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RECAP: New Streaming Research Drops, Dubset Opens to NMPA Members, Rhapsody Launches VR

Posted by Glen Sears | May 23, 2016 9:16 am | No Comments

Electric-Jukebox-Infographic-4-700x364

Story of the Week

New Research Claims Streaming ‘Black Hole’ Beyond Millennials
A new survey of British consumers suggests that people older than 35 may be being “left out in the cold” by music-streaming services. And while there’s a caveat here – the research was commissioned by Electric Jukebox, which is launching a streaming service aimed at exactly that demographic – YouGov’s 2,000-person survey still throws up some talking points.

The study claims that 16% of millennials – defined as 14-34 year-olds in this case – have music-streaming subscriptions, compared to 6% of Generation X consumers (35-55 year-olds) and 3% of Baby Boomers (over-55s). “Our research finds the older you are, the less likely you are to stream music and that if you’re over 35 you’re very unlikely to be a subscriber,” said CEO Rob Lewis.

Read the full story on Music Ally.

Top Music News Stories

Dubset/NMPA Deal Means New Income For Indie Artists, Publishers. Just weeks after groundbreaking deals with Apple Music and SoundCloud, Dubset has extended its MixBANK monetization platform to indie songrwriters and publishers that belong to the National Music Publishers’ Association.

SoundCloud Says Reports of DJ Mixes Being Pulled Are Wrong. Despite a report claiming the platform would be pulling down this type of content frequently in the wake of its deals with Universal Music Group and Sony Music, the company tells Billboard that “the story has no truth to it.”

YouTube Adopting New Tool For Faster, More Accurate Royalty Payments. It looks as though the service will soon be implementing a new data standardization tool which will help artists get clearer information regarding views and payments, as well as providing more accurate and efficient royalty accounting.

Pandora’s Biggest Shareholder Urges Sale of Company. In a cage-rattling letter to Pandora’s board of directors, Keith Meister said that Cortex now owns 9.9 percent and urged the streaming company to curb plans to diversify beyond ad-supported radio and explore a sale.

Is Terrestrial Radio Facing Its Judgment Day With Fierce Digital Competition? During a panel discussion at the Worldwide Radio Summit in Los Angeles on April 15, the moderator asked veteran programmer Jim McGuinn, formerly of modern-rock station WPLY (Y100) Philadelphia, why FM was no longer relevant to listeners in their 20s.

Rhapsody/Napster Launches First Virtual Reality Music App. At launch, Rhapsody VR features live performances of Talib Kweli performing his classic “Get By” and Flatbush Zombies performing “Bath Salt” and “Bounce.” There are also performances by The Blind Shake, Low Cut Connie, Sweet Spirit, Eli “Paperboy” Reed and Shannon and The Clams.

Universal Music Appeals Ruling Against VKontakte. Universal was one of the three international majors that filed a lawsuit against VKontake over copyright infringement back in 2014. The others, Sony Music and Warner Music Group, have since signed agreements with the social network.

Our best wishes for a great week! – MediaNet

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Recap: 68% Smartphone Users Stream Daily, French Sales Falling, U.S. Publishing Settlement Looms

Posted by Glen Sears | March 14, 2016 10:43 am | No Comments

music streaming

Story of the Week

68% Of Smartphone Users Stream Music Daily
Illustrating just how pervasive streaming music has become, a new study shows that 68% of smartphone users listen to an average of 45 minutes of streaming music daily. By comparison, 71% watch video daily on their smartphones, but only for an average of 24 minutes.

According to a new Parks Associates study, digital media usage varies based on OS brand and carrier. iPhone users consume more media than Android and other operating systems. T-Mobile and Sprint customers have the highest incidence of daily music consumption among U.S. carriers – over 75% of subscribers for T-Mobile or Sprint listen to streaming music daily, versus 66% of Verizon users.

Mobile Music Streaming statistics

“Currently Amazon Prime Music is the most popular paid music subscription service among U.S. broadband households, thanks to its inclusion in Amazon Prime, but the streaming music war has intensified as the large connected entertainment companies are driving to consolidate their offerings,” said Harry Wang, Director, Health & Mobile Product Research, Parks Associates. “Apple launched Apple Music, and Google is consolidating its music offerings across its Play content store and YouTube platform. Consumers are getting more music options as the competition for users escalates.”

