Digital music services continue to drive recovery of the music industry after a long period of decline, and the AM/FM music radio business is starting to feel it. Young people born after Millennials don’t use radio the same as previous generations. Can commercial AM/FM radio compete with pure play digital music services? Russ Crupnick of MusicWatch and Steve Goldstein of Amplifi Media join us to discuss what’s happening to radio listenership, and how radio needs to respond to the threat posed by unlimited, commercial-free music.
The way radio pays for music it uses may have acted as a kind of an economic disincentive for radio to invest in its own digital future. AM/FM radio broadcasters in the US pay a tiny amount, about 4% of revenues, to songwriters and music publishers, but American AM/FM stations are exempted from paying anything to the artists who performed the music or their record companies. This exemption doesn’t apply to digitally delivered radio streams, like SiriusXM or Pandora, or even the digital streams of AM/FM radio broadcasters.
Edison Research’s “Share of Ear” report shows that AM/FM radio is responsible for over half of all time spent listening to music in the U.S. among listeners 18 and older. Radio believes the power of its strong, local brands will insulate it from digital competition. However, this may not be the case in the car as the dashboard reconfigures around connectivity with advanced digital services. The car is currently the number one location for listening to radio, and automotive is the number one revenue category for radio. The connected car and its multiple audio offerings may be the greatest threat to AM/FM radio broadcasting, with 75% of new cars expected to be connected by 2020. Listen to this episode of Musonomics as we dive into the uncertain future of radio.
It’s not a secret that live music has kept many artists afloat as the recorded industry has cratered. But fifty percent of last year’s top 100 grossing acts are over 50 years old. Mick Jagger is 73 years old. So what will happen to the live music industry when they’re no longer around? On this episode of Musonomics we’re talking about the future of the live music industry and rock’s demographic crisis. Neil Shah, a staff reporter at The Wall Street Journal, is wondering whether the next generation of artists will be able to command the same ticket prices and bring the same revenue to fill the hole that would exist when Mick Jagger no longer sings “Satisfaction” at sold out stadiums. And if they do — are they gonna be able to do it for the next thirty years?
Music festivals are a big source of income – especially this time of year. Over 32 million people attend music festivals in the US every year. This year’s Coachella sold out in only three hours after the lineup was announced in January. Over the last ten years, concert promoters have been buying stakes in music festivals. Live Nation recently became the majority shareholder in Bonnaroo and the Isle of Wight and is now producing over 60 festivals. AEG Presents, the world’s second largest music promoter, is producing 18, including Coachella the highest grossing music festival. Neil Shah says the promoters are looking to take stakes in a business that will increasingly provide a bigger share of live music revenues.
But it’s not all sunshine. 2016’s Bonnaroo was the least attended in that festival’s 15 year history. And both Tomorrowland and Wakarusa cancelled their festivals last year. This – paired with a lot of lineup overlaps – has raised the question whether we have in fact reached what’s been called peak music festival. Cherie Hu writes about music and technology in Forbes. She thinks characterization of the current scene as “peak festival” is an oversimplification. To get to the bottom of the claim that festivals have a lot of lineup overlaps, she analysed the data from nine upcoming festivals. Hear what she found out in this episode of Musonomics.
As always, you can listen to the new episode on iTunes, or stream it on Soundcloud.
China has the largest population in the world and an economy that keeps growing at a steady pace. But China’s music industry is still the size of small European countries like Austria and Sweden. Why is that? On this episode of Musonomics we take a look at the Chinese music market, so full of potential and changing more in the last five years than in the last 50. We’ll address how decades of piracy have shaped consumer behavior; discuss the major players when it comes to Chinese streaming services and project what will happen in the next few years.
You’ll hear from Ed Peto, the music executive who moved to China to build a bridge between the Chinese music market and the western music industry. Ten years later he’s running Outdustry and helped launch the selling record ever — Adele’s 25 — in the Chinese market.
You’ll also hear from Billy Koh, the Simon Cowell of China with a long view of the Chinese music industry. Billy is a popular judge on the TV talent shows and also the founder and CEO of the hit-making record labels Ocean Butterflies and Amusic Rights Management.
As always, you can listen to the new episode on iTunes, or stream it on Soundcloud.
We know you probably don’t buy CDs anymore, and that you’re not reading the lyrics from the CD case insert. That doesn’t mean you don’t feel the need to look up the lyrics from time to time, right? Especially those fast-paced rap songs, they can be really tricky to figure out by just listening. But when you go online to do that, have you ever thought about whether these lyrics sites have the right to publish those lyrics and make money off of the ads on the site? Probably not.
