“One is loved because one is loved. No reason is needed for loving.”
Paulo Coelho, The Alchemist
Total revenues for the global recorded music business grew by 8.2% to $20.2 billion, according to an IFPI report for 2019. Streaming revenue grew 22.9% to $11.4 billion, more specifically, accounting for more than half of total revenue for the first time, at 56%. Paid subscription streaming powered a large part of the growth with a 24.1% increase. The category also counted 341 million users of paid streaming services at the end of 2019, up 33.5%, with paid streaming accounting for 42% of total recorded music revenue.
Peloton reported $49.3 million spent on settlement and litigation costs this past financial quarter. The fitness company was hit with a copyright suit filed by music publishers alleging $300 million in damages for the infringement of thousands of songs by not properly obtaining sync licenses. The two sides reached an agreement that promised better collaboration towards a better approach to licensing in February.
YouTube Music has now rolled out its Explore tab to mobile users on iOS and Android this week, including features like in-app lyrics, which has been in beta for the better part of six months. The app has replaced Google Play Music as the default music player on Android devices, and it has rocketed to the top of the “most-downloaded” apps charts.
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In this newsletter:
- Global Recorded Music Revenues Topped $20 Billion in 2019, but Streaming Growth is Slowing
- Peloton Reports $49 Million in Legal Costs After Settlement with Music Publishers
- YouTube Music Rolls Out Its “Explore Tab” to Android, iOS Users
- Spotify is Testing Video Podcasts with Two YouTube Stars
- ASCAP Paid Out $1.18 Billion to Songwriters and Publishers in 2019
- Silver Lake to Invest $750 Million in JioSaavn Parent
- Country Music is Enjoying a Streaming Boom During the Pandemic: New Data
- Why Nigeria has “Massive” Potential for Music Streaming
Now, the details...
Compiled by Heidi Seo
Exploration Weekly - May 8, 2020
Global Recorded Music Revenues Topped $20 Billion in 2019, but Streaming Growth is Slowing
According to data released by the International Federation of the Phonographic Industry (IFPI) on Monday, for 2019, total revenues for the global recorded music business grew by 8.2% to $20.2 billion, with streaming revenue growing 22.9% to $11.4 billion, accounting for more than half of total revenue for the first time, at 56%. The growth was powered by a 24.1% increase in paid subscription streaming with nearly all markets reporting growth. There were 341 million users of paid streaming services at the end of 2019 — up 33.5% — with paid streaming accounting for 42% of total recorded music revenue. However, even as value estimates of the global music industry soared over the past three years, the surge has begun to cool off despite major label expansions into newer markets like Asia and Africa. US and Canada showed 10.4% growth, accounting for 39.1% of the global market.
Peloton Reports $49 Million in Legal Costs After Settlement with Music Publishers
In an earnings report by fitness startup Peloton Interactive, a figure of $49.3 million was spent on settlement and litigation costs this past financial quarter, likely reflecting what it took to get the company out of a massive copyright suit filed by song publishers. These music publishers were alleging $300 million in damages for the infringement of thousands of songs by not properly obtaining sync licenses. Peloton fought back by asserting antitrust counterclaims, but in January, a federal judge rejected those claims. The parties eventually arrived at a settlement that was announced in February, including an agreement that Peloton and the National Music Publishers Association would collaborate towards a better approach to licensing. Peloton recently showed a 66% increase in revenue to $524.6 million in its latest quarterly financial results.
YouTube Music Rolls Out Its “Explore Tab” to Android, iOS Users
YouTube Music launched its Explore tab to mobile users on iOS and Android this week. Google began experimenting with the new feature as a way to curate personalized recommendations. It also includes its in-app lyrics feature, which has been in beta for the better part of six months. Now, YouTube Music will deliver static lyrics in the app whenever they are available. YouTube Music has replaced Google Play Music as the default music player on Android devices. That alone has helped the app rocket to the top of the “most-downloaded” apps charts.
