Category Archives for "Music Industry News"
I’ve been predicting for over a year that the streaming world would eventually move to high-resolution audio, and a recent announcement from a group of large industry players makes it look like things are finally moving in the right direction. All 3 major labels, Pandora, Rhapsody/Napster, HD Trax and the RIAA announced their support for the high-quality format through the Digital Entertainment Group (DEG), an industry association dedicated to hi-res releases. Interestingly, Apple Music and Spotify were absent from the announcement.
While the DEG didn’t specify exactly what “hi-res” meant, Apple has been collecting high-resolution masters for its Mastered For iTunes program for the last 4 years. Although Apple would prefer masters at a 96kHz/24 bit resolution, it considers any master that’s 24 bit to be hi-res, regardless of the sample rate.
Since Apple has been at the forefront in collecting high quality masters, it would stand to reason that Apple Music would have no problem implementing a new hi-res tier. There’s been no hint of that, however, although the company is notoriously tight-lipped about new developments. Spotify doesn’t seem to want to go that route yet, having enough trouble getting people to buy up to the $9.99 per month paid subscription tier, although it does have 41 million current subscribers, about twice that of its nearest competitor Apple Music.
Tidal and Deezer both have hi-res tiers, but neither has made much of a impact on music consumers. That said, there are numerous online services like HD Trax that specialize in 96/24 and higher products available for download at a premium price. These are more for the audiophile sector, however, and don’t get much traction from mainstream consumers.
That said, the natural progression is to high-resolution streaming, and all services will eventually go that way (you’ve heard it here first). I predict that what we’ll eventually see is the standard subscription tier at $4.99-5.99, and the hi-res premium tier at $9.99 per month. That’s not going to happen soon though, but 5 years from now there’s a good chance that it will be the norm when it comes to streaming.
Content creators have been complaining about the fact that there’s no way to monetize their content on Facebook the way you can on YouTube. Those days look to be coming to an end, however, as industry insiders now say that Facebook will start testing mid-video ads soon. As with YouTube, the revenue from the ads will be shared with the content owner. The bad news is that the revenue split is the same as YouTube, with Facebook taking 45%, a figure that artists and labels feel is way too low.
The catch is that the viewer has to watch the video for 20 second before the ad runs. It will be interesting to see how many people abandon the video at that time. The length of the video must be at least 90 seconds long to be able to insert an ad.
Why, mid-video? Apparently that directive came from the top, as CEO Mark Zuckerberg hates pre-roll ads and forbid them from happening on Facebook videos.
This will again bring up the question of what exactly constitutes a “video view” on Facebook. Right now its any time a viewer watches a video for at least 3 seconds, even with the sound off or if she didn’t click on it. With the new 20 second metric, you can be sure that video views will be looked at differently in the future on the platform.
The good news here is the fact that Facebook will finally reward content creators with some revenue for sharing their work. The bad news is that the split is controversially low and will certainly be a major talking point in licensing discussions with labels and publishers.
Albums just aren’t selling like they used to, and that goes for physical and digital. The end-of-the-year Nielsen numbers are out and they show that only 4 albums made it to platinum-level last year, which is sales of 1 million or more. If you add in sales of digital albums, you get 3 more, which is still way off from previous years.
We live in a streaming world, and that means that the single rules and consumers are buying far fewer individual albums, preferring to spend their money on a monthly streaming subscription instead. Here are the top 10 albums in the US for last year, both physical and digital.
Top Selling Physical Albums In The US In 2016
|4||Chris Stapleton, Traveller||1,085,000|
|5||Pentatonix, A Pentatonix Christmas||904,000|
|6||Original Broadway Cast Recording, Hamilton: An American Musical||820,000|
|7||Twenty One Pilots, Blurryface||738,000|
|8||Prince, The Very Best of Prince||668,000|
|10||Justin Bieber, Purpose||554,000|
Adele has had the top selling album in the US for 4 out of the last 6 years, something that’s never happened before.
Top Selling Digital Albums In The US In 2016
|4||Chris Stapleton, Traveller||447,000|
|5||Original Broadway Cast Recording, Hamilton: An American Musical||422,000|
|6||Twenty One Pilots, Blurryface||377,000|
|7||Prince, The Very Best of Prince||371,000|
|8||J. Cole, 4 Your Eyez Only||356,000|
|10||Panic! at the Disco, Death of a Bachelor||334,000|
It’s been no secret that SoundCloud has been up for sale for some time. Both Twitter and Spotify reportedly looked into acquiring the service and decided against it over the last few years. Now the latest rumor has Google acquiring SoundCloud for around $500 million, which is about half of what it was going for previously.
SoundCloud boasts around 175 million users around the world, and that appears to be the biggest selling point of the service. The licenses with the labels probably wouldn’t be transferrable, but Google has that taken care of anyway. Likewise, Google has the streaming infrastructure well in place, so there doesn’t seem to be a need there either. Execs or engineering talent could be the draw, perhaps, but there’s no clear superstar within SoundCloud that appears to warrant that kind of investment.
From the standpoint that Google’s Play Music streaming service is an also-ran in the streaming wars, an infusion of new users would be a boon, but remember that most of these users use SoundCloud to stream their own music and not listen to someone else’s.
