In today’s Music Ally Bulletin
RIAA mid-year figures reveal 9.1% growth for US recorded music
Deezer revenues grew by 12.1% in the first half of 2022
Tencent Music may have run into trouble with QQ Music NFTs
UK Music's latest report explores industry's pandemic recovery
Symphony launches video streaming service for classical music
Music Tectonics reveals finalists in its 2022 startups contest
Spotify adds 'Planet Hip-Hop' to its branded Roblox island
Apple Music preps Wizkid concert and adds Flo to Up Next promo
Twitch tweaks its revenue-sharing deals with top streamers
Google may challenge Dolby Atmos with a new 3D audio format
LEAD STORY
RIAA mid-year figures reveal 9.1% growth for US recorded music
US labels body the RIAA published its mid-year figures for 2022 yesterday, revealing that the retail value of recorded music in the US grew by 9.1% to $7.69bn in the first half of this year. Meanwhile, wholesale (trade) revenues grew by 8% to $4.9bn.
The retail figures included 9.4% growth in paid subscriptions to streaming services, which were worth $4.51bn in the first half of 2022 – 58.6% of the total. Factor in limited-tier subscriptions (up 16.6% to $525m), ad-supported on-demand streaming (up 16.4% to $871.5m) and other forms, and streaming now accounts for 84.2% of the overall market.
This is all positive news, but what about the much-discussed concerns that streaming growth is slowing? In percentage terms, yes. Looking back at recent RIAA mid-year reports, the growth of paid subscriptions has fallen steadily: 49.5% in 2017; 36.5% in 2018; 29.8% in 2019; then 13.7% in 2020 as Covid-19 hit.
The 2021 mid-years saw a bounceback effect with 24.9% growth in US subscription revenues, which is one factor in the slide in growth to 9.4% this year. Which is at least growth rather than shrinkage: against a backdrop of economic uncertainty, more people are taking out new music subscriptions in the US than are cancelling them.
Percentage growth isn't the entire story, of course. Paid subscriptions generated $387.6m more revenues (retail, still) in the US in the first half of this year than in the comparable period last year. Even from a bigger base, that's well down on the $752.5m added in the first half of 2019 compared to the first half of 2018 – the last pre-Covid comparison available.
Still... The US may be the biggest recorded music market, but it's not expected to be the key driver of music subscriptions (and thus overall revenues) in the coming years. Earlier this year, Midia Research claimed that emerging markets will represent the majority of music subscribers by 2026, for example.
Also, the RIAA figures just cover recorded music and its key formats/collecting sources, and this is clearly just one piece of the picture for musicians. Live and publishing, most obviously, but also their (still patchily-tracked) D2C businesses, and some of the emerging areas: tips economies, superfan subscriptions, new kinds of product from virtual merch to (whisper it!) NFTs and more.
All of which is to say: figures showing the growth of recorded music are important, especially when they come from the world's largest market, but there's a bigger picture around how the people making that music might be growing their own incomes.
Labels may not play as big a role in that as they do for recordings, although they would like to play a role, and are building out teams, technology and partnerships to make that case to artists. Slowing growth in streaming revenues is one of the drivers behind that trend, as well as fuelling their efforts to license new partners in fitness, social, gaming and other sectors.
Recorded music figures remain an important barometer for that side of the industry, and that's why tracking the trends and discussing the challenges revealed is key. But it's just as vital to remember that in the next decade, perhaps more than ever before, these figures are just the start of the tale of how musicians make a living, rather than the entire story.
The slowdown in streaming growth is encouragement to continue fleshing out that narrative, rather than a cause for panic.
Music Ally archive: RIAA
MORE MUSIC NEWS
Deezer revenues grew by 12.1% in the first half of 2022
Deezer is now a public company, which means we'll be getting quarterly updates on how its business is progressing. Yesterday the streaming service published figures for the first half of 2022, revealing that its revenues grew by 12.1% year-on-year to €219.4m ($216m). That included growth of 12.2% for its B2C business (consumers) and 7.9% for its B2B business (partners like telcos). France remains a significant share of Deezer's revenues though: 60.3% this year compared to 60.9% a year ago. As for subscribers, Deezer ended June 2022 with 9.4 million of them, down from 9.7 million a year ago. It lost around 100,000 B2B subscribers globally; gained 300,000 B2C subscribers in France; and lost 500,000 in the rest of the world – the latter partly due to pulling out of Russia, and also because Deezer has been reducing "unprofitable spend in noncore long tail markets" in order to focus on a smaller group of key territories. Profits? Not just yet, but Deezer did manage to lower its first-half operating losses from €61.1m in 2021 to €52.6m in 2022. CEO Jeronimo Folgueira said he hopes that Deezer can "continue improving our profitability to reach breakeven by 2025" though.
