Industry Groove – Week 27
The most important contribution this week comes from music industry analyst Mark Mulligan. His razor-sharp analysis sees the music industry at a turning point and clearly explains why.
Other important news this week aligns seamlessly with Mulligan’s analysis. For example, SoundCloud is trying to solve a problem that will only grow bigger, namely that many songs are listened to very little or not at all. TikTok, with its tool Ripple, is doing precisely what Mulligan highlights in his analysis, namely giving people the opportunity to create music as easily as taking a photo or shooting a video. Furthermore, there are parallels to Goldman Sachs’ report, which, although predominantly optimistic in tone, also recognizes a structural transformation, warns of a flood of songs, and considers the current streaming model as outdated.
Of course, one can still comfortably settle within the existing system, but it would be much more important to engage with what is to come. As Mulligan rightly warns, we now have the opportunity to shape the future, but this window of time is small and will close soon.
- It is a truism that nobody is really happy with streaming. Artists have been complaining for years and even superstars are now struggling, prompting the majors to rethink their strategies. And while artists and labels believe they are getting too little, streaming services are operating at a loss. In the end, nobody is getting what they would like to have.
- According to Mulligan, a system that was developed when albums, charts, downloads, and radio were relevant simply cannot work in today’s music world.
- Therefore, AI is not the cause but rather a catalyst for existing problems.
- Mulligan also does not believe that a system change to a user-centric or similar model is the solution. He sees the real issue as the shift in music consumption from active to passive due to streaming. The focus should be on fixing consumption, not the payout.
- Additionally, a problem arises from the fact that AI-generated music has the greatest potential in the short term, particularly in the passive lean-back space. In other words, passive listening is likely to become even more prevalent.
- It’s much more about creating a unified sonic landscape than individual songs or the artists themselves. Listeners are being offered increasingly specific music that AI can produce or tailor even better than human producers.
- If DSPs now produce AI music themselves, they can not only increase their margins, but also impose this music on listeners. Because whoever controls the algorithms also controls listening behavior.
- He sees the real danger in the combination of very simple AI music tools and platforms like TikTok, Snapchat or BandLab. When users can create music as easily as photos or videos, this will result in millions of songs per day. This will ultimately cause the current model of streaming royalties to collapse.
- For Mulligan, it is clear that improving the existing system is not enough. A Plan B is needed to create a music world that revolves around fandom, identity, creativity, and exceptionalism – the human elements of music.
- Mulligan concludes his analysis with the following statement: “Five years ago, it would have been crazy to be thinking about how machines will shape the near future of both the business of music and of music itself. Just imagine what we might be discussing five years in the future?..…”
- Lately, SoundCloud has increasingly been the DSP attempting to find timely solutions to current problems. And indeed, there is a problem: As I previously reported, 42% of all songs uploaded to streaming services are streamed less than 10 times. An astounding 24% or 38 million tracks haven’t received a single stream.
- With currently 120,000 songs uploaded per day (and soon possibly even millions of songs daily), this problem is certainly not diminishing.
- Of course, SoundCloud cannot guarantee a decent number of streams for each of these hundreds of thousands of songs – and let’s be honest, many of them wouldn’t deserve it anyway – but at least all songs should receive a little boost.
- This is where the new feature “First Fans” comes in. Through the autoplay algorithm, each newly uploaded track will be presented to approximately 100 users who have matching musical preferences.
- However, SoundCloud clarifies that this doesn’t necessarily equate to 100 streams, as they cannot control whether the song will actually be listened to.
- Unlike Spotify’s Discovery Mode, the streams generated through this feature will be compensated the same as any other stream.
- First Fans is currently being tested with a selected group of artists, and if the test proves successful, the feature will be rolled out more broadly.
- It has only been two months since I reported that TikTok owner ByteDance was working on an AI music creation app. Now, it has been released under the name Ripple.
- ByteDance describes Ripple as a “music creation, composition, and audio editing” app. Currently, it is available by invitation only and exclusively in the United States for iOS, but that is likely to change soon.
