Last Call for Our Artist Survey

This is your last chance to take part in our global artist survey – we are closing the survey this Friday (19th April).

In partnership with independent distribution company Amuse, MIDiA Research is undertaking a detailed study of the music artist landscape. We are fielding a survey to the artist community, exploring issues such as:

  • What success looks like to you
  • Career aspirations
  • The importance of signing to a record label
  • Financial wellbeing
  • Maintaining creative control

If you are a singer, DJ, producer, performer, or in a band, then we’d love to hear your views. Just click the link to take the survey.

All of your responses will be treated as strictly confidential and will only ever be presented in aggregate as part of results for the entire survey – so never attributable to any individual. We will not use any of your responses to contact you again for any purpose, unless you specifically provide your email address to us in order to be interviewed in more detail for the research project.

We will also send you a summary of the findings so that you can see how you fit into the picture amongst your fellow performers, and benchmark yourself against their aggregate responses.

If you have any questions concerning the survey the please email us at info@midiaresearch.com

Spotify, the Decline of Playlists and the Rise of Podcasts

The following is a small excerpt from MIDiA’s forthcoming third edition of its ‘landmark State of the Streaming Nation’ report. For more information about this report email stephen@midiaresearch.com

Most things that Spotify does are scrutinised and cross-examined within an inch of their lives, with vested interests trying to second guess what may be the intended or unintended consequences for them. Most actions are viewed through the disruption lens i.e. how will this hurt or compete with Spotify’s rightsholder partners? The streaming market is of course so much more than just Spotify, but the company acts as a lightning rod for the wider market and most often sets the strategic agenda.

Spotify’s Two Phases of Growth

Two of Spotify’s most significant moves have been playlist curation and podcasts. Spotify is moving into the second major phase of its existence. Phase 1 was about establishing itself as a streaming music powerhouse, Phase 2 is about what it becomes next, extending beyond the streaming music beachhead. This is the typical trajectory of tech companies, establishing themselves in their core competencies and then expanding. This can either be a dramatic expansion – e.g. Amazon moving from eCommerce into video and music – or a more focused value-chain extension – e.g. Netflix moving from simply streaming other’s shows to making its own. For Spotify, playlists were a Phase 1strategy and podcasts are very much part of Phase 2.

midia playlists and podcasts

Podcasts may just have come in the nick of time for Spotify because curated playlists remain much more about potential than they do reality. Just 15% of streaming consumers listen to curated playlists. In fact, of all the key streaming feature activities, curated playlists come lowest. Curated playlists are clearly not to streaming music what binge watching is to streaming video. Instead streaming activity is fragmented across multiple features and just 10% of streaming consumers regularly do all four of the activities listed in the chart above.

‘But wait’ I hear you ask, ‘that doesn’t make sense, look at all these streams we’re getting from playlists’. The key factor here is the difference between the number of playlist users and the number of playlist streams. Playlists over index in terms of contribution to streams. With dozens of tracks per list, lean-back playlist listening can easily generate more streams per user than lean-forward listening. Thus, we have one of the great emerging paradoxes of streaming: passive audiences can generate more streams, and thus rightsholder pay outs, than engaged, aficionados. However, a word of caution, should casual playlist listening become large enough, then the net result will be a dilution of the royalty pool and thus diminishing per stream rates.

Perhaps not the holy grail of promotion

A few years ago, playlists looked like the future of artist marketing, now they are looking a bit like a busted flush. They may be great at generating streams but are not so great at building an artist’s story. The near-obsession with Spotify playlists in label marketing strategy reflects the fact that most record label executives use Spotify and thus often have a Spotify-centric (and therefore playlist-centric) worldview. But labels are now beginning to question the artist ROI of playlists. The growing adoption among casual listeners only compounds matters and means that a playlist ‘hit’ does not necessarily do much to help long-term artist brand building. To put it simply: a playlist is not a shortcut to cultural relevance.

Podcasts could be bigger than streaming

Enter stage left podcasts. With its acquisitions of Gimlet, Anchor and Parcast, Spotify is betting big on podcasts. Already, more streaming users (18%) listen to podcasts than curated playlists while overall consumer podcast penetration is 11%. In Sweden – the early adopter market that gives us a view of where other markets are heading – podcast penetration is 19%, rising to 28% among streamers. Podcasts are a Netflix moment for radio and may even have the potential to be bigger than streaming music (US radio ad revenues alone are $16 billion). Right now, the growth in overall podcast audiences is fairly slow, but engagement is accelerating as are content creation, monetisation and distribution. It is not entirely inconceivable to think that five years from now, podcasts could be a bigger business for Spotify than music. Certainly, creators could be making much more money, even now.