Music Ally archive: Deezer
Tencent Music may have run into trouble with QQ Music NFTs
Last year, Tencent Music began exploring NFTs in its native China, launching a digital collectibles feature within its biggest streaming service QQ Music. How did that go? The South China Morning Post suggests it has run into trouble, with a number of buyers posting on the app saying they want refunds. The report also notes that TME stopped selling these collectibles at the end of June, and that people who did buy the NFTs now have to take several more steps to find them within the service. The backdrop to all this, as the Post reported, are some ominous noises coming from the Chinese authorities regarding regulation of NFTs, as well as "waning public interest" in these products. The fact that cryptocurrencies are officially banned from being traded in China has also presented a headache for companies trying to explore NFTs there. TME has told reporters that it is evaluating its digital collectibles strategy, and that it will address QQ Music buyers' complaints.
Music Ally archive: NFTs
UK Music's latest report explores industry's pandemic recovery
The British music industry's umbrella body, UK Music, has published its latest 'This Is Music' annual report this week. Alongside it, the body has called for more support from the British government for musicians and music companies. The key figures from the report are being wielded to support this call, telling a story of a partial bounceback from the initial hit of the Covid-19 pandemic, but still some way to go to fully recover. For example, UK Music has calculated that the local music industry's contribution to the wider economy was £4bn ($4.51bn) in 2021, up from £3.1bn in 2020, but still well down on its peak of £5.8bn in 2019. The trend is the same for employment (197k music industry jobs in 2019, 128k in 2020 and then 145k in 2021) and exports (£2.9bn in 2019, £2.3bn in 2020 and £2.5bn in 2021). "Our sector still faces a serious threat from the economic storm that could blow our fragile recovery off course without urgent Government support," said CEO Jamie Njoku-Goodwin. UK Music has welcomed this week's energy-relief measures for businesses, but would like to see tax reliefs and more copyright protection measures – including abandoning plans for a copyright exception for AI text and data mining.
Music Ally archive: UK
Symphony launches video streaming service for classical music
Symphony is the latest startup hoping to build a viable streaming business around classical music. Its focus is firmly on video, giving subscribers access to streams of live performances, along with related interviews, behind-the-scenes footage and commentary. It kicks off this Saturday (24 September) with a performance by the Concertgebouw Orchestra from Amsterdam, with the London Symphony Orchestra, the Royal Stockholm Philharmonic Orchestra and Tonhalle-Orchester Zürich among the other orchestras confirmed as partners who'll stream four live concerts every year on Symphony. Initially available in the Netherlands, Sweden, the UK, US, Canada and Australia, Symphony will charge €9.95 a month for a subscription, with a 14-day trial if people want to give it a spin for free first. The company says that half of its revenues will be paid out to the partner orchestras.
Music Ally archive: Startups
Music Tectonics reveals finalists in its 2022 startups contest
The Music Tectonics conference is fast making a name for itself as one of the key music/tech events in the US, and that includes its 'Swimming with Narwhals' startups contest. This week, the four finalists in this year's competition have been announced. They are: song-separating firm AudioShake (who we profiled for a Startup File earlier this year); Opnr, which connects musicians with concert organisers with support slots to fill; Tuney, a tool to help video creators edit music into their work; and Viktrs, which helps artists make shoppable music videos and add other interactive features. The four finalists will pitch their startups at the Music Tectonics conference in Santa Monica next month, with winners to be announced on the final day of the conference.
Music Ally archive: Startups
MARKETING NEWS
Spotify adds 'Planet Hip-Hop' to its branded Roblox island
One problem with music experiences on Roblox is that many of them are one-offs: a single performance or album launch then nothing more. Fans can still visit these worlds, but they're essentially digital tumbleweed. Thankfully that doesn't appear to be the case with Spotify's Roblox strategy. It started with its own island, then built a K-Pop-focused 'K-Park' as its first expansion. Now there's another new zone: Planet Hip-Hop. It's launching with a virtual swamp built for US artist Doechii, complete with merch, customisable cars and a Soundtrap-powered music creation feature. The merch is worth watching: clothing, emotes, parkour effects and other items are being sold, including the option to have them virtually 'signed' by Doechii. "Net proceeds from digital sales on Roblox are distributed to the rights-holders of the items," noted Spotify in its blog post, without (of course!) quantifying the revenue share here. Planet Hip-Hop sits within Spotify Island on Roblox, which at the time of writing has been visited 13.8m times, and has been favourited by nearly 143,000 people.
