🔵 Amid selloffs and slowdowns, has the music industry peaked?
Universal layoffs & slowing growth, SoundCloud selling up, Believe looking for buyer... what's going on?
Reading the news of late, one cannot help but get the sense that things might be peaking in the music industry. Let’s consider a few facts:
Universal, amid slowing growth, is now planning to lay off hundreds of staff from its recorded music division. It is also working to squeeze more revenue from both partners (e.g. Spotify), and consumers (e.g. via its new discovery of superfans).
SoundCloud is now up for sale, as its owners look for an exit now that the company is finally profitable.
Believe is also considering a takeover by taking the company private and selling up.
Bring these together and it paints a picture that perhaps 2024 is the year the music industry’s good fortunes peak. This would explain the planned exits for SoundCloud and Believe, and also underlines why Universal is now desperately seeking new ways to generate revenue in the face of slowing growth.
I remarked recently that all formats in music are finite, and at some point even streaming will begin dying in the same way as vinyl, CDs, cassettes and even 8 tracks did back in the day.
If you look at the rise and fall of most formats, the lifespan is around 15-17 years - slightly longer in the case of CDs:
Nothing lasts forever therefore, and whilst streaming looks solid at present, it isn’t inconceivable that within a couple of years, it might start to decline, given it has been around for a decade now. Really though, that is dependent on another format appearing to replace it, as has always been the case in the past. Nothing simply died without reason: one format always gave way to another.
Of course, the industry has seen off at least one existential challenge (in the shape of piracy) before now, but I still wonder the degree to which the explosive growth of the creator economy, coupled with the accelerated growth of AI and tools using it, will reshape the music industry into something else altogether.
That is my concern around the likes of Universal looking to create a two-tier system that protects its current interests and tries to draw more revenue against them. It feels myopic, in the sense that the Era Of The Superstar is drawing to a close. What might be left is a world where you have millions of people making music, sharing it among friends, living a life where it will be a norm that making music is something you do whilst holding down a day job. Thanks to Universal’s revised deal, most of this would not live on platforms like Spotify either; it simply wouldn’t get the number of streams to justify it, leaving other platforms to emerge (Bandcamp being something of a case in point).
There is another outcome, which I feel is also increasingly possible. There is much talk of the “zombie internet”, in which most accounts on social media are actually AI bots, all conversing with one another or performing other human functions. One ChatGPT glitch drew back the curtain on just how much AI was driving accounts on X/Twitter, though this has even reached the likes Amazon where it was being used in retail.
Beyond the bots though, there’s just a sense that the internet is getting worse. Search engines are getting less effective, content is becoming saturated and worthless, and all the while the techno utopianist movement tries to tell us that tech really is the answer to everything.
If it is achieving one thing, it is in making us aware of how much we value real things, created by actual humans. This is not a phenomenon the world has really had to address before now, but understanding and valuing what makes us human will become more important than ever as AI continues to increase its presence in our lives.
If I am right, then being real, being human will become a treasured quality. It is plausible it might even see us celebrating analogue media, and moving back towards items we can touch, hold and have materially exist in our homes. Tech is now reaching a point where it is everywhere, but in a manner that is no longer actually beneficial in our lives. Quite the opposite; it is feeling overwhelming and of increasingly little use at times. It would make sense then to see people increasingly rejecting that in favour of a simpler approach based around actual ownership.
I could be wrong on all counts, but for now the signs appear relatively evident: change is coming within the music industry and the wider world as we know it. In the music industry space, stakeholders might even be looking to exit in the face of that, recognising that things will get worse before they ever get better.
If that sounds depressing, I do not think it needs to be. Change does not have to be bad. Yes, change always brings casualties in one manner or another, but ultimately things re-align and grow once more. In the case of the music industry, I think the next winners will be the ones who are prepared to consider a future without superstars representing an absurdly high proportion of all listens, and in which a longer tail of keen music fans all making and sharing material is a more plausible outcome. Really though, the main thing is to be realistic and accepting of what comes next, rather than try to deny it. Nothing good ever came of pretending change isn’t happening.
Have a great evening,
D.
🎶 listening to “Starsailing - a cv313 Tribute” mix by Silent Wanderer on SoundCloud. I wasn’t really across cv313’s work before now, but it is the kind of music I adore: rich, deep, dubby techno dripping in ambience. True head music. This mix will serve as a perfect intro - dive in.
📺 watching the “World’s Best Steak!! 🥩 INSANE DINO RIBEYE - Meet The KING of Beef!! | El Capricho, Spain” Vegetarians and vegans, look away. This is a drool-inducing tour of one of the finest steak spots on the planet. I defy you to not feel hungry whilst watching 😆
Stories from the Music Industry:
Universal Music to cut ‘hundreds’ of jobs in Q1, with majority of layoffs in recorded music division
“While we maintain our industry-leading investments in A&R and artist development, we are creating efficiencies in other areas of the business so we can remain nimble and responsive to the dynamic market, while realizing the benefits of our scale.”
👆🏻Hot take: this is the move of 2024, i.e. cut staff to increase margins and look more profitable. In Universal’s case, it is whether this will fool investors long enough as its growth slows and everyone gets nervous.
