Digital Media Digest

May 2017

With the accelerating pace of technological change, the League posts a monthly digest of relevant news and information regarding changes, trends, and developments that may affect the digital media activities that orchestras use to achieve their institutional missions. For each monthly digest, the League's digital media consultants, Michael Bronson and Joe Kluger, draw from a variety of websites and publications to provide excerpts or summaries of articles. (These do not necessarily represent the views of the League.)  

As a service of the League, members with questions about the information in this digest or about other digital media topics – e.g., planning, strategy, and production – may contact Michael Bronson at This email address is being protected from spambots. You need JavaScript enabled to view it. or Joe Kluger at This email address is being protected from spambots. You need JavaScript enabled to view it. .


Members of the Dallas Symphony Orchestra perform their own 'Carpool Karaoke'
In a parody of James Corden's popular Late Late Show bit, five members of the Dallas Symphony Orchestra packed themselves into an SUV and drove through Dallas on their way to the Meyerson Symphony Center, all while playing a variety of classical tunes. On the YouTube video, they play a rendition of Spring from Vivaldi's Four Seasons: Spring, and continue into a cover of Journey's Don't Stop Believing. (Source: CBS Radio)

The Minnesota Orchestra's first educational webcast is now available. The performance, which was recorded during a live Minnesota Orchestra Young People's Concert on March 2, 2017, will be available through May 18 for free streaming on the orchestra's YouTube channel. (Source: Minnesota Orchestra)
 
The score of Boston – The Documentary, a film about the Boston Marathon, is a character all of its own. It has been brought to life by composer Jeff Beal and the Boston Symphony Orchestra. Beal recorded the score at Boston Symphony Hall in February with members of the BSO. This is only the fourth movie score recorded by the BSO. Boston now joins Schindler's ListSaving Private Ryan, and Mystic River on this short but impressive list. (Source: CBS Radio)
 
Opera Philadelphia launches free Breaking the Waves audio stream
In late March, Opera Philadelphia unveiled on its website a free on-demand audio stream of its world premiere production of Breaking the Waves. (Source: Opera Philadelphia)

The first opera hit the stage over 400 years ago. Now, a company called Rainy Park Opera is creating operas for the internet. Adam Taylor, a young filmmaker based in Los Angeles, teamed up with Scott Joiner, an opera singer working on his doctorate at the Manhattan School of Music. Joiner composed the music for and sings the lead in Connection Lost: The Tinder Opera, an opera about a young man trying to connect through Tinder and failing. Taylor, who directed and wrote the screenplay, says that the entire 11-minute soundtrack was recorded first, and the video was shot to fit. The Tinder Opera is scored for 10 female singers, two male singers, a pair of pianos and a string quartet. Everyone volunteered their services, so the entire budget was just $2,000. After the opera debuted last April on YouTube, a backer offered to pay for a sequel. (Source: NPR)
 
In the past few decades, we've seen how technology has threatened the old order in cultural businesses, including the decimation of the music industry. But things are turning around. Part of the story is in the art itself. In just about every cultural medium, digital technology is letting in new voices, creating new formats for exploration, and allowing fans and other creators to participate in a glorious remixing of the work. Yet the business side of culture has looked under assault. The internet taught a whole generation that content was not something you really had to pay for. In the last 12 months, however, people started paying for online content at an accelerating pace. Huge content platforms have been criticized for the way they treat artists. Even if lots of people are paying for services like Spotify, critics say that it can be difficult for musicians, especially smaller and less-well-known ones, to make a sustainable living from the platform. Yet many artists are finding ways around these difficulties. Thanks to Facebook, Instagram, and Twitter, artists can now establish close relationships with their fans. They can sell merchandise and offer special fan-only promotions and content. (Source: New York Times)
According to the Recording Industry Association of America, music revenues in 2016 were the highest they've been in eight years, and year-over-year gains of 11.4 percent were the largest percentage increase seen since 1998. This growth has been almost entirely driven by the rise of streaming, the technology long discussed as the potential savior of the beleaguered music business. But there are some caveats. The music industry remains greatly diminished since its turn-of-millennium heights: 2016's $7.7 billion in revenue is only half of the approximately $15 billion that was being made in 1999.  And while the industry may have bounced back a bit from rock bottom, there are forces that could pull it back down. Revenues from CDs and digital sales have continued to decline in drastic measures—CDs by 21 percent year over year, downloads by 22 percent. In 2016, those losses were offset by streaming's rise (and by vinyl's continuing resurgence, which has brought it to 26 percent of the physical sales market—the highest percentage since 1985). But whether that dynamic continues is unknown: 2016 was either the start of a significant period of streaming growth, or a one-time boom. (Source: The Atlantic)
 