On this episode of Musonomics we talk about lyrics licensing and how the changes in the music industry are affecting the hardworking people who wrote those lyrics – the songwriters.
You’ll hear from Darryl Ballantyne, CEO and founder of LyricFind. It’s a company that up to date has licenses with over 4,000 music publishers, to try and make sure that the songwriters and right holders are compensated for their work when the lyrics end up online. How did he come up with the idea to start licensing lyrics and how did the music publishers react?
In the end, the people losing out on unlicensed lyrics being published online are the songwriters, so we also talk to Phil Galdston, whose songs have sold 70 million copies worldwide. What’s his take on the songwriters’ struggle to be able to sustain themselves by just writing songs in the digital era? And if you want to hear a longer version of the interview with Phil Galdston, you can find it here.
Let’s start with the good news. In 2016, the music industry saw two consecutive quarters of growth for the first time in over a decade. This growth, largely due to an increase in streaming subscription revenue, sparked the interest of financial institutions like Goldman Sachs and Credit Suisse that see a very promising future for the industry.
As for the bad news; in the next 4 years the American music industry could face unpredictability on all fronts of the business like never before. Unpredictability is a concept that we in the music industry are all too familiar with. But as we leave 2016 behind and enter the first year of a Donald Trump presidency, we find ourselves in a time of unusual uncertainty and apprehension, not unlike the rest of the U.S.
Uncertainty is not good for business and as a result, investment, that is already hard to acquire in the music industry, will become scarce. As consumers begin to grow unsure of the future, spending on entertainment like music will likely see a hit as well, affecting the streaming subscription revenue that brought growth this year.
Trump’s unpredictability and his lack of comment on music industry issues like copyright reform make it hard to tell whether or not he will make any changes to current copyright laws to help songwriters and artists. This is one of the reasons that, like much of the nation, a large part of the music industry that had been banking on Hillary Clinton’s victory and even funding her
campaign, was shaken by the results of the election.
The musicians and business executives in the industry that pride themselves on diversity and freedom of speech were also dismayed at the victory of Trump’s racist and sexist rhetoric.
With so many musicians speaking out against Trump, the one silver lining we might witness is the return of protest music. In this respect, the live music industry may see a rise in revenues as those who are opposed to Trump’s views come together at concerts. The harsh reality, however, is that the rise of protest music against Trump might also affect his decisions on policy. Trump, who has a track record of being easily offended and vengeful, already spoke out against “unfair” protests that
took place after the election. Protest music, although it is so important at this time, may offend Trump and reflect in his policy decisions, especially for copyright reform.
At the same time, it is also true that Trump has a vested interest in copyright due to his involvement in the entertainment industry. Although much of his campaign was focused against lobbying and against the influence of special interest groups on policy, it is clear from his actions since the election that he is going to do a lot of things to help himself and his businesses. Trump owns about 30 copyrights that come from various projects he has been a part of or owned, including the television show The Apprentice, and this gives him an incentive to push for copyright reform to help copyright owners like himself.
At this time, all we can do is speculate. The only thing that has been consistent throughout Trump’s campaign has been inconsistency and there is no reason to expect any different from his presidency. There is no doubt that Trump’s policies and the members he appoints to his cabinet will have an effect on the economy of the country and the workings of all industries, including the music industry.
Still, great music comes out of difficult times. From the jazz music that surged out of Nazi Germany to the soul singing of Sam Cooke’s A Change Is Gonna Come out of the Civil Rights Movement, history has shown that difficult times bring inspiration for great music; the kind of music that brings people together, helps them fight and provides anthems for their fight. The hope is that the music industry will come out of the next four years as a stronger knit community, providing hope and comfort to those who are afraid for the future of this nation.
Brooks, Dave. “Five Ways the Trump Candidacy Will Impact The Music Industry.” Amplify. Amplify Media Inc., 09 May 2016. Web. 24 Dec. 2016.
Erickson, Kevin. “What A Donald Trump Presidency Means For All Musicians And The Music Business.” Hypebot. Hypebot, 14 Nov. 2016. Web. 24 Dec. 2016.
Grossman, Marla, and Gene Quinn. “Trump on Copyright: How the Trump Administration Will Approach Copyright Law and Potential Copyright Reforms.” IPWatchdog.com. IPWatchdog Inc., 17 Dec. 2016. Web. 24 Dec. 2016.
Rau, Nate. “How President Trump Could Be a Boon for the Music Industry.” The Tennessean. The Tennessean, 11 Nov. 2016. Web. 24 Dec. 2016.
