State Champ Radio analysis
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Just because an AI-generated track makes— or even tops — a Billboard chart doesn’t mean it’s very popular.
Take, for example, Breaking Rust, an AI-assisted artist that attracted global attention for reaching No. 1 on the Country Digital Song Sales chart. Breaking Rust’s track “Walk My Walk” amassed approximately 3,000 track downloads in the week ending Nov. 6, according to Luminate. “Don’t Tread on Me” by Cain Walker, another AI-assisted country artist, is currently at No. 3 after selling approximately 2,000 downloads in that same week. That’s all it takes to top a genre download chart these days.
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The digital download is a relic of an era when iTunes ruled the music industry and streaming was in its infancy. Over the years, as consumers shifted to subscription streaming platforms, downloads have all but disappeared from the landscape. In 2024, downloads accounted for $329 million, according to the RIAA, approximately 2% of U.S. recorded music revenue. That’s down 86% from 2015, when downloads generated $2.3 billion and represented 34% of the U.S. market. Revenue from subscription streaming platforms, which now play a major role in the most well-known charts, climbed 860% to $11.7 billion over the same time span.
Pop songs put up much better numbers. As Billboard noted in an article on country executives’ reactions to Breaking Rust and Walker, the top track on the all-genre Digital Song Sales chart, Taylor Swift’s “The Fate of Ophelia,” sold 29,000 copies. But even the most popular pop download doesn’t do the numbers seen just a decade ago. The No. 1 track in the same first week in November 2015, “Hello” by Adele, sold a whopping 636,000 units.
To put Breaking Rust and Walker’s popularity into a better context, it helps to know where they rank amongst their human peers. For the week ended Nov. 6, Breaking Rust was ranked No. 228 among country artists in terms of equivalent album units (EAUs, which combine streams and sales into a single metric). No. 1 country artist Morgan Wallen had 113 times more EAUs and 227 times more EAUs than Walker, who was No. 359. It would take 13 Breaking Rusts and 25 Walkers to equal the No. 18 artist, Bailey Zimmerman.
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The most successful AI artist is currently Xania Monet. Her creator, Telisha Jones, writes the lyrics and uses an AI platform to create the music. Monet has been on Billboard charts such as R&B Digital Song Sales, Hot Gospel Songs and Emerging Artists. But among artists of all genres, Monet ranked only No. 927 in terms of EAUs in the week ended Nov. 6, about equal to Cyndi Lauper and French Montana — artists who, unlike Monet, aren’t currently being promoted to terrestrial radio and attracting worldwide fascination.
To be sure, many human artists would love to have the sales and streaming numbers of these AI-assisted artists. Walker and Breaking Rust are No. 9 and No. 11, respectively, on the Emerging Artists chart, right behind country singer Alexandra Kay, who is signed to BMG-owned BBR Music Group and regularly sells out theaters around the country. In the U.S., Breaking Rust has 9.3 million streams to date, while Walker has 1 million, according to Luminate — the kind of numbers achieved by developing artists backed by record labels and artist managers.
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But the AI artists attracting headlines and creating consternation within the music industry don’t have popularity to match the attention they’re getting. They are making noise mainly by getting onto download charts, which don’t reflect how most Americans consume music. Nor are they likely to have the longevity of other artists. Walker, ranked No. 359 amongst country artists, is just a few spots below country legend Hank Williams. But nobody is saying that Walker matches the popularity of Williams, an inductee into the Country Hall of Fame, Songwriters Hall of Fame and Rock and Roll Hall of Fame.
That’s not to say AI artists aren’t having an impact. They’re quickly growing in numbers, and it’s not difficult to imagine that they could soon gobble up much more market share.
Take the 10 AI-generated or AI-assisted artists mentioned in Billboard’s Nov. 4 article about AI artists who landed on the charts. The 10 artists mentioned in that article — including Juno Skye, Enlly Blue, Unbound Music, Ruby Darkrose and ChildPets Galore — have an average EAU in 2025 of approximately 7,200 units. That’s not much. But 1,000 of these AI artists, in aggregate, could have a legitimate impact: 1,000 artists at 7,200 units is 7.2 million units — equal to a 0.7% year-to-date U.S. market share. That’s on par with large independent record labels like Big Machine Label Group (0.78%), BMG (0.77%) and Secretly Distribution (0.75%). Two thousand AI artists with an average of 3,600 AEUs would have the same collective market share. Or 4,000 AI artists with an average of 1,800 AEUs.
An invasion of AI music may feel like a dystopian future to most people, but it’s a plausible scenario. A person reading about Xania Monet or Breaking Rust could experience the same spark of inspiration felt by teenagers seeing punk rock bands in the mid to late ‘70s. Punk grew quickly because starting a band required a passion for music, not musical expertise. When millions of people read about AI artists on the charts, some of them will have the same realization that kids had in the ‘70s: “If they can do it, why can’t I?”
Billboard determines if a charting title is AI or AI-assisted through checking the artists’ official pages, some of which say they are generated with the help of AI; cross-checking the songs using Deezer’s AI detection tool, which adds a flag to all AI-generated content on the platform; and reaching out to the creators themselves, among other methods.
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Echoing disagreements between YouTube and music rights holders, Alphabet-owned YouTube TV is currently in fraught negotiations with Disney over the amounts the pay TV streaming platform is willing to pay for the company’s TV channels, which were pulled from YouTube TV on Oct. 30 after the two sides failed to agree on the terms of a licensing renewal.
