Business

Tunecore Artists See Big Streaming Gains, Bring In Over $130 Million in 2014

Hands Holding out Money
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Last year's numbers from digital distributor TuneCore, released Tuesday, is a snapshot of the music industry's search for a sustainable future. What must artists and labels do to survive in a marketplace that's increasingly dependent on streaming services? Get your music into more services, some of them in untapped markets, and hope for the best with consumer adoption.

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Not surprisingly, TuneCore's streaming activity rose at an astronomical rate. TuneCore artists experienced a 120-percent increase in their number of streams and downloads (not revenue from streaming services, to be clear) to 7.5 billion from 3.4 billion in 2013. As a point of comparison, streaming activity -- not royalties -- rose 54.5 percent in the U.S. last year, according to Nielsen Music. (The reason TuneCore's growth exceeded that of the U.S. market is explained below.)

The revenue gain was less impressive, however. Artist earnings -- from downloads and streaming, not the company's publishing administration business -- rose 11 percent to $134 million last year and have grown 31.3 percent in the last two years. Big gains came from developing digital markets. Royalties increased 112 percent from South America and 87 percent from Africa last year.

The revenue gain from streaming was impressive, though. TuneCore tells Billboard artists earnings from streaming "doubled" from 2013 to 2014, although the exact revenue figure was not given.

New digital partners and geographic expansion can help explain these gains. The addition of 10 new digital partners brought the number of TuneCore digital partners to over 150 in over 200 countries. In South America, TuneCore's catalog last year became available at Claromusica (the unlimited streaming service is also available in 6 Central American countries). Last year, the company also added Africa-focused Spinlet, Tapai-based streaming service KKBox, and Anghami, a streaming service that provides Arabic and international music to listeners in the Middle East and North Africa.

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A "high percentage" of earnings still come from North America and Europe, TuneCore tells Billboard. This makes perfect sense. These are the most mature digital markets in the world, and, with the exception of Japan, represent the largest recorded music markets in the world. But, the company adds, developing markets are experiencing revenue growth "at a much higher rate" than the mature markets.

Annual payouts of $134 million puts TuneCore's share of the nearly $15-billion global recorded music market at roughly 0.91 percent, assuming the global market followed the 3.9-percent decline in 2013 with a 2-percent decline last year (the IFPI will release 2014 figures in a few months).