Post-Pandemic Programming

COVID-19 caused dislocation and disruption to the global entertainment business. Now, the recession and the prospect of further pandemic peaks create an unprecedented outlook for entertainment companies. Many of the shifts that occurred during lockdown will define the new market dynamics. The old rule books are being rewritten and new approaches to entertainment business models and experiences will be crucial to move from the holding pattern of survive to the growth mode of thrive. Approaches that worked for decades will no longer work while new innovations will gain traction in a mid-term market that will necessitate an entirely new approach for players across the entertainment industries. MIDiA has kicked off a new programme of research, analysis and insight around these dynamics. We call it Post-Pandemic Programming.

COVID-19 created a mini-recession via lockdown measures, stifling many businesses in an instant, paving the way for the onset of a more traditional, wider recession. All recessions though have uneven impact, affect many companies adversely but some positively. The early signs are that while there were many lockdown losers there were also plenty of companies that fared well, even thrived during lockdown. What was definitely going on, was a reallocation of spend. For example, in Q2 2020 Live Nation and Disney lost $9.9 billion between them compared to Q2 2019. Meanwhile Home Depot increased its revenue by $7.2 billion over the same period. While the comparisons are not perfect, they do illustrate the underlying dynamic well. What is crucial to understanding the post-pandemic period is identifying which of these shifts persist and which revert.

Before that though, the combined impact of the second wave and the coming recession needs to be mapped. To do this, we created a risk framework, looking at what characteristics make entertainment businesses low or high risk, both during a recession and during a pandemic. To understand the coming months, these then need to be overlayed. Companies that have both low recession risk and low pandemic risk will prosper while the adverse is also the case. So, if a company is virtual / online, is scalable, has unique content and is part of a bundle, then it is set to fare well. Enter stage left, Amazon Prime. 

Standalone digital subscriptions (e.g. Netflix, Spotify, Xbox Live) are low risk from a pandemic perspective (as the last nine months have illustrated) but the fact they are non-contract based means that they are more vulnerable to churn than say a pay-TV subscription which is contract based and therefore a subscriber has to buy their way out of a commitment (which has the exact opposite of the desired effect of cancelling to save money).

If you are interested in learning more about this research and understanding how music, video, games, sports and media companies will be affected in the coming months, there are two things you can do:

  1. Check out our subscriber report
  2. Sign up to our free-to-attend webinar on the 10th November

You may need to hurry for the webinar, we are already nearing capacity since promoting it to our clients and newsletter subscribers, but there are still some spaces left. 

Spotify Q3 2020: What price growth?

Spotify reported another strong quarter in Q3 2020, with subscriber growth up 27% year-on-year (YoY) and ad-supported user growth up 21%. Spotify continues to set the pace for the global streaming market and has demonstrated that streaming has proven resilient to lockdown. (Spotify finished the quarter with 144 million subscribers, just above MIDiA’s 143 million forecast – we maintain our end of year forecast for 154 million.) Further evidence of Spotify’s lockdown resilience is that global consumption hours surpassed pre-COVID levels and that churn levels fell. However, Spotify’s premium revenue growth continues to trail subscriber increases, which raises the question: what price is growth coming at for rightsholders and creators?

Spotify’s Q3 2020 premium revenue was €1,790 million, up 15% YoY – notably lower than the 27% subscriber growth. This is a long-term trend for Spotify, resulting in a steady erosion of premium average revenue per user (ARPU). Q3 2020 ARPU fell to €4.19, down from €4.67 in Q3 2019 and €5.76 back in Q3 2016.

There are multiple factors underpinning this shift:

Growth of emerging markets where ARPU is lower

Growth of family and duo plans

Use of promotional offers

Growth of low-priced tiers (telco bundles, student plans)

Spotify emphasised that ‘product mix’ was the core driver of lower ARPU in Q3 2020 and pointed to price increases for family plans across four Latin American markets, Australia, Belgium and Switzerland. Rightsholders and creators will be hoping that this is the start of a wider strategy. 

