Everywhere right now you hear what great potential can be found within the so-called creator economy and how much it will grow in 2022 and in the following years. The social media platforms, DSPs, and other providers constantly release new features with which the creators can generate income and which are obviously supposed to tie them to the platform. As a musician, you are inevitably a creator as well, and not just of your songs, but also of any other type of content. And this can certainly have its downsides, as well.

Constant communication

We have often pointed out that you can’t just make your music available in the shops and then hope it’ll get discovered somehow. To have people listen to you, you need constant communication with the outside world, be it over the streaming platforms themselves, via social media, through the mailing list, or using various other platforms where you can be in contact with your fans or subscribers. In this day and age marked by ephemerality, you need to bring your name into play over and over and over again – which is definitely time-consuming.

Satisfy the hunger for content

However, in this hustle, many artists not only reach their time limits but also their creative limits. They have to constantly come up with new ideas to keep their followers entertained and win over new ones. On top of that, they have to upload new music to the streaming platforms every month. They need to keep delivering to satisfy the hunger of the consumers and stay present in their feed and release radars – especially in times where the direct connection between artist and fan is becoming increasingly important.

The fact that many are aware of this only exacerbates the problem. The more content is produced, the harder it is to stand out from the crowd. Your single flopped? Well, quickly make a new one then. Your TikTok video didn’t get as much attention as you wanted? Time to upload the next clip. It’s a vicious circle that many artists are trapped in. In the worst case scenario, it can end in burnouts and in milder cases, still lead to frustration and creative lows.

Replaceable creator

The platforms live off this constant flow of new uploads and the consumers fuel it with their hunger for content. The creators can be the profiteers of this situation, but oftentimes also the ones to suffer most. And they are replaceable, too: if one creator goes, the algorithm will simply suggest another. With the generous help of creators dying for attention, the platforms have created a system in which the content alone is the focus rather than its maker. Who knows that it’s your song that’s coming on in the playlist, and who’s gonna notice that it’s being replaced by a different track?

Finding the balance

But what are the alternatives? Are there even any? Not playing this game of fighting over attention is a luxury most artists cannot afford. At the end of the day, it all comes down to finding the right balance that allows you to keep the quality of your work as the main focus. You should therefore always reassess which platforms you really need to be present on and how much of your available time you are investing in them. Ideally, you should also have a team behind you to help with the creation and marketing of the content.

This is obviously all much easier to write than to actually implement. We need to keep in mind that finding this balance between sufficient content and constant quality, between the creation of music and its marketing, between a steady online presence and rejuvenating creativity breaks, will be one of the biggest challenges that artists have to face in the coming years – especially since there are always looming changes in the music industry that you need to get in on before it’s too late.  

Around a year ago, we showed you in one of our posts how TikTok’s algorithm works. Now, internal documents have been leaked and made public by the New York Times, allowing for an even more in-depth look. Considering the TikTok algorithm is viewed by many as revolutionary, experts were at first surprised to discover that it is not fundamentally different from the algorithms on YouTube or Spotify. In this two-part post, we will explain how it is constructed and how to best take advantage of it.

Let’s not pretend, TikTok’s algorithm, of course, primarily serves business goals. It is supposed to attract more active users and keep them engaged on the platform. The stronger the engagement and the longer users stay on the app, the more data TikTok can gather, which will improve the algorithm even more.

Just like other social media platforms and DSPs, TikTok suggests videos to their users that are similar to those that you have already watched. Additionally, TikTok also suggests videos that have been viewed by users that consume similar videos to you.

So far, so familiar. The question is: What are the deciding factors that determine which videos are shown?

Analysis of content

As soon as a user uploads a video, several independent but connected algorithms will analyze its content. To be precise, the following parameters are examined:

• Video description
• Video format
• Hashtags
• Used songs/other sounds
• Used effects

But the analysis doesn’t end with the metadata that you provide. The audio component of the video is also analyzed, meaning what is said or sung in the clip. All contents of the visual part are scanned, as well. That means, that the algorithm can tell, for instance, that a specific video features a woman, a laptop, and a coffee mug. The algorithm thus obtains a plethora information that are not necessarily already discernible from the metadata.

This algorithm check also serves to spot suspicious videos which will then be manually evaluated. Once it passes the automatic, or sometimes also manual test, the video will be shown to a small group of users to get some initial feedback, meaning data. If the feedback is positive, that is, if it gets lots of views, comments, shares, and is rewatched multiple times, it will be suggested to a larger group. If that feedback then remains positive, the process starts all over again and the video continues to be shown to more and more people.

Feedback

TikTok differentiates between two kinds of feedback:

• Active feedback (likes, comments, follows)
• Passive feedback (playtime, completion rate – meaning how often the video is watched til the end –, rewatch rate)

Of these different feedback parameters, the completion and rewatch rates have the biggest influence. Compared to other platforms, shares only play a limited role. This is probably due to the fact that there are much fewer shares than likes or comments. And the golden rule is clear: the more data, the better.

