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The key players in the music industry are keeping at it - WR #205
Weekly Roundups
March 15, 2024

The key players in the music industry are keeping at it - WR #205

Between regulation of streaming platforms in South Korea and music consumption, there has been strong moves made in the music business. Let’s see what happened!

#1. Because Music supports Universal against TikTok

We’ve been talking about this for a month now, Universal Music Group decided to end its collaboration with TikTok following a disagreement over the music rights linked to the use of their catalog on the platform. Specifically, Universal had stated that negotiations with TikTok had failed on three key points: appropriate remuneration for their artists and songwriters, protection of human artists from the harmful effects of AI, and online safety for TikTok users.  

Emmanuel de Buretel, founder of Because Music, publicly gave his support to Universal Music Group in its dispute with TikTok. He criticizes the app's disregard for industry standards and denounces its algorithm, which allegedly could lead to abusive content and potential defacing of music. In addition, De Buretel fears that TikTok's algorithm prioritizes addictive content and favors AI-generated music. 

And our guy doesn’t stop there, adding that the music industry has successfully asserted its rights with the giant YouTube, and that it would be essential to do the same with TikTok. However, the latter is "flooding its platform with music recordings generated by artificial intelligence, developing tools to encourage them", resulting in a "massive dilution of the share devoted to real artists". His support underscores the broader issues of fair remuneration and the integration of music into the music industry.

#2. German music market in all its glory

The German music market enjoyed some strong moments in 2023! In fact, the market grew by 6.6% in the first half of 2023, reaching 1.056 billion euros. According to The German Music Industry Association (BVMI), all physical media and physical unit sales generated around 18% of sales, while the digital market dominated, accounting for 82% of sales. The digital segment grew by 8.4% in the first half of 2023 compared with the same period in 2022. Revenues from audio streaming also rose by 9.7%, while revenues from downloads fell by 4.9%. That’s a lot of positive numbers.

Florian Drücke, President and CEO of BVMI, took the opportunity to remind everyone that streaming certainly has increased the music market as a whole, but is still highly unbalanced. Drücke adds that opening up the market to a large number of independent artists, this would enable highly modular collaborations, but that the funds advanced by companies to artists are generally not recouped, demonstrating the financial imbalance within the industry.

#3. Spotify Now Has Its Own Video Catalog

Spotify is still catching up with Social Media video formats. Indeed, the music streaming giant announced the rollout of full video clips on its platform. However, it's not the first platform to experiment with this innovation, as Apple Music and Tidal got it right a few years ago. But to keep up with the competition as well as they can, Spotify has decided to update this feature in 11 countries only.

In the meantime, Spotify is completing existing features by adding these clips in Canvas format, enriching the platform's content to provide a better exposure for artists.

The inclusion of music videos on Spotify offers artists new opportunities to showcase their work and connect with audiences. As the streaming giant continues to innovate, it remains to be seen whether this initiative will rekindle interest in music videos and reshape the digital music landscape.

#4. South Korea could regulate streaming platforms 

South Korea is considering including music streaming in its proposal for the Platform Competition Promotion Act (PCPA). This follows concerns about the dominance of foreign giants such as Spotify and Apple Music, and its impact on the Korean music industry.

The country's Fair Trade Commission (FTC) has announced its intention to introduce the PCPA to create a more leveled playing field, by regulating market-dominant platforms. This initiative aims to anticipate and control the monopolization of the market by large platforms, which could harm consumers and small and medium-sized enterprises. For example, the launch of Spotify in South Korea in February 2021, has intensified local competition, jeopardizing the position of leaders like Melon. This raises concerns about the impact on discoverability and revenues for Korean music.

If music streaming is included in the PCPA, platforms could be subject to stricter laws on data protection, playlist organization and music recommendation. In addition, regulators could require platforms to reinvest part of their revenues in the Korean music industry, specifically through artist development programs.

#5. Streaming audio subscriptions on the rise in US

In the United States, more than half of the population subscribe to an audio service. The analysis, carried out by MusicWatch, reveals that the number of subscribers to paid music services reached a record 109 million in 2023. Taking into account major platforms such as Spotify, Apple Music, Amazon Music, YouTube Music and Pandora,The study shows that spending on recorded music in the United States rose by 7% in 2023, and that 80% of streaming music users regularly listen to audio categories other than music.

Vinyl, meanwhile, is becoming increasingly trendy, keeping up with the last years’ trend, with 90% of vinyl buyers planning to buy more or the same number of records in 2024. In addition, a third of streamers surveyed expressed a strong desire for high-quality audio, indicating an interest in streaming or purchasing more high-resolution or immersive formats and a willingness to pay more for superior sound quality, a positive insight for the development of the industry.

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