While it remains more likely that music will be the core of Spotify’s business half a decade from now, all the early indications are that Phase 2 will mean a degree of diversification of user experience, business model and revenue stream, with podcasts at the vanguard. Playlists are not dead, but nor are they the golden child anymore.

New MIDiA Latin American Streaming Report, in English, Spanish and Portuguese

MIDiA Latin America Streaming reportMIDiA has just published its latest report on the Latin American streaming music market, and we have versions available in English, Spanish and Portuguese.

MIDiA has been tracking the Latin American music market for over five years, including annual consumer data and market metrics.

Our latest report ‘Latin America Streaming Music Market: YouTube and Spotify Take Hold’is written by our long term Latin American music analyst Leo Morel and features data on Mexico, Brazil and the region as a whole.

 

 

The report includes analysis and data on:

  • Consumer adoption of YouTube, Spotify, Apple Music, Deezer and other streaming services
  • Playlist penetration
  • Wider consumer music behaviour eg downloads, CDs
  • Streaming revenues (subscriptions, ad supported music ad supported video)
  • Streaming users (subscriptions, ad supported music ad supported video)

Companies and brands mentioned in the report: Apple, Deezer, Google, iPhone, iTunes, Movistar, Spotify, TIM, Virgin Mobile, Vevo, Vivo, YouTube

The reports are immediately available to our clients, while you can purchase the individual reports here:

The reports each come with PDF, Slides, Excel and infographic.

For any questions please email info@midiaresearch.com

10 Trends That Will Reshape the Music Industry

The IFPI has reported that global recorded music revenues have hit $19.1 billion, which means that MIDiA’s own estimates published in March were within 1.6% of the actual results. This revenue growth story is strong and sustained but the market itself is undergoing dramatic change. Here are 10 trends that will reshape the recorded music business over the coming years:

top 10 trends

  1. Streaming is eating radio: Younger audiences are abandoning radio for streaming. Just 39% of 16-19-year olds listen to music radio, while 56% use YouTube instead for music. Gen Z is unlikely to ever ‘grow into radio’; if you are trying to break an artist with a young audience, it is no longer your best friend. To make matters worse, podcasts are looking like a Netflix moment for radio and may start stealing older audiences. This is essentially a demographic pincer movement.
  2. Streaming deflation: Streaming music has allowed itself to be outpaced by inflation. A $9.99 subscription from 2009 is actually $13.36 when inflation is factored in. Contrast this with Netflix, for which theinflation-adjusted price is $10.34 but the actual 2019 price is $12.99. Netflix has stayed ahead of inflation; Spotify and co. have fallen behind. It is easier for Netflix to increase prices as it has exclusive content, but rights holders and streaming services need to figure out a way to bring prices closer to inflation. A market-wide increase to $10.99 would be a sound start, and the fact that so many Spotify subscribers are willing to pay $13 a month via iTunes shows there is pricing tolerance in the market.
  3. Catalogue pressure: Deep catalogue has been the investment fund of labels for years. But with most catalogue streams coming from music made in this century, catalogue values are being turned upside down (in the streaming era, the Spice Girls are worth more than the Beatles!). Labels can still extract high revenue from legacy artists with super premium editions like UMG did with the Beatles in 2018, but a new long-term approach is required for valuing catalogue. Matters are complicated further by the fact that labels are now doing so many label services deals, and therefore not building future catalogue value.
  4. Labels as a service (LAAS): Artists can now create their own virtual label from a vast selection of services such as 23 Capital, Amuse, Splice, Instrumental, and CDBaby. A logical next step is for a 3rdparty to aggregate a selection of these services into a single platform (an opening for Spotify?). Labels need to get ahead of this trend by better communicating the soft skills and assets they bring to the equation, e.g. dedicated personnel, mentoring, and artist and repertoire (A+R) support.
  5. Value chain disruption: LAAS is just part of a wider trend of value chain disruption with multiple stakeholders trying to expand their roles, from streaming services signing artists to labels launching streaming services. Things are only going to get messier, with virtually everyone becoming a frenemy of the other.
  6. Tech major bundling: Amazon set the ball rolling with its Prime bundle, and Apple will likely follow suit with its own take on the tech major bundle. Music is going to become just one part of content offerings from tech majors and it will need to fight for supremacy, especially in the ultra-competitive world of the attention economy.
  7. Global culture: Streaming – YouTube especially – propelled Latin music onto the global stage and soon we may see Spotify and T-Series combining to propel Indian music into a similar position. The standard response by Western labels has been to slap their artists onto collaborations with Latin artists. The bigger issue to understand, however, is that something that looks like a global trend may not be a global trend at all but is simply reflecting the size of a regional fanbase. The old music business saw English-speaking artists as the global superstars. The future will see global fandom fragmented with much more regional diversity. The rise of indigenous rap scenes in Germany, France and the Netherlands illustrates that streaming enables local cultural movements to steal local mainstream success away from global artist brands.
  8. Post-album creativity: Half a decade ago most new artists still wanted to make albums. Now, new streaming-era artists increasingly do not want to be constrained by the album format, but instead want to release steady streams of tracks in order to keep their fan bases engaged. The album is still important for established artists but will diminish in importance for the next generation of musicians.
  9. Post-album economics: Labels will have to accelerate their shift to post-album economics, figuring out how to drive margin with more fragmented revenue despite having to invest similar amounts of money into marketing and building artist profiles.
  10. The search for another format: In 1999 the recorded music business was booming, relying on a long established, successful format that did not have a successor. 20 years on, we are in a similar place with streaming. The days of true format shifts are gone due to the fact we don’t have dedicated format-specific music hardware anymore. However, the case for new commercial models and user experiences is clear. Outside of China, depressingly little has changed in terms of digital music experiences over the last decade. Even playlist innovation has stalled. One potential direction is social music. Streaming has monetized consumption; now we need to monetize fandom.