If the performance declines, the video will no longer be recommended by the algorithm. Should the video get good viewership even without the push from the algorithm, say due to creator promotion or other factors, it could get a second chance and be picked up by the algorithm again to be shown to new users. But how does TikTok decide which videos to show which users?

User analysis

The algorithms can already tell a user’s preferences after just 8 videos they’ve watched. Especially when only a small amount of data is available, things like device, country, and account settings, as well as language preferences and device model also play a role. The more interactions occur between the user and the platform, the more accurate, of course, the suggestions will be.

Based on a user’s interactions and history, the algorithm will make up a score for each video. The bigger the chance that a user will like a video, comment on it, or watch it til the end, the higher the score. The videos with the highest ratings will end up in the user’s For You feed.

Engagement

Another important factor is how the creators behave. How often do they upload content (the more, the better), how many users visit their profile and look at other videos there, and does the creator make use of every possible outlet – for instance, do they use livestreams or the donation feature? The leaks show that TikTok does give smaller creators the chance to go viral, as well. Additionally, the algorithm is very strongly programmed to avoid repeats.

Optimize your uploads

If you want to be successful on TikTok, you should know that the platform takes time. TikTok is not a site you can maintain on top of seven other social media platforms. You either invest time to produce good content or you can pretty much forget about it. This is also because you should always make exclusive content for TikTok. Using the same clip for Reels, Snapchat, Shorts, TikTok, and Spotify Canvas would be counterproductive. Additionally, you should be posting at least once a week. If you’re really serious about it, a minimum of once a day would be even better.

Precise video descriptions and fitting hashtags make it easier for the algorithm put the video in the right categories. Especially if you’re new on TikTok or don’t have as many followers yet, you should try to find your niche. You can steer your account in the right direction using good descriptions and hashtags. Additionally, you should make sure that the quality of the video (such as the lighting) as well as the elements in it are all good. Let’s keep in mind: everything seen in the video is scanned by the algorithm.

Pay special attention to the first seconds of the clip, since they need to immediately grab the audience. Since many users watch videos with no sound, it’s well worth putting in some text, as well. Of course, you should also regularly use your own music, although maybe not in every single video.

Analytics

To understand who your audience is on the one hand, and which videos perform well on the other, you should constantly analyze the data that TikTok provides. That way, you can find out, for instance, how many users integrate your music into their posts.

TikTok snippet via iGroove

To make sure you’re getting the most out of the sound integrations on TikTok, iGroove now offers the opportunity to upload a separate TikTok snippet. You can also select a separate release date for it. That means that you could, for instance, make the snippet available on TikTok two weeks prior to a release to build hype for it and get people excited for when it comes out.

Spätestens mit der Pandemie ist vielen Künstler*innen klargeworden, dass sie ihre Einkommensflüsse differenzieren müssen. Zudem wurde vielen bewusst, dass der profitabelste Weg der direkte Verkauf an seine Fans ist. Als schöner Nebeneffekt lässt sich dadurch auch gleich noch die Beziehung zu der Fangemeinde vertiefen.

Wie verkaufe ich?

Es braucht nicht unbedingt den eigenen Shop auf seiner Website. Eine der populärsten Möglichkeiten die Mittelmänner zu umgehen, ist Bandcamp, die sich während der Pandemie mit ihrem Bandcamp Friday zusätzliche Pluspunkte abholten. Hier lassen sich an einem Ort neben Downloads auch physische Produkte wie Vinyl, CDs oder Shirts anbieten.

Eine weitere Option sind die Shopping-Integrationen bei Instagram, Facebook, Snapchat oder YouTube sowie nun auch die Zusammenarbeit von Spotify und Shopify.

Will man sein Merch breit streuen und unkompliziert bei verschiedenen Plattformen integrieren, ist Shopify sicherlich eine der simpelsten Möglichkeiten, da sie neben Spotify auch mit Google, Facebook, Instagram und neu auch TikTok zusammenarbeiten. Es gibt aber auch zahlreiche andere Anbieter und ein Vergleich lohnt sich, um denjenigen zu finden, der optimal zu den eigenen Bedürfnissen passt.

Wo verkaufe ich?

Seine Produkte promotet man dort, wo man auch sonst am intensivsten mit den Fans in Kontakt ist. Dies kann Insta, TikTok, Twitch oder Discord sein aber ebenso der Email-Verteiler. Schlussendlich soll es für die Fans so einfach wie nur möglich sein zum digitalen Merch Table zu gelangen und den Kauf abzuschließen. Dabei jedoch beachten, dass man weiterhin auch normalen Content postet und seine bevorzugte Plattform nicht zu einem reinen Verkaufskanal umbaut.

Was verkaufe ich?

Bevor man jedoch richtig loslegt, muss man sich überlegen, was man seinen Kunde*innen anbieten will. Welche Farben und Größen sind gefragt, welche Preiskategorien sind realistisch? Setzt man eher auf exklusives Merch in kleinen Auflagen oder sollen die Produkte über längere Zeit verfügbar sein? Hierzu helfen die Analyse-Tools der Streaming- und Social-Media-Plattformen. Zeigen die Daten zum Beispiel, dass man viele ältere Hörer*innen hat, könnte man eine Retro-Kollektion ins Auge fassen.

