• Manager article part 5

Music Business News, May 23, 2017

Analysts noted that major labels now earn $150 per second from streaming. Also, the global music business grew significantly in 2016. And Amazon’s Prime Live Events series prepared for launch.


Manager article part 5


Major Labels Earning $150 per Second from Streaming


Universal, Sony and Warner made over $1 billion from streaming in Q1 of this year, reported Music Business Worldwide. This means they are making almost $150 per second from Spotify, Apple Music and others.


An analysis indicated that the three companies’ recorded music departments together had earned $1.13 billion as of the end of March 2017, which is $523,000 per hour.


Universal Music Group got 44-percent of the money, earning $498 million during that time period. This led to its highest-earning quarter in 15 years. Streaming made up 46-percent of its total revenues.


Sony Music got $332 million in streaming revenues in the first quarter of this year, getting a major label market share of 29 percent.


Warner earned $300 million in cash from streaming to take home 27 percent.


An analysis of 2016 indicated that UMG, Sony and Warner made $824 million in streaming revenue in Q1 of last year.


UMG had a smaller market share last year, at 41 percent. Sony had 34 percent. In the U.S., Warner took in $207 million in the first quarter of last year.


Numbers indicate that Universal has grown its Q1 global major label streaming market share by three percent over the past year. Warner grew its share by two percent.


The overall first-quarter streaming revenues going into all the major labels have grown by 37 percent in the last year.


The total recorded music streaming market in the first quarter of 2017, including independent labels was somewhere around $1.5 billion.


Global Music Merch Business at $3.1 Billion in 2016


Global retail sales of music merchandising grew faster than almost any property type in 2016, according to the results of an annual survey by the Licensing Industry Merchandisers Association (LIMA).


Sales of all licensed goods and services worldwide reached $263 billion, a 4.4-percent increase from 2016. The music merchandise category experienced twice the growth. LIMA reported that music merchandise grew 9.4 percent, reaching $3.1 billion. In 2016, it was $2.83 billion.


LIMA senior VP Marty Brochstein explained the reason for the growth: “Music is part of the culture, and people shopping for [music related merchandise] are not limited to the music fans per se … Brick and mortar is taking the music [merch] category much more seriously.”


For example, retailers have been going beyond the standard music merch sold in stores, experimenting with limited-edition or limited-time merchandise from artists like Justin Bieber, Metallica and Lady Gaga.


Entertainment and character licensing is still the biggest category and makes up $118.3 billion. Corporate and brand trademarks brought in $54.6 billion, fashion $31.1 billion and sports $25.5 billion.


President of LIMA Charles Riotto stated, “The 2017 Survey reinforces the positive momentum of licensed products worldwide and across all categories, especially the large and growing entertainment/character sector … This year’s results also speak to the impressive reach and strength of licensing initiatives in growth markets around the world, contributing to the continued vitality of the industry.”


Participants in LIMA’s annual survey include retailers and licensing companies. LIMA also looks at import and export data.


According to executives, a large part of music merch revenue comes from merch sales at concerts.


Amazon Preparing to Unveil Prime Live Events Concert Series


Amazon’s foray into live ticketing, Prime Live Events was set to launch this week but has been postponed due to the Manchester Arena attack. The series will begin with a sold-out Blondie show, then continue with concerts by Alison Moyet and Katie Melua.


GM of Amazon Tickets, Geraldine Wilson spoke to Music Week about the spirit of the project and its future.


She said, “It allows fans the opportunity to see their favorite artists up close and personal, in beautiful, iconic, intimate venues … This whole process is about providing the best live experience that you can have.”


She added, “We’re talking to a broad range of artists and we’ll announce those throughout the year. We have lots of ideas on how we want to expand it.”


Amazon did a soft launch of the Prime Live Events series last year with shows by Robbie Williams at St. John’s Hackney and John Legend at Round Chapel. Both were filmed and shown via Prime Video.


Wilson explained why Amazon decided to get into live concerts: “We talked to promoters, but their model is more around bigger tours, and we had a very clear idea of what we wanted to create here … We decided we wanted to produce and promote these shows for our Prime members. For these shows, we are the producer and promoter because we felt that was the right way to get the experience we wanted.”


She continued, “We work with all of the UK promoters with our tickets business and also in creating some of our premium experiences and we will continue to o that. But for the Prime Live Events, we’re producing those ourselves.”


Amazon brought on BBC Introducing head Jason Carter to be the director of Prime Live Events. According to Wilson, “Having worked for a brand like the BBC, Jason understands the importance of the whole customer experience and that was paramount to us. He has produced everything from very intimate events to huge festivals.”

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