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The Outlook for Music Catalogue Streaming Changes Everything

Report by Mark Mulligan and Zach Fuller
Cover image for The Outlook for Music Catalogue
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The 20,000 Foot View:  Catalogue was a real money spinner for the music industry throughout the sales era. First it underpinned the CD boom (convincing music fans to re-purchase old albums they already owned on prior formats). Then, through the emergence of the digital economy, it provided a stable respite from the volatility of declining overall revenues in the wake of            file sharing. With high margins (recording costs etc are already covered, and many re-issues are premium products) and low marketing costs (fan audiences are already established), catalogue has become the investment fund that labels use to turn artists into superstars. Yet, as the business shifts to the lower margins of streaming and a model based on engagement, the early warning signs are that catalogue will struggle to remain an influential component of labels’ revenue mix. With streaming’s emphasis on the new set to create a world of mega hits and audiences with less inclination towards looking back, catalogue is at a tipping point. Either it changes to meet the market or the market leaves it behind.

Key Findings

  • Catalogue acquisitions            at a new high:            million            spent on catalogue rights acquisition            2017, up from            million in           
  • The surge            demand for music catalogues has            a sellers’ market
  • Streaming creates            catalogue economics – Bruce Springsteen’s            greatest hits album generated around            his five most streamed Spotify            just            million
  • Streaming catalogue            skews towards more recent history:            catalogue streams in the UK            from the year 2000 and           
  • Music catalogue                       billion in retail revenues in            up from            billion in 2016
  • Catalogue revenue            grow to            billion by 2025            its contribution to recorded music            will fall to            from            in           
  •            of all UK catalogue streams in 2017 were for music released in the current decade, up from            in 2016
  • Older music            are abandoning new artist albums            means formats that skew towards            demographics, such as CDs, are            more catalogue orientated 
  • Catalogue marketing            product strategy requires innovation to            in the streaming era
  • Success will            upon harnessing social context and            cultural context

Companies and brands mentioned in this report: Amazon, Apple Music, BMG Music Rights, Downtown Music, Dubsmash, Guardians of the Galaxy, Man in the High Castle, Napster,, Round Hill Music, Sony Music, Spotify, Universal Music Group, Warner Music Group