China-based Tencent Holdings – as the leader of a consortium of backers – is now the proud owner of 10% of Universal Music Group.
UMG parent Vivendi announced the completion of the long-awaited deal today (March 31), exactly three months after the contractual agreement of the acquisition was announced (December 31).
The deal gives Universal Music Group an implied Enterprise Value of €30bn. At last year’s annual exchange rate, that would equate to UMG being worth $33.7bn.
It also means the Tencent-led consortium has acquired its 10% for €3bn, or approximately $3.37bn.
The consortium includes Tencent alongside Tencent Music – in which it is majority owner – plus other financial investors, and can acquire a further 10% in UMG at the same price by January 15, 2021.
In a further important news, Vivendi has confirmed that Tencent Music is acquiring a minority stake in UMG’s Greater China operation for an undisclosed price.
Don’t expect this to be the last we hear about minority stake sales in Universal Music Group, either.
Vivendi said in an update today: “Now that this very significant strategic operation has been completed, Vivendi will pursue the possible sale of additional minority interests in UMG, assisted by several banks which it has mandated.”
It added: “Vivendi is very happy with the arrival of the Tencent-led consortium. It will enable UMG to further develop in the Asian market.”
The company reiterated that an IPO of UMG – which would presumably spin the company out from Vivendi to some degree – is planned, for early 2023 at the latest.
Vivendi said that it “intends to use the proceeds from these different transactions for substantial share buyback operations and acquisitions”.
Universal Music Group, led by CEO & Chairman Sir Lucian Grainge (pictured), saw its overall revenues in 2019 – across recorded music, publishing and other activities – hit €7.16bn ($8.04bn).
A record annual figure for the company under Vivendi ownership, that revenue number was up 14.0% year-on-year at constant currency and perimeter
The big story in the country in 2019, aside from a slight dip in these overall revenues (to 299.76bn Yen) was the rise of streaming services.
According to new stats published by local trade body RIAJ and crunched by MBW, subscription and ad-funded audio streaming services like Spotify generated $385m (41.97bn Yen) for the industry in Japan in 2019, representing growth of 33.8% on the 31.37bn Yen generated by the format in 2018.
Indeed, audio streaming revenues in Japan nearly doubled just in the two years between 2017 (23.89bn Yen) and 2019 (41.97bn).
With both video and audio included, Japan’s monetary streaming haul in 2019 rose to $426m (46.53bn Yen).
CD, though, very much remains king of the market.
The physical format saw its revenues fall by just 3.0% in Japan at the Yen level in 2019, generating a whopping $1.37bn (149.55bn Yen) in the year.
What impact did this all have on the make-up of Japan’s recorded music business?
In the pie charts below, MBW pits the annual (Yen-level) revenue of audio streaming in Japan (including subscription and ad-funded) against CD and download across both 2018 and 2019.
These charts are strictly audio only – the RIAJ offers a wealth of music video statistics that you can peruse at your leisure. These charts also do not include periphery digital formats (ringback tones, master ringtones, other non-streaming/download revenue).
As you can see, streaming claimed 19.3% of Japan’s audio music market revenues in 2019, up from 14.6% in the prior year.
CD, though, continued to clearly dominate, with 68.9% of all audio-related music revenues in 2019 – though this was down slightly on the 71.9% the format claimed in 2018.
In a nutshell, then, streaming is definitely becoming a more significant part of the Japanese recorded music market as the years tick on… but it’s still worth less than a third of the revenues being generated for the industry by Japan’s favorite format, the CD.
To put into perspective the overall size of Japan as a recorded music market, the RIAJ’s figures here are believed to be wholesale numbers.
This allows us to simply compare Japan’s size ($2.75bn) to that of the USA, where the RIAA just confirmed that, on a wholesale basis, the market was worth $7.3bn in 2019.
The major record companies are on course to generate over $14bn in total – with approximately $8bn from streaming alone – this calendar year.
That’s according to an MBW forecast based on recent fiscal results from Vivendi/Universal Music Group, Sony Corp and Warner Music Group.
