01
Jan
17

Music Business Research 2016 – in retrospective

Dear readers of the music business research blog,

2016 seems to be the pivotal year in the recorded music industry. Although no annual statistics have been published until yet, we can take it for granted that the positive trend of 2015 continued in 2016. In 2015, the global recorded music market expanded by 3.4%. The US-market slightly grew by 0.9% and the German recorded music sales even increased by 4.4%.

The booming music streaming market was of course the main driver for the economic recovery of the recorded music business in 2015 and we can expect a further growth in 2016 and the upcoming year. The revenue growth of the streaming business compensated for the decline in CD sales, despite decreasing music download sales as highlighted in “The fate of the CD – an international CD-market analysis”. However, an in-depth analysis of the statistics unveils very different market dynamics in various countries. Whereas music streaming is the main business of the recorded music industry in Scandinavia, CD sales are still relevant in Germany and in Japan (see “The Music Streaming Market Revisited, 2011-2015”).

 

The increasing number of users of music streaming services has not, however, established a lossless business model as highlighted in “The Economics of Music Streaming: Spotify”. The Swedish music streaming company has widened its losses to EUR 185m in 2015 despite an impressive growing user base and increasing revenues. A turnaround is not in sight and, thus, Spotify representatives desire an IPO that is to be expected for springtime in 2017. French music streaming service Deezer should have gobe public in autumn 2015, but cancelled the IPO just three days ahead of its deadline.[1] Although no other justifications than “market conditions” were given, one might speculate whether investors believe in the music streaming business model or not. Both, Spotify and Deezer have to prove in 2017 to successfully compete in a highly contested market.

Whereas the recorded music industry has slowly overcome recession, the music publishing industry has never been affected by a turndown in the digital era. The blog-post “The Global Music Publishing Market – an Analysis” highlights that the global market volume almost doubled since the late 1990s. A closer look, however, unveils a significant shift in the revenue-mix. Whereas the revenue from mechanical rights dominated the in 2005, performing rights  have become the most important revenue stream nowadays, followed by revenue for licensing digital rights.

As the music publishing business prospers in the digital age, the live music sector also did despite the global economic crisis. The blog-post “Live Nation in the Digital Paradigm Shift” highlights that the world’s largest concert promoter and ticketing company has significantly increased the number of music events and attendances. The growing revenue, however, conceals annual losses of the concert business and the Artist Nation segment. Live Nation’s operating gain comes, thus, from the ticketing, sponsoring and advertising segments.

Therefore, it is no surprise that the artists mainly rely on income from the live music business. The recorded music business has become more or less irrelevant in the artists’ revenue-mix. And the growing relevance of music streaming will not improve the economic situation of interpreters and creators as already highlighted in a blog-post in 2015. Thus, more than a thousand of notable artists petitioned to the EU Commission for higher payouts from Google owned video-streaming platform YouTube.[2] In the US, 186 musicians signed a petition to US Congress calling for a redrawing of the “safe harbour” provisions in the Digital Copyright Millenium Act (DCMA), which – according to the petitioners – unjustifiably favours YouTube.[3]

Despite a booming music streaming market and a turnaround in the recorded music business, the problems of the music business seem to be anything than solved. The fight on slicing the music business’ revenue pie will continue in 2017 among musicians, record companies, publishers and digital music service providers, which I have already highlighted in a 2015 blog-post.