‘Measure us on growth’

Spotify continues to tell the markets to measure it on growth and market share rather than margin or ARPU. That serves Spotify better than rightsholders and creators. However, this may be about to change. Spotify’s big growth bet is podcasts, which it is monetising via advertising. Although Spotify had a decent quarter for ad revenue (after many weak ones) it is still just 9% of total revenue. Podcasts have the potential to be bigger than music for Spotify but it is going to take a long time to realise the potential, especially as the coming recession will likely dent the global ad market. 

A new growth story

Why this matters for music stakeholders is that Spotify may find it hard to convince investors to start backing yet another ‘measure us on growth’ story when it already has one. As streaming starts to mature in Western markets, Spotify may now be on a path to shift its music subscriptions narrative to one of turning around the ARPU decline, focusing on increasing “lifetime value”, reducing churn and improving margins. It can then make podcasts the ‘growth story’ and music the ‘margin and ARPU story’.

Music rights holders may be concerned that podcasts threaten their share of Spotify revenue, but they may also end up thanking Spotify’s podcasts strategy for indirectly resulting in a stronger focus of improving music monetisation. This in turn will mean higher per-stream rates – something that artists and songwriters in particular will appreciate.

How YouTube can be a music industry growth driver

In the coming weeks MIDiA will be presenting the third edition of its biannual YouTube music report, State of the YouTube Music Economy 3.0: End of the Beginning. This is a major report that presents the definitive traits of the YouTube music economy, including revenues, royalty payments, streams, subscribers, user behaviour and user demographics. One of the key themes in this report is how the music industry, or at least the Western music industry, is failing to capitalise on the revenue potential of YouTube. Royalty rates play a part, and Europe’s Article 17 will have some role (exactly what is yet to be determined) in changing this. However, music rightsholders can also get more out of YouTube by better utilising the dynamics of the YouTube economy. As subscription growth slows in developed markets, YouTube has the potential to be a major revenue growth driver.

Music does not naturally fit YouTube’s channel template. YouTube’s ‘channels’ are better considered talent and content feeds; they perform the same role as following a creator on TikTok or Instagram, ensuring that the subscriber gets immediate access to all the latest content without having to go looking for it. Most artist channels on YouTube deliver content infrequently and, crucially, only sporadically. YouTube audiences expect more from YouTube channels. This approach implicitly treats YouTube channels as fan clubs rather than the content feeds that they are designed to be. 

Treat channel subscribers like you would friends

It does not need to be this way. In fact, an emerging breed of non-Anglo music channels are finding success by doing things differently. Across the top 10 most subscribed music channels on YouTube, one is Brazilian, two Indian and one Korean. Unlike the Anglo artists that make up the remainder of the top 10, these four channels deliver a frequent, regular flow of content. The contrast between the two approaches to content is clearly visible. The top three non-Anglo channels had uploaded more than one video a day for the first 10 days of October. Of the Anglo artists, however, only Marshmello had uploaded a new video recently, while most of the others had not uploaded in months. Ed Sheeran was the worst culprit, with nine months having passed since his last video, his ‘BRB’ logo notwithstanding. Taking nine-plus months off and then simply expecting the audience to still be there, waiting, is little short of arrogant. YouTube subscriber bases need treating like friends. How would you feel if a good friend went dark for nine months and then got back in touch and asked you for something? A similar dynamic is at play here.

Label-led curation and programming

A unifying factor of these top performing non-Anglo music channels is that they are ‘label’ led rather than artist led. Artist-led YouTube strategy is a natural extension of label marketing strategy but it falls short on YouTube because most artists deliver far too little content. Of course, a label-led approach flies against how music fandom has worked for decades (niche afficionado labels excepted) but a genre or label approach alongside artist channels can be a way of driving subscriber engagement and pushing up ad revenues. Yes, Indian music companies are dramatically different entities to Western labels, but the principles can still be translated – and KondZilla (the second-most subscribed music channel) is Brazilian.

Innovating the format 

Then there is the issue of format innovation. MIDiA has been arguing for years that labels should be considering longer formats to complement the core music videos. One way is stitching together curated collections of tracks with chapter markers between each one to create more video ad inventory opportunities. This is something the non-Anglo channels are already doing. For example, in the 10-day sample period, Zee Music Company posted an extended video the ‘Best of Amitabh Bachchan’ that featured ten separate music videos spliced together with chapter breaks.

