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Jan 27 2023

🔵 All these new concepts for streaming models - but which is best?

The latest news from the music and tech industries
Hi there -

MBW is the latest publication to put forth some ideas around possible new streaming models. and it's worth your while taking a look.

Two things struck me reading through these ideas. First, it's fascinating how many alternative models there are - or could be. Second, almost all of these models have winners and losers, meaning if any of them proved to be the new system of remuneration, someone would be losing out.

One might argue this is already the case, with current streaming models generally favouring the Ed Sheerans and Taylor Swifts of the world. My concern is that if one complaint of the current system is that you have a lot of 30s tracks and other audio detritus fouling up the system to game it for revenue, most other models will fairly certainly invite the same sort of nonsense.

Something else I am noticing is that everyone is still talking in the context of streaming audio being the incumbent model. Granted, I don't see DSPs disappearing overnight, but historically the dominant music format has changed every two decades or less, so it isn't crazy to think that something else might replace it entirely.

Ditto the attention economy, which a cynic might argue is simply yielding unprofitable companies in most spaces, be that music (Spotify) or TV (see the Peacock story below). Aren't we due a fundamental shift to something a little more realistic? We've lived in a "convenience uber alles" world for some time now, and it has eroded the album as a longform listening format, the album as a physical format, hell even the actual quality of the music itself for a long while there.

(A quick aside: is it me, or is Spotify sounding pretty terrible these days? I was shocked to hear the difference between, for example, Skrillex's "Leave Me Like This" on YouTube versus Spotify. Way more dynamic range and clarity on the former - and that's YouTube, not even Apple Music where the audio is essentially CD-quality now.)

A subscriber to the Digest replied to me the other day that he was genuinely excited about what is going on at the moment (ie with Universal moving to explore new models etc). Finally it feels like change is afoot, and that was amazing.

I agree wholeheartedly.

Have a great weekend,

D.

🎶 written whilst listening to Smashing Pumpkins "Siamese Dream". I was reflecting on this excellent Rick Beato video of the 40 greatest sounding albums, and whilst Siamese Dream wasn't on the list, and arguably shouldn't be, was IS great on this album is that monstrous wall of fuzz, powered by an insane number of overdubs. The band's best, without a doubt. 
Stories from the Music Industry:
Universal is investigating new royalty payout models for streaming. Which one will it choose?
We know that Sir Lucian Grainge and Universal are unhappy with the corruptible nature of the pro-rata model. And were pretty sure backed up by sources close to UMG that theyre not fully on board with a straightforward user-centric alternative. Instead, theyre going to pick something different (or at least a significant modification of these two established models). But what? Below, MBW sketches out five concrete examples of different streaming royalty models that could replace or augment the current pro-rata model.

👆🏻 Hot take: more ideas on what a new streaming revenue model could look like. As I read all these suggestions, my only worry is that there could be massive implications if the wrong one is chosen. 
Berchtold also called for legislation mandating all-in pricing of tickets, in which fans can know the full cost of their tickets from the start of their purchase, with the various fees broken out and displayed. Nevertheless, he said, We actually believe the ticketing business has never been more competitive. Another witness, Jack Groetzinger, CEO of SeatGeek, a Ticketmaster rival, compared the present day situation to that of the Hollywood studios in the 1930s and 40s, when they controlled movie talent, distribution and exhibition until the federal government stepped in. They broke it up. That is a solution you need to look at, he said.

👆🏻 Hot take: it feels like a fait accompli now that Live Nation and Ticketmaster will no longer be able to operate as they currently do. When both sides of the House are against you in the US, you *know* there's a problem.
Universal Music UK-owned EMI Records is launching a new label in the northern British city of Leeds, in Yorkshire, called EMI North. The company claims that in launching EMI North, it becomes the first major label to open a physical space outside of London. Based in Duke Studios, the creative hub in the city centre of Leeds, the label will be led by Clive Cawley, who moves over from his current role of MD, EMI to President, EMI North.

👆🏻 Hot take: I love this idea. Something I like about the team here at MU is that a good number are well away from London, and I think that's really healthy. Great for the Leeds economy, great for the music scenes in and around it... all credit to them. 
Warner has now provided an update on its legacy unrecouped advances program, revealing that the program saw around 4,500 artists and related producers benefit globally in its first year. The company says it expects this number to grow as we connect with all eligible participants. Additionally, WMG says that it has also begun to reach out to [Warner Chappell Music] WCM songwriters who could benefit from this program, with over 1,600 accounts eligible globally.

👆🏻 Hot take: certainly a smart move to publicise this kind of info. I'm sure some might argue it was past time the majors dismissed unrecouped advances, but they have and that's the main thing now. Fair play. 
Stories from the Broader World of Tech:
FaZe Clan faces possible delisting from the Nasdaq just 6 months after going public
FaZe Clan, the digital gaming-and-e-sports-content platform that went public just over six months ago with a valuation of $1 billion, is already trading well below a dollar per share, putting the company at risk of delisting by the Nasdaq exchange. Face Holdings, the parent company of FaZe Clan, has seen its stock price fall from a high of $24.69 on August 30, 2022 to just 75 cents on Thursday. Under Nasdaq rules, any company that fails to close above the $1 mark for 30 consecutive days is issued a deficiency notice, which can trigger a delisting.

👆🏻 Hot take: if you want a poster child for the degree to which zeitgeists can turn to dust at great speed, look no further than FaZe Clan. Web3: take note. 
Comcast-owned streaming service Peacock had its best quarterly result since its 2020 launch, adding five million paying subscribers in its fourth quarter of 2022 to bring the total to 20 million, up from the over 15 million subs in the previous quarter. In Q1 2021, Peacock had 9 million paid users. Peacock gets much of its success from its sports programming. The boost in paid subscribers was primarily due to the FIFA World Cup, which streamed in Spanish on Peacock Premium and Telemundo. The streamer also now has exclusive next-day rights to NBC and Bravo shows.

👆🏻 Hot take: I still wonder where these streaming wars will end. Consolidation of some kind feels inevitable as I just don't see the market sustaining all these competitors. 
Theres a big figure in the start-of-the-year blog post from Twitchs chief product officer Tom Verrilli and chief monetization officer Mike Minton. Streamers earned over $1 billion across Twitch in 2022, they wrote. Thats a mixture of channel subscriptions, tips and shared advertising revenues, although the blog post didnt break down the overall figure into those categories. Instead, it focused on summarising the various tools and programs that Twitch launched last year to help streamers to make money.

👆🏻 Hot take: these are good stats to push out there as Twitch battles to maintain relevance against YouTube and (ever more) TikTok. Smart, pragmatic moves being made in general here. 
Other Reads I've Enjoyed Lately:
Alleged Crypto Bro Jimmy Fallon Didn’t Disclose His Financial Stake While Hawking ‘Bored Ape’ NFTs on ‘The Tonight Show’
Fallon and other A-listers could face consequences for allegedly inspiring their fans to pay the price of a house for a monkey JPEG

👆🏻 Hot take: if this lawsuit goes against those named, the implications could be pretty massive. The facts definitely don't read well either, making me think the chance of a win for those suing is pretty good. 
Reflecting on my desire for Chinese-style e-commerce platforms.

👆🏻 Hot take: a fine piece just reflecting on fast fashion and the consumerism it fuels. 
Would your city spend $65 million for this?

👆🏻 Hot take: I'd argue that the UK Govt has frittered away infinitely greater sums on things nowhere near as awesome as this, so I am all for it. Fair play to you Netherlands!

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