(via Hypebot)

Top Music News Stories

More Than 50% Americans Listen To Online Radio Weekly. The number of listeners is up from 44% last year, according to new Edison Research survey, with 126 million Americans over age 12 now listening weekly.

French Music Sales Plummeted Last Year. France was hit particularly hard with a 7% drop in 2015, and although streaming was up, it was hardly enough to counteract overall plummeting sales.

Tuesday Was The Most Important Day For Direct To Fan Music Since CDBaby & Tunecore. Three significant players in music tech placed big bets that the future of the new music industry lies in the powerful connection between artists and fans; and those companies that enable that direct connection will be the winners.

Sony Develops App For Streaming Royalty Reports. The app is only available to Sony artists in Sweden (where the app was developed) at the moment, but is expected to be rolled out to Sony artists globally later in the year.

SoundExchange Launches Free 20 Million Song Search Database. From music streamers lawsuits to takedowns on iTunes, song identification has become a major issue. To help solve the problem, SoundExchange has launched free ISRC Search Site that includes 20 million songs.

Allison Moore Hired As Chief Revenue Officer As Paid Launch Nears. New deals with the major labels require monetization and recent filings point to a company bleeding cash at alarming rate. Now an experienced digital executive has been hired to sort out the mess.

Settlement May Be In Sight For U.S. Publishing Royalties Suit. While the National Music Publishers Association (NMPA) may well be on the verge of brokering a deal with Spotify that could in turn help its rivals sort out their publishing-licensing problems, that may not be the final word.

FCC Plans to Expand Low-Income Assistance to Broadband Ahead of Privacy Rules. FCC chairman Tom Wheeler posted a lengthy letter to his office’s website that laid out the Commission’s plans for Lifeline, a federal program which provides a $10 per month subsidy to the lowest-income Americans for wired phone services.

Last week famed producer and “fifth Beatle” George Martin passed away at the age of 90. His mark on popular music will last many generations, and our thoughts go out to his family and friends. Read a retrospective of his life and career here.

Our best wishes for a great week! – MediaNet

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Music News Recap: 25M Listeners Want To Pay For HD Audio (Maybe), Streaming Revenue Doubles, Deezer & SFX Financials

Posted by Glen Sears | January 25, 2016 10:14 am | No Comments

high definition lossless music streaming

Story of the Week

25 Million People Are Willing to Pay More for Better Sound Quality (Maybe)
Lossless streaming audio, often referred to as “high-definition” music, is enjoying something of a slow burn. HD audio is the defining feature of TIDAL, and Neil Young’s Pono music player promises to “stand up for sound.” We’ve written before about why most digital music services aren’t high-definition, and it comes down to two points: high cost and low market demand. Now a study unveiled by MusicWatch challenges one of those factors.

MusicWatch has shared research into consumer sentiment about what listeners want in a music streaming subscription. When asked what feature would encourage them to pay for their tunes, far and away the top answer was control over a completely on-demand service at 39%. However, 11% said “sound quality as good as the recording studio.” According to MusicWatch Managing Partner Russ Crupnick, that’s an estimated 25 million people voicing willingness to pay for better audio.

While encouraging for pristine audio evangelists, one of the most interesting facets to the results was that while “recording studio” quality clocked in second, the option of sound that’s “better than MP3; as good as CD or vinyl” would only motivate 6% to upgrade to paying customers. Crupnick interpreted this as a sign that highly technical jargon may not be the best way to explain the benefits or features of better-quality audio. Either way, the question remains whether or not these estimated 25 million people would be willing to pay the premium required for HD audio—especially as they already have the option.

Read more on RAIN News, Digital Music News, and MusicWatch.

Top News Stories

Is There A Streaming Music Ceiling? According to music industry writer Cortney Harding, streaming services don’t make economic sense for the vast majority of music consumers when free options like YouTube and ad-supported Spotify exist.

App Annie Report 2015: Music Streaming Revenue Doubles. “The decline in digital music sales is a trend that will most likely continue in 2016… and is likely to receive another boost as underpenetrated markets such as Japan finally reach a tipping point.”

Apple Music Reportedly Has 300K Subscribers in Russia. Russian business newspaper Vedomosti claims that “Russia is quite likely to be on the top five of Apple Music biggest markets” – with figures backed up by Billboard’s industry sources there.

