The music industry never stops! This week brings exciting news about the use of data in AI training, fantastic updates on streaming numbers, and discussions about summer hits, among other things. Let's dive right in and explore the latest developments in the world of music!
#1. OpenAI Now Accesses music libraries through Shutterstock
OpenAI, the company behind ChatGPT, and Shutterstock, a leading stock image provider, have announced the extension of their partnership. This agreement grants OpenAI access to Shutterstock's rich image, video, and music libraries, enabling enhanced training of its AI algorithms. In return, Shutterstock gains access to OpenAI's advanced artificial intelligence tools, including the innovative DALL-E, a text-to-image generator.
This alliance has garnered attention in the market, with Shutterstock's shares rising by 9% after the news broke. The collaboration reinforces a symbiotic relationship between the two companies, positioning Shutterstock as a data and distribution partner of choice for industry leaders in generative AI. Additionally, this extension opens new possibilities for content creation and ideation, empowering brands, digital media, and marketing companies.
The integration of OpenAI's technology into Shutterstock's image-creation tools benefits creators and ensures fair compensation for their works. This move aligns with Shutterstock's commitment to driving AI tech innovation and its continuous expansion into audio capabilities. The partnership showcases the potential for generative AI to revolutionize content creation and positions OpenAI as a key player in the development of transformative possibilities for the future.
#2. Music Streaming Soars according to Luminate
Luminate recently released its midyear report for H1 2023, revealing significant growth in on-demand audio streams and music consumption. Globally, on-demand song streams (Audio + Video) rose by 30.8% to reach 3.3 trillion, with total on-demand audio streams increasing by 22.9% YoY to 2 trillion. In the US, on-demand audio streams grew by 13.5% to reach 616.5 billion. Additionally, Luminate highlighted the increasing share of 'Catalog' music (older than 18 months) in the total album consumption, which reached 72.8% in H1 2023, while the share of 'Current' music slightly declined.
The report also shed light on the trends in music streaming. While the average daily new track uploads to music streaming services slowed down in H1 2023, the popularity of non-English language music, like Spanish, is on the rise, leading to a decline in the share of English language music in the Top 10,000 tracks both in the US and globally. The report showcased the remarkable growth of genres like Regional Mexican Music and Afrobeats, with artists like Elsabon Armado and Burna Boy gaining immense popularity. Moreover, Luminate identified 15% of the general population in the US as 'superfans,' who spend significantly more on music each month, making them a lucrative target audience for the music industry.
The report's insights provide valuable data to understand the shifting music consumption patterns and emphasize the growing importance of non-English language music and superfans in driving industry revenue.
#3. How does the Music Industry Pick the Seasonal Anthem for Summer?
With summer in full swing, the music industry is abuzz with contenders vying for the title of the song of the summer. Major streaming platforms have released their lists of potential hits, including Morgan Wallen's "Last Night," Dua Lipa's "Dance The Night," Luke Combs' "Fast Car," Lil Durk's "All My Life" with J. Cole, and Taylor Swift's "Karma" and "Cruel Summer." But how do they accurately predict which songs will dominate the pop culture conversation in the coming weeks or months?
The process of selecting the song of the summer is a highly technical one, involving a deep analysis of data and a blend of human judgment. Platforms like Spotify rely heavily on data analysis, examining not only what people are currently listening to but also the rate at which certain songs are gaining popularity and how they transition from being favored by super fans to gaining traction among the general public. However, predictions are not solely based on data; taste and musical instincts also play a crucial role.
While data and metrics are essential, the ultimate summer hits are the ones that resonate with people on a personal level and become synonymous with the season. The best summer songs are always uptempo, hooky, emotional, and filled with summer-themed lyrics that transport listeners back to specific memories.
#4. TikTok’s Music Streaming Service to Australia, Mexico, and Singapore
Just two weeks after its launch in Brazil and Indonesia, TikTok Music is making its way to Australia, Mexico, and Singapore. The music streaming service will be introduced on July 19 in closed beta form, with a selected group of volunteer users testing the service. All participants in the beta test will receive a three-month free trial of the subscription-only music platform.
TikTok Music combines the power of music discovery on TikTok with a vast catalog of millions of tracks from various artists. The move to expand into these new markets is part of TikTok's strategy to enter different corners of the music business. Earlier this year, TikTok faced a temporary limitation in Australia, where some users were blocked from using major label-licensed music in their videos. The test aimed to analyze the impact of sound usage but led to a decrease in the number of TikTok users in the country.
The expansion of TikTok Music comes alongside a new multi-year, multi-product licensing deal with Warner Music Group (WMG). The agreement allows TikTok to license music from WMG's repertoire to TikTok Music, as well as its video editing platform CapCut and Commercial Music Library.
With its expanding music services, TikTok is increasingly becoming a significant part of music culture, driving viral trends and impacting the music industry, with competitors like Spotify experiencing stock price drops in response to TikTok's music ambitions.
#5. Hipgnosis Songs Fund Contemplates Asset Sales
Hipgnosis Songs Fund (HSF) is facing a valuation problem despite strong revenue growth. The company's share price is trading at around half the size of its per-share 'operative net asset value', leading to frustration among shareholders. Some of Hipgnosis’ biggest shareholders are considering a strategic plan to increase the company's public valuation, which includes a potential corporate share buyback and the sale of some assets in the marketplace.
If Hipgnosis decides to sell some copyrights, one potential asset that might be divested is the Nettwerk catalog, which was acquired in 2020 and includes songs from artists like Mariah Carey and Lindsey Buckingham. This catalog may not fit Hipgnosis's focus on "extraordinary success and cultural importance," making it a candidate for sale.
The decision to sell assets and boost the share price ultimately lies with the shareholders, who will vote on the matter during the upcoming Annual General Meeting. The outcome of this "Continuation Vote" will determine whether the company continues to operate as a publicly-listed entity on the London Stock Exchange.
While some shareholders believe in the long-term value of Hipgnosis and expect the share price to recover over time, others may be more impatient and concerned about the valuation gap between the public and private markets. An asset sale and subsequent share price boost could potentially sway the vote in favor of keeping the company publicly listed.