YouTube will no longer display ads on videos from channels with fewer than 10,000 views, a move the company says was in the works long before the current controversy over ads appearing before extremist videos. The video-hosting platform, which is owned by Google, said the new view count threshold gives YouTube enough information to ensure creators that reap money from their content are following the site's guidelines and advertising policies, and was designed to "protect creators first and foremost." The company has algorithms that can detect copyright infringement, and YouTube recently improved processes to allow users to report channels that impersonate other content creators. (Source:Los Angeles Times)
 
When music business scholars rifle through the history books in decades to come, 2016 will go down as the year when subscription streaming changed the game. According to fresh stats from the RIAA, U.S. retail revenues generated by subscription streaming platform leapt up by an off-the-charts 114% last year to brush $2.5bn. Combined with ad-funded streaming and SoundExchange distributions (from web radio platforms such as Pandora), streaming generated $3.93bn in the 12 months – up 68% on 2015. Driven by huge growth from the likes of Spotify and Apple Music, the amount of people in the U.S. paying for a streaming music service in the year more than doubled, up to 22.6m. Most importantly, streaming dragged the overall U.S. recorded music business to double-digit growth – with retail sales across all formats jumping 11.4% to $7.7bn. Meanwhile, the U.S. industry was up 9.3% on a wholesale basis (i.e. the cash that actually made its way back to record companies and artists) to $5.3bn. Yet not every aspect of streaming's growth was quite so encouraging – with one black sheep in particular. Looking at the graph (in the article), two things really stand out: the breathtaking growth in subscription music revenues, and the comparatively meager increase in the cash generated by on-demand ad-funded services such as YouTube and Spotify's free tier. (Source: Music Business Worldwide)
 
Nielsen Music's first-quarter figures for music consumption show on-demand music streaming up a whopping 35.2% in the first three months of 2017 compared to one year earlier. Consumers initiated 133.9 billion streams in the first quarter, up from 99.1 billion during the same period last year, continuing the growth of 39% overall in 2016 compared to 2015. Translated as album sales, using a formula that assigns one sale for every 1,500 song streams, the music industry also experienced continued growth, but at a more modest rate of 5.9%. Unit sales of track equivalent albums (TEA) and streaming equivalent albums (SEA) increased from 137.4 million last year to 145.5 million so far in 2017. (Source:Los Angeles Times)
 
Canada Council announces $88.5-million Arts in a Digital World Fund
Simon Brault, head of the Canada Council for the Arts, has announced an $88.5-million Arts in a Digital World Fund, 2017-2021. Details on specific projects were not revealed by the Council. Set to launch in the fall of this year, the fund will support short-term small-scale projects for less than $10,000 and large-scale initiatives with funding up to $500,000. Broadly speaking, the fund will encourage initiatives that foster digital literacy though training programs, employ digital approaches to increase public access to the arts, and support the technological transformation of the arts sector as a whole. (Source: Toronto Globe and Mail)
 
Podcast audience continues to rise according to annual report
If you wanted the stats that explain why so much energy is rightly being directed toward the creation of podcasts, an annual report from Edison Research and Triton Digital, The Podcast Consumer 2017, would do it for you. Many podcast trends continue to rise, from the percentage of the age 12+ population that has heard the term podcasting (60 percent, up from 55 percent last year) to the percentage that has listened to a podcast (40 percent, up from 36 percent last year) to the percentage that has listened in the last month (24 percent, up from 21 percent last year) or last week (15 percent, up from 13 percent). And the term "listened to" isn't a loose one. An overwhelming majority of listeners get through either all of a podcast (42 percent) or most of it (44 percent). (Source: Adweek)
 
