Independent labels ask Spotify to pause ‘blunt instrument’ royalty planA coalition of independent record labels has called on Spotify to answer questions about its revamped royalty structure and pause plans for early 2024 implementation. EU-based trade group Impala, which. Continue reading
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How Taylor Swift’s direct to fan engagement embraces Web3 principlesAnyone involved in music can learn from Taylor Swift’s success including how she and her team have embraced the principles driving the shift to Web3 and netting spectacular results. by. Continue reading
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AllMusic's Best of 2023Each year at AllMusic, our editors look back through the albums that made the biggest impact, broke new ground, and just all-out moved us. We begin with our overall best-of list, and will explore a different genre each weekday until the new year. These are our 100 favorite albums of 2023.

How many music genres are there? [Bobby Owsinski]How many music genres are there? Hint: A LOT more than you think… by Bobby Owsinski of Music 3.0 One of the things that’s particularly hard for artists and bands. Continue reading
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The effect of Beyoncé’s Homecoming on the Dance Music GenreBeyoncé’s RENAISSANCE may have caused controversy at the Grammys, but its positive impact on the career of seasoned dance musicians like Honey Dijon and Big Freedia is undeniable. by Harry Levin from. Continue reading
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Why I just resigned from my job in generative AI.Ed Newton-Rex has quit his role at Stability AI. In an exclusive op-ed, he shares why.
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From Spotify’s 1,000 plays threshold to Taylor Swift’s blockbuster 1989 rerecording… it’s MBW’s Weekly Round-UpThe five biggest stories to hit our headlines over the past seven days
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Why artist subscriptions are the perfect partner to two-tier licensingWith two-tier licensing now a thing, it is time to focus the discussion on how to add new components to the DSP ecosystem that will help long-tail artists continue to thrive in this brave new world. There are many positives that two-tier licensing will bring (helping mid-tier artist remuneration, attaching an appropriate premium to lean-forward listening, etc.) even if the streaming fraud efforts will likely soon be offset by bot farms increasing their minimum streams thresholds. But the potential downturn to long-tail artist income is a very real prospect. Not only could artist subscriptions re-level the playing field, but self-releasing artists (artists direct) also have an opportunity here that label artists do not.

For more years than we care to remember we have made the case for artist subscriptions, most recently in this MIDiA report. The data in the report shows that what fans want to pay for most (and by some margin) is early access to music, exclusive merchandise, and songs. On one hand, this makes artists subscriptions relatively low effort, as there is no need to produce backstage access videos or host live Q&As, among other things. On the other hand, it is problematic for record labels that have to consider factors such as release campaigns driving large stream volumes to trigger the algorithms, and commercial agreements with DSPs that can complicate exclusives. Artists direct, however, have no such constraints. 

MIDiA’s data shows strong willingness among fans to pay, up to $5 an artist. But, if a long-tail artist was to price their subscription at just fifty cents, it would only take five fans to subscribe to generate the same amount of income a thousand streams would. Get that to ten fans (surely eminently achievable for many long-tail artists) and they would be earning double the minimum stream threshold of the two-tier system. It is a mechanism that enables DSP streaming to deliver on the elusive long tail promise and, to boot, everyone wins:

Artists direct get income that is more meaningful income than in today’s one-tier system

Bigger artists continue to get a more meaningful share of streaming royalties

The beauty of this approach is that the infrastructure is already in place, it just needs a little tweak. In August, Spotify and Patreon announced a new initiative for podcasters, enabling them to create premium subscriptions for exclusive podcast content. Artist subscriptions thus already exist on Spotify, they are just not called artists subscriptions, yet.

Starting in 2024, Spotify and other DSPs face a delicate balancing act. They must navigate the demands of larger rightsholders – a term that covers not only major labels but also a very large number of indie labels and publishers of all shapes and sizes. At the same time, they are going to have to convince the wider creator community that they are there for them. 

