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The Norwegian streaming market is currently (2013) the world’s most developed with a 78% digital market share of recorded music, and a 65% share from streaming alone. Lately, several voices within the music industry have asked if a user-centric settlement of revenue might meet some of the challenges and criticism facing the current music streaming model. For the first time, the Clouds & Concerts research project addresses the difference between two settlement models, based on real listening patterns of all users of WiMP Music in Norway in August 2013 and August 2012. The results of the comparison between the two models shows that they do not differ much viewed from a bird’s eye perspective. Both models give the same share of revenue to the same top 5000 artists collectively, and the top four labels would receive almost the same revenue with a user-centric model, as in the current pro rata model (75% compared to 76%). From a more refined and detailed perspective, however, the comparison shows an overall increase of 13% in revenue for local artists when we apply a user-centric model. The report asks if a user-centric model might motivate labels to find and develop local talent, inspire artists to connect with local fans by touring and concentrate on building a fan-base, and may consequently make it less likely that small labels and local artists to withdraw their music from the streaming catalogue. Finally, a new user-centric model is likely to be perceived as a more fair model by fans, as they are treated equally according to what they pay for music, and the money they contribute is distributed directly to the labels and rights-holders behind the music, thus connecting it to each listener’s streams. To see the full report these slides are based on, please visit: www.cloudsandconcerts.com (redirects to the webpage at the University of Oslo) or download directly from this link: http://www.hf.uio.no/imv/forskning/prosjekter/skyogscene/publikasjoner/usercentric-cloudsandconcerts-report.pdf Some twenty researchers and students from the University of Oslo are involved in the research project Clouds & Concerts studying audiences experience of live music and the use of new digital music services. The growth in the festival market and streaming services like Spotify and WiMP are two notable trends in Norwegian music culture. The project is funded by the Research council of Norway, and cooperates with WiMP Music and Telenor. The report was written by Arnt Maasø based on data analysis performed by research assistants Ola Løvholm and Xin Jian in cooperation with the author. Results was first presented at the panel 'Distribution of Income in a Streaming Economy' at SXSW 14 March 2014 (http://schedule.sxsw.com/2014/events/event_MP18453). For further questions and comments, please contact: [email protected] @arnte on Twitter. Arnt Maasø Oslo, March 2014
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User-centric settlement for streaming?
Arnt Maasø, Associate professor, University of Oslo, Norway
OutlinePhysical era vs. streaming era Challenges for artists and music business Results from research on user-centric settlement
The era of physical units
Artist received a !direct share of !
a fan’s purchase
My streamsYour streams
Example
100 streams1000 streams
SUM: 1100 streams
‘Pro rata share’ = personal streams !divided by total sum of streams
=1000/1100 =100/1100
Pro rata model
100 streams1000 streams
Pro rata model
=1000/1100 =100/1100
90,9%
=1000/1100 =100/1100
100 streams1000 streams
9,1%
Pro rata model
User-Centric model
50% 50%Shared between the artists
Miriam listens toShared between the artists
Arnt listens to
User-Centric model
Challenges with existing model?
Economic disconnect between fans and artists Favors ‘quantitative’ usage Niche artists with niche audience may struggle May inhibit innovation
Results from one sample month (August 2013 + 2012)
All streams by all anonymized users of
WiMP Music in Norway
Share labelsUniversal
Sony Music
WMG & EMI
Phonofile
Other
Share of revenue August 2013
Pro rata model User-centric model
Market share inferred from the model, and not based on actual information about price tiers or price-per-stream.
Artists: cumulative shareC
umul
ativ
e sh
are
20 %
40 %
60 %
80 %
Top 5000 streamed artists August 201310 100 500 1000 5000
8,5 %
34,1 %
60,1 %70,8 %
89,7 %
7,6 %
31,8 %
58,3 %69,4 %
89,2 %Pro rata modelUser-centric model
Cum
ulat
ive
shar
e
0 %
20 %
40 %
60 %
80 %
Top 5000 streamed artists August 2012 and August 2013
10 100 500 1000 5000
89,1 %
69,2 %58 %
31,6 %7,9 %
88,2 %70,4 %
59,7 %
34,5 %
9,4 %
User-Centric 2012User-Centric 2013
Comparison 2012-2013
Note: The data in the 2012-2013 comparison here are filtered for users with more than 100 streams. Data for all other figures are with all users with more than one stream.
Share of revenue local artists
Cum
ulat
ive
shar
e
10 %
20 %
30 %
Local artists among top 5000 artists10 100 500 1000 5000
2,7 %
11,1 %
19,0 %21,5 %
25,4 %
1,6 %
9,3 %
16,4 %18,6 %
22,5 %
Pro rata modelUser-centric model
International!70,9 %
29,1 %
User-centered model favors local artists
13% !increase
* Percentages here are of the top 5000 artists (accounting for near 90% of all streams), tagged
with nationality
International!74,2 %
25,8 %Pro rata model User-centric model
User-centered model favors local artists
WiMP Passion indexSt
ream
ing
in h
ours
Number of users
* LOW passion
* HIGH passion
Passion index and user-centered model
31 of 100 top artists on the passion index are local 8 of these have significantly more (5-800%) streaming by fans in a 30 km radius from where they are from Almost all artists with high passion index benefit from a user-centric model Highlights the importance of developing close fan-artist relations
Fair for artists - fair for fans?May this be an incentive for labels to develop local talent?
Added incentive for artists to connect with local fans?
Increase legitimacy for streaming services?
Thank you!
www.cloudsandconcerts.comArnt Maasø, University of Oslo <[email protected]>
Arnt MaasøXin Jian Ola Løvholm
The Clouds & Concerts research project involves: Anne Danielsen (project leader, U of Oslo), Arnt Maasø (project leader, U of Oslo), Yngvar Kjus (post doctor), Anja Nylund Hagen (PhD), Marika Lüders, (researcher, SINTEF), Beathe Due, Johannes Bjelland, Kenth Engø-Monsen, Pål Roe Sundsøy Wenche Nag (Researchers, Telenor Group), Research assistants: Ola Løvholm, Xin Jian, Marc Casanovas, Linn Jakhelln, Gro Kirkeby, Erik N. Strutz, Hanne Tråsdahl, Ragnhild Toldnes, Inger Helseth, Helena Zarifa Pedersen.
#sxstreaming
Panel discussion
Kjartan Slette!Head of strategy!
WiMP Music
Arnt Maasø!Assoc. professor!
Univ. of Oslo
Hedvig Mollestad!Thomassen!
Artist
Moderator: Inger Elise Mey!Director TONO
Trond Tornes!Marketing Dir.!
Phonofile
#sxstreaming
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