Apple’s Subscription Pivot

On Tuesday Apple announced its arrival on the world stage as a media company, using the lion’s share of its product keynote as the platform for a succession of super star actors, directors and other personalities to tell the story of their respective Apple original TV shows. Breaking with a longstanding tradition of using these keynotes to announce new hardware, Apple used this one to showcase content and its creators. While services revenue is still but a small minority of Apple’s business (11% in Q4 2018), there is no doubt that Apple is placing a far greater priority on content – a strategic pivot made necessary by slowing device sales in a saturated global smartphone market. Apple has already made itself a power player in music, but has the potential to turn the entire digital content marketplace upside down should it so decide.

four phases of media formats midia

Apple’s ramping up of its content strategy is best understood by looking at its place in the four stages of media formats:

  1. Phase 1 – physical media formats:In the old world, consumer electronics companies came together to agree on standards and then competed in a gentlemanly fashion on execution. This approach underpinned the eras of the CD and DVD.
  2. Phase 2 – walled garden ecosystems: In the internet era companies competed fiercely, building proprietary formats into impenetrable walls that locked consumers in. This resulted in the rise of walled gardens such as iTunes and Xbox.
  3. Phase 3 – post-ecosystem: App stores became the chink in the armour for walled garden models, allowing a generation of specialist standalone apps such as Spotify and Netflix.
  4. Phase 4 – aggregation: Walled garden players had inadvertently created global platforms for specialist competitors, so are now figuring out how to avoid going the route of telcos and becoming dumb pipes. The likes of Xbox, Amazon and Apple have started to embrace some of their standalone competitors, adding curatorial layers on top via hardware and software. This is how we have Amazon channels, Fortnite’s marketplace within Xbox and, soon, Apple channels.

Apple just prepped its content portfolio for a subscription pivot

Apple built its modern-day business firmly on the back of content. The iPod was the foundation stone for its current device business and simply would not have existed without music. While its current device portfolio meets a much wider set of user needs, content remains the use case glue that holds its device strategy together. On Tuesday Apple announced new subscriptions for news (News+), games (Arcade) and video (TV+). Interestingly, in an entire keynote focused on media, Apple Music did not even get a mention, despite Zane Lowe’s Beats One show providing the background music prior to the presentations. Perhaps Apple felt Apple Music is so well established that it did not merit a mention, but the lack of an update felt like more than an oversight, intentional or otherwise.

That aside, Apple now has prepped its content proposition for a subscription pivot. Prior to these new announcements, Apple’s content offering (Apple Music excepted) was firmly rooted in the increasingly archaic world of downloads. Shifting from downloads to streaming is no easy task, and Apple will have to tread a cautious path so as not to risk alienating less adventurous download customers. It is the exact same shift that Amazon is navigating. But now Apple has the subscriptions toolset to start that journey in earnest. It has decided that subscriptions are ready for primetime.

This primetime strategy underpins Apple’s early follower strategy across its entire product and services portfolio. As its customer base has gotten older and more mainstream, it has had to progressively stretch out launches, to such an extent that at times it looks at risk of being too late. Apple Music looked too late when it launched, but still made it to a clear number two position. TV+ was even later to market, but don’t count against it plotting a similar path to Apple Music.

