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Music Industry News Roundup #8

Music Industry News Roundup Here’s the music industry news roundup from the last week. As always, streaming and streaming services are in the news, but so are a number of huge artists, as well as some cool speculation on the future. Let’s get into it.

Apple Music is seriously getting into song lyrics. Reports are that it’s hired a new team to curate lyrics rather than use a third party to do it. The feature is supposed to be part of iOS 10, which hasn’t been released yet.

The Ed Sheeran plagiarism lawsuit is causing a bit of a dustup. Billboard rants a bit about the bad journalism surrounding the suit (that “Thinking Out Loud” is too close to Marvin Gaye’s “Let’s Get It On”), and on the surface, this one feels frivolous, but we’ve been surprised by the results before. This could be a bombshell for songwriters and music publishers alike if it goes against Sheeran.

Chance The Rapper turned down all the major labels and signed an exclusive with Apple instead. That’s the way the new music business works, although I’d bet that he ends up on a major sometime in the future.

Speaking of exclusives, Frank Ocean also went with Apple Music. Starting to see a trend here? First it was Tidal, then Spotify, now it looks like Apple is putting on the serious push for exclusives. It will be interesting to see its latest subscriber numbers.

In the meantime, Spotify is diversifying into gaming. It launched a new portal dedicated to game soundtracks, which is a great idea, given that gaming is a far larger business than music.

Pandora’s doing the same thing. Diversifying, that is. The company has added more comedy and podcast content, in a move that might be too little too late. Notice how little press the company is getting lately?

People can’t tell what fidelity they’re listening to. That’s what an informal study by CNBC says. Only 1 in 3 could identify the hi-res stream in a test that included streams from Tidal, Spotify and Apple Music. I’m not sure if that means the codecs have all gotten better or the basic quality of the tracks have gotten worse (probably a little of both).

Will Google suffer Yahoo’s fate? It wasn’t all that long ago when Yahoo was the search engine of choice, and this article shows how it could also happen to the current king of the mountain.

How Drake conquered streaming. First you conquer social media, then the streaming comes with that, according to this article. Yeah, it also helps when you’ve had success before a great team to work with.

That’s the News Roundup of what went on in the music industry last week. Let’s see what next week brings.

Music Industry News Roundup #7

Music Industry News Roundup Here’s the music industry news roundup from the last week. There’s good news and bad news, and some things to keep an eye out for to see how they play out in the future. Let’s get into it.

Sony Music buys Ministry of Sound. MoS is known for their compilations, which don’t play well in the streaming world since all the money goes back to the original label. This should play better on a major label that already owns many of the licenses.

The National Music Publishers’ Association (NMPA) and the Nashville Songwriters Association International (NSAI) are going to war against Sony Music Entertainment. Speaking of Sony, music publishers feel that the label and publishing giant is taking the side of the streaming services instead of songwriters when it comes to the mechanical royalty rate ruling from the Copyright Royalty Board.

Can Deezer’s personal music assistant Flow differentiate it from the competition? That’s what the company is hoping, as it tries to wean users away from the free to a paid tier. It’s going to be an uphill battle though.

Giant torrent sites might disappear. Once the scourge of the music business, torrent sites like Torrentz and Kickass Torrents are gone and the future of other large torrent sites are cloudy at best. You can thank streaming for that.

Nigerian musicians a big influence on the British music scene. They used to lie and say they were from Jamaica, but no more, as Nigerians leave their mark on every corner of the British music business.

Music for apps is becoming a larger revenue stream for artists and songwriters. More app developers realize that hit music can make people play longer, but now record labels are making it easier than ever to license the music they want.

Spotify’s new Release Radar feature provides a new way to discover new music. It provides a playlist of songs from newly released albums. Discover Weekly, which looks at songs released over the last 6 months, starts the week off on Monday, while Release Radar, which only looks back to the last 2 or 3 weeks, hits the weekend on Friday.

Ringo explains why The Beatles benefited from being late to CDs, late to iTunes and late to streaming. It doesn’t matter what the format is, the band continues to sell exceptionally well.