This is particularly pertinent because DSP streaming no longer hold a monopoly over music creators. In 2022, the number of creators releasing outside of the traditional digital supply chain grew twice as fast as those releasing into streaming. This is the second successive year that this has been the case. A forking is taking place. These creators are choosing share their music on platforms like TikTok, YouTube, Soundcloud, BandLab, Discord, Twitch, Instagram, etc. rather than risk getting lost in the DSP ocean. From a creator economy perspective this is no bad thing, in fact, it will probably be a good thing. However, from a DSP perspective, they will want to utilise every resource at their disposal to position themselves as the most attractive platform for artists.

Chart data collection change will under-report physical sales by 95%, say indie music storesIndie music stores and labels are sounding the alarm over plans by Luminate, the music data provider for the Billboard charts, to change how it calculates physical sales at independent. Continue reading
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Two-tier licensing is about to become a reality With the dust still far from settled on the UMG / Deezer streaming royalty proposal, something even bigger is coming: Spotify is turning the concept into reality in Q1 2024. The behind-the-scenes conversations have been ongoing for some time, but the details were stated publicly on panels at last week’s ADE conference, meaning that the information is now firmly in the public domain. Obviously, nothing is official at this stage, so consider this ‘as reported’ information. Even if the final details end up varying, what is clear is that two-tier licensing is about to become a reality.

Things are moving fast, going from ‘limited trial’ to ‘actually happening’ in the proverbial blink of the eye. If Spotify is indeed set to launch two-tier royalties just months from now, it begs the question as to what the Deezer trial was about in the first place? If decisions had already been made elsewhere, then the likelihood is that it was a way of softening up industry opinion before the big news hit next year, to acclimatise the industry community to the concept ahead of launch.

Streaming democratised access to the means of distribution, enabling an unprecedented growth in artists and releases. But the brake is now being firmly applied. Streams may have all been created equal, but now some streams are becoming more equal than others. 

There are, of course, compelling arguments for ‘fixing’ streaming royalties (arguments that we have discussed at length). But if consumers are choosing to listen to long-tail artists, or if the algorithms consider long-tail artists to be the right fit for their tastes, then the ‘problem’ lies with consumption patterns, not royalties. (And of course, what consumers are listening to is also the most precise way measure where and how subscribers allocate the value pf their subscription.)

Between 2019 and 2022, artists direct streaming revenue grew by 130% while the majors grew by 58%. Long-tail artists are growing their share of ear (even accounting for the fact that algorithms are not neutral agents). In 2022, artists direct accounted for 8% of global streaming revenue and at current trajectory would reach 10% by 2025. Consider that WMG’s share was 16% in 2022, and it becomes clear just how significant the long-tail pool is.

But here is where the cynical genius of the two-tier system comes into play. Right now, streams and revenue are effectively synonymous, but by this time next year, they will mean very different things. The majority of artists direct artists will no longer be paid for their contribution to the value of the $11.99 subscription. The c.10% of consumption they will generate will disappear from the streaming revenue map. They will be othered, their revenue becoming a new black box for the biggest artists to share between themselves. Which means that, hey presto, all that annoying artists direct market share suddenly gets reallocated to everyone else. Market share erosion? What market share erosion?

The two-tier system does not even try to turn back the clock on the rise of independence, it simply funnels the growing revenue from this cultural paradigm shift to the bigger artists who are losing share. If DSP streaming was the only game in town, then the risks of antagonising long-tail artists (label and direct) would be relatively low. But the music consumption and creation landscapes are changing. Non-DSP streaming revenue is outgrowing DSP streaming, while creators choosing to release only on non-DSP platforms is growing twice as fast as artists releasing onto DSPs.

Perhaps it would serve bigger labels and artists well, to have smaller artists and labels focus their attention elsewhere. But if they do so, then they will take audience attention and cultural capital with them. At some stage or another, that kind of shift will start to bite into DSP acquisition and retention rates. By which stage it may be too late to halt the decline. 

