Streaming
Page: 75
Chris Rock is going where no comedian has gone before — live on Netflix.
The streaming giant said Thursday (Nov. 10) that Rock will be the first artist to perform on the company’s first-ever live, global streaming event. The comedy special is set to stream in early 2023, but few other details were revealed.
“Chris Rock is one of the most iconic and important comedic voices of our generation,” Robbie Praw, Netflix vice president of stand-up and comedy formats said in a statement. “We’re thrilled the entire world will be able to experience a live Chris Rock comedy event and be a part of Netflix history. This will be an unforgettable moment and we’re so honored that Chris is carrying this torch.”
Explore
Explore
See latest videos, charts and news
See latest videos, charts and news
This will be the first significant test of live streaming on Netflix, potentially opening the door for other programs to get the live treatment. It will be Rock’s second Netflix stand-up special. His first, Chris Rock: Tamborine, debuted in February 2018; Rock also appeared on the streamer’s Netflix Is a Joke comedy festival earlier this year alongside friend Dave Chappelle.
The as-yet-unnamed special will be Rock’s seventh stand-up special to date. The comedian is currently on his Ego Death world tour, which will keep him on the road through a Nov. 20 date at the Dolby Theatre in Hollywood; he will then play a series of dates with Chappelle that kick off on Dec. 1 in San Diego and run through a Dec. 16 gig at Seattle’s Climate Pledge Arena.
Thundercat‘s “Them Changes” is steeped in funk history, with drums that nod to The Isley Brothers‘ “Footsteps in the Dark,” stutter-stepping at 82 beats per minute, and a wobbling bass line. On Sept. 22, the TikTok account Ezzsounds posted a simple remix of the track, pushing the tempo until the song catches the jitters. This new version was a world away from the slow-and-low original — at 114 beats per minute, it’s like a train threatening to jump the tracks. TikTokers loved it.
“By the next Monday, we had already seen the streams double,” says Will Slattery, vp of North American marketing operations for the independent label Ninja Tune. The company sent an official sped-up rendition of “Them Changes” to streaming services and worked with marketing companies to increase the new version’s exposure on TikTok. The single cracked Billboard‘s Hot R&B Songs chart in October, a first for Thundercat as a lead artist.
“Sped-up tracks feel like a thing, but I was not expecting it to happen to Thundercat,” says Josh Berman, who leads marketing efforts for the artist’s management company, Really Happening. “I’ve seen trends happen and they’re gone in 72 hours. We’re really blessed that this one’s still going.”
Sped-up versions of songs, especially older ones, have thrived on TikTok for years — Cafuné’s “Tek It,” Demi Lovato‘s “Cool for the Summer,” Ellie Goulding‘s “Lights,” Sam Smith‘s “I’m Not the Only One,” and Nelly Furtado‘s “Say It Right,” for example, all enjoyed streaming bumps thanks to the success of uptempo reworks. This style now appears to be on the verge of reaching a new level of mainstream exposure. “Sped up songs are becoming insanely popular,” says Tyler Blatchley, co-founder of the label Black 17 Media, which has producers working on pell-mell renditions of many major-label tracks.
“Back in the day, we used club remixes to diversify the visibility of a record,” explains Nima Nasseri, global head of A&R strategy for Universal Music Group’s music strategy and tactics team. “The purpose was to bring back visibility to the main version. Now people are discovering the main version from the sped-up or slowed one. Instead of spending $50,000 for a remix from a big-name DJ, you’re spending relatively minimal amounts [on a sped-up rendition] and getting much more return and reach.”
“These remixes have been a thing for a while,” adds 20-year-old Tristan Olsen (xxtristanxo on TikTok), who has amassed more than 3 million followers on the app with videos of him playing tempo-shifted edits, usually in a red-lit room, while sporting dark sunglasses. Happily for him, “the industry is catching up now.”
It’s easy to survey TikTok or scan streaming charts and conclude that songs which zip along at a breakneck pace are popular on the app. It’s much harder to explain why.
The genre known as nightcore, which also centers on music that’s sped up and pitched up, was popular long before the debut of TikTok. Nightcore eventually filtered into the PC Music scene, which spawned artists like SOPHIE and A.G. Cook, who went on to work with pop stars (Charli XCX, Madonna). But its hit-making power was negligible compared to TikTok’s sped-up song ecosystem.
Steven Pardo, digital marketing director at Secretly Group, believes that “in a video platform that prioritizes catching attention immediately, being able to get the impact of the lyrics across more quickly is advantageous.” On top of that, “dancers [on TikTok] love the chipmunk versions” of songs, according to Kuya Magik, a producer and DJ with more than 11 million TikTok followers.
