The three major labels’ revenues could have grown by 29% in 2021 according to new number-crunching by Midia Research, which estimates that if UMG, Sony Music and WMG’s Q4’s followed past years’ patterns, they could be in line for $19.6bn of revenue collectively last year.
“By way of comparison, 2020 growth was 6%, and 2019 was 10%,” wrote Midia’s Mark Mulligan in his analysis. “To put it another way, major label revenue increased by $787 million in 2020, and in 2021 it was up by $4.4 billion.”
What’s interesting is the exploration of where the revenue growth came from, and how that compares to the wider market – as represented by recorded music revenues. Midia points to “large, one-off payments from the likes of ByteDance, Twitch and Facebook” as one reason why the majors’ growth may have outstripped the overall market, as well as licensing income from those same partners.
“Midia estimates that these new non-DSP streaming income sources accounted for between $0.8 and $1.2 billion in 2021. Even at the lower end of the estimates, that revenue alone would have driven the same amount of growth in 2021 as all major label revenue growth combined in 2020,” wrote Mulligan.
The major labels are excited about new revenue sources, so in one sense this analysis is positive. However, it could also be a pitfall in the UK, where competition regulator the CMA is preparing to begin its market study of streaming music, and by extension the music industry.
The details of these ‘non-DSP’ deals remain private, like those with the traditional streaming services. But we would not be surprised at all if Tom Gray’s Broken Record campaign and bodies like the Ivors Academy and Musicians’ Union encourage the CMA to probe a bit more into the terms of those deals: how music usage is reported, how the payments are shared with artists, and how they compare to the deals with the independent sector.