"At the highest level of business there's mailbox money..."~Nipsey Hussle
A look at how streaming has kept the 💵 rolling in for labels and artists, Spotify's new 👑, & the 2022 EOY Artist Market Share report
Before we turn the page on 2022, there are a couple things that I want to revisit.
This week, Sir Lucian Grainge made some comments in an internal memo to his staff that the streaming model needs to change. I’m sure most would agree with these sentiments.
With 100,000 new tracks uploaded to DSP’s daily, the fragmentation of stars that this creates works to the disadvantage of labels. Additionally, everyone is utilizing and evaluating the same data sets from streaming services to find the artists that they want to sign. This only drives up the price of deals. Once again, working at the disadvantage of the labels.
While the economics of the streaming models may need to change, there is no doubt that the major labels have been the beneficiaries of a great gift.
Troy Carter emphasized this on the Music Business Podcast two years ago with his statement, “When you look at the contribution that streaming has made to the music industry, it’s the gift that keeps on giving. When labels no longer have to spend money on marketing albums, but still get to collect that revenue, that’s significant.”
Let’s take a deeper look into this to fully understand just how impactful streaming has been.
According to data from Nielsen, Drake generated 16.5 Billion global audio streams in 2022.
The estimated economics around this massive streaming number are staggering:
$82.5M in 2022 estimated audio streaming revenue
$6.9M in Monthly estimated audio streaming revenue
$1.6M in Weekly estimated audio streaming revenue
$226k in Daily estimated audio streaming revenue
$9.4k in Hourly estimated audio streaming revenue
While Drake is paid handsomely for his art, there is no doubt that UMG is also reaping some incredible benefits as well.
Aubrey’s boasts are most likely not lacking truth.
“Shit done changed, billionaires talk to me different when they see my paystub from Lucian Grainge.”
Let’s dive in a little deeper.
Drake dropped two full length projects this past year, “Honestly, Nevermind” and his collaborative project “Her Loss” with 21 Savage.
While both performed well, statistically the lion’s share of his global audio streams came from his prior releases.
Her Loss (2022): 2.2B global audio streams = 13%
Honestly, Nevermind (2022): 1.9B global audio streams = 12%
Catalog (2021 and prior): 12.4B global audio streams = 75%
*I realize that catalog is usually defined as 18 months and older*
This goes back to Troy’s point, streaming has been an incredible gift for labels.
How much money was spent on marketing in 2022 for Drake’s catalog to achieve those streams? I’d venture to guess that it wasn’t a lot.
One could say, well that’s Drake, and what applies to Drake doesn’t apply to many other artists. Fair enough.
Let’s take a look at Polo G who just turned 24 years old last week.
Even without putting out any new full-length projects in 2022, Polo G still drove 3.4B global audio streams.
Estimated revenue from those streams, $16.9M.
Hypothetically speaking, let’s assume that Polo has recouped because he’s a big earner, his advances were moderate, and the costs to generate his success are relatively low.
If he’s getting a 20% royalty, he received $3.38M while Columbia Records received $13.52M.
This is just audio streaming revenue from a year where the artist didn’t put out any new product.
If that hypothetical turned out to be true, it would seem like a great deal for Columbia Records.
Well let’s now take a look at another example, but this time where the majority of the royalties are flowing to the artist.
Frank Ocean released his album “Blonde” on August 20, 2016 via his label, Boys Don’t Cry.
Six and a half years later, this album is still printing money, in large part to streaming.
Breaking down the streaming numbers reveals:
$29M in All-Time estimated audio streaming revenue
$110k in Weekly estimated audio streaming revenue
$15.7k in Daily estimated audio streaming revenue
So a self-distributed album from over six years ago is still generating in the ballpark of $110k a week in audio streaming revenue.
While an outlier, it’s still amazing.
It will be interesting to see how large of a bump in streams Frank's Coachella performance will provide Blonde.
A New King…
The Weeknd’s “Blinding Lights” recently became Spotify’s all-time leader in streams with over 3.3B.
The song, which is a little over three years old, has generated in the ballpark of $16.7M on Spotify alone.
Artist Market Share…
Which artists had the biggest impact on their distributor’s and label’s in 2022? Let’s take a look at the end of year Artist Market Share Report.
Using end of year US only data from Luminate, there are a couple interesting takeaways:
12 of the top 20 artists came from UMG
Those 12 artists contributed 44.7M albums out of UMG’s 305.2M total haul or 14.78% of UMG’s total.
Republic Records had 5 of the top 20 artists:
Taylor Swift
Drake
The Weeknd
Morgan Wallen
Post Malone
The 5 of them combined for 25.5M albums out of Republic’s 68.6M total or 37%
Bad Bunny’s #’s while impressive, are extremely misleading. If this was a Global report it would show just how big of a year he had.
Alamo continues to rely heavily on their two heavyweights; Rod Wave + Lil Durk who contribute 4.8M out of the 6M albums (or 80%) that they moved in the US.
Steven Cooper’s comments that Warner Music Group is less reliant on super-star acts seems to be true. Their lone representative on this list, NBA Youngboy, is now with UMG.
Coming soon:
A look at artist IP, the top artist / actors, and some of the best artist investments.
If you find what you’ve read interesting, please share.