Exploration Weekly - YT Partner Program Channels Doubled in 2020 / Apple Services Quarterly Revenue Up 24% / Will LMAC Acquire a Music Company Next?

“Hold fast to dreams,
For if dreams die
Life is a broken-winged bird,
That cannot fly”

Langston Hughes

In a letter to the YouTube community, CEO Susan Wojcicki stated that, over the last three years, YouTube has paid out more than $30 billion to creators, artists, and media companies. More creators are also gaining the ability to monetize, with the number of channels joining the YouTube Partner Program in 2020 having doubled over the previous year.

The services division at Apple hit a record quarterly revenue high of nearly $15.8 billion, up 24% from the $12.7 billion it brought in during the same period a year earlier. The group specifically consists of services like Apple Music, Apple TV+, iCloud, App Store, and other software products, and it is the second largest division behind iPhones.

Newly formed acquisition company, Liberty Media Acquisition Corporation (LMAC), raised $575 million in its IPO in the US last week. A press release by the company stated that LMAC “intends to search for a target in the media, digital media, music, entertainment, communications, telecommunications and technology industries”. Will the next target acquisition be a music company, and if so, who will it be?

In this newsletter:

The Number of Channels Monetizing Via YouTube’s Partner Program Doubled in 2020, CEO Says
Apple Services Hits Record $15.8 Billion in Quarterly Revenue
Liberty Media Offshoot Raises $575M to Buy Huge Company - Will It Be In Music?
The MLC Newsletter: What’s New? What’s Next? And Reminders
COVID-19 Knocks 76% Off Europe’s Music Revenue
French Study Offers New Data on Impact of User-Centric Payouts
Now There’s a Licensing Platform for Small-Scale Livestreams in the UK

Now, the details...
Compiled by Heidi Seo

Exploration Weekly - January 29, 2021

The Number of Channels Monetizing Via YouTube’s Partner Program Doubled in 2020, CEO Says

CEO Susan Wojcicki shared in a letter to the YouTube community looking back on 2020 that YouTube’s creative ecosystem contributed approximately $16 billion to the U.S. GDP in 2019 based on an Oxford Economics report. Moreover, over the last three years, Wojcicki noted, YouTube has paid out more than $30 billion to creators, artists, and media companies. And more creators are gaining the ability to monetize, with the number of channels joining the YouTube Partner Program last year having doubled over 2019. Looking ahead, Wojcicki stated that YouTube was readying even more tools for the creator community. The company is investing in new mobile creation functionalities, including bringing its TikTok-like Shorts product to more markets this year. And the company is also developing new commerce tools that will enable viewers to discover and buy products that they see in videos.

Apple Services Hits Record $15.8 Billion in Quarterly Revenue

Apple's services division hit an all-time revenue high during the final three months of the year. The group, which accounts for sales from Apple Music, Apple TV+, iCloud, App Store and other software products, had fiscal first quarter revenue of nearly $15.8 billion, up 24% from the $12.7 billion it brought in during the same period a year earlier. The growth in services revenue, a priority for the company in recent years, helped to drive record revenue for Apple, which reported quarterly sales of $111.4 billion. The main driver for the quarter was Apple's new line of iPhones, which brought in $65.6 billion in revenue. Services is Apple's second largest division behind iPhones. The company has prioritized keeping its device owners in its ecosystem by offering them a suite of media apps and other utility software.

Liberty Media Offshoot Raises $575M to Buy Huge Company - Will It Be In Music?

Liberty Media Acquisition Corporation (LMAC), the newly formed “blank check” acquisition company launched by Liberty Media, raised $575 million in its IPO on the Nasdaq Stock Exchange in the US last week. The company’s 57,500,000 shares started trading at $10 per unit on January 22, under the symbol LMACU. According to a new press release, LMAC “intends to search for a target in the media, digital media, music, entertainment, communications, telecommunications and technology industries”. In response to that statement of intent, two questions on the lips of many in the music business today, are: will LMAC’s target acquisition end up being a music company, and if so, who will it be? In LMAC’s prospectus and on its new website, the company explains that, “We have not selected any business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target”. Amongst other holdings, Liberty Media - via its Liberty SiriusXM group - owns a 33% stake in Live Nation Entertainment, and a 5% stake in iHeartMedia. In addition, it owns a 74% stake in SiriusXM, which in turn fully owns Pandora.

The MLC Newsletter: What’s New? What’s Next? And Reminders

This week’s newsletter published by The MLC highlights a few updates, including new navigation buttons and a recently launched bulk data upload feature. In addition, The MLC anticipates the shift from the prior mechanical licensing system to the new blanket mechanical licensing system by noting changes in the timing and frequency of royalty distributions for rightsholders. For digital service providers (DSPs), the statutory deadline for paying your historic unmatched royalties and usage reports to The MLC is Monday, February 15, 2021. For members, The MLC plans to begin distributing monthly royalty payments starting in April, which means members need to make sure that all of their contact and payment information is accurate and up-to-date.

COVID-19 Knocks 76% Off Europe’s Music Revenue

A study published by European Authors Society GESAC showed overall revenue in Europe's creative sector dropped 31% in 2020 from a high of $783 billion (€643 billion) in 2019, pre-pandemic, to $540 billion (€444 billion) last year. Music revenue in Europe also slumped some 76%, and box office sales at European cinemas fell an estimated 75%. The only creative sector to see an uptick was the video games industry, which recorded a 9% bump in sales. GESAC is calling for "massive public financing" and stronger support for private investment in cultural and creative businesses, to return the industry to growth post-COVID. They are also demanding a "solid legal framework" to allow creatives to adequately protect and leverage their original content online. Royalties from collection agencies fell 35% in 2020 and that, in most sectors, increased digital revenue did not compensate for the loss from reduced physical sales.

French Study Offers New Data on Impact of User-Centric Payouts

According to a new study commissioned by the National Music Centre (CNM) in France from Deloitte, using data from Spotify and Deezer, switching to a user-centric system would reduce the royalties paid out to rightsholders of the top 10 artists by 17.2% - they’d get 7.7% of the overall payouts rather than 9.3%. The result would be small percentage gains further down the pyramid: an average 1.3% increase for artists ranked 11-100; 2.2% for those ranked 101-1,000; 0.5% for those between 1,001 and 10,000; and 5.2% for those outside the top 10,000. The CNM warned, however, that “If the percentages of change seem not insignificant, the amounts in value remain in reality limited.” That 5.2% average increase for artists outside the top 10,000 would be “at most a few euros per year on average” for those musicians.

Now There’s a Licensing Platform for Small-Scale Livestreams in the UK

PRS for Music formally announced the release of its one-stop licensing portal this week. The 107-year-old UK collecting society created the platform due to the “huge rise” in livestream concerts that’s arrived amid the pandemic, and the tool is available specifically for livestream events that generate $683.70 (£500) or less. The livestream licenses, which cover public performances as well as associated sync and mechanical licenses, cost $30.80 (£22.50) apiece for digital events with revenues of up to $342.25 (£250). Additionally, the licenses come with a price tag of $61.60 (£45) each for online gigs that make between £251 and £500. PRS for Music also noted in the release that it’s working “to apply temporary discounted rates” (until traditional concerts resume) for licensing on livestream sets that earn above £500. Moreover, the London-headquartered entity is “proactively in discussion with other societies to deliver” a global blanket license for UK gigs that “might be accessed internationally.”

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