Our number-crunching shows that total recorded music revenues across the ‘Big Three’ in the first nine months of 2019 hit $10.29bn, significantly up on the $9.26bn they posted in the same period of 2018.
Collectively, in the final calendar quarter (Q4) of last year, the three majors generated $3.86bn from recorded music.
The majority of the major labels’ $10.29bn revenues in the first nine months of 2019 were derived from the likes of Spotify: Universal, Sony and Warner generated $6.07bn from streaming platforms in the 9M period to end of September, up by over a billion dollars on the $5.0bn they collectively generated from streaming in the same period of 2018 – a 21.4% YoY rise.
Perhaps the most memorable stat to emerge today: in calendar Q3, the three majors collectively generated an average of $22.9m every day from streaming – a number which suggests that at some point very soon, Universal, Sony and Warner’s labels will be jointly raking in more than a million dollars every hour from Spotify, Apple Music et al.
Alongside these super-positive figures, however, there is a slight cause for… well, if not concern, then certainly conversation.
Because as the world’s biggest streaming territories mature, and the ARPU of certain platforms continues to tumble, one thing looks certain: the majors should prepare themselves for a deceleration in streaming revenue growth in 2019… and beyond (unless emerging markets, or emerging services, can pick up the slack).
So: the collective streaming revenue of all three majors in the first nine months of this year ($6.07bn) was up by $1.07bn on the $5.0bn generated in the same nine months of the prior year (2018).
Yet that $1.07bn figure was down by around $140m on the equivalent 9M year-on-year growth margin the majors saw from streaming services in the same period of 2018 (vs. 2017), which stood at $1.21bn.
Breaking this trend down further:
Universal’s YoY recorded music streaming growth in the first nine months of 2019 (vs. 2018), according to MBW’s calculations, was $497m; in the same period of 2018 (vs. 2017) that figure was $114m bigger, at $611m;
Sony’s YoY recorded music streaming growth in the same nine months of 2019 was $275m, down by a more modest $25m on the $300m it saw in 9M 2018;
Warner bucked the trend (just); in the first nine months of 2019 vs. the same period of 2018, WMG’s recorded music streaming haul grew by $298m; in the first nine months of 2018 vs. the same period of 2017, it grew by exactly the same figure (see below).
If we focus solely on calendar Q3 (the three months to end of September), we can see that Universal and Warner both saw a deceleration in YoY recorded music streaming growth – with UMG’s down from $205m in Q3 2018 to $169m in Q3 2019 and Warner down from $95m in Q3 2018 to $84m in Q3 2019.
Interestingly, looking at Q3 alone, Sony was the only the major to see its labels’ streaming growth accelerate in the period: it collected $110m more in calendar Q3 2019 than it did in the prior year; the equivalent figure in Q3 2018 was up by just $35m
This must mean that one of two things is about to happen: (i) either Goldman is right, meaning that the major record labels will, as a consequence, concede streaming market share to the independent sector in 2019; or (ii) Goldman is not right, in which case the entire industry may follow the major label trend of posting smaller streaming growth this year than it did in 2018. Or both.
The majors, of course, are very aware of these trends, and are looking to the likes of India, China and Africa – not to mention new services from TikTok and others – to kickstart accelerated streaming revenue growth in future years.
And yet, within the recent annual filing of Warner Music Group, the following reference to a worst-case-scenario sticks out – echoing the sentiment, no doubt, across the world’s biggest music rights companies: “If growth in streaming revenues levels off or fails to grow as quickly as it has over the past several years, our recorded music business may experience reduced levels of revenues and operating income.”
Justin Bieber made headlines this weekend for seemingly directing his fans to game Spotify, iTunes and YouTube in order to help send his recent single, Yummy, to No.1 in the US.
A streaming service-gaming guide for fans was reposted to Bieber’s official Instagram account on Thursday night (January 9) and was subsequently flagged by a number of social media users.
As reported by the Verge, the now-deleted post first appeared on fan account, Outlyning (which has 115,000 followers), stating: “Justin really wants that #1 and he is really excited about it as he said yesterday in his livestream. If you don’t want to do any of this it’s totally fine, just ignore the post. ✌️This is tips for the people who actually wants to do an extra effort!”