Study Finds Digital Music Sales the Least Hurt By Piracy…Eight Years Ago. A new research paper (that focuses on some fairly old data) delves into the relationship between file sharing and music sales.

Deezer Raises $109 Million From WMG Parent and Telecom Giant. CEO Hans-Holger Albrecht says the “vast majority” of the funding from Access Industries and Orange will address Deezer’s biggest challenge, customer acquisition.

SFX Borrows $20M At 20% Interest, Uses Promoter ID&T As Collateral. To avoid bankruptcy, CEO Robert Sillerman have secured a bridge loan under very unfavorable terms to keep the company afloat.

Is There a Music Tech Bubble? Billboard Senior Editorial Analyst Glenn Peoples claims “sky-high valuation” and “runaway funding” mean the music industry should be thinking about life after streaming.

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Music News Recap: US, UK Streaming Way Up, Downloads Way Down, Studies Claim To Know Why

Posted by Glen Sears | January 11, 2016 10:26 am | No Comments

Music streaming grows, downloads shrink

Story of the Week

US & UK Streaming Numbers Were Way Up, But At What Cost?
In 2015, overall US music consumption tracked by Nielsen Music grew 15.2 percent to 549.4 million track equivalent albums and streaming equivalent albums, a 93% increase. The UK now follows an increasingly familiar European narrative of strong streaming growth helping bring total markets back to growth. Sales revenue increased 3.5% to reach £1.1 billion while total streams increased by 85% to reach 53.7 billion, with audio stream representing 49.9% of that total.

Crucially for those in the music industry, this rapid increase in streaming doesn’t come without a cost. While streams increased by 257% between 2013 and 2015, download sales decreased by 23%. And of course the vast majority of that streaming volume came from free streams, not paid. There are a number of theories. One from MusicWatch’s Russ Crupnick claims about 50 million of the 120 million people using music audio and video streaming sites won’t pay to stream—the remainder will be difficult to reach.

US UK streaming up downloads down

Another explanation is digital deflation, a term that explains how content loses value when consumption switches from physical to digital formats. (In economics the term refers to the idea that digital technologies lead to greater productivity and cheaper prices.) It’s too early to say if streaming will further the digital deflation in music, but it doesn’t appear to be reversing the effect. But streaming revenue is more complicated than download revenue. Royalties paid to rights holders can depend on a number of factors: streaming activity, label market share, advertising rates, the number of subscribers to premium services and the amounts paid to those services.

The download to streaming transition is an inevitability, whatever business models are wrapped around it. It is part of the fundamental shift from ownership to access of which streaming music is but single component. It comprises consumers progressively replacing one behaviour with another. We all just have to learn how to thrive in that new ecosystem.

Read more on Billboard, Reuters, and the MiDiA Blog

Top News Stories

BPI Study Asks Why Fans Pay For Streaming Music, What Makes Them Convert From Free. The study suggests that there are really a variety of factors including exclusive features that motivate users to lay down their credit card.

iHeartMedia Announces Digital Expansion Into Canada. In partnership with Bell Media, the deal will encompass everything from live and televised events to content on car dashboards, handheld devices and consumer electronics, putting Bell Media ahead of its direct media competitors in Canada.

Breakdown: Pandora’s Ticketly Acquisition in Numbers. In 2014, Ticketfly had revenue of $55.0 million, an operating loss of $8.9 million and a net loss of $9.5 million. In the first three quarters of 2015, it had revenue of $52.8 million, a $12.3 million operating loss and a $13.9 million net loss. (See the full figures here.)

SFX Entertainment Explores Bankruptcy, Hires Restructuring Experts. Only 26 Weeks after a $260M IPO, SFX is exploring the protections available in federal bankruptcy, according to a new SEC filing. It has hired restructuring experts TI Consulting to lead the effort.

Surprising Discoveries

40% Of Customers Would Change Providers If Music Came With Their Mobile Plan. A new survey suggests that mobile bundling may be a more effective way to gain users, and confirms why mobile carriers need to be more aggressive with their music offering.

Apple Music’s App Has More Users Than Spotify’s. The Apple Music app is allegedly now the 9th largest smartphone app, with 54.5 million users, outpacing both Spotify and Pandora. Whether these users count as actually “active” however, is questionable.