There’s a hidden beneficiary in any acquisition, regardless if it’s Google or another service, and that’s the major labels. Why? They each own stock in SoundCloud and would stand to reap a cool $45 million between them from the sale if it stands at that price. Music Business Worldwide pegs Universal at 4% ownership in the company, Sony with 3% and Warner on somewhere between 1% and 2%. This is why the labels always push for equity in their licensing deals.
MBW also mentions that some large investment funds are now raising their ownership stakes in Pandora, with the thinking that it will also be acquired sometime this year. If both companies are acquired, that would definitely change the streaming landscape, although probably not as much as you might think. The big money is still on Spotify and Apple Music until someone else steps up.
Out of all the music streaming networks, Tidal seems to get more than its fair share of publicity. No doubt that’s because it’s owned by a music celebrity (Jay-Z), but for a relatively small player in the streaming game, Tidal manages to punch above its weight. The company recently released some interesting numbers that covered everything except what matters most, and that’s paid subscribers.
For instance, the company says it has produced 39 live streams of concerts and festivals, given away over 180,000 tickets to subscribers for more than 100 events, hosted more than 45 music videos and 90 behind-the-scenes videos, and offered more than 150 playlists created by artists, athletes and celebrities throughout the year.
It also reported 32 exclusive albums released on the platform in 2016, including releases of Rihanna’s Anti, Kanye West’s The Life of Pablo and Beyoncé’s Lemonade. It made a big deal out of the fact that it was the only place to stream 15 Prince albums, only to discover down the road that, according to the Prince estate, it had no right to do so.
These are all nice numbers, but there’s no mention of the number of subscribers. It’s been estimated that Tidal has around 3 million paid subscribers, which while is not in the same league as Spotify and Apple Music, is still respectable. That said, it’s also been reported that Tidal has more subscriber churn than other services, with many users signing up for an exclusive, then dropping it after the exclusive has run out.
The company has also faced a significant brain drain, changing high-level execs regularly, and appears to be in a money crunch, which is why Jay-Z has been openly looking for a buyer for some time. That’s less and less likely to happen, since there’s not that much that another service would get for the acquisition. The subscriber numbers aren’t that high, you probably wouldn’t inherit the licenses, and any streaming service in the game already has it’s own infrastructure in place.
With all that in mind, look for Tidal to change significantly during 2017. To be sure, it won’ be the same service this time next year.
It looks like you can expect a lot more from Facebook in 2017 in more ways than one. The company is advertising for an in-house composer to add to its in-house sound design team. According to the advert:
The in-house Music Composer role requires 10+ years of professional experience in the music industry, plus experience in ProTools and the ability to “work closely with a wide variety of sound artists”.
“CANDIDATES MUST HAVE EXCEPTIONAL COMPOSITION SKILLS AND MASTERY OF MODERN PRODUCTION TECHNIQUES. THE ROLE COMBINES MUSICAL RECORDING AND COMPOSITION CHALLENGES WITH PROJECT MANAGEMENT LEADERSHIP.”
The link turns out to be dead, which either suggests that the position is now filled, or that it was getting to much visibility. Facebook is under fire for still not having a way for artists, labels and publishers to get paid for songs and videos that are played on the network, so everyone is a little chagrined at the fact that the company is trying to develop what looks to be in-house production music first.
That said, rumors still persist that 2017 will be the year that FB finally puts their own version of YouTube’s Content ID in place, which will compensate creators when their works are played on the platform.
This is much more problematic than it sounds given the fact that Facebook measures video views much more liberally than YouTube, so potentially it will be paying out more as a result, even if the royalty rate is the same as YouTube. The royalty will undoubtedly be higher though, since the music industry views YouTube’s 45% cut way too high and out of line with the other delivery systems, so any license from the major labels or publishers will no doubt go beyond that rate.
That said, it should be interesting to see exactly what Facebook has in mind for its new composer in residence, and how the sound design team will be implemented.
If you look closely, streaming is teaching us all some marketing lessons, according to analytics service Next Big Sound (now owned by Pandora), a company that looks at social, streaming and event data as well as the interaction between an artist and a fan. While many look at it as just a way to get their music to the public, there’s actually a lot more to it than that. Here’s what the company found.
1. Streaming platforms provide a path to niche audiences
When you’re trying to reach a specific demographic, streaming music platforms coupled with social media channels provide the most direct path. For example, according to the report, “latin artists now account for one-third of the most popular artists on YouTube. Half of the top 20 artists on Pandora are most popular with 25- to 34-year-old women.” Streaming, along with social media, allows you to specifically target the group that you’re interested in reaching.
2. Underground EDM and hip-hop fans are the most engaged
Some of the biggest top 40 artists may have larger followings, but that doesn’t mean they’re the most engaged. Artists like Vinny Cha$e, Marshmello, and Logic haven’t even sniffed radio or the Top 40 but have extremely strong audiences, in some cases more loyal than the superstars.
3. People still listen to older hits
Believe it or not, in America people are is still listening to bands like Nickelback—a lot. On Pandora, legacy rock artists like Journey and the Eagles perform just as well as Katy Perry and Kanye West.