To amplify the single’s Spotify streams, the guide urged fans to “create a playlist with Yummy on repeat and stream it”.
It further instructed fans to “let it play while you sleep” – but, presumably to avoid Spotify’s fraud detection measures, suggested that they avoid muting the track, and instead play it “at a low volume”.
The post encouraged fans outside the US to use a VPN, and to set their location to the USA so that their streams counted towards the Billboard charts.
As noted by the Verge, fan led-strategies to boost singles in the charts in a similar manner are not un-common.
In 2018 for example, over 1,000 Spotify logins were claimed to have been distributed by the BTS fan ‘Army’ to boost US streams for the K-Pop superstars’ album, Love Yourself: Tear.
As detailed in this Complex article, Justin Bieber’s Instagram post follows various other social media-based promotional tactics for the single, which include posting videos simply asking fans to stream and purchase the track to get it to No.1
Dernier volet du cycle MAIN Conférences, la conférence sur les podcasts organisée à la SACD cette semaine fait l’état des lieux d’un écosystème en pleine effervescence et en voie de structuration. Dans ce moment charnière, les acteurs historiques radiophoniques et les plateformes de streaming s’interrogent sur l’écriture des podcasts, leur distribution et la juste rémunération des auteurs.
L’audio en ligne : un usage qui devient courant
Rodolphe Desprès, Responsable département internet de Médiamétrie, présente une etude entierement consacree a l’audio. Si la Radio FM reste le premier média d’écoute de contenus sonores, se développe le “streaming” (écoute sans téléchargement) et l “podcast”, qui peuvent être soit le “replay” d’une émission déjà diffusée, soit un contenu “natif ” c’est-à-dire produit pour le web.
Au delà de cet usage disruptif de la radio, l’écoute de l’audio en ligne est devenue un usage courant sur le web au même titre que la lecture d’articles de presse ou le visionnage de vidéos. La preuve en est : le podcast a désormais son propre festival : le Paris Podcast Festival.
L’effervescence des podcasts natifs
Les acteurs historiques comme Radio France se sont lancés dans la production de podcasts natifs (France Inter, France Culture, Rtl, Europe 1) ainsi que la presse (Elle, Slate, Le Parisien) et des acteurs indépendants (Binge Audio, Louie Media, Nouvelles ecoutes, Boxsons).
A l’origine exclusivement musicales, les plateformes de streaming(Deezer Spotify) se sont également mise à distribuer et à co-produire de l’audio parlé . Dans le même temps, de nouveaux acteurs (Sybel, Majelan) proposent dès leur lancement une offre de podcasts sélectionnée et leur propre production. Preuve de cet écosystème en pleine effervescence, le classement podcast Itunes France comporte désormais des podcasts natifs dans son top 10.
Un ton unique
Le podcast natif permet une écriture plus décalée, plus libre et plus longue. Féminisme, sexe, identité raciale ou de genre, développement personnel, entrepreneuriat, le podcast natif délivré de toute contrainte de format adopte le ton de la communauté à laquelle il s’adresse.
“Il y a ce ton très particulier que l’on va chercher quand on fait des co-productions avec des marques Média comme So Foot par exemple.” explique Frederic Antelme de Deezer.
Les auteurs de fiction exploitent cette liberté de ton. Klaire fait Grr, autrice et membre de la SACD a ainsi produit une comedie feuilletonnante sur les déboires amoureux d’une jeune femme qui a reçu le Prix Italia de la meilleure fiction radio en 2018.
Les supports d’écoute
Les podcasts natifs sont consommés à 48% via des applications de podcasts. 41% d’écoute se font sur le site ou l’application de l’éditeur.
La découverte des podcasts via les enceintes connectées est aujourd’hui encore anecdotique en France. Les avis divergent sur la nécessité d’y être présent.
“Je crois davantage à l’intégration dans les voitures connectées qu’aux enceintes connectées” déclare Mathieu Gallet de Majelan.
