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Music Business News, March 6, 2018

CD Baby paid out $80 million to artists last year. Also, Universal said it will share Spotify stock profits with artists. And a new report dove into the latest social media trends.


CD Baby Hitting $600 Million in Artist Payouts Since 1998


CD Baby reported it paid out $80 million to artists in 2017, according to Billboard. Launched in 1998, the indie distributor and publisher has paid $600 million to artists in its 20 years in business.


The company was started in the middle of a record industry boom and hit an overall revenue high by the end of its first year. However, as the industry changed, its business was cut in half and continued to struggle. This past year, however, as streaming hit its stride, CD Baby began to grow again.


The $80.1 million CD Baby paid out to artists in 2017 was 33-percent than it paid out in 2016. It distributes 650,000 artists and over nine million tracks. The company also publishes 140,000 songwriters and 875,000 songs, representing artists and bands in 215 territories worldwide.


Kevin Bruener, CD Baby’s VP of marketing explained, “Just six years ago, iTunes downloads were the main source of sales revenue for our artists … With this shift [towards streaming], we’ve seen revenue increase dramatically. The overall pie is growing and indie musicians are getting their slices.”


CD Baby offered up data to Billboard (available in the linked story) supporting its declaration of growth. In 2009, only 1.7-percent of the $33.3 million the company paid out to indie artists came from streaming services. Only eight years later, that percentage was 58 percent. $36.7 million paid came from streams last year.


However, CD Baby’s artist payouts are still a small percentage of the indie music market worldwide, which hit $6 billion in revenues in 2016 to make up 38-percent of the entire recorded music market. Other stats released by CD Baby showed that its overall payments have grown, but its share of total digital distribution revenue has gotten smaller during the past six years as companies like Spotify, Apple Music and Pandora emerged.


CD Baby CEO Tracy Maddux said, “We’re excited to see average artists’ earnings grow for a third consecutive year due to millions more consumers engaging in music discovery on streaming services … We’re very optimistic about the trend as we continue to lobby for higher per stream rates.”


Universal Planning to Share Spotify Stock it Sells with Artists


Universal Music Group confirmed it will share the money it gets via sale of its Spotify stock with artists, reported Music Business Worldwide.


Warner Music Group and Sony Music Entertainment both committed to share some of their Spotify equity profits with artists two years ago, but Universal had remained quiet.


A spokesperson announced, “Consistent with UMG’s approach to artist compensation, artists would share in the proceeds of a [Spotify] equity sale.”


Sources with knowledge of the situation said UMG may have been unable to make a public statement about the issue because they were not allowed to until Spotify confirmed it was going public on the New York Stock Exchange. Spotify officially went public on February 28, 2018. The filing showed that only one major label, Sony Music owns Spotify shares totaling more than five percent.


The document indicated that Sony has a 5.7-percent share in Spotify, estimated to be worth more than $1 billion.


Other sources close to UMG said that the label has not yet sold any of its shares in Spotify during private trades. This indicates that Sony may have purchased additional shares in the company after getting its initial allocation through licensing agreements.


All three major labels plus indie company Merlin have obtained Spotify equity since the streaming platform’s launch in 2008. Together, these companies had the rights to 87-percent of streams hosted on Spotify in 2017.


New Report Showing Latest Social Media Trends Released


A new study released by Pew pointed to the latest social media user behavior.


The underlying research showed that Facebook and YouTube were the most-used social media platforms among a majority of adults. However, young Americans age 18-24 are using a large number of platforms beyond the top two and very often.


The average user in the U.S. uses three of the eight major platforms explored by Pew as part of this report: Facebook; YouTube; Snapchat; Twitter; Instagram; Linkedin; Pinterest; WhatsApp.


Pew also discovered that 78-percent of American 18-24-year olds use Snapchat, and 71-percent of this group use the platform more than once per day. Instagram is also used by 71-percent of 18-24-year olds. Twitter is used by 45 percent.


Despite these large numbers above, Facebook and YouTube are still consistently popular, with 68-percent of adults in the U.S. using Facebook and 75-percent of this group visiting the platform daily. Facebook by far houses the widest range of demographic groups of any platform.


YouTube has more users than Facebook. 75-percent of U.S. adults and 94-percent of 18-24-year olds use YouTube regularly.


Still, Pew’s study indicated that social media may not be as popular as it has been in previous years. Of those surveyed, 59-percent of people who use social media said they would not find it difficult to give up social media. 29-percent of users said even more definitively, “It would not be hard at all.”

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