https://newsroom.spotify.com/2022-09-21/heres-your-first-look-at-planet-hip-hop-spotify-islands-latest-experience-on-roblox/
https://www.roblox.com/games/8209480473/Planet-Hip-Hop-Spotify-Island
Music Ally archive: Spotify - https://musically.com/tag/spotify/
Apple Music preps Wizkid concert and adds Flo to Up Next promo
Apple Music is getting back to its live roots by returning to the Roundhouse venue in London for a concert. Nigerian star Wizkid is the artist performing, as part of the recently-launched 'Apple Music Live' series of hybrid physical/streamed concerts. The concert will be recorded on 27 September, although registrations are already closed after opening yesterday on a first-come first-served basis. The concert video will be streamable on Apple Music later in the Autumn. In separate news, Apple Music has chosen British R&B group Flo as its latest 'Up Next' artist. They've already been getting support on a number of Apple Music playlists, and will now receive the usual treatment from the DSP's emerging-artists program: a short film, Apple Music Radio interview, and a slot on late-night US chat-show Jimmy Kimmel Live.
https://www.axs.com/wizkidliveregclosed
http://apple.co/upnextflo
Music Ally archive: Apple Music - https://musically.com/tag/apple-music/
WIDER ANGLES
Twitch tweaks its revenue-sharing deals with top streamers
Twitch's standard revenue share for channel subscriptions is 50/50, but the Amazon-owned platform is having to have a somewhat delicate conversation with its creator community about it. Why? Because some of its most popular streamers were on better deals – agreements that are now being tweaked to match those offered to the rest of the community. "As we reflected on how we handled these premium deals, we realized a few problems," wrote Twitch president Dan Clancy in an open letter to Twitch streamers yesterday. "First, we had not been transparent about the existence of such deals. Second, we were not consistent in qualification criteria, and they generally went to larger streamers. Finally, we don’t believe it’s right for those on standard contracts to have varied revenue shares based on the size of the streamer." Twitch can't just bump all its top channels down to a 50/50 rev-share for their subscriptions though, so there's a carefully-crafted sliding scale where they still get 70% of their first $100k of subs revenue, then 50% of everything above that. Clancy said that Twitch can't offer everyone a 70/30 split due to the costs of delivering the service, although he did note that the company recently bumped up creators' share of advertising revenues to 55%.
https://blog.twitch.tv/en/2022/09/21/a-letter-from-twitch-president-dan-clancy-on-subscription-revenue-shares/
Music Ally archive: Twitch - https://musically.com/tag/twitch/
Google may challenge Dolby Atmos with a new 3D audio format
Dolby's Atmos 3D-audio format has been gaining a lot of momentum in music thanks to its adoption by Apple Music, Amazon Music and Tencent Music's QQ Music among others. In August, Dolby said that Atmos was now being used by two thirds of the artists in Billboard's top 100 chart. One of Atmos's prominent competitors is Sony's 360 Reality Audio, but another may be on the way... from Google. Tech site Protocol reported that Google is developing two new 'open media' formats for 3D audio and HDR video under the working title of 'Project Caviar'. It suggested that the goal is to make these formats available for Google's own services (e.g. YouTube) but also for other device makers and digital services "without the licensing fees hardware manufacturers currently have to pay Dolby". Would a new Google 3D-audio format be adopted by music services however? Amazon already supports both Dolby Atmos and 360 Reality Audio, so in theory it is open to competing formats. Apple Music might be a stretch, but Spotify has famously yet to launch its long-promised hi-res tier. Having worked closely with Google in other ways (smart speaker integrations for example) could it be waiting for 'Project Caviar' to reach fruition?
https://musically.com/2022/08/11/two-thirds-of-top-100-billboard-artists-use-dolby-atmos/
https://www.protocol.com/entertainment/google-dolby-atmos-vision-project-caviar
Music Ally archive: Google - https://musically.com/tag/google/
FURTHER READING TODAY
- TikTok's BeReal-style TikTok Now app has started strongly outside the US https://www.theverge.com/2022/9/21/23365425/tiktok-now-standalone-app-launches-outside-us-bereal?scrolla=5eb6d68b7fedc32c19ef33b4
- British music retailer HMB is launching... a record label? https://www.theguardian.com/business/2022/sep/22/hmv-vinyl-label-1921-records-india-arkin
- Spotify is buttering up big-brand CMOs with songs again https://adage.com/article/creativity-news/spotify-honors-mastercards-raja-rajamannar-wendys-carl-loredo-cmo-songs/2431061
- Despite scare stories, 'sleepy chicken' isn't a proper trend on TikTok https://techcrunch.com/2022/09/21/nyquil-chicken-fda-warning-tiktok-trend/
- Spotify's latest playlist is based on a question: "What is more Australian than the fear of swooping magpies?" https://thenewdaily.com.au/news/2022/09/21/spotify-playlist-swooping-magies/