The fracas is part of a larger pattern, artist manager and businessman Irving Azoff wrote in a Nov. 5 op-ed at Billboard. Azoff, a longtime YouTube critic, called the company “a behemoth bully” that uses its vast market power to coerce content owners. “The playbook is always the same: if you refuse to accept YouTube’s below-market terms, YouTube threatens to go dark until you capitulate.”
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Similar disagreements have plagued the music industry’s relationship with YouTube over the decades. (YouTube TV is run separately from YouTube, which generates most of its income from advertising.) Most notably, Warner Music Group pulled its catalog off YouTube in 2008 after licensing negotiations broke down. Over the years, rights owners have frequently — and publicly — complained about YouTube’s relatively low royalty payouts and a business model that allows for user-generated content that often includes copyright-protected music.
The pay TV dispute pits one of the world’s largest tech companies against the owner of some of America’s most popular TV channels. Disney owns more than 20 TV channels that span sports (ESPN, ACC Network, SEC Network), entertainment (FX, Freeform, Localish), family (Disney Channel), National Geographic and ABC and its local affiliates. Disney CEO Bob Iger has called these broadcast TV brands an “asset” that operate alongside its growing streaming platforms, Disney+ and Hulu.
News reports say that Disney offered YouTube TV terms commensurate with its latest deals with the largest pay TV providers, Comcast and Charter, while YouTube insists it has “been working in good faith” on a deal “that pays them fairly” for their content. However, Disney has cited YouTube TV’s “repeated refusal to negotiate in good faith” and demand for preferential treatment.
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Disputes over carriage — the agreements in which a multi-channel video distributor includes a TV network’s channels — are not uncommon. YouTube also removed Televisa/Univision channels in October and narrowly averted a blackout with Fox in August. As for Disney, carriage disputes caused its channels to briefly go missing from DirecTV in 2024, Charter in 2023 and Dish in 2022.
But the Disney-YouTube battle isn’t a battle of equals — or close to it. A relative newcomer to the pay TV business, eight-year-old YouTube TV is the fourth-largest pay TV provider in the U.S. with nearly 10 million subscribers. But YouTube TV is a small fraction of parent company Alphabet’s total business. At $83 per month and 10 million subscribers, YouTube TV generated $7.4 billion in the first nine months of 2025 — just 2.6% of parent company Alphabet’s $289 billion of revenue in that period.
For Disney, the loss of carriage fees works out to approximately $2 billion annually, or 2% of Disney’s revenues, Lightshed Partners’ Rich Greenfield told CNBC on Monday (Nov. 3). That weighs more heavily on Disney, which generated $72 billion of revenue in the first nine months of its fiscal year (the company releases fiscal year results on Nov. 13), than YouTube TV. “When Charter loses ESPN, everybody goes, ‘How can Charter survive?’,” said Greenfield. “There’s not one investor going, ‘God, is Google going to survive this?’”
Failing to reach a resolution could drive consumers to find Disney programming elsewhere. Consumers can access Disney or any other TV content in numerous places. Desired sports content such as Monday Night Football is available through ESPN Unlimited for $29.99 per month or $299.99 per year. Bundling ESPN Unlimited with Hulu — wholly owned by Disney — and Disney+ offers sports and a wider variety of programming that costs $29.99 per month with ads or $38.99 per month without ads.
A new survey from Drive Research found that 24% of YouTube subscribers have already canceled or plan to cancel their YouTube TV subscription as a result of the dispute. Additionally, 30% of subscribers said they have subscribed or intend to subscribe to ESPN Unlimited or Hulu’s live sports plan to maintain access to sporting events. Clearly, the backlash to the Disney fracas is real — but a giant like YouTube TV can afford to shed subscribers in a way other carriers likely couldn’t.
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On Wednesday night (Oct. 29), Universal Music Group (UMG) and AI music company Udio announced they had reached a strategic agreement. Importantly, this agreement not only settled UMG’s involvement in the massive copyright infringement litigation the major labels brought against Udio and another AI music company, Suno, last summer, but also paved the way for the two companies to “collaborate on an innovative, new commercial music creation, consumption and streaming experience,” according to the announcement.
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The newly revamped version of Udio is set to debut in 2026, and it will feature fully-licensed UMG sound recordings and publishing assets that are totally controlled by UMG — but only those from artists that choose to participate.
Here, Billboard looks at the deal more deeply and answers some questions that have arisen in the wake of the first-of-its-kind agreement.
Why did UMG and Udio decide to come together and settle this week?
It’s hard to know exactly what happened behind closed doors, but reports that the major music companies had been in talks to settle with Udio — and Suno, which was also sued in a nearly identical lawsuit by the majors — have been circulating since this summer, making it relatively unsurprising to hear that at least one deal has been finalized.
One clue as to why there was incentive to settle here comes from a recent Barclays Research report on the majors’ lawsuits against the AI music firms, which stated that it could be “prohibitively expensive to lose” for Udio, much more than Suno, given the two firms had raised $10 million and $125 million, respectively, at the time the report was published on Tuesday (Oct. 28). Even a tough settlement, the report states, “would likely only mean the disappearance of Udio.”
The timing of the press release about the UMG-Udio deal also arrived the night before UMG’s Q3 earnings call, which took place yesterday (Oct. 30). The company has a history of announcing big news just before earnings calls in general, including one instance when UMG reached an agreement with TikTok the night before earnings in 2024 after a three-month standoff.
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What exactly will this 2026 version of Udio entail?
The new version of Udio will feature a number of tools to allow users to remix, mash up and riff on the songs of participating UMG artists. Users will also be able to create songs in the style of participating artists and use some artists’ voices on songs.
