🔵 How the music industry is diverging into two separate economies
MIDiA Research's latest report highlights just how our industry is changing
Hi there -
MIDiA Research has published its latest “State of the Music Creator Economy” report. You can find full info with insights and details on how to purchase here.
The report itself is a dense work. It says everything that I’ve only gotten about eight pages in and I’ve had to take a break, as the volume of mind-blowing facts was proving a little much to digest without serious pause for reflection.
One trend it highlights, which I’d argue is consistent with what I’ve written/warned about in the past, is the divergence that’s occurring in the music industry. In 2022, the number of creators grew by 12% to 76 million. The number uploading their music to services grew by double that amount. However - and this was the red flag moment for me (one of them anyway) - the number uploading to streaming services grew at half that rate.
In simple terms, it would appear creators are seeing less value in being on streaming services, and may instead be choosing to focus their time elsewhere. Quite what that means for DSPs longer-term might be up for debate. Personally I don’t think this spells the end for the streaming model; it just demonstrates an evolution of sorts.
This diagram shows how things are changing:
This all brought to mind a clip we were discussing earlier today on the company Slack board: one of a creator “speed running” to create the Soulja Boy Crank Dat beat in less than 17 seconds:
In many ways this is a perfect example of the evolution of the creator. A producer is using their talent not to create their own music, but to recreate someone else’s, all in a gamified setup where speed is the key goal. And arguably if this creator was looking for viral fame, he most definitely found it.
Of course, that’s not the only way music creation and consumption will evolve, but it is a fine indication. Music is certainly not “that thing you just stream on Spotify” any more. It is increasingly central to entertainment, with creators becoming broadcasters and the amount of play around music itself (such as the gamified example above) being new, emergent trends.
This also chimes with another article I read yesterday - The Record Label Is In Crisis - which does a terrific job of outlining how record labels used to work, and how they are largely still working within that same construct, whilst the entire consumption model of music has shifted around them. It is a compelling argument that labels need remodelling from the ground up if they are to provide greater value to creators.
This is not to say the music industry as we know it is dead, or will be any time soon. However what MIDiA’s report illustrates is the degree to which new economies in music will begin to appear, sitting alongside the existent ones.
If we can accept that this is a likely outcome (and I certainly do), then the next question it raises is whether the incumbent music industry rights holders etc will look to move into this space. The likes of Universal et al certainly have the financial means; ironically at this point I’d argue the bigger issue is the mindset required to engage with this all. That will definitely require some work.
Have a great weekend,
🎶 listening to “Surreal Estate” by Emperor’s New Clothes. I became aware of it after Trevor Jackson (aka Underdog) launched a ferocious salvo at Acid Jazz regarding his attempts to issue the album. I’ll let you read it rather than repeat it here. Those issues aside, Jackson is right that this album is a stone cold classic; a five star gem that most definitely deserves a proper reissue in its intended state. Make time for it.
📺 watching “Filthiest, Dark Mud, Poured From This Flooded Rug | Carpet Cleaning Satisfying ASMR”. I’m blaming the Adam Buxton podcast for this one. Why is this so satisfying to watch? Either way… I might be addicted.
🤖 playing with Sonic Garbage, a loop-builder that draws random audio from random YouTube videos and presents it as a set of squares you can turn on or off. Sounds odd, but use it right and you can create quite hypnotic little soundscapes, like this one my colleague Stone and I batted back and forth a couple of days ago.
📖 Network Notes might become more sporadic next week, basically depending on how much news there is to cover. I suspect we might create two more editions before breaking for Christmas
👏🏻 Congrats to George Constantine Douglas who won first the Network Notes Music League! That was a lot of fun - expect a new league in the new year.
Stories from the Music Industry:
According to a report from Ashley Carman at Bloomberg on Monday (December 11), Apple Music “plans to give added weighting to streams of songs” mixed in Dolby Atmos. The move could result in increased royalty payments for artists who release their music in Spatial Audio, reported Bloomberg, citing “people with knowledge of matter”.
👆🏻Hot take: this feels right to me. Let’s not forget that remixing albums into spatial/immersive audio is costly, so Apple needs to show some kind of ROI for rights holders investing into that space.
