Took last week off for meetings in LA. Here is this week's count down of the most important stories in the music business:
tldr: The one cross-genre American music awards show motivated by quality and not commerce or television ratings announces nominees.
FRNC: Ok, mea culpa: this isn't one of the most important stories of the week, but it should be, and I'm including it here to speak that future into existence. You know what's awesome? The music of Japanese Breakfast, Jason Isbell, and Arlo Parks. Quite a different look than the top Grammy nominees. The Libera Awards have a legit opportunity to become the most important award show in music in the coming 5-10 years. Part of that is because monolithic institutions like the Grammys broadcast are crumbling. In the days before choice, the Grammys being all things to all people was the best we could hope for. Now the Grammys themselves are trending toward being a niche. But if independent music and the Grammys are both niches, which will be bigger five years from now? For the love of god, A2IM, find some investors and roll the goddam dice.
Meanwhile, It's Award Week
As we head into Oscar weekend, and then the Grammys a week later, it's fun to debate who will win. But the real question is, will anyone watch? If the trend line for most of this decade--and especially the last few years--continues, the literal answer may be "no." But hey, don't you worry! Award shows are still making money even if no one is watching.
Here's a darker thought: is there a ratings number at which the optics for, and the upside associated with the show become so poor that artists stop going? Sad to say, I'm not heading to Vegas for the Grammys. These days, I go to Grammy Week to catch up with all the folks who are making tomorrow's music business happen--the up-and-coming executives, cool indie companies, etc. And almost none of those folks will be in Vegas.
tldr: French DJ Maelstrom used Sound.xyz to sell a 14-track, hour-long mix. The project raised $36K almost instantly, with the producers of the tracks receiving 5.7% each. Meanwhile in Austin, TK dropped a new song into his DJ set, through a QR code up behind him, and sold a track for roughly $3K.
FRNC: There were a few other NFT stories I could have chosen this week. Namely, we all need to keep an eye on Instagram. And big music partnerships like this one for live NFTs with AEG Presents. And also who is investing via hires to build in the space. But to many, the most interesting aspect of the NFT space is the way it can empower independent artists to create new models and connect directly with fans. Maelstrom and his producers split $36K almost instantly. Secondary sales of the mix have generated just under $10k so far this week, and the creators will get ten percent of this revenue stream in perpetuity. Meanwhile, the TK approach of throwing up a QR code during live music is tried and true--selling things to drunk fans is one of the oldest business models in the music business book. Forget about giant dollar amounts in headlines. Pay attention to the business models that are emerging.
3 ASIA ASIA ASIA
Tldr: Revenue is flowing into and out of SE Asia at increasing velocity
FRNC: Analysts, reporters and Twitter busy bodies focused on the music biz should probably pay more attention to SE Asia than to NFTs. The first two headlines are obvious milestones for the growing music biz in SE Asia. You have to read into the third headline: check Believe’s growth by region, and Asia Pacific and Africa combined grew a whopping 63.4% compared to the prior year and represented nearly a quarter of the company’s total revenues.
Tldr: HIFI, a financial tool/dashboard to track and predict earnings across artist platforms, announced an impressive list of investors, ranging from Quincy Jones, Diplo and 3lau to Michelle Jubelirer, the Chair/CEO of Capitol Records.
FRNC: This story was everywhere, based on the semi-breathtaking list of industry leaders named in this investment round. But if you read any of these stories, and can tell me exactly what it is HIFI does or how they make money, I’ll give you a dollar. Meaning: shame on the trades for reprinting a press release, without doing actual new reporting.
I contacted a few of the folks named in the release and didn’t get the strongest sense that they knew exactly what they had invested in either. But there’s two reasons I think this is a really important story. One, all of the investors I spoke with sang the praises of CEO Damian Manning as a legitimate visionary, and the reason why they invested. And two, creating better, faster accounting that is also predictive is such an obvious need in the industry. This is a business that often takes the better part of a year to provide clear accounting—and god forbid, pay—for artists. If HIFI can do what it has hinted at in previous press, this could be transformative for artists' abilities to pay their bills. As reported, part of the service called Cash Flow "allows artists to get paid a salary twice a month based on their expected royalty income for the year."
The potential of HIFI reminds me of the early days of Kobalt, who launched on the promise of realtime digital dashboards for accounting, instead of the twice-annual paper phonebooks that artists and business managers received. Behind the scenes, every major publisher told me how silly Kobalt’s vision was, and then probably less than two years later, they were all building the same dashboards to play catchup. The real revolution in music, if it happens, will be the emergence of a healthy middle class of artists—talented singers and performers who will be able to pay for health care and raise families. This will require different funding sources and financial tools, and from what I’m hearing, HIFI is one to watch.
And the biggest news of the week, even though it's old, mostly predictable, and anyone who needs to care is probably tired of this argument, but there's still important reasons you should care:
1. Spotify blah blah blah something something money
Daniel Ek Shares New Loud & Clear Report on Spotify Payouts
And: The Best Analysis I Read, By Far (MBW)
Tldr: Spotify updated its Loud & Clear report with 2021 royalty payouts, showing that 200k artists are making $50k a year or more--up 23 percent from 2020.
FRNC: Yes, my headline was intentional. Debating with most people about whether Spotify payments are fair is like arguing about politics with your drunk family. You already know what they're going to say, no one knows what they're talking about, and everyone is so upset. And just like politics, I'm exhausted by the debate. If you want to say Spotify should raise their prices and pass more revenue on to the music biz, I think there are good arguments to be made. But if you think Spotify is unfair to artists or songwriters, I generally disagree. Spotify hands over ≈ 70 percent of their revenue to rights holders. And I'm sorry, but that's reasonable. Are artists getting screwed? Yeah, if they signed a standard 15-18% royalty deal. Are songwriters getting screwed? Yeah. But not by Spotify. The dirty truth is, the labels get ≈ 52 percent of every Spotify dollar and publishers get ≈ 16 percent. Artists and writers get paid from those respective buckets based on their individual deals. Should the master recording be worth more than 3X the lyrics and composition, particularly at a time when modern music is driven more than ever by writer-producers? Hell no. Is that Spotify's fault? Of course not. But the music publishers, as led by the NMPA, can't in any way publicly attack the labels that are taking an unfair share. Because they are all owned by the same people! Can you imagine Sony Music Publishing attacking Sony Music? Spotify also can't point this out publicly, because they'd be seen as attacking their supplier. These are points worth considering when you read about the rate court proceedings.
Two stats I loved: One, just over a third of the artists making $10K or more a year live outside of the top 10 global music biz markets. And two. Spotify says they are responsible for 20 percent of artist revenue. Which means you can multiply the Spotify figure by four for a sense of what artists are making in full from recorded music. By my math that means there may be nearly 20k artists in small markets around the world making $40k or more. That's a little something I like to call the future of the music biz.
FINALLY
Win a Bet
According to this Hit Songs Deconstructed report on all songs that hit the Top 10 of the Billboard Hot 100 chart throughout 2021, only two artists earned those hits as solo writers: Glass Animals ("Heat Wave") and J Cole ("95.south," "Amari" and "Interlude.") More than two-thirds (69%) of those hits utilized four or more writers.
.
|
