Tag: Music Industry

  • Spotify share price dips 9% on back of first quarterly report

    Spotify share price dips 9% on back of first quarterly report

    Spotify’s share price took a hit yesterday as the streaming music firm published its first quarterly financial report as a publicly listed company. Even though most of the figures contained in said report were pretty much in line with expectations, based on statements made by Spotify in the run to the firm’s direct listing on the New York Stock Exchange last month. The company’s CFO reckons investors just weren’t paying attention.

    According to the quarterly report, net sales were up 26% year-on-year for the first quarter of 2017, though they were down slightly on the previous quarter. That was a result of a 22% dip in ad income, which can possibly – in part at least – be explained by the seasonable ups and downs of the ad market: there’s always more ad spend in the Christmas quarter.

    Ahead of its arrival on the NYSE, Spotify did try to put a positive spin on the revenue-generating potential of its loss-leading really-all-about-the-upsell free service – a service it enhanced last week, of course – which might make investors nervous when they see that side of the business under-perform.

    However, the real money in streaming is in premium subscriptions. There were 75 million paying subscribers by the end of the quarter, a 45% increase on the same period a year ago. In terms of subscription revenue, that was up 2% quarter-on-quarter to 1.04 billion euros.

    Of course, another reason for concern among investors is that Spotify – like all streaming music companies – is currently loss-making. Although Spotify was clear that that would be the case for a while yet as it continues to grow the business. Streaming is a scale game, and Spotify’s aim is to get to the level of scale where the whole thing starts to become profitable.

    Nevertheless, among the concerns expressed by Wall Street types are the level of losses, the pace of growth, and the financial value of each subscriber.

    Some are concerned that Spotify’s pretty impressive premium subscriber growth numbers are being achieved through heavy discounting, reducing the value of each customer. Other more US-centric investors worry about how the service is competing in their home market, where rivals Apple and Amazon are particularly strong and therefore Spotify subscriber growth is generally slower.

    All of which might have contributed to an almost 9% drop in Spotify’s share price in after-hours trading following the release of yesterday’s financial report. Spotify CFO Barry McCarthy told the Financial Times that there were no surprises in said report, and that the share price wobble was likely the result of the market having got slightly ahead of itself when the firm listed. That is quite common with much hyped tech start-ups.

    The FT quote McCarthy as saying: “It was a no-surprise quarter that turned into a surprise for the market. I don’t know what I would have done differently, except scream in a louder voice: ‘We’re going to do what we said we would’”.

    He added that the streaming music firm was pretty much happy with the outcome of its stock market listing. He went on: “We thought there was a risk sellside analysts would ignore the stock. We thought success would be if fifteen analysts followed the stock after three months, and we have 20 analysts covering it already. Volatility has been terrific, liquidity has been good. In hindsight, all of what we hoped to accomplish, happened”.

    Which is all great Barry, but CMU’s single Spotify share is now worth pretty much what we paid for it on the first day of trading. This time yesterday we were up $9.71 on the deal. And I had such big plans for how we were going to spend that $9.71!

     

    Source: Complete Music Update

  • 8 Mind-Blowing Facts About Music Business In Japan

    8 Mind-Blowing Facts About Music Business In Japan

    jpBy Lee Parsons, Founder of Ditto Music.

    As founder of Ditto Music, an online music distributionservice. I was recently asked to undertake a learning expedition to Japan and present my company to the Japanese music market.

    Here are 8 facts that will blow your mind about the Japanese Music Market:

    • It is ILLEGAL to sell a CD for less than $25 in Japan
    • The CD market in Japan is still the biggest making up over 80% of the market, but not just sales….
    • The majority of Japanese consumers ‘rent’ the latest CD. They rip it and then take it back.
    • The biggest group in Japan is called AKB48. They have 89 members and had record sales of over $226 million. A large percentage of the music industry revenue as a whole is JUST from AKB48.
    • The Japanese digital market is small but growing. Spotify have had Japanese offices since 2011 but have so far been unable to launch.
    • Product placement is king in Japan. Unlike the western world where certain practices are frowned upon, it is considered an honour to be in the latest TV advert for washing powder or any other product or service
    • Advertising is old school. Billboard vans drive around Tokyo blasting out music from their latest artists
    • Japan remains a strongly cash-based society. On average, only four credit card transactions are undertaken per person per year! This poses big problems for online services.

