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SoundCloud's Partnership with Feature.fm: A Game Changer for Independent Artists and the Audio Streaming Industry

The recent partnership between SoundCloud and Feature.fm has significant implications for the audio streaming industry as a whole, particularly for independent artists looking to expand their reach and grow their fan base. With SoundCloud's extensive library of indie music and Feature.fm's powerful marketing tools, independent artists now have an opportunity to increase their visibility and reach a wider audience.

For SoundCloud, this partnership represents a strategic move to stay relevant in an increasingly competitive market. With the rise of streaming services such as Spotify and Apple Music, SoundCloud needed to find new ways to differentiate itself and provide unique value to its users. By partnering with Feature.fm, SoundCloud is demonstrating its commitment to supporting independent artists and providing them with the tools they need to succeed.

For independent artists, this partnership represents a significant opportunity to expand their reach and gain more exposure. With Feature.fm's targeted marketing campaigns, independent artists can reach new audiences and connect with potential fans who may not have discovered their music otherwise. This, in turn, could lead to more opportunities for live performances, collaborations, and other ventures that can help them grow their careers.

Moreover, this partnership could have wider implications for the audio streaming sector as a whole. As more independent artists are able to gain exposure through streaming platforms like SoundCloud, we may see a shift in the way that the industry operates. Instead of relying solely on major record labels and established artists, streaming services could become a more democratic space, where independent musicians have a greater opportunity to succeed.

Overall, the SoundCloud-Feature.fm partnership represents a significant development in the audio streaming industry, one that could have far-reaching implications for independent artists and the music industry as a whole. By providing new marketing tools and opportunities for independent artists, this partnership could help to level the playing field and provide more opportunities for musicians who may not have had the chance to succeed otherwise.

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Spotify Live Bids Farewell After Two Years of Testing the Waters (4/04/23)

Spotify Live, the live audio app that was launched by Spotify two years ago, is being shut down by the music streaming giant. The decision comes after a period of experimentation and learnings around how Spotify users interact with live audio. Although Spotify believes that live fan-creator interactions have a future in its ecosystem, it has determined that the app is no longer viable as a standalone platform.

Spotify intends to persist with specific live audio elements, including "listening parties," a format that the company claims has exhibited encouraging outcomes. Some of the shows that were featured on Spotify Live will continue as pre-recorded content on the primary Spotify app. The music streaming service was among several companies that dabbled in live audio after Clubhouse's rapid ascent in 2020.

While some may see this move as a failure, I see it as a sign of innovation. The app alone may not have made sense, but the data collected from users is crucial for Spotify moving forward. The company will be able to use this information to create more successful features within the main Spotify app.

In March 2021, Spotify reportedly acquired Betty Labs and its app Locker Room for around EUR 57 million. This acquisition enabled the music streaming service to broaden its live audio content to encompass weekly music, entertainment, and lifestyle shows. Although the market for live audio apps may be limited, Spotify was able to expand its content and bring some of its features into the main Spotify app.

Overall, this decision shows that Spotify is not afraid to experiment and innovate. The company will continue to adapt to the ever-changing market and user needs, and we can expect to see new and exciting features in the future. As a Spotify user myself, I appreciate the company's willingness to try new things and take risks in the pursuit of improving their platform.

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Spotify’s 2022 Figures Show Decrease in Number of DIY Artists Earning over $10K Compared to 2021 (3/21/23)

According to Spotify figures, the amount of independent artists who make over $10K in music royalties - just under 15,000 - on the platform fell from the year prior. Interestingly enough, the total number of artists who made over $10K through both recorded music and publishing increased - that number is 57,000 artists. Hence, from last year’s figures about 25 percent of artists who hit this threshold were DIY artists. It was important to note that although there was an insubstantial decline of 440 DIY artists who made over $10k, the total number of artists who surpassed this milestone grew by over 4,400. All this to say that, artists who are backed by the major labels and other record companies have continued to eat up market share. It is becoming harder, if not impossible, for an artist with no backing to leverage up in this industry.  

Every year, the number of artists who have music on Spotify increases by 1 million. At the end of 2022, Spotify had 9 million artists on its platform. According to a study done by Midia Research, DIY artists from all over the world generated more recorded music revenue than ever before - a huge part of that being a direct causation of the pandemic and TikTok blowing up shortly after. Midia suggests that DIY acts generated just under $2 billion, comprising 6% of global market share, while growing at just under 17%. 

