“There is a time for silence. There is a time for waiting you turn. But if you know how you feel and you so clearly know what you need to say you'll know it. I don't think you should wait. I think you should speak now.”

Taylor Swift

The International Federation of the Phonographic Industry (IFPI) posted in its recently published “Global Music Report 2021” a sixth consecutive year of growth in global music sales in 2020, with total revenues rising 7.4% to $21.6 billion on the back of an 18.5% rise in streaming subscription revenues. Latin America was the fastest-growing market region for a sixth year in a row, while South Korea grew the fastest overall among major markets.

Short-form video app Triller inked a licensing deal with the National Music Publishers’ Association (NMPA) this week. The license will be opt-in, meaning that eligible publisher members must actively seek coverage; it will not happen automatically.

In order to help the Mechanical Licensing Collective (MLC) identify and locate copyright owners with unclaimed royalties of musical works, the US Copyright Office is undertaking a public study compliant with the Music Modernization Act (MMA) and in consultation with the Government Accountability Office. Last summer, it issued a notice soliciting public comments and due to the high volume of requests to participate, public roundtables were held on March 25 and 26 via Zoom.

Mark your calendars for the new and exciting upcoming event on Royalty Forensics with Exploration this Monday March 29 at 12 PM PST! Deep dive into your royalties and learn more about how you can get paid. The webinar will be hosted by SONA as part of their Sexy Metadata Action Group initiative. Please visit this link here to register.

Our next video in the “Music Industry - 5 Mins or Less” video series discusses new developments and updates surrounding The Mechanical Licensing Collective (The MLC). Find out more about what to expect from this organization by watching here below:

In this newsletter:

Now, the details...
Compiled by Heidi Seo

Exploration Weekly - March 26, 2021

IFPI Global Report 2021: Music Revenues Rise for Sixth Straight Year to $21.6 Billion

Global music sales grew for the sixth consecutive year in 2020, with total revenues rising 7.4% to $21.6 billion on the back of an 18.5% rise in streaming subscription revenues, according to the International Federation of the Phonographic Industry's (IFPI) "Global Music Report 2021." Total recorded music sales revenues jumped by 10.5% in 2020, the highest growth rate ever recorded by London-based IFPI. Revenues from streaming formats grew by 19.9% to $13.4 billion and accounted for 62.1% of global recorded music revenue, a jump in share of 6.5% over 2019. Overall physical sales fell by 4.7% to $4.2 billion. Latin America was the fastest-growing market region for a sixth year in a row, while South Korea grew the fastest overall among major markets (up 44.8%). The U.S. retained its long-held position as the largest market, with music sales growing 7.3% in 2020, driven by an almost 13% rise in streaming revenues. However, due to the impact of COVID-19, public performance revenues across the globe fell by 30.4% to $572 million.

Triller Finally Forges Licensing Agreement with Music Publishers

Short-form video app Triller has struck a licensing agreement with the National Music Publishers’ Association (NMPA), which represents most American music publishers. The deal will see the platform compensating the songwriters and publishers covered by NMPA when their songs are used in videos on the platform. NMPA announced the deal on its social media platforms on Wednesday afternoon. The license is opt-in, meaning that eligible publisher members must actively seek coverage; it will not happen automatically. NMPA president and CEO David Israelite said in a statement, “Music is foundational to Triller’s platform and it is essential that the songwriters who create that music are paid for their contributions to the Triller experience. Music and video offer limitless potential to social media platforms, however compensating songwriters must be a primary consideration, not an afterthought”.

U.S. Copyright Office Holds Unclaimed Royalties Study

The US Copyright Office is undertaking a public study as directed by the Music Modernization Act (MMA) and in consultation with the Government Accountability Office to recommend best practices that the Mechanical Licensing Collective (MLC) may implement to effectively identify and locate copyright owners with unclaimed royalties of musical works, encourage copyright owners to claim accrued royalties, and ultimately reduce the incidence of unclaimed royalties. On June 2, 2020, the Office issued a Federal Register notice soliciting public comments for this study. Public comments were due August 3, 2020, and reply comments were due August 31, 2020. Due to the high volume of requests to participate, the Office held public roundtables as part of its study on March 25, 2021 and on March 26, 2021 via Zoom.