Ebenso gilt es die Verkäufe stetig zu analysieren, um herauszufinden, welche Produkte, Größen und Farben funktionieren und welche man wieder aus dem Sortiment nehmen kann. Wichtig ist auch eine vorausschauende Planung. Die Winterkollektion sollte man nicht erst im Herbst andenken. 

Bei der Planung nie vergessen darf man die Kosten, die beim Direktverkauf anfallen. Neben der Herstellung der Produkte sind dies die Lagerung, Versandkosten, Verpackungsmaterial oder Steuern. Dies muss von Beginn an in den Verkaufspreis eingerechnet werden.

Natürlich endet der Direktverkauf an seine Fans nicht bei den traditionellen Produkten wie CDs, Vinyl, Shirts oder Hoodies. Neben physischen Produkten gibt es zahlreiche andere Möglichkeiten wie z.B. NFTs, ein privater Videocall mit den Fans oder exklusiver Content bei Social Media. Kreativität ist ebenso gefragt wie das Gespür dafür, was zu einem als Künstler*in passt und was auf Interesse bei den Fans stoßen könnte.

Spotify is going through some turbulent times at the moment. Not only are their market shares stagnating, as we have recently reported, but some artists have also removed their music from the platform due to the COVID misinformation that flagship podcaster Joe Rogan has spread. Moreover, Spotify CEO Daniel Ek has come under fire for investing some of the millions he made from Spotify into a company that produces military technology. And finally, the audiophiles among the Spotify consumers are still waiting on the HiFi option that was supposed to come out 2021.

The sources of your streams

The good thing about criticism, however, is that it often leads to more transparency, and this is exactly what Spotify wants to create with its new “Made to Be Found” page. It is supposed help artists learn more about their listeners and how they discover music. Every year, there are billions of new discoveries being made – that is, individual users listening to an artist for the very first time.

Spotify divides the way in which consumers listen to music into three different categories according to the source:

• Made by Editors (through playlists curated by Spotify)
• Made for You (through personalized playlists, autoplay, or the radio feature)
• Made by You (through the artist’s playlists, the user’s playlists, or the user’s active search for a specific artist or song)

According to Spotify, most streams are generated from the third category, active listening. However, they don’t mention exact numbers. Additionally, a third of all artist discoveries happen in the “Made for You” category, meaning through the algorithm. To promote active listening further, Spotify recommends always keeping your profile up-to-date, using Canvas and Promo Cards, and putting together your own playlists.

Additional information on Spotify for Artists

In addition to this landing page, there is now more data on Spotify for Artists, as well. Also new is the analysis of how the streams came about (you can find this under Audience and then Engagement). The data is only ever available for past 28 days, but you can sort it by country. This is supposed to give artists a better understanding of how their music is discovered and serve as a basis for marketing campaigns.

Spotify now has 180 million subscribers

In addition, Spotify also published the latest user figures. At the end of 2021, Spotify had 406 million monthly active users. This is 61 million or 18% more than in the previous year. Premium subscribers grew to 180 million, up from 155 million a year ago, so this represents 16% growth. Revenues from advertising grew particularly strongly, by a whopping 40% to 394 million euros.

2022 has been dubbed by many experts as the “year of the creator” – not exactly a bold suggestion, so-called creators have gained enormous reach in the past few years and the creator economy is said to be worth around 100 billion dollars. Creators have also generated much traffic on social media platforms, which is why it is in these platform’s own interest to keep them happy by offering them monetization opportunities. This is exactly the direction the planned subscription models are aiming for.

First tests run on Instagram

These plans are already taking somewhat concrete form over at Instagram, which has now started its first tests. These are, however, still within a moderate framework: no more than 10 creators from the U.S. are able to use the feature at the moment. There are eight different price levels available for these subscriptions: 0.99, 1.99, 2.99, and 4.99, and up to 9.99, 19.99, 49.99, and even 99.99 dollar per month.

Added value for subscribers

But what’s in it for the subscribers? For one, they get access to exclusive live videos and stories. For another, they receive a special badge that makes them stand out in the comments or the inbox of the creators. As soon as someone signs up, they will have access to all the content previously only available to the subscribers, such as the stories in the creator’s highlights. Until 2023, at least, Instagram will take no share of the generated revenues.

TikTok only in planning phase

There is no doubt that Instagram is also launching this new monetization option to counter the mounting pressure from TikTok. But TikTok isn’t slacking off either and now have their own subscription model planned for their creators. News on this is still pretty vague, however. The only thing TikTok has confirmed is that the feature is currently being tested. It is therefore still unclear what the creators will actually be able to offer to their subscribers and whether TikTok will pocket any of the revenues.

Possibilities and tightrope walks

For creators, especially those on TikTok, this development raises the question of which content they will use to feed the algorithm and which they want to exclusively offer to their subscribers. This is likely to prove to be a tightrope walk, since on the one hand, you want to gain new followers, and on the other, you have to provide content to your paying subscribers. Another aspect that remains open is if the users, especially the gen Z majority, would be willing to make monthly payments or if they prefer occasional donations.