Although I am in the Stern School of Business pursuing a career in finance and real estate, I also have dreams of being an artist. I have uploaded three songs to date - cumulatively having around 5,000 streams. This article is such an eye-opening one because there was a point in time where I wanted to pursue music fully. I’m sure that many other kids have the same dilemma. We should always chase our dreams, but it is also essential to understand how monopolized this market is. It is extremely difficult to gain traction and genuine fans without the backing of hundreds of thousands of dollars, a marketing team, and so forth. 

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Experience George Ezra's Music in a New Dimension: Amazon Music Unveils Six Exclusive Spatial Audio Tracks (3/06/23)

George Ezra, an English songwriter based, had his first taste of success back in 2014, with the release of his hit song “Budapest.” His latest studio album, Gold Rush Kid, released on June 10th in the past year under Columbia Records. Just recently, Ezra decided to enter a “joint collaboration” with Amazon Music and Sony Music UK to re-release six songs from his latest project. The differentiator in this new release is that the music is incorporating Sony Music’s spatial audio technology. 

Instead of remixing the original songs, Ezra re-recorded six of his existing songs in an immersive studio environment in London. By doing this, Ezra could fully capture the 360 Reality Audio technology that gives listeners a fresh perspective and ear to the songs. The world of audio streaming is constantly changing, and this is a new piece of technology that easily has the potential to tap into avid music lovers and fellow musicians, who have a better ear than the average listener. 

This collaborative project is not only great for Ezra, but also for the streaming platform itself - Amazon Music. It is working with Ezra to bring another exclusive project to the service, in hopes of creating higher engagement with the consumers through a more creative form of content. The two streaming giants - Spotify and Apple Music - have already dabbled in this field, which shows how compelling this feature is. As Laura Lukanz, the Head of Music for Amazon Music UK, Australia, and New Zealand, states, “This first-of-its-kind immersive EP brings a new way of listening to music… showcasing them to fans and new audiences alike in a brand new, immersive way.” 

This album will be available exclusively on Amazon Music for three months. In conjunction, Amazon is partnering with Sony to offer a free four month trial of Music Unlimited. I see this as a move to gradually increase its existing 10% market share in US audio streaming. Although it will not impact players like Spotify and Apple right now, this is a great indication for Amazon moving forward, as this is a fairly new space for them.

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Universal Music Group's Quarterly Revenue Surpasses $1 Billion from Recorded Music Subscription Streaming in 2022 (3/03/23)

Recorded music subscription streaming has been experiencing consecutive double-digit growth globally for nearly a decade. Universal Music Group (UMG), one of the three largest record labels in the world, has also been benefiting from this trend. The latest financial reports from UMG reveal that its recorded music subscription revenue increased by 11.3% YoY. For the fiscal year, UMG's revenue exceeded $4 billion, which equates to generating $1 billion per quarter from this stream. Q4 of that year was particularly notable for UMG, as it became the first quarter to ever generate over €1 billion in revenue. While streaming growth has been flatlining in mature markets, UMG's most important revenue stream still managed to achieve double-digit growth, despite Spotify refusing to increase its flagship prices.

UMG distinguishes itself by dividing its recorded music streaming revenue into subscription and other streaming categories, unlike other major labels. This strategy provides transparency about the direction of user preferences, with ad-supported streaming accounting for about 37% of its revenue, at $1.49 billion. According to Goldman Sachs, global ad-supported streaming revenue is expected to triple between 2021 and 2030. While UMG's ad-supported streaming revenue increased by almost 10% YoY, a growth rate of less than 2% in Q4 may suggest that user preferences are shifting. Although there is no need to panic at present, this is a warning sign for the future. 

As FY 2022 came to a close, both YouTube and Meta saw YoY declines in their advertising revenues. This trend, in addition to the competition from other platforms, has put Universal Music Group on alert. One such platform is TikTok, which has rapidly grown to become a major player in the music industry. UMG will be closely monitoring the amount TikTok pays out to music rights holders, as it could potentially impact the revenue of the industry as a whole. With the ongoing shifts in consumer behavior towards streaming, it is crucial for music labels to stay vigilant and adapt to these changes in order to remain successful.

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Spotify Unveils Personalized ‘DJ’ Featuring Generative and Voice AI Technology (2/28/23)

Artificial intelligence (AI) has taken the music industry by storm in 2023, with generative AI used for lyric composition and voice-mimicking AI in songs becoming a popular topic of discussion. Spotify, the world's leading streaming service, has recently launched a new DJ feature powered by AI, making a significant move into this exciting field of technology. The company aims to solidify its position as the largest streaming service globally, stating that the feature acts as a "personalized AI guide" that selects music based on a user's unique preferences.