Despite being so well established, YouTube is growing fast in terms of revenue, audience and views. Yet, music monetization is not growing at the same (watch out for the report for exactly what this divergence looks like). Now is the time to start experimenting with new formats and content strategy. Done right, YouTube monetization can grow strongly for music rightsholders, regardless of what happens with Article 17.

Podcasts Q2 2020: Spotify takes an early lead

MIDiA has just published its latest Podcast report, Podcasts Q2 2020: Spotify Takes an Early LeadIn it we present data from MIDiA’s quarterly survey that presents a comprehensive view of podcast user behaviour, who podcast listeners are, how it stacks up against radio and music streaming listening and which platforms listeners are going to for their podcasts. One of the key findings of the 3,000 word report is that Spotify is now firmly established as the most widely used podcast platform. 

Spotify is now the leading destination platform for podcast users. In Q2 2020 42% of podcast listeners used Spotify, 10 points ahead of Apple in second place. This does not necessarily mean that it yet leads in terms of volume of listens, but it is the platform that the largest share of regular podcast listeners visit. Spotify was second in Q4 2019, so it is a rapid ascension for the streaming platform, leaving Apple trailing significantly. Google in third place may surprise some in the podcast sector, as it is renowned for being a small player. However, MIDiA has tweaked the wording of the question repeatedly over the last nine months, making it absolutely clear what we are referring to, and the result is always the same. This suggests either a) a large number of people use the app but have much lower listening patterns than users of other platforms, or b) Android users are somehow less clear on what podcast apps they use than iOS users. We think the latter is unlikely.

Early adopter behaviour shapes the market

Varying levels of podcast usage among users is however very likely as we are at such an early stage of market development (just 14% of consumers listen to podcasts regularly). This means that podcasts are at the ‘critical mass’ phase of adoption, where usage starts to move from early adopters towards the mainstream. As a consequence, heavy-usage early adopters, which Spotify podcast users tend to be, have particularly heavy behaviour and skew the overall numbers. This illustrates the supreme importance of measuring audience behaviour like MIDiA does, rather than relying solely on analytics – which are great for understanding volumes of listens, but less useful for understanding audiences. 

This early adopter skew also means that the content that resonates well with podcast users now will not necessarily be the right content to pull in more mainstream audiences, nor is it likely to be the right content mix for a longer-term strategy.

Podcasts are still small scale for now, but have vast potential

Podcasts are still small scale and far outweighed by radio. In fact, overall audience penetration has not shifted much during the last six months, though volumes of podcast listens have increased. So, existing podcast users are listening to new podcasts, creating new ‘day parts’ in their lockdown behaviours.

Spotify’s podcast strategy is dominating thinking in the podcast space at the moment, and with good reason considering its heavy investment. However, with the ad market softening, and Spotify relying primarily on ads to monetise podcasts, it will be some time before it can recoup its investment. Nevertheless, Spotify is betting big. It sees the opportunity in competing for radio listening to be a much bigger move than music alone. It is betting that podcasts will take radio out of radio, just like Netflix took TV out of TV.

BBC Sounds represents a podcast blueprint for radio broadcasters 

Spotify will not, however, find all radio companies bending to its will. In the UK, the BBC Sounds app illustrates how powerful a strongly integrated app and content strategy can be, with the app the second-most used podcast platform in the UK. Crucially, the vast majority of Sounds users that are also podcast users, use the app for podcasts. This contrast strongly with other broadcaster apps. For example, in the US, only a small minority of NPR’s app users that are podcasts listeners use the app for podcasts.

The experience of BBC Sounds illustrates that broadcasters can be a major force in the future of podcasts, but that they cannot rely solely on the strength of their content and programming. Without the tight technology integration that Spotify employs, broadcasters will find themselves looking more like NPR than they do the BBC.

If you are a radio broadcaster exploring how to innovate your audio and tech strategy to compete in this new marketplace, then get in touch with stephen@midiaresearch.com to see how MIDiA can help.