What Apple needs from content

Watch and TV could both be long-term contenders for Apple’s revenue growth until it launches a product category to drive new, iPhone-scale hardware growth, but the odds are not yet in their favour. Services look like the best midterm bet. But Apple has some tough decisions to make about what role it wants content to play in its business. This is because subscriptions pose two challenges for Apple:

  • Margin could be a real problem:Apple’s high profile spat with Spotify over its App Store levy hides a bigger commercial issue. With margins in streaming as low as they are, Apple most likely makes more margin on its Spotify App Store levy than it does selling its own Apple Music subscriptions. The amount of money it has invested in its lineup of TV+ originals is also unlikely to do its services margins any favours.
  • Subscriptions have to get really big: Standalone subscriptions will not only be low (perhaps negative) net margin contributors, but will not deliver enough revenue. It would take more than one billion Apple customers paying for two $9.99 subscriptions every month of the year to generate the same amount of revenue it currently makes from hardware. The App Store is Apple’s current services cash cow, and Apple’s new slate of subscriptions are preparing for a post-App Store world. Yet it would take a hundred million $9.99 subscriptions every month of the year to get Apple’s services revenue to where it is now. That number is eminently achievable but generates revenue stagnation, not growth.

Doing an Amazon

So how does Apple square the circle? Probably through a combination of standalone subscriptions, bundles and a single Apple bundle plan. And yes, once again, this is exactly what Amazon has been doing for years now. In fact, you could say Apple is doing an Amazon. The Prime-like bundle could be the most disruptive move of the lot. Imagine if Apple, alongside the full-fat subscriptions, deployed a lite version of Music, Games and TV+ available for a single annual fee and / or as part of a device price (like Amazon Music Unlimited vs Amazon Prime Music). This option would mean that Apple would be simultaneously doing free without ads and subscription with fees. The implications for pure subscription and ad supported businesses are clear.

Whatever options Apple pursues, the permutations will be felt by all in the digital content marketplace.

How YouTube’s 1bn+ Club is Changing the Face of Global Music Culture

Throughout 2018, while locked in a bitter war of words with rightsholders and creators over Article 13, YouTube quietly but dramatically expanded its role as the most powerful platform for creating global superstars. Nowhere is this better illustrated than with the YouTube music videos that have one billion streams or more. Not only did that number become bigger than ever in 2018, but the rate at which videos joined the 1bn+ club grew too. With music audiences fragmenting into algorithmically defined niches, YouTube continues to create truly global scale, mass market audiences.

As of Q1 2019, 139 music videos have joined the 1bn+ club, with a record 52 of those reaching one billion in 2018 alone. Not only are more YouTube videos joining the 1bn+ club, but they are getting there faster. On average, the 1bn+ videos released in 2018 got to that milestone ten times faster than those released at the start of the decade. But something very interesting is happening. Now that Latin America and US Hispanics are becoming a major constituency of the YouTube audience, Latin music videos are becoming the dominant part of the 1bn+ club. 63% of all 2018 videos that reached one billion streams were Latin music videos. YouTube is fast establishing itself as the consumption method of choice for Latin American audiences, and their listening behaviour is helping reshape the face of global music culture. In doing so, YouTube is helping to create a new generation of superstars – Latin superstars.

top 5 1b+ artists on YouTube midia

The artist with more 1bn+ videos than any other is Puerta Rican reggaetón and Latin trap artist Ozuna. He appears, either as the lead artist or as a featured artist, on eight, yes eight, videos with a billion streams or more, generating 10.1 billion streams to date. Although Anglo-centric artists fill three of the other top five spots, the tide is turning. In 2018 Latin 1bn+ videos generated three and a half times as many streams as Anglo-centric pop 1bn+ videos did.

There is another important, less obvious implication of the rise of Latin artists on YouTube. Latin America is now such a large part of the global streaming user base that it can generate hits that look global in scale, but in reality are only regional. India will start to do the same in 2019 and 2020. Record labels need to take a more nuanced approach to reading global-scale data trends. Just because a track breaks into Spotify’s Global 100 does not mean it is a global hit. In today’s world, global scale does not always mean global appeal.

