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the north-south divide

Hey! According to the Associated Press, Taylor Swift’s Eras Tour Book sold 814,000 copies in its first weekend. At $39.99 per book, that’s over $32 million in revenue. I know… I shouldn’t be surprised by any Taylor Swift stats anymore, but still. Putting up presidential memoir numbers for a book of pictures from a concert tour is crazy.

Anyways, today's memo is about the true value of music. We have a two-parter.

The first is from my chat with Will Page. He released his annual report on the global value of music copyright. This year’s number was $45.5 billion. You can listen to the episode here and read his full report here.

The second is from my Trapital Summit conversation with Troy Carter. We talked about what’s next after streaming and touched on a similar topic: the influence of YouTube.

Here are a few highlights from both conversations. Enjoy!

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The value and volume difference

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The globalization of music is a trend that’s both as old as the streaming era, but more underdeveloped than some realize. In many regions of the world, the number of songs streamed may be quite high, but the value that those streams generate is quite low.

The chart from Will Page’s global value of music copyright report makes that point:

North America and Europe account for less than half of all streams, but they still account for 80% of the value. It reminds me of a similar distinction from Spotify’s Q3’24 earnings report, where North America and Europe account for 65% of premium subscribers but 45% of monthly active users.

In our episode, Will said that his goal was to move the industry to a “trade-weighted exchange rate index” and go deeper than just streaming volume. That would make it more clear for the industry that not all streams are created equal.

Some may view the focus on “value” as a Western-centric, Anglo-Saxon perspective. On the surface, it may appear to be in contrast with the streaming success stories from Latin America, Africa, and Asia. But both things can be true. It’s important to follow how the money actually flows. We can state the reality without disregarding the progress of any particular region.

I made the pitch to Will to create a Big Mac Index for streaming. It would get us away from the reporting on “pay per stream,” since that’s not how payouts work on most DSPs. The industry would benefit from something that offers an easily digestible way to understand the difference in value and volume.

You should listen to our full episode here.

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The price sensitivity of music lovers

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At the Trapital Summit, Venice Music CEO Troy Carter and I covered a bunch of topics, including the understated influence of YouTube.

After a decade-plus of 9.99 per month pricing for the U.S. dollar, pound sterling, and Euro, the major music streaming services have been on an annual rate hike in the past few years. Spotify is now $11.99 in the U.S. It’s safe to assume that another increase may come in 2025.

To this day, music is one of the best consumer subscription deals there is. Music fans pay Hometown Buffet prices for all-you-can-eat, A-grade quality music. Sure, there’s a lot of D and F-grade quality music on there too, but there’s something for everyone.

Music streaming pricing has stayed low due to growth and competition. Spotify was part of that millennial lifestyle subsidy, but the company has been slower to raise its rates than most companies in that group, especially Netflix. The monthly price for a Netflix premium subscription in the U.S. is $22.99 per month.

But Spotify, unlike Netflix, doesn’t have the YouTube challenge.

Sure, Netflix competes with YouTube for audience attention and advertiser dollars, but not for the same exact content. The music Spotify sells subscription access for is also readily and quickly accessible on YouTube within seconds, for the small fee of watching an ad or two. YouTube isn’t the only free ad-supported DSP, but it’s the one that’s powered by the second-largest search engine.

It’s why most DSPs' main selling point is their convenience, not their exclusivity. And convenience, frankly, has a lower price point than the combination of exclusivity and convenience.

You should listen to the full episode. We also talked about the future of music after streaming. Troy made the case for synthetic artists.

Listen to the full conversation with Troy and I here.

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Dan Runcie
Founder of Trapital

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