According to Udio CEO Andrew Sanchez, who spoke to Billboard just after the deal was announced, “[Udio is] going to involve all kinds of AI models, like a base model… The best way to explain it, [is it] will have sort of like flavors of the model that will be specific to particular styles or artists or genres. And this, again, provides an enormous amount of control.”
How can UMG artists and songwriters participate, and can they get paid for that?
Yes, UMG artists and songwriters will be remunerated for participating in Udio. According to a source close to the deal, this will include financial rewards for both the training process of the AI model and for its outputs. The details of exactly how that payment will work beyond this are unclear. Sanchez declined to answer a question about whether the model uses attribution (tracing back which songs in a training dataset influenced the outputs of a model) or digital proxies (a selected benchmark, like streaming performance, used to determine the popularity of songs in a dataset against others overall) as a way to determine payment — two of the most often proposed methods of AI licensing remuneration.
This answer is also made more complicated when considering the breadth of AI tools Udio plans to offer on its service. Importantly, artists can pick and choose exactly which Udio tools they “opt-in” to: “We’re going to launch with a set of features that has a spectrum of freedom that the artist can control,” Sanchez said. “There are some features that will be available to users that will be more restrictive in what they can do with their artists or their songs. And then there will be others that are more permissive. The whole point of it is not only education but just meeting artists at the levels they’re comfortable with.”
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Who is the target audience for the newly revamped Udio?
According to Sanchez, it’s fans: “We want to build a community of superfans around creation. As we say internally, it’s connection through creation — whether that’s with artists or that connection with other music fans. We want to lean into that. I think it’s going to be a huge asset for artists and fandoms.”
Are Sony and Warner still pursuing their lawsuits against Udio?
Yes, for now. UMG’s settlement and deal with Udio does not impact Sony Music and Warner Music Group’s lawsuit against Udio for widespread copyright infringement. While some industry onlookers posit that Sony and Warner are more encouraged to settle now that UMG is no longer pursuing litigation against Udio, there’s no indication that these companies are definitely planning to do so yet.
Why are some Udio users upset about this deal?
By doing this deal with UMG, Udio has agreed to a major pivot in its offering to users. Currently, the site is known for helping users make songs from simple text prompts, which they can then export and upload to streaming services, share on social media — or whatever they want to do.
Users are particularly upset because, as part of this deal with UMG, Udio immediately removed its users’ ability to download their work from the service. Angry subscribers gathered on a subreddit to complain. “This feels lie an absolute betrayal,” wrote one user. “I’ve spent hundreds of $$$ and countless hours building tracks with this tool,” wrote another. “No one warned us that one day, we wouldn’t even be able to access our own music. You can’t just pull the plug and call that a ‘transition.’”
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In a statement to Billboard on Thursday (Oct. 30), an Udio spokesperson said that disabling exports on the platform is “a difficult but necessary step to support the next phase of the platform and the new experiences ahead.” On Friday (Oct. 31), Udio relented slightly, writing on Reddit that starting Monday (Nov. 3), the platform will give users a 48-hour window to download their existing songs — and that any songs downloaded during that time will be covered by the terms of service that existed before the UMG deal was signed.
The move to restrict downloads in the long term may prove to be more than just an inconvenience for users — Udio could also be hit with legal claims over it. There could be arguments made that disabling downloads was a breach of the subscription contract that Udio signed with users, or that Udio falsely advertised its services in violation of consumer protection laws. It wouldn’t be the first time this has happened in recent memory: Just last year, Amazon Prime users brought claims like this over changes to the cost of ad-free movie and TV streaming for subscribers.
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The Velvet Sundown is an AI-generated rock four-piece that captured worldwide attention in June after word of the surreptitiously computer-made music spread online. The music is a mix of classic rock, folk and psychedelic Americana. The album’s surrealist artwork evokes Salvador Dali during a stint in the high desert of the American Southwest. The band came replete with an AI-generated press photo and a halfway believable bio.
News of The Velvet Sundown’s AI origins spread like wildfire, and U.S. on-demand streams quickly jumped to approximately 140,000 per week, according to Luminate. The dramatic rise revealed strong curiosity about a band with a fully formed concept but no human creativity. Interest reached a fever pitch the following week when weekly on-demand streams jumped to 760,000. That turned out to be the band’s high-water mark.
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Streaming activity dropped 25% the following week, and another 7% the week after. Then interest in The Velvet Sundown fell off a cliff. Weekly streams plunged 48%, then 34%, and then another 25%. Six weeks after hitting its streaming pinnacle, The Velvet Sundown’s weekly on-demand streams were just 15% of its peak number. In another nine weeks, those streams were just 7% of the peak week.
The band’s Google search traffic followed a remarkably similar trajectory. The number of searches for “The Velvet Sundown” peaked the same week that on-demand streams did, and then steadily dropped.
When plotted on a chart, The Velvet Sundown’s weekly U.S. on-demand streams and U.S. Google search traffic look like one-half of a seismometer after a massive earthquake. A sharp peak of curiosity — measured in streams and searches — was followed by a cliff of disinterest.
The shape of the curve says a great deal about both The Velvet Sundown and AI music in general. If AI music is fortunate enough to find an audience, it won’t be easy to keep listeners engaged. Maintaining and building an audience is the domain of record labels, artist managers and armies of service providers and consultants. People see chart positions, news appearances and social media mentions, but they don’t see the behind-the-scenes blocking and tackling that creates all that visibility. The Velvet Sundown had the benefit of being one of the first AI artists most people encountered. Once that novelty wore off, it was left to compete with far more organized, more resourceful artists.
