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 maximise their income and reduce their touring costs.
Music streaming giant Spotify finally increased the price of its flagship Premium subscription in the US this week, by $1, to $10.99
The company announced the new pricing on Monday morning (July 24), also announcing increases in 52 other markets, including the UK, Canada, Brazil, Spain, France, Australia, Indonesia, Israel, Sweden, and Mexico.
The announcement arrived a day before SPOT published its Q2 results, in which it reported that its global Premium Subscriber base grew to 220 million paying users in the quarter (ended June 30), up 17% year-on-year.
Universal Music Group also published its Q2 results this week, reporting revenues of EUR €2.697 billion (USD $2.93bn) for the quarter, up 8.8% YoY at constant currency.
Amongst the other highlights from UMG’s Q2 was a 13% jump in subscription streaming revenues to reach €1.068 billion ($1.16bn).
That result, according to UMG, was “driven primarily by the growth in global subscribers as well as the impact of price increases at certain platforms”.
Elsewhere this week, Spotify CEO Daniel Ek sold 675,000 Spotify shares worth $100 million, while Reuters reported that US performance rights company BMI is in renewed sale talks.
Here’s what happened this week…
1) UNIVERSAL MUSIC GENERATED $2.93BN IN Q2 – BOOSTED BY SALES FROM SUPERSTARS LIKE TAYLOR SWIFT AND KING & PRINCE
On Tuesday (July 25), the world’s biggest subscription music streaming service, Spotify, announced its Q2 results.
On Wednesday, it was the turn of the world’s largest music rights company, Universal Music Group, whose financial results for the three months to the end of June and the first half of the year were published after the close of the Euronext in Amsterdam on Wednesday (July 26).
The headline figure from UMG’s Q2 results: the music company generated revenues of EUR €2.697 billion (USD $2.93bn) during the quarter across all of its divisions (including recorded music, publishing and more). That Q2 revenue figure was up 8.8% YoY at constant currency….
2) SPOTIFY IS RAISING ITS PRICE IN THE US AND 52 OTHER MARKETS. HOW MUCH MONEY WILL THAT MAKE THE MUSIC INDUSTRY?
As expected, on Monday (July 24), Spotify – after 12 long years – finally announced a 10% rise in its flagship individual Premium subscription price in the United States, up from USD $9.99 per month to $10.99 per month.
Not only that: Spotify is also raising the price of its other subscription plans in the US. This includes its Family Plan, which moves up from $15.99 to $16.99 per month; it’s the second time SPOT has upped this particular price point in the States (the first was in 2021), and brings Spotify’s Family Plan pricing in line with that of other services such as Apple Music and YouTube Music.
The (much) bigger-picture news?
Spotify isn’t just increasing its prices in the US – it’s also upping its subscription cost (across various plans, including individual Premium) in a whopping 52 other markets, including the UK, Canada, Brazil, Spain, France, Australia, Indonesia, Israel, Sweden, and Mexico.
Yet how much will this new round of price increases from Spotify be worth to the company – and to the music rightsholders to whom it pays out around 70% of its income?
3) BMI ‘IN DISCUSSIONS WITH OUTSIDE PARTIES’ AFTER SCRAPPING SALE PLANS IN 2022
This week, Reuters reported that US performance rights company BMI (Broadcast Music Inc.) is “once again exploring options including a sale”.
The report arrived around a year after BMI scrapped plans for a multi-billion dollar company sale following underwhelming offers.
BMI President & CEO Mike O’Neill issued a memo to staff this week addressing “press articles [that] have come out today speculating that BMI is considering a sale”.
In the memo, obtained by MBW, O’Neill writes that, “Not surprisingly, interest in BMI has continued since we announced a year ago that we were no longer considering a sale of our company”.
He added: “Since then, the success of our business model change and our commitment to investing in BMI to grow the value of our affiliates’ music has only intensified that outside interest…”
4) DANIEL EK SELLS $100M WORTH OF SPOTIFY SHARES
Spotify CEO Daniel Ek is selling 675,000 Spotify shares worth $100 million. That’s according to an SEC filing that went live on Thursday (July 27).
J.P. Morgan Securities is named in the filing as the broker for the sale.
The filing also reveals that these shares are to be sold by D.G.E Investments Limited, an entity indirectly wholly owned by Ek…
5) HAVING PAID OUT OVER $250M TO ITS MEMBERS TO DATE, BEATSTARS STRIKES STRATEGIC PARTNERSHIP WITH AI MUSIC STARTUP LEMONAIDE
BeatStars revealed this week that it has entered into a strategic alliance with an AI music startup called Lemonaide, which has developed an AI-powered plug-in that generates ideas for beats.
BeatStars also confirmed in its latest announcement that it has now paid out over $250 million to its members through its marketplace and publishing services to date (The company struck a partnership with Sony Music Publishing in 2020)…
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