INDUSTRY 2018-19 points

IN THIS POST:
See below for a list of themes/points/case studies covered.
The idea of this is to gather a range of resources, as I encounter them, which help to inform you on the music industry. it will be a rather big post! Use this with an earlier summary with examples mostly not referenced here, but also the various tags!!!

https://www.billboard.com/articles/business/8520844/money-makers-major-labels-individual-revenues

Do they pay enough? This audio atrocity made a lot of money for a charisma-free star... Read on to find out who

“At the beginning of the digital revolution it was common to say that digital was killing music,” said Edgar Berger, chief executive of the international arm of Sony Music Entertainment. Now, he added, it could be said “that digital is saving music.” [NYTimes]

......

Did you know that primitive, bleepy (polyphonic) ringtones were the 1st major market for the music biz on the then new smartphones? This headline comes from 2005, when people paid up to $/£4 for a single ringtone, changing these as the charts changed. Online distribution, popularised by piracy site Napster from 1999, began to be monetised by labels from 2000, and by 2003 this was a booming market. In a sign of how fast things change, digital downloads, the 2nd big market, are tipped to disappear soon ... and the ringtone market (and charts!) already has. Of course, there's now a retro market for this defunct technology, and Crazy Frog lives on...
....

TO EDIT......
http://ultimateclassicrock.com/metallica-napster-lawsuit/
https://www.rollingstone.com/music/music-features/tim-ingham-music-industry-status-2018-771105/

HMV is a bedrock of the British music industry – its loss would affect us all

https://www.theguardian.com/music/2018/dec/30/hmv-is-a-bedrock-of-the-british-music-industry-its-loss-would-affect-us-all?CMP=Share_AndroidApp_Copy_to_clipboard

IN THIS POST: 
I began this just as a summary on a report on UMG's increasing profits, but I've widened it out to provide key facts/figures on the music industry. As well as multiple tags (monetising, merchandise, music industry, Spotify, distribution etc) you can find key posts like this industry summary, ppt on Bicep example with more egs of monetising, and this post with graphs and stream revenue calculators, + this 2018 summary which drew on multiple articles:

• when did it peak (were revenues highest)? 1999
• why did revenues fall after this? Online distribution made piracy easy (eg Napster) and undermined the appeal of expensive CDs 
• by today a whole generation has grown up with the attitude that music is/should be free; not prepared to pay for albums (there's even a political party campaigning for this: The Pirate Party)
• ...indeed, the album is being undermined, with streams from albums on Spotify typically focused on just 3-4 songs
• monetizing recorded music is therefore not as easy as it once was;
• the existing business practice, distributing recorded music as physical media, was disrupted by convergence/digitisation
• the smartphone (+phablets/tablets) is the key converged device for the music industry, overtaking the PC where previously people would access the likes of Napster
• by 2012, streaming/digital sales revenues overtook physical sales in the US
• it wasn't until 2017 that this happened in the overall, global market (broadband, 3G/4G rollout and take-up being slower in many markets)
• the digital sales market was initially key, especially iTunes sales, but will soon be overtaken by vinyl revenues!!! 
• other early digital markets have quickly disappeared as technology accelerated: ringtones were a huge market just a decade ago
• the video in this post uses the 'polymorphic', 8-bit music style that people used to pay a few euros to get for their phones, before continued convergence made it easy to load your own (probably ripped from YouTube) MP3
• starting in 2000, this was the 1st way the music biz had of making money from phones - the US ringtone market alone was worth $300m by 2004 (Japan $900m, globally about $3.5bn [see Wiki]). It declined from 2008 on; by 2014, the ringtone chart was abandoned (see this article)

  

  a whole market that's now gone: polyphonic ringtones

• see this interactive website to sample a range of ringtones over time! 
• streaming now accounts for over half of all music industry revenues and is growing, while physical media sales continue to fall 
• UMG 2017-2018: digital (streaming/sales) up 1/3, physical down 20%
• the payment per stream remains controversial: the music industry strongly argue that YouTube especially must pay much more - see the calculator below
• the EU may pass laws to force YouTube to pay more...
• ...which may lead to millions of fan videos being taken down!!!
• touring (tickets) and merchandising, + sponsorship, tie-ins, etc are another key means of monetising for artists and labels
• but labels increasingly force artists to sign '360 deals' including image rights + a % of tour revenues

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DOES YOUTUBE PAY ENOUGH PER STREAM??
I've blogged on this (and Spotify and others before); here's a revenue calculator for 1 of the most streamed videos ever ... you can try it for others ...

UNIVERSAL'S PROFITS SOAR EVEN AS PHYSICAL MEDIA CONTINUES TO FALL

Lot of great details in this musicbusinessworldwide feature on the corporate fortunes of UMG (Universal Music Group), one of the big 3 that accounts for a combined 80% of the global music industry's revenues...