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Enter Xania Monet, an AI-based R&B artist who signed a multi-million-dollar deal with Hallwood Media in September. Monet is the creation of Mississippi artist Telisha Jones, who used AI music platform Suno to create songs based on lyrics she penned herself. Monet could have had an experience similar to The Velvet Sundown’s, but she took a different path.
When Billboard broke the news about Monet’s signing, a wave of media attention drove her on-demand streams and Google search traffic to a peak in mid-September. The week after the peak, Monet’s streams fell 24% — remarkably close to The Velvet Sundown’s 25% decline after its peak week. That could have been the beginning of a steep drop following the height of the public’s curiosity. Instead, Monet’s weekly streams stopped their downward decline and leveled off over the last three weeks. So why didn’t Monet suffer the same fate as The Velvet Sundown?
Velvet Sundown, Xania Monet
Billboard
A week after Monet’s streams hit their apex, Hallwood Media started securing radio play for her songs. In the first week — when her streams fell 24% — Monet’s songs were played just twice on broadcast radio, according to Luminate. But weekly spins rose to 109 the next week, then climbed to 423 and 485 in the next two weeks. By the most recent week (the period ended Oct. 16), Monet had something The Velvet Sundown didn’t: an aggregate radio audience of more than 1 million listeners.
Placed side by side, the charts representing The Velvet Sundown and Xania Monet show the difference between existing outside of the traditional music business and operating within it. Radio play helped turn Monet away from the cliff of disinterest and put her on a different trajectory. Without promotion, both radio and digital, it can be exceedingly difficult for any artist to maintain momentum — much less one created with AI.
With Spotify leading the way in subscriber counts, the number of global music subscribers grew 11.6% to 818.3 million in 2024, according to MIDiA Research’s music subscribers market shares Q4 2024 report. That was about the same number of subscribers added in 2023, but where those new subscribers originated continues to change.
“The continued fast rise of the Global South is the market-defining dynamic, pointing to a rebalancing of the global music industry,” Mark Mulligan, managing director/senior music industry analyst, said in a statement. MIDiA Research defines the Global South as regions other than Europe and North America, where subscription penetration rates and prices are the highest in the world. “Revenues still skew heavily to the West but user growth is now consistently coming from elsewhere.”
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Nearly four out of every five new subscribers added in 2024 came from the mid-tier and emerging markets in the Global South, accounting for 78.4% of the 84.8 million new subscriptions last year and nearly three of five global subscribers overall. In turn, the mature streaming markets in Europe and North America represented 41.0% of global subscribers, down from 52.3% in 2020 and 62.0% in 2015.
The Global South has relatively small but fast-growing regions, often places where streaming has enabled a legal music ecosystem to thrive where little to none existed a decade or two ago. As Billboard reported last week, Mexico replaced Australia as the No. 10 market in 2024, according to the IFPI. The Middle East-North Africa region grew 22.8% while Sub-Sahara Africa improved 22.6%. China, the No. 5 market, grew revenues by 9.6%.
Spotify had a 32.2% share of global subscribers and finished 2024 with 236 million global subscribers, according to its latest earnings release. Spotify had more than double the No. 2 company, China’s Tencent Music Entertainment, which had a 14.7% share based on 121 million subscribers. Tencent Music Entertainment operates Kugou Music, Kuwo Music and QQ Music.
Apple Music was No. 3 at 11.6%, which works out to 95 million subscribers. YouTube Music and Amazon Music were tied for fourth at 10.1%,, or 83 million subscribers, each. Neither Apple Music, YouTube Music nor Amazon Music publicly releases their subscriber counts. YouTube’s latest number of 125 million subscribers announced on March 5 includes both YouTube Music and YouTube Premium, the ad-free tier of the video streaming service.
Apple Music and Amazon Music each lost nearly a percentage point of market share and added fewer subscribers than in the previous year. Of all globally available platforms, YouTube Music was the only major streaming service to post accelerated subscriber growth compared to 2023. That tracks to comments made last year by Universal Music Group CFO Boyd Muir. While Spotify, YouTube [Music] and some regional and local platforms showed “healthy growth,” Muir said during the company’s July 24 earnings call, some other, unnamed platforms “have seen a slowdown in new subscriber additions.”
China’s NetEase Cloud Music was No. 6 at 6.7%, which works out to approximately 55 million subscribers. Russia’s Yandex was No. 7 with a 5.0% share equal to 41 million subscribers. All others—including TIDAL, Qobuz, SoundCloud, Deezer, Napster and South Korea’s Melon—had a combined 9.5% share, which equals roughly 78 million subscribers.
If it seems like everybody is talking about Spotify Wrapped, the streaming service’s data-driven annual recap of listening habits, it’s because everybody is talking about Spotify Wrapped. That says a lot about its effectiveness and its value to the company.
The streaming platform’s personalized year-end recap is unmissable this time of year. Mashable began prepping its readers back on Nov. 19. A week later, Spotify heightened expectations by advising users to update the Spotify app to the latest, Wrapped-ready version. When Wrapped finally appeared on Wednesday (Dec. 4), there was an onslaught of media coverage. Billboard even got into the Wrapped coverage, revealing Chappell Roan’s top artists and songs on Spotify in 2024 (Ariana Grande and Heart’s “Barracuda,” respectively).
