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Hello everyone -

As the dust settles on Bandcamp's Friday 'no fee' bonanza that saw $7.1m of revenue go straight to artists, it has been interesting to note how this is being noticed by artists and managers. Certainly we are seeing more change their position and move to embrace the platform, but as I intimated last week, it suggests a broader shift of view in which artists generally see this model as a better and more sustainable one for them.

With this in mind, it is interesting to read Music Ally's article today that picks up on the Spotify (though really we should say "streaming audio") debate, asking how these DSPs could pay musicians more. It is a positive article in the main, looking at this optimistically, which is to be applauded. The problem is, I feel increasingly that the model itself just isn't one that appears to work so well. This is where the #brokenrecord movement appears to be gaining pace (search the hashtag on Twitter), because if Covid has proven one thing, it is that without live revenues, artists are largely struggling to live off recorded revenues alone.

Of course, those with a mandate to operate at scale - distributors for example - may well argue that streaming works great. And in that respect, I suspect it does, and very well too. However when it comes down to each individual artist, the picture does not appear so rosy.

All the said, this is where the positive sides of Covid and lockdown come into play. People are being forced to reconsider their view on things. New ideas have to be entertained. Change must be embraced, and this is all a good thing in my view.

Another great article to read that continues this train of thought is the excellent Stratechery piece about "The Anti-Amazon". In short, this advocates for more engagement with D2C retailing, leveraging things like Google Shopping and Shopify to really open up the opportunities to retail direct to fans, selling a broad spectrum of products. So again, for artists, it presents a great chance to review how they connect with fans and monetise that relationship.

There is no end of bad news around the impact of Covid-19 on not just the music industry but all others besides. However there are positives, and those should be sought out and embraced, as I feel there may be answers therein that provide a better situation for everyone - be that in music or beyond it. Now's the time to seek our new paths.

