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Streaming Music Subscriptions Grew 26% in 2021, With YouTube Music as Fastest Growing DSP in the West

Article by Chris Willman for Variety

A study released by Midia Research shows that worldwide streaming subscriptions grew by a healthy 26.4% in the second quarter of 2021, standing at 521.3 million subscribers at the end of that period, an increase of 109.5 million from the year before. But that growth didn’t necessarily come via the usual DSP suspects.

Spotify continued to have by far the highest market share among streaming services, with its 31% slice of the pie being more than double the 15% claimed by the nearest runner-up, Apple Music. With Spotify adding more subscribers than any other service in the 12 months leading up to the middle of 2021, “there is no risk of Spotify losing its leading position anytime soon,” wrote Midia’s Mark Mulligan. But, he cautioned, “the erosion of its share is steady and persistent,” since Spotify had a 33% share at the same time a year before and 34% in 2019.

So who’s benefitting most from the industry’s gains? Midia points to the momentum belonging to YouTube Music, which still has a modest share — just 8% of the market — but which grew by more than 50% during the 2020-to-2021 Q2 period. “YouTube Music was the only Western DSP to increase global market share during this period,” Mulligan writes.

The news was also fairly good for second-place Apple Music, which saw gains of 25%, versus Spotify’s 20% growth.

“But the biggest subscriber growth came from emerging markets,” Midia points out. Two services that are only available in China, Tencent Music Entertainment and NetEase Cloud Music, together account for 18% of the global streaming market — and those two combined added 35.7 million subscribers during the 12 months measured. (Tencent has 13% of the worldwide market, and NetEase is at 6%.)

And whatever Cold War fears may be arising at present about Russia, streaming is getting hotter in that country. “Yandex, in Russia, was the other big gainer,” Mulligan writes, “doubling its subscriber base to reach 2% of global market share.”

Midia’s report cautions that the 26.4% global growth in subscribers doesn’t translate to that big of an increase in revenue. The reason for a disparity, Mulligan writes, is due to “the rise of multi-user plans and the growth of lower-spending emerging markets.” Still, he adds, “growth in monetized users represents the foundation stone of the (DSP) streaming market. So, accelerating growth at this relatively late stage of the streaming market’s evolution is clearly positive.”

The full report is only available to Midia subscribers, but Mulligan’s summary, and an accompanying pie chart showing the market share of the different services, can be found here.

Production Music is a Billion-Dollar Business

Production music is a $1 billion global industry “hidden in plain sight” that is ready for its close-up, according to Joe Saba, who promises to deliver just that with the fourth annual Production Music Conference, Oct. 4-6 at the Loews Hollywood Hotel.

Saba, who is vice chairman of the Production Music Association, notes that this is the first time the trade group has put a value on the production music sector, which supports “tens of thousands of songwriters, composers and musicians” as well as ancillary businesses like recording studios, rights administration and software services.

Loosely defined as pieces primarily composed for visual and marketing media that can be re-used across multiple projects and mediums, production music is today ubiquitous on screens that span in size from Imax to mobile.

More info can be found here.

Broad Grant of Rights

BE INFORMED WHEN NEGOTIATING: AVOID BROAD GRANTS OF RIGHTS

In negotiating with television networks over the use of your music, you should be very aware that the networks are pushing for and are regularly utilizing the broadest possible grant language in their contracts with music providers. While these clauses may appear like harmless boiler­plate at first glance, they are a trap that could lead you to granting away far more rights than you ever anticipated and with no additional payment for doing so.

For example, one of the major networks uses language pursuant to which the music provider grants “rights in all media worldwide now known or hereafter devised, whether known or unknown, including, but not limited to, Free TV, Cable (basic and pay subscription), VOD, HDTV, Digital TV and DBS, Radio, Internet (streaming and download), Wireless platforms or Devices (now known or hereinafter devised), with such rights granted in transit and in perpetuity.”

