Last year when Spotify took on $1 billion in debt, we reported that it did so under terms that forced rate increases if it failed to IPO. Now, those terms could force Spotify to IPO quickly, which leaves the music industry in a strong negotiating position.
Spotify’s average per-stream payout has fallen by 16% since 2014, according to a new dataset published by artist-rights blog The Trichordist.
The figures are based on 2016 streaming data for an independent label with around 150 albums available digitally, which is compared to a similar study in 2014.
According to the analysis, Spotify generated $0.00437 per stream for the label in 2016, down from $0.00521 in 2014. Yet Spotify accounted for 69.6% of the label’s overall streaming revenues: its per-stream rate may have fallen, but its scale still makes it the major earner for this particular catalogue.
(Additional context: if Spotify users have become more engaged in its service over time, listening to more music by more artists, that would be a factor in the falling average per-stream payout. When Spotify relaunched its artists portal in November 2016, it stopped publishing its own figure for average per-stream payout to all rightsholders.)
The last time we did this was back in 2014, so we thought it was time for an update. Not a lot of surprises but as we predicted when streaming numbers grow, the per stream rate will drop. This data set is isolated to the calendar year 2016 and represents an indie label with an […]
The last time we did this was back in 2014, so we thought it was time for an update. Not a lot of surprises but as we predicted when streaming numbers grow, the per stream rate will drop. This data set is isolated to the calendar year 2016 and represents an indie label with an approximately 150 album catalog generating over 115m streams. That’s a pretty good sample size. All rates are gross before distribution fees.
Spotify was paying .00521 back in 2014, two years later the aggregate net average per play has dropped to .00437 a reduction of 16%.
YouTube now has their licensed, subscription service (formerly YouTube Red?) represented in these numbers as opposed to the Artist Channel and Content ID numbers we used last time. Just looking at the new YouTube subscription service numbers isolated here, they generate over 21% of all licensed audio streams, but less than 4% of revenue! By comparison Apple Music generates 7% of all streams and 13% of revenue.
Speaking of Apple, they sit in the sweet spot generating the second largest amount of streaming revenue with a per stream rate .00735, nearly double what Spotify is paying. But, Spotify has a near monopoly on streaming market share dominating 63% of all streams and 69% of all streaming revenue. The top 10 streamers account for 99% of all streaming revenue.
[Editor Charlie sez: Spotify can’t account for millions of songs as it is, how will they give songwriters a straight count on “Jump In” feature? Easy answer–they won’t.]
Spotify is testing a new feature called Jump In that would let its free mobile users get on-demand features in certain playlist, according to multiple sources with direct knowledge of the situation….
Spotify is currently in the midst of negotiations with all of the major labels, and those deals won’t be done anytime soon, according to multiple sources. Given that there are no deals in place, the company would need special approval to push Jump In, which could potentially alter or delay the rollout schedule.
The radio industry is about to learn what many others already have — when you push Irving Azoff, he pushes back. Usually harder.
After nearly two years of negotiations over licensing rates for radio song plays, the Radio Licensing Music Committee (RMLC) recently “ambushed” Global Music Rights (GMR) — the nascent U.S. performance rights organization launched in late 2013 by Azoff, in conjunction with MSG Entertainment and with former ASCAP executive Randy Grimmett at the helm — with an antitrust lawsuit filed in the U.S. Eastern District Court of Pennsylvania on Nov. 18.
That was followed by the filing, on Dec. 6, Daniel Petrocelli and his firm O’Melveny & Myers of an antitrust suit on behalf of GMR against the RLMC in the U.S. Central District Court of California. Petrocelli stresses that the suit is not retaliatory, but was filed to fight the RLMC’s “collusive tactics to depress [the] prices” that radio stations pay songwriters.
Azoff, the legendary artist manager who began GMR because he felt songwriters were getting shortchanged in performance licensing, tells Billboard that he takes “artist rights very seriously. I grew up around guys named Lew Wasserman[former head of MCA, now known as Universal Music Group] and Steve Ross [who created Warner Music Group], who taught me to respect talent. We feel that they [the RMLC] violated respect for talent. We didn’t start this fight, but we aren’t going away.”
This week Spotify’s UK head of content programming George Ergatoudis told Music Week he had met Taylor Swift’s management team to talk about her returning to the service.
Ergatoudis said: “It’s not a lock-in, but I’ve got every reason to be very optimistic Taylor Swift will be coming back to Spotify. I’m not saying it’s done, but the indications are good, put it like that.”
When Swift released her album, 1989, in 2014 she pulled her entire catalogue from the streaming giant in protest at its free tier.
Swift said at the time: “Music is art, and art is important and rare. Important, rare things are valuable. Valuable things should be paid for.”
But Ergatoudis said: “The world’s moved on a lot, even in the last year. There’s a hell of a different market right now.”
This is very true for the music industry, which has been in turmoil for more than a decade. The only constant factor is that most of parts of the sector are in decline.
Ten years ago sales by the British music business accounted for £1.2bn, a slump of 42% in a decade.
The clear reason for this fall is the rise of digital services such as Deezer and Google Play as well as Spotify and Apple Music, which represents a massive consumer shift from owning music to simply streaming it over digital devices.
The BPI said ad-funded websites paid out a “meagre” £24.4m in 2015 in royalties in the UK. This was despite British fans streaming almost 27 billion music videos, an 88% increase from 2014.
Last year YouTube paid out $740m in music rights payments worldwide, according to a report from industry-funded body UK Music. This is up 11% from 2014, despite total views jumping by 132% to 751 billion streams. Per-stream rates fell from $0.0020 to $0.0010.