Versace, Chris. “Will Donald Trump Make the Music Industry Great Again?” Newsmax. Newsmax Media Inc., 29 Nov. 2016. Web. 24 Dec. 2016.
It’s OK. We know you probably don’t use Tidal’s $20 per month highest fidelity music streaming service.
Or hey, maybe you do, but the fact of the matter is most people don’t spend their hard-earned money on luxury streaming services. But level with us here— even though you might not be subscribed to a high-fidelity streaming service, are you really satisfied with your earbuds?
On this episode of Musonomics, we investigate whether there’s enough room for a profitable niche market supporting multiple competitors in the high-resolution music market.
We’ll talk to MQA CEO Mike Jbara, 7 Digital deputy CEO Pete Downton, and HDTracks CEO David Chesky to see what the future of high quality streaming could become. Is there a real future for these high-quality music streaming services, and, if so, what does that future look like? Let’s find out. As always, you can listen to the new episode above iTunes, or stream it on Soundcloud or YouTube.
Imagine the creation of database that would contain all of the data about all the music that already exists as well as all music going forward. It doesn’t exist yet, but it might — on the Blockchain.
In our latest episode of Musonomics: why are more and more music industry insiders looking to Blockchain technology as a solution to the metadata problem? What really is the Blockchain? And why is it so important? These are just some of the questions host Larry Miller of NYU Steinhardt, and co-host Carmen Cuesta Roca will unpack.
To get you started, we’ve covered the Blockchain on our blog before. Here’s a good Blockchain explainer, and here’s another entry on its significance.
The episode features PledgeMusic founder Benji Rogers, who is evangelizing a comprehensive database of music metadata on the Blockchain. He’s also written on the topic, which you can access here. Singer-songwriter Imogen Heap sheds light on the potential for accurate and intricate metadata. And Bill Rosenblatt of Giant Steps Media Technology Strategies explains that industry-wide standards are key to the metadata problem, but the complexity of the music industry and its vast number of stakeholders will make those standards difficult to achieve.
Music publishing desperately needs some form of public ledger withholding all records of whom is owed what. Blockchain -still- seems to radiate the best potential solution for an efficient transparent automated payment system and a centralized database.
This fervor clearly resonated early June this year at the annual MIDEM conference in Cannes, France. Blockchain has been a sizzling hot topic thanks to momentum generated by two articles written by Benji Rogers, founder of PledgeMusic and the driver of the dot blockchain music project. The topic of using the Blockchain as a solution to the key problems of music publishing has become increasingly popular among music industry executives and artists alike. Performing Rights Organizations (PROs), who are in charge of distributing publishing royalties, haven’t been able to keep up with demanding payment efficiencies facilitated by technology, which has been evolving faster than we can figure out how to make use of it.Yet, Blockchain still remains a batman-esque figure we keep talking about, but who we barely understand.
Blockchain became known for being the underlying technology that allows Bitcoin, a cryptocurrency that is unregulated by a central bank, to exist. For those who don’t know what Blockchain is, I recommend reading this overview of how blockchain works, and how it could be adopted by the music industry.
Most recently, British songwriter and producer Imogen Heap subdued Blockchain’s spotlight after showcasing her venture Mycelia: “ an open database that describes the whole music industry so that everyone involved can be acknowledged and rewarded.” At a first glance, blockchain might sound like an actual quasi-utopian solution for slow or lost payments in music publishing. And it might be, yet all empirical proof stemming from similar previous projects have failed to show positive results, such as the Global Repertoire Database, which was abandoned by its early supporters and shut down in 2014 before it had an opportunity to launch. So, through divergent thinking, I have come up with four vital factors that would need to be addressed for a Blockchain system to stand up to its dreamy epitome and eventually become the next (tech)platform that innovates the business realm of music publishing.
The basic premise of an automated transparent public ledger is for money to travel from point A to B as swiftly as possible. But for it to work effectively and efficiently, data points (who/what is A and who/what is B, etc.) need to be entered correctly for the system to recognize them and distributing the payments accordingly. If a single letter, comma or dash is misplaced, it could mean a relapse into chaos. Each PRO, publisher, record label or anyone who owns the copyright of a musical work, would have to use the same software to enter the data. An alternative would be an underlying standard system of rules that would have to be integrated into any software that provides a solution for entering and uploading specific metadata traits into the blockchain system.