Hip Hop, a tale of two streams

On audio streaming services Hip Hop is the ubiquitous genre, with its artists among the highest profile in the music industry. Spotify’s top three most streamed tracks of 2018 were all Hip Hop, while for Apple Music it made up the entire top seven. Among YouTube’s biggest tracks, however, Hip Hop is a minor player, with just 7% of 1bn+ videos. Demographics and geography play roles, but so do the respective relationships of the platforms with the major labels. The labels have more overall influence on Spotify and Apple Music’s programming, and additionally focus intense efforts on influencing their curated playlists (Spotify especially). Because Hip Hop is the priority genre for the major labels, all of whom have a strong US-centric worldview, Apple Music and Spotify end up with a strong Hip Hop skew. YouTube, however, is much less directly influenced by the record labels and relies on algorithms rather than programming to surface content for its users. YouTube’s genre mix thus more closely follows the tastes of its users, while Apple and Spotify’s more closely follow the priorities of the labels.

So, what does the rise of Latin artists and the under-performance of Hip Hop on YouTube say about today’s global music landscape? For me, it is this:

Anglo-centric artists have been the global superstars for decades because it took the marketing dollars of big, global record labels to make them. Now, large scale, regional audiences can have the same impact, by just listening.


This post highlights just some of the data and findings that are going to be revealed in our forthcoming report: 1bn+ Music Videos: Latin Takeover

 If you are a MIDiA client and would like to get early access to the data email enquiries@midiaresearch.com

 If you want to learn more about how to become a MIDiA client, email stephen@midiaresearch.com

Why Facebook Can Be the Future of Social Music, But Isn’t Yet

Facebook recently secured licensing deals with music rightsholders in India, an important step in what has thus far been an underwhelming social music strategy since first inking rights deals in June 2018. Facebook has the potential to be a giant in social music, in no small part because most streaming music apps do such a poor job of social functionality themselves. Instead it is Asian streaming apps that are largely setting the pace, with the occasional western breakthrough (normally from Chinese companies). So, what does Facebook need to do to deliver on its undoubted promise? Look east…

Facebook has little motivation to become a streaming service in a traditional sense. There is little room for a new global scale player in the streaming space and the wafer-thin operating margins are not so much well understood as they are simply an open wound for the sector. Facebook’s move was always going to be one that focused on creating social experiences centred around connections and personal expression. It is a sound strategy, but one that has not yet been executed. However, it is not alone; indeed, the streaming music marketplace is woefully non-social.

social music landscape midia research

Personal identity has always been at the heart of what music is. The music we listen to helps express who we are and, especially in formative years, helps shape who we are. In the analogue era, music fans could immediately convey who they were with shelves of vinyl or CDs. The very act of buying an album or single once showed that you had skin in the game for your favourite artists. Saying ‘I’ve got that album’ meant you cared enough about that artist to part with cash. In the streaming era, however, those shelves have been replaced by lists of files stored in the cloud, and ‘I’ve listened to that song’ has little inherent weight.

The self-expression void

This self-expression void needs filling, but in the west YouTube and, to a lesser degree, Soundcloud are really the only global scale streaming services meeting this need with features such as comments, thumbs up/down etc. In Asia though, things look very different. Tencent has built a portfolio of music apps that are either highly social (e.g. Kugou, Kuwo) or that are social expression first and music second (WeSing). Japan’s Line has followed a similar path.

Social music apps serve young audiences

In the west, social takes centre stage outside of streaming apps. A number of smaller apps such as Vertigo are emerging that focus on creating engaged micro communities around music. The standout success story is TikTok, which is run by Chinese company Bytedance. TikTok picks up where Musically left off (which of course was bought and then killed off by Bytedance). But, as exciting as Musically was and TikTok is for giving consumers a way to express themselves through music and dance, they appeal first and foremost to tweens and teens. TikTok is used by 31% of 16-19s, but just 2% of the overall adult population (interestingly, Musically had exactly the same penetration rates at its peak).

Facebook is not fulfilling its potential

All of which brings us onto Facebook. Facebook, through its portfolio of social apps, has an opportunity to deliver a portfolio of social music experiences that appeal to multiple age groups and use cases. This could be TikTok-like experiences for younger Instagram users, music greetings on Messenger, sound tracked stories on Facebook, or even delivering social layers directly into the streaming apps themselves. Of course, it is doing some of this already but to really deliver, Facebook needs to go beyond – far beyond. Social music experiences have not hit mainstream outside of Asia because the right formats aren’t there yet. Facebook has the potential to deliver but needs to innovate out of its comfort zone to do so.

Social music could be the next format

The decline of closed-format consumer electronics was the death knell for music formats – streaming is a business model rather than a format. But it is clear that the market needs something new. Streaming growth will slow and user experience innovation there has been limited. There is a risk that 2019 can look a lot like 1999, i.e. a long-established format going strong in a growing industry with the prospect of a fall around the corner seemingly ridiculous. Social formats may be the next much-needed injection of growth. If streaming monetizes consumption, social can monetize fandom. The question is whether Facebook can seize the mantle.