Researcher Claims Labels Still Don’t Get YouTube, And It’s Costing Them. “Record labels and artists can seize some control of their destiny, by taking a more sophisticated view of YouTube and exploring how to build strategies that work for YouTube in 2016.”

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Digital Song Sales Hit Seven-Year Low, and the Week in Review [Soundcheck]

Posted by Glen Sears | September 8, 2015 11:49 am | No Comments

digital music streaming sales nielsen billboard

Story of the Week

Digital Song Sales Hit Seven-Year Low, Streaming Continues to Rise
15.66 million. The lowest weekly number in nearly eight years for digital songs sold in the U.S. According to Nielsen, the week ending Aug. 27 had the smallest weekly sum for song downloads since the week ending Dec. 9, 2007, when 15.64 million were sold.

Not surprisingly, as sales plummet streaming continues its ascent, with the same frame marking the highest week of total U.S. on-demand audio and video streams: 6.6 billion. The streaming surge follows as consumers adapt to free and low-cost streaming services (like Spotify, YouTube and Apple Music) and shift away from the pay-to-own model.

Read More: http://bit.ly/1PZrX2W

Other Important Headlines

Google Brings Its Music Streaming Service to Japan’s Unique Digital Music Market – Google followed Apple and brought Play Music All Access to Japan on Friday, giving the world’s second-largest music market subscription services from two huge technology companies. Read More

Comscore Data Shows 44 Million In U.S. Have Used Apple Music – That number is much higher than the 10 million global user figure “leaked” by supposed industry insiders last month. Read More

Why Profit Isn’t An Issue For Apple Music – “Apple has always primarily been a hardware company, and has a history of operating many of its services, like iTunes, at a loss.” Read More

StubHub Claims Many Users Don’t Want To See Out-of-Pocket Prices – “We have many different types of users at StubHub. A significant number of users prefer to comparison shop while other users prefer to just see the out of pocket price when making purchasing decisions.” Read More

ReverbNation Has Been Hacked – Change Your Password Now! – Law enforcement agents say that in January of 2014, an individual, who has since been charged, illegally accessed a vendor’s computer systems and gained access. Read More

Pandora To Celebrate 10 Years With Ad Free Listening Tomorrow, September 9th – They’re calling it Listener Love Day – a full day of music with no ads from 12:00am ET, Wednesday, September 9 thru 12:00am ET, Thursday, September 10. Read More

The ‘Friend’ Who Killed a Grooveshark Executive Faces Life In Prison – According to details released by Florida’s Sixth Circuit State Attorney’s Office this morning, Torres faces formal sentencing October. That could include life in prison. Read More

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5 Important Lessons From Next Big Sound’s “Data To Date” Report

Posted by Glen Sears | August 19, 2015 2:34 pm | No Comments

Next Big Sound Music Industry Data
Next Big Sound, a digital music analytics firm recently acquired by Pandora, made headlines last week with the release of its report “Data To Date: The Rapid Rise of Social and Streaming.” This in-depth report examines how digital music is streamed and how it is shared.

The report, which analyzed over one trillion plays across 7 major services, put real data to many of the suspicions held about digital music. It’s growing rapidly, videos carry huge weight, and being a huge pop star all but ensures you continue to be a huge pop star.

While the report is easy-to-read and well-formatted, it is also long. We decided to pull what we feel are the most important parts of the report and compile them here.

You can read the entire Data To Date report here.

1. More digital music was streamed in the 1st half of 2015 than in all of 2014.

Anyone with a Spotify or Apple Music account knows just how prevalent streaming music has become. What’s surprising is the almost unbelievable speed at which it is growing. The 1,032,225,905,640 plays dwarfs 2014’s 434,695,663,626, with 4.5 months still left in the year.

Part of this play data can likely be attributed to the inclusion of Pandora’s venerable streaming radio service, but even so the numbers show just how fast digital music streaming is skyrocketing.

2. If you’re an artist building your brand, you need to use Instagram daily.

When considering social media for musicians, no platform showed the massive growth of Instagram. Monthly new follows for artists were up an astounding 455%, from 51m in June 2014 to 283m in May 2015.