If you enter into a contract containing such broad grant language, you should be aware that you risk granting away all of your exploitation rights in the music at issue. For years, broad grants of rights clauses have been litigated in the Courts, with the grantor usually losing and the grantee usually winning. These cases often involved whether a grant of motion picture rights included video rights (which were unknown at the time at the time of the grant). The Courts often look at this broad language and conclude that grantor clearly had no intention to retain any rights and find that everything was conveyed. This is a result that you obviously want to avoid at all costs.

How do you do it? Some members have some very specific language that they seek to negotiate. Try to be very clear about what you are granting. Also end your grant clause with language such as: “All rights not specifically granted above are reserved to the Grantor.” Years ago, a famous songwriter included that language in a grant he made to a motion picture company to use his music in a film. At the time, videos were unknown. When, many years later, the motion picture company sought to use his music in the video version of the film, he was able to prevent it from doing so based on the retention language. Naturally, an additional and substantial fee was negotiated for the use of the music in the video.

If a network is persistent in its requirement that the broad language be utilized and you feel that you have no choice, at least attempt to make sure that you will receive additional compensation in the event that some new or unforeseen media comes into existence during the life of the grant. For example, try to add a sentence that provides that “Any use of the music in media which is not specifically described herein shall constitute an additional and new use and will require a separ­ate license, to be negotiated in good faith with [Grantor].” While such language may not be accepted, it could possibly result in a higher license fee.

In short, avoid giving your music away for free. Use specific grant language and broad retention language wherever possible.

Retitling

SHOULD YOU SIGN WITH A NON-EXCLUSIVE RETITLED LIBRARY?

Get the facts before you decide.

Many composers and songwriters are lately being offered what seems like a deal too good to pass up: get film/TV placements of their music and a share of sync fees from non-exclusive distributors while retaining 100% of their copyrights. While this may appear to be an irresistible bargain on the surface, it is essential that writers fully understand the ramifications of this business model in order to make an informed decision.

What Is Non-Exclusive Retitling?

First, let’s clarify what is meant by the term “retitled libraries”. This term does not refer to libraries that exclusively own the rights to their works and for whatever reason decide to re-release the works under alternate titles; it is a library’s prerogative to re-release or repurpose tracks in such a manner. Rather, for the purposes of this article, this term shall refer to libraries that engage in the practice of retitling tracks without obtaining exclusive rights to the works. For these libraries, retitling is simply a way to market and license non-exclusive content and collect performance revenues by registering existing works under different titles.

How Does It Work?

Retitled libraries solicit content from composers or songwriters promising that they will “retain ownership” in the works and simply license their tracks on a “non-exclusive” basis. They offer to retitle the works and share publishing revenue generated from their placements of the retitled tracks. (There is generally no upfront cost involved for the writer, although a few retitled libraries have been known to retain all or part of the writers share of performance royalties- a definite “red flag”). This sort of arrangement can obviously be appealing to a writer who might have dozens of songs, scores, demos and other unused musical material just “sitting on the shelf” gathering dust. Why not monetize these tracks to generate some extra revenue? For that matter, why not sign the same tracks with as many retitling services as possible to maximize income? Before signing away your tracks, let’s delve a little deeper and explore some of the repercussions of these deals.

One Song, Many Titles

The most obvious drawback with this model is apparent on the client side of the equation. With more and more companies dumping retitled content onto the market, situations are starting to arise where multiple parties are claiming ownership in the same work. In fact, several top Hollywood music supervisors are now refusing to accept material from retitled libraries after being pitched the same song from different sources under different titles (and at different rates!). The potential for confusion has led at least one major studio to issue an edict stating that they will only work with music companies that represent their content exclusively.

Similarly, for broadcasters or other library clients who are often highly sensitive about market exclusivity, it could be devastating to sign a deal with library X only to hear the same tracks used by a competing station who signed a deal with library Y. Such a scenario could easily happen if both libraries are offering retitled music.