Part of TikTok’s power also stems from the way it makes room for users to fiddle with songs and upload their versions of popular sounds, changing the stakes of fan engagement. “We’re seeing in consumer surveys how much Gen Z wants to actively participate in music,” notes Tatiana Cirisano, an analyst at MIDiA Research and former Billboard reporter. “They don’t just listen and consume passively; they make their own videos, remix the song.”
This ethos doesn’t only impact TikTok through sped-up tracks. The platform is awash in “sped-up versions, slowed-down versions, clap-track versions, versions that are super heavy on reverb, like turned-all-the-way-up-to-11 kind of sh–,” says Johnny Cloherty, co-founder of the digital marketing company Songfluencer. “Everyone’s experimenting with this stuff.” Jacob Byrnes, director of creator relations and content strategy for Universal Music Group’s music strategy and tactics team, recently had a meeting with a TikTok marketing company that informed him that 80% of the top 100 sounds on the app were tempo-altered; some sprint, while others crawl. (A rep for TikTok declined to comment.)
There are a number of popular TikTok pages that specialize in this material — not only KuyaMagik and xxtristanxo, but also Itsjovynn (9.7 million followers), Spxedupsongs (5 million followers), Speedysongs (2.7 million followers), and Bestspedup (2 million followers). Now artists and labels are paying some the creators in this niche to edit their tracks, seeking to harness their promotional firepower; these accounts seem to have captured some of the king-making abilities once reserved for top influencers like Charli D’Amelio and Addison Rae.
While some of these pages post remixes along with eye-catching visual clips, others don’t do much more than post a new version of a track next to its lyrics. Ezzsounds, which helped launch Thundercat’s “Them Changes” onto the Hot R&B Songs chart, hails from the latter camp; the account is more than 700,000 followers strong. Pardo from Secretly Group has his eye on the page Ex7stence (4.4 million followers), which recently helped popularize sped-up versions of songs by Phoebe Bridgers and Bon Iver. “The velocity of sounds that come off that page in the past couple of weeks has been fascinating,” Pardo says.
Historically, the music industry has not been comfortable with unauthorized remixes. Nasseri and Byrnes even initially encountered some resistance from artists’ teams when they started pushing to release official tempo-altered versions of singles. “It was six months of explaining to people what this is and begging them to approve it,” Nasseri says.
“There was a long period of ‘trust us on this,’” Byrnes adds. His pitch: “This is the new remix. This is better than a remix.”
Suffice it to say that “long period” of doubt has come to an end. “I see artists dropping the sped-up version with the official one on release date to try to see if that catches on and points back to the original,” says Johnny Minardi, vp of A&R at Elektra Music Group. “It’s become one of those alternate looks to try to start the song or get a little bit more life out of it.” Two marketers say it’s routine for them to pay TikTok accounts to put out edits of songs they’re promoting; the cost is usually between $50 and $200.
Interscope just released an accelerated version of Summer Walker‘s entire Last Day of Summer project, billing it as the “first sped-up album.” UMG does “bulk agreements” with Xxtristanxo for remixes of its music, according to Byrnes. “He has 3 million monthly listeners [on Spotify] from these remixes — they generate so much money for us and for these artists,” the executive says.
The Spotify account Sped Up Nightcore, which only posts uptempo remixes of songs from Warner Music Group, is earning close to 2 million plays a day, according to the Spotify for Artists app — numbers many acts would hack off an arm for. (While none of Sped Up Nightcore’s releases on Spotify have any public credit information, Warner is claiming ownership of most of these songs on YouTube; a rep for Warner did not respond to a question about the label’s relationship with the account.)
Kuya Magik, who also does remixes for UMG, says messing with a track’s tempo and posting it on TikTok “doesn’t always work — but if that sound goes in front of the right person, you’ve got a gold mine in terms of a viral song.” Case in point: Cafuné’s “Tek It – Sped Up” has more than 95 million Spotify streams, almost as many as there are on the original, which surely makes it one of the most commercially successful singles in this style. (Minardi signed the band to Elektra.) The popularity of the jittery “Them Changes” on TikTok led weekly streams of the original to triple from mid-September to mid-October, according to Luminate. Slattery from Ninja Tune says streams of the rest of Thundercat’s catalog increased as well.
Most executives who have engaged with the sped-up ecosystem agree that it’s particularly effective for reviving songs that are more than 18 months old. “It’s a great avenue for promoting catalog tracks,” says Slattery. “People enjoy sped-up versions of songs that they already know” — like “Them Changes,” which already had more than 150 million Spotify streams before its recent surge. “When there’s familiarity with the song to begin with,” Slattery continues, “it helps it go farther and increases demand.”
That means there’s a potential opportunity for record companies. “If I was a label with a big catalog, I would start creating three to five versions of all my biggest hits with different tempos,” Cloherty says. “I would just have a producer on staff creating them nonstop all day every day.”