Despite the open questions, new opportunities could no doubt emerge here for musicians with an engaged fanbase. Whether this will be a replacement or an addition to platforms like Patreon or OnlyFans, of course, won’t be known until the subscriptions are officially available. But the moment it gets really interesting for artists is when streaming platforms, too, start offering subscriptions with which one can offer exclusive content to fans.

Those of us who are interested in different sources of revenue for musicians are sure to have stumbled across the term “sync licensing.” But what’s behind the concept exactly? How do you secure a placement? And how do you make money from it? We’re here to shed some light on the matter.

In today’s day and age, musicians have to make use of many different sources of revenue. Most will nevertheless put their focus mainly on streaming services, social media, and perhaps some live shows. The fact that many are not entirely sure what sync licensing is, is precisely the reason why this income idea has often been overlooked. But with some luck, you can actually earn a significant amount of money from syncs.

The basics

Sync licensing (also known as “synchronization rights” or “sync rights”) refers to the licensing of music for various media such as TV, film, series, advertisements, or video games. A connection is essentially formed between a piece of music and visual media, which is known as synchronization. If someone wants to use your music for a film, for instance, they would need the permission of the rights owners, and pay a handsome sum for it, generally. In addition, the placement will widen the song’s and therefore also the artist’s reach.

Or, as our lawyer puts it in slightly more eloquent terms, “The right to couple music with visual media is a stand-alone economic good, which means the rights owner may demand compensation for the coupling process (synchronization) itself. Potential compensation sources therefore include all makers of audiovisual media, e.g., TV, film, series, advertisements, or video games.”

How big is the sync business?

Worldwide revenues from sync licensing currently amount to around 432 million USD per year. This is despite a 9.4% drop due to COVID. While the revenues from ads tend to decline due to advertisers having music specifically made for this purpose instead of licensing it, new opportunities have opened up in other areas of sync licensing. Some of these include fitness, wellness, and e-sports. Streaming providers such as Netflix or Amazon Prime have also shown an increased demand for music. Due to their international market, they are also seeking more and more music from different countries written in different languages. The demand for non-English music seems never to have been as big as now.

Who needs to be asked for permission?

Just like when you want to use a sample of a song, sync licensing, too, requires the permission of all rights owners, meaning the master owners as well as the publishing owners as well as any potential ancillary copyrights owners (especially when the original recording is used). Remember, the publishing rights are in the hands of the composers and lyricists of a song (or the song’s publisher). The master rights, on the other hand, are the rights to the recording and are either owned by the artists themselves or often by the record label. So, in order for a song to able to be used in a film, for instance, all rights owners must first give their permission.

If the song is a cover, then the artist is only in possession of the master rights. That means, in order for the song to be used, the songwriters and composers of the original song must agree to it, as well. That might sound complicated at first, but it is certainly worth a try, since covers are often licensed, especially when it is of a very famous song and the original would simply be too expensive to license.

The situation gets much more complicated, however, when your song contains samples which have not been cleared. Music supervisors pay very close attention to the ownership of the rights so that their clients will not be sued. Therefore, they are not likely to license a song containing uncleared samples. This is also the reason why most supervisors will only work with sync agents.

What does a sync agent do?

Of course, theoretically, it is possible to do the research yourself and find out who the music supervisors are that pick out the music for TV programs, series, or ads. But it will take enormous effort and making direct contact yields fairly slim chances of success. Sync licensing, just like many other areas in the music industry, is a people business, which is where sync agents and their contacts come into play. Sync agents, who can work independently for music publishers, record labels, or distributors, are the contact persons for music supervisors. When the music supervisors are looking for a song for a particular movie scene, for instance, the sync agents will propose different tracks that they think could fit. They will also proactively approach the supervisors and pitch songs from their repertoire. Last but not least, they will negotiate the price and take care of the administrative duties which are not to be underestimated. In exchange, they will, of course, receive a portion of the generated revenues.

Often, sync agents will ask for songs to be “pre-cleared” already. That pretty much means that you give them the right to negotiate deals in your name and that the permissions from all the rights owners are already at hand. This eases the negotiation process, and more importantly, makes it faster and less complicated. This is a factor that should not be underestimated, since today, things often need to get done quickly, and if there are too many issues that still need to be settled, the supervisor might decide to go with another song instead.

If you work with a sync agent, the cooperation doesn’t necessarily have to be exclusive. That means that you can deposit your song with multiple sync agents to increase your chances of getting a placement. But you should be careful, since different agents may offer the same song at different prices. And naturally, the supervisor will then choose the cheapest offer. Additionally, it can be exhausting for music supervisors to have the same song pitched to them multiple times.

Before you sign a contract with a sync agent, it is imperative that you verify them first with an expert (e.g., a music lawyer).

How much do you make from sync licensing?