However, the major recording music companies seem to adapt themselves to the new digital environment as the analysis of “Warner Music Group in the Digital Paradigm Shift” highlights. A new technology – the blockchain – has the potential to revolutionize again the music business. In an international workshop on March 3, 2017 – “The Blockchained Music Business” –, which closes with a panel discussion (open to the public) on 16:30 at the Department of Cultural Management and Gender Studies of the University of Music and Performing Arts Vienna, the relevance of blockchain technology for the music business will be discussed by international experts. The impact of the blockchain on the music business – among other topics – will also be highlighted in the 8th Vienna Music Business Research Days on “Unchaining the Digital Music Business” from September 14-16, 2017. Next year’s international music business research conference will again take place at the University of Music and Performing Arts Vienna, which already staged the 7th Vienna Music Business Research Days on “Self-Management in the Digital Music Business”. International researchers gathered to present and discuss recent research results on the second conference day. The third and last day was entirely devoted to the overall conference topic. Experts discussed the relevance and design of career centres at music universities, after Angela Myles-Beeching of the Manhattan School of Music had already introduced her best-selling book “Beyond Talent” on the conference’s first evening. Music industry consultant, Johannes Ripken explained his concept of “Organic Artist Development” (live-stream and presentation), before Robbie Williams producer Steve Power shared his experiences of self-management in the music business with the audience (live-stream). After his presentation he discussed with Roxanne de Bastion (musician, London), Keith Harris (manager of Stevie Wonder) and Johannes Ripken (music industry consultant) moderated by the successful music producer and vice-president of the Austrian Composers Association, Harald Hanisch on the conference’s main topic. The conference was closed with awarding the Young Scholars’ Workshop best paper, which had taken place on the first conference day. An international jury voted for Lorenz Grünewald’s paper “The (In)significance of the Brand: Brands & Music Culture”, which will be published in the International Journal of Music Business Research (IJMBR).

 

In 2016, two further issues of the IJMBR have been published:

Volume 5, no 2, October 2016

Editorial by Dennis Collopy, pp. 4-5

Paul Saintilan: Aesthetic preferences and aesthetic ‘agnosticism’ among managers in music organisations: is liking projects important?, pp. 6-25

Peter Gilks: Constructing authentic identities: why narratives are better than chronicles of achievement in musicians’ biographies, pp. 26-45

Geoff Luck: The psychology of streaming: exploring music listeners’ motivations to favour access over ownership, pp. 46-61

 

Volume 5, no 1, April 2016

Editorial by Dennis Collopy, pp. 4-5

Adam Fer & Barbara Baarsma: Rockonomics revisited: The rise of music streaming services and the effect on the concert industry, pp. 7-35

Alexander Brem & Michael Reichert: Innovation diffusion in B2B relations: New song diffusion in radio broadcasting, pp. 36-58

Job van der Velden & Erik Hitters: The distinctiveness of Electronic Dance Music. Challenging mainstream routines and structures in the music industries, pp. 59-84

Book review by Daniel Nordgård: Business innovation and disruptions in the music industry (eds. Wikström, P. & DeFillippi, R.), pp. 85-90

 

The International Music Business Research Association (IMBRA) starts to publishthe IJMBR in 2016. IMBRA’s first general assembly was held in the course of the 7th Vienna Music Business Research Days and the delegates decided to foster international collaboration and to enlarge the emerging scientific community of music business research. All researchers interested in the new scientific discipline are invited to become a member in 2017: http://imbra.eu/

The second IMBRA general assembly will be held in the course of the 8th Vienna Music Business Research Days on “Unchaining the Digital Music Business?” at the University of Music and Performing Arts Vienna. The call-for-papers for the Young Scholars’ Workshop on September 14, 2017 as well as the Conference Track Day on September 15, 2017 are still open. Researchers of all disciplines are invited to submit paper proposals latest until March 31, 2017 to:

Young Scholars’ Workshop: viennamusicresearch@hmkw.de

Conference Track Day: vmbrdays@gmail.com

 

In the next section you can find a list of all theses & papers which were added to the blog in 2016:

Bruckner, Wolfgang, 2011, Marketing-Konzeption für Tonstudios. Masterarbeit, Wirtschaftsuniversität Wien.

 

The following studies, reports and working papers with a music business/industry focus were published in 2016:

Benner Mary J., Joel Waldfogel, 2016, The Song Remains the Same? Technological Change and Positioning in the Recorded Music Industry, Strategic Science, 1(3): 129-147.

