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Jan 6 2023

🔵 The death of the superstar, the purchase of Spotify and other "could happen" events in 2023...

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

One article I'd recommend taking in today is MBW's "5 numbers that will come to define the music business in 2023". In it, the author (the ever-reliable Tim Ingham, never someone afraid of asking awkward questions, god bless him) runs a few figures past us that certainly make for a few compelling observations of the state of music in the coming twelve months.

If you want a point to contemplate over a quiet pint, cigarette, cup of tea or dare I say joint (for our US-legal readers!), the first one is definitely worthy of consideration. Specifically, if the contribution of major stars is now at 5% and shrinking, what even is a superstar?

No doubt some of you will shake your heads and roll your eyes at this point, which is fair enough, To me though it is genuinely a point worth considering. Music has always punched well above its weight in cultural heft. Its superstars may not have the wealth of Elon Musk or Jeff Bezos, but their cultural impact is gigantic, in turn creating a lot of additional clout for the music industry itself.

If the cultural big-hitters are no longer coming from music, what does that say about the longer-term value attributed to music in general?

The other point that caught my eye in Tim's piece was his speculation that maybe - just maybe - Spotify is now looking like a dead bet in terms of its value, such that it may be better to simply sell up, most likely (one would imagine) to the likes of Apple, Amazon or Google.

Again, at first glance it appears a crazy notion, but as that share price graph continues its uninterrupted downward spiral, one has to surely conclude it is not so crazy an idea.

Lastly, Ingham once again flags the issue of saturation where music DSPs are concerned, with over 100k tracks being uploaded per day.  Personally I still wonder how the majors could affect some kind of lockout for smaller tracks, but ironically I'd quite welcome it.

As I've said in previous editions, the likes of Bandcamp and SoundCloud are doing a far better job (IMO) of catering to DIY and emerging artists - though I'd really extend that to anyone not currently signed to an upper-tier indie. That being the case, a split system in which those artists simply aren't allowed on Spotify might actually cause artists to double down on the platforms they can use, further building value, community and enrichment all round.

I am really curious to see if any of these issues come to be a reality, but as ever, I don't see them as bad things. It's a great time to embrace this all and get stuck in. Yes, change is afoot, but we must embrace that and work out how it can benefit us, irrespective of the role we hold in this industry.

Have a great weekend,

D.


🎶 written whilst listening to Brian Eno's "Ambient 4: On Land" album. I bought the remastered version of this on vinyl. It's a 2LP set that plays at 45rpm. Problem is, I didn't realise this until I'd played Side 1 without even realising. That said, it turns out is sounds even better on the wrong speed, so if you can, get a copy and play it on 33rpm! 😆
Stories from the Music Industry:
Universal Music Group sued over its Spotify equity ownership by artist in class action lawsuit
NYC-based Andres Titus and William McLean, via their attorneys, make three main claims: (i) That Black Sheep and other artists signed to Universal should have been paid 50% of royalties from Spotify since 2011 due to a clause in their contracts pertaining to net receipts; (ii) That UMG agreed to accept lower royalty rates from Spotify in exchange for receiving equity in the streaming service back in 2008; and (iii) That Black Sheep and other artists should also have received 50% of UMGs Spotify equity (or the value of it) because, according to the duos suit, this would be proportional to their royalty contract.

👆🏻 Hot take: I suspect this will not hold up as the evidence being presented is little more than conjecture at points. What will be interesting is whether UMG will settle on the royalties point, which wouldn't be the first time (and which looks.... curious). 
Largely thanks to analyst disappointment over that gross margin impacting on share price, Spotify is currently only worth about $15 billion on the New York Stock Exchange. If it doesnt improve its gross margin soon, could it become an acquisition target for a tech giant in 2022? (Speaking of which, just for fun: Imagine Twitter buys it tomorrow. Whats the first thing Elon Musk does?)

👆🏻 Hot take: a. really great piece from MBW presenting all manner of points to pontificate upon. Too much to comment on succinctly here; just take a read! 
Curve is the latest in a series of strategic acquisitions made by Downtown in recent years. In addition to Curve, New York-based Downtown has acquired companies including B2B music tech and services platform FUGA and indie distributor CD Baby. Downtown has also made investments in the likes of Beatbread and Vampr.

👆🏻 Hot take: a logical move from Downtown here, given its company portfolio. Curious what other ancillary music businesses will also be in the company's sights too. 
The lawsuit alleges that Triller has not paid UMG invoices for the last three quarters as part of the nearly-$3m deal for licensing and past use of Universals catalogue. It is also accused of failing to provide quarterly usage reports on the majors catalogue. Triller has come out swinging, as is its wont. Nothing more than a minor contractual dispute with a publisher, not the label, and has no impact whatsoever on Triller or its business,it told Variety.

👆🏻 Hot take: I cannot help but feel that Triller's attitiude and tone around all legal matters is hopelessly wrong. It will simply alienate all partners which is a fatal error IMO. 
Stories from the Broader World of Tech:
Tech grifters out, Abercrombie in: what the vibe shift will bring in 2023
Still, people want to gather, and there are hard limits to what the digital socialization and communities we saw during lockdowns can achieve without an IRL component. Socialization has been made much more expensive, especially, again, compared to a decade ago when you could get $2 PBRs as opposed to a $30 martini. People are trying to find whatever way they can around that. Maybe video games, or spaces like Twitch, could become a substitution. Music is going to have a hard time this year. The cheap, dingy venues are gone, so young people use video games as a social space. Its like a phone call, but youre also doing an activity together.

👆🏻 Hot take: some great insights with much food for thought here. Eminently worth a read IMO. 
For example, say youre following a TikTok recipe video and want to get to a specific part of the video. In the past you would have had to blindly scrub through the video. Now, you will be able to see where exactly you want to fast forward to via the new thumbnails.

👆🏻 Hot take: not especially world-changing in itself, but definitely another indicator as to the degree to which TikTok squarely has YouTube in its sights around longer-form viewing now. 
Apple has quietly launched a catalogue of books narrated by artificial intelligence in a move that may mark the beginning of the end for human narrators. The strategy marks an attempt to upend the lucrative and fast-growing audiobook market but it also promises to intensify scrutiny over allegations of Apples anti-competitive behaviour.

👆🏻 Hot take:  as an angle to compete with Audible, this is certainly a compelling one. The anti-competitive concerns are legitimate, however. 
Other Reads I've Enjoyed Lately:
Use ChatGPT to Generate Facebook Pixel Purchase Event Code
Use the powerful AI of ChatGPT to easily generate Facebook pixel purchase event code. Here's how...

👆🏻 Hot take: I wrote in the last Digest about how AI will be replacing all manner of functions, and for you marketing folk, here is a perfect example. You're welcome 😉
An illegal six day rave in the Spanish village of La Peza was "magnificently organised" according to its mayor

👆🏻 Hot take: I love this story purely for the reaction from the Mayor. Not outrage, but admiration for how well this was executed. Brilliant. 
#EnemiesToLovers. #OnlyOneBed. #TheChosenOne. Is picking books by trope too easy?

👆🏻 Hot take: how reductive hashtags from TikTok are affecting the books that sell well. Perhaps a cautionary tale for the music business (if we're not there already!)
The latest from Motive Unknown on Twitter:

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