In general, there are two ways to make money from sync-licensing your songs:

• An individual fee
• Revenues from a copyright collective

Individual fee

The individual, often one-time fee will in many cases be divided proportionately between the owners of the master and publishing rights. If you own all the rights, you will also get all the dough. You can also forego the one-time fee – for instance, if you allow a small film production without a real budget use your song. But even then, you should still receive compensation of equivalent value, such as sufficient exposure.

Copyright collectives

In some countries (for example Germany and Switzerland), producers of audiovisual media have the alternative option of acquiring the sync license directly from the copyright collectives. Examples include SUISA and GEMA, to which artists may hand over their sync rights for collecting purposes. So, as an artist, you need to decide whether you want to negotiate the individual fee yourself (or via a sync agent) or whether you want the copyright collective to handle the process. While the personal negotiation may yield higher monetary gain, licensing through a copyright collective could mean a higher chance of actually getting placed, precisely because of the lower licensing fee, especially when the client represents a smaller production. This decision is therefore very much a personal one. So, take a careful look at what your collection agreement says about sync licensing. Once you have handed over the rights to a copyright collective, in some cases, you may have no more influence over the precise use of your music. That means that a TV channel could use your song for a daily soap that you may not want your music to feature in.

Difference between sync licensing and use licensing

But even if your sync license isn’t handled by a copyright collective, it will still generate revenues. A sync license remunerates artists for the permission to create an audiovisual product in which their music is used. But on top of that, there is also the remuneration for the actual use (e.g., for TV, film, ads, games, etc.).

For example:

A film producer wants to add a specific song to the opening scene of their movie. To be able to do that (=creation), they need to pay a general license fee to the rights owners. This is the sync license.

If the film is picked up by cinemas, the operator must pay for another license to be able to show it (= actual usage). If the film is played on TV, the channels must equally acquire a license for the broadcast (= another actual usage), and so forth and so on.

That means that revenues can still flow via the copyright collectives when your song is broadcast on TV. This is comparable to the revenues generated when your song is aired on the radio, your music video is shown on TV, or your song is played in a bar or club. These revenues will be paid out accordingly by the copyright collective that you are registered with.

In some cases, everything is compensated with a one-time fee and the regular revenues through the copyright collective are dispensed with (however, this only applies if and as long as there is no relevant collection agreement made).

Let’s recap:

How much one effectively earns in a particular case can’t be predicted in exact numbers. In fact, it is always different for each placement and depends on numerous factors, such as:

• Which medium is used (usually, you will get more if your song is used in an ad than in a small film or a video game)
• Which territories the song is licensed for (worldwide or only specific countries)
• Whether the whole song is used or only a small part
• How long you grant the rights for (a specified timeframe or in perpetuity)
• Whether there are any limitations such as noncompetition clauses (for instance, if you hand a sync license to cellphone company A, you can’t then license the same song to cellphone company B)
• The music supervisor’s budget or their client’s
• The artist’s level of popularity
• The purpose for which the song is used – is it only played in the background or is it theme song of the film?
• The negotiation skills of your sync agent

So, it may very well be that the one-time fee only amounts to a few hundred Euros, but it is also not uncommon for Netflix, for instance, to pay a five-figure sum to a rather unknown artist. Ads and blockbuster movies may even spend six figures.

The sync market is known to be unpredictable. Sometimes, songs that you are confident in end up not getting used, while another track that you would never expect is chosen out of nowhere. So, you can’t really plan sync revenues into your budget, but when they do get paid out, you will definitely find yourself with some sweet extra income.

What else do I need to keep in mind?

• You should always keep track of who owns the master and publishing rights to your songs. Are the master rights yours or your label’s? Which songwriters were registered? If this still needs to be figured out, the deal might already be off the table.
• Find out whether your songs are registered with a copyright collective and in what scope it will assume and collect on your rights.
• Make sure that your songs don’t contain any samples that have not yet been cleared.
• Don’t just focus on your newest or most popular tracks. Music supervisors look for the most fitting songs, and these don’t necessarily have to be brand new or extremely well known. Sometimes, they want exactly the opposite. It is therefore best to make your whole catalog available to your sync agent.
• Make sure that you have instrumental versions or even individual audio tracks of your songs ready. Oftentimes, movies and ads will only use the instrumentals, because the lyrics might distract from the dialogue or simply don’t fit the content. Other times, the supervisor just wants the dreamy piano melody or the funky bassline. Having these ready at all times will definitely increase your chances.

Wider reach

Even though the revenues from sync licensing can be very lucrative, they are not the only benefit that come with placements. You know how it goes – you hear a song in a movie or even an ad and you immediately open Shazam afterwards. With the right placements, you have the opportunity to introduce your music to an entirely new audience through a different medium. Ideally, this can open new doors for you, as well. It is therefore only fitting to celebrate a successful placement on all your platforms and let everyone know about it.

On a regular basis, MIDiA analyzes which streaming services have grown by what percentage and how the market shares have changed. The most recent numbers are drawn from the second quarter of 2021. According to their analysis, 523.9 million people worldwide have a paid streaming subscription. That is 109.5 million or 26.4% more than there were in the previous year. Another piece of good news is that the growth was also higher than in 2020.