4. Some musical genres resonate more with listeners
If you look to the Top 40 as a barometer for what’s popular, you’d come to a wrong conclusion as you’d probably get the idea that pop or country ruled. On Pandora, 60% of the top artists are hip-hop artists, compared to just 15% on the top 40.
5. Emerging artists can be social influencers too
Once again, it’s easy to think that Beyonce or Katy Perry rule because they seem to dominate the streaming and social networks but that’s not the case. Young electro pop artist Halsey, for instance, has a follower growth on Twitter that outranks the Top 40 artists like Iggy Azalea, Adele, Justin Timberlake, and Britney Spears.
The bottom line is that we tend to think that the world revolves around music’s 1 percenters, but that’s not the case at all. Maybe in radio and on the Top 40, but not across all streaming networks, which gives hope to indie artists everywhere that are trying to improve their marketing .
In an effort to “own the topic of music online,” the Hollywood Reporter-Billboard Media Group has acquired SpinMedia, whose assets include Spin, Vibe and Stereogum. This means that the company is now the world’s largest online music brand and its sites will see traffic of about 45 million per month as a result. It will now reach 1 out of every 3 millennials, a powerful benefit for advertisers. The Media Group has also partnered with Facebook to create custom content for the recently launched Facebook Live.
While this sounds like a great business move on Billboard’s part, since millennials don’t read Billboard or the Hollywood Reporter (unless they happen to be in the entertainment industry), it’s probably not so good for Spin, Vibe and Stereogum in the long run. Those sites were vibrant when run by the founders (except for Spin, which was acquired by BuzzMedia, which then rebranded as SpinMedia in 2012), but much of that street knowledge and connection is diminished once the corporate suits get involved.
While it’s not impossible for a news website to maintain its audience once it’s acquired, it does start to lose its edge and it’s only a matter of time until something newer and edgier comes along. That won’t happen overnight though, so if you’re a regular visitor to those sites, you probably won’t see an immediate change. That said, it should be interesting to see how things evolve over time as the suits get more involved.
Video is an important part of every artist’s tool box these days. While many prefer to stay within the confines of produced videos uploaded to YouTube or Facebook, live streaming video can be extremely effective as well. Google Hangouts and Facebook Live have been the predominant ways to broadcast to fans and followers, but Facebook has now introduced an alternative with Messenger Video Chat.
Video Chat is similar to Google Hangouts in that you can interact with others that are streaming on the same call. It beats Hangouts though, in that up to 50 people can stream both video and audio simultaneously (Hangouts is limited to 10, as is Skype). The limitation (although it may not be if you’re using it for promotion) is that after 1o people, Messenger will display only the dominant speaker’s feed.
There are other alternatives to Messenger Video Chat. Both Slack and Snapchat also introduced this same feature recently. The difference is that pretty much everyone is on Facebook, so it’s as universal as you’d want if you need to get your message out.
Live streaming can be an easy alternative to produced videos when it comes to promotion from the standpoint of ease of use and timeliness. As with everything social, consistency is important, and if fans and followers expect a video at a certain time, sometimes the only way to deliver is with a live stream. Not only that, it’s the perfect tool to be able to broadcast from events like gigs, backstage, release parties, in-store signings, and just about anything else that you can think of.
While video chatting, Messenger’s other functions still operate, which means you can still send texts, stickers, and other animations while video and audio are transmitting. iOS also has one additional exclusive feature called Live Masks, which is similar to Snapchat filters that animate a visual overlay over your face in real time, Facebook’s live masks tale this a step further and allow the user to overlay animation to the live video chat. The feature should also be arriving on Android soon.
Give it a try and let us know how it works out.
It looks like all of those rumors about Spotify buying SoundCloud have turned into nothing more than words on paper. Word is now out that any hopes of a deal between the two companies has been squashed, although months of talks almost lead to a deal.
Why? Although it hasn’t been officially announced, Spotify is planning on a public offering in 2017, and there were fears that this particular acquisition could negatively impact the IPO. The fact that Spotify hasn’t turned a profit yet and owes loads of money is bad enough, but at least it’s generating lots of cash and growing. You can’t say the same thing for SoundCloud, however. Despite many different attempts to both gain more users and get them to pay for the premium service, that hasn’t happened, so the company’s health is definitely in question.
The other question that potential investors and underwriters had was about the synergy between the companies. For SoundCloud, the acquisition would be a life preserver. For Spotify, it would gain some potential users, and perhaps provide them with an easy path to post their music on Spotify, but it’s difficult to see how that helps Spotify enough to justify a potential billion dollar investment.
Another negative is the fact that Spotify would have to enter into another round of negotiations with record labels and publishers for new SoundCloud license agreements. These licenses are the biggest hurdle for any company either trying to get into, or already in the music distribution business, and investors know how difficult they can be. As a result, it’s a headache that Spotify can’t afford to take at the moment.
If Spotify does go public next year and is flush with cash (after paying off investors that is), look for the company to revisit the SoundCloud acquisition again. Until that time, SoundCloud has to hang on.