Archive for the 'music streaming' Category

03
Apr
18

Spotify goes public – an economic background analysis

April 3rd 2018 is a historic moment in the digitized music industry, when the Swedish music streaming company Spotify is listed at the New York Stock Exchange. Spotify’s stock exchange listing is not just a touchstone for the music streaming service’s business model, but for the entire recorded music industry that is back on a path of growth. Spotify is the darling of the big music industry players. It provides a legal business model that can be monetized by hefty advances and royalty payments. This allowed the music majors and the indie label licensing agency MERLIN to become Spotify’s shareholders in return for advance payments Spotiy could not afford. Sony Music Entertainment’s Spotify stake of 5.7 percent (Spotify 2018: 148) e.g. is worth US $500m to 1.3bn.[1] The following analysis highlights Spotify’s success story, but also outlines potential risks of going public. It also analysis who benefits from Spotify’s stock exchange listing and assesses the impact on the music streaming market.

Continue reading ‘Spotify goes public – an economic background analysis’

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05
Mar
18

Music Majors in the Streaming Economy: Warner Music Group

In its last annual report Warner Music Group (WMG) exhibited a total revenue of US $3.58bn – the highest since the recorded music company was sold by Time-Warner to the Investor Group in 2003. Although overall costs also increased to US $3.15bn (WMG 2017: 38-39), the operating income is remarkably high with US $222m (WMG 2017: 40) especially compared to the disastrous results of the early 2000 years with annual losses of about 1 billion US$. The main driver of the revenue growth is the music streaming boom. In the recorded music segment streaming revenue increased by US $434m to US 1.34bn in the fiscal year ending on September 30, 2017. The music publishing segment contributed a further increase of US $58m of streaming revenue (WMG 2017: 36). Thus, WMG earned almost US $500m more with music streaming in 2017 compared to 2016. The further analysis highlights how the music major’s business model has shifted to the music streaming economy.

Continue reading ‘Music Majors in the Streaming Economy: Warner Music Group’

31
Jan
18

Artists in the Music Stream – A Case Study

On 24 January 2018 the Latin superstar Enrique Iglesias filed a lawsuit against Universal International Music for “systematically underpaying streaming royalties” (complaint, Enrique Iglesias vs. Universal International Music, January 24, 2018). The lawyers of Iglesias argue that Universal Music should have paid 50 percent of the net revenue from the streaming services. Instead Iglesias was paid just a fraction of the royalties according to the rate agreed for physical and download albums. This remarkable case sheds light into the contractual practices in the recorded music industry and helps to explain, why artists contracted to record labels does not really benefit from the music streaming economy yet.

Continue reading ‘Artists in the Music Stream – A Case Study’

31
Dec
17

Music Business Research 2017 – in retrospective

Dear readers of music business research blog,

The music streaming boom dominated 2017. Market statistics highlight that music streaming revenue has become the most important income stream for the phonographic industry. The US figures for 2016 highlight a tremendous shift from selling music (CDs and downloads) to accessing music (by streaming services). In the US, music consumers paid for the first time more for music access by ad-supported and paid streaming services (US$ 3.9bn) than for CDs, music downloads and ringtones (US$ 3.5bn). In the UK, the massive growth of music streaming revenue also increased overall recorded music sales in 2016. Gains of £103m in the music streaming segment, thus, compensated not just for the loss of £5.8m of physical sales, but also for the £56m decrease in download sales in a year-to-year comparison, as a long-term analysis of the UK recording sales indicates. We can, thus, expect a further massive growth of music streaming revenue in 2017 also on markets with a still strong physical segment such as Germany.

Continue reading ‘Music Business Research 2017 – in retrospective’

05
Sep
17

The Economics of Music Streaming – Book presentation & Panel Discussion

In collaboration with the Austrian and Viennese Chamber of Commerce an additional event of the 8th Vienna Music Business Research Days 2017 wil take place in Gewerbehaus of the Austrian Chamber of Commerce (3., Rudolf Sallinger Platz 1) on September 13 from 19:00-21:00. After the book presentation “The Economics of Music” by Peter Tschmuck, Peter Jenner (Sincere Management, London), Sally Gross (University of Westminster, London), Hannes Tschürtz (ink music, Vienna) and Alexander Hirschenhauser (VTMÖ – Austrian Indie Label Association, Vienna) discuss on “The Economics of Music Streaming – Revenue Streams for Musicans and Music Producers from Spotify & Co?

Entrance is free, please register here: Austrian Chamber of Commerce (WKO)

 

The Economics of Music Streaming – Revenue Streams for Musicans and Music Producers from Spotify & Co?
September 13, 2017
19.00-21.00
Gewerbehaus
Große Dachterrasse
Rudolf Sallinger Platz 1, 1030 Wien

 

in collaboration with  Bildergebnis für WKÖ logo      and       Bildergebnis für wirtschaftskammer wien

 

 

13
Jul
16

The Economics of Music Streaming: Spotify

2016 is the pivotal year for the music streaming industry. After years of growth, we can expect a market consolation for the new few months with mergers, acquisitions and insolvencies. Thus, the question arises which music streaming services will survive that consolidation process. I try to assess who will be the winners and losers by analysing the financials of several music streaming companies. In the first part of this series I examine the global market leader in the music streaming market, the Swedish music streaming company Spotify.

Continue reading ‘The Economics of Music Streaming: Spotify’

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’




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