    How to get gigs in Japan

    Japanese music promoters work the same as any other country, they want to sell tickets. If you aren’t well known in the market then unless you book the venue and sell tickets yourself you may struggle to organise gigs. Our advice is to contact Japanese artists and see if they will help you out. Plenty of Japanese artists would love the chance of getting exposure in whatever country you live in, so a kind of exchange system would work really well. Work with each other and you will be surprised at the results. Myspace is still very popular in Japan so get retro, create an account and start some conversations.

    Gaining Japanese Fans

    If you are spending all of your time promoting your band in your hometown it could be time to think outside of the box. Japanese culture is very similar to others, they use Twitter and Facebook heavily and have a great respect for western music. The language barrier can propose a problem but a lot of young Japanese, especially in Tokyo have a good knowledge of English. And that doesn’t stop you brushing up on your Japanese.

    The key to any new market is hard work. While a lot of artists may see the obstacles, with such a small percentage of people truly spending the time to build their Japanese market, there is a massive opportunity for the ones who do.

    Wired Japan Feature

  • YouTube reveals $1bn music payouts, but some labels still unhappy

    YouTube reveals $1bn music payouts, but some labels still unhappy

    'We’ve paid out to the music industry over the last several years over a billion dollars,' said YouTube's Tom Pickett.
    Google’s Video service may be ‘all-in on music’, but rightsholder unrest at its parent company persists
    ‘We’ve paid out to the music industry over the last several years over a billion dollars,’ said YouTube’s Tom Pickett.

    A recent piece of research by VideoInk and video analytics firm Tubular Labs claimed that music videos account for 38.4% of all views on YouTube, reinforcing the Google subsidiary’s position as the world’s biggest streaming music service.

    “We’ve paid out to the music industry over the last several years over a billion dollars,” said vice president of YouTube content Tom Pickett during a panel session at the Midem music industry show in Cannes this week, during which he also stressed that “we are all-in on music”.

    Not everyone is convinced. A key theme of this year’s Midem has been continued resentment towards YouTube and its parent company from musicians, independent labels and industry bodies alike. Pickett was heckled during his panel session, and the conference also saw regular anti-Google outbursts from speakers.

    “Google are not music people, and that scares me,” said Colin Daniels of Australian independent music firm Inertia, which helped solo artist Passenger break big last year.

    “I am concerned with YouTube entering the market because for YouTube everything is about dominance, and dominance is connected to destruction,” said Horst Weidenmueller of well-respected indie firm !K7. “I would rather prefer perhaps Google not being in music.”

    Friction between Google/YouTube and the music industry is not a new trend, and there are many ways the two sides are working together, from YouTube helping labels to identify user-generated videos using their tracks and make money from them, through to the Google Play music subscription service.

    Even British industry body the BPI, which has been a regular critic of Google over the high rankings for piracy sites on its search engine, has launched its own YouTube channel called Transmitter to promote British artists’ music – illustrating the perception of Google as both copyright foe and distribution friend for music companies.

    Still, the foe camp have been increasingly prominent at the Midem conference this week, questioning Google and YouTube’s commitment to music, and wondering why the money it pays out to labels and publishers (who then pass it on to artists) isn’t even higher.

    BPI chief executive Geoff Taylor drew attention to this while on-stage with YouTube’s Pickett, comparing YouTube unflatteringly to streaming music services like Spotify and Deezer, which mix advertising-funded free streaming with premium subscription tiers.

    “I think YouTube has lacked that, and that has been a problem for the industry,” said Taylor. “When I looked at the billions of streams there were in music videos, and the pounds and pence coming in to the industry from that, it was a very small number.”

    The streaming rivals are fuelling this debate. Deezer’s chief executive Axel Dauchez called YouTube “the most important legal pirate” during another Midem panel session, while Spotify recently contrasted its own average payout of $6,000 – $8,400 per million streams to the $3,000 per million streams paid out on average by a “video streaming service”. While unnamed, the reference to YouTube was clear.

    YouTube has its defenders in the music industry too, some of whom spoke out at Midem. “It’s a top-five revenue source now at most of the labels, and it’s going up. It’s not perfect, but they’re moving in the right direction,” said Tom Silverman from independent label Tommy Boy.

    Meanwhile, some of the multi-channel networks (MCNs) helping musicians make more money from YouTube suggested that increasing payouts requires making cleverer use of Google’s service, rather than simply demanding higher per-stream rates.