“What would ‘Bridge Over Troubled Water’ sound like sped up?” he wonders. “I don’t know. But that could be the next TikTok hit.”
YouTube announced that it now has more than 80 million Music and Premium subscribers around the world (counting users in trials). That represents a jump of 30 million users from 2021.
In a blog post, Global Head of Music Lyor Cohen called passing the 80-million threshold “a monumental moment for music on YouTube.” He added, “Hopefully, these milestones demonstrate our commitment to becoming the #1 contributor of revenue to the music industry.”
In a statement, Lucian Grainge, chairman and CEO of Universal Music Group, praised YouTube for “creating a compelling and unique music service that is rapidly growing its base of subscribers and contributing significantly to the vibrancy of the music ecosystem.”
“YouTube has demonstrated their commitment to partnership with the music industry and growing revenue for all artists and rightsholders alike,” added Jeremy Sirota, CEO of Merlin.
YouTube’s latest level-up follows the company’s September announcement that it had paid out $6 billion to the music industry in the 12 months between June 2021 and June 2022. That amount represented a hefty 50% increase relative to the previous sum YouTube reported in June 2020: $4 billion over a 12-month period. (In 2020, the company reported that it had 30 million subscribers.)
Cohen has set lofty goals for YouTube: “We want our twin engine of ads and subscriptions to be the #1 contributor of revenue to the industry by 2025,” he declared in September. That won’t be easy; Spotify’s Loud & Clear report said the company paid $7 billion in royalties to the music industry in 2021. That was a 40% jump from the $5 billion the service said it paid out in 2020.
Among other major streaming services, Apple Music reported 60 million global subscribers back in 2019, while Amazon Music reported 55 million subscribers worldwide in 2020 (neither company has updated those numbers since). Elsewhere, the much-smaller Deezer boasts 9.4 million global subscribers as of its Q3 2022 earnings report, while paid subscribers to the diminishing Pandora service were 6.3 million, according to parent company SiriusXM’s Q3 earnings report released Nov. 1.
In his blog post, Cohen seemed cheerful about his company’s ability to leapfrog its competitors, ending the short note with McFadden & Whitehead‘s ode to persistence, “Ain’t No Stoppin’ Us Now.”
LONDON — Deezer has always been the streaming service that charted its own path. After launching in 2007 — a year before Spotify debuted — the Paris-based company rapidly opened its service in over 180 countries; but, unlike Spotify, which focused on one or two markets at a time, Deezer avoided the biggest markets, like the United States and Japan, for many years. But now that the number of on-demand music subscription services has boomed, Deezer has struggled to keep up with its rivals.
New CEO Jeronimo Folgueira, who took over in June 2021, hopes to change that. Deezer is shifting from targeting small and emerging territories to renewing its focus on large and established music markets, where consumers are more willing to pay for subscriptions. In August, Folgueira forged a partnership with German broadcast giant RTL Deutschland to deliver music and video content in a single app — RTL+ Musik — putting Deezer in a stronger position to compete with Spotify, Apple Music, Amazon Music, China’s Tencent Music Entertainment (TME) and YouTube Music.
Folgueira calls the RTL tie-up a “transformative” deal that gives Deezer the scale it needs to break into Germany, the world’s fourth-biggest recorded-music market, with revenue of $1.6 billion in 2021, up 12.6% from 2020, according to IFPI. “In those markets where we have the right partner and the right distribution strategy, our product is second to none,” says Folgueira.
But in the increasingly crowded streaming business, Deezer, which counts Warner Music Group owner Access Industries among its biggest shareholders, is fighting an uphill battle to unseat Spotify. Deezer’s strategy seems more about becoming a “second-tier player that is strong where first-tier players are not,” says Mark Mulligan, analyst at MIDiA Research. While it was “once incumbent,” along with Rhapsody, “it is now challenger, and it has honed its strategy accordingly.”
Deezer is strongest in France, where it is partnered on bundle deals with telecom company Orange and has 4.4 million subscribers, and in Brazil, where it partnered with TIM Celular in 2016 and has 2.7 million subscribers, according to company filings. Worldwide, Deezer has 9.4 million subscribers compared with Spotify’s 195 million subscribers and 273 million free (ad-supported) users, while TME has 82.7 million paying subscribers, according to the companies’ latest earnings reports.
While Apple Music, Amazon Music and YouTube Music don’t regularly announce user numbers, last year Lyor Cohen, YouTube’s global head of music, said the service had surpassed 50 million paying subscribers worldwide. The last time Apple issued any data for its service was in 2019, when it said it had over 60 million subscribers worldwide; Amazon Music said it had more than 55 million subscribers globally in January 2020 but has not updated that figure since.
