✘ A changing music industry expands to $100 billion in revenues. For whom?
- The state of sync - The ISWC explained - How new artists will learn to navigate the music business - New technical certification for AI models - Economic opportunities for our avatars
As the music industry continues to morph and change, MIDiA comes out to forecast that we’ll hit $100 billion in total revenues by 2031. This sounds massive, but we’re actually not that far off at the moment. Will Page calculated that 2022 saw a record $41.5 billion in total music rights revenues. And the PWC’s Global Entertainment and Media Outlook had live music ticket sales down for $23 billion in 2023. Live Nation’s total revenues for 2023 were $22.7 billion - showing how there’s more to live music than ticket sales. But the focus of the MIDiA report is recorded music. They have the total global recorded music market down for $58.1 billion in 2023. Whichever way you look at this, music bucks the general economic trends and MIDiA projects that it will continue to do so over the next years. What does this mean? How does this play out?
Who grows to $100 billion? Artists as retail media
MIDiA has subscriptions and ‘other ad-supported’ growing at the highest rates in their forecast. There’s a third marker that’s relevant and that’s what they call ‘expanded rights’. This fits their ‘bifurcation theory’ which explains how the music industry will grow into two different parallel revenue models: one passive, the other active. Passive centres around lean-back listening, algorithmic playlists, and DSP subscription revenue. Active centres around lean-in listening, fans as co-creators, and monetizing fandom. In a lot of ways, the already major players will continue to win in this scenario. The majors keep cornering most of the market and those with the most marketing Dollars to spend will find the biggest audiences. This can play out differently, or at least have other scenarios play out in parallel.
1. Opportunities grow inside
The continued growth of the subscription DSP market cannot continue without some major changes to how the system works. One way to understand this is how MIDiA projects China to be the second biggest market - after the USA - by 2031 for recorded music. China, and South Korea and other Asian markets, have long been ahead of the Western world when it comes to audience engagement (think BiliBili or longstanding AI avatar stars). As DSPs develop, more opportunities to engage fans inside and through the apps will turn up. One example is how Spotify recently launched a partnership with sesh to provide artists an opportunity to actually build a community through streaming. The way sesh works is to bring fans together in streaming, then to offer more opportunities for engagement. This starts in LatAm, one of the growing markets which will push the global South close to the global North’s share of listening in the next years.
2. Artists as retail media
While opportunities arise inside the machine, there’s also ample opportunity to build your own. One way to think about that is the consider the artist as retail media. Or, preferably, a scene or collective as retail media. What would need to happen is for artists, scenes, or collectives to pool together enough first party data to become interesting to advertisers. I’ve previously written about how FAST (free ad-supported streaming television) presented, and presents, a similar opportunity around music videos. However, that was mostly based on lean-back listening. The current opportunity is more about lean-in. It’s an extension of social media influencer culture, where brands pay people to reach their audiences. The ad has to really fit the music, artist, and fan. It’s not as easy as advertising on Facebook, but that’s the whole point.
The whole point of retail media is to get ads as close to the point of contact - or consumption - as possible. As the barrier between artist, fan, creation, and distribution continues to blur, there are very interesting points of sales that rise up. If you’re an artist who already sees this happening, take advantage. Reach out to DAWs, plugins, software and other things you use to preach about your retail media network effects. Moreover, artists can also invert the retail media idea on themselves. With their own first party fan data, they can set up direct ads to their fans. Messaging apps will also continue to develop sales options here. Just look at how this works in China and south-east Asia through apps like WeChat or LINE. Small businesses can run their entire sales chain through the app we - as consumers - all love to use already.
A cautionary note about the ‘who’ will grow
The MIDiA forecast comes out in the same week that sees Suno announce a $125 million dollar funding round. This is also the same week that OpenAI got hassled by Scarlett Johansson about using not her voice, but her voice. Sam Altman put that down to poor communication, but yeah… that’s the ultimate non-excuse. There’s a lot here about the power dynamics at play in not just the music industry but beyond. If we want to empower artists and collectives to take advantage of their work through, for example, retail media effects we have to create a world in which they can do so. This world most likely won’t be created by the major labels, the leading ticketing agencies, or massive venture-backed companies. It may well be that this world will be built outside of the bifurcation theory. It’s not about $100 billion, it’s about how many artists can have a sustainable music career. It’s about tapping into the developments that lead the growth broadly and then choose your own adventure along the way.
LINKS
🏊♀️ Synchronized swimmingly? The state of sync in 2024 (Eamonn Forde)
“A pandemic closed huge parts of the sync industry down and then, as it was recovering, a series of strikes saw things being put on hold again. Now it is grappling with the complexities of AI – software that can streamline the business while creating “free” music that TV and film companies, keen to slash their overheads, could be increasingly drawn to.”
✘ Lots of great quotes from others interview by Eamonn in there as well. What’s clear is that sync still creates big opportunities, but also faces unprecedented challenges.
🥷 The ISWC: The Secret Identification of Songs (Unison Rights)
“A very important detail to keep in mind is that the ISWC is not an identification code for a version of a song, but rather it identifies its underlying composition, which is something that typically remains stable between versions, mixes, and remixes. The code that identifies the recordings, which we will discuss in future posts, is called ISRC and operates at a different level from the ISWC. Therefore, a song should only have one ISWC, but it can have several ISRCs if multiple versions of the same song have been made.”
✘ Everything starts with the basics, and ISWC is one of them. This is a thorough explanation of what it is, where it comes from, and why it matters. Always get one.
🎓 How will new artists learn to navigate the music business? (Elias Leight)
“As a result, there is a dire need for quality, accessible music business education. Many of the platforms that allow artists to create, listen to, or distribute music today see educational initiatives as a way to foster loyalty and community — which will in turn help them stand out in the neverending battle for users and attention — and possibly as an additional revenue stream as well.”
✘ As someone who teaches music business, I can relate. There’s specific ways that students can benefit from a university-based music business education. However, there’s also lots of other routes to knowledge, and experience.
🗟 Voice-Swap and BMAT Launch New Technical Certification for AI Models (Kristin Robinson)
“Companies that wish to earn the Voice-Swap and BMAT certification must allow the two to analyze a given model’s training data and compare it against the 180 million copyrights BMAT has logged in its music index.”
✘ I don’t think Suno, Udio, and the likes will come knocking. However, the most significant part about this certificate is that it allows people in litigation to say that there’s routes to attribution.
🐈 Economic opportunities for our avatars (John Egan, Anthony Kelly, Aurore Geraud, Ariana Monteiro)
“The combination of emerging technological economies and widespread technological infrastructure are the building blocks for our economic future. The ways in which they are utilised and regulated will define social mobility for decades to come.”
✘ Such a great piece of writing, and fantastic insights into how the structures of what we build impact our social lives. Similar to what I wrote above, new tech brings new opportunities. This only affects our social lives positively if we channel those opportunities to as broad a section of humanity as possible.
MUSIC
This is hardcore as it was meant to be. A brutal, high energy assault with lots of drumkicks and snares. Skip it if it’s not your cup of tea, by all means, but listen if you’re even just a little curious. It’s got two tracks in the 180bpm range, bringing in the Dutch hardcore continuum. Then there’s two more tracks up to 200bpm, shifting the continuum to the UK hardcore spectrum. Deathmachine is a master of the genre.