    “It’s no longer an album cycle, it’s a 12-month content cycle. For every piece of content you release, there should be 6-8 other pieces of content to support that,” said Brandon Martinez, chief executive of music MCN INDMusic, which helped indie label Mad Decent capitalise on last year’s viral YouTube success of Baauer’s Harlem Shake track.

    Jordan Berliant, of The Collective Music Group, was more blunt in his appraisal of why some labels complain about YouTube. “It’s not a place to make money right now, but it’s not primarily because of YouTube or Google in my mind, it’s because the people representing the content primarily don’t understand the marketplace.”

    Some of those people’s concerns about YouTube tie in to their wider arguments with Google over its copyright policies, though. During Pickett’s panel session, one audience member demanded to know what YouTube is doing about ‘stream-ripping’ services that enable people to convert videos into MP3 downloads. He was backed up by BPI boss Taylor.

    “We’ve been asking YouTube to deal with these stream-ripping applications for many years. YouTube is supposed to be an ad-funded streaming service, not a free download service,” said Taylor, comparing these talks with the BPI’s separate efforts to persuade Google to downgrade piracy sites in its search engine. “We can’t understand why it’s taken so long for Google and YouTube to do something about this.”

  • Beats Music buys Topspin and leaves Spotify in an awkward spot

    Beats Music buys Topspin and leaves Spotify in an awkward spot

    beats-music-300x256Streaming music service Beats Music has acquired D2C firm Topspin. The company announced the deal in a blog post from its CEO Ian Rogers – formerly boss of Topspin – this afternoon.

    “The acquisition brings a team of talented people who have spent years working on building and fine-tuning the artist-to-fan connection into the Beats Music experience,” Rogers wrote. “Topspin + Beats Music combines music discovery and direct relationships between artists and fans in a revolutionary way.”

    Rumours of the deal have been bubbling within the music industry this week, and we’ve heard from multiple sources that Beats is paying a relatively low price for Topspin – one source suggested it may be as little as $1.5m.

    Topspin has been one of the most prominent companies helping artists manage their direct relationships with fans, as well as selling their own music and merchandise, including deals with Beats Music and Spotify via its ArtistLink platform to show merch within their profiles on the streaming services.

    A Beats-owned Topspin is likely to have ramifications for Spotify, although the volume of speculation in recent days will surely have had the latter company making alternative plans just in case.

    “Topspin partners, please know we’ll be honoring the agreements made by Topspin and assigned to Beats Music,” wrote Rogers. “Since ecommerce isn’t our core business, we’ll be working with the Topspin team to find the best possible partner to handle Topspin’s ecommerce and fulfillment in the coming weeks.”

    Topspin mirrored these promises in its own blog post: “or existing Topspin customers, there will be no immediate change. We will continue to operate both ArtistLink and the Topspin Platform without any interruption to either products’ service,” explained the company.

    “You can continue to use ArtistLink to manage your presence on your MTV artist page or publish your merchandise offers into Spotify. Both of these integrations will continue to operate as-is after Beats Music acquires ArtistLink. There will also be no changes to ArtistLink’s Promo Exchange or advertising service.”

    Topspin hasn’t had the best last 12 months, with senior executives departing – not just Rogers, but SVP of product and marketing Bob Moczydlowsky, who left for a role at Twitter – and a recent batch of layoffs described as a restructuring process.

    The company is understood to have been looking for a buyer in recent months, and found it in Beats. The deal could be seen as a hail mary from Topspin, and a necessary move by Beats to avoid a key element of its service either going out of business or falling into the hands of a rival. However, Rogers suggested a more positive approach.

    “We’re committed to establishing Beats Music as a conduit for the artist-fan relationship, a platform where artists have a voice, and a provider of useful data and analytics on how fans interact with artists and their music,” wrote Rogers. ”This acquisition puts our money where our mouth is.”

    Fonte MusicAlly!

  • Jac Holzman: From vinyl to apps to what comes next (Q&A)

    Jac Holzman: From vinyl to apps to what comes next (Q&A)

    Jac Holzman, founder of Elektra and Nonesuch Records.(Credit: Getty Images)

    Jac Holzman is legit.

    His track record in the music industry stretches back nearly 65 years — that’s the lifespan of about 12 iTunes — to when he founded Elektra Records out of his college dorm room in 1950. He went on to sign acts like the Doors, Carly Simon, and the Stooges, but don’t mistake him as a label exec lost in a bygone era.

