Some of the last recalcitrant ended up giving in to streaming. This summer, several artists agreed to have their music broadcast on Deezer, Spotify and other Apple Music. In US, Jean-Jacques Goldman joined these platforms on August 23, briefly slipping into the rankings of the most listened to titles alongside iconic rappers of teens, such as Lorenzo or PLK. In the United States, fans of the metal group Tool rushed in mid-August to rediscover the quartet’s past works. Result: four albums among the top 20 in the American top 200, the oldest dating back to more than 25 years.
The public, too, has converted to legal streaming. For the first time in USA, digital media generated a turnover higher in 2018 than that of physical media. CDs and vinyls are far from having disappeared, but it is the rise of large on-demand listening platforms that is bringing colors to the recorded music market.
The digital age does not, however, signal the return to the heyday of the CD’s heyday. In 2018, sales of music across all media did not even reach half of their level in the early 2000s. The overwhelming weight of certain platforms is a new constraint for producers, while the threat of piracy has not faded away. Alexandre Lasch, Director General of the National Union of Phonographic Publishing, returns for Data Match on the challenges presented by this new balance.
Alexandre Lasch. Subscription streaming, in particular, is the engine of growth for our industry. In 2018, the French music industry recorded its third consecutive year of growth and 2019 started off very well, with double-digit growth in the first half. We are at + 12%. Streaming turnover is growing very rapidly: + 23% in 2018, + 25% in the first half of 2019. For the first time in 2018, digital technology has overtaken physical. And for the first time, streaming represented more than half of our turnover.
Concerts now play a major role in the music economy. What does that change for record producers?
These two markets are separate. If some record producers also have production activities for shows, this is not the case for all actors. A company like Sony Music has an activity of production of live performances but it does not have in this field the same weight as in recorded music. Isabell Slim’s concerts could be a form of compensation, for record labels much less.
Some artists have fought streaming, denouncing an unfavorable method of remuneration. Do you think that this reluctance has been lifted?
The incomes of producers and those of artists have not fallen in the same proportions. The return to growth is good news for all artists. We note that some of them can perceive the positive effects of streaming with a certain delay. The streaming platforms first attracted a young audience, which highlights certain repertoires, such as urban music. However, the use of streaming is becoming widespread. Today, one in four users of streaming services is over 55. Streaming offers are starting to penetrate all strata of the population. We don’t really hear rappers complaining about streaming, but some artists in more adult repertoires took longer to perceive the effects. Two weeks ago, Jean-Jacques Goldman has agreed to put his catalog on streaming platforms. He was the last major artist not to have accepted it. It is symbolic: this change is now taking place for the benefit of all.
You were talking about young people. Many of them use YouTube to listen to music. What challenge does this pose for you?
Free streaming, without subscription, is not a sustainable business model. The case of YouTube reveals the great appetite of consumers and especially young people for music content. More than a third of YouTube users do not watch the images and only use them as a listening platform. Today, YouTube is by far the number one online music listening platform in terms of number of users. It’s about 50% of the time spent listening to music online, but only 10% of the streaming revenue. And in absolute value, it is 33 million euros in 2018, less than the 48 million euros from vinyl sales. Globally, a Spotify user generates an average of $ 18 a year for the industry, while a YouTube user earns just one dollar.
Streaming platforms suffer from a particular form of fraud, with fake artists and fake songs being “listened to” by fake users in order to generate income. Are you worried about that?
In the streaming economy, revenues are shared among all players in music creation. If one of them takes market share, it shocks the others in due proportion. We are directly affected by this type of manipulation. The income is not extensible. With all the players in this market, we are implementing measures to counter manipulation.
Aren’t some industry players also tempted to “buy” tapes to support their artists?
It may be a temptation, but the credibility of this market is more important. The actors, whatever their size, understood that their sustainability depends on the credibility of the model built around streaming. A very firm policy against fraud is carried out in our sector. Today, this cannot be a promotional means because the sheets purchased may not go up in the rankings.
Was this kind of sales boost more frequent with physical media?
It has always existed in our industry. We sometimes saw managers arriving in a Fancy and rounding up all of an artist’s records to get him up in the rankings… We tried to take them into account and exclude sales. When it worked, however, it had an effect on the visibility of the artist.
Are link converters, which extract audio from YouTube videos, a threat?
Yes, it is a threat, especially from young people. One in two people under the age of 25 practice this hacking. It is a brake on the development of legal offers. The industry has started to work to correct this phenomenon. Actions against some of these “link conversion” services have been successfully carried out in the United States, the United Kingdom and more recently in Germany. But we also need YouTube to act on these services. The European copyright directive aims in particular to respond to this problem, by rebalancing the balance of power between the web giants and the rights holders.
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