Quand Virginie Maire, Fondatrice de Sybel fait le choix d’y être.
“45% de la consommation de podcasts se fait à domicile. Nous souhaitons donc être présents sur cet outil d’écoute propice à la maison.”
Lundi dernier, Apple s’est retrouvé sous le feu des projecteurs avec des annonces fracassantes ! Apple a levé le voile sur son nouveau service d’accès à la presse,proposant un accès à plus de 300 magazines et titres de presse pour 9,99$/mois. Ce bouquet est loin de faire l’unanimité, notamment auprès des éditeurs de presse. En cause, la répartition des recettes : Apple prendrait 50% des revenus, ce qui a fait se détourner plus d’un éditeur de ce nouveau service. Certains estiment que cela pourrait ouvrir une brèche massive dans leur paywall et donc fragiliser un modèle économique qui commençait à porter ses fruits. Une chose est sûre, ce n’est surement pas fait pour aider la presse. Et qui est prêt à payer 120$ par an pour lire des magazines ?
Par ailleurs, le nouveau service streaming vidéo reste, même après la keynote (notre résumé ici), toujours assez opaque. Malgré un coup de com’ tenté par Apple en faisant appel à des stars (vieillissantes), Hollywood n’est toujours pas convaincu par l’offrenon plus. Mais l’enjeu n’est pas là. D’autant plus qu’Apple TV+ n’a même pas besoin d’être rentable.
Hasard du calendrier ou pas, YouTube a décidé de jeter l’éponge dans le streaming vidéo payant. La concurrence de Netflix, Amazon, Disney et… Apple aurait-elle eu raison de la plateforme ?
De son côté, Snapchat crée davantage de programmes originaux pour mobile, en misant davantage sur du contenu premium qui arrivent de plus en plus sur mobile.
Aussi cette semaine :
La réforme (controversée) du droit d’auteur a enfin été adoptée mardi au Parlement Européen. Alors victoire pour la démocratie ou fin de la liberté sur Internet ? De manière générale, cette réforme est plutôt bien vue par les milieux culturels qui espèrent engranger des revenus de la part des plateformes. C’est même un « immense soulagement » pour le Directeur général de la SACEM. Mais cela n’est pas du goût de tout le monde. Des Youtubeurs tentent toujours de lutter et le font savoir. Cela apparaît également comme un énorme aveu d’échec pour les GAFA, qui avaient pourtant fait preuve d’intense lobbying. Pour d’autres, cette réforme contribue ainsi à diviser l’Internet en trois, entre les Etats-Unis, l’Europe et la Chine.
En France, Emmanuel Hoog a rendu son rapport sur la création d’un conseil de déontologie des médias. Il préconise la création d’une instance d’auto-régulation de l’information, sans pouvoir de sanction et, bizarrement, laisse au CSA un pouvoir co-régulation sur la déontologie de l’info.
Aux Etats-Unis, l’administration attaque Facebook en justice pour discrimination publicitaire en matière de logement et enquête à ce sujet aussi sur Google et Twitter. Etats-Unis toujours, après les révélations du rapport Mueller et la disculpation de Donald Trump dans une quelconque implication de la Russie dans sa campagne en 2016, les médias font profil bas pendant que le président n’hésite pas à les qualifier « d’ennemis du peuple ».
50% – c’est le pourcentage des 16-18 ans qui n’est pas sur Facebook en France
200 millions d’heures – c’est le temps qu’est consommé YouTube par jour sur l’écran TV
$300 millions – c’est la somme dépensée par Mac Donalds pour acheter une compagnie spécialisée dans la personnalisation
The USA’s recorded music market generated $9.8bn in total retail revenues last year, of which $6.6bn made its way back to artists and labels in wholesale payments.
The remainder of that $9.8bn, of course, was retained by retailers and digital music services like Spotify.
These new figures, from the RIAA, tell us that 67.35% of last year’s $9.8bn retail haul was paid out to labels and artists. In 2017, it was a similar story: 67.05% of that year’s US retail revenues ($8.8bn) made its way to music rights-holders on a wholesale basis ($5.9bn).