- Ripple is targeting both musicians and social media creators. The former are supposed to receive help with music production through Ripple, while the latter get a tool to create music for their videos themselves. This point is particularly highlighted in an article by MBW. Because TikTok would benefit from creators making their own music instead of using licensed music, which TikTok has to pay for.
- With the “Melody to Sing” feature, users are given the ability to sing or hum a melody, which the app will then convert into instrumental songs in various genres.
- Currently, Ripple can only produce instrumental music in general.
- Additionally, Ripple offers a virtual recording studio where audio tracks can be edited.
- The AI has been trained using music that ByteDance has licensed or owns, as well as in-house produced songs. The company confirms that no commercially released music has been used, not even from artists who use SoundOn as distribution.
- How Ripple handles situations where users hum copyrighted melodies into their phones remains to be seen.
- Currently, videos on Spotify are limited to podcasts, 30-second storytelling clips, and, of course, Canvas. However, rumors suggest that Spotify may soon offer full music videos on its platform.
- This would be a direct challenge to YouTube and Apple Music, which have long been offering music videos on their platforms. And as with virtually all major moves in recent times, it is also an attempt to keep up with TikTok.
- Spotify has not yet commented on the rumors, so it remains unclear for now how musicians would be compensated for video views.
- The report by investment bank(st)ers Goldman Sachs, titled “Music in the Air,” always garners a lot of attention in the music industry, not least because people love to hear the very optimistic forecasts.
- Last year, they projected revenues of $94.9 billion for 2023 and $153 billion for 2030. These figures have now been slightly revised downward to $92 billion for this year and $151.4 billion for 2030. These are the projected revenues in the areas of recordings, publishing, and the live music industry.
- In addition to gross revenues, Goldman Sachs estimates net revenues, which are expected to reach $65.1 billion in 2023. This is divided into $28.2 billion for recorded music, $8.8 billion for publishing, and $28.1 billion for live music.
- Goldman Sachs expects net revenues of $104.4 billion for 2030, with $50.1 billion for recorded music, $14.7 billion for publishing, and $39.5 billion for the live business.
- The bankers also predict a significant structural transformation for the music industry. Not surprisingly, they attribute this to the lack of monetization of music content, outdated structures of streaming payouts, and, unsurprisingly, artificial intelligence.
- They believe that it is necessary for the costs of streaming subscriptions to continuously increase. They also label Pro-Rata as an outdated model.
- Additionally, they predict that in the foreseeable future, not 120,000 but millions of songs will be uploaded to DSPs every day, as creation becomes so much easier (or already is) through AI.
- It is important to keep in mind that this analysis comes from a single firm, which may have its own interests, including investments in companies like Universal and Spotify.
- As I previously announced, Meta has been working on a Twitter clone, and it has arrived sooner than expected. Specifically, the Instagram platform called Threads is now available – at least for some users.
- Threads has been launched in over 100 countries, but EU users still need to be patient a little longer. The launch has been postponed to ensure that Threads complies with European data protection regulations.
- Posts on Threads can be up to 500 characters long, and users can also upload photos or videos up to five minutes in length.
- Undoubtedly, it is a good time to introduce a competitor product to Twitter, as Twitter has consistently faced criticism, and Musk himself has repeatedly stirred controversy surrounding his company.
- While there are already some competitors, it is clear that Meta, with its enormous market power, has the greatest chance of capturing Twitter’s users. And it seems to be working: Within the first four hours, 5 million people have already signed up. However, it remains to be seen how many of them will stay and even leave Twitter.
- As usual, when something new suddenly dominates the headlines, many untruths and half-truths are circulating. This article attempts to debunk some myths surrounding AI-generated music. It highlights, in particular, that as an artist or engineer, you will not be replaced today or tomorrow, and that AI tools in the music domain are not as advanced as some may think.
- After Apple Music, Amazon Music, Deezer, and other DSPs, TIDAL has now also announced that they will be raising the price of their subscription in the USA from $9.99 to $10.99. The increase will take effect from August 1st and is expected to impact several other markets as well. Spotify’s exact plans remain unclear. This article also shows that the price increases did not cost Apple Music and Amazon Music any subscribers – on the contrary, in fact.