Rapidly growing TikTok dwarfs them all, with the social media app boasting over 1 billion active monthly users, many of whom use music in their videos. Streaming executives will watch closely what ByteDance, TikTok’s parent, does next. The Beijing-headquartered company is understood to be in talks with labels about expanding its subscription-based music streaming service Resso — currently available in India, Indonesia and Brazil — to more than a dozen new markets ahead of a global rollout. (Verified profiles with the username “TikTok Music” have appeared on social media platforms in recent months advertising “a new way to experience music.”)
For Deezer, strategic partners like RTL Deutschland, which says it reaches 99% of the German population through its 15 TV channels and numerous radio, print and digital outlets, are the key going forward, says Folgueira. “RTL has to compete with Netflix, Apple and Amazon,” he says. “We compete against Spotify, Apple and Amazon. Together, we can compete much better and have a proposition that is equal or better.” Deezer is seeking strategic partners in other big markets, he says, including the United States (where it launched in 2016), the United Kingdom, Spain and Italy.
Engineers at Deezer and RTL spent a year developing the RTL+ Musik app, which combines music streaming with film, TV and news content and costs 9.99 euros ($9.84) for the first six months, then rises to 12.99 euros ($12.80) per month. RTL, which is owned by BMG parent company Bertelsmann, says it has 3.4 million paying subscribers for its lower-priced, video-only RTL+ streaming service but believes it can quickly grow its premium subscriptions through music.
This year’s merger with I2PO, a special purpose acquisition corporation that raised 275 million euros ($282 million) in a 2021 initial public offering, gives Deezer the funding it needs to execute the plan, says Folgueira. Still, as it tries to make its strategic pivot, Deezer faces strong market headwinds and an uncertain investment environment for music streaming.
Since its rocky debut on the Euronext Paris exchange in July 2021, Deezer’s share price has plummeted almost 60% and now hovers around 3.5 euros (it closed at 3.42 euros on Nov. 8). Spotify shares have tumbled 74% over the past year, to $73.44 on Nov. 7, as investors soured on streaming following a pandemic-related boom. (Spotify’s all-time high closing share price was $364.59, set on set on Feb. 19, 2021.)
“There is a growing acceptance among investors that the boom period for streaming investments is drawing to a close,” says Mulligan. He predicts streaming services will continue to represent long-term value but “will be less interesting to certain kinds of investors, which may weaken overall demand and thus push down share prices.”
Folgueira points to Deezer’s midyear financial results — revenue grew 12.1% (up 9.9% at constant currency) from the prior-year period to 219 million euros ($218 million) — as evidence that the company is well positioned to survive and grow within the fast-changing music streaming market. (Since the interview, Deezer released its third quarter earnings on Oct. 27, showing revenue up 13.8% and 11.4% at constant currency.) “For the last 10 years, streaming companies have prioritized growth over profitability,” says Folgueira. “That will start shifting now, and we will all focus more on profitability going forward.”
In September, “Dumb Dumb” — a song by mazie featured in the Netflix teen drama Do Revenge — caught a wave on TikTok, and listenership grew exponentially. Over the course of two weeks, “the record went from doing around 10,000 streams per day to around 1.4 million per day and has sustained since,” says Max Gredinger, who manages the 23-year-old artist. “We saw increases across the rest of her catalog as well, which showed new fans were sticking around to learn more about mazie and her music.”
Artists and executives compare success on TikTok to the lottery — it often seems just that random. But crucially, the payout on a winning ticket doesn’t come from TikTok itself. The financial rewards accrue outside the platform in the form of royalties from streaming surges or a label advance, with seven-figure deals routinely thrown at viral acts in recent years. TikTok, which has built a thriving business based largely on users syncing videos to music, pays “almost nothing,” according to one music distribution executive.
There isn’t a fixed rate for music on TikTok; labels and distributors negotiate licenses individually. But one thing appears constant: “The numbers are horrifying,” says one manager who has had several songs take off on the app and shared his royalty statements with Billboard. A marketer who oversaw the campaign for a single that was used in roughly half a million TikTok videos reports that his artist took home less than $5,000 from the platform, despite the views numbering in the billions. TikTok’s parent company, ByteDance, “doesn’t view music as a value add,” says another senior executive. “They just view music as a cost center they have to limit as much as possible.”
So far, ByteDance has been very successful in doing just that. One indie-label head shared several months of royalty information indicating that 1 million views on TikTok leads to about $8 — actually a better rate than the one exhibited on three other indie labels’ most recent statements that were shared with Billboard. In contrast, managers say that while payouts from YouTube vary, 1 million views will usually earn somewhere between $500 and $2,000.
It’s surely not a coincidence that music industry complaints about the money flowing from TikTok are gaining traction as the major labels are negotiating licenses with ByteDance, which is planning to expand its streaming service, Resso, beyond test markets in Brazil, India and Indonesia. Speaking at a recent industry conference in Singapore, Universal Music Group (UMG) CEO Lucian Grainge warned the music business of a value gap “forming fast in the new iterations of short-form video.”
