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Global music publishing collections grew to €8.96 billion ($10.04 billion) in 2019, up 8.4% from the year prior among members, according to an announcement made by international collection society trade group CISAC. Digital revenue drove most of that increase, which was up 27.2%, growing to €2.05 billion ($2.3 billion) from €1.61 billion in 2018. CISAC executives hope that digital can sustain that pace this year. With the ongoing global pandemic, it is predicted that global collections will experience a 20-35% decrease for 2020.
London-based MIDiA Research, in partnership with Audible Magic, announced that user-generated content (UGC) could be worth around $6 billion to the music industry over the next two years. Music-related UGC is estimated to be worth $4 billion in 2020 alone, with $2.2 billion of that being an estimate of potential music rights holder income. A big driver of growth in music-related UGC revenues in 2019 was social media platform TikTok, which reported to have hit $1.2 billion globally by March last year.
In a statement by Alphabet CFO Ruth Porat, YouTube was up 32% in advertising revenue during the third quarter of 2020, compared with the same period a year earlier, earning a total of $5 billion and additionally driving a 14% increase in overall quarterly revenue for parent company Alphabet. The video platform was reported to bring in $15 billion in advertising in 2019.
In this newsletter:
- Global Music Publishing Collections Grew Last Year, But a Big Pandemic Drop is Coming for 2020 and 2021
- Music-Related User Generated Content Could be Worth $6 Billion Over the Next Two Years (Report)
- YouTube Revenue Up 32 Percent in Summer Quarter
- Spotify Reaches 144 Million Subscribers but Misses on Revenue
- SoundCloud Rolls Out Snapchat Integration, with Facebook Stories Coming Soon
Now, the details...
Compiled by Heidi Seo
Exploration Weekly - October 30, 2020
Global Music Publishing Collections Grew Last Year, But a Big Pandemic Drop is Coming for 2020 and 2021
International collection society trade group CISAC announced on Wednesday October 28 that global music publishing grew to €8.96 billion ($10.04 billion) in 2019, up 8.4% from the year prior among CISAC members. Driving that increase was a nearly 27.2% surge in digital revenue, growing to €2.05 billion ($2.3 billion) from €1.61 billion in 2018. CISAC executives hope that digital can sustain that pace this year, because economic ravages from the ongoing COVID-19 pandemic will result in what they predict will be a precipitous 20-35% decrease in global collections for 2020. This could, in a worst case scenario, set music collections back to 2015 levels, wiping out the nearly 25% growth that has occurred in the intervening years.
Music-Related User Generated Content Could be Worth $6 Billion Over the Next Two Years (Report)
According to a report published by London-based MIDiA Research, in partnership with Audible Magic, entitled The Rising Power of UGC, user-generated content could be worth around $6 billion to the music industry over the next two years. It estimates that music-related UGC revenue will be worth $4 billion in 2020 alone, with $2.2 billion of that being an estimate of potential music rights holder income. Based on “the current trajectory of social media activity,” this opportunity will increase to $5.9 billion over the next two years, claims the report, with a revenue potential of $3.2 billion for music rights holders. ByteDance-owned TikTok was one of the biggest growth drivers of 2019’s strong music-related UGC revenues, which were reported to have hit $1.2 billion globally by March last year. Last month, TikTok confirmed that its platform has surpassed 100 million Monthly Active Users (MAUs) in Europe. It has also passed 100 million in the US, while Douyin, the Chinese version of the app, has hit 600 million MAUs.
YouTube Revenue Up 32 Percent in Summer Quarter
YouTube earned $5 billion in advertising revenue during the third quarter, up 32% compared with the same period a year earlier, helping to drive a 14% increase in overall quarterly revenue for parent company Alphabet. The statement was made by CFO Ruth Porat who acknowledged the increase in advertiser spend for Alphabet’s Search and YouTube groups. Alphabet does not break out YouTube's non-advertising revenue, which comes from subscriptions and other entertainment transactions, like movie rentals. Those revenues are reported as part of the "Google other revenues" line item, which contributed $5.5 billion during the period. The parent company began disclosing YouTube revenue in February of this year when it announced that the world's largest ad-supported video platform had brought in $15 billion in advertising in 2019.
Spotify Reaches 144 Million Subscribers but Misses on Revenue
Spotify continued to grow subscribers and content in the third quarter of 2020 but came up short on sales and earnings, driving its stock down in early trading on Thursday. CEO and cofounder Daniel Ek also hinted at a price increase during the call, but cited the ongoing global COVID-19 pandemic as a reason why that might not happen in the immediate future. The streaming service lost the equivalent of 68 cents a share on sales of $2.31 billion in the most recent quarter. Analysts expected it to lose 61 cents a share on sales of $2.36 billion; in the same quarter last year, its Spotify earnings were 40 cents a share on sales of $1.93 billion. On the other hand, it reported a gain of 6 million subscribers, from 138 million in the second quarter and 130 million in the first, and 320 million total monthly active users, up 29% year over year. Ek pointed out that its advertising revenue came in better than expected, returning to growth after a significant dip in the second quarter. The company also launched in Russia and 12 surrounding territories. He also pointed to the company’s areas of growth during the report, saying that it has paid out more than €1 billion to rights holders in every quarter in 2020.
SoundCloud Rolls Out Snapchat Integration, with Facebook Stories Coming Soon
SoundCloud has rolled out a new integration with Snapchat, which builds on last week’s launch of Sounds, a new feature that lets the social media platform’s users add music to their Snaps. Snap Inc. stated that it secured multi-year deals with a number of major and independent publishers and labels to launch Sounds. Beginning October 27, SoundCloud users can share any track, playlist, album or artist profile from SoundCloud’s full 200 million-track catalog to Snapchat. This integration was previously announced in June. In addition, announced this week and rolling out soon, SoundCloud users will also be able share any track, playlist, album or artist profile from SoundCloud’s catalog to Facebook Stories. In order to share music on these platforms, the user will need the latest version of the SoundCloud app.
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