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The Guide to Opening and Operating a Music Venue

Music venues are some of the most important elements of the music industry. Concerts create revenue, but also many often kickstart artists' careers. Concerts are a place for community and creativity. They are a vital part of the music industry. Yet, running a music venue is a difficult process. It can be rather costly due to equipment, management, and the infrequent nature of performances.

The Music Industry Report 2020 from Exploration suggests that “...some venues seek sponsorship from private or public arts funding organizations to stay afloat”. While starting a music venue may feel overwhelming, this guide is here to help you navigate the process and make the right decisions for the music venue you want to create.

Check out some of our other guides on music industry topics at Exploration Learn , or subscribe to our YouTube channel for more information.

In this newsletter:

Songwriters and music publishers are set to receive nearly $400 million in additional royalties for 2021-2022 due to a final ruling on streaming royalty rates. The decision by the Copyright Royalty Board in August 2023 established higher rates, revealing that streaming services underpaid songwriters and publishers by $419.2 million.

In 2023, ASCAP reported record financial results, achieving $1.737 billion in revenue. With $1.592 billion available for royalty distributions to its members, ASCAP's numbers are the highest among U.S. performing rights organizations.

Spotify announced on February 8 that it paid $9 billion in royalties for 2023, with annual payouts to music rights holders nearly tripling over six years. Total royalties since its 2008 founding reached $48 billion by the end of 2023.

Now, the details...

Exploration Weekly - March 1, 2024
Compiled by Ana Berberana

Songwriters and Publishers to Receive Nearly $400M Payout After Streaming Royalty Ruling in the US

Songwriters and music publishers are set to receive a net total of nearly $400 million more in royalties for 2021-2022, thanks to a final ruling on streaming royalty rates. This follows a years-long battle between creators and streaming services over fair compensation. The windfall stems from the Copyright Royalty Board’s Phonorecord III determination in August 2023, which established higher royalty rates for music streamed between 2021 and 2022. This means streaming giants like Spotify, Amazon Music, and Pandora underpaid songwriters and publishers by $419.2 million, according to information from the Mechanical Licensing Collective (MLC), highlighting underpayments during the 2021-2022 period. The figure includes $281 million in mechanical royalties and $137.8 million in performance royalties. The discrepancy stemmed from final royalty rates being higher than the interim rates used during a four-year dispute between publishers and streamers. The MLC was established by the Music Modernization Act of 2018. It serves as the sole entity authorized to collect and distribute mechanical royalties due for the reproduction and distribution of musical works. The MLC said it expects the total payout to grow by another $10-$15 million as more reports from streaming services come in. NMPA President & CEO David Israelite, said, “We are extremely pleased that songwriters and music publishers finally will receive the over $400 million they are owed in mechanical and performance royalties from the 2021-2022 period.”

ASCAP Announces Record Revenue for 2023

The American Society of Composers, Authors and Publishers (ASCAP) announced record financial results for 2023, with $1.737 billion in revenue and $1.592 billion available for royalty distributions to its songwriter, composer, lyricist and music publisher members. The numbers are the highest revenue and royalty distributions reported by any U.S. PRO, according to the announcement. The organization also welcomed many prominent new members, including Taylor Swift/ Lana Del Rey collaborator Jack Antonoff, PinkPantheress, Tyla and Jared Leto and Shannon Leto of 30 Seconds to Mars. ASCAP is the only remaining U.S. public performance rights organization to operate on a not-for-profit basis, after BMI’s recent transition to a for-profit model. The organization does not charge a commission or take a profit and deducts all expenses — approximately 10% — subject to a reasonable reserve, and then distributes all remaining dollars as royalty distributions to its members. The revenues represent an increase of $215 million or 14.1% over 2022. The announcement states that the organization increased the value and monetization of its members’ music, with domestic revenue from U.S.-licensed performances surpassing $1.327 billion which is an increase of $149 million or 12.6% over the prior year. In 2023, audio streaming revenue rose 21%, general licensing revenue rose 23%, radio revenue rose 10% and audio-visual revenue rose 3% as compared to 2022.

Spotify Says Independent Artists Received $4.5 Billion in Royalty Payments—Roughly Half of the 2023 Payout

On February 8, Spotify shared that it paid out $9 billion in royalties for 2023 to various music industry bodies. In that announcement, Spotify shared that its annual payouts to music rights holders have “nearly tripled in the past six years.” At the end of 2023, the total amount of recording and publishing royalties paid out by Spotify reached $48 billion since its founding in 2008. Daniel Ek took to X/Twitter to further break down that $9 billion figure today, revealing that $4.5 billion was generated by independent artists. That figure is backed up by Dr. Richard James Burgess, CEO of A2IM, which represents over 600 independent recorded music companies. “In 2023, independent music’s historic achievement, generating nearly $4.5 billion on Spotify, underscores the transformative and democratizing impact of streaming—marking a milestone in the global accessibility and success of independent artists,” Burgess said. Ek frames the video as “receiving a lot of questions about artist payouts.” That’s because the way Spotify pays out royalties is changing. Historically, Spotify paid its artists for total plays of their songs, full-stop. Now the DSP is moving to a system that only tracks streams on tracks that surpass 1,000 streams in a year—which is aimed at cracking down on streaming farms and other forms of fraud. Spotify says it is aiming to tackle the bot listening on its platform which generates fake plays.

UK Recorded Music Revenues Hit $2.76 Billion Annually, Finally Beating Previous 2001 High

In a sign of how long it has taken the music industry to recover from the deep slump caused by digital piracy in the early years of the internet, new data shows the UK’s music industry has finally managed to top its 2001 revenues – and that’s not adjusting for inflation. UK digital entertainment and retail association ERA reported on Thursday (February 29) that recorded music revenues hit GBP £2.223 billion (USD $2.761 billion, at the average exchange rate for 2023). That’s not the total for the 2023 calendar year; rather, it’s the cumulative total for the 12 months to the chart week that ended on Friday (February 23). The latest number represents an 8.65% YoY increase over the same period in 2022-2023, when revenues came in at £2.046 billion. It represents a more than doubling of UK recorded music revenue since it hit a historic low of £1.020 billion in 2013. And it marks the first time the running annual total has exceeded the record set in October, 2001, when Kylie Minogue’s Can’t Get You Out Of My Head was the chart-topping single in the UK, and the top album was STEPS’ Gold – The Greatest Hits. The report from ERA – a trade body that represents “virtually all” digital services that stream music in the UK, as well as music, video and game retailers – marks another data point showing strong growth in the UK’s music industry over the past year. According to data from the British Phonographic Industry, released in January, the total number of song streams in the UK jumped 12.8% YoY in 2023, to a total of 179.6 billion streams. That number is roughly double the total streams the UK clocked in 2018, coming in at 90.9 billion that year.

Random Ramblings

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