Adding to that sense of a value gap: As TikTok’s business expands — gaining more users and selling billions of dollars in advertisements — labels and distributors do not participate in that growth.
In a statement, TikTok global head of music Ole Obermann said: “We’re proud of the partnerships we are building with the industry and artists, and we are confident that we are enhancing musical engagement.” He added, “That translates directly to more financial and creative opportunities for music creators.”
Part of the debate over how much artists should earn from TikTok stems from a debate about the nature of the platform itself. TikTok is video-based, and Obermann has pointedly said that it is “not a streaming platform.” He reiterated this in his statement to Billboard: “Our community comes to TikTok to watch videos, not to listen to full-length tracks.”
But the app is already threatening established streaming platforms, which must battle for ear time with TikTok’s additive clips. And some in the music industry dispute Obermann’s claim — they already see a generational shift where “some people have a TikTok playlist and just use it as their music service,” as one indie-label head puts it. “Much of the [music] ‘discovery’ that happens on TikTok is consumption,” Mark Mulligan, managing director for music consultancy MIDiA Research, wrote in a recent blog post.
Sources say that individual labels and distributors have different deals with ByteDance, which negotiates lump-sum upfront payments to use their recordings on TikTok for a set period of time. (Since users can upload their own videos — with the music of their choice — to TikTok, ByteDance has added leverage in these negotiations. If a label doesn’t come to an agreement with the company, it will have to devote a good deal of time and resources to issuing takedowns.) In addition, each label and distributor can make its own decision about how to parcel out those payments to artists.
Many of the sources who spoke for this story are paid by their labels or distributors according to the amount of individual videos uploaded that incorporate their songs. Reports from one indie-label executive showed that acts on his roster earned around $150 from TikTok for roughly 100,000 videos made with their music. A manager who works with several artists who have had successful TikTok songs shared reports for individual tracks: One single brought in around $100 after being used in about 60,000 clips, while another earned $350 from over 80,000 videos.
Other sources say they see only TikTok views, rather than video creations, on the royalty reports they receive from their label or distributor — or make the decision to rely on views to calculate TikTok payouts internally. “If you’re paying based on creations, that’s saying it doesn’t matter if a song is heard one time or 1 billion times, and that would really devalue music,” says the indie-label head.
When executives examine TikTok payouts compared with views on platform, the money made seems even more minuscule. “TikTok doesn’t pay out nearly what any other view pays,” says a head of a record company that is distributed by a major. “It’s astronomically lower.”
Some in the industry who value TikTok as a marketing tool note that money flowing to the music industry has improved over time. And several sources compared the current situation to the music industry’s combative early relationship with YouTube.
In Singapore, Grainge warned of “repeating past mistakes,” citing both MTV and YouTube. “We were given a lot of reasons why our artists shouldn’t get paid,” Grainge told attendees. “People said, ‘It’s great promotion,’ ‘Or you can use it as a platform for discovering new artists’ … technology platforms were built on the backs of the artists’ hard work.”
Grainge called on key players to protect music’s “cultural and commercial value.” And the senior executive who believes that ByteDance sees music as a “cost center” expressed a similar sentiment. ByteDance “needs to move to a more rational model that equates more value with what is driving their business,” he says. “Only pressure is going to get them there.”
This story originally appeared in the Nov. 5, 2022, issue of Billboard.
The Ledger is a weekly newsletter about the economics of the music business sent to Billboard Pro subscribers. An abbreviated version of the newsletter is published online.
Apple Music’s recent subscription price increase and a likely forthcoming price hike by Spotify would provide a boost to U.S. and global music revenues and likewise impact catalog valuations.
Higher prices for Apple Music and Spotify’s individual plan could be worth hundreds of millions in additional subscription revenue annually in the U.S. Incremental revenues resulting from these price increases have the potential to reach roughly $650 million a year for streaming services. That assumes 7% growth in subscribers in 2023, no additional churn, a full year of higher prices and higher prices for both self-paid and promotional subscription plans.
However, a small amount of churn is possible, and Spotify is unlikely to raise rates at the beginning of the year. Additionally, not all subscription plans are subject to increase. (Apple is not raising the price on Apple Music Voice, for example.) Thus, the actual impact is likely to be lower next year and in successive years.
Apple Music’s individual plans rose $1 from $9.99 to $10.99 per month, while its family plan price increased $2 from $14.99 to $16.99. Apple One, a bundle that includes Apple Music, Apple TV+ and other services, rose $2 for the individual plan and $3 for the family plan (which includes Apple Arcade and iCloud+) and premier plan (which adds Apple News+ and Apple Fitness+).
