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Music Business News, July 11, 2017

Sony Music struck up a licensing deal with Spotify. And TicketWeb started a new ticketing service for grassroots music. Also, the UK live music market was up 12 percent in 2016.

 

Sony Music Entertainment and Spotify Finally in Business

 

Major label Sony and streaming service Spotify finally made a licensing deal.

 

As Billboard reported, this agreement will help forge a path for Spotify to go public.

 

Sony is the second major label to make a licensing deal with Spotify after Universal Music Group (UMG), whose deal was announced in April. The terms of Sony’s deal have not yet been released.

 

UMG’s agreement gives Spotify a break on the revenue percentage it has to pay the major label as its subscriber base continues to explode. The licensing agreement brought its percentage down to 52 percent from 55 percent. The deal also lets artists limit their albums to Spotify’s paid subscribers for two weeks post release. No major artists have used this feature thus far.

 

Jay-Z, whose label is attached to UMG has not yet made his latest 4:44 album available on Spotify, though after a seven-day exclusive on Tidal, he released it to Apple Music and Amazon Music Unlimited.

 

Spotify is still in licensing talks with Warner Music Group.

 

These new deals could help make Spotify more profitable as it grows, which will bring down Spotify’s marketing costs and make it more valuable to investors. It currently has 50 million paying subscribers and 140 million total users, although its net loss doubled in 2016. Rival Apple Music has 27 million total subscribers as of June 2017.

 

Spotify has been under the gun to offer shares to the public because of its growing debt. The company is weighing the benefits of a “direct listing” instead of a standard IPO, which may cut its interest payments but also might decrease demand for shares.

 

When UMG’s CEO Lucian Grainge announced the new licensing agreement in April, he said, “Working hand in hand with these digital services brought us the industry’s first real growth in nearly two decades.”

 

TicketWeb A Partner in Grassroots Venues Tickets

 

TicketWeb and Music Venue Trust (MVT) announced the launch of Grassroots Venues Tickets, a web-based ticketing service that will help fans find tickets and venues for grassroots music in the United Kingdom.

 

According to Music Week, 16 venues have signed up for Grassroots Venues Tickets. Part of the cost of each ticket goes directly to the venue in order to support renovations and also to MVT, which is helping to fight for the survival of small venues throughout the UK.

 

CEO of MVT Mark Davyd explained, “We wanted to bring a ticket product and service into the market that was all about supporting the Grassroots Music Venues sector. There’s been a lot of talk about ethical ticketing and the music industry’s concerns about these venues. We wanted to work with a partner to develop a grassroots ticket that genuinely enables fans to know that what they are buying is directly supporting the venues they love that really need help.”

 

Tickets purchased through the website include a service charge of five percent. TicketWeb said it plans to give a portion of this service charge to MVT to fund campaigning against venue closures and improvements to the venues. 50p is also added to each ticket and goes directly to the venue itself.

 

Davyd added, “Alongside a great deal for fans and a major step forward in funding for venues, we also wanted Grassroots Venues Tickets to do something for writers and publishers. In our exclusive ticket offer to venues, MVT is going to be able to track, monitor and pay collection agencies such as PRS for Music on behalf of grassroots music venues, while filing great information that ensures grassroots writers and artists are getting paid when their work is performed. It removes a significant burden of work and responsibility from venues and is a real win for writers and artists at this level.”

 

Managing director of TicketWeb, Sam Isles said, “Today we are proud to unveil Grassroots Venues Tickets  alongside our partners MVT. Together we continue to work in the interests of GMVs around the UK. The launch of this site is a culmination of lots of work behind the scenes to ensure it empowers both independent venues, and music fans alike.”

 

Last October, TicketWeb also launched its Backline platform, created with MVT to give support to independent venues and promoters.

 

Britain’s Live Music Market Revenue Up

 

More than 30 million people went to concerts and festivals in Great Britain in 2016. Research from UK music revealed that attendance was up 12 percent from 2015, said Billboard.

 

Live music fans pumped $5.1 billion into the UK music economy, an 11-percent increase from the previous year.

 

Box office receipts were up 19 percent to $844 million, and amount generated by tickets, transport and accommodation (“direct spend”) increased by nine percent.

 

27 million of the 30.9 million attendees of live music events went to concerts, a 13-percent increase on 2015. And 3.9 went to festivals, up six percent from the year before.

 

The UK Music figures indicated that 11.6 million ticket buyers were “domestic music tourists” – British citizens who have traveled “at least three times the average commuting distance in the region in which the event took place.”

 

The number of music tourists from overseas was up seven percent, totaling 823,000. Despite the boost, 21-percent fewer international music fans went to gigs at small or fringe concert venues.

 

Grassroots venues saw fans spending less money at their establishments. Direct spending was down by 13 percent. Still, according the study, full-time employment directly related to music tourism was up 22 percent, reaching 47,000 employees.

 

Michael Dugher, UK Music chief executive stated, “Live music in the UK is a tremendous success story and makes a massive contribution to our culture and general wellbeing, as well as our economy.”

 

Dugher also warned small music venues about the pressure Brexit may put on small music venues, which he indicated are “a vital part of the live music industry.” He promised, “We will be pressing the government to make sure the impact of Brexit does not damage our export trade or make it harder for U.K. artists to tour abroad and for overseas acts to come here.”

 

Paul Latham, Live Nation UK and Ireland COO agreed with Dugher’s sentiment in his foreword to the study: “There are undoubted challenges ahead — whether that’s the threat to local venues through planning, licensing or tax issues, or the wider uncertainty surrounding Brexit and its impact on our sector … The key to our continued success that we celebrate in this report will be rising to those challenges and standing up for the millions of people who love what we do … Be bold, be creative, be happy, be the very best we can be.”