Tencent Music Improves Revenues 15% in 2020, Equals Spotify’s Market Cap

Chinese music streaming company Tencent Music Entertainment earned net income of $641.4 million in 2020 on revenues of $4.5 billion, the company announced March 22. That helps explain why Tencent Music’s market capitalization is just 1.5% lower than Spotify’s ($51.8 billion to $52.6 billion) with only 51.3% of its revenue ($4.5 billion to $8.7 billion). Tencent Music’s revenues rose 14.3% to $1.28 billion in the fourth quarter and 14.6% to $4.5 billion in 2020. Music accounted for just 28.1% of total revenue in 2020 while social entertainment and “others” - live streaming and karaoke apps - represented the other 71.9%. Social entertainment monthly average users may have decreased 4.3%, but their average revenue per user grew 26.3% to become more than 18 times larger than online music’s ARPU. Music revenues are picking up steam though through the use of a paywall, improved subscriber retention and a 100% gain in advertising revenue in the fourth quarter. The statistics forecast that revenue growth will increase to about 20% in 2021 from 16% in 2020.

Music Startups Saw Funding Levels Sink by 67% in 2020 (Report)

Over 10,000 startups were launched around the world in 2020 and global startup funding across all sectors rose 42% year-over-year. The three industries that saw the biggest startup growth last year were Science and Engineering (+329.7%), Biotech (+187%), and Manufacturing (+113%). However, VC funding for music startups fell by 67% from over $1 billion in 2019 to $328.9 million last year. That’s according to new figures published by researchers at BusinessFinancing.co.uk in a report revealing how start-up funding changed from 2019 to 2020 and the difference in spending by country and industry. The report, which was compiled by analyzing Crunchbase data, also shows that the number of startup music companies receiving VC funding fell from 87 in 2019 to 68 last year. “It’s plausible to argue that these industries were affected by the events of 2020,” reads the report. Elsewhere in the data, the figures reveal that across all sectors, the average funding round in 2020 raised $28 million, a 57% increase on the 2019 average.

Global Value of Music Copyright Grew 7% to $31.6 Billion in 2019

Ex-Spotify chief economist, Will Page, posted his analysis for 2019 this week, and the topline story is 7% growth, with music copyright worth $31.6 billion that year. That’s split $19.6 billion from labels, $10 billion from collecting societies, and $1.9 billion of “publishers direct revenues” - although bear in mind that publishers also receive some of the second catup egory from the CMOs. “In USD constant currency, record labels were up 8%, CMOs were 4% and music publishers were up just 1%,” wrote Page. “This is a continuation of a ‘hare and tortoise’ trend: labels have gone from boom to bust and are now booming again thanks to streaming revenues, whereas CMOs and publishers who have more diverse income portfolios have never really stopped growing - albeit at more modest rates.” He also noted that when he first conducted his study in 2014, labels’ share of this global value was 55%, but that this grew to 62% by 2019, at the expense of CMOs’ and publishers’ share. Streaming accounted for 47% of the overall value in 2019, up from 39% in 2018.

Surprise! YouTube is the Most Popular Music Streaming Service

YouTube is the biggest music streaming service in the world, with its scale - both in terms of its overall users and the more than two billion people who specifically consume music on it, according to research firm YouGov in a recently published blog post. The organization surveyed people in 17 countries about their media habits, including music streaming. 44% of Americans use YouTube for music, according to the study, putting it well ahead of Spotify (27%), Pandora (25%), Amazon Prime Music (24%) and Apple Music / iHeartRadio (both 12%). Interestingly, for 18-34 year-olds, the gap with Spotify is much closer: the services are used by 53% and 45% of that age group, respectively.

Random Ramblings

  • Why we believe streaming subscription ARPU fell by around 8% globally for the record industry last year.
  • The 50 most streamed songs on Spotify of all time.
  • Why pop artists are trying to buy their master recordings.
  • How symphonic soul scored big in the 70s.
  • The boom of all-female collaborations.
  • Rita Ora delivers a brilliant performance of “Bang Bang” from her new acoustic EP, “Bang”.

Who is Exploration?

Exploration is proud to be the company of choice to administer much of the world’s most important media. Utilizing competent staff and advanced technology, our clients are able to better control their data and collect their money.

We’re writing a free book on how the music business works. Learn more here.

The catalog metadata template offers the minimum viable data needed to collect publishing royalties. Download the .csv file here.

To see who is collecting your royalties, request a free copyright audit here!

Please feel free to reach out anytime if you have any questions or ideas!

Hope you have a great weekend!

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