Next Big Sound Instagram

Artists can use the platform to give listeners and fans a glimpse into their lives. Fetty Wap (known for his breakout hit “Trap Queen”), is a prime example of this phenomenon, adding 1.1m new followers since the beginning of 2015.

3. Latin artists are disproportionately popular on Facebook.

A strange anomaly in the NBS data, Latin artists provided a social media surprise. With most Latin artists making up around 2% of activity across social media channels, Facebook activity for the genre is more than double at 5%.

Additionally, of the 10 artists that attracted the highest number of page likes, 50% were in the Latin genre. Nicky Jam added more than 14m Likes in just six months.

4. Soundcloud is still a major player and growing — even with the controversy.

With recent news that Soundcloud struck a deal with Universal Music Group, its days as a copyright Wild West may be coming to an end. But that didn’t stop the streaming service from tallying an explosion in plays, growing from 2.5b in June 2014 to 4.9b in May 2015.

Next Big Sound Soundcloud

This would seem to suggest that hesitant rights owners like Sony may find themselves reluctantly striking Soundcloud deals in order to get their share of the action. These deals, however, could also cannibalize a user base accustomed to receiving the service for free.

5. Undiscovered artists are gaining notoriety not from their own videos, but from videos using their songs.

Liv Buli, the public report’s author, calls YouTube song-in-video detection “one of the more telling metrics” about fan engagement. In theory, using an artist’s track in your own content is considered “next-level” engagement.

To this end, undiscovered artists like Halsey are finding major success on the platform even without doing the work directly. Three of their songs breached the Top 10 list of unsigned artists whose music is being used widely on the network.

 

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Why Aren’t All Streaming Music Services “High-Definition?”

Posted by Glen Sears | July 30, 2015 10:31 am | No Comments

high definition lossless music streaming
Historically, the most successful music streaming services have operated using two key formats: MP3 and AAC. Both formats take audio data and compress it by removing parts of the information deemed irrelevant to the listening experience.

This type of compression is referred to as “lossy,” and comes in a variety of bit rates. These bit rates determine how much audio data is removed, and the size of the file itself following compression.

Standard File Sizes (3-minute song):

  • CD-Quality WAV file (uncompressed): 31.7 MB
  • CD-Quality FLAC file (compressed): 15.85 MB
  • 320 kbps MP3: 7.2 MB
  • 256 kbps AAC: 5.76 MB
  • 192 kbps MP3: 4.32 MB
  • 128 kbps MP3: 2.88 MB

Even the highest bit rate (320 kbps) lossy compression reduces a song to 1/4 of its original size. This opens a world of possibilities for on-demand music services to deliver “near-CD” quality at tremendously faster speeds. Apple’s iTunes has sold (and now streamed via Apple Music) 256 kbps AAC files since 2011, and Spotify has offered 320 kbps mobile streaming since 2012.

What changed? Why did people suddenly start craving mobile high-definition music?

Lossless audio encoding like FLAC and Apple Lossless have existed for a long time. Lossless compression is a class of data compression algorithmsthat allows the original data to be perfectly represented by compressed data. Sophisticated algorithms create a file that sounds mathematically identical, at 50–60% the original size.

Pretty cool, right? Get original master recording sound quality at half the size. On hi-fi audio equipment, there is no doubt that lossless audio is fuller, richer, and more faithful than MP3 or AAC. It seems like anyone would want lossless audio, but as with all data — the devil is in the details. Size really does matter, and so do the people on the other end of the stream.

Bigger Isn’t Always Better

The MediaNet catalog contains 42 million tracks in 12 different formats.Let’s pretend for a moment that we only carry 320 kbps MP3, and every track is 3 minutes long. Storing this imaginary catalog would require 298,200,000 megabytes, or 298.2 terabytes, of usable server space.

Compare that with a 42 million track library of FLAC files, which would require 665,700,000 megabytes, or 665.7 terabytes, of usable server space. That’s 223% more space than the highest-quality MP3 library to store, and it isn’t taking into account the metadata contained in the files (ISRC, track name, artist, album, release year, etc).

Lossless audio requires 223% more storage space than high-quality MP3

Even today, server space isn’t particularly cheap. Using Amazon Web Services’ S3 Enterprise Cloud Storage solution, our FLAC library would cost $20,900 each month. Simply to store the files. Compare this with the relatively low cost of MP3 at $9,500, and you can begin to see the problem.

