🔵 Spotify unveils its changes to streaming payouts... but is it enough?
Sensible changes are afoot, but will it placate the likes of Universal?
Spotify has finally stepped up with its own take on combatting the various issues around streaming fraud and general white noise content on its platform with a threefold set of changes.
The first will see the platform change the minimum number of streams required to generate a royalty payout. So instead of a royalty being generated after 30s of music is played, it will instead require a minimum number of annual streams.
The second will see Spotify fining distributors aiding in provision of any music found to be engaging in streaming fraud. This also includes penalising labels.
The third will revise the minimum play time for a white noise track to have before it generates a royalty, thus eliminating the “60mins of music cut into 30s songs” issue that we’ve seen on the platform of late.
All three provisions are fairly sensible to me; in general I would think rights holders will be unanimous in agreeing that this is an improvement on the current state of affairs.
The real question, however, is whether this will go far enough to satisfy the likes of Universal, which has been increasingly vocal about its dissatisfaction with streaming remuneration, leading to its own deal with Deezer that we have covered a fair bit before now.
A cynic might argue that Spotify is make a pre-emptive strike here, offering a revision to things before rights holder force an alternative arrangement upon it. The reality is perhaps that these changes are all small, in the grand scheme, and that whilst they might do a little to reallocate some monies, they might not do enough to “enhance the value proposition of the platforms themselves, accelerating subscriber growth, and better monetizing fandom”, as Lucian Grainge put it back in January.
For that reason, it will be very interesting to see if the likes of Universal accept this as “good enough”, or whether it pushes back, seeking something that looks more like its deal with Deezer.
I’m fascinated to see how it all plays out.
Have a great evening,
🎶 listening to “Stoned Autopilot - C2 Version” by Martin Buttrich. I am a huge Carl Craig fan, and his considerable volume of remixes are always worth visiting. This is one high point that a lot of people missed, with Craig dialling in the kind of metronomic, repetitive 4/4 vibe that sounds simple, but is oh-so-hard to actually nail. Arguably the perfect song to walk to, such is the pace. Believe me, you’ll get anywhere quicker with this on!
🤖 playing with UJAM’s Beatmaker DOPE plugin. I’m 100% here for anything that lets me make beats like this in under 10mins:
Stories from the Music Industry:
Spotify is changing its royalty model to crush streaming fraud and introduce a minimum threshold for payment
In short, the three changes are: Introducing a threshold of minimum annual streams before a track starts generating royalties on Spotify – in a move expected to de-monetize a portion of tracks that previously absorbed 0.5% of the service’s royalty pool; Financially penalizing distributors of music – labels included – when fraudulent activity is detected on tracks that they’ve uploaded to Spotify; and Introducing a minimum length of play-time that each non-music ‘noise’ track must reach in order to generate royalties.
👆🏻Hot take: these changes are all sensible enough. The real question is whether this will satisfy the likes of Universal with its current dissatisfaction of streaming remuneration models.
NTS has not been sold—that’s the major point of difference when comparing its situation to that of Bandcamp—and the deal with Universal is not the first time the station has taken on outside investment. Parsing its statements, it seems obvious that “nothing is changing” was the primary message that NTS management wished to impart, even as it subtly touted the benefits that UMG’s involvement would bring.
👆🏻Hot take: kudos to for breaking this story. Personally I think its another example of “damned if they do, damned if they don’t” here. I also wonder if Universal’s investment is an attempt to ‘fix’ its A&R on some level.
The weeks/months ahead will require delicate and strategic maneuvering by shareholders to balance a desire for a more independent leadership team with the constraints of contractual obligations to the investment advisor. Along these lines, while the desire to terminate the investment advisory agreement is unsurprising. Electing a new board of directors who can implement a sustainable financial strategy and pursue a sale process with third party companies may prove to be easier, cheaper, and, ultimately, generate greater upside.
👆🏻Hot take: another fantastic, thorough deep dive into the Hipgnosis situation from. Be sure to subscribe to his newsletter as it’s a brilliant read.