Spotify undisputed but with downward trend

As expected, Spotify continues to have the biggest market share of 31%. However, this number is dropping slowly but steadily – in 2019, the share was still at 34% and in 2020 it was at 33%. But since quantitatively, they were able to gain the most subscribers and since the gap to Apple on second place is still very big, Spotify will still remain on the throne for the foreseeable future. Nevertheless, this stagnation or even slight drop is probably not exactly what Spotify’s management and more importantly, the shareholders want.

YouTube Music and Amazon gain

The success stories are written by other players, specifically Amazon and especially YouTube Music. In the last 12 months, YouTube Music grew by an impressive 50% and has recently brought its market share up to 8%. Amazon grew by a respectable 25%, which is also stronger than Spotify (20%). With 13% market share, Amazon equals Tencent and ranks third, just behind Apple Music. The fact that YouTube Music is scoring especially with Gen Z and millennials should give their competition pause, as well.

Strongest growth from China and Russia

The strongest growth, however, can be observed outside the Western World, specifically at Tencent and NetEase, which are only available in China, as well as at the Russian streaming service Yandex. In fact, 37% of total growth can be ascribed to these three providers, which together amount to a market share of 21%.

When a musician decides to sell an NFT to their fans, it inevitably raises the question of what exactly it is they are offering. One of the most interesting possibilities is to share the revenues from the artist’s songs with their fans.

In the meantime, more and more platforms have popped up that allow artists to sell a portion of their master and/or publishing rights to the fans. Some of these include Royal, Opulous, Royalty Exchange, Amplifyx, Band Royalty, and various others, although these are not based on NFTs.

Many of these platforms are still at the very beginning of their development or, at the moment at least, not yet available to all musicians. As is often the case in the NFT world, many things here, too, are still in their infancy.

Financing via song rights sale

The biggest advantage for artists is obvious: you get the revenues right then and there and don’t have to wait for the payout from streaming services. The fans, on the other side, feel good as they own a part of the song and also have the opportunity to share in its profits. This, of course, can also attract investors, who might be less interested in the music than in the financial gain.

But of course, there are also a few possible challenges. First, there is the question of who owns the rights to the music. If there are other parties involved, like a label, for instance, things quickly get complicated. Additionally, you are selling a portion of the rights to your own music, which is what many independent artists usually try to avoid at all costs. Last but not least, you have to ask yourself at what price you are willing to part with these shares.

If you set it too low, you will logically miss out on revenues. But if it’s too high, some fans could be disappointed or upset if they can’t even recoup their investment. The die-hard fans might not care about that, since they primarily want to support the artist. But for many others, the situation is likely to be different. If the fans or investors think that they’ll never get back what they put in, they probably won’t want to invest in song rights in the future.

NFTs from Nas: investment hardly recoverable

One example for prices often being set too high at the moment is the recently wildly discussed NFT drop by Nas. On the platform royal.io, the artist offered 50% of the revenues for two of his songs (“Ultra Black“ from King‘s Disease and “Rare” from King‘s Disease II). For each track, there are three different levels: 50, 250, or 4,999 USD, or in fact, 99, 499 or 9,999 USD. With that, you can buy a 0.0133-2.14% share of one of the songs.

We have analyzed how many streams it would take just to recoup the investment. We used a rather optimistic estimate where one million streams generate 5,000 USD. To get your investment back for “Ultra Black”, the song would need to generate a minimum of 46.72 million streams (current status: 8.12 million on Spotify). For “Rare,” it would even be 126.66 million streams (current status: 11.07 million on Spotify). Only when that 46.72 and 126.66 million mark is hit, respectively, the investors will begin to see returns on their investments. But it remains more than questionable whether this will happen at all.

What’s particularly troublesome is that both songs have been available for quite some time and it would therefore have been foreseeable that the prices are set very high. Both artists and platforms are thus walking a very fine line, especially when they make promises that the artist and the fans will both profit. But if that is not the case, the rising interest might subside again soon despite the undoubtedly huge potential.

Wir berichteten bereits vergangenen Frühling darüber, dass Katalog-Releases immer wichtiger werden und in den USA bereits zwei Drittel der gehörten Songs unter die Kategorie Katalog fallen. Die neusten Auswertungen zeigen nun, dass diese Zahl nochmals frappant angestiegen ist und unterdessen sogar 82,1% der gehörten Songs als Katalog Releases gelten.

Die von MRC Data erhobenen Daten zeigen für das zweite Halbjahr einen Anstieg auf die erwähnten 82,1%. Berücksichtigt werden dabei sowohl Verkäufe wie auch Streams. Damit ein Release als Katalog gewertet wird, muss es zum Zeitpunkt des Verkaufs bzw. Streams 18 Monate oder älter sein. Über das gesamte Jahr 2021 betrachtet, lag der Anteil der Katalog-Releases bei 69,8% (ursprünglich sprach MRC von 74,5%, sie korrigierten die Zahl aber nach unten), 2020 waren es erst 66,4%.