HomePod Mini: Apple’s pandemic-era product

Apple’s Tuesday product announcement showcased its 5G iPhones, but also included the launch of the new $99 HomePod Mini. Though it might have looked like a supporting act for the launch, its strategic importance should not be underestimated – especially in the context of how Apple competes with Amazon, the company that is arguably becoming Apple’s most important competitor among the Western Tech Majors (Apple, Alphabet, Amazon, Facebook). Amazon is emerging as a global scale hardware competitor, focused on the home rather than on personal devices.

HomePod Mini is a product for the era of pandemic

The home is becoming the new battleground for the tech majors and Amazon has a comfortable lead with more than 50% of the installed base of smart speakers, significantly ahead of Google and far ahead of Apple which currently sits at less than 10% market share. HomePod Mini is an affordable device that gives Apple the opportunity to quickly expand its role across the homes of iPhone owners, a beachhead for future content and services. HomePod Mini is also very much a pandemic-era product move; with more of us spending more time working and studying from home, we are more inclined to use specialised home devices such as smart speakers, rather than the convenient but not specialised phone. As the HomePod was always a premium, Apple afficionado device, HomePod Mini gives Apple a tool with which it can extend its footprint in the average day of its increasingly home-bound iPhone owners.

An enabler for audio strategy

Though Apple has much bigger ambitions for the home than music alone, music is the use case that is spearheading the product strategy. Apple TV continues to grow in importance for Apple, but as a screen plug-in, it lacks the capabilities of a standalone smart speaker. As Amazon has shown, smart speakers can become the digital hub around which smart home strategies can be built. HomePod Mini may also be the tool for a bolder, joined-up audio strategy for Apple. Alongside Apple Music, Apple continues to back its radio bet Apple Music 1 (previously Beats 1) and of course it is one of the leading destinations for podcasts. Apple can pull these three disparate strands together by creating in-home use cases via HomePod Mini. In this respect, Apple will need to, once again, do all of that and more – as not only has Amazon recently added podcasts to Amazon Music, but it also the home of Audible, an asset both Apple and Spotify lack.

Finally, what Apple did not announce on Tuesday was content bundles for its hardware. An Apple One / iPhone device lifetime bundle feels like an obvious move – competition authorities permitting, perhaps sometime over the coming 12 months. A $3.99 Apple Music Home Pod tier would make sense also.

The device may be mini, but the strategy is anything but.

Why Rishi Sunak is both wrong and right

Earlier this week the UK Chancellor of the Exchequer Rishi Sunak suggested that creatives such as musicians who had seen income dry up during COVID-19 should consider retraining for the new ‘opportunities’ the lockdown economy is generating. 

The principle makes sense from an economic perspective, but it is just that – an economist’s solution to a cultural problem. A guitarist becoming an Amazon van driver or a Just Eat courier will certainly have the desired economic output (i.e. more economic productivity), but the cultural damage is potentially irreparable. Perhaps more importantly, however, it is throwing in the towel after the first round of the fight. 

A quick lesson from history

Culture is one of the most important outputs of society and the more developed a society is, the more it normally invests in that culture. A brief overview of history illustrates the point. The Roman Empire, one of the first great civilisations, was focused on warfare and expansion. It spawned some famous philosophers and orators, as well as great art (sculpture and mosaics especially). Yet warfare was the defining trait of the empire, and so the majority of the great figures we remember are the military generals and emperors. Fast forward to the Middle Ages in the same Italian peninsula and we had the Renaissance, ironically rediscovering the lost art techniques of the ancients. Although Italy in this period was dominated by warfare, and although there are no shortage of generals and petty princes to fill the history books, it is the art and culture that the period is best known for. Artists like Leonardo da Vinci, Michelangelo and Raphael are the great names of this era. There was no structured art marketplace, however; instead, rich benefactors (bankers, princes, generals) patronised them, subsidising their art. They did so often in the hope of immortalising their own names, but instead immortalised the artists. Art does not always pay for itself. Sometimes it needs a helping hand.