Universal Music Group is worth more than $50 billion, as firm’s share price hits highest point in 2 years
According to Euronext data, UMG’s share price today translated into a market cap valuation of EUR €46.944 billion. In US Dollar terms at current exchange rates, that’s worth USD $50.68 billion. This is Universal’s highest share price since December 7, 2021 (€25.78) – just over 24 months ago. UMG’s share price peak came in mid-November 2021, when its day-close stock price crested at €27.72.
👆🏻Hot take: news like this amounts to a double-edged sword. Great news for Universal, but potentially more grist to the mill for any artists arguing that too little revenue finds its way back to creators.
Spotify has reversed its decision to pull out of Uruguay after receiving clarification from the government regarding recent changes to music copyright laws. The Uruguayan government has confirmed that rightsholders, rather than streaming platforms like Spotify, will be responsible for ensuring fair compensation to artists. This means that Spotify will not be required to pay multiple times for the same content, addressing concerns the company had raised about the sustainability of such a practice.
👆🏻Hot take: it would appear logic and sense prevailed, which in this day and age is oddly comforting.
Described as “an artist-centric, multi-genre social media platform”, FENIX360’s deal with DUET, expected to be completed in the first half of 2024, will see it become a public company on the NASDAQ. According to the announcement, the transaction values FENIX360 at $610 million.
👆🏻Hot take: I really don’t understand this. These manoeuvres yield gigantic valuations that, from where I am sitting anyway, make no sense whatsoever.
Among its complaints: a government-backed working group to discuss remuneration “is still to meet. We have no detail on who will be on the group or even its remit for discussion”. The body added in its statement that “despite some progress on improving data and transparency, the most contentious issues around music maker remuneration are yet to be explored. This is an intolerable situation for the UK’s artists, songwriters, musicians and producers”.
👆🏻Hot take: curious to see if the UK Govt will actually respond to this, or if the CMM is shouting into the void at this point. All progress thus far feels frustratingly slow.
Stories from the Broader World of Tech:
“Today’s verdict is a win for all app developers and consumers around the world,” Epic Games wrote in a statement about the verdict. “It proves that Google’s app store practices are illegal and they abuse their monopoly to extract exorbitant fees, stifle competition and reduce innovation.”
👆🏻Hot take: with an appeal quite definitely happening this is far from over, but this initial result certainly doesn’t reflect well on Google and its conduct around its app store to date.
Snapchat is releasing a few new AI powered features for Snapchat+ subscribers, the company announced on Tuesday. Most notably, subscribers can now create and send AI-generated images based on a text prompt. In addition to getting access to a new AI extend tool, subscribers can now also use the app’s Dream selfie feature with friends.
👆🏻Hot take: I like how Snap is rolling out its AI functions. This is the kind of AI I see people happily adopting: tools to help create and enhance an experience.
93% of US teenagers say they use YouTube, although that’s down slightly from the 95% it scored in the corresponding research last year. Second-ranked TikTok is used by 63% of US teens (down from 67% in 2022) with Snapchat (60%) overtaking Instagram (59%) for third place. The sight of YouTube, TikTok AND Instagram all declining in reach year-on-year is perhaps something to think about. This year Pew measured Discord for the first time, and found that 28% of US teenagers are using it: more than WhatsApp (21%), Twitter (20%) and Twitch (17%).
👆🏻Hot take: at a point where the music industry obsesses over TikTok, this makes for a fine reminder that YouTube is still absolutely a platform to focus marketing efforts into.
Need something else to read? Here you go:
Overdoing it, the experts say, doesn’t have to be inevitable at all.
👆🏻Hot take: I’d argue most of us will find this piece relatable.
Looking for an online bargain? Beware of exploding batteries, dangerous toys, even socks that can burn you …
Many items sold through online marketplaces don’t meet safety regulations. Then there are the counterfeits. Why is the law so powerless – and how can you protect yourself?
👆🏻Hot take: it does seem ludicrous that anyone can sell online with no regard for the safety of whatever they are selling.
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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