Taylor Swift’s music is streamed more in the US than the entire Jazz and Classical genres
Food for thought: If Swift were a record label – which, by owning her own recorded music copyrights (post-Big Machine era), she kind of is – that ‘1 in 78’ stat would equate to her claiming a US market share of audio streams of 1.28% in 2023. That’s a bigger audio streaming market share than both the entire Jazz (0.8%) and Classical (0.9%) genres, according to Luminate data, as well as the entire ‘Children’s’ genre (1.1%).
👆🏻Hot take: I could only read this as a case for a niche jazz music streaming platform - which in turn might yield other niche platforms for metal, reggae and other generally-overlooked genres among major DSPs.
Council of Music Makers slams majors' AI 'wall of silence'
“When the Council Of Music Makers sought reassurance from the majors that music-maker consent will be sought before allowing their music to be exploited by AI companies, we were met with a wall of silence,” claims the CMM now. “Letters from artists and their managers asking to discuss the opportunities in AI went unanswered. Attempts to discuss the CMM’s five fundamentals for the ethical use of music in AI were ignored.”
👆🏻Hot take: arguable proof, if proof were needed, that Universal’s “artist-centric” line around things like AI is really more “money-centric”. It isn’t a business operating in artists interests; it is simply that the artists are the mechanism for the real interest: profit.
Stories from the Broader World of Tech:
Did a ChatGPT glitch reveal Twitter's huge bot problem?
Writer Parker Malloy posted a video that appears to be bot responses to a Twitter post. Each of the responses is a variation on "I'm sorry, but I cannot provide a response to your request as it goes against OpenAl's content policy." This suggests that these are all bots that use ChatGPT to auto-generate responses to tweets. Interestingly, almost all of the accounts have blue checkmarks.
👆🏻Hot take: this will only lend weight to the “zombie internet” theory, i.e. that a large chunk of Twitter (among others) is just AI bots talking to one another, with far less genuinely human interaction going on.
Meta faces another EU privacy challenge over ‘pay for privacy’ consent choice
Withdrawing consent in the scenario Meta has devised requires users to sign up for a monthly subscription. Whereas agreeing to its tracking is a breeze: Users just need click ‘okay’. The legal issue here is that the GDPR requires consent to be as easy to withdraw as it is to grant. So noyb’s follow-up complaint targets the inherent friction in Meta charging users money to protect their privacy.
👆🏻Hot take: if correct on that point around GDPR and withdrawing consent, Meta might have a problem here.
Discord lays off 170 people, blames growing too quickly
“We grew quickly and expanded our workforce even faster, increasing by 5x since 2020,” Citron said in the memo. “As a result, we took on more projects and became less efficient in how we operated. Today, we are increasingly clear on the need to sharpen our focus and improve the way we work together to bring more agility to our organization."
👆🏻Hot take: the list of tech layoffs just keeps getting longer. I still wonder what the true impact of this will be. More startups and innovation? Or just more desertion from the tech space in general?
Need something else to read? Here you go:
The Internet Is About to Get Weird Again
The new year offers many of the promises of an online moment we haven’t seen in a quarter-century
👆🏻Hot take: a must-read from Anil Dash about how the internet is changing back to one that might look familiar to some of us (i.e. the older people!).
‘I do feel bad about this’: Englishman who posed as HyperVerse CEO says sorry to investors who lost millions
Stephen Harrison says he was paid to play role of chief executive of the crypto investment scheme but denies having ‘pocketed’ any of the money lost
👆🏻Hot take: a follow-up on a story included in last week’s NN about the non-existent HyperVerse CEO who has, of course, now been tracked down.
Who am I and who are Motive Unknown?
I’m Darren and I’m the MD of Motive Unknown. I started the company back in 2011. Since then we’ve grown to a team of 20, representing some 25 indie labels in the marketing strategy space, as well as working with artists directly.
Our artist clients cover anything from top-tier pop (Spice Girls, Robbie Williams) through hip hop (Run The Jewels, Dessa), electronic (Underworld, Moby) and more. Our label clients take in Dirty Hit (The 1975, Beabadoobee) Partisan Records (IDLES, Fontaines DC), Domino Records (Arctic Monkeys, Wet Leg), Warp Records (Aphex Twin, Danny Brown), LuckyMe (Baauer, Hudson Mohawke), and Lex Records (MF DOOM, Eyedress) among others.
Recent recorded music clients to join the family include Because Music (Christine & The Queens, Shygirl), Dangerbird (Grandaddy, Slothrust) and London Records (Bananarama, Sugababes).
In addition to our recorded music division, we also have a hugely successful growth marketing division which has a strong focus on the music creation space. Our clients in this space include Beatport, Plugin Boutique, Loopmasters, UJAM, RoEx, Krotos, Rhodes and more.
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It’s a pretty shaky model at present so yup think there are going to be some pretty seismic shifts coming up. Of course it will be innocuous and gradual too just as new car manufacturers stopped installing CD players as standard, just ever so gradually, so we didn’t really notice.
Again, a very interesting article to read. Thanks!