Business Matters: Inside SoundExchange's 2010 and 2011 Numbers
Business Matters: Inside SoundExchange's 2010 and 2011 Numbers

Subscription Services Get All The Attention, Pay Artists Less Than Webcasts
SoundExchange made 18,000 payments totaling $89.5 million in the fourth quarter of 2011. That brought its 2011 distributions to $292 million, an increase of 17 percent from the prior year. The organization registered 15,300 new rights holders and performing artists, up from 12,000 in 2010.

Webcasting and other digital transmissions are a good chunk of digital revenue but it's well behind download revenue. Let's put that $292 million in perspective. That's worth 292 million track downloads at $1.29 apiece at retail. U.S. track sales were 1.27 billion in 2011, according to Nielsen SoundScan (at a variety of prices, of course). So, webcasting royalties in 2011 were equal to somewhere from one-fourth to one-fifth of the trade value of track sales. SoundExchange's $292 million in distributions is equal to 41.7 million digital albums priced at $9.99 retail and $7 wholesale. U.S. consumers purchased 103.1 million digital albums in 2011.

Although subscription services get more attention, webcasting and other digital transmission royalties exceed subscription revenue to rights holders, according to some back-of-the-envelope calculations. It would take about 3.5 million subscribers for subscription services to return $292 million to rights holders, but there aren't 3.5 million subscribers in the U.S. Rhapsody has 1 million, Muve Music has 500,000, Spotify has (very rough guess) 350,000 and Rdio, Mog and Slacker probably have fewer than 200,000 in aggregate. That's about 2.05 million. Even if my Spotify estimate is way too low, the total subscriber count isn't close to 3 million. For the sake of example, I'm assuming subscription services pay out 70 percent of revenue and all subscribers pay $10 per month. (In reality, not every paying subscribers pays $10 per month. Some pay just $5 for PC-only access.) For the sake of simplicity, I'm leaving out advertising revenue from non-paying listeners.

An asterisk: the webcasting market was worth less than $292 million in 2011. Exactly how much less is unknown. Some SoundExchange distributions were given to new registrants for royalties earned in previous years. So the amount that applies just to 2011 is going to be less than $292 million.
( Press release)

Live Nation Stock Downgraded To "Hold" Status
Live Nation was downgraded to "hold" from "buy" by Stifel Nicolaus on Tuesday. A "hold" rating can typically be interpreted as an analyst telling an investor not to sell shares currently owned and not to buy shares. The analyst did not change the target price for Live Nation. The company's stock dropped a mild 2.3 percent Tuesday while the Dow rose 0.5 percent and the S&P 500 increased 0.4 percent. It was up 1.5 percent in late-afternoon trading on Wednesday.
( Localized USA)

Coachella Exhibits A More International Flair In Its Artists
As Richard Florida points out at the Atlantic Cities blog, 26 of 61 bands (about 43 percent) playing Coachella 2012 are from London while 23 are from Los Angeles and 12 from New York. No other city accounts for 10 or more bands, although a number of cities (Stockholm, San Francisco, Paris, Austin, Toronto, Manchester and a few others) account for multiple artists on the bill.

Florida notices a trend here. "What's especially interesting is the rise of non-American music scenes. Eight of the top 14 cities are outside the U.S. In fact, slightly more than half (71) of Coachella's 141 acts hail from foreign cities. This is something of a sea change in popular culture. Of course, English acts have been a powerful force in pop music ever since the British Invasion in the 1960s. Seminal sixties festivals like Monterey Pop and Woodstock featured The Who, Ten Years After, and Joe Cocker, as well as India's Ravi Shankar and South Africa's Hugh Masekela. But the vast majority of their headliners were home-grown-and most of the English acts played music that was steeped in American blues, folk, country, and R&B."

In terms of acts per million residents, the list goes like this: Stockholm, Austin, London, Los Angeles, San Francisco, Portland, Manchester, New York, Toronto, Montreal, Paris and Atlanta (and a handful more below that). That list is similar to the list Atlantic Cities put together of cities represented in Pitchfork's best singles of 2011 list. New York artists dominated the list, but in terms of artists per capita, smaller cities fared best (Eau Claire, Wisconson, the home of Bon Iver, was #1).
( Atlantic Cities)