Ericson Petter, Peter Harris, Elizabeth Larcombe, Turo Pekari, Dr. Kelly Snook, Andrew Dubber, 2016, Blockchain, #MTFlabs white paper, August 2016.

Green Todd, Gary Sinclair, Julie Tinson, 2016, Do they Know it’s CSR at all? An Exploration of Socially Responsible Music Consumption, Journal of Business Ethics, 138(2): 231-246.

Guichardaz Rémy, Laurent Bach, Julien Penin, 2016, Music industry intermediation in the digital era and the resilience of the majors’ oligopoly: The role of transactional capabilities, working paper, University of Strasbourg, CNRS, BETA UMR 7522.

Hiller Scott, 2016, The importance of quality: How music festivals achieved commercial success, Journal of Cultural Economics, 40(3): 309-334.

IPSOS, 2016, Music Consumer Insight Report 2016, im Auftrag der IFPI, London.

Mehrafshan Nima, Björn Goerke, Michel Clement, 2016, The Effect of Unexpected Chart Positions on the Firm Value of Music Labels. An Event Study of Album Success, EconStore, ZBW – Leibnitz Informationszentrum Wirtschaft.

Mendes Da-Sylva Wesely, 2016, The impacts of fundraising periods and geographic distance on financing music production via crowdfunding in Brazil, Journal of Cultural Economics, vol. 40(1): 75-99.

Montauti Martina, Filippo Carlo Wezel, 2016, Charting the Territory: Recombination as a Source of Uncertainty for Potential Entrants, Organization Science, 27(4): 954-971.

O’Dair Marcus et al., 2016, Music on the Blockchain, Blockchain for Creative Industries Research Cluster, Middlesex University, report no. 1, Juli 2016.

Parry Glenn, Oscar Bustinza, Ferran Vendrell-Herrero, Nicholas O’Regan, 2016, Internationalization of Product-Service Systems: Global, Regional or National Strategy?, Foresight and STI Governance, 10(1): 16-29.

Phillips Ronnie J., Ian C. Strachan, 2016, Breaking up is hard to do: the resilience of the rock group as an organizational form for creating music, Journal of Cultural Economics, 40(1): 29-74.

Renz Thomas, Maximilian Körner, 2016, Jazz-Studie. Lebens- und Arbeitsbedingungen von Jazzmusiker/-innen in Deutschland. Studie des Instituts für Kulturpolitik der Universität Hildesheim.

Richardson Martin, Frank Stähler, 2016, On the “uniform pricing puzzle” in recorded music, Information Economics and Policy, 34(C): 58-66.

Rogers Benji, 2016, How the Blockchain and VR Can Change the Music Industry (part 1), cuepoint blog.

Rogers Benji, 2016, How the Blockchain and VR Can Change the Music Industry (part 2), cuepoint blog.

Silver Jeremy, 2016, Blockchain or the Chaingang? Challenges, opportunities and hype: the music industry and blockchain technologies, CREATe Working Paper 2016/05.

Sonnabend Hendrik, 2016, Fairness as a Constraint on Profit Seeking: Evidence from the German Club Concert Industry, Journal of Cultural Economics, 40(4): 529–545.

Towse Ruth, 2016, Economics of music publishing: copyright and the market, Journal of Cultural Economics Online, 11 March 2016: 1-11.

Towse Ruth, Hyojung Sun, 2016, Researching song titles, product cycles and copyright in published music: problems, results and data sources, ACEI Working Paper Series no. AWP-06-2016.

Wang Qian, Jeroen de Kloet, 2016, From ‘Nothing to My Name’ to ‘I Am a Singer’: market, capital, and politics in the Chinese music industry, chapter 21 in Michael Keane (ed.), Handbook of Cultural and Creative Industries in China, Edward Elgar Publishing.

Watson Allan, Jonathan V. Beaverstock, 2016, Transnational freelancing: Ephemeral creative projects and mobility in the music recording industry, Environment and Planning A., 48(7): 1428-1446.

