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Radio Edit | 4.7.23

Radio Edit | 4.7.23

a music industry newsletter

Radio Edit Team
April 07, 2023

The accidental theme of this week’s top stories is streaming- with articles relative to its pricing, growth, and threats.

Other stories include CD’s return to the merch tables and an expanded viewing experience for watching next week’s Coachella festival from home.

Top Stories

The Cases For and Against Increasing Music Streaming Subscription Prices

At a time when industry executives like WMG’s CEO Robert Kyncl feel that music is being undervalued, there is growing pressure on streaming services like Spotify to raise their monthly subscription price as competitors like Apple Music and Amazon Music have done. Proponents of a price increase can point to a recent JPMorgan Chase study with some compelling projections:

For Spotify, a price increase of $1/month would create incremental annual revenue of about $200mm
A 10% price bump by all subscription services would result in a 13% increase in UMG’s earning per share and add $258mm of gross margin annually.
Similarly, WMG’s earnings/share would increase by 21% and add $158mm of gross margin.
Increase in revenue for rights holders, creators, and digital services

As with any argument, there are cases for both sides, and opponents of a price hike have their concerns as well:

Historically, Spotify has focused on growing the number of subscribers by maintaining a competitive price. As 2021 saw music subscription revenue growth fall from 22.2% to 7.2% (it’s lowest since Spotify entered the States), there is concern that a price hike would further stunt user growth.
As inflation and global supply chain issues have forced consumers to be increasingly price-sensitive, Spotify has been able to build a lot of goodwill with customers by not raising their prices through this period of uncertainty. While these issues still loom for the unforeseeable future, Spotify may fear that they could lose that good will by raising prices too early.

While the timing of such a change should be carefully considered, MIDiA Research’s Mark Mulligan warns that music subscription services’ unwillingness to increase their prices could put them at a disadvantage to video-focused competitors like YouTube. “Basically, streaming music waited so long to change prices,” says Mulligan, that “a whole generation expects these prices.” Billboard

How Fraud Detection Agencies Identify and Combat Fraudulent Streaming Techniques

In 2020 alone, a fraud-detection company called Beatdapp estimates that 3-10% of all streaming activity was fraudulent, leading to billions in misallocated streaming revenue. As fraudulent streams continue to siphon revenue away from legitimate music creators and rights holders, an increased focus is being placed on cracking down on these bad actors. Here’s a look at the three techniques generally employed by fraudsters and how protection agencies are fighting back:

While bots are probably the most common and effective form of fraud, Beatdapp’s software is designed to identify anomalous listening patterns- pointing to a specific example where they identified thousands of accounts who were all streaming the same 63 songs.
Because fraud detections software is designed to detect artificial activity, fraudsters attempt to disguise their activity as human by utilizing click farms. Giveaways to click farm activity are usually accounts that stream music 24 hours per day and smartphones that never move or dip below 100% battery power.
A growing trend has been imposters who upload a version of a hit song (generally one that has gone viral on TikTok) under a slightly different name and divert streams away from the legitimate version. Because of the increased frequency of this practice, labels are forced to diligently seek out these imposters and issue takedown notices to protect the streaming potential of their songs.

The effects of rampant streaming fraud go beyond just a label’s bottom line, but can affect how they value assets and plan for future releases as well. “Every penny that goes to a fraudulent stream is a penny that doesn’t go to a legitimate stream,” says Richard Burgess, president/CEO of the American Association of Independent Music. “Fraudulently increased stream counts can affect recording budgets, licensing deals, catalog valuations and can result in the misallocation of marketing budgets.” Billboard

Touring and Mental Health: The Music Industry Manual

Endorsed by Philip Selway (Radiohead) and Marty Hom (tour manager, Fleetwood Mac & Beyoncé), this comprehensive manual is designed to help artists and industry professionals address the physical and psychological challenges that come with life on the road. Written specifically for the music industry by health and performance professionals, this book covers topics including: mental health, performance anxiety, addiction, group dynamics, the media, crisis management, and post-tour recovery. Available at Omnibus Press

Spotify’s Bespoke Approach to India’s Massive, But Complex Market

Since entering the market in 2019, India has quickly become one of Spotify’s top five territories for total users of the platform. For context on how impactful this market is, Bollywood playback singer Arijit Singh racked up more streams on the app last year than Beyoncé. Fast forward to January, Singh broke into the top 10 of Spotify’s Global Top Artists chart, despite most of his plays coming from just one country: India.

While India may be a top 5 market in terms of users, they are not a top 5 revenue market for the streaming service. Contributing factors for this disconnect include a lower per-stream payout, a resistance to paid music subscriptions, and challenges posed by having a market with two official languages and 22 additional regional languages.

Employing a custom approach to India, Spotify is addressing these market challenges by:

offering a comparatively more affordable subscription price point of 119 rupees ($1.45)
offering a mobile-only mini subscription where users can pay 7 rupees ($0.09) per day to access ad-free streaming, group listening sessions, and the ability to download up to 30 tracks.
employing region-specific advertising and marketing with messaging running in five different Indian languages.
making Spotify available in 12 Indian languages. Citing a need to customize their operations to accommodate these language needs, GM/managing director for India Amarjit Sing Batra says “until we came to India, most [of our] markets [were dominated by] one or two languages. The whole structure, from the teams to the way we work to how we look at recommendations, curation — every piece had to be re-looked at.”

Their strategy seems to be paying off as Spotify has become India’s top audio-streaming service for engagement since entering the market just four years ago. Billboard

What Else Is Going On

Signings

After releasing an EP on Lava last year, Poppy has re-signed with Sumerian Records

Haitian artist-producer Michaël Brun has signed with Astralwerks

New West Records signs singer-songwriter Joe Pernice

Kimberly Perry of the Band Perry embarks on solo career as she signs with Records Nashville/Columbia Records

Streaming / Radio

Spotify sunsets Clubhouse-like app Spotify Live

Live / Touring

For the first time, Coachella will be live streaming sets from all stages via the festival’s six YouTube channels

Label

Former UMG Nashville senior execs Rachel Fontenot and Katie Dean to launch new Nashville-based independent label, Leo33

Publishing

Primary Wave acquires stake in Sarah McLachlan’s publishing catalog

Tech / Social Media

Tidal has finally launched HiFi

Other

Snoop Dogg steps down from board position at e-sports company, FaZe Clan

As supply chain issues impede artists’ ability to sell vinyl, CDs are taking up space on merch tables

YouTube is bringing back a feature for their streaming partnership of this year’s Coachella performances – an integration with YouTube Shopping, which allows viewers to purchase exclusive merchandise during livestream performances

Appointments / Departures

Appointments

Nederlander Concerts ups Jamie Loeb to SVP

Tom Keil appointed Global Head of Dance and Electronic / EVP, A&R at [PIAS]

TJ Landig elevated to SVP, Marketing at Warner Records

The Beatport Group appoints Sofia Ilyas to newly-created Chief Community Officer role

Former Head of Music Communications at YouTube Marni Greenberg joins Sofar Sounds as VP, Communications

Departures

UMG Nashville sees the exit of three executives: Royce Risser (EVP, Promotion), Brian Wright (EVP, A&R). and Stephanie Wright (SVP, A&R)

After over a decade in the Warner system, WMG and Anitta agree to go separate ways

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