With so much media coverage, some of it is bound to carry a grousing, annoyed tone. “Hate your Spotify Wrapped?” Rolling Stone asked, “You’re not alone.” “Sorry, parents,” The Washington Post lamented, “it’s actually your kids’ Spotify Wrapped.” Vogue turned Wrapped into a frank self-examination in an article titled “I love Spotify Wrapped so much I hate it.” For people whose Spotify Wrapped “suck[ed],” Pocket-lint suggests ways to “fix it” in 2025. The Huffington Post’s compilation of the “funniest” tweets about Wrapped was filled with only mildly humorous complaints.
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In contrast, articles about Wrapped’s peers came and went without anything close to the same level of media hullabaloo. The annual recaps of Apple Music, Amazon Music and YouTube Music received basic coverage at mostly tech-oriented publications but didn’t elicit the kind of longwinded pop culture essays that Wrapped conjures up every year. Apple Music Replay received run-of-the-mill articles such as “Apple Music’s yearly recap is finally available in the app” at tech news site The Verge. When TechCrunch covered the launch of Amazon Music’s 2024 Delivered, the headline referred to it as Amazon’s “take on Spotify Wrapped” lest nobody know what they were talking about. YouTube Music Recap launched on Nov. 25 to little media coverage.
For its part, Spotify contributed to the media overload by building a 2024 Wrapped microsite and posting 10 Wrapped-related press releases on launch day. Wrapped itself introduced new innovations in 2024, including a personalized Wrapped podcast featuring two AI hosts and the Your Music Evolution Playlist, a personalized playlist that tracks a user’s different musical interests and phases throughout the year. Wrapped has become such an important event that Spotify hosted a pre-release press briefing that featured talks by executives across the company. As Glenn McDonald, a former Spotify software engineer and author of the book You Have Not Yet Heard Your Favourite Song: How Streaming Changed Music, told Billboard via email, “nothing else they do gets as much marketing/branding energy put into it.”
Wrapped especially shines in the awareness it attracts on social media. At the end of every Wrapped recap, Spotify offers personalized badges that flood X, Instagram and TikTok — the latter two benefitting from integrations announced in November that make it easier to share content. In this way, Wrapped turns its users into “active brand advocates on social media,” as one academic study put it. Or, as another paper phrased it, Spotify turns its users into “free labour” to help market its product. “For Spotify, it is 100% a brand-visibility moment,” says McDonald. “Social virality is the only metric the company cares about. The viral attention does help with user retention and reactivation, but the virality itself is the thing they’re measuring.”
More than an effective marketing ploy, Wrapped has turned into a competitive advantage in a business where standalone music streaming services desperately need one. A company has a competitive advantage when it creates more economic value than its competitors. Economic value is the difference between the perceived value of the product and the costs required to produce the product. Some brands are able to charge a premium because they have succeeded, through the quality of the product and the effectiveness of marketing, in convincing consumers their product is worth more. Food made with better ingredients commands a price premium, for example. Sometimes differences in perception of value come down to marketing. The difference between luxury clothing brands’ prices can be explained by amounts spent on splashy advertisements and celebrity endorsements, not just the cost of materials and labor.
Unlike streaming video-on-demand (SVOD) services, which attract viewers mainly through exclusive programming, music streaming platforms have — for the most part — the same content and must find other avenues to attract and retain customers. Amazon Music Unlimited, for example, is cheaper for members of Amazon Prime. Apple Music benefits from being part of the Apple entertainment ecosystem and Apple’s ownership of music identification app Shazam. YouTube Music gets its subscribers through YouTube, the most popular streaming app in the world. Spotify, a standalone company, can’t match Amazon’s low price, Apple’s omnipresence or YouTube’s ubiquity.
Instead, Spotify competes on product features it develops in-house. Launched in 2015, Discover Weekly, a personalized playlist filled with recently released tracks, was so popular that people who streamed their Discover Weekly playlists streamed twice as much as people who didn’t. A product that popular helps give Spotify an advantage over its larger competitors. Discover Weekly was launched the same year Apple launched Apple Music. Although many onlookers expected Apple would crush Spotify, Spotify has consistently maintained a sizable lead in market share, and innovation played an important role in holding off behemoths like Apple and Amazon. As Will Page, former Spotify chief economist, put it in his 2021 book Pivot, Discover Weekly “create[d] a moat to protect Spotify’s castle.”
Wrapped follows in Discover Weekly’s footsteps as a moat-building product innovation. The key is Spotify’s ability to get its listeners to talk about Wrapped. One study found that Spotify Wrapped was more effective than Apple Music Replay in users’ willingness to create user-generated content (i.e. share Wrapped on social media). That’s gold in a business where consumers can choose between a number of fairly identical substitutes with similar features. Anything that increases engagement and prevents users from leaving for Apple, Amazon or YouTube is valuable. In that sense, developing a product that becomes a part of the cultural zeitgeist, like Wrapped, is perhaps the biggest competitive advantage a streaming service can have.
From Taylor Swift T-shirts to Fleetwood Mac Rumours vinyl LPs, the global music merchandise business will grow to a retail value of $16.3 billion by 2030, according to a new report by MIDiA Research.
Merch become a priority for many artists in 2020 when the COVID-19 pandemic shut down the concert business. And as touring resumed and fans opened their wallets, the global merch business rose to $13.4 billion in 2023. But merch sales are expected to cool considerably, as MIDiA forecasts merch sales will grow at a compound annual growth rate (CAGR) of just 2.8% through the end of the decade. There’s still plenty of opportunity, though — if artists and merch companies don’t treat merch like a cash grab.