Wlömert Nils, Dominik Papies, On-Demand Streaming Services and Music Industry Revenues – Insights from Spotify’s Market Entry, International Journal of Research in Marketing, 33(2): 314-327.

 

Music business/industry books published in 2016:

Acheini Ben-Ameh Christine, The Impact of Music Streaming on The Music Industry: Case study-Spotify, Lambert Academic Publishing.

Hughes Diane, Mark Evans, Guy Morrow, Sarah Keith, The New Music Industries: Disruption and Discovery, Palgrave Macmillan.

Johnson Jamie, The Music Business for Artist Managers & Self-Managed Artists: All You Need To Know To Get Started, Get Noticed …, Kindle Edition.

Owsinski Bobby, Music 4.1: A Survival Guide for Making Music in the Internet Age, Hal Leonard.

Peres da Silva Glaucia, Wie klingt die globale Ordnung? Die Entstehung eines Marktes für “World Music”, VS Verlag.

Steijlen Erwin, Corporate Music Method: The Black and White Version, CreateSpace.

Taylor Timothy D., Music and Capitalism: A History of the Present, University of Chicago Press.

Wikström Patrik, Robert DeFillippi (eds.), Business Innovation and Disruption in the Music Industry, Edward Elgar Publishing.

 

Finally, I would like to thank 30,574 visitors of the blog for 54,456 visits in 2016 – 149 visits per day. Most of the visitors came from the US, UK, Germany, Austria, Australia, France, Canada and Spain, but also from the Netherlands, Italy, India, Brazil, Japan, Norway, Poland, Finland, Denmark, Russia, Ireland and South Korea. Except a few African countries, Syria, Iraq, Iran, Afghanistan, Turkmenia, Tajikistan, Papua-New Guinea, Surinam, French Guiana, Cuba and North Korea, visitors from all countries of the world has browsed the music business research blog in 2016.

 

The top-10 most visited blog entries in 2016:

  1. The Recorded Music Market in the US, 2000-2014 with 3,522 visits
  2. The Recession in the Music Industry – a Cause Analysis with 3,083 visits
  3. The Global Music Publishing Market – An Analysis with 3,054
  4. The Recorded Music Market in der US, 2000-2013 with 2,990 visits
  5. The Economics of Music Streaming: Spotify with 2,003 visits
  6. Money from Music – a study on musicians’ revenue in the U.S. with 1,864 visits
  7. Is Streaming the Next Big Thing? – The Business Models of Music Streaming Services with 1,101 visits
  8. Music Streaming Revisited – the International Music Streaming Market 2014 with 1,016 visits
  9. Introducing our guests: Keith Harris, manager of Stevie Wonder with 666 visits
  10. The Recorded Music Market in Germany, 2003-2014 with 602 visits

 

To sum up, all articles and sites on the blog has been visited 340,603 times since March 2010 when I started this blog. Thus, the blog almost hit the 341,000 mark in 2016 with your support – thank you! Please come back all in 2017 to read e.g. about 8th Vienna Music Business Research Days on “Unchaining the Digital Music Business” (conference call and call-for-papers for the Young Scholars’ Workshop) that will be held at the University of Music and Performing Arts Vienna from September 14-16, 2017. The sixth volume of the International Journal of Music Business Research will be published with two issues in spring and autumn 2017. And as usual you will find new blog entries on music business/industry topics, book reviews, conference announcements and updates of the several databases.

Hope I see you all again on the blog in 2017. Best wishes and a successful New Year,

PETER

 

Sources:

[1] Music Business Worldwide, “Deezer scraps IPO that could have raised $400m”, 28. Oktober 2016.

[2] Music Business Worldwide, “Revealed: The 1,000 artists attacking YouTube’s safe harbour in Europe”, 5. Juli 2016.

[3] Music Business Worldwide, “Revealed: The 186 artists fighting the YouTube-shielding DMCA”, 21. Juni 2016.

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