The Ledger
The Ledger: How the Industry Went From Discussing Fairness to Accuracy – And Why it Matters
The Ledger is a weekly newsletter about the economics of the music business sent to Billboard Pro subscribers. An abbreviated version of the newsletter is published online. What a difference a decade makes. Ten years ago, most music industry conferences played like long, geeky arguments between technology companies that said they represented the future of the business and labels and publishers that wanted that future to involve getting paid. At one memorable SXSW panel, independent artists and small label owners seethed over their inability to get YouTube to permanently remove their music from user-generated videos. At MIDEM in 2010, a year before Spotify launched in the U.S., Americans heard horror stories from European executives about the platform’s minuscule royalty rates for ad-suppor...
The Ledger: How Much Will Music Subscriptions Grow in 2022?
The Ledger is a weekly newsletter about the economics of the music business sent to Billboard Pro subscribers. An abbreviated version of the newsletter is published online. Earnings season is a great time to read the tea leaves about the future of the streaming and subscription businesses. How much growth is ahead? Where will that growth come from? Is pricing headed up or down? The answers are vital for investors but are also important to labels, publishers and creators. In the last two weeks, three companies — Spotify, Universal Music Group and Believe — provided some outlook on the streaming market during their earnings calls with analysts. Their earnings reports appeared in the wake of Netflix’s warning of subscription growth slowdown and the abrupt demise of CNN’s subscription platform...
The Ledger: Tencent Music Highlights Risks of Doing Business in China
Doing business in China got tougher in 2021 after government agencies handed down new rules and levied fines against some well-known companies. For evidence this has made investing in Chinese companies more complicated, look no further than Tencent Music Entertainment’s annual report released Tuesday. All publicly traded companies’ financial statements include risk factors mandated by the Securities and Exchange Commission to help investors understand companies’ unique challenges and possible negative outcomes if things go south. TME’s previous annual reports have listed numerous risk factors, ranging from licensing third-party content to its corporate structure. It’s a long list that just got longer. The new risk factors in TME’s 2022 annual report are further evidence of the challenges f...
The Ledger: For Streamers, Does Catalog Size Matter?
The Ledger is a weekly newsletter about the economics of the music business sent to Billboard Pro subscribers. An abbreviated version of the newsletter is published online. If millions of songs are uploaded to streaming services yearly and no one listens, do they make a sound? Yes and no. Someone — but not many people — listens to most every track. But few tracks could be called popular by any definition. Spotify’s catalog grew from 70 million to 82 million tracks in 2021, according to the company’s last two annual reports. That works out to an average of 33,000 per day. Some of its competitors grew faster and further, according to figures in public reports and press releases. Apple Music shot up from 70 million in January 2021 to 90 million in November 2021. YouTube Music also took a big ...
The Ledger: Inside Universal Music’s 2021 Annual Report
The Ledger is a weekly newsletter about the economics of the music business sent to Billboard Pro subscribers. An abbreviated version of the newsletter is published online. Universal Music Group’s first-ever annual report, released Thursday, offers an exhaustive look at the company’s finances and operations as well as environmental, social and governance initiatives. If you want to know how many metric tons of paper was purchased for internal use (24) or the number of megawatt hours of electricity from renewable sources (7,982), it’s in there. In terms of dollars and cents behind investments and catalogs, the annual report has a few things worth highlighting. UMG sold Alamo Records for 102 million euros ($112.7 million) for a gain of 98 million euros ($108.3 million). Sony Music reportedly...
The Ledger: The Major’s $25B in Revenue in 2021 Is Just the Start
The Ledger is a weekly newsletter about the economics of the music business sent to Billboard Pro subscribers. An abbreviated version of the newsletter is published online. Six years into the global music industry’s recovery, the largest labels and publishers are growing by leaps and bounds. The three major music groups — Universal Music Group, Sony Music Entertainment and Warner Music Group — had combined revenues of $25.4 billion in calendar 2021, up 19.8% from calendar 2020, according to Billboard‘s calculations. That annual growth rate was more than a four-fold improvement from the companies’ 4.7% revenue growth in 2020 after a slowdown in physical goods sales during the pandemic. Combined, the companies had an operating profit was $4.1 billion in 2021, a 44.3% increase, with...
The Ledger: Hits Are Great, But Labels & Publishers Seek Higher Margins Too
There’s little doubt record labels and publishers will continue to improve revenues in the coming years on the backs of streaming subscriptions, stronger internet advertising and burgeoning sectors like social media and connected fitness. But there’s less certainty about how their margins will grow as industry revenues surge. Investors and analysts are making their best guesses. During Warner Music Group’s earnings call on Tuesday (Feb 8), RBC Capital Markets analyst Kutgun Maral asked management asked if recent deals “are indicative of a greater focus on M&A” and if they “are accretive or dilutive to margins.” CEO Stephen Cooper said WMG will “be quite assertive” in seeking deals it believes can be “immediately accretive [to margins].” Lou Dickler, senior vp, controller, added that th...
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