On an industry level, it is hard to argue that the industry will benefit from situations where multiple parties are claiming rights to the same song and bidding against each other for the same placement. This practice only serves to further erode sync fees and devalue music in an already hypercompetitive marketplace, as well as feed cynicism and mistrust towards the production music industry in general. There is, after all, a certain aspect of duplicity surrounding the notion of the same piece of music having multiple title aliases depending on the situation or vendor. Such confusion, if unabated, will just encourage more unreported music uses and piracy due to the lack of publishers’ ability to effectively monitor and police their works. Furthermore, at a time when music rights are under siege by legislators, broadcasters and technology companies alike, it is safe to say that adding more confusion and uncertainty to the music rights landscape is probably not a sanguine development for the industry.

Identical Fingerprints

It is widely accepted in the music community that fingerprinting , in one form or another, holds the key to performance monitoring in the years ahead. ASCAP and BMI have already tested and implemented fingerprinting technology on a limited basis (Mediaguide and Landmark, respectively), and a more extensive rollout of these technologies is planned in the near future. Since every piece of audio contains a unique “fingerprint”, the day will soon come when digital algorithms will automatically detect each piece of music and (ideally) every performance will be tracked and paid- without the hassle of cue sheets or the burden of physically watermarking every track. Most libraries consider fingerprinting to be a critical step towards improving the fairness and accuracy of PRO distributions. In addition to performance tracking, fingerprinting systems are also being increasingly used by libraries to monitor sync uses of their catalog and by broadcasters to automatically generate cue sheets.

All of these scenarios present an obvious conundrum for retitled music companies: since their audio files are not unique, each detection can no longer be linked to a unique title record, making accurate performance identification virtually impossible. Clearly, the practice of retitling only serves to stymie these important initiatives and therefore runs counter to the best interests of the industry.

Legal Challenges Loom

It is only a matter of time before legal challenges arise from these practices. Whose title of a song was ultimately used in a film or TV show if multiple versions were pitched? Which title and which master are being referenced in a composer contract? Is anyone vetting these tracks for rights clearances or potential infringement issues? Do these companies even have the legal right to license these tracks, considering that copyrights are based not on title (titles are not copyrightable) but on the underlying composition and sound recording? How many non-exclusive catalogs have unwittingly entered into exclusive overseas subpublishing deals? Only time will tell how these issues will play out on the legal front.

The Artist Perspective

Industry considerations aside, what’s in it for the artist? The argument is often made that this model “helps artists” by allowing them to “retain control” while giving them “exposure” and generating “additional income”. To some extent, this may be true; a writer can sign a track with a retitled library while still releasing it on an album or otherwise exploiting it themselves. But often overlooked is the downside: once a writer signs a non-exclusive deal, that basically preempts any future possibility of signing an exclusive deal with another library or label. No reputable exclusive library is going to acquire or distribute a track that already exists in other permutations in the marketplace, and such exclusive libraries represent the majority of library music use in film and television. What may seem like a great deal is actually a dead end.

Writers also tend to overlook the fact that non-exclusive libraries are less likely to actively promote or pitch their tracks since they have less incentive to do so. These companies know that the same recordings might be available on other services, so often the tracks are just dumped on a drive or server and forgotten.

Another little known but critically important fact is that non-exclusive retitled catalogs miss out on significant revenue streams related to international distribution. Since libraries are generally represented by territory on an exclusive basis, retitled libraries technically cannot enter into these deals (to the extent that they do anyway, they are in breach of their contract). To drill down further, in many foreign territories music licensing is strictly controlled by mechanical copyright societies such as MCPS (UK), SDRM (France) and AMCOS (Australia). These societies, who are responsible for the vast majority of licensing in their respective territories, set the rates for music licenses as well as collect and distribute payments to composer and publisher members. In order for works to be represented by these societies, they must be the exclusive agents for their territory. Since non-exclusive content is often made available on websites or drives without regard to international borders, these catalogs do not qualify for registration and consequently their international income potential is severely limited. In the event a publisher or website representing non-exclusive content does attempt to register tracks with one of these mechanical societies, both the writer and the publisher will be in a potential breach of contract situation.

