Music Business News, November 29, 2017

The Copyright Royalty Board announced new royalty rates for 2018. Also, Spotify acquired an online recording studio. And an analyst explored the longevity of songs by both major label and independent artists.


Music Royalty Rates Increasing in 2018


The Copyright Royalty Board (CRB) set new rates for master recording copyright holders and non-commercial webcasters in 2018.


According to Billboard, the new rates represent a cost of living adjustment and will increase to $.0018 for ad-supported, non-subscription streaming channels and $.0023 per performance for paid subscription services. Rates were formerly $.0017 and $.0022.


Non-commercial webcasters will pay $.0018 per performance for each one above 159, 140 ATH (aggregate tuning hours) in one month. That is up from 2016 and 2017, but down from years prior to that.


These new rates mark the first in a series of new rates policies set by the CRB. More rate determinations are expected in the coming days and weeks that will affect many aspects of the music business: mechanical licenses that labels and digital services pay music publishers and songwriters; rates paid to music copyright owners by services like SiriusXM and Music Choice.


The CRB also set a cost of living adjustment beyond the music industry, adjusting the royalty that satellite carriers (as TV re-transmitters) pay under a compulsory license. These two rates went up by one cent each.


Spotify Nabbing Online Recording Studio Soundtrap


Spotify acquired Stockholm-based startup Soundtrap, an online recording studio, reported Music Business Worldwide.


Founded by Per Emanuelsson, Björn Melinder, Gabriel Sjöberg and Fredrik Posse, Soundtrap is a platform rooted in the cloud that helps musicians record and edit tracks across devices and also collaborate with others on projects.


Spotify explained, in a note, “Soundtrap empowers artists of all levels to create music online with a web-based, easy to use, collaborative music recording and production studio … The Soundtrap team of engineers, designers, and music producers have been revolutionizing the music-making process by building tools for consumers, educators, and students. The Soundtrap service will continue to operate as usual.”


The note added, “Soundtrap’s rapidly growing business is highly aligned with Spotify’s vision of democratizing the music ecosystem.”


Music Business Worldwide noted that there is a question about how “democratic” recording software can actually be when aligned exclusively with a single streaming platform.


Spotify grabbd up four different startups in the first half of this year: French AI company Niland; UK data/audio recognition company Sonalytic; TV recommendation platform MightyTV; blockchain company MediaChain. Spotify’s total spend for these four companies was $42 million.


Major Label Artists Charting Higher on Streaming, but Have Shorter Life Spans than Indies


Majors are getting a lot of attention on flagship Spotify playlist Today’s Top Hits, but they’re not lasting as long, explained music analyst Mark Mulligan of the Music Industry Blog.


Metrics presented by Chartmetric’s Sung Cho grabbed Mulligan’s attention, and he pulled them apart to get the full story.


Artists on major record labels made up 77-percent of all tracks in Today’s Top Hits from May to November 2017. And this number had risen to 78 percent in the last available figures. This is comparable to a recorded music market revenue share of 69 percent for the majors in 2016 and 72 percent streaming revenue market share during the same year. Major label artists get a lion’s share of the tracks in this Spotify playlist compared to their market share, and thanks to this high-profile playlist, they are more likely to be heard by listeners, who will stream them more than other artists and help them bring in more revenue and also bring more traffic to the streaming service.


And some major labels fared better than others. Universal’s steraming revenue market share in 2016 was about 30 percent, but it got 43-percent of the tracks in Today’s Top Hits over the same period. Sony got 20 percent against a revenue share of 23 percent, and Warner got only 13 percent with a revenue share of 19 percent.


With all these metrics in mind, indies appear on the surface to be at a disadvantage overall. In 2016, a streaming revenue market share of 28 percent equals a 23-percent share of the tracks on Today’s Top Hits. And indie label tracks take, on average, more than one week longer than major label tracks do after release to get added to the playlist.


These stats are an indication that major label tracks are more often unquestionably added to playlists without first getting listener feedback, whereas indies have to prove they are of value through organic plays. In fact, 55-percent of indie tracks wait over a month before being added to Today’s Top Hits, compared to 49-percent of major label tracks.


Still, indie tracks tend to stay on the high-profile Spotify playlist for 12 days longer than major label tracks, proving that earning a spot via organic plays gives them more staying power. Figures show that 13-percent of all Today’s Top Hits Tracks were put on the list the same day they were released, which, Mulligan pointed out, makes one wonder how they can be declared “hits” when they have not been streamed yet.

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