Trapital - herbivores to carnivores

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herbivores to carnivores

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Hey. RIP to Tina Turner. A true legend. If you haven’t seen Tina on HBO Max, I highly recommend. Glad to see she got her flowers in later years.

Today’s Trapital episode is our breakdown on the state of the music industry. I’m joined by Will Page, the author, economist, and industry thought leader. Last year’s episode was Trapital’s most downloaded episode of the year. I think this episode was even better than last year’s so let’s make that happen again.

Here are a few highlights from our chat.

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the rise of “glocalization”

Will’s latest report discusses the impact of glocalization: creating products for global markets that bring local cultures together.

In several countries — Britain, France, Germany, Italy, and Poland, among others — the top 10 songs of 2022 in each country were almost entirely from local domestic artists. The same is likely true across Latin America, Africa, and Asia.

That’s the global impact of streaming. With lower entry barriers, artists and fans can more easily connect in their local languages, dialects, genres, and cultures. Technology brought us together, which is dope.

But attention is a zero-sum game. Suppose those music listeners are tuned into local artists. In that case, they spend less time tapping into Western, English-speaking artists (and the machine behind them) that have dominated the airwaves for decades.

This is significant. Music has always relied on exporting its product. Major record labels want their music to ring in the streets from Paris to Tokyo. That’s their value prop to new artists! When prospective talents walk the halls of a record label to meet with execs, they see rooms full of pictures of artists who benefitted from the old days.

But like the great Slim Charles once said, “The thing about the old days… they the old days.”

Glocalization makes it harder for mega superstars to emerge, especially from established markets. Will says that Britain’s last true new superstar to emerge was Dua Lipa in 2017. It’s been six years since her debut album. That’s directly correlated with streaming’s hyper-growth phase.

The major record labels must sign and develop talent in each region to maintain market share. With increased costs (without the promise of increased revenue), glocalization will shift everything from KPIs, value props to new artists, and future expansion plans.

Will credits Amazon Music head Steve Boom with saying, “As the world becomes more globalized, we become more tribal.” All facts.

We’ve already seen this play out in Hollywood. China is much more selective with the U.S. movies it will bear. The Marvel Cinematic Universe cleaned up in China during the 2010s, but the country has since blocked several tentpole franchise films. Unless it’s an Avatar sequel or a Fast & Furious movie, good luck reaching audiences in Beijing and Shanghai.

You can listen to the full episode here or read more highlights below.

are price hikes short-lived?

Last year, Will talked about music streaming shifting from a herbivore to a carnivore market. After years of gaining market share, he predicted that the services would start taking subscribers away from each other.

Paid subscriber growth for music streaming services has slowed. In 2019, paid users were 46% of Spotify’s total user base. Today, it’s 40%. Will’s data suggests that 1 in 4 Apple Music users also use Spotify. Platform churn is inevitable, especially if economic constraints continue.

This dynamic contrasts the pricing debate that the industry has focused on. Major record labels want the DSPs to raise rates. But without differentiated content across services, price becomes an even more critical factor to compete on. As the labels and streaming services debate how the additional revenue gets split, the broader economic trends are hard to ignore.

AI music as a back catalog demand generation

The record labels and publishers are already frustrated that their music is paid the same rate as “whale music.” They believe AI music will accelerate this.

But AI can help the majors generate more demand for their back catalogs!

In the fight for attention, each impression reminds fans to listen to the music they love. That impression can be a new album, a live performance, an award, a sync placement, or an AI song that goes viral.

At Spotify, where Will was chief economist, he saw this play out with Eminem. His latest albums aren’t as highly regarded as his late 90s and early 2000s run, but each new release drives streams for all those songs.

That viral AI song with Drake and The Weeknd has the same power to drive demand. This is one reason why the industry should embrace generative AI music based on the music it holds the rights to.

It can drive demand for the assets they hold the rights to. That’s what’s in it for them.

These are just a few highlights from my chat with Will. We also covered:

• why the music industry may be worth closer to $40 - 45 billion
• how to improve streaming royalty rates
• the boom in both vinyl and CD sales

Listen to our full conversation here:

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​https://trapital.co/2023/05/25/the-state-of-music-with-will-page/​

money moves

• Tina Turner is having the time of her life (from NYT 2019)
• ​Glocalisation of music streaming within and across Europe
• music industry slow down?​
• ​2023 Believe in Humanity mix by Will Page

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coming soon from Trapital

Podcast: The Rise and Fall of Roc-A-Fella Records. Next week!

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