Spotify could follow with similar price increases in the U.S. of $1 per individual subscription, though it may not further raise its family plan price on top of the $1 increase, to $15.99, that it imposed in April. Spotify also has discounted plans for students that cost $4.99 per month. For these purposes, Billboard assumes those discounted plans will remain untouched.
Creators and rights owners effectively get a raise from a price increase. The same percentage of streaming services’ revenue would flow as royalties to labels and publishers. Higher prices wouldn’t impact listening habits — although some churn is possible — so the math is favorable to creators and rights owners: a larger royalty pool would be divided by the same number of streams to calculate the per-stream royalty owed to each track.
Higher rates from the two largest subscription services in the U.S. would make songwriting and recording catalogs more valuable, too. Price increases will add revenues to a catalog’s existing royalty income, and streaming growth has been positively correlated with higher valuations of music catalogs. As Billboard reported this week, a new paper by New York University professor Larry Miller found that streaming accounted for 62% of the average multiple paid for songwriting catalogs in 2021.
Spotify has not announced a broad price increase on its individual and family plan subscriptions, but CEO Daniel Ek signaled the company would likely follow Apple Music’s lead when speaking to investors during Spotify’s Oct. 25 earnings call. A U.S. price increase “is one of the things we would like to do,” Ek told investors, adding Spotify will have conversations with labels “in light of these recent developments with our label partners.”
Expect higher prices to become the norm. Amazon Music Unlimited raised its prices in May. Deezer raised its subscription prices in France, its largest market, in January and plans rate hikes in Germany and the U.S. in December. Apple Music’s decision to raise prices “opens the door for further price increases down the line,” Deezer CEO Jeronimo Folgueira said during its Oct. 28 earnings call. Exactly how much incremental revenue these price hikes will generate depends on many variables. In any case, creators and rights owners can expect more subscription royalties in 2023 and beyond.
Legendary lawyer Don Passman has likened the music biz and its transformation in the digital era to a Rubik’s Cube. It shifts so much that there have now been 10 editions of his industry bible, “All You Need to Know About the Music Business.”
The industry’s challenges, however, did not deter the lay economists at NPR’s Planet Money podcast after they heard an old song called “Inflation.” The funky, moody track with lyrics like “Inflation is in our nation… I can see a depression coming on” was written in 1975 when inflation was at levels slightly higher than today. A cassette tape of the song by Earnest Jackson‘s Sugar Daddy and the Gumbo Roux showed up in Planet Money hosts Sarah Gonzalez and Erika Beras‘ mailbox one day, and they “got a little obsessed” — so obsessed they embarked on an 8-month effort to start a record label and publish the song.
Gonzales and Beras discuss the challenges of creating a label, striking deals with different stakeholders and promoting the never-before-published song over two episodes of the podcast, this week.
Describing their reporting to Billboard, Gonzalez and Beras say that in the course of creating a contract that split revenue between the label and musicians, they came up with what Passman describes as “possibly the worst record deal I’ve ever seen, from a record company point of view.” (Passman was interviewed for the podcast.)
“We are not doing this to make money. We are really doing this because we want to explain the music industry,” Gonzalez says. “It’s just really difficult to make money in this industry, which we all knew. But it’s not until you get into it that you really understand it.”
If a typical deal gives 80% of revenues generated by a song to the record label and 20% to the musicians, Planet Money proposed giving 80% to the musician, namely singer and songwriter Earnest Jackson, and keeping 20% for their label. The hosts felt that was a fair deal given that even if the song was streamed 1 million times, they could only expect to collect around $4,000 total.
After much back-and-forth with Jackson’s old bandmates, which included Journey bassist and American Idol host Randy Jackson and others who went on to successful music careers, they landed on a deal that gives about 67% to Earnest Jackson, 15% to the bandmates and the remainder to the label and others.
Any revenue generated from the song that goes to NPR will go back into producing more shows, Gonzalez and Beras say. They say they do not plan to recoup expenses from publishing and promoting the song, which included at least $10,000 in legal fees.
Once they uploaded the track to TuneCore and started promoting their first, possibly only hit, they learned that “Inflation” had to be streamed 5,000 times in the first week for the label to be able to pay for promotion. Fortunately, the song crested 65,000 plays in its first few days, but it still has some way to go to reach 1 million plays.
“No one ever makes money on streaming,” Beras says, when asked what she learned from her reporting. “I feel like I’ve repeated that a thousand times and never understood what I said.”
“We put all of our effort behind this song and behind Earnest Jackson and are going all in,” Beras says.
Next, they plan to make it a ringtone — which earns a bit more than streams — and they are trying to land it in a Netflix documentary.
Since launching their label last week, Planet Money has received two more submissions from musicians, according to Beras. For now, they are focused on “Inflation” and have no aspirations to “become music moguls,” Beras jokes.
