Sony Music Unlimited Had Just 20,000 Subscribers Before Folding…

saywhat

Because if you force them to pay, they’ll probably just go to Spotify, YouTube, or Pandora.

Like Sony Music Unlimited, which according to a freshly-leaked document had about 20,000 subscribers before collapsing earlier this year.

On the ropes and  hemorrhaging cash, Unlimited ultimately shut down and tapped Spotify to power its entire service in January (it’s now PlayStation Music, btw).

This is a publishing statement leaked to Digital Music News this morning, which details publishing royalties for the entire Sony Music Unlimited service from May, 2014.  According to the source of the leak, there were few additional subscribers prior to the shutdown.

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14 Responses

  1. Name2

    Except for maybe the label’s CEO, or the artists’ moms, or the CEO’s mom, nobody is interested in a 1-label service.

    Reply
      • Name2

        “That’s not how that works. That’s not how any of this works.”

        Srsly, thanks for the clarification.

        I’m old enough to remember when Sony’s big entree into online retailing was their music retail store (which WAS Sony-only titles, premium-priced).

        Reply
  2. DavidB

    Never mind the subscriber numbers, what I want to know is can someone explain the royalty payments? Out of a revenue of approx $100,000, only about $3000 is attributed to the ‘payable royalty pool’, which is divided among approx 5 million plays, giving a per play rate of around $0.0006 per play. So where does the rest of the revenue go? The largest amount is clearly ‘Label payments, where service pays publishing’, at around $54 million. But what happens to this? Is this just snaffled by the labels as ‘advances’ or some such, or is it allocated to artists by the labels themselves?

    Reply
    • sosmithjr

      $54 THOUSAND goes to the labels. That’s the rev share that was negotiated directly between the labels and Sony Music Unlimited. The labels then split that amount with their artists according to their contracts with the artists.

      $7,485 goes to the PROs (ASCAP, BMI, SESAC) to pay performance royalties to songwriters. These rates were negotiated directly between the PROs and SMU as well.

      The $3,002 goes directly to publishers (e.g., Warner Chappell, Sony/ATV) to cover mechanical royalties. This payment is likely the result of a statutory rate structure put in place by the CRB as a result of a negotiation between the NMPA, the RIAA and DiMA back in 2012. I say “likely” because it is possible that Sony negotiated this directly with publishers too, but they probably just relied on the statutory structure.

      So, labels get ~55% and publishers/songwriters get ~10.5% of the total revenue. The 10.5% is split between performance and mechanical royalties (~7.5% for performance and whatever remains goes to mechanicals).

      Clear?

      Reply
  3. john

    you’re all talking about this shit like they had no fucking expenses. revenue of 100k, big fucking deal, they were prob hemorrhaging money out the ass hosting and serving all that music, paying motherfuckers to make sure it didn’t crash and tons of other people that you need to run a business.

    many of the richest people in technology have never run a company in the black, it’s insane.

    Reply
  4. blastjacket

    President of this will probably land another cushy job with another digital platform to restart the cycle.

    Reply
  5. Music Man

    There is no context from what this sub count is coming from. This looks more like Subs who played tracks from that particular publisher and not active subs over all.

    Reply
    • Chris

      Looks like this is a period statement for that royalty period (which I’d assume is monthly) — it begins with the total gross service revenue and calculates the universal share from there.

      I’d imagine this then became the default rate for all label payments unless an individual label or publisher negotiated a variation to the contract. The rate is low, but that’s due to their negligible subscriber base. They’d have to hugely scale in order to reach the (still pitifully low) Spotify level of payments.

      Reply
  6. wallow-T

    Isn’t this Sony’s second crash of an online retail operation? In the early 2000s there was PressPlay.

    From outside of the music biz, what I see is labels who don’t want any retail or broadcast operation to make enough profit to succeed: the resentment against MTV is often cited, even though the CD boom of the 1990s was fueled in part by MTV exposure of artists. But at the same time that labels don’t want to leave any money for the consumer-facing businesses, the labels fail miserably at their own direct-to-customer experiences.

    Reply

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