MIDIA RESEARCH 2018–2026 STREAMING MUSIC FORECASTS

MIDiA has just published its global music forecasts, with revenue and user numbers projected out to 2026 (a list of data items and countries covered are listed at the bottom of this post).

2017 was the last year of strong streaming revenue growth. From 2018 onwards streaming growth will lessen each year, falling from 29% in 2018 to 7% in 2026. The slowdown in revenue growth reflects maturation of developed streaming markets such as the US, UK, Sweden, Netherlands and Australia. Longer term growth will be driven by emerging markets such as Brazil, Mexico and Indiaas well as later adopting major markets Germany and Japan.

midia music forecasts

Even with this slowing rate there is a lot of growth left in the market – so much so, in fact, that the market will grow from $19.6 billion in 2018 (in retail terms) to $45.3 billion in 2026. This means the market will more than double.We also have all of the market numbers in label trade revenue terms, but we are focusing on retail revenues for a crucial reason: the difference between trade revenues and retail revenues will widen between now and 2026. This reflects a number of factors that will see streaming services improve their margins and thus widen the gap on label revenues:

  1. Rising publishing related rates
  2. Increased share of royalty pot going to non-music content
  3. Increased share of royalty pot going to non-label music
  4. Potential long-term future label rate cuts (e.g. relief for price hikes)

The last item won’t happen in the current round of negotiations with rights holders, but at the next round more power will lie with streaming services. Right now, Spotify poses a lot of threat in rightsholder eyes, but its actual power is more limited. Streaming revenues accounted for 51% of label revenues in 2018 and with Spotify accounting for less than half of that, this means that Spotify accounts for less than a quarter of total label revenues. The labels, publishers and right bodies need to maximize their negotiating power now, while they can.

This will change, and when combined with the other three factors, the conclusion is clear: label trade revenues are becoming a progressively less useful way of measuring the future size of the streaming market.

In subscriber terms, at the end of 2018 there were 278 million paid subscribers. However, due to the impact of family plan accounts, unique subscriptions were only 242 million. The 2 biggest streaming markets in 2018 (US and UK) will remain the largest by 2026 while large markets such as Germany and France will also still be large, leading markets. Brazil, India, MENA and China will all be established as top 15 global markets by 2026, with the first four each more than doubling revenue compared to 2018.

MIDiA clients can access the report and full dataset right now here. Clients can also explore the forecastsin our forecasts viewer on our data portal Fuse here.

The report and data are also available for purchase on the MIDiA report store here.

List of data points and markets:

  • Subscription revenue (retail values)
  • Audio Ad supported revenue (retail values)
  • Video Ad supported revenue (retail values)
  • Total Ad supported streaming revenue (retail values)
  • Total streaming revenue (retail values)
  • Downloads revenue (retail values)
  • Total digital revenue (retail values)
  • Physical revenue (retail values)
  • Other revenue (retail values)
  • Total recorded music revenue (retail values)
  • Subscription revenue (label trade values)
  • Audio ad supported revenue (label trade values)
  • Video ad supported revenue (label trade values)
  • Total ad supported streaming revenue (label trade values)
  • Total streaming revenue (label trade values)
  • Downloads revenue (label trade values)
  • Total digital revenue (label trade values)
  • Physical revenue (label trade values)
  • Other revenue (label trade values)
  • Total recorded music (label trade values)
  • Subscribers
  • Subscriptions (unique accounts)
  • Ad supported audio users
  • Ad supported video users
  • Subscriber ARPU (USD) – Retail values
  • Ad supported audio ARPU (USD) – Gross revenues
  • Ad supported video ARPU (USD) – Gross revenues
  • Subscriber ARPU (USD) – Trade values
  • Ad supported audio ARPU (USD) – Trade revenues
  • Ad supported video ARPU (USD) – Trade revenues
  • Audio streams
  • Spotify subscribers
  • Apple Music subscribers

Countries covered

  • US
  • Canada
  • Austria
  • Belgium
  • Denmark
  • Finland
  • France
  • Germany
  • Italy
  • Netherlands
  • Norway
  • Poland
  • Spain
  • Sweden
  • Switzerland
  • UK
  • Other Europe
  • Australia
  • China
  • India
  • Indonesia
  • Japan
  • Philippines
  • South Korea
  • Taiwan
  • Thailand
  • Other Asia
  • Argentina
  • Brazil
  • Colombia
  • Mexico
  • Other Latin America
  • Russia
  • Middle East and North Africa

 

  • North America
  • Europe
  • Asia Pacific
  • Latin America
  • Rest of World
  • Global Total

Datasheets included in the Excel document:

  • Global Summary – Retail Values
  • Retail Summary
  • Global Summary – Trade Values
  • Trade Summary
  • User Summary
  • Spotify + Apple
  • Country Summaries – Retail
  • Country Summaries – Trade
  • Top Streaming Markets – Retail Values
  • Subscriber Market Shares
  • Methodology

Preparing for the Post-Album Industry

This is a guest post by Keith Jopling, MIDiA’s Consulting Lead. It is a follow-up piece to What’s Next In Playlist Innovation?

