Welcome to Music Business Worldwide’s weekly round-up – where we make sure you caught the five biggest stories to hit our headlines over the past seven days. MBW’s round-up is supported by Centtrip, which helps over 500 of the world’s best-selling artists maximize their income and reduce their touring costs.
The music streaming business is in the midst of some fundamental changes.
With market saturation on the horizon in streamers’ more developed markets, attention is turning away from growing subscriber bases to other forms of revenue growth: Price hikes, changes to royalty payment models, and a new focus on superfans.
This week, MBW reported on two notable changes at music DSPs. One came from Apple Music: Starting with this month’s royalty payments, Apple will be giving a boost of up to 10% for tracks available in Spatial Audio.
Meanwhile, it appears Spotify let it slip that it’s planning to launch ‘superfan clubs‘ on its platform.
Nevertheless, not all music streaming markets are reaching the point of saturation. Some are far from it, and chief among them is India. According to market monitor Luminate’s Year-End Report for 2023, India could surpass the US this year to be the world’s largest streaming market by volume.
Meanwhile, Germany-headquartered BMG announced it’s doubling down on its strategy for North America, which is already the company’s largest market by revenue. To that end, BMG announced two new promotions aimed at strengthening its North American position.
Finally, MBW founder Tim Ingham explored the quiet leadership changes at Warner Music Group that have taken place in the year since Robert Kyncl took charge as CEO.
Here’s what happened this week…
1) Apple Music to pay artists up to 10% higher royalties for music available in Spatial Audio
Starting this month, music available in Spatial Audio on Apple Music will receive a greater share of royalties from the platform.
In an update sent to its label partners on Monday (January 22), and seen by MBW, Apple Music confirmed that Spatial-available content will receive a royalty rate up to 10% higher than content not available in Spatial.
According to Apple Music’s update to its label partners, starting with the January 2024 month-end royalty payments, “pro-rata shares for Spatial Available plays will be calculated using a factor of 1.1 while Non-Spatial Available plays will continue to use a factor of 1″.
The news follows a report from Bloomberg in December that Apple Music was planning “to give added weighting to streams of songs” mixed in Dolby Atmos.
Apple Music said on Monday (January 2022) that the upcoming “change is not only meant to reward higher quality content, but also to ensure that artists are being compensated for the time and investment they put into mixing in Spatial…”
2) Did Spotify just confirm that ‘superfan clubs’ are coming to its platform?
Spotify may have just confirmed that ‘superfan clubs‘ are coming to its platform.
We’re not sure how intentional the announcement was, but Spotify appears to have revealed this information in a blog post published on its website on January 24.
The post explains that changes are coming to its platform for iPhone users in the EU in March as a result of Apple‘s so-called 30% ‘app tax‘ being curtailed by a new law.
According to the blog post, from March 7, iPhone users living in the European Union will be able to buy and subscribe to things directly within Spotify’s app as a result of the DMA, or Digital Markets Act, the landmark competition legislation in the EU that aims to clamp down on big tech ‘gatekeepers‘.
Likely of more interest to music rightsholders than Spotify’s ongoing battle with Apple, however, was the news that ‘superfan clubs’ form part of SPOT’s future vision for its app.
According to Spotify, “thanks to the DMA we’re looking forward to a future of superfan clubs, alternative app stores, and giving creators the ability to safely download Spotify for Artists or Spotify for Podcasters directly from our site — and that’s just the start…”
3) India could become the world’s biggest music streaming market by volume in 2024 – overtaking the USA
The shrinking market share of English language music on streaming services globally has been acutely highlighted by stats published by market monitor Luminate in its recent Year-End report for 2023.
According to Luminate, two years ago, in 2021, the annual share of English-language content among the world’s Top 10,000 streaming tracks (total on-demand streams inclusive of audio + video) was 67%.
By last year (2023) it had shrunk to 54.9%.
The top 5 languages last year amongst these 10,000 tracks, according to Luminate, were English (54.9%), Spanish (10.1%), Hindi (7.8%), Korean (2.4%) and Japanese (2.1%).
Interestingly, despite Latin Music‘s continued success globally, Spanish-language music’s share of the world’s Top 10,000 on-demand streaming tracks declined in 2023 – down from 12.4% in 2021 to 10.1% last year.
But perhaps the biggest story right now in terms of this topic?
That can be found in India…
4) BMG ‘doubles down’ on North America, as Jon Loba gets promoted to frontline role, with Thomas Scherer to run Global Catalog
BMG is planning to increase investment in its US record labels as it “doubles down” on its North American operation, which, it reports, already accounts for more than 50% of its revenue.
BMG’s entire business – including recorded music and music publishing – generated EUR €414 million (USD $447m) in the first six months of 2023.
As part of its plan to boost its investment in the USA, BMG announced on Thursday (January 25) that BMG Nashville President Jon Loba will become President Frontline Recordings, North America, taking charge of BMG’s entire North American frontline records business across Nashville, Los Angeles, New York and Canada.
In addition, Thomas Scherer, previously running publishing and recordings in Los Angeles and New York, will become President, Global Catalog Recordings, while retaining his responsibilities as President, Music Publishing, North America.
Alongside CFO North America Joe Gillen, they will comprise BMG’s US-based leadership.
BMG’s renewed focus on the US forms part of a new strategy revealed by CEO Thomas Coesfeld in October…
5) A year after he took charge as CEO, Robert Kyncl has quietly transformed Warner Music Group’s leadership
Just over 12 months ago, Robert Kyncl officially became CEO of Warner Music Group.
Within four weeks, he’d delivered his first address to investors on a WMG earnings call, setting out an agenda that took in the threats/opportunities presented by AI, plus streaming pricing, and his plan for Warner to “thoughtfully relocate resources to accelerate our technology investments”.
Looking at the more visible music biz faces within Kyncl’s leadership team since he started his tenure, you might be forgiven for thinking that the former YouTube exec hasn’t made sweeping changes to WMG’s top-tier personnel.
Yet a full rundown of WMG’s central leadership team on the company’s investor-facing site shows a different side to this story – one that has seen Kyncl quietly transform his C-suite since becoming boss of Warner…
MBW’s Weekly Round-Up is supported by Centtrip, which helps over 500 of the world’s best-selling artists maximise their income and reduce their touring costs.Music Business Worldwide