MBW Reacts is an analytical commentary series from Music Business Worldwide written in response to major recent entertainment events or news stories. MBW Reacts is supported by JKBXa technology platform that provides consumers with access to music royalties as an asset class.
For at least a year, music industry executives have expressed concern about the flood of songs arriving on streaming services.
Some fear that under the dominance of streaming pro rata In the royalty system, the share of the royalty pie going to professional and popular artists is diluted by payments for low-quality titles.
Others fear that high-quality artists will simply be drowned out in this tidal wave of new material – a fear reinforced by reports last year that a 120,000 new songs are being uploaded to streaming services every day.
Such considerations are now impacting the policies of major streaming services, including Spotify.
A very relevant question, then: how many titles are streaming services receiving today? less than 1,000 plays per year – and how many receive no game at all?
The answer, according to a new Market Monitor report BrightenEast enormously.
According to Luminate 2023 Year-End Music Reportentirely 152.2 million tracks each received 1,000 or less plays on audio streaming services in 2023.
This number equates to a huge 82.7% of the 184 million music tracks that Luminate measured on audio streaming services late last year via the ISRC (International Standard Recording Codes).
Even more revealing, a total of 45.6 million pieces received zero plays in 2023. This represents 24.8% of the 184 million songs available on audio streaming platforms.
Yeah: almost a quarter of the entire music catalog available from streaming services has not been broadcast even once Last year.
Luminate has already reported that approximately 38 million (37.9 million) tracks were not listened to on any streaming platform in 2022 – this figure therefore increased by 20% per year in 2023, or by 7.7 million.
However, the total the number of titles on streaming platforms also increased last year, rising 16.5%Year.
According to Luminate data, 152.2 million titles out of a total of 184 million available were streamed fewer than 1,000 times each in 2023.
Indeed, the total amount of music in the global audio streaming ecosystem has skyrocketed in 2023.
THE 184 million audio tracks on streaming services counted by Luminate at the end of 2023 were up by 26 million against the 158 million tracks that Luminate measured in late 2022.
To put it another way: there was around 2.17 million new songs uploaded to streaming services per month Last year.
The new Luminate report calculates that there was “an average of 103,500 new ISRCs (tracks) delivered to streaming services every day in 2023, which is on the rise 10.8% from 2022 where there was on average 93,400 delivered every day. »
The corresponding slide in the new Luminate report
As you can see above, 79.5 million tracks – just above 43% of all tracks available – received 10 plays or less on all audio streaming services in 2023.
These types of statistics help explain why audio streaming services have started to move towards “artist-centric” payment models, which generally favor artists with a larger number of streams, and seek to demonetize the unpopular pieces that each earn little. royalty amounts per year.
First out of the gate with an “artist-centric” model was Deezerthe music streaming service based in Paris.
In October, it introduced in France a new payment system allowing artists with a minimum of 1,000 streams per month and a minimum of 500 unique listeners receive what is known as a “double boost” for royalty payments.
Under this system, artists also receive a “double increase” in their share of royalties if they are actively sought after by listeners.
“In the coming months, I think you will see more platforms adopting these principles. For what? Because it’s the right thing to do both for artists and the broader music ecosystem.
Sir Lucian Grainge, Universal Music Group
Later last year there was a real seismic shift, when the granddaddy of music DSPs, Spotifyannounced that it was change your payment model Also.
In addition to demonetizing tracks with fewer than 1,000 streams in the previous 12 months, Spotify’s new model (again, launching this quarter – Q1 2024) also requires that each track achieve a minimum number of unique names listeners to become eligible for royalty payments.
So far, Spotify remains tight-lipped about what that minimum number of unique listeners represents. East because, he says, he doesn’t want to give this information to “bad actors.”
Meanwhile, Spotify says that “99.5% of all the streams “on its platform currently” are tracks that have at least 1,000 annual flows”, and that “each of these tracks will earn more under this policy”.
In a recent New Year’s note to staff, UMG’s Sir Lucian Grainge predicted that more streaming services would soon adopt “artist-centric” payment models.
“In just a few months, several global platforms, including the world’s largest music platform, have already adopted artist-centric principles that will transform the way artists are compensated for their work,” Grainge wrote.
“In the coming months, I think you will see more platforms adopting these principles. For what? Because it’s the right thing to do both for artists and the broader music ecosystem.
While the new payment models at Spotify and Deezer certainly solve the problem of low-play tracks, they don’t necessarily solve the problem of zero-play tracks.
After all, under the conventional system of pro rata payment, a track with zero plays gets zero share of the royalty pool.
The volume of unreleased titles is increasingly becoming a problem for streaming services.
MBW estimated that Spotify’s minimum possible annual cost for “cloud computing services and additional software licensing fees” increased from 35 million euros in 2019 to more than 130 million euros in 2022.
And while these numbers include more than just the cost of music storage, we can be sure that a good portion of the increase has to do with the rapid increase in songs available on its platform. (Again, these are minimum possible costs based on limited information released by Spotify – actual figures are likely much higher.)
In March last year, Jeronimo Folgueira, CEO of Deezer, addressed this issue during the earnings call: tell the analysts that “a lot of content is uploaded to our platform every week… that puts a lot of content on our servers that we have to pay for. Having a constantly evolving catalog has a cost. »
“Every week a lot of content is uploaded to our platform… that puts a lot of content on our servers that we have to pay for. Having a constantly evolving catalog has a cost. »
Jérôme Folgueira, Deezer
As part of its announcement of an artist-centric payment model last September, Deezer said this would “replace non-artistic noisy content on the platform with its own content in the functional music space, which will not be counted in the royalty pool” – clearly a move towards reducing the catalog of songs constantly increase.
All of this leaves us with big questions:
Is the rapid increase in the number of titles downloaded to streaming services financially viable?
Will streaming services like Spotify need to take additional steps to deal with the rising costs of hosting this growing volume of music?
And will more drastic measures – like charging distributors to upload new songs or removing non-performing tracks from the catalog – ultimately prove necessary?