Small venues create national economic output; virtual ones may not

Now to be clear, I am not advocating that music should become state subsidised. Nor am I comparing the musical output of a bedroom musician with that of a renaissance master (though Kanye does think that he is ‘unquestionably’ an even better artist than even those Italian greats). The lesson to learn from history here is that in tough times, society benefits from supporting culture. If small music venues continue to fall like flies,smaller and emerging artists will be bereft of real-world places to perform and to build audiences. The music market will stagnate with new talent having one more hurdle to success put in its way. Live streaming will pick up some of the slack and may even become a valuable alternative for many artists. For the UK government, however, that will mean swapping the economic output of UK venues for that of predominately American technology platforms. That economic output will leave the UK economy – and at a time of trade uncertainty leading up to Brexit, to lose music, arguably the UK’s most culturally renowned global export over the last century, would be a weighty hit.

Artists need to experiment and innovate now more than ever before

This is bigger than national economic protectionism, and it is certainly bigger than the UK. To use that horrible management consultant phrase: change is difficult. We are cursed and blessed to live in interesting times. Technology has changed the recorded music business beyond recognition; now, because of the pandemic, technology is going to accelerate change in the live business as well. This process may be difficult, and it may be long, but it will result in a differently shaped music business in the mid-term future. Artists have an opportunity, even a responsibility, to innovate and experiment. Before COVID-19, live, merch, recording and publishing were – in varying degrees – the majority of the revenue mix for most artists. Live is unlikely to return to anything resembling normality until 2022. From this moment on, then, artists need to experiment with new models, new ways to engage with audiences and to generate income – whether that be writing for other artists on Soundbetter, making sound packs on Splice or Landr or selling digital collectibles via Fanaply. Artist income is more varied and sophisticated now than it was 10 years ago. The reality is that this trend is going to accentuate both in the lockdown economy and post-pandemic. 

However, new models take time to become viable. In this interim stage, if there is a role for state support, it is to provide artists and songwriters with the financial support and technical and business training to enable them to be winners in this new creative paradigm. Rishi Sunak was wrong to suggest that artists should retrain out of music. But he was right that they should retrain. They should retrain from being artists of the 2010s to artists of the 2020s, and that is where he should be providing support.

Independent artist creativity and innovation in the age of COVID

The COVID-19 pandemic has turned the music industry upside down in many ways but among the direct artists community there have also been signs of resilience and creativity in the face of adversity. For these ‘unsigned’ artists, 2020 is both the best of times and the worst of times. 

Self-releasing artists are not bound by industry promotional cycles, and in many cases, today’s artists must not just create their music but ‘sell it’ as well. If you have the drive to create music there is very little stopping you from writing, recording, producing and indeed releasing that music. All the tools and platforms are available. 

It’s been a boom year for music making – from record Fender guitar sales to yet another peak in streaming demand. Yet there’s never been a tougher time competitively—with 40,000 tracks released daily, cutting through the clutter is a very real challenge. The age of ‘create it and they will come’ never really existed, but today’s music market started to obliterate the notion completely and COVID-19 has acted as a catalyst for the changes that were already taking place.

For MIDiA’s latest independent artist survey report in partnership with artists services and distribution company Amuse, we interviewed 346 artists around the world during the heart of lockdown to get a unique view of how the crisis is affecting artists. What we found was anxiety mixed with aspiration and creativity. The full report is available for free here but we’ve pulled out here five key themes for artist success:

1 – A sector with real scale: Artists direct (i.e. those without record labels) generated $873 million in 2019, up 32% from 2018. These independent artists represent the fastest-growing segment of the global recorded music business, a segment of global scale with real impact and influence. They are also more streaming native than label artists.

2 – Lockdown was a unique creative window: Nearly 70% of independent artists took the opportunity in lockdown to spend more time writing or making music, and a further 57% created more content for social media. Artists took full advantage of being away from the spotlight and the treadmill of promotion, to dive back into their creative spaces and make new music. In terms of releasing music, artists were split – with 46% releasing more music, but 40% putting projects on hold.

3 – Collaboration: 36% of independent artists reported working more on collaborations during lockdown than before. Music is becoming more of a collaborative undertaking than ever before and a whole ecosystem of digital tools and services is emerging to meet growing artist demand, providing more structured and networked process than many labels ever can. An unintended consequence of lockdown is that it has compelled more artists to explore ways of doing remote collaboration and many of these new learned behaviours will persist beyond the pandemic. A new way of making music is being born.