“As the market has become more sophisticated, fan expectations for quality have risen,” MIDiA’s Tatiana Cirisano said in a statement. “But record labels focusing on monetising fandom risk ‘overharvesting’ — exploiting this resource to the point of diminishing returns.”
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Music companies, Cirisano added, “must nurture deep, long-lasting fandom to sustain this growth.”
Physical music, which MIDiA considers to be merch because many consumers treat vinyl LPs and CDs as collectible items, is forecasted to peak in 2025 and decrease through 2030. Physical merchandise such as artist-branded apparel and digital merchandise such as virtual goods and NFTs are expected to make up for physical music’s decline and lift total merch revenues.
Merch isn’t the most financially appealing part of the music business. That would be digital music, which enjoys both higher margins and higher growth rates. In the first half of 2024, Universal Music Group’s recorded music business had earnings before interest, taxes, depreciation and amortization (EBITDA) margin of 25.4%, nearly five times its merch division’s 5.3% EBITDA margin. And while MIDiA expects merch to grow at a 2.8% CAGR through 2030, Goldman Sachs forecasts the global music streaming market will grow at a 9.9% CAGR over that time frame.
But merch has always been an important part of the music business because of music fans’ unending desire for T-shirts and keepsakes of their favorite artists. Consolidation in the merch business began about six years ago as major labels and some indies invested in merchandising companies to diversify their revenues and expand the services they offer to artist clients.
Warner Music Group, for example, acquired German merch specialist EMP in 2018. Universal Music Group acquired boutique merch company Epic Rights in 2019. Sony Music Entertainment made a strategic investment in merchandise company Ceremony of Roses in 2022, and its Thread Shop merch agency purchased the merch division of The Araca Group in 2019. Also in 2019, Indie company EMPIRE took a majority stake in merch/ecommerce company Top Drawer Merch / Electric Family.
On Thursday (Oct. 3), one day before first-round voting opens for the 67th annual Grammy Awards, the Recording Academy released its 2024 Membership Report. The most eye-popping statistic: 66% of the current Grammys electorate has joined since the Recording Academy introduced its new membership model in June 2019. Under that model, the academy invites large new member classes to join, with an eye on boosting the numbers of women, people of color and people under 40 in the academy.
Thus, the voting membership that delivered album, record and song of the year to Adele in 2017 and those same three awards to Bruno Mars in 2018 is much different today. We started to see a shift in voting patterns in February 2019, even before the new membership model was introduced, when Childish Gambino’s “This Is America” became the first hip-hop hit to win record or song of the year. (It won both.) That same year, Kacey Musgraves’ Golden Hour won album of the year.
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Since 2019, approximately 8,700 creators have become voting members of the Recording Academy. Of that total, more than 2,000 joined just this year. There are now more than 13,000 total voting members, according to the Academy.
Other key takeaways from the report include:
Boosting Numbers of Women
In 2019, the Recording Academy set an ambitious goal to add 2,500 women voting members by 2025. With a year to go, the Academy has already surpassed this goal, adding more than 3,000 women voting members. Since 2019, the percentage of women voting members has grown by 27%.
Increasing Racial Diversity
The Academy reports that the percentage of people of color has grown by 65% since 2019 among voting members. Since 2019:
The percentage of Black or African American+ members has grown by 90%.
The percentage of Hispanic or Latin+ members has grown by 43%.
The percentage of AAPI+ (Asian American or Pacific Islander) members has doubled, reflecting a 100% increase.
The current voting membership, counting the new voting members added this year, is 49% white or Caucasian; 38% people of color; and 13% prefer not to disclose or unknown. That “people of color” slice breaks down like this: 19% Black or African American+; 10% Hispanic or Latin+; 4% Asian or Pacific Islander; 2% prefer to self-describe; and other smaller slices.
The current voting membership is 66% men; 28% women; 6% prefer not to disclose/unknown; and other, smaller slices.
Too Much Jazz. Not Enough Country
By genre, the current voting membership is 27% pop; 19% jazz; 17% R&B; 17% rock; 13% American roots; 13% alternative; 12% classical; 10% global music; 10% Latin music; 10% other; 10% rap; 9% dance/electronic; 9% country; 8% gospel/Christian; 8% visual media; 7% contemporary instrumental; 5% new age; 4% children’s; 4% musical theatre; 3% reggae; 3% spoken word; and 1% comedy. (Members could select more than one genre.)
Jazz and classical are overrepresented, relative to their share of the music market. Country lags behind its share of the music market.
By area of specialization, the current voting membership is 46% songwriters/composers; 33% producers; 33% instrumentalists; 32% vocalists; 19% engineers; 12% arrangers; 6% other; 4% music video; 3% album packaging; 3% album notes writers; 2% music supervisors; 2% conductors; 2% spoken word.
In a letter accompanying the release of the report, Harvey Mason Jr., CEO of the Recording Academy, said in part: “The Recording Academy membership has never been more reflective of the music community than it is today. It has more women, more People of Color, and a broad representation of diverse genres and crafts. But we’re not just celebrating numbers. Our organization has been fundamentally transformed by this extraordinary infusion of new talent, making us an unquestionably better, stronger, more successful, and more impactful organization.
“And we’re not done yet. Even though we’ve made huge strides towards creating a diverse and representative membership body, there is still much work to be done. We want to recruit more young voters, because the future of music is in their hands. We want to see an increase in the percentage of women and people of color, because our goal must always be to accurately represent our community.
“And as we globalize our mission, we want a membership body that reflects every corner of the music world.”
