Australia’s music revenues grew over 10% in 2018

Australia have reported incredible growth in recorded music revenues last year with a massive boom in streaming.

Music streaming services worldwide are causing a giant boost to music industry revenues. The Australian Performing Right Association have released their figures showing that recorded music revenues in Australia grew by 12.3% last year.

Revenues surpassed a whopping $526 million for the year in their fourth successive year of industry growth. Music streaming is the driving force of all growth which now accounts for over two-thirds of their market – 71.4% of revenues at $304 million. That’s growth of 41.2% for streaming revenues.

Sony Music Entertainment Australia and New Zealand chairman and CEO, Denis Handlin said: “This result is a testament to the great music that is being produced by our outstanding local artists, as well as the tenacious approach that our local industry takes in marketing and delivering music from all around the world to fans across the country.”

Presenting the IFPI’s Global Music Report, CEO Frances Moore spoke on the “very healthy level of growth” that was happening for music in Australia currently. Stu Bergen, Warner Music Group CEO, says that Australia “continues to be a good place for creative expression and creative talent” as it is “growing significantly”.

Music revenues worldwide are up 9.7% with massive growth in streaming

2018 saw another year of growth for recorded music all around the world as music streaming gets bigger in more and more countries.

In 2018 the global recorded music market grew by 9.7% according to the recorded music industry trade group IFPI’s Global Music Report 2019. This is the fourth year of consecutive growth for music worldwide after the advent of online piracy caused revenues to drop for an extended period.

Music streaming services offered a legitimate solution to the issue of music streaming that brought money back to unlimited music access and the effects are clear to see. In 2018 music streaming revenues were up 34% worldwide, making up almost half of the $19.1 billion in global recorded music revenues.

Last year, for the first time music streaming’s growth offset the decline in physical revenues and digital downloads which were down 10.1% and 21.2% respectively. The largest growth was seen throughout South America, with 16.8% growth in the region. Asia is also seeing significant growth in music.

The IFPI’s chief executive Frances Moore said: “Last year represented the fourth consecutive year of growth, driven by great music from incredible artists in partnership with talented, passionate people in record companies around the world. Record companies continue their investment in artists, people and innovation both in established markets and developing regions that are increasingly benefiting from being part of today’s global music landscape.

As music markets continue to develop and evolve, it is imperative that the appropriate legal and business infrastructure is in place to ensure that music is fairly valued, and that the revenues are returned to rights holders to support the next cycle of development. We continue to work for the respect and recognition of music copyright around the world, and for the resolution of the value gap by establishing a level playing field for negotiating a fair deal for those who create music. Above all, we are working to ensure that music continues its exciting global journey.”

Read the full report here:
https://www.ifpi.org/downloads/GMR2019.pdf

Pandora’s grip on American music streaming to give way to Spotify in 2 years

Pandora have long been the favourites for online music in the US but eMarketer reckons their rein is coming to an end.

Spotify are easily one of the world’s leading music streaming services with hundreds of millions of users worldwide. Before they became so popular in the US, Pandora had the digital game down with their radio-style digital service offering up endless streams of music on-demand. Pandora are still winning the numbers game but for how long?

Online research firm eMarketer have predicted that Spotify will become the most popular music streaming service in the US by 2021, overtaking Pandora. They reckon that in the next 2 years Pandora’s userbase will slightly drop whilst Spotify continues its trend of meteoric growth worldwide in the US.

In their updated forecast for Spotify and Pandora, eMarketer predicts that Pandora’s user base will be 9% lower than their peak by 2023. Pandora currently have 72.4 million US listeners, 0.5% less than last year. Meanwhile Spotify have been growing nearly 14% year-on-year with 65.3 million users currently in the US.

eMarketer’s forecasting analyst, Chris Bendtsen said: “Pandora lost users last year because of tough competition from other services attracting people to switch. Apple Music has been successful in converting its iPhone user base, Amazon Music has grown with smart speaker adoption, and Spotify’s partnerships have expanded its presence across all devices.”

Whilst Pandora’s offering of unlimited music streaming was unique at the time it’s now the standard in music services. Bendtsen warns that the same is happening with Spotify and that their unique offerings which fuelled so much growth has now been diluted by competition.

Bendtsen says: “Spotify’s initial growth was driven by its unique combination of music discovery, playlists and on-demand features. But now that all music streaming services have the same features, Spotify’s future success will rely on partnerships with other companies. We expect more partnerships to come, leveraging multiple brands, devices and services to drive user growth.”

What Spotify still offers over most competitors, giving it the edge, is it’s free model. The same goes to Pandora. Whilst rivals like Apple Music are gaining large amounts of traction with subscription growth, growing 17% from last year in the US, it’s a subscription only service.

40% of Indian record labels’ digital revenues come from YouTube

A new report shows just how massive an impact YouTube is having for the digital music industry in India’s up-and-coming market.

The Federation of Indian Chambers of Commerce and Industry (FICCI) has recently published a report that shows some insights into the fast growing digital music market of India.

