Major Labels Are Making $14.2 Million a Day From Streaming

Major Labels Are Making $14.4 Million a Day From Streaming

With the “Big 3” bringing in huge revenue from streaming, will artists get their fair share?

A new study shows that the three major labels – UMG, WMG, and Sony Music – collectively earn $14.2 million a day in streaming revenue.

Music Ally analyzed the financial results of the “Big 3.”  They found that the labels’ collective recorded-music revenue from streaming grew to $1.3 billion in Q2 2017.  It grew 38.5% year-over-year.  Music Ally wrote that labels “collectively [make]” $14.2 million a day from streaming.

Out of the three, Warner Music Group emerged as the label that grew its streaming revenue the fastest.  Universal Music Group remained a close second, though it earned more from streaming than WMG.  Growth in streaming has fallen behind at Sony Music, according to the report.

Though growth isn’t as substantial, UMG earns the most from streaming

Vivendi recently posted their financial results for the first half of 2017.  UMG generated €962m ($1.15bn) in streaming revenue.  Music Ally noted that the company first announced €467m ($556m) for Q1 2017.  In the second quarter, streaming brought in €495m ($589m) for the label.  This represents a 43.1% growth year-over-year.  For the same quarter last year, UMG brought in $407 million.

WMG posts huge revenue growth

In its Q2 2017 financial report, Warner Music Group reported $360 million in recorded music revenue from streaming.  It grew 58.6% year-over-year.  During the same period last year, WMG posted $227 million.

Sony Music falls behind

Last month, Sony has posted their Q2 2017 financials.  The label made $346 million in streaming revenue, up 15.3% year-over-year.  Streaming hasn’t grown as quickly in this major label.  In 2016, it reported $300 million.

In short, every major label wins.  But will artists get paid their fair share?

In Q2 2016, Music Ally found that the Big 3 earned $934 million from streaming.  During the same period this year, the number skyrocketed to $1.3 billion.

Music Ally didn’t include Merlin’s streaming revenues, however.  It generated $353 million for members from March 2016 to March 2017.  The organization didn’t provide concrete streaming numbers for its members.

 


Image by Jeremy Schultz (CC by 2.0)


5 Responses

  1. Faza (TCM)

    A billion plus change seems like a lot of money – right up until you realize it’s global revenue for all music available on streaming services (which is pretty damn close to all music released by the Big 3’s subsidiary labels over the entirety of their existence).

    What does that mean? Quite simply, that there’s a lot of artists who might be entitled to payment, worldwide – and that in turn means there isn’t that much money to go around in the first place.

    Let’s assume there’s a million individuals entitled to a share of that billion. Sound like a lot? Well, we’re talking about a recording library assembled globally over decades (there’s no difference between A Hard Day’s Night and Swish Swish, as far as streaming is concerned). A million individuals (whether solo artists or band members) seems a pretty conservative estimate.

    Best case scenario: each is entitled to an equal share – a whole $1,300 for a year’s worth of streaming.

    Um… that’s not very much, is it?

    Of course, such a division doesn’t actually leave any money for the label. Let’s try to be fair and do a fifty-fifty split (no major label I know actually offers such terms, but we’re examining best case) – each artist would only be entitled to $650 for the year.

    The only way for one artist to earn more, is for another to earn less. In simple terms: for an individual to earn the princely sum of $1,300 (double the equal share, after splitting 50/50 with the label), another individual must earn exactly $0.

    In practice, the situation is a lot worse. A very small number of premium artists may be earning generous sums (measured in millions), whilst the vast majority of artists will earn fractions of pennies – if that.

    No label shenanigans necessary: artists not getting paid anything like a sensible income is a baked-in feature of the streaming model.

    Reply
  2. Anonymous

    “With the “Big 3” bringing in huge revenue from streaming, will artists get their fair share?”

    They get what they contracted for – which is fair. If they want more, then renegotiate the contract.

    Reply

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