    As waves of technological change have washed over the music industry, Holzman worked to stay ahead of the break, testing how the conjoined worlds of music and technology could enhance each other. He was served as the chief technologist at Warner Communications (later Time-Warner) and developed Warner Music Group’s e-label, Cordless.

    His latest project is an encyclopedic app delving into the history of the Doors, something he built with a small team from scratch over the last 16 months. Having harnessed the popular consumer technology of today to rekindle the fanbase of a band formed half a decade ago, Holzman looks back at the music industry’s response to other technological changes and discusses the changes he’d like to see in the future.

    The following is an edited Q&A.

    Q: What is in the Doors app? 
    Holzman: This is the new box set. The idea was to tell the story of a group, whose audience has been growing rapidly — 6 months ago, the Doors’ Facebook friends were 10 million; it’s now up over 15 (million). A lot of this is younger generation. We have assembled the entire Doors story, which you can approach from many different angles. There are over 1,550 pieces, and this is really about an experience. But there are other reasons to do this. Music has become terribly commoditized. We’ve essentially lost the album. In most cases, that’s not a real loss. But there are artists who have been incredible album artists. The album is a matching of context and content, and you’ve got to get them both right for those albums to be magic.

    In general, apps are tough, and they’re tough because to do them well costs real money. Sometimes what it would cost to do a standard album, but there’s no way in today’s “music should be free” climate that you can ever recover that. One of the things that encouraged me to do the app, and encouraged Rhino and Warner Music Group to support my little team, was to see what it would lead to. If you don’t start somewhere, you don’t get anywhere.

    You mentioned before that the Doors app — now that you’re at the other side of it, 16 months later — has been successful. How have you seen that success?
    Holzman: There was a kind of a dynamic flow to these things. While all of the so-called marketing is going on, you’re selling a lot of apps. Two weeks after the marketing is up, you’ve dropped considerably, but you stay steady. It’s not like it ever goes dead, because what you have then is the effect of people turning on other people. When we did the first update, we sold almost as many apps as we did originally. That was really interesting.

    But the Doors adding 5 million fans from the end of 2012 until today, is unheard of. And I think that we’re showing that enthusiasm in the streaming services.

    Jac Holzman at his 2011 induction to the Rock and Roll Hall of Fame(Credit: Getty Images)

    The anniversary of the Beatles’ first appearance on The Ed Sullivan Show is Sunday. I was curious about your perspective on these iconic groups like the Beatles — the Beatles catalog known for being more inaccessible than other classic groups — on the streaming services. What do they have to gain and have to lose by not being on a streaming service, by having an app or by not having an app?
    Holzman: Streaming services are part of the process of ephemeralization that Buckminster Fuller spoke about years ago. If you take a look at what technology has brought us, we used to have to listen to music at home or have it programmed for us on radio, then the iPod came and we could carry it around. Then iTunes made it possible to buy just individual tracks, further ephemeralization. Now you’re in a situation where you can hear whatever, wherever you are at a fixed price per month. That is probably the ultimate aspect of the ephemeralization. Do I think we’re going to stop selling physical product? Not for quite a while. Take a look, physical product is still greater than digital in many countries in the world. No, we’re going to have all of these mixed up.

    I think where streaming services have been weak is in introductions to new music. We need more trusted first filters. Interestingly enough, we used to have them, we had them on radio in the form of disc jockeys, in the early days of FM when the disc jockeys were more eclectic. We lack first filters, we lack first filters who we really trust. I think Beats has a real opportunity there to pick up on. Because Beats has structured itself and is proud of itself as a curated type of service. They launched it probably at the right time. It’s a work in progress but Ian and his people are really first rate so I have high hopes for them. Pandora was designed to sort of average out the things that you listen to and come up with things you might like, I must say that has that has never worked for me. They come up with some of the oddest stuff that has no relationship to anything I like. I gave up on Pandora, but I still use Spotify. I will audition a record, or two or three tracks from a record before I purchase it — but I still purchase a number of records.

    But the best first filters are friends, people who know your musical taste and talk to you about music. We need more of that circulating.

