“Music was my refuge. I could crawl into the space between the notes and curl my back to loneliness.”
The Mechanical Licensing Collective (The MLC) has officially started administering the new blanket mechanical license established by the Music Modernization Act of 2018. US digital audio services operating under this license will be required to send monthly usage reports and mechanical royalty payments to The MLC, which will then match the usage activity to the appropriate musical works owners and distribute the royalties it has received to music publishers, musical works administrators and self-administered songwriters, composers and lyricists.
MRC Data’s latest report states that US music streaming in 2020 has set a new streaming record with a 17% increase to 872.6 billion streams. Lil Baby led the record with a total of 3.9 billion on-demand streams for its tracks. In addition, the year’s most-consumed song in the US was Roddy Ricch’s “The Box” with 1.3 billion streams and 1.7 billion audience impressions at radio.
Lastly, SiriusXM warns of a $1 billion non-cash impairment charge for its Pandora music streaming service, due mainly to the impact of per-play royalty payment costs. CEO Jennifer Witz points to the uncertainty of this year, increased competition, and the potential for higher royalty costs to drive lower margins and have a “meaningful” impact on Pandora’s profitability over the coming years.
Join us on January 12th, from 2:30-3:30 PM PST, for an exciting panel discussion on copyright terminations at the California Copyright Conference, sponsored by Exploration! Zoom registration available here.
In this newsletter:
- The Mechanical Licensing Collective Begins Full Operations as Envisioned by The Music Modernization Act of 2018
- Report Shows Music Streaming Set New Record in 2020, with 17% US Increase Led by Huge Lil Baby Tally
- SiriusXM Warns of $1 Billion Impairment Charge for Pandora
- Warner Music Group Inks Licensing Deal with TikTok
- Music Streaming in the UK Increased 8.2% in Locked-Down 2020 - But Not One Album Went Platinum
- Report Claims Spending on Apps Grew by 30% to $111 Billion in 2020
Now, the details...
Compiled by Heidi Seo
Exploration Weekly - January 8, 2021
The Mechanical Licensing Collective Begins Full Operations as Envisioned by The Music Modernization Act of 2018
The License Availability Date set by the landmark Music Modernization Act of 2018 (MMA) has officially arrived. Digital audio services can begin operating under a new blanket mechanical license covering every musical work available on their US services. The Mechanical Licensing Collective (The MLC) will begin administering this new blanket license established by the MMA. Services operating under the blanket license will be required to send monthly usage reports and mechanical royalty payments to The MLC. The MLC will then match the usage activity to the appropriate musical works owners using the data in The MLC’s new musical works database, and distribute the royalties it has received to music publishers, musical works administrators and self-administered songwriters, composers and lyricists. The MLC anticipates sending out its first royalty payments and statements in April of 2021. The public musical works database can now be accessed via the “Public Search” button on The MLC home page. In addition, The MLC will launch its Bulk Data Access subscription program, allowing subscribers to download a set of files containing all of the musical works ownership data in The MLC’s database.
Report Shows Music Streaming Set New Record in 2020, with 17% US Increase Led by Huge Lil Baby Tally
According to a report released by MRC Data, music streaming in the year 2020 set a streaming record in America, increasing 17% for the year to end with an unprecedented 872.6 billion streams. Lil Baby, whose “My Turn” album, released in late February, ended the year with a total of 3.9 billion on-demand streams for its tracks. The study further showed that the streaming uptick was even greater globally than it was domestically. International audio on-demand streaming was up 22.6% in 2020. In the U.S., the year’s most consumed song was Roddy Ricch’s “The Box,” with 1.3 billion streams and 1.7 billion audience impressions at radio. Internationally, the biggest track of the year was “WAP” by Cardi B featuring Megan Thee Stallion. Global song sales, on the other hand, were down 19.2% and the decline was even harsher in the U.S., with a decline of 22.3%, from 301 tracks sold to 234 million. In terms of genres, R&B/hip-hop was on top with 28.2% of overall volume, followed by rock with 19.5%, pop with 12.9%, country with 7.9%, Latin with 4.7%, dance/electronic with 3.2% and Christian/gospel with 1.9%.
SiriusXM Warns of $1 Billion Impairment Charge for Pandora
SiriusXM said it expects to record a $1 billion non-cash impairment charge for its Pandora music streaming service, due mainly to the impact of per-play royalty payment costs. "The uncertainty we have this year and the potential for higher royalty costs will likely drive lower margins and have a meaningful impact on Pandora's profitability over the coming years and this drives the bulk of the expected impairment," Jennifer Witz, newly-installed CEO of the audio entertainment giant, told the 2021 Citi TMT West Conference. Besides statutory royalty rates for artists, Pandora has direct licensing deals with major label groups. And Witz said a recent fall in ad revenue for Pandora amid the pandemic was accompanied by consistent consumption of its music streaming product, which will hit profitability as the overall royalty cost structure for the music streaming service rises. The SiriusXM boss also pointed to increased competition from music streaming rivals like Spotify and Apple Music, which has reduced revenues from ad-supported Pandora listeners. SIriusXM also added 909,000 net self-pay subscribers to finish 2020, with around 30.9 million self-pay subscribers, exceeding the company’s most recent 2020 subscriber guidance.
Warner Music Group Inks Licensing Deal with TikTok
Warner Music Group (WMG) has signed a licensing deal with TikTok. The news marked the viral video platform’s second major label license deal in as many months, after it was announced at the beginning of November that it had struck a deal with Sony Music Entertainment. As first reported by Bloomberg, TikTok’s latest licensing agreement covers songs from WMG’s publishing division Warner Chappell Music in addition to WMG’s recorded music catalog. The deal also follows the news at the end of November that TikTok has agreed a multi-year licensing deal with Pan-European licensing hub ICE for the musical works represented by the ICE Core.
Music Streaming in the UK Increased 8.2% in Locked-Down 2020 - But Not One Album Went Platinum
Though music streaming in the UK increased by 8.2% in locked-down 2020, according to a new year-end report from the British Phonographic Industry (BPI), not one album went platinum. The year-over-year boost to music streaming in the UK helped 2020 become the sixth consecutive year in which music consumption has grown. In total, fans streamed or purchased approximately 155 million albums throughout the year, while individual streams hiked more than 20% compared to 2019, finishing at 139 billion. Streaming also accounted for 80.6% of all UK music consumption in 2020. Lewis Capaldi’s Divinely Uninspired to a Hellish Extent topped the list of most popular albums, followed by Harry Styles’ Fine Line, Dua Lipa’s Future Nostalgia, Billie Eilish’s When We All Fall Asleep, Where Do We Go?, and Stormzy’s Heavy is the Head, respectively.
Report Claims Spending on Apps Grew by 30% to $111 Billion in 2020
In an analysis of 2020’s apps spending by customers of the iOS App Store and Android’s Google Play, app analytics firm Sensor Tower stated, “Consumers spent nearly $111 billion globally on in-app purchases, subscriptions, and premium apps across both marketplaces...This figure represents 30.2 percent year-over-year growth from 2019 when app stores generated $85.2 billion.” Apple’s store accounted for 65% of the total in 2020 – around the same as previous years. And TikTok alone generated $1.2 billion of App Store spending in 2020 – that’s in-app purchases by users, since the app is free to download and use. The company also cites a new record for “first-time installs” of apps in 2020 – as in, not re-downloads of apps people already own – up 23.7% to nearly 143 billion installs last year.
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