• Manager article part 5

Music Business News February 6 2018

Analysts predicted that Apple Music subscribers may match Spotify’s by mid-year. Also, Spotify added songwriter credits to its platform. And Warner Music Group streaming revenue was up by nearly 43 percent in 2017.


Apple Music Subscriber Numbers Approaching Spotify’s


The number of Apple Music subscribers is on track to either match or surpass the number of Spotify subscribers by July of this year, said Billboard. The analysis was originally reported by the Wall Street Journal over the weekend.


Spotify is still leading the streaming music pack, but Apple Music’s rapid growth during the past few months is bringing up questions about Spotify’s long-term profitability.


As of the last week of October, 18.2 million of Spotify’s 70 million paid subscribers were located in the U.S. Apple had 15 million U.S. subscribers. During 2017, Apple added about 6 million paid subscribers in the U.S., while Spotify increased by 5.2 million subscribers.


According to industry analysts, Apple Music has about 15-percent of the overall revenue share coming from record labels, while Spotify has 17 percent. When taking into account the iTunes download stores and its revenue along with Apple Music and its Beats Digital Radio service, the combined market share of Apple-owned digital services is 30 percent. This means that Apple as a company is about two-thirds greater than Spotify in the U.S., at least for major labels.


Even though Apple Music subscribers are expected to be even with or greater than Spotify’s by summer, the rapid decline of downloads may decrease Apple’s overall market share by the end of the year.


The fact that Apple is quickly overtaking Spotify in the U.S. is making people in the music industry and beyond question Spotify’s decision to go public. Apple, Amazon and Alphabet can afford to run streaming music services that do not make a sizable profit, but Spotify, which relies almost entirely on streaming, may not be able to do that long term.


The four-percent-per-month rise of Apple Music’s subscriber base is leading its steady U.S. growth. Spotify’s growth has been about one to two percent per month. When Spotify runs a special on subscriptions, its growth rate is about seven percent.


Spotify grew to about 19 million U.S. subscribers in 2017. Its paid subscription service earned about $1.04 billion in revenue last year.


Apple Music started 2017 with 10 million subscribers and ended it with 16 million.


Spotify Adding Songwriter Credits


Spotify added songwriter and producer credits for tracks on its desktop platform.


The announcement was made via a post on the official Spotify blog.


The information can be seen by right-clicking on tracks within Spotify and selecting “Show Credits” from the menu of options.


Spotify is currently showing information obtained from record label metadata, including the source of the credits. Some of this information will initially be incomplete or inaccurate but will be corrected as the feature evolves and includes information from more independent labels, songwriters and other industry partners.


Spotify said these credits are an enhancement of its recent songwriter initiatives, including the Secret Genius Program, which provides inside information from artists about lyrics and more. This initiative also includes Songshops, a global songwriting workshop as well as The Secret Genius Awards, podcasts and curated playlists.


Songwriting and producer credits will be available on the Spotify mobile app in the coming months.


Warner Music Group (WMG) Streaming Revenues Up Over 42 Percent in 2017


Revenues at WMG-run labels were up 11.8-percent total in 2017 for the first time since 2011, according to an analysis by Music Business Worldwide.


Streaming was up by 42.5-percent, with total label revenues reaching $3.13 billion.


Music Business Worldwide also analyzed Sony Music’s comparable figures on February 2, 2018. WMG’s revenue percentage growth was greater than Sony’s, driven largely by Ed Sheeran’s latest release.


Music Business Worldwide’s analysis of Sony’s year in 2017 revealed that the company’s recorded music revenues were up by 33 percent. Overall recorded music revenues grew by 5.9 percent.


In dollars, Sony’s overall recorded music revenues were up by $214 million, whereas Warner’s were up by $331 million.


In terms of physical formats, Warner saw a drop of six percent in revenue in 2017, with download sales falling by 23.1 percent. This was comparable to Sony’s decline in both areas.


Streaming was 46-percent of Warner’s total recorded music revenues last year, including “Artist Services” and Licensing revenue. This is up from 36 percent in 2016.


Warner announced its Quarter 1 2018 results on February 2, which included the calendar Q4 2017 results. These results indicated that publishing and recorded music at the major label was $1 billion during the first quarter of 2018 for the first time in its history.

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