Mistakes are human. Entering incorrect data can always happen. That’s why there are specialists who try to fix them so that a system keeps working properly. In the world of Bitcoin (the most popular application of Blockchain), miners are individuals (or groups of people) who, among other duties, issue new bitcoins by solving complex math problems -with the help of specialized software and hardware- in exchange of a fee (commission). This allows for new Bitcoins to enter the market, thus nourishing the system. In the world of publishing, miners would need to be incentivized to clean the data that was entered incorrectly into blockchains, thus being stored in a “black box” of lost revenues. These miners would need to be granted a percentage or one-time fee of each publishing work they help mine and place in a verified chain so that the designated payment could reach the correct rights holder(s).
In the United States alone there are hundreds of music publishers who distribute payments to songwriters, producers and artists. And these numbers don’t consider the potential hundred thousands of artists who manage their publishing independently. This means all of them would need to have access to this centralized ledger to input their information. And in order to do so, they would first know what Blockchain is, how it works and why it’s helpful. It might sound trivial, yet explaining the context to its users will allow for this technology to bloom its full potential.
Neutral Business Model
Just like anything else in life, a Blockchain platform would require maintenance to keep running smoothly. This could mean debugging, code fixes and any necessary firmware updates, etc. To maintain such a system that benefits numerous corporations and individuals alike, there would need to be a neutral business model set in place that would work for public benefit. A small percentage fee shaved-off from every transaction could be a solution, yet concrete numbers depend on the real costs building and maintaining such a system would incur into.
Where would this leave current PRO’s? ASCAP, HFA or any similar Public Rights Organization would have the potential to develop and administer such a system, yet their current business model would lose relevance. This could create tension between the archaic royalty payment distribution system in place right now and Blockchain.
There are currently two interesting initiatives, which intend to solve this problem, that we can’t lose sight of. One is theOpen Music Initiativeby Berklee College of Music and MIT, who also target to build a “shared way of identifying ownership.” As Panos Panay, founder of the Berklee Institute for Creative Entrepreneurship said “There’s hardly a day when you pick up the newspaper and you’re not reading about yet another lawsuit that is happening in the industry,” he said, “or yet another situation where takedown notices are being sent, because there’s unauthorized use of music on a particular streaming service.” The second one is the Dot Blockchain Music Project, which aims to create a new media format that will, as its website states: “ will provide for the benefit of all musicians, composers and people in the music and related industries, primarily through open source protocol, licenses and leveraging blockchain technology methods.”
It won’t be long until the Blockchain is better understood, or a similar technology appears, and more independent companies or individuals begin coming up with solutions that will disrupt music publishing just like Napster spearheaded the decline of recorded music in the early 2000s. That’s why our next Musonomics episode unpacks what the Blockchain is, who the key players are, and why it’s become the most talked-about new initiative in the music industry.
No music startup has generated an operating profit in 20 years. Not Pandora, not Spotify.
The largest cost and greatest obstacle for music-streaming services like these is the the cost of the music they play, while prioritizing growth over profitability. Spotify pays out 70-80% of its revenue to rights holders for its on-demand service, and Pandora about 50% of its revenue for the radio-like service it currently offers.
But music startups all across the board are struggling. More than half of 2013’s most promising music startups no longer exist.
Why are music startups struggling to thrive, or even simply survive?
In this episode, we examine several perspectives to understand why the space for music startups is so
unforgiving, and what music startups can do to be successful.
Cortney Harding, a digital music consultant, discusses the recent slowdown in the music startup space. Edward Ginis and Brady Brim-DeForest, share of the bootstrapping approach that’s worked for OpenPlay. David Pakman of Venrock explains why his firm has never invested in a digital media company, while Jon Vanhala, formerly of Universal Music and now at Crossfade Partners, offers insight into who can be blamed for the fact that music startups are finding it so hard to make money. But it’s not all bad news. Music isn’t going away, it’s an essential aspect of the human experience. Our episode concludes with Michael Dorf, who tapped into the value of the live music experience and his own love of wine. Michael is generating more profit than he ever did in the digital music business while operating and growing his City Winery locations across the country.
Hot on the tail of this year’s Record Store Day, we’re taking a fresh look at an old medium — vinyl records. About this time last year, we did our first show on the state of physical music retailing, and we concentrated on vinyl. We took a look at how Record Store Day helped revive a segment of the music industry and saved local record stores — but there’s more to the vinyl story than the retail effect.
In this episode of Musonomics, we look further up the vinyl production line to see how the format is maturing, and what’s still holding it back. Josh Friedlander, the RIAA’s data guy, talks about the continued growth of vinyl records. Billy Fields, the vinyl guy at Warner Music Group, chats with us about whether vinyl might be heading for a plateau. And Eric Astor of Furnace takes us into the factory and through the vinyl manufacturing process, from finished audio to a pristine, pressed record.