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Hello all -
Apologies for the lack of Digest; since Thurs last week I was in LA, and between a hectic schedule and an 8hr time difference getting these out proved impossible.
SoundCloud is grabbing some headlines today with its own response to Spotify's direct monetisation move, which will allow Pro and Pro Unlimited users with more than 5k plays to upload their own tracks and draw down revenues without a middleman. A nice concept, for sure, but one wonders how many more of these will be announced but crucially whether any will actually move the needle. Even Spotify's announcement appeared to met with something of a shrug from most quarters of the music industry, I suspect because everyone feels the whole process of releasing music runs a little deeper than just "upload it to a streaming platform". Whilst SoundCloud makes bold claims around its user base etc, its means to generate revenue has not been its strongest asset to date, with a more terse response from one artist on Twitter simply being "100% of nothing is still nothing".
One article that really got me thinking today was the ever-reliable Mark Mulligan's breakdown of Tencent Music's IPO. The really fascinating bit here is in how Tencent actually makes its money, with the bulk of it not being from streaming music directly (as many assume, I suspect) but more from broader "social experiences" which covers things like virtual goods and and social gifting. If that is the case, and if Tencent's IPO goes to plan (it is worth noting Mulligan's points regarding Chinese firms lying to Wall St regarding user numbers, among other things), it will be an interesting business to analyse compared to the likes of Spotify et al. Put simply, if Tencent successfully IPOs to a billion dollar offering, one would expect many to ask why more companies in Europe and the US aren't looking to explore similar models to generate money around music, as there is evidently a huge amount of value in it. Take a read below - great food for thought...
Have a great evening,
D.
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The platform is expanding its direct monetization program, SoundCloud Premier, to hundreds of thousands of users and claims to offer “the power of direct monetization to many times more creators than any other audio service”. SoundCloud Premier was previously an invite-only program, but it is now being rolled out to SoundCloud Pro and Pro Unlimited ‘creators’ with ‘eligible content’, at no additional cost. Eligible creators are those with at least 5,000 plays in the past month from countries where SoundCloud listener subscriptions and advertising are available (US, UK, Canada, Australia, France, Germany, Ireland, The Netherlands and New Zealand).
https://www.musicbusinessworldwide.com/soundcloud-expands-direct-monetization-program-to-hundreds-of-thousands-of-users/
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TME reported its combined (net) mobile music MAUs to be 644 million in Q2 2018, though defining its users as unique devices rather than unique users. (Interestingly, it defines its social users on an individual basis.). What is clear is that TME’s music users and social users are mirror opposites in user tally and the revenue they generate; social users are just 26% of users but account for 71% of revenues. Clearly, TME has identified there is a lot more money to be made from social experiences than streaming music. Few western companies saw this opportunity. Musical.ly, founded by Alex Zhu and Luyu Yang, did, and was predictably bought for $1 billion by Chinese company Bytedance, home to Douyin (known as TikTok in the west).
https://musicindustryblog.wordpress.com/2018/10/05/looking-for-the-music-in-tencent-music/
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Like YouTube and Facebook before it, Snapchat is pushing head-first into original entertainment programming as a way to drive up engagement among its predominantly young audience and capture lucrative video advertising dollars. But its slate won't be ripped from the Netflix playbook. All Snapchat scripted series will average about five minutes an episode and be released daily in the signature vertical video format. “It is uniquely Snap,” says Dead Girls producer Jordanna Fraiberg. “In this version, it can’t exist elsewhere.”
https://www.billboard.com/articles/business/8479238/can-snapchat-original-shows-keep-users-from-disappearing
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MTS’ new idea: let fans choose if they want their subscriptions to be divided up in this new way. “When the fan signs up for a service, let the fan check a box that says ‘Ethical Pool.’ That would inform the service that the fan wants their subscription fee to go solely to the artists they listen to,” it explains, suggesting that this would ensure streaming services don’t fall foul of contracts that require them to treat royalties in the traditional ‘Big Pool’ way. “Artists also would be able to opt into this method by checking a corresponding box indicating that they only want their recordings made available to fans electing the Ethical Pool. The artist gets to make that decision. Of course, the artist would then have to give up any claim to a share of the ‘Big Pool.’
https://musically.com/2018/10/09/ethical-pool-idea-could-let-fans-choose-user-centric-royalties/
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“We have teams who are literally looking at data and stats all day long; various touch-points of whether something looks like it’s got an audience. But the fact is, there has to be some degree of personality injected into the process… The data is dramatic now because of the streaming services but sometimes [an artist’s success] can appear in a different way later on, and that can [show] more longevity than an act that has good [immediate] stats.”
https://www.musicbusinessworldwide.com/rob-stringer-talks-spotify-ar-youtube-and-the-possibility-of-a-major-label-owned-streaming-service/
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An analysis of the impact of Europe’s new data protection framework, GDPR, on the adtech industry suggests the regulation has reduced the numbers of ad trackers that websites are hooking into EU visitors. But it also implies that Google may have slightly increased its marketshare in the region — indicating the adtech giant could be winning at the compliance game at the expense of smaller advertising entities which the study also shows losing reach.
https://techcrunch.com/2018/10/09/gdpr-has-cut-ad-trackers-in-europe-but-helped-google-study-suggests/
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Innovations on the tech side of music haven’t done much to curtail its piracy problem, according to the International Federation of the Phonographic Industry (IFPI). The organization, which represents the interests of recording industries around the globe, released its 2018 consumer insight report on Tuesday, finding that 38 percent of consumers are obtaining music through illegal means. The most popular form of copyright infringement is stream-ripping (practiced by 32 percent of all consumers), followed by downloads through cyberlockers or P2P (23 percent) and obtainment via search engines (17 percent); Those results come out of a study that the IFPI conducted, earlier this year, among a representative sample of 16- to 64-year-olds in 18 countries — including the U.K., U.S., Brazil, France, South Africa and South Korea
https://www.rollingstone.com/music/music-news/streaming-music-piracy-copyright-stealing-734293/
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Blockchain startup DotBlockchain appears to have secured a high-profile new partner from the rightsholder world: Warner Music Group. “In the next months, Warner Chappell publishing and WMG labels will collaborate with us to create a revolutionary way for record labels and publishers form a collective truth about their media assets on the blockchain,” announced DotBlockchain, while stressing that the partnership is starting with a limited catalogue.
https://musically.com/2018/10/03/warner-music-group-signs-partnership-with-dotblockchain/
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Facebook Inc. is rapidly increasing its ad revenue from video, capturing 25 percent of the nation's digital ad spending in that category, according to a forecast released Tuesday. Facebook is expected to bring in $6.8 billion in digital video ad revenue this year, up 42 percent from 2017, according to research firm EMarketer. The Menlo Park, Calif., company, which owns photo and video app Instagram, is outpacing video ad sales for other social media competitors, including Twitter Inc. and Snap Inc. Facebook commands 87 percent of U.S. social network video ad spending, compared with Twitter's 8 percent and Snap's 5 percent.
https://phys.org/news/2018-10-facebook-captures-percent-digital-video.html
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