Well, it’s time to take a look at how we are responding to the changes about to happen in the music industry. From Deezer and Universal’s model to shaping the music market, there’s a lot to unpack!
#1. The concerns about Deezer and Universal’s user-centric model
Silvia Montello, CEO of the Association of Independent Music (AIM), has expressed concerns about Deezer and Universal Music's "artist-centric" model. While admitting to this being a step in the right direction (especially regarding fraud), there’s still a potential issue with the fact that the model might create an imbalance between established and emerging artists, some genres being way more productive than others on the platforms.
Another issue would be the lack of information the industry got prior to the announcement. One obvious problem that was highlighted by many actors is the lack of transparency. But most of all, the worry is all about making sure that the process benefit rights holders are all levels in the music industry.
Deezer's partnership with Universal Music was made to rethink streaming economics. It will go live in the next quarter but the reservations are broader than the ones expressed by Silvia Montello; a lot of actors are concerned about the potential impact on independent labels and emerging acts, suggesting that more dialogue and openness are needed to refine the model effectively.
#2. How to give up on the mainstream ideal and find the right niche
The music industry is experiencing a paradox: while it has never been easier to become a content creator, it has also never been harder to sustain a full-time music career. There’s no secret about it; streaming has reshaped the way audiences engage with music. But another aspect is the proliferation of creator tools, including generative AI, which has lowered the barriers to music creation.
This democratization of music creation has led to intense competition on platforms like Spotify. Additionally, the time and skills required for marketing on platforms like TikTok often differ significantly from those needed for creating good music, resulting in not necessarily the best artists gaining visibility.
As music consumption habits evolve, audiences increasingly seek ways to be part of the creative process, engage in remixing, and experience music more intimately. MIDiA Research is throwing a new idea out there; a three-tiered system for music creation and consumption platforms, where each tier targets different aspects of the music experience. Social-centric platforms like TikTok could cater to the early stages of music creation, fostering collaboration and interaction. Platforms like SoundCloud and YouTube could offer spaces for raw and in-progress content, while major streaming platforms like Spotify and Apple Music could become curators of the "final product," setting higher entry standards to ensure quality and professionalism.
This framework allow creators to monetize every stage of the creative process, offering audiences a more tailored experience and addressing the clutter that plagues current platforms. Overall, this shift represents an opportunity for the music industry to adapt to the evolving dynamics of music production and audience engagement in the era of web 3.0.
#3. Why should we expect higher prices for streaming (again)?
Spotify, YouTube Music, and Amazon Music have all implemented price hikes in recent months. The push for higher prices is not only coming from the streaming platforms but also from music industry leaders like Warner Music Group's CEO, Robert Kyncl, who sees these increases as just the beginning. These price hikes are driven by the belief that the market could grow even more, as new subscriber growth in the US begins to slow down. As a result, industry attention is shifting towards improving the Average Revenue Per Premium User (ARPPU), making further price increases likely in the near future to boost industry revenue and profitability.
#4. A new catalog sale to keep an eye on
It had been a while since we talked about a new catalog sale here. Katy Perry has sold some of her music rights to Litmus Music, backed by $500 million. The deal includes her stake in master royalty income and publishing rights for five studio albums recorded for Capitol Records. Universal Music Group retains master rights to the Capitol albums. The deal with Katy Perry, estimated at around $225 million, is one of the most impressive ones this year !
#5. How artists participate in shaping our market
To wrap up our weekly roundup, we wanted to take a quick look at how artists are perceived. It's crucial to consider the demands placed on artists to drive this innovation forward. Artists play a pivotal role in shaping markets; they are the pioneers whose creative expressions guide platforms and founders to find their niche and product-market-fit.
Mariana Mazzucato's concept of "predistribution of value" becomes relevant here, as it emphasizes building equity and public good into projects from the outset, which is often not the case with new technologies. By recognizing revenue as more than just monetary gain and considering the elusive network value, we can begin to recalibrate our approach to supporting artists in their journey to create new economies and art.