That’s the News Roundup of what went on in the music industry last week. Let’s see what next week brings.

Apple Music Now In 114 Countries, But At Different Prices

Apple Music PriceIf you want to get your music to be heard in every part of the planet, then Apple Music is currently the way to go. Apple recently announced that it has expanded its reach to 114 countries, far more than any other service at the moment.

Spotify, which Music Business Worldwide now estimates at 36 million paid subscribers, is only in 60 countries at the moment, and despite the graphic disadvantage, seems to be growing faster than Apple Music. Still, you can’t argue with the footprint that Apple Music has, as it’s now available in in prized territories like China, Turkey, Taiwan and Israel.

One of the things that most artists and bands aren’t aware of though, is that Apple Music utilizes variable pricing from country to country. This means that while subscribers in the U.S. pay $9.99 per month, Israeli subscribers pay about $5.20 and Russian subscribers around $3. That means that if most of your streams come from a low paying territory, you’ll be paid a lower royalty as a result.

The variable pricing is a result of a “what the market will bear” that Apple also uses for iTunes, which proved to be successful in the past.

In the last few years Spotify has also launched in a number of other countries as well, adding Italy, Poland, Portugal, Mexico, Hong Kong, Malaysia, Singapore, Estonia, Latvia, Bolivia, Bulgaria, Turkey, Chile, Cyprus and Czech Republic to the list. The company expects to launch in Russia and Japan later this year. Spotify also utilizes variable pricing, but most of the time the price is actually higher than the U.S. For instance, Australians pay $11.25 while Swedes pay the equivalent of $15.22. Poles only pay $6.62 however.

What this shows is that streaming is expanding both territorially, and revenue-wise, which can only be good for artists, bands, labels and songwriters everywhere. The problem is that the variable pricing makes it a lot more difficult to determine just how much an average stream is worth, something that will haunt us all for some time.

Music Industry News Roundup #5

Music Industry News Roundup Here’s the music industry news roundup from the last week. There’s much more diverse news than previous weeks, but streaming continues to dominate the conversation.

Taylor Swift is the highest earning celebrity. The thing is, she didn’t get that way from selling music. She learned early that it’s the brand that sells.

Elizabeth Warren has it in for music monopolies. She has her eye keenly on Apple, Google and Amazon. This is not the person to have angry with you, regardless how large the enterprise.

Spotify’s trying some hosted radio shows. It seems like Apple Music’s Beats 1 is making an impact, so Spotify’s trying something similar, but without the big name DJs.

Spotify looks to go public this year. In related news, 5 sources have stated that the company will file an IPO soon. I bet the investors are happy at the prospect of getting some money back, but what will the market say?

Sirius XM subscribers pass 30 million. Everyone thought that the satellite business was dying, but that’s not the case at all. You know what? It’s all about the programming (something that terrestrial radio should learn).

Pandora is teetering. The major shareholders aren’t happy and they’ve brought in a high-powered consultant to explore a sale.

Artists not seeing much from secondary ticketing. Not much of the money made by Stubhub, Viagogo or Ticketmaster seems to be making its way back into the pocketbooks of the artists. Isn’t this a bigger issue than YouTube royalty rates?

Selena Gomez social media posts are worth $550,000 a piece. Astonishing but apparently true, Ms Gomez ranks #1 with sponsors who are willing to pay to be included in her posts.

Nielsen’s mid-year charts. Drake, Adele, Rhianna dominate. No surprises here except for Bowie’s Blackstar being the #1 vinyl album so far (but with only 57,000 copies sold). Sales are still falling, with Adele’s 25 leading the pack with only 1.4 million in sales.

That’s the News Roundup of what went on in the music industry last week. Let’s see what next week brings.

Deezer Launches In The U.S., But Does Anybody Care?

Deezer-logoAfter a year run up, the streaming service Deezer has finally launched in the United States. Spotify’s major competitor in Europe is now in the world’s largest market, but the question is, does it have enough to differentiate itself from the rest of the current streaming contenders in the space? The Paris-based service launched in 2007 and is already live in 180 countries and has 3 million paid subscribers.