Stay safe,

D.
Soundcharts: Free Access For 2 Months!
Soundcharts is a platform we use daily here at Motive Unknown; we're big fans. It not only gives you streaming insights; you can get airplay data and even summaries of key mentions from notable press websites etc. So, in the spirit of spreading word on things we love, we thought we'd share that they are now offering up to 10 artists to track for free, for the next couple of months. Just head to their site to redeem here.
STORIES FROM THE MUSIC INDUSTRY:
Spotify should pay musicians more? Let's talk about how
What else can musicians do to survive and thrive? This is a positive point. There’s no contradiction between musicians calling for change in the way the streaming economy works, while also working hard to create opportunities for themselves within the system as it stands. It’s what they’re doing already. They and their teams are mastering mailing lists; serving their superfans; figuring out social marketing; being smarter with their merchandise; exploring new models like livestreaming; using tech and services to make sure their metadata is accurate and their royalties are collected; making clever use of the ‘on-platform’ creative and marketing tools of the streaming services… they’re taking control of their businesses and hustling to make the most of the current systems and structures.
Embracing a Future Where Memes Choose the Hit Songs
Not only is meme-ability determining what we listen to, but it also determines who we listen to. Arguably, Carly Rae Jepsen’s career took off after “Call Me Maybe” while the web took over with clips of celebrities mouthing the lyrics on homemade videos. There’s no doubt her talent would have still driven her to the forefront, considering E•MO•TION is one of the best albums out there, but the boost in exposure to online humor considerably helped make the process faster. The song and the resulting videos had such an impact on pop culture that there’s even a meme generator for the song.
Why Hip-Hop and Gaming are Still Scratching the Surface
Media analyst Matthew Ball wrote about this recently: "It’s likely that soon we’ll see D2C consumer product companies begin building their own bespoke experiences inside digital theme park platforms; the age of growth-hacking via referral codes, native podcast ads, SEO, and social is over. Imagine, for example, a Blade Runner-esque immersive world created by Harry’s. Similarly, we’re not far from albums premiering via “in-game” concerts attended by millions and which are set-up entirely by a label, rather than Roblox Corporation or Epic Games." This should be top of mind for all companies that partner or have endorsement deals with hip-hop artists. Also, an artist’s brand is likely stronger than the company’s brand. Product placement with a top artist may be more impactful than a standalone sponsorship.
Soundcloud to launch live original programming on Twitch
Music streaming service Soundcloud is capitalizing on consumer demand for live entertainment amid the COVID-19 quarantine with the launch of its own slate of originally produced live programming. The company today announced its plans for a new Twitch channel where it will air live chat series and other panel conversations, plus music sets and shows focused on music discovery. The programming will feature artists, producers and other industry experts in an effort to appeal to both music creators and fans alike.
Global recorded music industry grew by 8.2% in 2019 says IFPI
Keep an eye on the deceleration of streaming revenues however: their growth was 60.4% in 2016, 41.4% in 2017, 34% in 2018 and now 22.9% in 2019. Within that, subscription revenues have seen their growth move from 45.5% in 2017 to 32.9% in 2018 and now 24.1% in 2019. Again, this is a deceleration in growth NOT a decline. It’s just a reminder that now’s a good time to be continuing discussions, as an industry, about how and where growth might be coming from in the next few years, and what needs to be done to make it happen.
Daniel Ek says Spotify's subscription growth is increasing. But that's not true in monetary terms.
Spotify’s ARPU – the average revenue paid each month by its Premium subscribers around the world – fell by 7% at constant currency, year-on-year, to €4.42m in Q1 2020. Want a quick takeaway factoid as to why that’s so significant? It’s the first time in history that Spotify’s official ARPU has fallen to less than half the €9.99-per-month subs price it launched with, in Europe, in 2008. Still not convinced this is worthy of industry alarm bells? Try this: Yes, Spotify’s year-on-year Premium subscriber growth, as correctly pointed out by Daniel Ek, increased in Q1 2020 vs. Q1 2019. But its year-on-year Premium subscriber revenue growth did not. Actually, it slowed down… because of ARPU. Because Spotify’s 130m Premium customers were paying, on average, 7% less money than they were at the same time last year.
YouTube is generating $32k every minute – but how much of that money is being driven by music?
In fact, compared to Entertainment 10%, People and Blogs (21%), Gaming (37%) , and Other (19%), last year, music accounted for the smallest category volume of YouTube content (alongside Film & Animation, also at 5%). However, despite this relatively small volume, Music videos attracted 22% of all views on YouTube last year. That was more than Entertainment at 21%, Gaming (8%) and Film & Animation (7%). It was a similar story in 2018, when Music generated 20% of all views – a stat which suggests that Music, in basic terms, became more important, year-on-year, on YouTube in 2019.
With questionable copyright claim, Jay-Z orders deepfake audio parodies off YouTube
But is it copyright infringement? Like virtually everything in the world of copyright, it depends—on how it was used, and for what purpose. It’s easy to imagine a court finding that many uses of this technology would infringe copyright or, in many states, publicity rights. For example, if a record producer made Jay-Z guest on a new single without his knowledge or permission, or if a startup made him endorse their new product in a commercial, they would have a clear legal recourse. But, as the Vocal Synthesis creator pointed out, there’s a strong case to be made this derivative work should be protected as a “fair use.”
Deezer develops AI to detect explicit song lyrics
Streaming service Deezer is developing technology to automatically detect explicit content in songs. The company has been looking into the issue because record labels often fail to identify offensive lyrics when they submit songs, it explained. In fact, it said, a "substantially large part" of its library did not have a tag indicating whether or not a song contained strong language or themes. In response, it is researching a way of automatically flagging up such content.
Saudi fund acquires $500m stake in Live Nation – as the company balances 'doing the right thing' with its $3.8bn cash pot
To run you by that again: Live Nation’s President said in April that the firm’s access to $3.8bn in cash – including $2bn of “event-related deferred revenue” – would be enough to see the company through, with zero concerts going on, until somewhere between October 2020 and January 2021. You therefore have to assume that Berchtold is indicating, in approximate language, that without more cash, things would start becoming financially untenable for Live Nation in or around Q4 2020 to Q1 2021 – when the firm would have to seek more capital.
BROADER STORIES FROM THE WORLD OF TECH:
The Anti-Amazon Alliance
That, though, points to an obvious market-based response: 3rd-party merchants, particularly those with differentiated products and brands, should seek to leave Amazon’s platform sooner-rather-than-later. It is hard to be in the Anti-Amazon Alliance if you are asking Amazon to find you your customers, stock your inventory, package your products, and deliver your goods; there are alternatives and — now that Google is all-in — the only limitation is a merchant’s ability to acquire and keep customers in a world where their products are as easy to buy as bad PR pitches are easy to find.
Quibi Is What Happens When Hollywood Overvalues Content And Undervalues Community
So far, however, Quibi appears to be yet another example of a point I made about Hollywood and the internet over a decade ago: entertainment execs have a long history of overvaluing the content and undervaluing users and what they want. Sometimes I've described this as overvaluing content and undervaluing technology (which plays into the whole Hollywood/Silicon Valley divide), but it's actually something different than that, which is ably shown by the complete dumpster fire that Quibi has been so far.
Squad hits desktop as the social screen-sharing app aims to become Gen-Z Zoom
On the back of a big quarantine usage bump, Squad, a social screen-sharing mobile app popular with teen girls, is looking to eat away at Zoom’s social growth and widen its app’s appeal with the launch of a desktop web version designed to help people binge TV shows and movies together. While the quarantine has upended plenty of consumer-centric startups, Squad has seen record growth with teens stuck at home and socially distanced from friends. Over the first two weeks of March, CEO Esther Crawford says usage of the platform climbed 54%. As teens further settled into lockdown and schools went fully remote, usage of Squad exploded, climbing 1100% in the last two weeks of March.
Silver Lake to invest $747M in India’s Jio Platforms
Weeks after Facebook invested $5.7 billion in Jio Platforms, India’s top telecom operator, private equity firm Silver Lake is following suit — and is willing to pay a premium for it. Silver Lake announced on Monday it will be investing 56.56 billion Indian rupees (about $746.8 million) in Jio Platforms for about 1.15% stake in the Indian telecom network, giving it a valuation of $65 billion, a 12.5% premium* to the valuation implied by the Facebook investment.
Alphabet: Google parent reveals coronavirus earnings impact
“Performance was strong during the first two months of the quarter, but then in March we experienced a significant slowdown in ad revenues,” said Ruth Porat, Alphabet and Google’s chief financial officer. Internally, the company has responded with warnings of hiring freezes and budget cuts, CNBC reports. While Alphabet missed analysts’ expectations for earnings, the company brought in more revenue than expected ($41.2 billion versus $40.3 billion). Nicole Perrin, principal analyst for eMarketer, described the hit to Google’s ad revenue as serious but “not as severe as it could have been.”
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