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 maximize their income and reduce their touring costs.
This week we learned, from data published in the RIAA’s new midyear report, that the United States saw just 2.5 million net additions of Paid music subscription accounts in H1 2024 vs. the prior-year period – a rise of just 2.7% YoY in percentage terms.
That +2.5 million YoY net increase in H1 2024 compared to a +6.6 million YoY net rise in H1 2023, +7.9 million in H1 2022, +9.4 million in H1 2021, and +14.4 million in H1 2020 – a steady pattern of deceleration in the growth of subscriptions in the US market.
Also this week, we reported that Bill Ackman‘s Pershing Square Holdings, which owns 10% of Universal Music Group‘s equity, recently published its interim financial report for the first half of 2024, in which it expressed confidence in UMG’s long-term prospects.
Plus, a prominent music business analyst just upgraded UMG’s stock from “neutral” to “outperform.”
We also learned this week that UK-headquartered Beggars Group is now a GBP £100-million-plus annual revenue company.
Meanwhile, Bertelsmann-owned BMG reported that its turnover hit EUR €459 million (USD $496m) in the six months to end of June, up 11.1% YoY, or up 12.5% YoY on an organic basis, as digital revenues significantly increased their share of BMG’s overall turnover.
Finally, in a guest column for MBW, Ed Newton-Rex, CEO of the ethical generative AI non-profit, Fairly Trained,argues that it’s time for DSPs to take action against music generated by AI models that were trained on copyrighted music without permission.
Here’s what happened this week…
Credit: Tribune Content Agency/Alamy
1) PAID STREAMING SUBSCRIPTIONS GREW JUST 2.7% YOY IN THE US IN H1 2024 – BUT OVERALL MARKET REVENUE TOPPED $8.6BN
Two important data points for you.
Important Data Point 1: There were 131.43 million households in the US last year, according to Census data.
Important Data Point 2: According to new stats from the RIAA published Thursday (August 29), there were 99.0 million paid music streaming subscription accounts in H1 2024.
What we’re about to tell you, therefore, is no great surprise. But it’s still big news for the global music industry:
The United States appears to be officially nudging closer to saturation point for music subscriptions – i.e. the moment when the maximum possible amount of paying American music subscribers has been reached…
Credit: Shutterstock
2) THIS ANALYST HAS WATCHED UNIVERSAL MUSIC GROUP CLOSELY FOR YEARS (AND HASN’T ALWAYS BEEN MEGA-POSITIVE). HE JUST UPGRADED UMG’S STOCK FOR THE SECOND TIME IN A YEAR.
There are few financial analysts that have observed the music business – particularly Universal Music Group – for as long, and as closely, as William Packer of BNP Paribas Exane.
On Thursday (August 29), Packer tweaked his view of Universal Music Group’s stock, and it’s good news for Sir Lucian Grainge and co: Packer has again upgraded his stock rating, this time from “neutral” to “outperform”.
Credit: Ben Houdijk/Shutterstock
3) BEGGARS GROUP IS NOW A £100M+ ANNUAL REVENUE COMPANY
Beggars Group, the UK-based record company that owns or co-owns XL Recordings, 4AD, Rough Trade, Matador and Young Recordings, among others, has reported a 13.3% YoY jump in turnover for 2023, bringing its annual revenue above GBP £100 million for the first time.
According to its annual accounts, filed on Tuesday (August 27) with the UK’s Companies House, the company owned by Martin Mills last year brought in revenue of £103.18 million (USD $128.33 million at the average exchange rate for the year).
Meanwhile, XL Recordings, 50% owned by Beggars, reported an operating profit for 2023 of GBP £10.32 million (USD $12.8 million).
During those 12 months, XL released just eight new albums — maintaining its track record of making big bucks from relatively few recordings…
Credit: Press
4) BMG REVENUES HIT $496M IN H1 2024, UP 12.5% YOY ON ORGANIC BASIS
BMG has reported double-digit revenue growth for the first six months of 2024.
The Bertelsmann-owned company’s turnover hit EUR €459 million (USD $496m) in the six months to end of June, up 11.1% YoY, or up 12.5% YoY on an organic basis.
Bertelsmann credited “strong growth in digital income streams” as a key driver of BMG’s growth, noting a “strong performance across its recordings and music publishing business”.
The share of digital business at BMG grew to 69% of its revenues in H1 2024 vs. 63% in the prior-year period…
Credit: Poetra.RH/Shutterstock
5) IT’S TIME FOR STREAMING SERVICES TO ACT ON AI MUSIC
Ed Newton-Rex, former VP Audio at Stability AI and founder of JukeDeck and ethical AI licensing non-profit Fairly Trained, writes for MBW:
There was always going to come a time when streaming services had to make a call on what to allow on their platforms when it came to generative AI. That time is now.
Up until now, Spotify has had no policy explicitly banning AI-generated music. In 2023, Daniel Ek said that tools that mimic artists were not acceptable; these may be forbidden under the company’s Deceptive Content policy (the wording isn’t entirely clear). But, in the same interview, Ek specifically called out AI music that didn’t directly impersonate artists as something they would not ban at this stage.
And there are signs that, as a result, AI music is all over the platform… For DSPs to continue to allow this is to actively permit the exploitation of musicians’ copyrighted work without a license to do so.
When DSPs distribute music made using AI models that are trained on musicians’ work without a license, the dilution of the royalties paid to human musicians that these artists warned about is underway…
MBW’s Weekly 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.Music Business Worldwide
