“Music, once admitted to the soul, becomes a sort of spirit, and never dies.”

Edward Bulwer Lytton

Spotify posted its second quarter results this past Wednesday July 31, counting 108 million premium subscribers and 232 million total active monthly users as of the end of June. To compare, Apple Music reported 60 million subscribers as of June. There is also talk of two new deals with major music labels struck with Spotify this week, though there is no confirmation specifying these two labels. The company expects to add between 2-6 million premium subscribers in Q3 and have between 120-125 million paid users and as many as 265 million total MAUs by the end of the year.

According to a recent third-quarter earnings call on Tuesday, the services division at Apple had sales of $11.46 billion, an all-time high. This figure includes revenue from subscriptions like Apple Music and Apple Pay. CEO Tim Cook confirmed that he plans to invest heavily in this department, mentioning forthcoming services like Apple TV+, Apple Arcade, and a credit card later this year. The company currently counts 420 million total subscriptions to its services businesses.

Katy Perry’s 2013 hit “Dark Horse” was found guilty for infringing on the song “Joyful Noise” by Christian rap artist Marcus Gray (aka Flame) this past Monday July 29. The jury trial lasted for a week in Los Angeles civil court, which included a 35-minute testimony by Perry herself. “Joyful Noise” co-writer Emmanuel Lambert Jr. (aka Da Truth) argued that the song was a huge hit in the Christian music genre, thus making it easy for the “Dark Horse” writers to have heard it. Perry’s attorneys responded by saying that the musical phrase in question was too common and brief to be protected by copyright. However, the jury disagreed and handed the victory over to the plaintiffs.

Now, the details...
Compiled by Heidi Seo

Exploration Weekly - August 2, 2019

Spotify’s Second Quarter Reports 108 Million Premium Subscribers

As of the end of June, streaming service Spotify reported on Wednesday a smaller second-quarter operating loss and said it grew its user base to 108 million premium, or paid, subscribers and 232 million total active monthly users. As of the end of March, the company reported 100 million premium subscribers and 217 million total active monthly users. Rival Apple Music had 60 million subscribers as of June, including people on a three-month free trial. Spotify CEO Daniel Ek also announced two new deals with major music labels this week, though he did not specify which labels it had struck deals with. According to the report, Spotify’s second-quarter operating loss amounted to $3.3 million (€3 million euros). The firm’s net loss narrowed to $84.7 million (€76 million) from €394 million in the year-ago period. Quarterly revenue rose 31% to $1.86 billion (€1.67 billion), while operating expenses increased 4%. From the revenue tally, $1.67 billion (€1.502 billion) came from premium subscribers, amounting to an increase of 31% year over year. Ad-supported revenue totaled $184 million (€165 million), an increase of 34% year over year. The second quarter user figures exceeded Wall Street estimates. The company expects to add between 2-6 million premium subscribers in Q3 and possibly return to a small operating profit. By the end of the year, the streaming service also hopes to have between 120-125 million paid users and as many as 265 million total MAUs.

Apple’s Services Revenue Reach $11 Billion in Third Quarter Earnings Call

Apple’s services business, which includes revenue from subscriptions like Apple Music and Apple Pay, had sales of $11.46 billion, an all-time high, as reported in its fiscal third-quarter earnings on Tuesday. iPhones brought in $25.99 billion in revenue, more than any other division but lower than what analysts were expecting. Because of this, Apple is facing increased pressure to grow its other lines of business, including the services division. CEO Tim Cook plans to invest heavily in the space, with plans to launch a TV offering, video game service, and credit card later this year. Overall, the tech company reported quarterly revenue of $53.8 billion, up 1% from the same period last year. Some details for its forthcoming TV service was unveiled during a March 25 event. It would be called Apple TV+, and it would offer original programming that supplements other TV offerings that people can subscribe to through their Apple TV set-top boxes. The exact launch date and pricing for this service have yet to be announced, but Apple executives teased a few details, saying that the company currently has 420 million total subscriptions to its services businesses, and that the launches of Apple Arcade and Apple TV+ will add to that base. Revenue is expected to reach between $61 billion and $64 billion during the fiscal fourth quarter.

Jury Finds Katy Perry’s “Dark Horse” Copied Christian Rap Song Without Permission

On July 29, Katy Perry was found guilty for infringing on the song “Joyful Noise” by Christian rap artist Marcus Gray (aka Flame) over her 2013 hit “Dark Horse”. The decision concerning the track’s underlying beat followed a week-long trial in Los Angeles civil court, which included a 35-minute testimony by Perry herself. She stated that co-writers and producers Dr. Luke (Lukas Gottwald) and Cirkut (Henry Walter) brought her the song’s instrumental track, which suggests the two could have included elements of “Joyful Noise” in the song without Perry’s knowledge. However, “Joyful Noise” co-writer, Emmanuel Lambert Jr. (aka Da Truth), said the song had been a significant hit in the Christian music genre, thus making it easy for the “Dark Horse” writers to have heard it. Perry’s attorneys argued that the musical phrase is too common and brief to be protected by copyright, but the nine-person jury disagreed, handing the victory over to the plaintiffs.

