“Find something that makes you happy and don’t let anyone take it away from you.”

Luke Hemmings

In an announcement by Google on Monday in its latest quarterly earnings report, YouTube generated $15.1 billion in ad revenue during fiscal 2019. Its YouTube TV streaming bundle now has more than 2 million subscribers, and YouTube Music and YouTube Premium now have more than 20 million paid subscribers. The video platform also reported $4.7 billion in the fourth quarter alone.

Tencent Music Entertainment’s antitrust investigation by China’s State Administration of Market Regulation has been put on hold, according to Bloomberg. The country’s antitrust authority began investigations in January 2019 to review the firm’s deals with Warner Music, Universal Music Group, and Sony Music Entertainment.

Spotify stated on Wednesday that it grew its paid subscriber base to 124 million and its total monthly active user base to 271 million at the close of 2019. By the end of this year, Spotify hopes to have between 143-153 million paid users and somewhere in the ballpark of 328-348 million total MAUs.

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Compiled by Heidi Seo

Exploration Weekly - February 7, 2020

YouTube Reveals Revenue for First Time: $15.1 Billion in 2019

Google revealed this past Monday in its quarterly earnings report that YouTube generated $15.1 billion in ad revenue in fiscal 2019, including $4.7 billion in the fourth quarter. Its YouTube TV streaming bundle now has more than 2 million subscribers, and YouTube Music and YouTube Premium now have more than 20 million paid subscribers. The unit’s subscription revenue now has a $3 billion annual run rate, stated Google and Alphabet CEO Sundar Pichai. Alphabet CFO Ruth Porat included on the call that the company sees “substantial continuing opportunity” at YouTube with both direct-response advertisers, as well as brand ad campaigns. She also warned that the company is committed to growing its subscription business, which carries higher acquisition costs. YouTube’s ad revenue has nearly doubled over the past two years. Overall, Alphabet hit $161.8 billion in revenue in fiscal 2019, including $46.1 billion in Q4.

Tencent Music Antitrust Investigation Paused in China (Report)

China’s antitrust authority’s Tencent Music Entertainment Group (TME) investigation has been put on hold. According to Bloomberg, the country’s State Administration of Market Regulation “told Tencent Music and the record labels in January [2020] that it had paused the investigation”. The news that Tencent Music was being investigated in China for alleged anti-competitive practices broke in August last year. China’s State Administration of Market Regulation reportedly launched the investigation in January 2019 to review the firm’s deals with Warner Music, Universal Music Group, and Sony Music Entertainment. There was no reason why the investigation was suspended, according to Bloomberg’s sources. Tencent Music is home to three of China’s leading music streaming services, QQ Music, Kugou Music, and Kuwo Music. Tencent Music Entertainment officially started trading on the New York Stock Exchange under the symbol TME on December 12, 2018. And just before the end of 2019, TME parent company Tencent Holdings signed a share purchase agreement with Vivendi to acquire 10% of Universal Music Group.

Spotify Increases Paid User Base to 124 Million as Quarterly Revenue Tops $2 Billion Mark

According to reports on Wednesday, Spotify stated that it grew its user base to 124 million paid subscribers and 271 million total monthly active users at the close of 2019, despite a fourth-quarter operating loss. The company ended 2018 with 96 million paid users, showing a 29% year-over-year growth for its premium tier, representing the fastest the company ever added at least 10 million subs. Ad-supported monthly active users now total 153 million, a bump of 9% on the quarter and 32% year over year. Looking ahead, the company expects to add between 2-7 million premium subscribers in Q1 and possibly smaller operating losses. By the end of the year, Spotify hopes to have between 143-153 million paid users and somewhere in the ballpark of 328-348 million total MAUs.

SiriusXM Adds 355,000 Satellite Radio, Loses 88,000 Pandora Subscribers

Entertainment company SiriusXM reported continued subscriber growth on Tuesday in its satellite radio business during the fourth quarter, but a decline in Pandora subscribers. Controlled by John Malone’s Liberty Media, SiriusXM added a net of 355,000 satellite radio subscribers, including 341,000 self-pay customers and 14,000 paid promotional subs. Pandora, on the other hand, lost 88,000 subscribers in the fourth quarter, with 4,000 new paid promotional subs more than offset by a 92,000 drop in self-pay subscribers. It ended with more than 6.2 million total subscribers. Ad revenue at Pandora reached $348 million, up from $314 million in the fourth quarter of 2018. SiriusXM's earnings fell 3% to $243 million in the fourth quarter. Quarterly revenue increased 6% to $1.9 billion. On the earnings conference call, SiriusXM CEO Jim Meyer said that 2019 was “a challenging year” that meant bringing SiriusXM and Pandora together, but he was “really pleased” with the integration and bullish on the future upside of the combination.

US Appeals Court Rules that Drake’s Jimmy Smith Sample is Definitely Fair Use

The Second Circuit appeals court in the US has confirmed that Drake’s sample of a recording by jazz musician Jimmy Smith, used in the 2013 track “Pound Cake,” is fair use. Therefore, the use of that sampled audio without license does not constitute copyright infringement. The recording that was sampled was a short spoken word bit called the “Jimmy Smith Rap” that appears on his 1982 album “Off The Top”. Drake’s label did actually get a license to sample the Smith recording, but after the jazz musician’s estate went legal on the basis that no license had been sought for the literary work contained within that recording, Drake’s team then pleaded fair use. The court stated, “‘Pound Cake’ criticises the jazz-elitism that the “Jimmy Smith Rap” espouses. By doing so, it uses the copyrighted work for ‘a purpose, or imbues it with a character, different from that for which it was created’”. Which, the judges reckon, is sufficient to constitute fair use.

South Korea Now Has More Than 10 Million Paying Music Subscribers

According to recent industry estimates, the total number of paying music subscribers in South Korea, across all domestic and international platforms, is slightly more than 10 million, up from around 8.5 million at the end of 2018, in a country of 51 million people. Local sources suggest that streaming revenue grew by 13.7% to US $329.3 million in 2018, helping overall recorded music to leap 17.9% the same year. Clayton Jin, CEO of Warner Music Korea, concludes, “More and more great artists from diverse music genres and styles are coming to market with dreams of becoming global stars and I think this plethora of talent is the key driving factor of the growth in recorded music revenue”.

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