• UMG's streaming revenues are greater than Spotify's total revenues, a reminder of the diversity within a market dominated by bug names like Spotify, YouTube and Apple, but with plenty more such as Amazon and Deezer.
• Overall revenues are rising despite continuing steep falls in physical media revenues.
• Rock music is very much secondary to rap/rnb/urban for sales (this goes back about a decade)

There's lots of business terms/abbreviations here:

• YoY = year-on-year (eg 2018 profits up on 2017's)
• Q4 = Quarter 4 (businesses publish reports on revenues, profits, losses every 3 months ... every quarter

If you were to ask Sir Lucian Grainge what his favorite genre of music is right now, you’d have to guess he’d say hip-hop.
According to Vivendi, Universal Music Group’s five biggest revenue-generating artists in the first nine months of this year were: (i) Drake; (ii) Post Malone; (iii) Kendrick Lamar; (iv) XXXTentacion; and (v) Migos.
These acts drove UMG’s recorded music sales in the first nine months of 2018 to an all-time high of €3.28bn ($3.93bn), up 10.2% YoY at constant currency.

Remember that the music industry constantly moans about piracy and the streaming platforms paying too little per stream ... yet profits are increasing overall.

HOW PROFITS BEGAN RISING AGAIN AFTER FALLING EVERY YEAR FROM 1999-2011

After years of falling from their 1999 peak, the industry (not just UMG) starting growing again in 2012, as this 2013 report highlights:

The music industry, the first media business to be consumed by the digital revolution, said on Tuesday that its global sales rose last year for the first time since 1999, raising hopes that a long-sought recovery might have begun.
The increase, of 0.3 percent, was tiny, and the total revenue, $16.5 billion, was a far cry from the $38 billion that the industry took in at its peak more than a decade ago. Still, even if it is not time for the record companies to party like it’s 1999, the figures, reported Tuesday by the International Federation of the Phonographic Industry, provide significant encouragement.
“It’s clear that 2012 saw the global recording industry moving onto the road to recovery,” said Frances Moore, chief executive of the federation, which is based in London. “There’s a palpable buzz in the air that I haven’t felt for a long time.”For years, the music industry’s decline looked terminal, with the record companies seemingly unable to come up with digital business models that could compete with the lure of online piracy. Last year, however, digital sales and other new sources of revenue grew significantly enough to offset the continuing decline in CD sales.

UNIVERSAL'S GRIP TIGHTENS AS THEY SIGN UP TAYLOR SWIFT
Universal just tightened its grip on the industry with the signing of Taylor Swift, though they agreed to give her ownership of the masters of all recorded music, a big change from usual industry practice, and to pass money from sale of its shares in Spotify to its artists.

Taylor Swift leaves lifelong label to sign with Universal Music Group

More details: Taylor Swift strikes a blow for fellow artists as digital revenues soar

https://www.theguardian.com/business/2018/nov/24/taylor-swift-blow-fellow-artists-streaming-revenues-soar-universal-spotify?CMP=Share_AndroidApp_Copy_to_clipboard

https://www.cbcmusic.ca/posts/20648/danny-michel-opens-up-about-reality-being-musician

$44.99 sales, including $0.003 per Spotify stream, for a Canadian artist's top 10 hit (Canada charts and figures)

New campaign to get Spotify etc to tag Indie artists and boost the 19.55% global share not taken by the big 3.

https://www.hypebot.com/hypebot/2018/11/spotify-apple-music-urged-to-label-indie-music.html

https://www.hypebot.com/hypebot/2018/11/the-music-business-is-about-more-than-just-the-big-three.html

Music biz revenues grew in 2017+2018 as streaming booms.

Universal expanding in China/Asia.

Metallica launch Enter Night Pilsner, building on whiskey (Rolling Stone).
They even released a 'making of' video! (Blabbermouth)

https://www.musicbusinessworldwide.com/jobs/spotify-manager-artist-label-marketing-us/

Physical sales so reduced, a Jan 2019 #1 only had 823 album sales!!!

Average Spotify user only paying 5.5o, and falling, as global rollout in poorer countries builds and family plans too.

https://www.hypebot.com/hypebot/2019/01/record-labels-evolve-to-stay-relevant-in-the-streaming-era-musonomics-report.html

https://www.billboard.com/articles/news/features/8492870/spotify-direct-to-artist-tools-label-territory

https://www.newstatesman.com/2019/01/is-the-music-industry-dead

ALT VIDEOS vertical version convergence UGC

Thanks to Simon for this one, which demonstrates another alternative to the traditional narrative/performance video but also the ongoing process of convergence. Its also a further demonstration of how artists are increasingly taking on formats popularised by fans as UGC and releasing their own official versions to better control the monetising of their recorded material.

Simon linked this eg by the world's biggest-selling artist of recent times, the ubiquitous Taylor Swift. She makes for an interesting digitisation/convergence case study already - she initially refused to allow her albums to appear on Spotify and Apple Music, forcing Apple to abandon plans for a free version of Apple Music with lower artist payments.



and here's the original


Think about why artists do this:

• primarily more control over monetising their work
• but also accessibility: creating the sense/brand image that they are to some degree at the level of their audience still (in this case shooting simple vids through their smartphone)
• standing out: multi-versions like this generate articles/news stories, thus more hits and more revenue
• for ultra-mainstream artists like Swift maintaining wide audience appeal through single narrative videos can be difficult, so these help to target specific demographics

REPRESENTATION INDUSTRY Swift tailor-made case study

Taylor Swift’s reputation: will her new album silence her critics?