TikTok Hires European Music Rights Lawyer Amid Legal Battle with Licensing Body ICE

Earlier this month, Music Ally reported that ByteDance-owned TikTok asked the UK’s Copyright Tribunal to step in to resolve a licensing dispute with ICE, the joint venture between European collecting societies PRS for Music, STIM, and GEMA. An ICE spokesperson responded, calling TikTok an “unlicensed” platform, while explaining that ICE was “disappointed [that] an agreement for [the] use of the millions of musical works belonging to the songwriters, composers and publishers we represent has not been reached before this point.” The news follows another recent occurrence that showed ByteDance appointing a top European rights lawyer by the name of Dr. Joern Radloff, who only two months ago was Head of Rights & Repertoire at ICE. Radloff arrived at ByteDance in June as Corporate Development (Music, Content, Intellectual Property) / Senior Counsel. And according to his LinkedIn page, he took on an additional role as Head Counsel Music Licensing, EMEA / Corporate Development IP EMEA this month (July). The rights lawyer was also Head of Rights Management & Repertoire Online at collecting society GEMA prior to ICE. TikTok has entered into licensing disputes before. In April, Bloomberg reported that Universal Music, Sony Music, and Warner Music wanted ByteDance “to pay them hundreds of millions of dollars” for music played on TikTok. ByteDance is currently valued at around $75 billion, and it recently acquired UK-based AI music company, Jukedeck.

SiriusXM Counts 174,000 Satellite Radio, 64,000 Pandora Subscribers in Second Quarter

SiriusXM reported continued growth in its satellite radio and Pandora subscribers in its second-quarter financials and performance metrics on Tuesday. This was the second earnings report released since the company closed the $3.5 billion acquisition of music streaming service Pandora Media. SiriusXM added a net of 174,000 satellite radio subscribers in the latest quarter, ending June with more than 34.3 million subscribers, including more than 29.3 million self-pay subscribers. Pandora added 64,000 net new self-pay subscribers in the quarter to end it with more than 6.2 million self-pay subscribers. Total Pandora subscribers reached 7 million at the end of the period. SiriusXM earned $263 million in its second quarter, compared with a profit of $293 million in the year-ago period. Pandora revenue grew 15% to $441 million in the quarter, driven by an 18% increase in subscriber revenue to $135 million and a 13% advertising revenue gain to a second-quarter record of $306 million. The company added, “Strength in audio and video programmatic and engagement-based video, as well as the expansion of off-platform efforts and fees generated on the AdsWizz platform, drove revenue growth.”

Reliance Jio Now Largest Telco in India

Indian telco Reliance Jio has overtaken rival Vodafone Idea to become the biggest mobile operator in India, with 331.3 million subscribers. TheNextWeb reports that this compares to 320 million people using Vodafone Idea, and the most recent figure of 320.6 million for the other big telco in India, Airtel. Reliance Jio is the owner of JioSaavn, the music streaming service created by the merger of its own JioMusic with formerly independent service Saavn. In April, JioSaavn reportedly had 104 million monthly active users, narrowly ahead of the most recent milestone for its big rival Gaana. The growth of Reliance Jio is an important driver for the JioSaavn streaming service.

Streaming Makes Up 63% of France’s Recorded Music Revenues, Says Report

The National Syndicate of Phonographic Publishing (SNEP), a French music industry trade group, revealed in its mid-year 2019 report that digital revenue accounted for 57% of the market in France. Digital sales reached €335 million ($380 million) in 2018, and the country’s recorded music market grew 1.8%, marking three consecutive years of growth. Streaming revenue, more specifically, grew a whopping 23%, and paid streaming subscriptions generated 41% of music sales. In its mid-year 2019 report (H1 2019), SNEP stated that recorded music revenue totaled €277.2 million ($309 million) in the first six months of 2019. This marks a 12.7% growth compared to the same period last year. Furthermore, streaming revenue grew 28.3% year-over-year to €175.3 million ($195.3 million). This means streaming alone now makes up over 63% of France’s overall recorded music revenues. Paid streaming subscriptions rose 25% to €138.1 million ($153.9 million). The report also revealed that roughly 160 domestic artists ranked among France’s Top 200 best-selling albums. 40% of the Top 200 were “French urban music”.

Lil Nas X, Sony Music Sued in $25 Million Copyright Infringement Lawsuit Over “Carry On”

Lil Nas X and Sony Music have both been hit with a $25 million copyright infringement lawsuit by a California-based publisher, The Music Force, claiming that Lil Nas X borrowed from “Carry On,” a song written by Bobby Caldwell. Caldwell has released 16 studio albums to date. As a result, The Music Force is seeking $10 million for damages to its property and $15 million in punitive damages. At the time of writing, neither Lil Nas X nor Sony Music issued a public statement. This is not the first copyright infringement lawsuit Lil Nas X has faced. His highly successful “Old Town Road” track was taken to court for borrowing a sample from the Nine Inch Nails’ “34 Ghosts IV,” which contained a beat made by a Dutch teenager, who eventually sought compensation. The 20-year-old artist, also known as Montero Lamar Hill, has collaborated with the likes of Billy Ray Cyrus and Cardi B, and on June 21, his eight-track EP, “7,” was released and peaked at number two on the Billboard 200.

Random Ramblings

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