The company’s Gross Margin finished at 26.4% in Q3, while, in terms of profitability, Spotify posted an operating income of €32 million ($34.82m). Amongst the factors listed by SPOT for turning a profit in Q3 were an “improvement in podcast trends”, as well as “growth in marketplace activity”, plus “other cost of Revenue favorability”.
👆🏻Hot take: cutting costs, reducing staff overheads and pushing prices up appears to have worked (finally!). Curious to see further analysis regarding both the increase in ad revenue (suggesting a growing free tier) and a decrease in ARPU.
TikTok Music just launched publicly in Australia, Singapore and Mexico… without Universal Music’s catalog
The question many in the music business will be asking now is, why didn’t TikTok Music wait until it had all three majors on board before expanding the music service out of beta in Australia, Singapore and Mexico? And could UMG’s hold-off from the service in these three territories have something to do with ongoing global negotiations to license UMG’s catalog to both TikTok and TikTok Music in future?
👆🏻Hot take: an odd decision to launch without Universal rather than wait to negotiate, but still keen to see how this shapes up as a music platform. Features like the AI assistant certainly suggest something that could be a breath of fresh air.
“Starting today, we’ll begin rolling out a new experimental feature for English language US users on YouTube Music that creates customized playlist art using generative AI,” explained director of product management T. Jay Fowler in a blog post. “The guided experience allows users to effortlessly explore from a range of visual themes and options to create one-of-a-kind cover art that expresses the uniqueness of your personal playlists.”
👆🏻Hot take: a simple-but-smart feature addition here. Now, can we get an AI playlist-creating assistant please?
Stories from the Broader World of Tech:
Livestreaming is an example where Meta sort of shot itself in the foot as far as content creation goes. I have no doubt some streamers would love this if they could use this on TikTok or Twitch. But they can’t. Instead, they’re corralled into Meta’s services. It makes sense — Big Tech loves protecting its walled gardens — but from a broader adoption perspective, this is silly. It’s one of the reasons Snap’s Spectacles never took off. Meta’s mostly lucky that Instagram is still popular with influencers.
👆🏻Hot take: credit to Meta, its product design here is fantastic. Agree that locking it in to Meta’s world is a huge negative, but everything about these makes them a compelling product to try out IMO.
X-formerly-Twitter is still bleeding advertisers under Elon Musk's characteristically unpredictable leadership — and the situation may be even more dire than we'd thought. As Insider reports, marketing consultancy Ebiquity found that the vast majority of the biggest spenders have stopped advertising on X following Musk's ill-fated takeover last year. That seems to contradict Musk's and CEO Linda Yaccarino's recent promises that all is well and that most of the advertisers have since returned.
👆🏻Hot take: no surprises here. I still wonder how much longer this farce can continue.
Snap generated $1.19bn in the third quarter of 2023, up 5% year-on-year. It’s not profitable yet, although its operating losses narrowed from $435.2m in Q3 2022 to $380.1m a year later. In the results, Snap called out its ‘My AI’ chatbot as a success story. Since its launch in February this year, more than 200 million people have sent over 20bn messages to the bot.
👆🏻Hot take: great to see positive results for Snap. More contenders in this space is no bad thing.
Need something else to read? Here you go:
Balance disorders like vertigo can be devastating for patients—but they’re often invisible to the doctors who treat them.
👆🏻Hot take: incredibly timely to have this suggested as an article in Pocket when my own inner-ear complaint has returned with a vengeance. A great read though - even if your balance is fine!
There has been quite a hullaballoo in Nigeria recently over the fact that the three top candidates in February's presidential elections presented academic records showing different names to those by which they are now known.
👆🏻Hot take: I never knew this about the Nigerian approach to names and naming people. Fascinating stuff.
The latest from Motive Unknown’s world:
Guns N Roses legend Duff McKagan makes released his highly anticipated 6th album. We’ve had the pleasure of running all Duff’s e-commerce, digital marketing strategy including a gated, early access livestream of the new single and an exclusive interview with Jerry Cantrell.
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