Deezer is available on iOS, Android and Windows phone apps and features a catalog of 40 million songs and 40,000 podcasts, but most significant is that it won’t have a free, ad-supported tier. The service is instead opting for a free 30 day trial period with no ads and no usage limitations. That should make artists, their managers and their labels happy, but it may not be much of an incentive to get people to jump from an existing service of choice.

The platform allows users to create multiple playlists, import MP3s of songs they already own so all their music can be found in one place, and even listen while offline. A feature called Flow also provides song recommendations based upon the user’s listening experience and existing library, and something called Deezer Sessions features live music from festivals and other venues. There are also curated playlists and recommendations, and lyrics are available for the songs you listen to.

Deezer is rolling out its U.S. service without a top Stateside executive though, as former CEO Tyler Goldman is apparently no longer with the company, according to TechCrunch. You can hear Goldman discuss Deezer on my Inner Circle podcast from September 13, 2015.

The company postponed its IPO last year after receiving only lukewarm interest, but raised an additional round of funding worth $109 million this year that made the U.S. launch possible. Deezer has been active in the territory for a while though, as it had previously acquired Muve Music from AT&T as well as the podcast service Stitcher, and also partnered with Sonos last year to support its $19.95 per month high-resolution tier. [Read more on Forbes...]

Music Industry News Roundup #4

Music Industry News Roundup Here’s some interesting music business news from the last week. There’s a lot going on in the streaming world, but as usual, that’s not all.

Warner Music had it’s best quarter in a long time. Streaming agrees with this major label, and it’s up around 14% over the same time last year. Guest what? It’s all due to streaming.

“Happy Birthday” is copyright free, but what about “We Shall Overcome” and “This Land Is Your Land?” Both are considered national treasures and thought to be in the public domain, but are instead controlled by the daughter of Woody Guthrie. New lawsuits attempt to change that, but what does it mean for copyright law?

Many superstars are going it alone without a manager. Taylor Swift, Bruno Mars, Beyonce and Ariana Grande are using a close tight nit team to guide their careers instead of traditional management companies. Prince was notorious for doing the same thing, and Mick Jagger has essentially guided the Rolling Stones since early in their career. Works for some, not so much for others as Queen and Billy Joel had a rough time after trying the strategy.

Drake’s Views chart dominance is mainly due to streaming. It seems that sales aren’t what they used to be, but I’ve been making that point for a long time.

Spotify is trying to program ads based on your musical tastes. The company is now asking advertisers to submit ads that fit specific profiles to better target listeners on its free ad-supported tier. Creepy or smart?

Song pluggers now target playlists. Song “pluggers” or promoters used to target just radio in order to raise the profile of a song and make it a hit, now they target various playlists instead.

Apple has fixed a big problem with Apple Music. It has moved to fingerprinting technology to help better match your personal music collection to its online catalog. User have been frustrated with inaccurate matches, but this promises to kill the bug.

Downloads will be dead by 2020. That’s what this article predicts as it looks at the downward spiral down of downloadable music consumption. Not analysts believe it will happen this quickly, by the way.

Has streaming broken the UK singles charts? A better question might be, what dos the singles chart now measure, because it certainly isn’t sales.

That’s the News Roundup of what went on in the music industry last week. Let’s see what next week brings.

Apple’s Publishing Royalty Proposal Is A Shot At Spotify

Apple's Music Publishing ProposalWho says Apple’s music executives aren’t smart? In what may end up being a brilliant strategic move, the company discretely made a proposal to the governing Copyright Royalty Board to increase the song publishing royalty rate to 9.1 cents per 100 interactive streams, a significant increase over what is currently paid, according to the NY Times.

On the surface, this is not only an greater payday for songwriters and music publishers, but also a vast simplification over the current complex royalty calculation. Streaming services now pay publishers from 10.5 to 12% of overall revenue, which is determined via a strikingly large number of factors that changes with the device used, the country the user resides in, if the service is bundled, and the type of subscription, to mention just a few. The music royalty collection company Audiam reports that the average publishing royalty is now around 5 cents per 100 plays, so Apple’s proposal of 9.1 cents represents a windfall for a part of the industry that has suffered during the run up of streaming popularity.