Yet in 2016, according to the RIAA, the wholesale revenues paid out to labels and artists was slightly higher than it was in the following two years: 68.42%, to be exact ($5.2bn wholesale versus $7.6bn retail).
Why? Perhaps because Spotify struck new deals with major and independent labels in the first half of 2017, which saw those same rights-holders agree to lower the share of pro-rated net revenue they received from the service, down from approximately 55% to 52%.
Back to last year. According to new RIAA data, the US recorded music market – which was up 12% overall – saw specific revenues from streaming music platforms grow 30% in 2018 to reach $7.4bn.
That made up some 75% of the industry’s $9.8bn total revenue tally, thanks to a variety of formats including premium paid subscription services, ad-supported on-demand services (i.e. YouTube, Vevo, and ad-supported Spotify), and streaming radio services, such as those that distribute revenues through SoundExchange (including Pandora, SiriusXM, and other internet radio services).
Total 2018 subscription streaming revenues (ie. those paid for by consumers) increased 32% to $5.4bn, says RIAA, making up more than half of the entire market’s revenue across all formats. (Included in this figure is $747m in revenues from ‘Limited Tier’ subscriptions on services like Amazon Prime or Pandora Plus, as well as fully-stacked premium, on-demand streaming subscriptions from the likes of Spotify, Apple Music, Amazon Music, Pandora etc.)
The average number of paid subscriptions (excluding limited tier options) grew 42% in 2018, says the RIAA, exceeding 50m for the first time ever. On average, more than one million new subscriptions were added each month.
Revenues from on-demand, ad-supported streaming services (including YouTube, Vevo, and the free version of Spotify) grew 15% in 2018, significantly slower than paid-for subscriptions. The total haul from ad-supported services was $760m, less than seven times the amount of money pulled in from streaming subscriptions.
Revenues from digital and customized radio services (including Pandora, SiriusXM satellite radio, iHeart Radio, and internet radio services) grew 32% year-over-year to $1.2 billion – the first time the category exceeded one billion dollars annually.
Revenues from downloaded tracks and albums declined for the sixth consecutive year to $1.04 billion. Album downloads fell 25% to $500m in 2018, while individual track sales were down 28% to $490m.
Revenues from shipments of physical products decreased to $1.15bn, down 23% from 2017. At estimated retail value, CDs fell by just over a third – 34% – to $698m. It was the first time that annual revenues from CDs amounted to less than one billion dollars since 1986.
Revenues from vinyl albums in 2018 hit $419m, an increase of 8% year-on-year, and the highest level since 1988.
You can see a detailed breakdown of US recorded music revenues in 2018 and 2017 below, and you can download the RIAA’s complete 2018 year-end report through here.
In a blog post today (February 28), RIAA Chairman & CEO Mitch Glazier wrote: “Rejuvenation in the industry means more opportunities to find and break new artists for fans to enjoy. In response to a growing market, labels are doubling down on what they do best: investing in great music makers and innovative businesses to realize creative visions and bolster the strong connection between artists and their fans.
“According to an illuminating recent report (“Same Heart. New Beat”) by NYU Steinhardt Music Business Program Director Larry Miller, more than 650 new artists were signed to major labels in 2017, a significant increase over prior years. At the same time, labels’ evolution continues, with teams working 24/7 to support their artist partners with coordinated global campaigns that turn local breakouts into international superstars.”
He added: “Make no mistake, many challenges continue to confront our community. As noteworthy as it is for the business to approach $10 billion in revenues again, that only returns U.S. music to its 2007 levels. Stream-ripping, and a lack of accountability for many Big Tech companies that drive down the value of music, remain serious threats as the industry strives for additional growth.
“But there is reason for buoyed optimism among those who help create music. Recognizing that there is more work to do, labels remain focused on building an ecosystem where every responsible player does its part to ensure that innovation continues to thrive, fans continue to be connected and engaged, and everyone is paid fairly for their work.”
According to BuzzAngle data issued earlier this year, the USA’s five biggest streaming artists in 2018 were Drake, Post Malone (pictured), XXXTentacion, Eminem and Migos.