Spotify is Testing Video Podcasts with Two YouTube Stars
Spotify is now testing video podcasts in its app, starting with two YouTube stars: Zane Hijazi and Heath Hussar, hosts of Zane and Heath: Unfiltered. A source close to Spotify tells The Verge that the global test, which allows the creators to upload their recorded video footage to the app, will show up for 50% of the show’s Spotify podcast listeners, and videos will only be coming to three recent episodes, numbers 28 through 30. Video will sync with the audio feed and keep playing even if listeners lock their phones, and ad spots will still play but with the video showing up as a single, static shot. The feature is available on the desktop and mobile Spotify apps.
ASCAP Paid Out $1.18 Billion to Songwriters and Publishers in 2019
A publication of ASCAP’s 2019 financial results showed that its revenues topped $1.274 billion in 2019, which marks a $47 million increase over 2018, and a fifth year of record-breaking financial results. Royalty distributions to ASCAP members in 2019 increased by $75 million, crossing the $1 billion mark for a third year with $1.184 billion in total royalties paid out. ASCAP operates on a not-for-profit basis and distributes all revenues collected, less operating expenses. Domestic (US) revenue collected last year was $945 million, up $39 million over the prior year, driven in part by an increase in audio streaming, which increased 16%. Domestic distributions from ASCAP-licensed and administered performances in the US totaled $869 million, up $55 million over last year. Foreign revenue increased to $329 million and foreign distributions were $315 million, up by nearly $20 million over 2018.
Silver Lake to Invest $750 Million in JioSaavn Parent
Private equity firm Silver Lake has struck a $750 million deal with Indian telecom and technology giant Jio Platforms, less than two weeks after Facebook said it would pay $5.7 billion for a holding of about 10% in the company. Silver Lake's investment values Jio at $65 billion, about 12.5% more than the valuation implied by Facebook's recent deal. Jio Platforms was launched by India’s largest conglomerate, Reliance Industries, in late 2016. It counts nearly 400 million customers, has released its own low-cost mobile phones, and has built a digital ecosystem of streaming video, music, chat, e-commerce platforms. According to the Wall Street Journal, Jio is considered a prime candidate for an eventual initial public offering. Silver Lake has approximately $40 billion in assets under management, including major stakes in Endeavor, Twitter, and AMC Theatres.
Country Music is Enjoying a Streaming Boom During the Pandemic: New Data
Country music has shown a 10.7% growth in on-demand audio streams to a record high 1.26 billion, enjoying a streaming bonanza for the week ending April 23. The next week ending April 30, a new record was set as streams grew 14.3% to 1.3 billion. This is versus the baseline weekly audio average of 1.138 billion for the eight-week period Jan. 17 through March 12, according to MRC Data/Nielsen Music. Factors for its rise include the release of new albums from Kelsea Ballerini and Sam Hunt, television shows prominently featuring country artists, and the deaths of Kenny Rogers and Joe Diffie. Since March 12, audio country streams have grown 6.2%. Other genres to see on-demand audio streaming gains are children’s music and classical.
Why Nigeria has “Massive” Potential for Music Streaming
According to PwC’s Entertainment and Media Outlook 2019-2023 report, recorded music revenue in Nigeria is expected to increase at a compound annual growth rate of 5.6% over the next five years to reach $40 million in 2023. The country is being predicted to be the world’s fastest growing Entertainment and Media market over the next five years, albeit in percentage terms. Music streaming revenue in Nigeria will be fueled by a boom in mobile internet, increasing at 39.6% CAGR over the next five years to reach $17.5 million in 2023.
- Read more about Title II of the Music Modernization Act (MMA) on pre-1972 sound recordings here.
- The new realities of music licensing.
- Every protein is a song.
- Deezer develops AI to detect explicit song lyrics.
- What makes K-Pop, K-Pop?
- Florence Welch performs “You've Got The Love” for the virtual Met Gala.
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