Sony Music boss Rob Stringer took part in the parent corporation’s annual investors presentation overnight, and made two significant announcements about the music arm.
The first was a single stat. “New business categories, like social, gaming and fitness, account for nearly $500 million in revenue,” said Stringer. As far as we can tell, that’s across Sony Music’s label and publishing business.
There are some comparable figures to set this against. In September 2021, Warner Music boss Steve Cooper said his company was making $235m a year from “alternative offerings that create new use cases for music” – Facebook, TikTok, Peloton and Roblox being four examples that he cited.
(Don’t compare the figures too directly, mind: the WMG figure was an ‘annual run-rate’ stat based on its monthly revenues at the time. We’d expect the figure to be higher now, eight months later.)
Meanwhile, Midia Research boss Mark Mulligan tells Music Ally that by his company’s calculations, “non-DSP streaming” generated $2.18bn for labels and publishers in 2021, which gives you a snapshot of the value of this new business to the overall market.
Money rolling in from new partners is good, but that inevitably (and rightly) sparks questions about how it’s being passed on to artists and songwriters, amid the wider debate about whether booming industry revenues are being fairly shared with the creators of the music that powers all these deals.
That brings us onto Stringer’s second announcement, which is that Sony Music is expanding the eligibility period of its Legacy Unrecouped Balance Program, which launched in June 2021 for artists then in July 2021 for songwriters.
Originally, it was focused on musicians who’d signed to Sony Music before 2000, and had not received an advance since that year. Their unrecouped balances were not wiped, but the company chose to pay through their royalties anyway, disregarding the balances.
The expansion now is that the program will operate on a rolling basis: so the eligibility date has moved forward to pre-2001, and will continue in that vein – i.e. the eligibility date will always start more than 20 years ago. SME says it has already paid though “millions” of dollars to “thousands” of artists and songwriters through the scheme.
It’s good news, and something welcomed even by prominent critics of the major labels (Broken Record’s Tom Gray for example). WMG announced its own unrecouped advances scheme in February this year, followed by UMG in April. It will make sense for all these initiatives to work on a rolling basis, as time goes on.
There’s a link between the two announcements made by Rob Stringer. The major labels are entitled to trumpet their success at finding new sources of revenue. Indeed, to keep investor confidence high, they’re obliged to.
However, they now understand that this must be accompanied by doing (and being seen to be doing) the right thing by the artists and songwriters, especially those who have yet to see the fruits of the streaming boom – let alone the new wave of ‘new business categories’.
Call us optimists, but the fact that the boss of the second biggest major label talked up its unrecouped balances program at an investor day seems positive. Yes, of course it’s what a music company is expected to say, but dare we envision an industry where rightsholder valuations are not just about revenue growth, but about their concrete measures to be as creator-friendly as they can?
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