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Music Business News, January 10, 2018

Facebook signed a multi-year licensing deal with Sony/ATV. Also, U.S. on-demand streams were more than 618 billion in 2017. And Jimmy Iovine denied news he will leave Apple when his stock vests.


Facebook Signing Deal with Sony/ATV


Facebook signed its second multi-year licensing deal with a major music label, this time with Sony/ATV Music Publishing.


According the Music Business Worldwide, the deal will include a catalog of over three million songs by artists such as Taylor Swift, Ed Sheeran, Drake, The Chainsmokers, Sam Smith, Sia and Kanye West.


A press release issued by Sony/ATV stated that the deal will give its songwriters “a unique opportunity to earn royalties from the use of their music on both Facebook and Instagram.”


The deal will allow users to upload and share videos on Facebook, Instagram and Oculus featuring compositions licensed from Sony/ATV’s catalog and “personalize their music experiences” with these songs.


Martin Bandier, Sony/ATV chairman explained, “We are thrilled that in signing this agreement Facebook recognizes the value that music brings to their service and that our songwriters will now benefit from the use of their music on Facebook. We are looking forward to a long and prosperous relationship.”


Head of Music Business Developments and Partnerships at Facebook Tamara Hrivnak added, “We’re excited to work with the largest music publisher in the world to bring amazing songs which deepen connections between friends and fans … Sony/ATV is a true leader and an absolute champion of writers in the digital space, and we’re thrilled to work with them as they grab new opportunities by the horns across all of our platforms.”


On-Demand Streams in the U.S. Over 618 Billion in 2017


A Nielsen report indicated that for the third year in a row, on-demand streams surpassed 618 billion this past year, up from 2016 and counteracting the decline in sales in other areas


According to Billboard, audio on-demand streams were up 58.7 percent to 400.4 billion, with video on-demand streams up 20.9 percent from the previous year. The U.S. also produced the first one-billion-stream song, “Despacito (featuring Justin Bieber),” which hit 1.3 billion streams in 2017.


Digital album and CD sales were down 19.6 percent, and track sales fell significantly as well. However, vinyl was up again in 2017, this time by nine percent. Top-selling vinyl albums included The Beatles’ Sgt. Pepper’s Lonely Hearts Club Band and Abbey Road.


In 2017, growth in consumption outpaced the 19.2 percent decline in album sales plus track-equivalent albums (which was down to 224.6 million). This marks a change from the last format shit, when downloads failed to grow as quickly as CDs declined.


Taylor Swift’s album Reputation was the top seller in 2017, selling 1.9 million copies just ahead of Ed Sheeran’s Divide, which sold 1.1 million. Both were also the biggest-selling digital albums at 868,000 and 592,000 copies respectively. Drake was the most-consumed artist overall of 2017, hitting almost six billion on-demand audio streams.


Universal Music Group was the leader in distribution, taking up 36.7 percent of the market share, up from 35.7 percent. Sony dropped to 27 percent of market share from 28.7 percent, and Warner Music Group had approximately 20.5 percent of the market, with indies coming in at 15.8 percent.


The report also indicated that current music (sales within the first 18 months after its release) comprised 39.3 percent of the market. This figure included albums that stayed on the top half the Billboard 200 or had tracks still spinning on the radio. Catalog albums in 2017 were at 60.7-percent of sales, which was almost exactly the same as they fared in 2016.


Top genres of music sold, including on-demand video, were R&B/Hip-Hop and Pop followed by rock. R&B had 24.5 percent of sales last year, up almost 3 percent from the previous year.


Jimmy Iovine Denying Reports of Apple Exit


Jimmy Iovine denied rumors he will leave Apple in August once his stock fully vests, reported Variety.


He added that he has committed to staying with the company to help it fully realize its potential in the streaming market: “I am almost 65, have been with Apple for four years and in 2 1/2 years the [Apple Music] service has gotten to well over 30 million subscribers and Beats has continued its successful run. But there’s still a lot more we’d like to do. I am committed to doing whatever Eddy [Cue], Tim [Cook] and Apple need me to do, to help wherever and however I can, to take this all the way. I am in the band.”


Iovine joined Apple as an executive in 2014 when the tech giant bought Beats Electronics from him and Dr. Dre for $2.6 billion in cash and $400 million in stock.


Iovine made an appearance at the Grammy Museum for a screening of the HBO documentary The Defiant Ones and said a few words. He said that his Apple stock has been vesting in stages since the purchase of Beats. He confirmed it would fully vest in August but that this will not prompt his departure.


He explained, “All this stuff you’re seeing in the newspapers, let me tell you, my stock vested a long time ago. We need Donald Trump here to call it ‘fake news’ … There is a tiny portion of stock that vests in August, but that’s not what I think about.”


He continued, “My contract is up in August, but the funny thing is, I don’t have a contract. I have a deal, and certain things happen along that deal. The bottom line is I’m loyal to the guys at Apple. I love Apple, and I really love musicians. That’s why those articles annoyed me, because it had nothing to do with reality. It made it out to be all about money.”


Iovine said that with his 65th birthday on the horizon, he will have to slow down in the coming years, but not any time soon: “The next chapter, whatever intensity I’m working, will be to help streaming come to scale.”


Apple Music has grown to 30 million paid subscribers in two-and-a-half years. Its competitor Spotify has been in operation for 14 years (10 officially) and has 70 million subscribers.

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