    You’ve talked about how as people pay less but have more access to more music, that’s a win for music.
    Holzman: It’s a win for everybody. It depends upon how you look at it. If you look at it from the vantage point of 1999-2000 when Napster was launched, it’s a disaster. If you look at it and say I am a record label, it’s not so hot either. Look at it and say: My role has changed, the role of this company has changed, and we are now a music rights management entity. We will manage our assets, and we will restructure our company so as to do that as efficiently as we can. Take honey. Pour some honey out on a flat surface and it’s a definable glob, but add heat to it, see how it spreads. That’s what’s happening. I don’t know what the numbers are going to be, but need to you spread it wider, you spread it thinner. The scalability and width is the important thing here, how big can you spread it, that’s what counts because the catalog becomes more valuable. How you call people’s attention to the catalog is another matter.

    You’ve also talked about opportunities missed during the Napster era, when it was such a fractious time. What other opportunities are the music industry taking of advantage of or missing?
    Holzman: It’s not an industry. It’s really not an industry and they’ve been fooling themselves for years. Napster was a wonderful opportunity to build a viable singles market over time because the loading speeds at that time were embryonic. Put aside the business proposition Napster offered the labels, instead of saying no to that, somebody should have said — and I would have I think if I had been working with Warner at that time — there is something in here. Look at what we’ve got, people can trade singles back and forth, we can monetize that modestly, it all goes through a central server so we can account for it. Had a couple of record companies made overtures to it and seen how the service could be worked, that was an opportunity.

    The Doors app(Credit: Screenshot by Joan E. Solsman/CNET)

    I don’t know how much further you can ephemeralize beyond streaming except maybe a yearly implant some place in your body that has all the collected music and is the size of a pinkie nail. I think streaming, you may find different uses for large companies or new companies. I don’t understand, for instance, why a label like Alligator hasn’t picked up on streaming just blues music for the blues fans. The people of Alligator are very smart, I just don’t know, but that would make sense to me, that’s where labels and label name has value today: if they’re particularly good on genre music. I think that that’s probably an opportunity in streaming, but again if the streaming services are going to do this they’re going to have to get the right people there to help them do it. And I think being able to do genre music intelligently probably will bring more people, more quickly to new music than in a general service.

    So you would advocate that streaming music services…
    Holzman: Tailor themselves for what the audiences are out there. If you’re not a 42 Long, don’t send a jacket that’s 42 Long. You can tailor it, and that doesn’t mean people can’t jump across these things. If I were doing a streaming service, I would tailor the material. I’d have a general thing and then I would have maybe different programs done by very good people on a monthly basis. Now there is some of that beginning to happen, but I would like to see more of it, especially since, for people to come, they find an entry point, I found an entry in folk music, it led to electric blues, it led to world music, it led to rock ‘n’ roll. All of these paths end up leading you to a larger musical feast.

    This touches on the ongoing discussion about man versus machine. How valuable is data, raw data, on a large scale about how people are listening to music and where does that value just falls short.
    Holzman: They tried to formulize it. There was a company in Scandinavia that tried to formulize it, and they had these charts and graphs and emotional peaks and stuff. “If you build a song this way, it’ll be a hit.” Music that works touches people generally in ways that are unexpected, they hear something and they go wow. The wow factor is wonderful, the sheer joy that you can take a limited number of notes, and you hear songs that you never would have dreamed could have been written before. A piece of music may affect you more rapidly than any other entertainment, or informational form. Music is like a carom shot in pool, you know, where you go banking off the side of the table to hit another ball, that’s how music works. That’s how it works with me anyway. There are those that you hear where you don’t want them to stop, you’re in an emotional bubble with the song, or with that piece of music, and those are incredibly moving experiences. And I think have a great deal to do with what makes us human.

    “All of the technology is a means to an end. We are the end. And we just have to pay attention..”
    –Jac Holzman

    What is music if you look at it in the context of this day and age, of being such a technologically embarked upon process — I mean it’s always been that way, you’ve always needed technology to hear music and to make music, but today it’s more wires and batteries than it has been in the past.
    Holzman: That’s just a means to an end. All of the technology is a means to an end. We are the end. And we just have to pay attention. And surrender to it, let it take over, you don’t have to be on top of everything all the time. Music is best when you surrender to it, especially when you find something great. If you find crap, turn it off, but if there is something that intrigues you, give it another listen. Some people come to music from the lyrics, some people come from the melody or the arrangement or how it was recorded, but the more you listen, the more you appreciate, so listen to lots and lots of music, even if you’re only paying half attention. Something will seep into your system that you can use. And sometimes music can get you out of a really bad spot.

    But that’s another conversation.

     

    originally posted at CNET.com