Harmonizing Economics: The Unseen Power of Music in Urban Revival [Kyle Bylin]Former Hypebot Editor Kyle Bylin is back with a dive into how music can unite residents and drive economic development if communities look beyond superstars and corporate music behemoths, nurture. Continue reading
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What should the music industry learn from the world of e-Sports?On this 'cast Tim Ingham, founder of Music Business Worldwide, is joined by Maria Egan, the Global Head of Music – as well as events – at Riot Games.
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Songtradr, Epic Games respond to Bandcamp Union concerns [UPDATED]UPDATE: Epic Games has joined Songtradr in responding to a letter from the Bandcamp United union expressing employee concerns after it was announced earlier this week that Epic Games had. Continue reading
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Spotify’s audiobooks move is another brick in the audio wallStreaming has come a long way since its days as a pure music service for super fans. Spotify’s announcement that it is making 15 monthly audiobook hours available to premium subscribers is simply the latest step in a journey that has seen streaming become the 21st century’s take on radio. This has been achieved with the steady addition of non-music content (podcasts and audiobooks especially) and a growing emphasis on programmatic lean back consumption. As with all change, when it sits in an extended period of transformation, its immediate impact is often under-recognised. Audiobooks are the completely natural and logical progression for Spotify (and other DSPs), but they are also another waymarker in the journey away from being a pure play music service.

The pandemic was a catalyst for audiobook consumption. Audiobooks had been around for a long time already, with Audible leading the charge, but it was the sudden increase in non-allocated time that people found themselves with that triggered a coming of age for the format. Listening surged, including of podcasts, but as normal life slowly returned, audiobook consumption dipped again, though to a higher point than pre-pandemic levels. 

In many respects, Audible never really managed to push the format out of its niche foundations, with weekly active user (WAU) penetration still stuck at around 10% (Q1 23). DSPs though, represent the opportunity to mainstream the proposition – something that Deezer identified many years ago by becoming the first DSP to integrate audiobooks. Deezer was, however, probably a little too early, launching audiobooks when streaming was still almost entirely about music and still very lean-forward. Now, streaming is the soundtrack to our everyday lives. It is about filling the silence (or blocking out the noise) more than active listening. In this use case, spoken word audio is just as good a fit as music. In fact, it can often be a better fit. For example, getting lost in the narrative of an audiobook can make a daily commute fly by a lot quicker than simply listening to a playlist, in large part because it commands your attention.

Spot the important shift there? Audiobooks can turn passive listening into active listening in a way that music cannot so easily do. Music carved out hours for streaming by being passive, and now audiobooks and podcasts can colonise those hours with active consumption. The more active usage becomes, the more engaged a user is and the less likely they are to churn. Music did the hard yards; audio reaps the rewards.

Music rightsholders have long been concerned about audio eating into listening hours, less because of the cannibalisation of hours and more so because of the risk of DSPs using that as a basis for negotiating down the share of the subscription fee that gets paid to them. 15 hours of audiobooks may not sound like a lot but it represents close to 40% of the monthly music listening hours of the average subscriber. There is a good chance that there will be strong uptake, not least because over half of audiobook WAUs are also Spotify WAUs (which will probably give Audible pause for thought).

Of course, from Spotify’s perspective at least, the benefit of reducing music rightsholder fees simply to replace them with book publisher fees would be self-defeating. That is unless Spotify can secure the latter for less. But there is another crucial variable at play: original content. Back in 2020, when Spotify was hiring its head of audiobooks, the job description included the following: “Develop, pitch and oversee production of high-quality content”.  Just as with podcasts, audiobooks represent an opportunity for Spotify to develop original content and improve its margins.

Spotify prompt-driven AI playlists risk devaluing many artists, genresSpotify is testing AI-generated playlists based on custom prompts. The streamer successfully launched its AI-powered DJ feature last year. Code pointing to prompt-driven AI playlists was discovered within the Spotify. Continue reading
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