Every week I’m still excited to check out the latest album releases. They are the gift that keeps on giving. But that gift feels different these days, more like receiving flowers or chocolate and less like anything you might say is a keepsake.

It’s becoming very rare these days for me to fall in love with an album the way I used to. I miss it, but there it is. Some of this is a conscious trade-off, since I enjoy compiling and curating playlists. But to some extent, it just feelslike I don’t have the time to give (i.e. invest in repeated listens) in the way albums – good ones – truly deserve.

Broader listening trends confirm that this applies to people in general. The penetration of adults that claim to listen to whole albums monthly, stands at just 16% (Q4 ‘18 data from MIDiA, a drop from 22% in the previous quarter), compared with say, 35% listening to music on the phone.

This is self-reported of course. Behavioural data on actual album listening is a patchwork of proxy measures, such as ‘listens (to individual album tracks) from the artist’s album page’ on Spotify. To be fair, we never ever really knew how consumers who bought albums actually listened to them. Survey data I saw a long time ago, before the streaming era kicked-in suggested that some purchased albums were played on average, just over once.

Competing in the attention economy

As the management consultants say, what can’t be measured won’t get done, and so in a world of real-time statistical feedback, why make an album if you cannot know who is listening and how? There is already a creative conversation in the industry about “skip-rate reduction” and one way to achieve this is to front load albums with the catchiest tracks, but where does that leave the art of album sequencing and story-telling?

The album’s competitive pressures go wider than music. In the attention economy, albums compete with Netflix, Fortnite, TikTok and Instagam. In music’s own attention economy, albums compete with singles, playlists, games, podcasts and box sets. And those latter two categories are literally stealing the show. This is unsurprising in the streaming world – a better way of coping with the content waterfall is a ‘consume-once-only’ approach. The idea of spending the same 45 minutes over & over to build up familiarity with a record seems taxing.

Albums are no longer water cooler moments

What seems particularly telling for music, is that ‘Netflix and shows’ is the water cooler conversation now. Pop culture talk is all about what you’ve watched, are watching or should watch, and any similar conversation about listening is conspicuous by its absence. The ‘event album’ seems to be over. Is it just me or do artists seem to want to drop albums with less fuss now anyway? Perhaps the element of surprise (Bowie’s legacy yet again) is smarter than facing the “aftermath of promotion”. But it’s also not without risk given the tonnage of new music flowing through. Coupled with this, some artists are either eschewing the format or at the very least questioning it. If we take the world’s biggest artist right now, Ariana Grande – what role did her album play in the scheme of things?

What choices does this leave labels and artists?

When the CD began to give way to streaming, it’s fair to say the labels embraced it. In some ways, the CDs decline was ushered in rather than managed out. Back around 2012 I was in the room when one label boss took hold of a CD and flung it across the room smashing it into shards. I was impressed if surprised. But are labels taking the same level of aggressive-progressive when it comes to succeeding the album?

I’ve already argued previously that the main format to succeed the album is the playlist, and that there is further innovation to go (also acknowledging Apple’s release regarding a more creative approach top playlist cover art). Meanwhile there is no doubt that the EP has made a comeback, and has become a useful vehicle for new artists to drop a collection of songs as a showcase of their repertoire.

But let’s take a look at some other options:

  • (Bring back) Album Exclusives:With some services so favouring the single track, could the labels divide & rule with full album licensing fenced off to other album focused services? Now I know we’ve been there before, and ‘nobody’ liked it much, but things are different now, and platform differentiation is a strategy both labels and platforms need when it comes to content. If some services stepped up in full support of the album, it stands a better chance longer term. A more radical option? Sell full albums exclusively on label-owned streaming services.
  • Physical Exclusives (through vinyl):Favouring both the true fan and the artist, perhaps vinyl should become the exclusive way to hear the whole collected work. With traditional vinyl at capacity one innovation I am keeping an eye on is Virylsteam-based manufacture. For artists looking to do something truly different, this is an option. Pre-order, custom versions, pre-sale and merch during tours, and pop-ups, as well as sell-through Amazon, Bandcamp and brick & mortar, the product sale potential is larger than it looks.
  • More visual outputs:Universal has doubled-down on video. Apple has doubled-down on video. Video remains huge, and continues to grow in short-form, and now long-form too. TV and theatrical productions are hunting very actively on music’s turf. It’s fascinating but by definition, not the same ubiquity potential of audio formats. Music films can do wonders for song catalogues however, Bohemian Rhapsdoy has proven that.
  • Experiment with entirely new formats:Easy to say, harder to do. New platforms such as voice and the car provide options without a doubt. Of course, an option for the producer sector is to do nothing much – simply wait for the technology sector to stumble on the next scaleable format. They are certainly trying, from Spotify’s Canvas moving images, to Pandora’s new Stories format, to Apple’s continued video format innovations such as Up Next. The platforms pitch these formats to artists as much as labels. One problem for labels is keeping up with the tail wagging the dog. Without knowing if the format will last, should they invest and convince artists to make stuff the platforms want? For example, should they make vertical videos just because Spotify wants vertical videos that month, or podcasts because it’s now all about podcasts, until it isn’t?
  • Expand into the live sector: Not easy. Wider representation of artists got a bad rap with the ‘360’ degree deals, but yet again, times have changed and a re-evaluation is due. With money coming in from streaming as well as outside investment, labels could buy smaller live promoters and venues.

What does this mean to the artist proposition and label economics?

Okay, so now we are down to the rub. The album is still the format that drives industry economics as a whole. The conversation around the artist proposition (and therefore the deal) has been changing for some years, but still essentially centres on the album as the economic unit. This must surely see more rapid change, to be replaced by agreed song numbers, or simply a time period covering numerous ‘artist projects’. We’ve already seen the first ‘lifetime’ deal between Elton John and Universal.

For the vast majority of artists, revenues are now following a pareto curve, with their ‘top songs’ (between five and ten say) making up a fraction of their catalogue but the large majority of their streaming income. When an established active artist releases a new album, the impact is often on those jewels in the crown more than the new collection, and if one or two songs make it into the crown, then bingo! The project pays off. The goal of any artist project is to get another jewel in the crown, but is an album the critical vessel to achieve that goal?

Perhaps the golden rule here is that the one size fits all model is becoming unfit for purpose. We’re already seeing some innovation, especially from Hip Hop artists like Migos, Drake and Kanye, but this trickle needs to turn into a flood. We’re getting to the time for ‘throw everything at the wall and see what sticks’.

The last days of All Killer No Filler?

I still use my primary source of the past 20 years to find new records, The Guardian G2 and Pitchfork. I can’t find any new albums via Spotify’s personalised feeds, because that’s mostly now just ‘for me’, or singles. Apple Music does a better job of presenting new release albums, and I guess both the streaming rivals are serving their own listener base appropriately.

Despite everything you read above, I feel the album will endure. The digital streaming age is a challenge to artists to make better albums, the ‘all killer no filler’ approach. The album as a canvas still feels relevant for some artists, but only some.

The album is already a niche in consumption terms, unmeasurable in streaming terms, but still the essential deliverable in the deal. That’s out of step, and those labels and artists with one eye on the mid-term future will already be planning for what the game looks like going forward. It’s what Reed Hastings calls “constantly worrying about what’s next” and it’s worked for him so far.

We don’t just write it. For a ‘post album world’ conversation with Keith & Mark contact us at MIDiA. We’ve already been helping labels, artists and managers rethink the album, drop us a line at info@midiaresearch.comto see how we could work with you.

 

Calling all Artists!

In partnership with independent distribution company Amuse, MIDiA Research is undertaking a detailed study of the music artist landscape. We are fielding a survey to the artist community, exploring issues such as:

  • What success looks like to you
  • Career aspirations
  • The importance of signing to a record label
  • Financial wellbeing
  • Maintaining creative control

If you are a singer, DJ, producer, performer, or in a band, then we’d love to hear your views. Just click the link to take the survey.

All of your responses will be treated as strictly confidential and will only ever be presented in aggregate as part of results for the entire survey – so never attributable to any individual. We will not use any of your responses to contact you again for any purpose, unless you specifically provide your email address to us in order to be interviewed in more detail for the research project.

We will also send you a summary of the findings so that you can see how you fit into the picture amongst your fellow performers, and benchmark yourself against their aggregate responses.

If you have any questions concerning the survey the please email us at info@midiaresearch.com