A case study that provides good insight into the changing music industry landscape...

In August, Taylor Swift released Look What You Made Me Do, the first single from her new album, Reputation, which finally emerges from its shroud of secrecy tomorrow. The track and its subsequent video broke three records within a week, including first-day streaming figures on Spotify and YouTube respectively. Swift’s sixth album has already thrashed pre-sale records, selling more than 400,000 copies – partially due to an industry standard reward system that gives early purchasers exclusive priority access to concert tickets.These achievements are fairly typical business for Swift, who often finds herself breaking records that were set with her previous release. She has sold more than 33m albums worldwide, thanks to her reluctance to join Spotify until this summer, keeping her sales robust while most artists have experienced a decline. 

UGC WEB 2.0 Fan album art, track listing

Faux real: Taylor Swift, Jay-Z and the ‘leaks’ that are too good to be true https://www.theguardian.com/music/2017/sep/29/taylor-swift-jay-z-leaks-too-good-be-true?CMP=Share_AndroidApp_Blogger

INDUSTRY No Swift end to YouTube fees war

An ongoing story to keep an eye on, the fight between artists and streaming outlets such as YouTube and Spotify over the fees or royalties paid. Counted for chart positions now, there is a fierce debate over the equity of the huge revenues generated for the likes of YouTube and the very, very small payments all but the very largest artists receive.


Taylor Swift has been notably outspoken in calling for increased payments per stream. See Taylor Swift is taking on YouTube, and it won’t be an easy fight.

YouTube Music Awards signify YT as industry king?

(or indeed queen!)

Can YouTube create live content that inspires watercooler zeitgeist moments like television? Google’s giving it a shot with the YouTube Music Awards, a celebration of do-it-yourself Internet culture livestreaming on YouTube right now. It’s chaotic, innovative, offensive, silly, and downright weird. But one thing’s for sure. You won’t see this on TV.  (all quotes from TechCrunch live blog)

The fact that I heard about this on Radio 4, highbrow + 'high culture' station, certainly reinforces the impression that this event is seen as highly significant. Their media correspondent (530am bulletin, 4.11.13) was clear that YouTube now leads the music industry, its position as leading source of streamed material just one string to its bow. I've blogged on YouTube and its rise, expanding beyond its original format on the way, many times - click on the tag cloud (bottom right of the blog) to find out more.

UK acts dominate 2012 US charts

Adele tops the US album sales for a 2nd year running, a feat last achieved by Thriller, while 4 of the top 5 albums were by UK acts. See article below for more details.

Adele joins exclusive club as 21 named bestselling album in the US … again!

Tottenham's finest becomes first recording artist since Michael Jackson to top US album sales charts in consecutive years

Sean Michaels, 4.1.13, http://www.guardian.co.uk/music/2013/jan/04/adele-21-bestselling-album-us-again

Double top … Adele has emulated Michael Jackson after 21 became the first album since Thriller to top the sales charts two years in a row. Photograph: Matt Sayles/AP

For the second year in a row, Adele's 21 was the bestselling album in the US. The English singer has become the first artist since Michael Jackson to produce a record topping the sales charts in both the year of release and the year following.
According to Nielsen SoundScan, 21 sold 4.41m copies in 2012 – just 25% less than the year before, when XL/Columbia moved 5.82m. In fact, 21 hasn't left the weekly top 40 since it debuted, at No1, in March 2011. Adele's success puts the album in a very exclusive club: only three other LPs have scaled comparable heights across two successive years. The feat was last accomplished in 1985, when Jackson issued a little record called Thriller. The previous record holders were soundtracks: West Side Story in 1962/63, and My Fair Lady in 1957/58.
Overall, America's 2012 charts show a major British invasion. Apart from Taylor Swift's Red, which sold 3.11m, all of the top five albums were made by UK acts. One Direction's debut, Up All Night, was the No3 record, selling 1.62m, and their second album, Take Me Home, came in at No5. Mumford & Sons sold 1.46m copies of Babel, making it No4.
On the singles side, Gotye struck gold with his xylophone ditty Somebody That I Used to Know, selling 6.8m copies, almost exclusively digitally. Carly Rae Jepsen's Call Me Maybe rung in at No2, followed by We Are Young, by Fun. All three songs broke the all-time digital record, previously set by Adele's Rolling in the Deep.
As in the UK, there was a dip in overall album sales, from 331m in 2001 to 316m in 2012. But vinyl sales continue to grow year after year, and are up 18% thanks to hits like Jack White's Blunderbuss and the Beatles' reissued Abbey Road. Still, those black lacquer discs form only a tiny part of the pie: less than 2% of all albums sold.
Britain's bestselling album of 2012, Emeli Sandé's Our Version of Events, has never charted in the US.

Any predictions for 2013?