16bn reasons why Adele’s streaming snub paid off

Yesterday, MBW made a conservative stab at estimating the revenue generated by Adele’s 25 in 2015.

We’ll spare you the calculations: across the UK and US in 25’s six weeks on sale, we worked out, the album would have taken around $115m at retail.

That figure is based on the average sale price of albums on both sides of the Atlantic, and the fact it shifted 10m units in these markets its opening six weeks.

Considering that average price mixes in budget and discounted releases, our figure is almost certainly on the low side.

No matter. It’s enough for us to play with…


Adele famously decided not to put 25 on streaming services, including Spotify.

“I believe music should be an event,” she explained to Time at the end of last year. “I don’t use streaming – I buy my music.”

She added: “I know that streaming music is the future, but… I can’t pledge allegiance to something that I don’t know how I feel about yet.”

When 25 was released on November 20, some in the music industry suggested Adele’s streaming snub was a grave error.

“I don’t use streaming – I buy my music.”

Adele

Ranter/blogger/seer Bob Lefsetz even hyperbolically suggested that Adele was “dumb and uneducated” for her decision to overlook Spotify and its rivals.

So, just for fun, let’s estimate how many streams Adele would have had to clock up in order to achieve the same income as she achieved at retail.

Unfortunately for Spotify, this is where its commendable openness with artists and songwriters leaves it a little exposed.

Spotify remains the only streaming service to publicly announce an average per-stream rate for music rights-holders: a blended average, it claims, across free and paid tiers of $0.007 per play.

Before we crunch the numbers, a few mediating factors to consider:

  • Streaming services offer record companies and artists a much better margin than physical retail. With all those Adele CD sales, for example, distribution, retail and manufacturing costs would have to be deducted – and that would have cost millions of dollars. These losses would be far lessened, or non-existent, on a streaming service;
  • Spotify would no doubt argue that although 25 would have still generated significant revenue on its service, it would have also received other benefits – including a digital virality which would have possibly helped sell (don’t laugh) even more albums. Certainly, it would have added another format to the mix of consumption. Whether that format was additive or damaging to Adele’s CD/download sales is another matter…
  • We don’t know what certain streaming services might have paid Adele and her UK/US labels – Beggars/XL and Columbia – as a one-off fee should some kind of exclusive deal have been thrashed out a la Taylor Swift’s 1989 concert on Apple Music.
  • Adele’s 25 will surely land on streaming services eventually – and it will provide very helpful legacy income after, say, a year’s-worth of retail sales.

Anyway, back to that US/UK revenue figure from 25’s first six weeks on sale:

$115 million

Ready?

Taking Spotify’s average per-stream payout of $0.007, tracks from Adele’s 25 would have needed to be streamed an obscene amount to generate the same amount of cash as she did via download and retail.

To be exact:

16.4 billion times

Yikes.

Could she have done it?

In short, no way. Literally zero chance.

How do we know?

Because the most streamed artist in the history of Spotify, Ed Sheeran, has racked up 3 billion streams on the service since it launched in 2008 – generating around $20m.

Even when you add in all the other licensed audio streaming services out there, it’s a tally currently miles out of reach for any act – even the world’s predominant pop-soul queen.

Further evidence: Spotify says it attracts close to a billion streams in total each day.

So even if all of its 75m users streamed nothing but Adele, it would have taken over two weeks to hit $115m.


16.4bn streams is a startling number, but in truth it doesn’t really show us too much more than this: the giant gulf between Adele’s unique money-making prowess at retail, and what she could have expected her latest album to generate on streaming services as we stand today.

As such, it’s an illustration of why, now the dust has settled, it’s pretty impossible to say she made the wrong call.

Surely only the ‘dumb and uneducated’ would dare suggest otherwise.Music Business Worldwide

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