The Rethink Music initiative recently published a report on “Fair Music: Transparency and Money Flows in the Music Industry”. The report identifies barriers in the money flows to artist and states:”[O]nly a small proportion of the money beyond the initial recording advances ultimately makes its way to artists as ongoing revenue.” (Rethink Music, 2015: 3). Especially in the digitized recorded music business the revenue streams are often obscure and non-transparent. And if it comes to music streaming, artists are sceptical about the underlying business model. Based on the report’s finding, the revenue streams from music streaming and the structures behind the business are analysed.
Posts Tagged ‘Pandora
Tags: artist income, ASCAP, Believe Digital, BMI, collecting society, composer, content aggregator, copyright, Deezer, Harry Fox Agency, iHeartRadio, income distribution, income of musicians, master right, mechanical right, MRO, music publisher, music streaming, musical copyright, Pandora, performance right, performer, PRO, rdio, Rebeat, record labels, revenue distribution, SESAC, Sirus XM, songwriter, sound recording right, SoundExchange, Spotify, streaming income, streaming revenue, The Orchard
Tags: ad-supported music services, Deezer, freemium, IFPI, iHeartRadio, iTunes, music download sales, music streaming, music subscription, Pandora, physical music market, QQ Music, recorded music market, Recording Industry in Numbers 2014, RIN 2014, SoundExchange, Spotify, Vevo, YouTube
Music streaming is on the rise. In the recent IFPI report “Recording Industry in Numbers 2014” IFPI CEO Frances Moore is cited with “Streaming is now a mainstream part of the modern music industry.” (IFPI 2015: 5) Indeed, global subscription streaming revenue increased by 39.0 per cent and ad-supported streaming revenue by 38.6 per cent in 2014. In 2014, the global music streaming market (ad-supported as well as subscription) has a volume of US $2.2bn, which is even bigger than the single track download market (US $1.9bn) (IFPI 2015: 9). Music streaming, therefore, accounts for nearly a third 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 70 per cent of the overall recorded music market, in Germany just 6.3 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 3.1 per cent.
In the following I would like to highlight the economic relevance of the music streaming market segment in an international comparison.
In the past few days two studies on the impact of music streaming on recorded music sales surfaced. The Country Music Association (CMA) presented study results that streaming services are more successful in fostering music sales than radio. It was reported that more than a quarter of the respondents purchased music after streaming it compared to eight percent of radio listeners. Since the CMA study is not available, the results cannot be seriously assessed. Therefore, we rely on a study of Stephen McBride, a researcher of the Science Team at Pandora Media. He testified before the U.S. Copyright Royalty Judges and presented evidence that show a positive impact on music sales. In a nutshell, he highlights that listening to a song on Pandora increases music sales be more than 2 percent – a moderate “Pandora effect”, as he called it. In following, I will analyse McBride’s findings in the so-called Music Sales Experiments that were conducted by Pandora’s science team. Learn more about it here:
Tags: Artists revenue project, Atoms for Peace, Damon Krukowski, digital sales, Ellen Shipley, Future of Music Coalition, Galaxie 500, income of musicians, music royalty, music streaming, Pandora, physical sales, royalties, SoundExchange, Spotify, Spotify (UK) Ltd., streaming revenue, streaming services, Thom Yorke, webcasting, YouTube, Zoë Keating
In mid of July 2013 Radiohead frontman Thom Yorke caused for controversies when he pulled his song catalogue and those of his band Atoms For Peace from music streaming service Spotify. His straight forward argument was as cited in The Guardian that “new artists get paid fuck all with this model”. Several artists take the same line as Yorke. The co-author of the Belinda Carlisle hit “Heaven is a Place on Earth”, Ellen Shipley, complained that the royalty paid by Pandora to her for more than 3m plays was US$ 40. She accused Pandora, Spotify, YouTube and Google for “(…) the meager, insulting, outrageous amount of money songwriters are being paid” according to Business Insider. In fact some big names are not available on Spotify: The Beatles, AC/DC, The Eagles, Garth Brooks, George Harrison.
Thus, the question arises if and how music streaming services can be valuable for artists? In the following I would like to highlight the pros and cons of music streaming services form an artists’ perspective.
Tags: Access Industries, ad-supported, Apple Inc., Beats, Beggars Group, Bertelsmann Music Group, Charles Caldas, Daisy, Deezer, download revenue, EMI, freemium, iHeartRadio, indie labels, initial public offering, IPO, iTunes Radio, Kleek, major labels, Martin Mills, Merlin, music streaming, music subscription, Pandora, rdio, royalties, Sirius XM, Sony Music Entertainment, SoundExchange, Spotify, streaming revenue, Tim Westergren, UMG, Universal Music Group, Warner Music Group, WMG, XL Recordings
The Beggars Group chairman, Martin Mills, recently told the Guardian that “(…) 22% of the label group’s digital revenues came from streaming – and that the majority of its artists earn more now from track streams than track downloads” in 2012. Though the article does not report absolute figures, the revenue can be considered rather high with a roster including Adele, Jack White and The xx.
A member survey of the global rights agency Merlin representing more than 20,000 indie labels including Beggars Group/XL Recordings, Rough Trade, Naïve, Tommy Boy, Cooking Vinyl and Naxos unveils that “92% of respondents saw streaming and subscription revenues grow between 2011 and 2012, with a third enjoying increases of more than 100%” as recently reported by Musicweek. The same study shows that 24% of indies across the world and 30% of European indies generated more income from streaming than downloads in 2012.
These figures suggest that music streaming seems to be a promising revenue source for record labels. In the following the economic potential of music streaming and the underlying business model are analysed from the record labels’ perspective.