4 – Independent artists need side hustles like never before: Artists need to work multiple revenue streams to build career momentumFor independent artists, streaming is their primary source of income at 28%. Live revenue is second at 18% (which means they are less exposed to lockdown’s impact than established label artists). But the key for today’s artists is to make revenues from multiple sources including publishing, teaching, session work, sponsorship and merchandise. Artists’ need to work multiple revenue streams to build career momentum. The number of artists offering online tuition has grown hugely during the pandemic, as has artists selling their old kit. Additionally, artist skill platforms will only grow as the number of aspiring creators grows, and, as with live streaming and making sound packs, is yet another revenue stream for artists. Artists are small entrepreneur businesses. They need four or five income streams to get off the ground.

5 – Marketing IQ is becoming key: Half of all direct artists do their own marketing, with one third managing their own marketing budget, but less than one in five are working with a distributor or label on marketing activities and 40% spend nothing at all on marketing. Artists are self-reliant but still inexperienced with marketing and most are not making the most of the tools available. While almost two-thirds of artists are using Spotify For Artists, few of them are using any other marketing related tools. The independent artist must know that marketing is about research, experimentation and persistence and is even more important for independent artists that do not have labels to do this work for them.

Making and marketing music is both getting easier and harder at the same time. Easier because artists can be in control: releasing music when you want to, growing and using social media, seeking out like-minded artist collaborators and sponsors, not having to rely on paymasters or gatekeepers. Easier also because artists can go global right from the beginning. 

On the other hand, the road to a career is longer and possibly never ending. The gap between artist and fan, creator and consumer is narrowing. Equipment makers are having a boom year, and one of the many things people have done with more time on their hands is fulfil their passions. So, for aspiring independent artists, a whole new wave of competition has arrived in the form of talented amateurs, armed with the tools and the time to make their own entertainment. 

The independent artist sector had another boom year in 2019 and the early signs are that it has not only weathered the COVID-19 storm but has made the best of a bad situation, seeing lockdown as an opportunity to create, experiment and innovate. Which should not surprise us, as after all these are some of the defining characteristics of one of the most important and exciting elements on the modern music business. Pathfinding through the pandemic requires innovation and patience and it looks like the direct artists sector has plenty of both. 

Why Kanye West is the modern-day Prince

Not ‘prince’ in the Machiavellian sense of the term – though there is an argument for that too – but as in the artist formerly known as. Back in 1992, Prince fought his label Warner Bros to get ownership of his rights and more creative control, struggling to get out of a deal he signed when he was 19 and had since decided was unfair and overly restrictive. He famously started appearing with the word ‘slave’ on his face. The bitter conflict resulted in Prince changing his name to ‘symbol’ and self-releasing via an artist subscription service long before subscriptions were even a thing. He then came back to a label deal on his own terms, later returning to Warner Bros and winning ownership of his masters, and finally signed with Tidal (read this for a succinct history of Prince’s label deals).

Now we have Kanye posting pages of his UMG deal on Twitter and saying it represents slavery. Why, nearly 30 years later, is history repeating itself?

Many artists start naïve and become educated 

Many artist careers follow a similar path: 

  1. Sign a deal as a young, commercially naïve artist 
  2. Become successful
  3. Learn how the business works
  4. Realise that the deal you signed was heavily stacked in favour of the label

In recent years, this path has started to change, with most artists initially spending a few years as independent artists, learning how the business works, before getting a deal. When that deal comes, more of them go into it with eyes (relatively) wide open and negotiate terms that are more equitable for them. Companies like Cooking Vinyl, BMG and Kobalt’s AWAL helped change the market dynamic, pushing a new paradigm in artist deals and, in turn, driving the wider industry in the same direction. Label services, distribution deals and joint ownership deals are now commonplace even among major record labels.

A two-tier system

This dynamic has created a two-tier system. Many of the new generation of younger artists who own their masters have favourable royalty splits and high degrees of creative control. The older, established artists – including many of today’s superstars – are meanwhile still locked into the old way of doing things. These artists are starting to question why, as the artists with most sway, they seem to have less negotiating power than smaller, newer artists, and they don’t like it. Enter stage left, Kanye.