Mason added some specifics in an interview with Billboard this week. “It’s been a very intentional effort to try and make sure that our membership is the most relevant, the most diverse. …We’re not just trying to build numbers. We’re looking at, what is the music community made up of? … A big goal for us is to make sure that we’re matching or coming close to the community that makes music. That’s not the same as the general population of our country. We know that R&B/hip-hop is roughly 33%-34% of all music created and consumed. We know what the numbers are for Latin music, women, and other groups. We have a rough idea of what the numbers feel like.”
On July 26, Mason sent a pointed letter, via email, to the Academy’s voting members, “It’s about the current year and the quality of the work, period!,” he implored. “There should be no other rationale for voting. If you are taking into account an artist’s older work, or their reputation, or race, or gender, what label they are on, who their manager is, how many friends participated in the project, or anything else like that, you’re not doing your job.”
Talking to Billboard, Mason expressed a little more sympathy for members who may be inclined to take other factors into account, though he again said he hoped the focus would be on the music. “Voters have their own ideas around how they vote and what they chose to vote for and we want to give them some latitude to be able to do that but it’s my hope and I believe it’s the Academy’s desire that our voters will evaluate the music based on the merit of that music exclusively. It’s not about past sins [of the academy]. It’s not about genre representation. It’s really about the quality of the music. My hope is that people listen to the music and evaluate it based on the merits.”
At another point in the conversation, he said “The whole idea of this membership [drive] is not just to hit numbers, it’s to try to get the right results and the right outcome.”
Asked to be more specific about that statement, Mason said, “I’m not saying the positive result is any specific album or genre winning any specific award. I’m just looking for accuracy and relevance and making sure the outcomes are reflective of what’s happening in music. I don’t care what genre that is. I’m definitely not looking at making reparations [for past Grammy outcomes]. I’m just saying the outcomes for our academy … are all driven by our membership and if we have the right membership, we’re a better organization.”
First-round voting for the Grammy Awards opens on Friday Oct. 4 at 9 a.m. PT, and closes on Oct. 15 at 6 p.m. PT. Grammy nominees will be announced on Nov. 8. Final-round voting will be held from Dec. 12 to Jan. 3. All voting members, including those welcomed in the 2024 new class, are eligible to participate in the voting process. The 67th annual Grammy Awards will be held on Feb. 2 at Crypto.com Arena in Los Angeles. The host has yet to be named. Trevor Noah hosted the last four Grammy telecasts.
The 66th annual Grammy Awards were held on Sunday, Feb. 4. Ben Winston, Raj Kapoor and Jesse Collins were executive producers. Hamish Hamilton directed. The show received a Primetime Emmy nomination for outstanding variety program (live), but lost to The Oscars (which was also executive produced by Kapoor). The Recording Academy has yet to announce the host, producer or director of the 2025 show.
Sturgill Simpson is keeping it simple for his Why Not? Tour this fall.
The country artist announced on his website in July that although he and his team were “doing everything in our power to keep tickets in the hands of fans and out of the hands of scalpers,” they were opting out of using dynamic pricing for the 37-date run.
Although dynamic pricing is one of the concert business’ most effective tools for keeping tickets off the secondary market, it’s also a major factor in the sharp rise of ticket prices, and Simpson was taking his fans’ wallets into account.
For years, promoters put tickets on sale at a handful of price points, then watched them sell out and get listed with huge markups on the secondary market — revenue that would not accrue to them.
Since then, scalpers have hacked most efforts to foil them, including one of the strategies Simpson is employing: vetting presale buyers. The only proven deterrent has been dynamic pricing: charging what the market will bear during the initial on-sale in hopes of curbing secondary markups.
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In the early days of the music industry’s post-pandemic return to live shows, when pent-up demand led to robust sales, dynamic pricing became the go-to strategy for major acts. The move helped lead to a 30% rise in ticket prices from 2019 to 2024, however, according to Billboard Boxscore, with the average ticket price of a top 40-grossing tour jumping $111 to $144 at midyear 2024 — 6.6% in the past six months.
With the pandemic in the rearview mirror, many in the industry express concern about the sustainability of this upswing. In recent weeks, The Black Keys, Jennifer Lopez and other high-profile artists have canceled tours due to backlash over ticket prices. (The Black Keys fired their management in the aftermath.)
According to Billboard Boxscore, only a handful of acts can charge more than $200 a ticket and sell out, and yet more artists are pushing the boundaries on ticket price and quickly approaching average ticket prices between $150 to $200, getting very close to the ceiling of what fans can or will pay.
“Patronage is up — we are seeing more fans come out to shows, but our costs are eating into the increase in volume,” said Morgan Margolin, CEO of Knitting Factory Entertainment, who says agents and managers are charging 30% to 40% more for acts than they did prior to the pandemic.
“It’s getting more difficult to do business in the major markets, especially with minimum wage increases, insurance, rent, and other costs,” he added. “If artists and managers and agents keep escalating on top of those fees, where is the tipping point?”
The Black Keys successfully played U.S. arenas in the past but only a handful. Most of their dates were either festival slots or amphitheater and theater shows. In 2019, they grossed $28 million on their co-headlining Let’s Rock run with Modest Mouse. Tickets for that tour started at $36.50, with four price points under $100. For the band’s canceled International Players Tour, some tickets were priced at $59.75 and $89.75 but others were listed for $119.75, $159.75 and $199.75. In comparison, the bulk of Simpson’s tickets are selling in the $53 to $72 range.
Pricing tickets based on how much scalpers might profit is difficult and risky. If they are overpriced and the tour flops on the initial on-sale, it’s almost impossible to save. Reducing the price can alienate fans who paid the full cost. Stay the course, and if the tour is deemed a loser, fans will avoid it.