Then add the cost of delivering those files to users. A standard streaming service can easily log over 500,000,000 plays in one month. That means our FLAC catalog would deliver 7.9 petabytes of data to users vs 3.6 petabytes for MP3, every single month. $426,900 vs. $204,300, respectively. That’s 209% more per month to deliver FLAC audio instead of MP3.

In reality, the cost of delivering digital audio could be slightly higher or lower, but can generally be accepted as increasing proportionally with file size. At over double the cost, lossless audio files are a huge strain on storage and bandwidth, as well as existing server architecture.

Many streaming services, especially those just launching, can’t afford that huge infrastructure cost without massive investment.

Your iPhone Will Hate You

So what? Lossless streaming services like TIDAL, Qobuz, and Deezer Elite have found a way to afford the massive infrastructure costs. Why can’t everyone else? The next sticking point is how a service’s music is consumed.

52% of Spotify users consume their music on a mobile device such as a phone or tablet. This means that data throughput is subject to an individual’s mobile data plan.

Verizon’s “More Everything” plan offers users 10 GB of data per month.According to Pew Research, half of all cell phone users listen to mobile music. Let’s assume 50% of their data (5 GB) is available for music streaming.

“Few people really want to pay more to wireless carriers for any data overage charges associated with streaming high-quality music.” — Venture Beat

Using a FLAC streaming service, a user could listen to roughly 315 songs per month, or 10 songs per day. Using an MP3 streaming service, a user could listen to roughly 694 songs per month, or 22 songs per day. That huge discrepancy could cost consumers tens or hundreds of dollars in data overage charges. That’s bad PR.

These numbers don’t take into account the elements of the user interface (album art, UI elements, etc) that are loaded each play. Existing apps must also be re-built with enhanced delivery APIs required to stream lossless audio. All these factors equal a huge strain on a user’s data bandwidth.

Even More Technology Costs

Did you know that codecs like MP3, AAC, and others cost money to use? Every streaming service has to pay a license fee (either one-time or per-play) to the technology company that created the codec. While FLAC is truly free, many other lossless codecs are not.

This problem is compounded when attempting to get permission from a record label to offer music in a lossless format. Labels are understandably protective of their 24-bit masters, as they are a great way to establish copyright. As the gatekeepers of high-definition content, labels are choosy with who they allow to stream content beyond 320 kbps MP3.

Additionally, finding the studio-quality digital masters for every single track you want in your catalog can be difficult when you’re dealing with over 370,000 labels and 500,000 new tracks released each month. (That’s what we handle at MediaNet for our catalog.)

Labels don’t offer a “better than CD” experience to just anyone, and if a service is deemed worthy of lossless audio, it may be required to use certain codecs, licensors, and B2B partners approved by the label. These may not be the same for each label. Each of those partnerships can require additional license fees.

You Probably Won’t Hear The Difference Anyway

When it’s all said and done, is high-definition audio really any better than high-quality MP3? It depends on who you are and how you’re listening.

NPR and The Verge both put that question to the test: Can you tell the difference between AAC, MP3, and FLAC? NPR claims “many listeners cannot hear the difference,” and The Verge found that in “29 percent of the tests, subjects couldn’t tell any notable difference at all.”

29% of people can’t tell any difference between lossless and MP3 audio

While lossless audio might seem like the next frontier in digital audio, it faces an uphill battle: it’s too expensive to do at the same price as MP3. Until server and bandwidth costs decrease significantly, high-definition streaming audio will always be a boutique market.

All things being equal, lossless audio sounds better than lossy audio. It’s simple mathematics. But imagine you’re on the train, at rush hour, listening to music on non-isolated earbuds while conversations are happening 2 feet from your ears. Without a dedicated hi-fi like SONOS or Cambridge Audio, will you really be able to hear the subtle differences in Coltrane’s tenor sax?

Most streaming services aren’t going to invest 223% more to find out.

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Soundcheck #008: Your 5-Minute Recap Of Last Week’s Most Important Music News

Posted by Glen Sears | July 20, 2015 11:11 am | No Comments

music transparency berklee rethink music soundcheck

Story Of The Week

Berklee Rethink Music Releases Landmark Fair Music Report, Ignites Massive Debate
Read more: http://n.pr/1dYnZdF
Last week, Berklee College of Music’s Rethink Music project released a 28-page report on the state of transparency and fairness the digital music industry. The report, backed by industry titans like David Byrne and the Future of Music Coalition, suggests that 20-50% of music payments don’t make it to their rightful owners. The report also details the researchers’ recommendations for repairing the opaque and complex music industry payments ecosystem.

