The recently published Ernst & Young study that was commissioned by the French music industry body SNEP highlights the revenue split of a premium subscription of EUR 9.99 Spotify, Deezer and other comparable music streaming services. The study’s results confirm the conclusions drawn in the blog series “Is Streaming the Next Big Thing?” that – beside the music consumers – the (major) record labels are the main beneficiaries of the current boom of music streaming. In contrast, the musicians get just a small piece of the streaming pie and the streaming services for their part have severe problems to establish a sustainable business model. In the following, I would like to highlight and to comment on the main results of the study.
Posts Tagged ‘Spotify
Tags: authors, composers, creators, Deezer, interpreters, major labels, music catalogue, music consumers, music majors, music publishers, music streaming, music streaming portal, music streaming service, music subscriber, music subscription, premium subscription, record labels, record majors, revenue share, revenue split, Spotify, streaming
Tags: ad-supported streaming, audio-only streaming, brand awareness, brand knowledge, consumer study, digital music market, freemium, music consumer, music consumption behaviour, music streaming, music subscription, music user, music video website, Spotify, willingness to pay, YouTube
The question if streaming is the next big thing for the music industry will be eventually answered by the music consumers. Several studies were conducted in past few years – most of them commissioned by music industry bodies – to assess the future potential of music streaming. It is essential for music streaming services and the copyright holders (labels and music publishers) if consumers are aware of streaming services, if they are using them frequently and if they are prepared to convert from Freemium to subscription models. Therefore the results of the studies are important indicators for the future development of the music industry. Although they provide different and even contradictory results – due to a different methodology – they help us nevertheless to understand music consumption behaviour in the digital age. In the following I would like to review some of the studies published in the past three years.
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.
Tags: ad-supported, All Access, Amazon, Apple, Cloud Drrive, Cloud Player, Deezer, freemium, Glenn Peoples, Google, Hulu, iCloud, Internet radio, iTunes Match, iTunes Radio, LastFM, Mark Mulligan, music downloading, music licensing, music streaming, Play Music, premimum subscription, Simfy, Slacker, Soundcloud, Spotify, Spotify (UK) Ltd., Spotity AB, subscription, TapeTV, Vevo, Vimeo, webcaster, Xbox Music, YouTube
The music streaming market is currently the most dynamic segment in the music industry. The market entry of Apple with iTunes Radio and Google with All Access underpin the relevance of music streaming. It is just a question of time when Amazon will announce the launch of its rumoured music streaming service. Google, Apple & Co., however, enter a highly contested market. In the relatively small Austrian music market, eight streaming operators offer their services to the consumers (IFPI Austria 2013: 13) – not counted are the myriads of Internet radios, video streaming platforms such as YouTube, TapeTV, Vimeo and Hulu as well as the cloud-based music services of Amazon, Apple and Google.