For months, industry executives from Warner Music Group to Kobalt have been steadily beating a drum for investing in the Middle East and African markets.
On Thursday (Nov. 3), it it looked like the investor interest swirling around the region may be codified when Frankly magazine reported that Spotify was considering buying Anghami, the Arab-speaking world’s most popular streaming and content service. Billboard could not independently verify the report, however, and a source close to the situation refuted its contents. A Spotify spokesperson says the company has “no news to report regarding any potential acquisition.” Still, investment bankers say we are likely to see increasing investor interest and action around music assets in these markets, as song catalog prices remain elevated and the challenging macroeconomic outlook for North America and Europe slows down the pace of dealmaking there.
Financial players say that the dominant music streaming platforms and labels are looking to extend their global reach through popular streaming companies like Anghami in the Middle East and Boomplay and others in Africa because of those regions’ rapid growth, comparatively positive economic outlooks and the explosive potential for converting free subscribers to paid.
Anghami CEO and co-founder Eddy Maroun declined to comment on the acqusition reports out Thursday, but in a late-September interview Maroun confirmed the company has been approached by interested parties in the past.
“We believe what we are on to as an opportunity is big,” Maroun told Billboard at the time. “Until now we are independent, and we wish to remain independent as long as it’s in line with our company goals.”
The Middle East and North Africa (MENA) was the fastest-growing region globally last year, with revenues up 35% to $89.5 million and a market that nearly doubled between 2019 and 2021, according to the International Federation of the Phonographic Industry (IFPI). More than 95% of MENA revenues came from streaming, and paid subscribership is expected to double by 2030.
“This sends a very big message to every industry player that this is a hot region and that this is where growth is,” Maroun said in September.
Launched in 2012, Anghami is the first and most popular streaming and content company focused on Arabic-language music, with about 58% of the Middle East’s market share and around 20 million active users, according to company filings.
With investors including the Saudi Arabia-backed firm MBC Group and Middle East Venture Partners and partner Sony Music Entertainment Middle East, with whom Anghami launched a joint venture record label last year, Maroun and co-founder took Anghami public in February.
After listing on the NASDAQ through a reverse merger with a special purpose acquisition company, Anghami stocks have fallen nearly 75% to $2.56 on the NASDAQ as of Thursday. Meanwhile, the company reported first-half 2022 revenues increased by almost 30% and monthly paid subscribers rose by 41% to 1.28 million. Bank sources described that growth as “encouraging,” and say that Anghami’s low stock price could make it an appealing acquisition for companies like Spotify.
For its part, Anghami aims to diversify its business with an entertainment division that houses a content creation studio, runs Anghami’s record label, Vibe Music Arabia, and operates a chain of music venues and lounges, the first of which recently opened in Riyadh, Saudi Arabia.
In addition to MENA, music and streaming companies in Sub-Saharan Africa, where music revenues grew by 9.6% last year, are steadily gaining big industry investors.
Major labels like Sony Music Group are adding staff to local offices in West Africa — where Sony previously had just two people — and Warner Music Group is leaning further into their strategy to acquire record labels and distribution companies in Africa, one of five priorities it pitched to investors during their 2020 IPO roadshow, say bankers familiar with the matter.
“French copyrights and Latin American copyrights became popular a little earlier,” says Michael Ryan-Southern, Goldman Sachs’ global head of music and live entertainment investment banking. “Now we’re seeing more and more music coming out of these local territories and therefore [companies] need to invest to make sure they are capturing that funnel of new artists locally to exploit globally.”
In its most recent Music In the Air report, Goldman Sachs analysts said Africa presents “a significant opportunity over time” and specifically highlighted Boomplay, one of the leading music streaming services, with 60 million monthly active users and a rapidly expanding song catalog.
Sources say streaming services and other companies that provide infrastructure for music are currently more appealing investment opportunities than catalogs by popular artists in the region because investors fear those are less mature assets with unknown decay rates.
Executives from Warner Music Group, Reservoir Media, Primary Wave, Kobalt and others have called out Africa and the MENA region in their emerging markets growth strategies in recent months.
U.S.-based Reservoir Media is one of the most vocal companies about the opportunity it sees in the Middle East and Africa. With its partner, the United Arab Emirates-based independent music company PopArabia, Reservoir recently bought the Egyptian label 100COPIES, the Lebanese label and music publisher Voice of Beirut, and signed publishing deals with Egyptian rapper and singer Mohamed Ramadan, Lebanese indie singer songwriter Zeid Hamdan and Moroccan hip-hop star 7liwa.
On a recent call with investors to discuss Reservoir’s earnings, the company’s founder and chief executive Golnar Khosrowshahi said emerging markets investments are a key part of the company’s diversification strategy.
