The Outlook for Music Catalogue Streaming Changes Everything
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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, Musical.ly, Round Hill Music, Sony Music, Spotify, Universal Music Group, Warner Music Group