There are, obviously enough, some worrying signals out there for record labels and artists amid the COVID-19 global outbreak.
Perhaps the most troubling example is a report from Spanish trade body Promusicae, released on April 1, which projected that the country’s recorded music industry would see a year-on-year fall of over €100m in annual revenues during 2020 due to the effects of Coronavirus.
Predictably, around €40m of this fall would be due to a perilous drop-off in physical music sales, said Promusicae, as the Coronavirus shutdown wipes out retail footfall.
However, it was another striking stat in Promusicae’s report that caused MBW particular alarm: a forecast annual drop in streaming revenues of “at least €50m” in Spain.
We’ve checked with the org and, yep, that’s a year-on-year projected decline in streaming money in 2020, down to circa €163m from the €213m generated by streaming for artists and labels in Spain in 2019 (see below).
In other words, Promusicae isn’t just predicting a slowdown in streaming subscription growth: the group, whose members include the three major record companies, is actually claiming that streaming income for labels in Spain will go into reverse this year.
Antonio Guisasola, President of Promusicae, is very clear that “in the case of [streaming] subscriptions, the expected drop will break the strong growth trend of recent years”.
Extrapolated on a global basis, and compounded by inevitable falls in physical and licensing income, this would be highly damaging news for the record business.
So it’s very much worth noting that Promusicae’s report (which, not insignificantly, has been submitted to the Spanish government alongside a woe-is-us letter requesting financial relief) appears to be being contradicted (so far) by examples elsewhere in the world.
In addition, Denis Ladegaillerie, CEO of Believe, which realized nearly $700m from digital sources last year, recently stated that, while audio streaming volumes were decreasing globally amid the age of COVID-19, it wasn’t the same story for the money being spent on streaming subscriptions. Ladegaillerie wrote on April 2: “We’ve had a lot of conversations with our partners – Apple, Spotify, Deezer etc. – and what we typically hear is that paid subscribers are continuing to grow; as markets have gone into confinement, a couple of services say they’ve actually seen acceleration in paid subscription uptake.”
Now, there’s further reason for cheer in the worldwide business.
Over the weekend, the New York Times ran some fascinating data from Earnest Research, which tracks and analyzes the credit card and debit card purchases of nearly six million people in the United States.
This data reflected the spend on these credit cards in the US in the week ending April 1, compared with the same retail week in the prior year (2019).
It showed that there have, undoubtedly, been economic victims in the US from Coronavirus quarantine. For example, Earnest’s data suggests that spend on movie theaters is down 100% (for obvious reasons), while spend on toys, books, physical music and sporting goods has all fallen by over 50% YoY in value terms.
“It’s early days, but that’s a very positive sign – and right now, all positive signs are welcome.”
Senior record industry source on Apple Music’s subscriber growth
However, there have also been some beneficiaries from / survivors of the stay-at-home measures put in place in states across the US. Spend on video gaming, for example, is up by way over 50%, according to the New York Times’ visualization of Earnest’s numbers.
And guess what? Spend on music streaming subscriptions is also up significantly year-on-year. From what we can tell from the NYT’s charts (which only denote 50% and 100% increments), consumer spending on the likes of Apple Music and Spotify Premium rose by just over 20% YoY in the week when compared to the same seven days in 2019.
That’s a bigger spending rise than that seen on News Media and eBooks, according to the NYT article, but a smaller jump than that seen by video streaming (Netflix et al) and video games.
Ordinarily, this wouldn’t be big news: after all, according to the RIAA, annual recorded music trade income from subscription streaming services was up by 27.5% year-on-year in 2019, to $5.93bn.
Yet in a world where economic gloom so often seems like the story of the day in the entertainment business media – not least in Spain – this is happy news for artists and labels.
As one senior record industry source told MBW last week regarding Apple Music’s recent monthly subscriber rise: “It’s early days, but that’s a very positive sign – and right now, all positive signs are welcome.”
[Pictured: Drake’s Toosie Slide, which is currently at No.1 on Spotify’s global daily chart.]Music Business Worldwide