“The thing about the emerging markets is that we could do high-volume deals, but at significantly lower price tags than what we do in Europe … North America, etcetera.,” Khosrowshahi said.
Outgoing Warner Music Group CEO Stephen Cooper said in September that Warner’s share in the Africa and MENA markets has grown from 10% to 30% in recent years through partnerships with record labels and distribution companies, and it aims to continuing investing in the region.
“Great content, great entertainers, great storytelling is starting to transcend language, and there’s a recognition that the next global chart-topping songwriter can come from anywhere in the world,” says Aaron Siegel, Goldman Sachs global head of entertainment investment banking. “That is a theme that major labels and publishing companies are willing to bet on.”
The anti-hero of the Nov. 5-dated Billboard charts, Taylor Swift tallies 20 debuts on the Billboard Global 200 and Billboard Global Excl. U.S. Every song from the expanded, “3am Edition” version of her new album Midnights launches in the top 40 of the former and the top half of the latter, led by “Anti-Hero” at No. 1 on both rankings.
The 20 songs on the set – which soars in at No. 1 on the U.S.-based Billboard 200 albums chart with the biggest week (by equivalent album units) in seven years – collectively drew 1.16 billion official streams and sold 211,000 downloads worldwide in the week ending Oct. 27, according to Luminate. That’s the biggest global streaming figure for an album this year, passing Bad Bunny’s 1.06 billion clicks in the week ending May 12 upon the arrival of Un Verano Sin Ti.
The 13 titles on the standard edition of Midnights garnered 973 million global streams, accounting for 84% of the set’s overall streaming figure despite equaling 65% of the total track listing. Standard-version tracks averaged 75 million clicks, compared to 26 million for “3am Edition”-only tracks. (The original version of Midnights arrived at midnight ET Oct. 21, followed by the “3am Edition” at, when else, 3 a.m.)
While standard Midnights songs scored nearly three times the global streams as their deluxe counterparts, the opposite was true in the sales market. The seven extra songs sold a combined 138,000 downloads worldwide, while the 13 standard songs amassed 73,000 (as many consumers likely purchased the set’s original version as a whole and upgraded to buying the seven bonus cuts à la carte, activity also reflected on the U.S.-based Digital Song Sales chart).
Meanwhile, Sam Smith and Kim Petras’ “Unholy,” the No. 1 song on both global charts the previous four weeks, falls to No. 6 on the Global 200, acting as the only interruption to Midnights’ near-total takeover atop the tally, as the 13 standard-edition tracks are Nos. 1-5 and 7-14. The seven additional songs rank at Nos. 21-22, 24, 30-31, 35 and 37, giving Swift half the chart’s top 40 songs.
Swift has accumulated 94 entries on the Global 200, leading all acts, over Lil Baby (69), Drake (61), Lil Durk (55) and Bad Bunny (52), since the survey started in September 2020. She also owns the record on Global Excl. U.S. with 75 entries, besting Bad Bunny and Drake at 52 apiece.
Amazon Music will expand its ad-free offering for Prime members from 2 million songs to more than 100 million songs, the company announced on Tuesday (November 1). There is one caveat, however: Prime members can only listen on shuffle, unless they upgrade to Amazon Music Unlimited.
Along with the increased access to music, Amazon announced that Prime members will also have access to a wide-selection of ad-free podcasts, plus a newly launched Podcast Previews feature that lets listeners easily test snippets of episodes to see if they like them.
“When Amazon Music first launched for Prime members, we offered an ad-free catalog of 2 million songs, which was completely unique for music streaming at the time,” Steve Boom, vp of Amazon Music, said in a statement. “We continue… to bring even more entertainment to Prime members, on top of the convenience and value they already enjoy. We can’t wait for members to experience not only a massively expanded catalog of songs, but also the largest selection of ad-free top podcasts anywhere, at no additional cost to their membership.”
This expansion follows the news from April that Amazon Music Unlimited raised its price for Prime subscribers from $7.99 per month to $8.99 (or from $79 per year to $89) and similarly upped the cost of its single-device plan (for Amazon’s Echo and Fire TV devices) from $3.99 to $4.99 per month. Other prominent streaming services recently took similar steps, with YouTube’s Premium Family plan — which includes its music subscription service — jumping from $17.99 to $22.99 per month, and Apple Music individual plans climbing from $9.99 to $10.99.
Amazon launched Prime Music with over one million songs, primarily catalog material, in 2014. Two years later, the company rolled out a multi-tiered offering, Amazon Music Unlimited, with many more titles.
“From our perspective, with Prime we helped push the music industry away from the one-size-fits all approach to music streaming, and to go after different customer segments,” Boom told Billboard at the time. “We’re going to grow the market [and add] new customers to streaming with a great way to get into streaming with really low friction.”
In 2020, Amazon said it had “more than 55 million” subscribers across its various listening tiers.