SoundExchange CEO points to SiriusXM's growth for royalty rate increase optimism
SoundExchange president and CEO Michael Huppe is optimistic about the current rate increase trial in Washington, DC, against SiriusXM, which has more than 30 million subscribers, as of Q1 2016. Since 2013, the royalty rate has increased by .5 percent each year, from 9 to 11 percent (a percentage of monthly gross revenues). The percentage of revenue rate requested by SoundExchange is 23 percent of gross revenues. In the current proceedings, the Copyright Royalty Board (CRB) will set rates for Jan. 1, 2018 thru Dec. 31, 2022 for SiriusXM's service, as well as for the cable/satellite TV music services provided by Music Choice and Muzak. "Part of what the judges do is they look at how the parties are performing, how the business model is working," says Huppe. "SiriusXM has been incredibly successful in terms of building subscribers and their revenue and their EBITA [earnings before interest, taxes, and amortization] is getting better and better and better. So we feel we're in a good position to have a rate increase." (Source: Billboard)
 
Spotify acquires blockchain startup Mediachain to solve music's attribution problem
Spotify has acquired the Brooklyn-based blockchain startup Mediachain Labs, whose team will join the company's office in New York where they will work on developing better technology for connecting artists and other rights holders with the tracks hosted on Spotify's service. Prior to its acquisition, the startup had developed several technologies that could aid in these efforts, including a decentralized, peer-to-peer database to connect applications with media and the information about it, as well as an attribution engine for creators, and a cryptocurrency that rewards creators for their work. In short, the startup was working to leverage blockchain technology in order to help solve problems with attribution.(Source: TechCrunch)
 
Now hiring: A lawyer to fix Facebook's music licensing mess 
Facebook kicked off 2017 with promising news. Ad revenue shares went up 53%. Then, the company hired a former YouTube music executive to lead the company's charge against the music industry. Yet, in order to charge against the music industry, it would need one very important thing: music licenses. Facebook, like YouTube, currently hosts hundreds of thousands of music videos. Yet, as the social media giant lacks licenses, artists may not receive any payouts at all from video views. However, a new job posting for a Legal Director, Music Licensing points to the company aiming to rectify that problem. (Source:
 Digital Music News)
 
Spotify finally finds a way to lower licensing deals and go public
Your paid subscription numbers keep jumping. You're alone atop the music streaming mountain. You have your eyes set on an IPO. So, what do you do? If you're Spotify, you prepare to offer premium-only content. According to details tipped, the Swedish streamer would restrict the biggest album releases to only paid subscribers for a period of time. In turn, the major music companies have agreed to trim their licensing rates.  If Spotify finally lands licensing deals with major companies, it could potentially boost the company's IPO appeal. (Source: Digital Music News)
 
Although Spotify's 50 million paid subscribers may dwarf Apple Music's 20 million, a new study shows Apple Music may actually be winning the streaming wars. Verto Analytics published this month's Verto Index, which analyzes March's top music streaming properties. Apple Music topped the Index, with almost 41 million unique visitors in February on mobile devices. The streaming service counted 20% more monthly unique users than Pandora and Spotify. One reason for Apple's elevated uniques undoubtedly comes from three-month free trials. It may take some time for those figures to normalize, and Apple certainly faces challenges with churn. But pound for pound, that 'free tier' is pulling people away from mega-rivals like Spotify. (Source: Digital Music News)
 
In the past few years, all three major music labels have posted higher financials thanks to one magic word: streaming. So why exactly are artists still receiving such tiny royalty payments? According to Hartwig Masuch, CEO of BMG, the reason may lie behind a "complex" excuse major labels use to pay out lower ratios due to "higher legacy expenses." These include the cost of warehouses, breakage, and logistics, which do not apply to digital content. He said labels currently spend an average 19% of revenue on artist payouts, while BMG now pays its artists 75% of streaming royalties. If artists push to renegotiate royalty deals at 50% or above, returns could head into negative territory for major labels, but a more equitable share for artists. (Source: Digital Music News)

Calculate your earnings from Spotify, Apple Music, Pandora, Amazon, Google Play & more
How much should Spotify, Apple Music, Pandora, Tidal, Deezer, Microsoft Groove, Google Play Music and Napster be paying you? Here's a handy calculator to help you figure it all out. (Source: Digital Music News)