There’s also a psychological impact that goes along with that figure however. Currently, the mechanical royalty rate for every song on a CD or vinyl record, or a download, is also set at 9.1 cents. A streaming rate set similarly will not only bring it in line with those standards, but put the ease of calculation back in the hands of the songwriter and publisher, who must now depend upon the streaming company to calculate the monies owed.

The Back-Door Strategy
While simplicity may seem to be the overriding factor for the proposal, there’s something much more strategic behind Apple’s thinking. First of all, an increase in publishing royalty payments would severely stress stand-alone streaming companies who’s only product is music streaming like Deezer and Tidal, but most especially Spotify. That company still hasn’t turned the corner to profitability, and having to pay roughly 80% more in publishing royalties might keep it that way, which may put the company in a more serious bind with its already itchy investors.

Not only that, it would put a severe crimp on any interactive streaming service (as opposed to non-interactive like Pandora) that currently features a free ad-supported tier, since the royalty rate per 100 streams would be the same regardless of if the subscriber makes a monthly payment or not. Such an increase in expenditures might put an end to the free tier as we know it (which in the end, might not be such a great thing for the industry – a topic for another day). [Read more on Forbes…]

Music Industry News Roundup #3

Music Industry News Roundup Here’s some interesting music business news from the last week. As always, it’s surprising how some old topics keep on coming back to life, and the new topics that we never expected pop up.

Streaming music has surpassed YouTube music views. They said it would never happen, but streaming music is now more popular that YouTube for listening to music. This is extremely important because it’s really a paradigm shift happening right before our eyes, as music streaming becomes the big dog of music distribution. Watch the financial pie get bigger for everyone in the food chain!

Spotify and Apple Music are beating YouTube with blockbuster hits. Huge hits like Drake’s “One Dance,” Rihanna’s “Work,” Desiigner’s “Panda” and Zayn’s “Pillowtalk” don’t appear as much on YouTube as on the streaming services.

Spotify paid subscribers now at 37 million. That’s a good strong metric for success, except that so many of subscribers are on a discounted $0.99 per month or 3 months for $10 plans, so there’s no telling what will happen when those run out. Spotify figures they’ll lose between 1 and 1.5 million subs, but experts figure it will be higher. Still, the streaming service continues to grow at a faster rate that the competition.

Sony/ATV’s purchase of the other 50% of Michael Jackson’s catalog is in jeopardy. It appears that European regulators may block the acquisition because it will give Sony too much control of the publishing world. I guess that owning 60% of any industry would get anti-trust regulators to open their eyes.

Speaking of Sony, it’s being investigated in the U.S. for colluding against Rdio. The streaming service filed for bankruptcy last year (a lot of its assets were purchased by Pandora), but Rdio’s 3 founders are filing an anti-trust suit saying that Sony colluded with Warner Bros and Universal in licensing issues to force them into bankruptcy.

The music and tech industries are out of touch when it comes to copyright laws. That’s the conclusion from an article in the Wall Street Journal, but most industry experts think that the existing copyright laws need a serious updating since they apply more to a time before the high-tech age we live in today.

A classical composer has a similar viewpoint. It’s not only pop and rock songwriters that are suffering from existing copyright laws. Jennifer Higdon feels she’s not getting free market value for her compositions, which are played by orchestras worldwide.

Distrokid has created a new system for getting artists paid. This allows for multiple people to get paid, even with different percentages of ownership, instead of the current system of a single payment to one person that has to be divided after the fact.

Soundcloud is taking another step to becoming a full-fledged streaming service. It’s added a new radio-like feature similar to what other services have. Users have said it’s very “Pandora-like,” although I’m not so sure that’s a good thing.

That’s the News Roundup of what went on in the music industry last week. Let’s see what next week brings.

Music Industry News Roundup #2

Music Industry News Roundup It appears that Music 3.0 blog readers liked the News Roundup concept, so here’s the second addition, although it’s a bit abbreviated because of the July 4th holiday.

