collect anywhere from 0.1 to 0.8%, but the PRS in the UK collects 3% of the gross.
Fixed costs – The costs of putting on a show at the venue and many and varied. These include the cost of the venue, stage hands, venue staff, electricians, scaffolding, barriers, catering, liability insurance, backstage furniture, forklifts, rigging, medical staff, among many other expenses. Some of these are included in the cost of the venue or paid by the promoter, but sometimes not. This can account for 25 to 40% of the gross.
The promoter – Of the 50% or so that’s left, the promoter can take anywhere from 5 to 15%. Of that, all costs for advertising and promotion are paid by the promoter. The promoter is also responsible for the artist’s guarantee. That means that regardless of how badly tickets sell, the artist will receive this minimum amount.
The artist gets the rest, which sounds like a lot, but there’s a lot of expenses there as well. The production (stage design), crew, sound, lights and transport (as many as 30 trucks on a huge tour, not to mention the busses for artists, musicians and crew) are the responsibility of the artist, although some of this could also come under the category of fixed costs as well. The production rehearsals before the tour (which may but up to 6 weeks with full production in a full-size venue) is also the responsibility of the artist. Then the artist has to pay management 15 to 20% of his take.
Top it all off, the daily expenses of being on the road are high. A superstar act may have an overhead of $750,000 per day on the road whether the artist plays a concert or not.
Still, there’s big money being made from touring, and almost from the beginning of modern music history, this is where the bulk of an artist’s income is made. Even a small portion of the ticket price comes out to a lot of money.
On Friday HMV Canada was placed into receivership and outlined its intent to close its 102 record stores in that country. HMV stores in the UK are not affected. According to a report by the Financial Post, HMV owes its major suppliers, including music labels and movie studios, about $42.6 million as of Dec 31.
If ever there was an indication that streaming is taking over as the main music distribution method worldwide, this is it. Canada is the world’s seventh largest recorded music territory, and the sixth biggest for CD and vinyl sales, which generated more than a $100 million last year. The HMV store closings are sure to impact that number as Canadians will find fewer places to purchase physical product even if they want to.
HMV was actually purchased by restructuring experts Hilco in 2011, but that company hasn’t been able to turn it around in an industry where fewer consumers care about physical product anymore. As a result, the company has suffered losses of around $20 million every year since .
Once again we see how technology has changed the music industry. Most every time a new more convenient (that’s the key) format is introduced, the industry and music consumers adopt it. This goes back to the days of piano rolls, followed by shellac records, vinyl records, cassettes, the CD, MP3s and now streaming. Sound quality doesn’t matter, its convenience that the consumer cares about. It’s simply easier to have access to tens of millions of songs on your phone than it is to own music anymore. Plus the inconvenience of going to a store to buy it (although many record aficionados claim that’s one of the best parts) is not in sync with the way most goods are purchased or consumed these days.
It’s a shame to see these stores close, but it was only a matter of time. The public knows what it wants and when it comes to music, its not something that you buy in a brick and mortar store.