As the DJ feature is still in the beta testing phase, the exact mechanics of how it operates remain uncertain. However, Spotify is confident that the AI will curate custom playlists and provide commentary on artists and tracks that align with a user's specific taste. To bring this vision to life, Spotify has partnered with two AI platforms, including Sonantic, which it recently acquired. The acquisition was driven by Sonantic's custom AI voice model, which was used in the popular movie Top Gun Maverick. Spotify plans to use the voice of Xavier Jernigan, the Head of Cultural Partnership, to create the AI voice model. Jernigan previously hosted one of Spotify's earliest morning shows and his personality resonated with many fans.

Spotify is also employing generative AI, developed by OpenAI (the company responsible for ChatGPT), to generate commentary for the DJ feature. This technology allows Spotify's music editors to enhance personalized music recommendations for a broader audience. The company's extensive knowledge of various music genres makes this development promising and potentially even more lucrative in the future. As a tech company, Spotify will integrate its existing personalization technology to provide users with more accurate recommendations based on their listening history.

Overall, Spotify's new DJ feature powered by AI has the potential to revolutionize the music industry and offer users a more personalized and engaging music experience. With its cutting-edge technology and dedicated team of music experts, Spotify is poised to remain at the forefront of music streaming services.

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Rihanna's Music Gets a Boost on Spotify after Super Bowl LVII Performance (2/14/23)

In the highly anticipated matchup between the Philadelphia Eagles and Kansas City Chiefs in Super Bowl XLVII, over 110 million viewers tuned in to watch the game. According to Forbes, the NFL continues to attract record level audiences to the game and more importantly the sport as a whole, despite all the negative backlash that has come out against the sport concerning player safety over the years.

As for many viewers, the Halftime Show is a highly anticipated event, featuring a top musical artist for just over 10 minutes. This break in between the two halves of football gives artists the platform to showcase their talents and reach new audiences. In fact, the Halftime Show has now cemented itself as a big cultural event in the U.S. Hence, it may be a shock to many people, including myself, that Super Bowl performers don’t actually get paid! For example, The Weeknd spent $7 million of his own money when he performed a few years ago because he wanted to perfect the production. 

Rihanna’s performance this past Sunday was the first time back on the stage in over five years. Immediately after her performance, Spotify announced that her streams were up almost 400%. Some of her individual tracks saw crazy spikes such as her opening track “Bitch Better Have My Money,” which had a parabolic spike of 1,800%; in addition, “Pour It Up” and “Rude Boy” both bumped over 600%. Although these numbers are exclusive towards Spotify, it is safe to assume that her music was highly boosted across all streaming platforms.

All in all, although Rihanna won’t be getting directly paid for her performance, we know with certainty that she will end up making a lot of money anyway. Because the music industry has shifted heavily towards digital (due to changing consumer preferences), this annual event is a very lucrative opportunity for an artist to make tens of millions of dollars through streaming in the near future after the performance.    

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Spotify surges ahead with skyrocketing user growth, despite widening operating loss in Q4 2022 Earnings Report (2/1/22)

According to Digital Music News, in the final quarter of fiscal year 2022, Spotify - the audio streaming giant - added a record high of 33 million users; more impressively, almost a third of these users have been converted as paid subscription users. However, ever since its initial inception Spotify has never been a profitable company! Digging deeper into Spotify’s financials, the firm’s reported revenue for fiscal year 2022 is €3.17billion, which is an 18% increase from the previous year. A big factor that led to a massive jump in ad-supported revenue was due to the introduction of podcasts on the platform. In fact, Spotify has invested $1 billion over the last four years into this particular segment. 

Hence, this leads us to the question of why a company that brings in billions of dollars of revenue per year is still “bleeding.” According to management and Yahoo News, Spotify attributes its extremely high operating loss on increased personnel costs and higher advertising costs. In addition, instability within the foreign exchange market has affected profitability and key margins that shareholders and investors use to look for suitable investments. Given that the world economy is still recovering from the global pandemic, looking towards the short-term future this is a big risk that Spotify should continue to keep their eye on. 

Following the earnings call, according to CNBC, Spotify shares closed up 12% as both revenue and subscriber growth exceeded expectations. The strong earnings could indicate a more positive and healthier future not only for the firm, but for the music industry as a whole. I believe that Spotify has shown its ability to adapt to changing consumer preferences as it continues to meet the growing demand for streaming music. The stock price of Spotify peaked at around $365 early in 2021; ever since then, the stock has plummeted to its current price of $125.

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My Sector is Audio Streaming

My sector is Audio Streaming. I will follow Digital Music News, MUSICBUSINESSWORLDWIDE, and Billboard as my three sources.