Typically artist payments aren’t a part of public consciousness. With the rise of digital streaming services, leaks of Spotify contracts, and Taylor Swift’s stand against Apple Music, the amount of money independent artists are paid (or not paid) has gained international attention. The question on everyone’s minds: where do the hundreds of millions of dollars in the music industry go?

The Fair Music Report attempts to answer this question, using a combination of industry insight and research. The report recommends a “Fair Music” seal for streaming services, a non-profit rights database, cryptocurrency payments, and education initiatives.

Other Important Headlines

The RIAA Responds To Fair Music Report, Says “This Is An Important Subject” – The RIAA goes on to assert that “some of the report’s findings are flawed,” before going on to point out that while major labels’ revenues have dwindled, the amount they pay artists rose 36 percent. Read More

Why The Music Industry Isn’t Transparent, and How To Fix It Right – “It’s simply too easy for big companies to sit on money because they can’t find out who to pay, or don’t care to know. It’s time to demand more accountability and transparency.” Read More

NPR Follows Amazon in Withdrawing From MIC Coalition – “When Amazon took the lead and left this anti-artist Coalition, after concluding the group was ‘consumed’ with lowering payments to musicians, musicFIRST called on NPR to leave as well.” Read More

Ticketmaster Competitor Ticketfly Closes $50M Series D Round – At its core, Ticketfly is pursuing a smarter, more flexible, more social ticketing platform that challenges Ticketmaster. It is now valued at $85 million. Read More

Blurred Lines Retrial Request Denied, Damages and Distribution Ban Cut – Gaye family attorney Richard Busch exclaimed “thrilled with the decision by the Court,” Thicke and Williams expected to appeal. Read More

Final Paid Edition of Music Magazine NME To Publish This Month – The music industry mainstay will be following the move with a brand new free magazine, launching in September. Read More

Marshall Cranks Out a Phone for Music Lovers – With a focus on music and shamelessly beautiful styling, the phone is equipped with stereo speakers, dual mics and headphone jacks, and hifi lossless audio card. Read More

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In Streaming, Licensing Means Far More Than A Huge Music Catalog

Posted by Glen Sears | July 9, 2015 10:08 am | No Comments

music licensing streaming

Key Takeaways

  1. For every song in a digital music catalog, there is a huge rights and licensing stack that is far more complicated to fulfill.
  2. Without a digital music platform that understands these relationships, potential for lost and escrow revenue increases dramatically.

 
At MediaNet we regularly see and hear music services touting the sheer size of their music catalog. On one hand, it’s the easiest number for regular folks to get their head around. A service has “this” many songs, and more is better. But where music streaming starts getting interesting (and difficult) is in paying for each song to get played.

The Problem

If you’re a music service, broadcaster, bar, venue, or other licensee of music, managing the process of calculating payments seems almost impossible. The large volume of digital usage, limited availability of ownership data, and the generally byzantine royalty structure all add up to one thing: lost payments.

Billions of dollars of digital payments are administered each year, $6.9 billion in 2014 according to the IFPI.

Rights holder losses are due frequently to old systems, unmatched pay, slow processing, poor ownership data, paper processing, and lack of open markets. We estimate these losses exceed hundreds of millions of dollars.

Content owners and legacy middle men (Labels, publishers, PROs, Societies) that license copyrights have a difficult time tracking, monitoring, and receiving payments from the 1,000’s of licensees in the U.S. and around the world. In addition, it can take up to 18 months for rights holders to get paid through these legacy systems.

These problems are a result of the transformation of music from a physical distribution and licensing framework to a digital distribution and licensing framework. Specifically there are two critically transformative changes: Volume, and License Laws and business models.

The volume of individual music transactions has increased massively. Not by factors of 5, 10 or even 100, but by an order of magnitude in the billions (yes, billions). Billions of lines of usage each month, compared to millions of sales of CDs each year.