The reasons why artists did, and still do, sign traditional deals are simple: 

  1. They are often what is first offered to them by many labels
  2. They reduce the artist’s exposure to risk by putting more of the risk on the label
  3. They give them the best chance of getting the full marketing heft of the label to make them into superstars
  4. They get a big advance

Kanye signed the deal he signed

Kanye’s Twitter posts indicate that he was given millions of dollars in advance payments. Now, however, with his ‘nemesis’ Taylor Swift enjoying the benefits of a new(ish) deal that gives her ownership of her rights, Kanye wants the same treatment. (Kanye’s advisor couldn’t avoid having a little dig suggesting that Kanye’s masters are worth more than Swifts’). I am not a music lawyer so I am not going to get into the details of whether Kanye’s deal is fair or legally watertight, but it is nonetheless the deal that he signed. And it was long after Prince’s campaign to get ownership of his masters. Kanye, knowingly or otherwise, signed the deal that he signed despite other deal types being available. It is a deal that may now look outmoded and out of pace with today’s marketplace, but he remains tied to its terms – for now at least.

From indentured labour to agency-client

Kanye and Prince’s use of the word ‘slavery’ is emotive and has extra connotations for black artists – and there is some logic to the argument. In a worst-case scenario, traditional label deals can resemble indentured labour, with the artist permanently in debt to the label, having no ownership of their work and unable to take their labour elsewhere. Modern day label deals are able to reframe the relationship to one of an agency-client model.

When Prince took on the music industry, he was a lone voice trying to bring a new way of doing things (though others such as the Beatles had previously fought the battle for their masters too). Prince’s actions helped pave the foundation for today’s better-balanced music business, and many superstars have taken advantage of his pioneering efforts, with Rihanna and Jay-Z just a couple of those that now own their masters. Nor is this the first time Kanye has been angling for ownership of his masters.

So, to answer the opening question, why is history repeating itself? Simply put, many young artists new to the profession will take the big cheque and the promise of being made into a superstar over getting a better deal. Many of the newer generation of music companies will note that it is no longer a binary choice if an artist signs a deal with them; nevertheless, the case of Kanye West shows us that for many artists it still is. 

What has changed is that a new artist today has more opportunity to educate and empower themselves – to get a deal that will enable them to build an equitable, sustainable career. For that, they owe a debt of gratitude to Prince.

Quick Take: Apple One – Recession Buster

Apple officially announced its long anticipated all-in-one content bundle: Apple One. $14.99 gets you Apple Music, Arcade, Apple TV+ and 50GB of iCloud storage. A family plan retails at $19.95 and a premier plan includes 1TB storage, News and Apple’s new Fitness+ service. While the announcement was expected (and you may recall that MIDiA called this back in our December 2019 predictions report) it is important nonetheless. 

As we enter a global recession, the subscriptions market is going to be stressed far more than it was during lockdown. With job losses mounting, and many of those among Millennials – the beating heart of streaming subscriptions – increased subscriber churn is going to be a case of ‘how much’ not ‘if’. In MIDiA’s latest recession research report, we revealed that a quarter of music subscribers would cancel if they had to reduce entertainment spend and a quarter of video subscribers would cancel at least one video subscription.

A $15.99 bundle giving you video, music, games and storage will have strong appeal to cost conscious consumers who are loathe to drop their streaming entertainment but need to cut costs. As with Amazon’s Prime bundle, Apple One is well placed to weather the recession. They may not be recession proof – after all, entertainment is a nice-to-have, however good the deal – but they are certainly recession resilient.

Which may explain why music rights holders have been willing to license the bundle which almost certainly included a royalty haircut for them, to accommodate the other components of the bundle. While rights holders will not have been exactly enthusiastic about further royalty deflation (one for artists and songwriters to keep an eye out for when Apple One starts to gain share) they are also keenly aware of the need to ensure they keep as many music consumers on subscriptions as possible. 

One key learning of the impact of lockdown has been that new behaviours learned during a unique moment in time (eg not commuting to an office, doing more video calls) can result in long term behaviour shifts. Lower music rightsholder ARPU may be a price worth paying for shoring up the long term future of the music subscriber base.