Bridging The Streaming Music ‘Value Gap’

The global music business offered up two cheers this week for the first signs of life in the recorded music business in nearly a decade. According to International Federation of the Phonographic Industry’s (IFPI) latest global sales report, total recorded music revenue grew 3.2 percent in 2015, to $15.0 billion, the biggest jump since 1998 and the only growth since 2012, when sales ticked up 0.3 percent.

The overall growth IFPI_YouTubecomparisoncame entirely from digital sources, particularly streaming revenue, which jumped 45 percent over 2014, to $2.9 billion, or 19 percent of total revenues. Physical sales continued their decade-long slide, falling another 4.5 percent, buoyed somewhat by the continued renaissance of vinyl.

The strong streaming numbers were not evenly distributed, however. Subscription streaming revenue accounted for $2 billion of the $2.9 billion total, as the total number of paying subscribers reached 68 million, while industry revenue from ad-supported streaming amounted to a mere $634 million, despite more than 900 million listeners worldwide.

The report referred to the mismatch between consumption and revenue to artists and labels as a “market-distorting value gap,” that must be closed, echoing comments last month by RIAA CEO Cary Sherman. Read More »

The Accidental Blockchain Evangelist

PledgeMusic founder and CEO Benji Rogers did not set out to become the leader of a movement when he posted his now-famous essay last November describing how the blockchain — the technological underpinning of the cryptocurrency Bitcoin — could be used to untangle the notoriously Byzantine world of music licensing and payments. It was more a thought experiment than a business plan. But his ideas struck such a chord in the industry that Rogers has been thrust into the unwonted role of leading spokesman for the use of blockchain in the music business.

PledgeMusic CEO Benji Rogers

PledgeMusic CEO Benji Rogers

“I could never have imagined that the article I wrote would have the impact that it has,” Rogers would write a few months later in a follow up post. “In the short time since it came out, I have been overwhelmed by offers to speak publicly, offers of help and even offers to fund ‘what you are building.’ So I need to be clear here before we begin: this is not something that I am building.”

There are many in and around the music industry who would like to try, however.

By putting the blockchain at the center of his proposal Rogers helped spark growing interest in the industry in using the technology to bring transparency to the famously opaque world of music rights, where simply identifying who owns a musical work or recording, and who is entitled to be paid for which uses, can be near-impossible, keeping works out of the hands of would-be licensees. Blockchain was a major topic of discussion at this year’s SXSW conference, where it bore for full slate of panels. Read More »

Apple-Dubset Deal Marks A Rights-Tech Milestone

Apple Music this week tapped rights-tech developer Dubset Media to manage clearances and royalty payments for DJ mixes and other mashups, opening the way for thousands of hours of user-generated content to be made available legally on the streaming service.

The deal, which relies on Dubset’s proprietary technology for identifying the individual tracks used in extended mixes and making payments to the appropriate rights owners, marks a milestone for electronic dance music (EDM) and other types of derivative work, such as DJ mixes and remixes, which have become hugely popular with music fans but until now have largely been kept off the major streaming services due to the difficulty and Andy_Moor_DJ_2010complexity of clearing the rights for the dozens of tracks they typically include. Instead, most EDM and DJ mixes wound up on platforms like SoundCloud , which until recently had no licensing deals in place with music labels or publishers, or on underground streaming services that are less particular about copyrights.

“Our genre has grown hand in hand with the rapid growth of streaming and digital services yet, despite billions of online plays, most of our creators and rights-holders earn very little for their efforts compared to their ‘pop’ peers,” Association of Electronic Music CEO Mark Lawrence told Music Business Worldwide in response to the Dubset announcement. “This is the first move to correct the imbalance.”

But the deal also represents a milestone in a growing effort, both in the music business and in other media industries, to bring technology to bear on complex rights-management problems to try to open up new, more efficient and transparent channels for exploiting and monetizing media content rights. Those rights-tech efforts could eventually prove as disruptive to the business of owning, using and licensing media rights as technology has already proved to the distribution side of the business. Read More »