Der Anteil der neuen Releases fiel nicht nur prozentual von 33,6 auf 25,5%, sondern auch in effektiven Zahlen. Obwohl 2021, gerade in der zweiten Jahreshälfte, viele Blockbuster-Releases erschienen, griffen die Hörer*innen vermehrt auf ältere Releases zurück. Nicht ersichtlich aus der Auswertung ist, ob vor allem Songs gehört wurden, welche die 18 Monate Marke knapp überschritten haben, oder ob der Anstieg tatsächlich auf Tracks basiert, die mehrere Jahre oder gar Jahrzehnte alt sind.

Immer mehr ältere Streamer*innen?

Nun stellt sich natürlich die Frage, wieso in der zweiten Jahreshälfte der Konsum von älteren Releases in den USA so massiv angestiegen ist. Eine Theorie ist, dass immer mehr ältere Hörer*innen Streaming nutzen und entsprechend auch Musik aus vergangenen Dekaden abspielen. In den USA nutzen bereits 89% der 56-74-jährigen Streaming, was verglichen mit anderen Ländern ein enorm hoher Wert ist. In Deutschland und Frankreich sind es beispielsweise nur 37%, in Italien 40% und UK bringt es auf 41%.

Streaming Nutzer per Altersgruppe

Land	Gen Z (Jahrgang 1998–2008)	Millennials (Jahrgang 1982–97)	Gen X (Jahrgang 1966–81)	Boomers (Jahrgang 1947–65)
Argentinien	87%	89%	77%	58%
Brasilien	87%	89%	73%	63%
Chile	91%	92%	78%	72%
Deutschland	83%	78%	59%	37%
Frankreich	84%	68%	53%	37%
Italien	77%	76%	59%	40%
Japan	89%	70%	51%	34%
Kolumbien	84%	88%	76%	69%
Mexiko	83%	87%	81%	75%
Spanien	82%	78%	74%	57%
UK	77%	79%	67%	41%
USA	99%	98%	96%	89%

Anmerkung: Argentinien, Brasilien, Chile, Kolumbien und Mexiko: Anteil der Bevölkerung über 13 Jahre mit Internetzugang, die Streaming nutzt.
Deutschland, Frankreich, Italien, Japan, Spanien, UK und USA: Anteil der Gesamtbevölkerung über 13 Jahre, die Streaming nutzt.

Vorausgesetzt die Theorie stimmt, dürfte also in den meisten Märkten der Anteil an Katalog-Releases nicht so hoch sein wie in den USA. Konkrete Zahlen dazu liegen uns jedoch nicht vor. Es gilt aber sicherlich weiterhin, was wir bereits in unserem letzten Beitrag erwähnten: man sollte unbedingt auch seine älteren Releases über die Streaming Plattformen bereitstellen und diese auch regelmäßig bei den Hörer*innen in Erinnerung rufen.

Vinyl- und CD-Verkäufe steigen an

Der Report von MRC Data zeigt weiter, dass die Vinyl-Verkäufe in den USA verglichen mit dem Vorjahr um 51,4% angestiegen sind und insgesamt 41,7 Millionen Exemplare verkauft wurden. Somit übertrifft Vinyl die CD erneut, dies obwohl die Verkäufe erstmals seit 2004 wieder angestiegen sind und gegenwärtig bei 40,59 Millionen Exemplaren liegen.

For many years, instrumental hip hop remained a niche interest for just a few beat nerds. This changed with the soon very popular YouTube livestreams and lo-fi playlists washing over millions with relaxing beats as they study, chill, or play games. One trailblazer of this movement is Lofi Records, better known as Lofi Girl or previously known as ChilledCow. Their most popular Playlist has over 6 million followers, therefore making it one of the biggest playlists not curated by Spotify.

After setting up their Livestreams on YouTube as well as their playlists, the next logical step for Lofi Records was to release the music for said playlists themselves. Thus, a livestream became its own (streaming) label – and a success story like no other. It’s a story from which we can learn quite a few things: on the one hand, they undercut the usual mechanisms of streaming, but at the same time, their success is also a reflection of the processes at work in the world of streaming and playlists.

A very own ecosystem

One could say that Lofi Records is beating Spotify at their own game. Most artists and labels are largely dependent on whether or not Spotify considers them for their playlists. By building their own playlists, however, Lofi Records has essentially rid themselves entirely of this dependency. They have created their own ecosystem, so to speak, and therefore have to follow the prevailing rules only to a certain extent. Contrary to the current trend, they have, for instance, exclusively released EPs and albums but not one single.

It’s the quantity that counts

While the majority of artists complain about the payout from streaming providers, the bigger labels have come to the best of terms with it. How come, you ask? The answer can be summed up in one word: quantity. A song released by Lofi Records will generate, on average, around 2.5 million streams over the course of the year. So, let’s assume an artist releases 10 songs in a year with Lofi Records, generates 25 million streams, and receives 50% of the revenues: A conservative estimate would put their earnings at around 25-30,000 Euros. A pretty sum, but what makes it truly interesting is the quantity.