Digital music in India, boosted by local streaming services like JioSaavn and international streamers. The report shows that digital music accounts for a whopping 83% of labels’ revenues in India. YouTube alone counts for a massive 40% of the country’s entire digital revenues.

The FICCI predict that around 1-1.5 million people paid for music streaming in India last year which generated roughly ₹800 million ($11.7 million). To represent just how vast and quickly India’s digital music growth is, songs were streamed about 5 billion times in India in December 2018. That’s 50% higher than the year before.

The overall music market showed some great growth of 10% overall to ₹14.2 billion (roughly $207 million). They also predict the growth to continue in the double-digits annually and expect it to reach ₹19.2 billion (roughly $280 million) by the year 2021.

The outlet who reported the FICCI report, MusicPlus wrote: “The music segment needs to be creative in channeling consumers towards a paid subscription model. If the current base of 1% Indian music pay subscriber, can shift upwards to 2-3%, digital revenues can propel the necessary growth to push the Indian music market towards ₹20 billion and beyond.”

Digital music is worth more than physical in France for the first time ever

CDs are becoming a thing of the past as more and more each year digital music replaces the way we used to listen.

France certainly aren’t strangers to music online, being the homeland of popular music streaming service Deezer. Their love for music streaming and downloads means that digital music is now worth more than their entire physical market of CDs, vinyls and all other music you get in a shop.

The latest figures from the SNEP show that for the music industry, digital revenues now account for 57% of the market (€335 million). The entire recorded music market grew by 1.8% in 2018, their 3rd year of growth in a row.

Physical music still makes up a large chunk of the industry in France, CDs represent over a third of all music revenues in France. The physical market made $265 million for the year, still a significant amount but a lot less than digital.

The SNEP say that despite the shift in platforms, physical music is still doing better in France than in many other places that are switching to digital music. They say this is thanks to a “unique distribution network of more than 4,000 sales outlets across French territory”.

Whilst overall market growth was good, at 1.8%, it is music streaming where the growth is really happening. Both free and Premium streaming revenues grew by 23% with paid subscriptions making up 41% of the income. That’s incredible growth for paid streaming which only accounted for 8% five years ago.

There were 57.7 billion audio streams recorded by the people of France in 2018. That’s up 35% on the prior year. Weekly listening figures peaked at 1.3 billion at the end of December.

SNEP’s general manager, Alexandre Lasch says: “In a recovering market, we are particularly proud of the spectacular success of the Made in France artists, who featured in 19 of the 20 best-selling albums of 2018, as well as 80% of the Top 200.

“Record producers are hardwired to discover and accompany artists in their careers. One very significant performance indicator in 2018 which highlighted their commitment was the wealth of new talent in the best-performing albums of the year: out of the top 200 best-selling albums of last year, 48 were debut albums, 40 of which were produced in France.”

Spotify want songwriters to be paid more but they’re appealing against royalty increases

Spotify have appealed against the Copyright Royalty Boards new rates but they say they support the increased streaming rates.

The US Copyright Royalty Board (CRB) have defined the new royalty rate that services will legally be required to pay out for music. The amendment to rates, which was finalised last month, will see mechanical royalties paid out to songwriters grow by at least 44% in the US between 2018 and 2022.

The rise in rates would affect all on-demand streaming services in paying out more per stream. But many of the biggest streaming services in the US have appealed against the decision, including; Spotify, Amazon, Google, and Pandora.

So why are music streaming services against artists and publishers getting paid more per stream in an industry that has quickly become the primary source of music for their country? In a new blog post Spotify have outlined their position to try and clarify why they are appealing against the decision.

Spotify insist that despite their appeal they do want songwriters to be paid more, saying: “The industry needs to continue evolving to ensure that the people who create the music we all love – artists and songwriters – can earn a living. The question is how best to achieve that goal.”

So why are they appealing? Spotify say that the CRB structure is “complex and there were significant flaws in how it was set”. Their particular concern, according to their statements, is that it will be apparently “very difficult” for music services to offer ‘bundles’ of music and non-music offerings. They insist that this is a key element in acquiring new subscribers to “keep growing the revenue pie for everyone”.

They have given vague terms on when they will be willing to support the increase in songwriter royalties.

“Music services, artists, songwriters and all other rightsholders share the same revenue stream, and it’s natural for everyone to want a bigger piece of that pie. But that cannot come at the expense of continuing to grow the industry via streaming. The CRB judges set the new publishing rates by assuming that record labels would react by reducing their licensing rates, but their assumption is incorrect. However, we are willing to support an increase in songwriter royalties provides the license encompasses the right scope of publishing rights.”

However, referring to the assumption that record labels would reduce their licensing rates, the NMPA president and CEO has refuted that as “one giant lie”. Speaking to Music Business Worldwide, David Israelite said: “I’m sure a PR team spent a great deal of time and energy crafting a statement to try to deceive artists and songwriters. They must think artists and songwriters are stupid. They are not.”

He continues: “The CRB ordered a rate increase for songwriters. Spotify is against it. It really is that simple.” Apple Music are the most notable service who seem to have accepted the decision and not made an appeal.