“I think a lot of these artists are getting bad advice and not thinking through the long-term consequences of chasing big bucks,” one arena booking executive says. “And that’s going to hurt them in the long run.”
A version of this story will appear in the Aug. 31, 2024 issue of Billboard.
Anyone who has bought a vinyl record or a CD in recent years knows full well that physical music products aren’t exempt from the inflation that has plagued U.S. consumers.
In fact, the price of a vinyl record in the U.S. rose 25.5% from 2017 to 2023, according to Billboard’s analysis of RIAA data — slightly more than the 24.3% increase in the consumer price index over the same time. CD prices fared a bit better, increasing just 20.4%.
However, while music subscription prices are rising, consumers can probably expect physical music prices to remain somewhat level going forward: Insiders who spoke with Billboard say vinyl prices are remaining steady in 2024 after the COVID-19 pandemic created supply chain problems and raised the costs of everything from raw materials to labor.
As one music distribution executive put it, those supply chain problems are “flattening out.” As a result, turnaround times have improved drastically as manufacturers worked through their pandemic-era order backlogs. “I feel like the prices will flatten, too,” says the executive.
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“Our manufacturing prices have been stable for quite a while,” says Bill Hein, CEO of Pressing Business. Freight costs can be improved if a buyer books with flexible dates, Hein says, and reliable sea freight is being used for more of its U.S. deliveries. “Generally speaking, both air and sea freight are more predictable now than they were during the lockdown era, and prices are generally better.”
Outside of the music business, rising prices on everyday necessities have been a fact of life. Tired of the inflation that has eaten into their paychecks, Americans are pushing back against the high cost of staples, and companies are responding with attempts to reduce prices.
In July, PepsiCo CEO Ramon Laguarta suggested consumers had grown tired of more than two years of rising prices. “Some parts of the [Frito-Lay] portfolio need value adjustment,” he said during a July 11 earnings call. Overall sales volume was down 4% in its most recent quarter, and North American beverage sales for the company dipped 3%. PepsiCo will respond, Laguarta said, by offering better deals and increasing advertising. For some consumers, Laguarta added, “we need some new entry price points.”
Companies across the economy are sharing PepsiCo’s experience with price-fatigued shoppers. Walmart is offering more short-term discounts. Target lowered prices. Fast food giants McDonald’s, Wendy’s and Taco Bell are courting customers through low-cost bundles and value-oriented menus. And because it’s an election year, Vice President Kamala Harris, the Democratic nominee for president, has floated a federal ban on price gouging in the grocery and food industries.
Since vinyl prices are based heavily on manufacturing costs, there’s little to prevent prices from creeping up without sellers losing profits. Vinyl retailers set prices based on wholesale costs and their need to cover overhead and other expenses. Artists on record labels must pay the wholesale price for their physical goods and don’t have control over pressing and printing costs, says Paul Steele, executive partner at Triple 8 Management. “Physical prices for our roster of nearly 30 artists have mostly stayed the same for a decade, with small inflationary increases here or there,” he says.
But aside from run-of-the-mill inflation, there are other factors that could push the average sale price higher. Physical music is increasingly a luxury good — a high-priced collectible item with packaging to match. Artists frequently release multiple variants of LPs with colored vinyl. And albums released today commonly have the expensive gatefold packaging that was common in the ‘70s.
The way music is released in the streaming era also drives up prices. Artists take advantage of the unlimited shelf space on streaming platforms by stuffing albums with more songs at no extra cost. As Billboard noted last year, the top 10 albums’ average number of songs rose from 13.2 in 2014 to 19.1 in 2022. A double album on a vinyl record is more expensive, and as one executive notes, putting more songs on an album will often — but not always — require paying more mechanical royalties to songwriters and publishers.
Indeed, some of the most popular vinyl records of the moment are double- or triple-LPs. Post Malone’s 18-track, two-LP album F-1 Trillion sells for $45.89 at Amazon and more at other retailers. Zach Bryan’s 34-track American Heartbreak has three LPs and a $44.98 list price. And that’s not to mention the more extravagant reissues, such as a 2-LP/2-CD/1-Blu-ray package for Van Halen’s For Unlawful Carnal Knowledge that carries a $99.98 list price.
Despite the increase in vinyl prices over the last several years, sales have yet to abate. Will that continue? The answer to that question will likely lie with younger consumers who have less disposable income. Michael Kurtz, co-founder of Record Store Day, says vinyl being a premium, collectible product is toughest on younger consumers. While Record Store Day succeeded in helping turn a new generation on to vinyl records, younger people don’t have as much money and are cutting back on their purchases. “A young customer 18 months ago would come to the counter with two or three records,” says Kurtz. “Now they come to the counter with one or maybe two.”
Catalog titles are often the more affordable option and help offset frontline price creep. Michael Jackson’s Thriller can be had for under $25. Fleetwood Mac’s perennial top-seller Rumours is offered in both affordable and more deluxe versions. Rhino Records’ Now Playing series of compilations for artists ranging from The Stooges to Gram Parsons to John Prine are priced at $19.99.
The good news — for all consumers — is that price growth is reverting to historical norms. The average monthly U.S. inflation rate reached 4.7% in 2021, 8.0% in 2022 and 4.1% in 2023. This year, the average monthly increase in the consumer price index (CPI) is just 3.2% through July. If vinyl prices seem like they’re continuing to creep upward, the packaging and the increasing prevalence of the double album are likely to blame.
