<
https://www.theguardian.com/music/2021/oct/02/odds-are-against-you-the-problem-with-the-music-streaming-boom>
"With the streaming revolution breathing new life into a once-moribund music
industry collapsing under plummeting CD sales and rampant piracy, the world’s
biggest record companies – Universal Music, Sony Music and Warner Music – have
got their financial mojo back.
After facing financial ruin a decade ago, the trio, which control the vast
majority of the world’s biggest hits with a roster of talent spanning Taylor
Swift, Ed Sheeran and Coldplay to the Beatles, Adele and the Korean megaband
BTS, are now valued at a combined $100bn (£73.8bn) as investors bank on the
titans being the biggest winners of the streaming boom.
“Fundamentally, music is a superstar business,” says Mark Mulligan, an analyst
and the managing director at Midia Research. “The streaming economy is working
really effectively in many ways. Music is now seen as stable, so big
institutional investors are flooding the space as they see streaming as a safe
and predictable asset. But they want to invest in the biggest companies and the
major labels have that market share, they have more artists – the biggest –
they have more streams, more everything.”
It is the sustained streaming gold rush that sent shares in Universal Music –
the world’s biggest music company which was floated by its French parent,
Vivendi, earlier this month – soaring, giving the business a €45bn valuation.
Bought for $3.3bn in 2011 by Sir Leonard Blavatnik, Warner Music, the world’s
third biggest music company, has rocketed to a $22bn market capitalisation
since being floated last year.
The big music companies have been able to use their muscle to strike
increasingly advantageous deals on royalties from streaming with leading
platforms such as Spotify. The basis of that negotiating power was highlighted
in a report from the Intellectual Property Office published last week, which
showed that the top 1% of artists account for 80% of all streams, and that 10%
account for 98% of all listening by fans.
And of the most popular tracks, big music companies own the rights to three
times as many among the top 10% as those owned by independent labels. In any
given week, nine of the top 10 selling songs globally – the streaming cash cows
– are owned by one of the three big music companies.
The success of the big music companies has come in for criticism with an
inquiry by a select committee of MPs into the economics of streaming published
this summer calling for a “complete reset” of royalty payments to musicians,
after concluding that only big acts and labels make money from the current
system."
Via Frederick Wilson II.
Cheers,
*** Xanni ***
--
mailto:xanni@xanadu.net Andrew Pam
http://xanadu.com.au/ Chief Scientist, Xanadu
https://glasswings.com.au/ Partner, Glass Wings
https://sericyb.com.au/ Manager, Serious Cybernetics
