For Music Biz, First-Half Results Are A Glass Half Full

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The Recording Industry Association of America this week reported that U.S. music sales through the first half of 2012 were up 8.1 percent over the first half of 2015, to $3.4 billion, the industry’s strongest rate of growth in more than a decade.

iphone-artist-spotifyThe surge was due almost entirely to a whopping 112 percent increase in revenue from paid streaming services such as Spotify, Apple Music, and Tidal which more than offset a 17 percent decline in digital downloads (including albums, single tracks, and kiosks), and a 16 percent decline in sales of physical formats (CDs and vinyl).

Revenue from free interactive streaming, such as Spotify’s ad-supported tier, YouTube and Vevo, grew 24 percent but remained a tiny slice (5.9 percent) of the overall revenue pie. Revenue from non-interactive streaming services, primarily Pandora, was up 4 percent.

“Streaming in all its forms accounted for almost half of all recorded music revenues in the first half of 2016,” RIAA CEO Carey Sherman wrote in a post on Medium. “This represents a remarkable transformation and reinvention by a business that was principally physical products just six years ago.” Read More »

The More Things They Change, The More Digital Platforms Become The Same

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YouTube is working on a plan to be more like Facebook, Snapchat, and Twitter. According to a report by VentureBeat, the video platform has been developing a new feature internally called Backstage that will allow users to post photos, links, text posts and other non-video content alongside their videos. The new content will resemble a Facebook Timeline, presented as a feed scrolling in reverse-chronological order on the user’s channel home page, but also appearing in subscribers’ feeds and notifications.

Backstage, or whatever it ends up being called, is expected to be rolled out later this year on select YouTube accounts.

The move to make using YouTube more like using Facebook seems only fair at this point given that Facebook has lately become more like YouTube. The social network has, with considerable success, moved aggressively to turn itself into a major platform for hosting and sharing user-created videos — once the near exclusive facebook_videoterrain of YouTube.

Facebook has also lately taken steps to become more like Twitter, launching Facebook Live to rival Periscope, while Twitter has tried to become more like YouTube by making video a bigger part of its offering.

A similar convergence is underway in the music streaming area. Pandora is reportedly in the final stages of negotiations with the record companies to launch an on-demand tier to its service, which would make it more like Spotify and Apple Music. Spotify, meanwhile, is acting more YouTube and even Netflix, adding original video to its mix of content.

It’s getting to where you can’t tell the players apart without a scorecard.

More to the point, it’s getting harder for digital platforms and services to differentiate themselves from each other. Music streaming services, which already share substantially the same catalog of content and now increasingly share the same business model, are trying, through the increasing use of  individual artist exclusives. Others have sought to make human vs. machine curation a point of differentiation. Read More »

Return Of The Gatekeeper

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Making content available on-demand was supposed to put the consumer in charge. Armed with “personalization” tools and backed by social media filtering the viewer/listener/reader would be king, usurping the power of traditional gatekeepers.

But a funny thing is happening on the way to the throne: consumers increasingly are inviting gatekeepers back into the realm, albeit not necessarily the same ones they had overthrown.

guard-buckhm-palace-shst_w_755Speaking at MIDEM this week, MIDiA analyst Mark Mulligan reported that “The percentage of people who make their own playlists on streaming has dropped by 10 percentage points in just one year,” said Mulligan. “The main playlists which people are using are the playlists which are being pushed to them,” by the streaming services, or in some cases by record labels.

Citing data provided by Spotify, Mulligan noted that in December 2014, Spotify’s Today’s Top Hits playlist had 2.3 million followers and generated 35.4 million streams per month. By April 2016 it had grown to 7.8 million followers and was generating more than 120 million streams a month. Read More »

The Accidental Blockchain Evangelist

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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. Here is new developments in crypto. 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 »

How The CRB Has Done The Music Industry A Favor (Updated)

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With the possible exception of Taylor Swift, Janet Yellen may now be the most powerful person in the music business. As chair of the Federal Reserve, Yellen controls the levers that control the rate of consumer inflation in the U.S., a number on which potentially millions of dollars in music royalty revenues will now turn in the wake of Wednesday’s ruling by the Copyright Royalty Board (CRB) setting the royalty rates that internet radio services like Pandora and iHeartMedia must pay to record labels and artists for the next five years.

Under the new rate card, internet radio services will pay 17 cents per 100 streams in 2016 ($0.0017 per stream), up nearly 20 percent from the 14 yellencents per 100 streams they pay today but well below the 25 cents per 100 that SoundExchange, which collects digital royalties for artists, had sought. After that, the rate will be indexed to the Consumer Price Index (CPI), the main gauge the government users to track inflation, for the next four years, which means the rate could go up or down with the price of bread.

It was an unexpected and deeply peculiar move that looked like nothing so much as an effort by the CRB, an arm of the Library of Congress, to get out of the rate-setting business, which itself would be mighty peculiar insofar as its role in setting royalty rates for webcasters is mandated by Congress and not really optional on CRB’s part. Read More »