Welcome to Music Business Worldwide’s weekly round-up – where we make sure you caught the five biggest stories to hit our headlines over the past seven days. MBW’s round-up is supported by Centtrip, which helps over 500 of the world’s best-selling artists maximise their income and reduce their touring costs.
Facebook has been making a lot of headlines lately.
Why? Because, according to an internal memo, Kobalt’s existing US licensing deal with Meta has expired and the two parties have failed to reach a new agreement.
It wasn’t all bad news from the offices of Zuckerberg et al this week, however.
On Monday (July 25), Meta revealed that it will now directly share a proportion of Facebook’s ad revenue with music rightsholders for certain user-generated content videos.
This new system works as follows: Video creators who choose to use licensed music in videos over 60 seconds long on Facebook will receive a 20% share of any advertising revenue generated by their creation.
The remaining 80% of that advertising revenue will then be split between the appropriate music rightsholders and Meta itself.
Elsewhere in the global music business this week, earnings season was in full swing.
On Wednesday (July 27), Spotify published its Q2 results, and confirmed that it added 6 million net Premium subscribers to its user base in Q2, taking its total global subs up to 188 million.
That was bigger than the 5 million subscribers SPOT previously told investors it was expecting to add in the second quarter.
Meanwhile, also on Wednesday, Universal Music Group posted its own Q2 2022 fiscal results (covering the three months to end of June).
UMG’s total company revenues across recorded music, publishing, and other activities were up by 17.3% YoY at constant currency to EUR €2.535 billion (USD $2.70bn) in the quarter.
And today (July 29), we reported that Sony’s global music rights operation – across recorded music and music publishing – generated USD $2.03 billion in the three months to end of June 2022 (calendar Q2 2022), up 11.7% year-on-year (vs. calendar Q2 2021) at US dollar-converted constant currency.
Here’s what happened this week…
1) KOBALT IS PULLING ITS 700,000 SONGS OFF FACEBOOK AND INSTAGRAM. IS THE MUSIC BIZ HEADED FOR A HISTORIC BUST-UP WITH META?
The other day MBW jokingly remarked that the global music business had become a little “cozy” this summer – with a distinct lack of companies (publicly) falling out.
Please, loyal reader, allows us to scratch that idea from the record.
On Sunday (July 24), MBW confirmed that Kobalt Music Publishing – home to 700,000 songs – is pulling its entire catalog from Facebook and Instagram in the United States….
2) FACEBOOK WILL NOW DIRECTLY SHARE A PROPORTION OF AD REVENUE WITH MUSIC RIGHTSHOLDERS FOR UGC VIDEOS. YOUR MOVE, TIKTOK…
If you’ve been paying attention to MBW this month, you’ll know that there’s an increasingly loud industry debate going on over “emerging” social platforms, and the different models they use to pay music rightsholders.
Leading music execs are starting to call out the likes of TikTok, Meta and others for exclusively paying publishers and record labels via lump-sum licensing advances (or so-called ‘buy-out’ deals) – rather than sharing an agreed proportion of revenue for every monetized play/use of music on their platforms.
Monday (July 25), then, was a big day: Meta has announced that it is changing the way artists and music rightsholders are going to be paid from Facebook – and that it WILL now be moving to a ‘revenue-share’ model for user-generated video content…
We can’t talk about streaming subscribers these days without mentioning Netflix.
The video streamer lost nearly a million net subscribers in Q2 (the three months to end of June) – which was better than expected but, following the loss of 200,000 net subs in Q1, also obviously not good news. What, then, of Spotify?
Did it suffer from a similar trend in its Q2 numbers? Did its subscriber performance send out a worrying message for the music business?
4) UNIVERSAL MUSIC GROUP GENERATED $2.7 BILLION IN Q2; RECORDED MUSIC SUBSCRIPTION STREAMING REVENUE GREW 7.0% YOY
In recent years, the music rights business has grown used to the major music companies posting double-digit YoY subscription streaming revenue growth every quarter that flies by.
On Wednesday (July 27), that narrative changed somewhat, as Universal Music Group, the world’s largest music rights company, posted its Q2 2022 fiscal results (covering the three months to end of June).…
3) SONY GENERATED OVER $2BN FROM RECORDED MUSIC AND PUBLISHING IN CALENDAR Q2; RECORDED MUSIC REVENUES WERE UP 11.2% YOY
Sony’s global music rights operation – across recorded music and music publishing – generated USD $2.03 billion in the three months to end of June 2022.
That’s according to MBW’s calculations based on Sony Group Corp’s calendar Q2 (fiscal Q1) 2022 results, as announced by the Japanese firm earlier today (July 29).
The $2.03 billion figure was up 11.7% year-on-year (vs. calendar Q2 2021) at US dollar-converted constant currency.
(Understanding Sony’s results at a US dollar-converted constant currency level is particularly important for calendar Q2 2022, when the strength of the dollar vs. the Japanese Yen – the currency in which Sony reports its earnings– rose to historic levels.)…
Music Business Worldwide