Archive for the 'Analysis' Category

28
Feb
17

The Music Business in the Blockchain

When the Economist article “The Trust Machine. The Promise of the Blockchain” was published in October 2015, a broader audience beyond the bitcoin community has become interested in the disruptive potential of the cryptocurrency’s technology. Meanwhile, further articles on the blockchain have appeared in the main press and Don & Alex Tapscott published “Blockchain Revolution” (2016), which highlights in detail the (revolutionary) impact of blockchain technology on the music business in chapter 9. We also discussed the relevance of the blockchain for the music business with the Blogchain-Hub founder Shermin Voshmgir in a music business research jour-fixe in Vienna on June 20, 2016.

On March 3, 2017, Carlotta de Ninni (Mycelia for Music Foundation, London), Peter Jenner (Sincere Management, London) and Benji Rogers (PledgeMusic and Dot Blockchain Music, New York) will supervise the international workshop “The Blockchained Music Business” at the Department of Cultural Management and Gender Studies (IKM) of the University of Music and Performing Arts Vienna. After the workshop(16:30-18:00) our guests will discuss the opportunities and challenges of blockchain technology for the music business in a public panel discussion in the Large Conference room of IKM (Anton-von-Webern Platz 1, 1030 Vienna).

In the following, I’m going to explain the fundamentals of blockchain technology and I outline its opportunities and challenges of the blockchain for the music business.

Continue reading ‘The Music Business in the Blockchain’

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”).

Continue reading ‘Music Business Research 2016 – in retrospective’

27
Dec
16

Warner Music Group in the Digital Paradigm Shift

On December 8, Warner Music Group (WMG) released the annual report for the financial year 2016 ending on September 30, 2016 reporting the highest revenue of US$ 3.25bn since Access Industries has acquired WMG in 2011. WMG also reported its best profit performance – measured in operating income before depreciation and amortization (OIBDA) – of US$ 507m since 2006. For the first time after Access Industries’ takeover, WMG will pay a dividend of US$ 54m to its shareholders (WMG 2016: 110). Those key facts indicate a healthy business performance of the smallest music recording major company in the digitalised music industry. Thus, the following analysis highlights the causes for WMG’s economic recovery and the re-structuring of its business model.

Continue reading ‘Warner Music Group in the Digital Paradigm Shift’

30
Nov
16

The fate of the CD – an international CD-market analysis

In March 2010, my first blog post in the music business research blog was entitled “The CD is Dead! Long Life the Music Download?” – with a question mark. The prophecy has become partly true. In some markets, e.g. in Sweden, the CD is only a by-product such as vinyl with a combined market share 12.4 percent (IFPI 2016: 92). In other countries, e.g. Germany, the CD is still economically relevant. Physical sales in Germany accounted for 60.0 percent in 2015 – with 83.6m CD units and 7.6m other physical units sold (ibid: 81). However, the CD is on the way to insignificance and will end up as a nostalgic collectors’ item. The following economic analysis of the international CD market shed light into the dynamics of different markets and explains, why some markets are still driven by CD sales.

Continue reading ‘The fate of the CD – an international CD-market analysis’

30
Jun
16

The Music Streaming Market Revisited, 2011-2015

Last year, I posted an analysis of the international music streaming for 2014 based on IFPI numbers. Since then the global streaming market was highly dynamic and therefore I updated my analysis and included also earlier data. In 2015 the global streaming revenue (subscriptions and ad-supported streaming revenue) increased by 42.5 per cent (IFPI 2016: 17) and had a volume of US $2.89bn. The music streaming market is almost as big as the music download market (US $2.97bn) (IFPI 2016: 49). Music streaming, therefore, accounts for 42 per cent of the global recorded music market. However, the market share of music streaming differs between countries. Whereas in Sweden the music streaming market share is 66.5 per cent of the overall recorded music market, in Germany just 11.4 per cent of the recorded music revenue comes from music streaming sources. And Japan, the second largest recorded music market in world, lags behind with meagre 4.6 per cent. In the following, please read an analysis of the international music streaming for the time-span from 2011-2015.

Animation of the international music streaming markets, 2011-2015

Continue reading ‘The Music Streaming Market Revisited, 2011-2015’

19
May
16

Live Nation in the Digital Paradigm Shift

In the course of digitization new players entered the music industry changing the rules of the game. Such a player is Live Nation. Live Nation Entertainment is the result of the merger of the world’s largest music promotion company, Live Nation, and the world’s largest ticketing company, Ticketmaster, in 2010. The Ticketmaster-Live Nation merger marks the beginning of a new era in the music business, with all activities within the industry now being integrated, including live music events, venue operations, ticketing services, sponsorship and advertising sales, and artist management and services (Live Nation 2015: 4). In the following Live Nation’s business model and economic performance after the merger is portrayed and analysed.

Continue reading ‘Live Nation in the Digital Paradigm Shift’

31
Jan
16

The Global Music Publishing Market – An Analysis

In a Music Business World Wide article[1], music industry analyst Will Page calculated a value of US $11.34bn for the global music publishing market in 2014. The number comprises of US $7.55bn for the collection of performance fees, US $1.32bn for mechanical collections and US $0.35bn for private copying collections by CISAC[2] members and US $0.42bn for non-CISAC mechanical collections (e.g. Harry Fox Agency collections). Further US $1.70bn of revenue have to be added for music directly licensed by the publishers (“grand rights” and synchronisation rights).

 

Figure 1: The global value of the music publishing market in 2014

Figure 1 - The global value of the music publishing market in 2014

Source: After Music Business World Wide, “$25 billion: The best number to happen to the global music business in a very long time”, December 10, 2015 (retrieved January 19, 2016)

 

The analysis highlights that music publishing is as relevant as the recorded music industry with a global market volume of about US$ 15bn. Therefore, this blog post analysis the global music publishing market in a long-term perspective and investigates economic relevance of music publishing for the music majors – Universal Music Group, Sony Music Entertainment and Warner Music Group – as well as the structure of the global music publishing market.

Continue reading ‘The Global Music Publishing Market – An Analysis’




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