In 2021, Lofi Records released 156 EPs and albums, as well as 3 compilations (totaling 1,453 tracks), which comes out to around 3 releases a week. These 159 releases generated 2.23 billion streams on Spotify in 2021 (meaning we’re not even counting those released prior to 2021). Using conservative estimates once again, they are likely to have made 5.5. million Euros in revenues. If, say, half of that went to the producers, there would still be 2.75 million left for the labels. The numbers therefore show that they might have just as well changed their name from ChilledCow to CashCow.

Dependence on playlists

Those who put out their releases with Lofi Records are guaranteed millions of streams. That is why Lofi Records not only introduces new producers to the scene, it also has the LoFi elite scrambling to work with the Parisian label. But while Lofi Records builds their success entirely on their own playlists, the producers are always going to be left with some dependence: either on the playlists made by LoFi Records or on those by Spotify or other curators. This becomes very clear when you take a look at the producers’ monthly listeners and followers.

On average, the 128 producers that put out releases with Lofi Records this year have 1.2 monthly listeners but only 6,800 followers. Experts recommend your followers make up at least 5% of your monthly listeners. Looking at these 128 producers, the average comes down to only 0.66%, and a mere 23 producers reached numbers above 1%. There is no clearer way to showcase the dependence on playlists than that.

Nevertheless, Lofi Records is not only a poster child for streaming labels but also a prime example for how thanks to streaming, niche music can reach a level of popularity never thought possible in the old CD era.

Those who have still doubted it in the past will have realized by 2021 at the latest that TikTok is one of the most important social media platforms there is and moreover, that it can be of enormous value to musicians especially. Last year, we have reported multiple times on how helpful TikTok can be in reaching a wider audience with your songs, how the platform became a trendsetter, and how being successful on TikTok has a direct influence on your number of streams and thus also your success in the charts.

Last year, TikTok reached the milestone of one billion monthly users. In their newest Music Report, they now put all their focus on their influence on the music industry. We have summed up the most important facts and numbers for you right here:

TikTok fame and chart successes

In 2021, 430 songs reached over a billion video views. In 2020, it was only 175. The most popular songs even made it to over 20 billion. To compare: On Spotify, there are currently 190 songs that have amassed more than a billion views.

175 tracks that had gone viral on TikTok then also went on to land on the Billboard Hot 100 list – twice as many as in the previous year.

For all genres and decades

The most popular genre among TikTok users remains to be hip hop, followed by pop, dance/electronic, and R&B/soul. The fastest-growing genre, however, is Latin music.

TikTok boasts their ability to help niche genres reach a worldwide audience and underground and DIY artists to vastly broaden their reach. Moreover, thanks to TikTok, many songs from past decades that have been on the brink of oblivion now live to see a comeback.

TikTok also once again refers to a study by MRC Data which shows that 75% of TikTok users in the US use the platform to discover new artists. 63% stated that they encountered music on TikTok that they had not heard before.

Go live with TikTok

Additionally, they remind users that TikTok is one of the most important places where you can go live. In times where the future of live concerts has once again become uncertain, this is a good resource to keep in mind.

We can already look forward to what new features TikTok will roll out in 2022 and how much they will be able to support DIY artists in building their reach and ideally, their monetization options, as well.

In our previous post on the topic of sampling, we based our explications on the “State of Sampling” report from the sample-clearing service Tracklib. Now, they have released their newest analysis which shows that sampling remains an essential part of popular music in 2021. Find out in this post how many songs use samples and what trends can be observed.

Sample usage remains stable

Out of all the tracks on the Billboard Hot 100, 14% use samples from previously published songs. When it comes to the albums that made it into Billboard’s Top 25 Chart, the number was as high as 54%. Both statistics have remained stable over the past few years, which means producers did not reduce their use of samples nor was there a significant increase to be observed. The album with the most samples, by the way, was “Certified Lover Boy,” which used 15 samples in 21 tracks.

Hip hop also the most popular sample source

Sampling is, of course, especially popular within the rap scene, which is also evident among the five nominees for the Grammy Award for Best Rap Album (Drake, J. Cole, Nas, Tyler The Creator und Kanye West). Almost half (48%) of the songs on these five albums used samples.

But hip hop producers not only use samples a lot, they also stand for the genre that is being sampled the most, followed by R&B and soul/funk.

From the 70s to the 2010s

The average publishing year of the samples used is 1992, which means that producers continue to draw from older music. The 70s and 90s are especially popular. The most popular decade, however, is the 2010s, and it has remained so for the past 7 years. Many producers, therefore, do not go very far back for their sample sources.

On one hand, Tracklib identifies a trend in the comeback of 70s soul samples. On the other, they also observe the increasing dominance of a generation of young hip hop producers that did not grow up with old soul, jazz, or funk and thus, only use samples from hip hop and R&B songs from the 90s and early 2000s. Some of us are probably starting to feel pretty old right now…

Conclusion

Sampling therefore remains popular, and nothing is going to change about that in the coming years, either. That applies not only to hip hop productions but all kinds of genres, although hip hop naturally continues to be the one that has internalized the sample culture the most. What’s important to note, however, is that samples always need to be cleared first, and that you could possibly run a pretty big risk if you don’t.