“The story of life is quicker than the wink of an eye, the story of love is hello and goodbye...until we meet again”
YouTube generated $7 billion from advertising alone in Q2 2021, equivalent to approximately $77 million a day, or $3.2 million every hour, according to an announcement made by parent company Alphabet. That’s up by 83.7% on the equivalent figure from 2020 ($3.812 billion).
Spotify's user base grew to 165 million paid subscribers and 210 million free users during the second quarter of 2021, the company announced in its latest earnings report. That's a net increase of 7 million paid users and 2 million free users compared to the first quarter. The metrics were on target with guidance, though Spotify conceded monthly active user growth was slightly underwhelming due to a softer first half of the quarter.
Several songwriter organizations have called on the US Copyright Royalty Board to reject the NMPA/NSAI mechanical royalty rate proposal. The groups, which include the Songwriters Guild of America, are asking for the current rates to be amended to take into account inflation since 2006.
A few announcements from us...
Exploration is hosting an upcoming webinar on Wed August 4th at 1 PM PST / 4 PM EST, with our Director of Business Development, Jacob Wunderlich, discussing how the music industry works, providing resources, and helping answer FAQs along the way. Please join us via Zoom next Wednesday!
We also want to mention a couple videos from both of Exploration’s co-founders Aaron Davis and Rene Merideth this week. To learn more about what happens “Behind the Scenes of the Music Business,” click here to watch Aaron’s fifth episode of the series!
We are also fortunate to have our very own Rene Merideth featured on #Eighteen by Janie’s Fund, a philanthropic initiative by Aerosmith’s Steven Tyler that aims to bring hope and healing to girls who have suffered the trauma of abuse and neglect.
In this newsletter:
- YouTube is Now Generating Over $3M an Hour From Ads - More Than $75M Per Day
- Spotify Reports 165 Million Paid Users as Q2 Revenue Climbs 23%
- Songwriter Groups Formally Call on US Copyright Royalty Board to Reject NMPA’s Mechanical Royalty Rate Proposals
- Apple Services Revenue Hits $17.5B
- Live Music Biz Generated $132.6B in Economic Activity in 2019, Study Finds
- SiriusXM Revenues Up 15% But Pandora Listeners Still Falling
Now, the details...
Compiled by Heidi Seo
Exploration Weekly - July 30, 2021
YouTube is Now Generating Over $3M an Hour From Ads - More Than $75M Per Day
In the three months to the end of June 2021 (Q2), YouTube generated a whopping $7.002 billion from advertising alone – equivalent to approximately $77 million a day, or $3.2 million every hour. That’s according to new fiscal results from Alphabet for the period, which tell us that YouTube’s Q2 2021 ad revenue ($7.002bn) was up by 83.7% on the equivalent figure from 2020 ($3.812 billion). Earlier this year, Music Business Worldwide forecast that YouTube might even surpass $29 billion in annual advertising revenue across the whole of 2021. Right now, that’s looking very plausible: In the six months to end of June this year, the platform generated $13.007 billion in ad revenues, according to Alphabet. According to recent data from Midia Research, YouTube Music / Google claimed an 8% share of the global music subscription market at the close of Q1 this year. With 487 million total music subscribers worldwide, that put Alphabet/Google/YouTube at approximately 39 million music subs globally.
Spotify Reports 165 Million Paid Users as Q2 Revenue Climbs 23%
Spotify's user base grew to 165 million paid subscribers and 210 million free users during the second quarter of 2021, with total monthly active users now hitting the 365 million mark, the company announced in its latest earnings release. That's a net increase of 7 million paid users and 2 million free users compared to the first quarter. Both of those metrics were on target with guidance, though Spotify conceded MAU growth (+9 million) was slightly underwhelming due to a softer first half of the quarter. Accordingly, Spotify lowered its guidance for MAUs at the end of 2021 from 402-422 million to 400-407 million. At the same time, it increased guidance on 2021 revenue and gross margin. Total revenue in the second quarter was 2.33 billion euros ($2.75 billion), up 23% year over year and 9% higher than Q1's 2.15 billion euro ($2.6 billion) tally.
Songwriter Groups Formally Call on US Copyright Royalty Board to Reject NMPA’s Mechanical Royalty Rate Proposals
An assortment of organizations representing songwriters in America and beyond – led by the Songwriters Guild Of America, the Society Of Composers & Lyricists and Music Creators North America – have called on the US Copyright Royalty Board to reject a proposal endorsed by the major music publishers to keep in place the current mechanical royalty rates for discs and downloads within the US. The various songwriter groups made a submission asking for the NMPA/NSAI settlement to be disregarded and for, at minimum, the current rates to be amended to take into account inflation since 2006. The document further explained how the mechanical rights compulsory license and subsequent royalty rate setting repeatedly disadvantaged US songwriters over the decades, and especially since 2006. They also set out their objections to the NMPA leading on the negotiations for a new rate, given that its three biggest members have a conflict of interest.
Apple Services Revenue Hits $17.5B
Apple announced this week that its services business, which includes Apple TV+, Apple Music, the App Store and iCloud, delivered $17.5 billion in revenue in the second fiscal quarter of 2021, which ended June 30. That is up from $13.1 billion in the same quarter a year ago, and from $16.9 billion last quarter, and marks a new record. Apple did not break down how its services revenue was distributed, or how many subscribers each service has. Apple CFO Luca Maestri told analysts that the company had “more than 700 million paid subscriptions'' across its services division, including Apple TV+, Apple Music, News and Games. Maestri also said that while Apple expects its services revenue to grow next quarter, it does not expect the same level of growth it saw this past quarter. Overall, Apple reported revenue of $81.4 billion, up 36 percent year over year.
Live Music Biz Generated $132.6B in Economic Activity in 2019, Study Finds
According to Live Nation and Oxford Economics’ report titled “The Concerts and Live Entertainment Industry: A Significant Economic Engine," in 2019, the concert business was valued at $132.6 billion. The live biz employs 900,000 people with associated labor income of approximately $42.2 billion. The report also found that concerts generate $55.2 billion in direct spending in the U.S. each year, including both venue operational spending to cover all the costs of show production and consumer spending by attendees before and after a show takes place. That amounts to nearly $9.3 billion in federal tax revenues and $8.3 billion in state and local tax revenues. In regards to local impact of concerts, the study finds that every $100 spent by an out-of-town attendee on a concert ticket, $334.92 is generated within the local economy.
SiriusXM Revenues Up 15% But Pandora Listeners Still Falling
US satellite radio firm SiriusXM reported its latest financial results with its Q2 revenues of $2.16 billion having grown by 15% year-on-year. The company added 355,000 net new self-pay subscribers during the quarter, taking it to 31.4 million overall. Less positively, SiriusXM is still struggling to reverse the listener decline of its music streaming subsidiary Pandora. The latter service had 55.1 million monthly active users in Q2, down from 59.6 million a year ago, and 55.9 million at the end of Q1 this year. Pandora’s advertising business is a brighter spot: its revenues grew by 82% year-on-year to $383 million, although that year-ago quarter took a significant hit from COVID-19.
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