Google Play offers 4 free months. If you’re a brand new subscriber, you can get Google Play and YouTube Red bundled together for what amounts to $40 value for a free trial. There is a catch though. If you’ve ever been a subscriber, even for a free trial, you’re not eligible.

How well is YouTube Red doing? Much better than you think, according to analyst Mark Mulligan. He says it’s reaching between 5 and 10% month over month growth, and there’s an appetite for the service, especially in the U.S. That said, it’s still only reaching slightly less than 90% of the current YouTube users, so some aggressive marketing is needed.

YouTube Red is going cheap. As a result, Red is trying to drum up business with a $0.99 for 3 months. The catch? The Christmas holiday season doesn’t apply. These 3 articles show that Google/YouTube is starting to get more aggressive in the marketplace, which will affect both Spotify and Apple Music. Price war, anyone?

People still refuse to pay for music. According to a BPI Briefing study, 2/3rds of adult Internet users stream music at least once a month. The bad news? Only 1 in 10 are willing to pay for it. Most surprising? It’s people between 16 and 24 that are more likely to pay for it.

Facebook changes its Newsfeed again. Everyone but consumers seem to be up in arms about Facebook’s new Newsfeed algorithm. The new one places more emphasis on posts from family and friends first, and posts that entertain and inform second. Ads and commercials come in last.

When music becomes more popular faster. An interesting article on Poly-Graph shows how there have been more music videos that exceed a billion views recently. How much so? Out of the 17 that have passed a billion, 15 have come in the last year. Adele’s “Hello” made it in only 87 days!

Automated rights might not be the way to go. Anti-piracy firm Rightscorp is questioning its own viability after some dismal first-quarter financial results. The company is hired by record labels and publishers to collect money from copyright infringers, but the pirates are either getting better at it, or it maybe piracy just isn’t as bad as it used to be.

The Consent Decree still stands. What may be the biggest story of last week, the U.S. Department of Justice refused to change what’s known as the Consent Decree. Music publishers want to be allowed to negotiate their US digital rights outside of the blanket licences offered by ASCAP and BMI, but the DoJ ruled against it. What more, the DoJ ruled that both ASCAP and BMI must accept 100% licensing – meaning that if a licensee clears a track with one writer, it doesn’t need to bother doing so with his or her co-writers or co-publishers. Publishers and songwriters aren’t happy, to say the least.

That’s the News Roundup of what went on in the music industry last week. Let’s see what this has brings.

July 1, 2016

Apple Music’s Not Catching Spotify Anytime Soon And That’s Not Good

apple-music-1 yearAs Apple Music reaches its first anniversary, the service is now up to 15 million paid subscribers, second only to Spotify’s 30 million. That number may not be as rosy as it seems though, since it may be well below what many in the industry initially expected.

A recent report from Cowen & Co. predicted that U.S. revenue from all streaming services will double by 2021, but Spotify is still expected to hold the subscriber lead during that period and not Apple Music.

One of the reasons why the service can be considered to be underperforming is the fact that Apple iTunes has more than 800 million accounts with credit cards already on file, and all of them had the ability to take advantage of a 90 day free trial of the service when it launched. While it’s true that Apple Music has worked it’s way up to 15 million paid subscribers from an initial 6.5 million, that’s still less than 2% of the potential audience once considered easy to tap.

While there was no official prediction on the number of conversions from iTunes to Apple Music, you can bet that not many in Apple upper management were counting on a figure that low. It’s difficult enough to get buy-in from consumers who aren’t already your customers, but when you can’t even get your most loyal customers who’ve spent money with you before (and a lot, in some cases) to sign on, you’ve got a problem.

Granted, there are some territories where an additional $9.95 per month (or the currency equivalent of the territory) might be considered a hardship, but the fact of the matter is that there are over 580 million iPhone users worldwide, which is an expensive purchase no matter what part of the world you live. Even using that total, 15 million subscribers still brings the conversion rate to slightly above 2.5%. [Read more on Forbes...]