Israelite congratulated them, saying: “We thank Apple Music for accepting the CRB decision and continuing its practice of being a friend to songwriters. While Spotify and Amazon surely hope this will play out in quiet appellate courtroom, every songwriter and every fan of music should stand up and take notice. We will fight with every available resource to protect the CRB’s decision.”

Spotify bizarrely claim that the National Music Publishers Association have also appealed against the CRB’s new royalty rates. We will see how the appeals of major streaming services plays out over the coming weeks. It looks like it might get messy.

Music streaming made up two-thirds of the US music industry last year

Last year music streaming made up 75% of the recorded music revenue in the US showing just how popular streaming has become.

As the US music industry reports double-digit growth for the third year in a row, streaming is leading the way. A new report from the Recording Industry Association of America (RIAA) shows that last year music streaming revenues increased by 30% to $7.4 billion which accounts for 75% of the US’ total recorded music revenues.

The RIAA even said that in 2018 music streaming accounted “for virtually all revenue growth”. Overall, the US music industry grew by 12% last year propelled in large part thanks to the continued significant growth of music streaming.

The growth in music streaming is being pushed by the surge in subscriptions as people move more to paid subscriptions from ad-supported services like Spotify free. Last year paid subscription made over half of all revenues for the first time ever rising 32% for a total of $5.4 billion.

South Korea loves music streaming with over 8.5 million subscribers

South Korea may be small but they are one of the world leaders when it comes to streaming music online.

South Korea have become one of the major players for music in the world thanks largely to the global boom surrounding K-Pop music. New figures show that their digital music industry is also seeing significant success with roughly 8.5 million subscribers at the end of 2018.

Warner Music Korea’s CEO Clayton Jin says: “There were approximately 8.5 million subscribers towards the end of 2018, which is a sizeable increase from 2017. Streaming continues to grow, and unlike in most other markets, the price of subscriptions has increased to reflect inflation.” This is referring to the rise in rightsholders’ royalty shares from digital music that were put in place earlier this year.

South Korea is home to a variety of it’s own native music streaming services like Melon, Naver Music, Bugs and many more. The country has adopted music streaming as happily as the rest of the world has taken K-Pop into their lives starting with the worldwide viral success of South Korean artist Psy with his hit Gangnam Style.

South Korea’s recorded-music business has seen a long-term upwards trend. It completely doubled between 2013 and 2017 and became the sixth-biggest global market for music according to the IFPI. 86% of their stratospheric 45.8% rise in overall revenue in those 5 years came from streaming music.

Music Ally have compiled a market report on South Korea’s rocketing music industry which you can read here.

Music streaming grew US music revenues 12% in 2018

The US record industry revenues grew to $9.8 billion in 2018 thanks to the continuing boom of music streaming services.

The Recording Industry Association of America (RIAA) have released their annual report for 2018’s music industry in the US. It showed that music streaming continues to bring reinvigorated life to the music with 12% overall growth thanks mostly to streaming revenues.

Free music streaming helped music streaming to become mainstream and as the services offering music streaming get more popular free streaming is slowly being phased out. Last year was the first time that paid subscriptions represented over half of all revenues accounting for $5.4 billion and rising 32 percent.

All forms of music streaming combined accounted for 75% of the total revenues, roughly $7.4 billion. Digitally downloaded music from services like iTunes and Amazon accounted for 11% of the revenues. Surprisingly physical music sales like CDs and records accounted for 12% of the revenues despite their downward trend in recent years.

Ad-supported streaming like Spotify free and YouTube saw $760 million of revenues with 15% in growth. Digital radio services represent a large part of the US music industry in 2018 with services like Pandora growing 32% for total revenues up to $1.2 billion.

Spotify are making a profit for the first time in 13 years

Spotify have been leading the music streaming revolution for 10+ years and at last the company has turned a profit for the first time.

Spotify have revealed their quarterly report for Q4 2018 and it shows the company is continuing their great growth. In addition the streaming service has a positive Operating Income, Net Income, and Free Cash Flow for the first time in the company’s history.

The report shows that their overall Q4 revenue stood at €1,495 million, a 30% year-on-year increase. They reported their first every quarterly Operating profit for Q4 2018, with an Operating Profit of €94 million, around $107 million, helped by operating expenses dropping 17% year-on-year.

Although they’ve seen great quarter the company are expecting a loss of €50 to €100 million (roughly $57 to $113 million) in the next quarter. For the year of 2019 the company predicts a €200 to €360 million loss (roughly $227 to $409 million).

Although Spotify are incredibly successful and are only forecast to see yet more growth this year, the company is more focused on expansion than profiting. As they take a new focus on podcasts they have acquired two giant podcasting producers; Anchor and Gimlet. In addition they expect to spend $400-$500 million on multiple acquisitions throughout 2019.

Looking at the year ahead Spotify expect to end the year with 245-265 million total monthly active users, 117-127 million of those being Premium subscribers. They predict that they could have 100 million paying subscribers by the end of the first quarter of 2019.