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.
A fair bit of the news in the music business this week centered around Spotify, the streaming service with which the industry has developed something of a ‘love-hate’ relationship. This week showcased exactly why.
The company credited with rescuing music from the scourge of piracy is reportedly planning a new Premium music tier that will feature high-fidelity audio, and will cost at least $5 more per month than existing plans. That’s undoubtedly good news for the companies arguing that music continues to be underpriced.
But then we were reminded of the other side of the relationship between Spotify and some parts of the industry – when the National Music Publishers’ Association (NMPA) filed a complaint with the US Federal Trade Commission over SPOT’s decision to bundle music and audiobooks to reduce the mechanical royalty rate for songwriters in the US.
Speaking of royalties, one thing holding rightsholders back is the hundreds of millions of dollars left unpaid every year due to incomplete or bad data. Warner Music Group CEO Robert Kyncl had some thoughts this week on how to (finally) fix the problem.
Also this week, MBW delved into Sony Music Group‘s decade-long acquisition spree, which we estimate to have been worth at least $6 billion.
And finally, the NMPA revealed this week that US music publishing revenue jumped 10.7% to $6.2 billion in 2023, outstripping recorded music’s growth in percentage terms.
Spotify is planning to launch a pricier Premium music tier later this year that includes access to high-fidelity audio.
That’s according to Bloomberg, which, citing sources, reported on June 11 that this new tier will cost “at least $5 more per month” and will be “an add-on” for existing subscribers.
The report adds that the new plan will include high-fidelity audio as well as new playlisting and song library management tools.
Spotify’s reported plan to launch a pricier Premium tier this year follows the company’s recent price hike in the United States, where its individual Premium tier is going up by $1 per month to $11.99…
In April, Spotify announced its controversial decision to reclassify its Premium tiers as ‘bundles’ by combining music and audiobooks.
The move resulted in Spotify paying a lower mechanical royalty rate in the US to publishers and songwriters.
Yet the world’s largest subscription music streaming service may not have anticipated just how fierce the opposition to its bundling decision would be from songwriters and publishers.
In the words of National Music Publishers’ Association boss David Israelite, speaking at the NMPA‘s Annual Meeting in New York on June 12: “Spotify has declared war on songwriters. Our response shall be all-encompassing…”
Each year, hundreds of millions of dollars in royalties globally are not paid to the correct rightsholders due to incomplete or bad data.
It’s been a source of frustration amongst rightsholders for years: where the so-called ‘black box’ money goes when PROs cannot match a track’s metadata to consumption, and pay out accurately.
Warner Music Group CEO Robert Kyncl wants the industry to solve the problem and has some suggestions for how to do so.
Kyncl called for the industry to figure out how to “enable” collection societies globally to “collaborate” in order to solve the issue of unmatched data…
If Bloomberg is to be believed, Sony Music Group is currently in discussions with Queen’s representatives over a potential acquisition of the legendary band’s catalog, which could cost, depending on the number of rights included, USD $1 billion.
Rob Stringer, Chairman of Sony Music Group, declined to directly discuss the Queen rumors during a presentation for Sony Corp investors on May 30. But he certainly made a nod in its direction.
He noted the increasing importance of older music to today’s commercial music industry, pointing out two stats: (i) According to Luminate, 73% of streaming consumption in the US last year was of catalog music; and (ii) Some 41% of Spotify‘s annual global 200 biggest tracks in 2023 were released more than two years previously.
“Through targeted investments, we believe catalog is the base of our strategy to navigate a successful path to all future tech trends in the music space… In the coming year, we’ll be smart in our purchases that are curated to this approach,” he said.
The US music publishing industry is facing a new challenge in the form of Spotify’s unexpected reduction to its mechanical royalty payouts. But despite this and other challenges, the songwriting and music publishing business remains strong.
That’s the verdict from David Israelite, President and CEO of the National Music Publishers’ Association, which on Wednesday (June 12) revealed US music publishing revenues for 2023.
Revenues for the year came in at $6.21 billion, up 10.74% from the year before, Israelite told the audience at the NMPA’s annual meeting.