License laws and business models are also very different in digital streaming and subscription models, requiring complex calculations and access to ownership data covering millions of content owners. The play of one song can require tracking and paying over 10 different entities, with royalty calculations of a single play monitored down to 6 decimal points (e.g. $.000003).

Incumbent services that have supported the music industry for almost 100 years, services that powered the entire royalty payments supply chain, simply were not designed to handle these volumes. They have managed to “get by” using older analog legacy systems (e.g. spreadsheets) and processes that are cumbersome and have numerous gaps in the workflows. These gaps cause loss of data resulting in loss of ability to properly account and completely pay all rights holders.

The Solution

When licensing, delivering, reporting, and paying on a world-class digital music library, it is imperative that the foundation be built with these things in mind. Any service that isn’t aware of plays and licensing isn’t built for the future.

Many companies are spending their time trying to consolidate and simplify licensing. Some are tracking down any number of the 900,000 revenue streams worldwide.Others are working toward combining mechanical and performance license servicing.

This is all great news. I fully support anyone who is working to make digital music licensing simpler and more efficient. But the question still exists: who will handle the digital fulfillment supply chain? Can they also get rights holders paid?

The answer? Here at MediaNet we’ve built and host a database of rights holdersspecifically matched and linked to Sound Recordings. Every time a song is delivered, we know who needs to get paid and how. Without any need for third parties. No third parties means less translation, better accuracy, and payments accounted for.

This is the way all future digital music platforms need to be built. From the ground up to be ready for any changes in licensing or publishing. A platform custom built to ensure that no matter what the contract says, everyone is getting paid.

-Frank
If you’re interested in learning more about how MediaNet can help power your service, I’d love to chat! Email me at fjohnson@mndigital.com or follow me on Twitter: @francjohnson

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June 15th Soundcheck: Last Week’s Music News In Review

Posted by Glen Sears | June 15, 2015 10:00 am | No Comments

Apple CEO Tim Cook, right, hugs Beats by Dre co-founder and Apple employee Jimmy Iovine at the Apple Worldwide Developers Conference in San Francisco, Monday, June 8, 2015

As you might have guessed, last week’s news cycle was absolutely dominated by the announcement of Apple’s new streaming platform, aptly named Apple Music. After the initial coverage of the Apple Music event itself, the internet ignited with a generous portion of backlash, calling multiple parts of the new service into question. Meanwhile, competing streaming services reacted with various degrees of snark.

Top Apple Music Stories

“Apple Music Is A Major Mess, and It Won’t Beat Spotify” – Mashable publishes an opinion piece on the new Apple Music service, criticizing the company for not being able to “get its musical act together.” Read More

Billy Corgan Rails Apple Music & Freemium Models On Twitter – “If you find yourself defending the biz practices of a billion dollar corp against that of a lone artist, you’re lost.” Read More

Rdio Reacts To Apple Music With The Ultimate Troll – “Welcome Apple, Seriously.” ad goes live in the snarky style of Apple’s own classic “Welcome IBM” ad. Read More

Apple Shines Spotlight On Unsigned Artist Who Doesn’t Exist – In its attempt to distance its launch event from the derided TIDAL launch, Apple focused on unsigned artists like Loren Kramar. Only problem? “The 26 year old visual artist (and magazine editor) from NYC who has zero existence as a musician on the web.” Read More

Apple Being Investigated For Pressuring Labels To Withdraw “Freemium” Support – New York And Connecticut attorneys general are searching Apple’s dealings with major labels such as Universal Music Group (which flatly denies the allegations) for possible antitrust violations. Read More

Apple Music Will Stream At 256kbps Instead Of 320kpbs – While some companies claim 320kbps is “the industry standard,” iTunes has held the 256kbps standard for almost 10 years. Read More

In Other News

Going To The Ends Of The Earth For Digital Music Royalties – Music publisher Kobalt announced it will use its American Music Rights Association to investigate “over 900,000” obscure international sources for additional royalties for its songwriters. Read More

Line Music Streaming Service Aims at Japan, Where CD Is Still King – Over 80% of music sales in the country are on physical media like CDs. The new Line service will charge 500 yen (about $4) a month for a basic plan that allows 20 hours of streaming each month. Read More

Have questions about the MediaNet platform? Ask us here. Want a topic or insight published on this blog? Ask us here. Other questions or comments? Let us know!

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