Last but not least is the new title itself: is it as effective and appropriate as the original title? Song titles should not be randomly generated or done in bulk fashion; they are more important than ever as they play a critical role in determining which songs get selected and auditioned by clients. It is not an obvious thing to effectively retitle a song with lyrics; by way of example, can you think of an alternate title for any of these hit songs: “Beat It”, ‘Like A Virgin”, “Hard Day’s Night” or “Are You Lonesome Tonight”? In lieu of donning a new title, some retitling services have resorted to simply adding a catalog number to precede the original title, i.e. “xyz001-My Love”, “xy002-My Love”, etc. It is hard to imagine how this scheme will accomplish anything except raise the amount of confusion among writers, clients and PROs to a whole new level.

Ultimately, writers need to weigh the perceived benefits of retitling against the potential pitfalls:

  • Devalues your music
  • Potential licensing disputes
  • Potential legal challenges
  • Risk of being blacklisted by film/TV clients
  • Can create confusion around your catalog
  • Can attach inferior titles to your songs
  • Limited potential for international income
  • Performances not tracked by fingerprinting
  • No possibility of exclusive deals
  • Limited potential for infringement claims with non-exclusive representation

A Song Is Still A Song

In conclusion, the practice of retitling does not pose a problem if the same entity, or combination of entities, controls the rights to all title variations of the same track; however it is very much a problem when multiple entitles lay claim to the same work non-exclusively based solely on title permutations.

Amidst all the technological change and upheaval buffeting the music industry over the past several years, some things still haven’t changed: a song is still a song and should not have multiple aliases depending on the situation or “who got the placement.” Clearly, the best strategy for composers and songwriters is to take the time to craft original, high quality music and develop a solid relationship with a reputable library that can represent their tracks exclusively and invest the necessary time and resources to properly tag, organize, promote and pitch their tracks. Integrity still counts, especially in the digital age.

PMA Academy Series – Finding Your Voice: Sound Design with Tom Holkenborg [AKA Junkie XL]

This very special tutorial is led by one of the most in-demand film composers in Hollywood: Tom Holkenborg (aka Junkie XL).

If you’ve ever seen films like Mad Max: Fury Road, Deadpool or Alita: Battle Angel (just to name a few), you’ve no doubt felt the impact of Tom’s mastery of sound design. Known within the industry as a “full-contact composer”, one of Tom’s biggest calling cards is that he does so many things himself—including creating vast sound libraries all his own for nearly every project he works on.

This webinar covers Tom’s unique process of sound design; a process that’s helped craft one of the most recognizable and signature sounds in modern day film scoring. The goal? Getting you informed and inspired to craft your own unique voice as you grow as composer and producer.

Topics include sampling, sound exploration, building your own libraries, modular synthesis and much more.

PMA Academy Series – Taking a Closer Look at Production Music in Advertising

All media has been impacted with the expansion of digital services, and the advertising industry is no exception. This panel will dive into how these changes relate to production music usage, what’s changed in this sector of the industry and what the future looks like for production music in advertising.

recording studio console and equipment

Digital Demo Derby

The Digital Demo Derby serves as an opportunity to get quality feedback from industry experts. Each quarter, we will utilize a different set of requirements for submissions, including but not limited to: genre, placement purpose (ie. for advertising, video game, documentary, sports, etc.).

In each round, we will select three composers to be reviewed by 2-3 industry experts. Each reviewer has the opportunity to select one of the three entrants for a 1 on 1, 30 minute meeting. Those selected will be notified by email.

Requirements for Q1 submissions:

  • Tracks must be no longer than 3 minutes in length.
  • Tracks must be in a playlist, whether on Soundcloud, Disco, or similar.
  • Tracks must not be represented by a third party licensing entity.
  • Tracks must be done by and/or feature a female composer
  • Deadline to submit your work is March 30, 2022. Selected participants will be contacted by April 10, 2022 and will be reviewed and met with prior to April 30, 2022.
  • Please contact Morgan McKnight at morgan@pmamusic.com with any questions.