July 9th | Spotify's playlists, The DSPs vs. Canada, 100M US paid users

Hello, everybody!

Welcome to our delayed July 5th edition of our newsletter. It was a massive 4-day weekend here in the states, so we are getting this out a bit late. That said, we will be on track again with our normal newsletter cadence this Friday.

Before we hop in, two bits of housekeeping.

This newsletter is sponsored by my company Habitat Financial. Habitat helps music businesses manage boring financial tasks like royalty processing and payments. Habitat saves you time and money by eliminating the need for expensive software or complex processes. It’s our hope that label operators can spend those resources on providing their artists with the best creative and marketing services while still providing frequent, transparent, fast compensation via our Habitat dashboard. Habitat has pricing plans for music businesses of all sizes, beginning with free plans for labels earning less than $2000/month and scaling to enterprise solutions for large and complicated catalogs.

Secondly, I’ll be in Berlin next week. So, if you’re in town hit me up. I’d love to grab a coffee and catch up. You can find me at calvin@habitat.financial.

Alright, onto the news:

1) There are 8BN user-curated playlists on Spotify, 725M created this year alone, Daniel EK says

Spotify's CEO Daniel Ek recently shared some staggering stats: there are now 8 billion user-curated playlists on Spotify, with 725 million created just this year. One of the biggest draws to Spotify is how easy it is to create, share, and listen to your music via playlist. In-fact, one of features that defined Spotify in its early days was the ability to create playlists that were available offline. According to one Bloomberg News report, Spotify may be counting on further innovation in playlisting to help drive growth as it searches for new ways to monetize users under new plans. One such tool is its AI playlist creator. The feature, currently in beta, allows users to create playlists using text prompts and chatbots.

Artists often think of playlists as powerful tools for discovery and engagement. For many indie artists, landing a spot on popular editorial playlists is a career goal and a rite of passage. As Spotify continues to develop their playlisting tools there's even more potential for exposure but also more potential for playlisting culture to wreak havoc on the music industry. Marketing strategies that focus too heavily on playlisting are often unsustainable and most of the streaming fraud prevalent on DSPs today are at least somewhat connected to the DSPs playlisting tools. Artists should continue to focus on cultivating fans before they spend time and resources thinking about a playlisting strategy. The highest value playlist that an artist can land is one created by an authentic fan.

2) Over 100m Americans have access to paid music-streaming services

Matthew Bass, VP of RIAA’s Research and Gold & Platinum Operations division told Music Ally that he estimates over 100 million Americans now have access to paid music-streaming services. This includes not just full-tier subscriptions but also limited-tier services like Amazon Prime Music and Pandora Plus. Recording Industry Association of America® (RIAA) does not have detailed subscriber information on these “limited-tier” platforms, but given the information on hand, it’s a near certainty that more than 100 million individuals in the US now pay for some form of streaming services.

More subscribers mean a larger audience that's willing to pay for music and under ideal circumstances it also means a larger royalty pool for artists to draw from. The "paid user” demographic is an essential group for indie artists to target. Paid subscribers tend to engage more deeply with music content and are thought to be more likely to become dedicated fans of individual artists.

However, it’s unclear if listener and fan behavior differs between full-service streaming subscribers and “limited-tier “streaming subscribers. It’s not hard to imagine that many of Amazon Prime Music’s subscribers are not active listeners, and perhaps don’t even use Amazon Prime Music as their primary streaming source.

For Indie artists, it's important to understand the platforms where your audience is and how to reach them effectively. If you’re an ambient artist, you might have a larger audience on Amazon Prime Music than on Spotify. Consider diversifying your presence across multiple streaming services and check your data to tailor your marketing strategies accordingly.

3) Amazon, Apple, Spotify file legal challenge against Canada’s music Streaming Tax

Amazon, Apple, and Spotify have filed a legal challenge against Canada's new regulation that imposes a 5% tax on revenue from non-Canadian streaming services. As we reported a few weeks ago, this new tax is intended to support Canadian music creators and broadcasters but has been met with resistance from the streaming giants who, for obvious reasons, would prefer to keep as much of their revenue as possible.

The legal battle highlights the ongoing tension between streaming services, regulatory bodies, and the artists and rights-holders who ultimately own the copyrights to the music that streaming services make billions selling. For indie artists in Canada, the outcome could have large impacts on how these platforms operate in their territory and how revenue is distributed. Further, if the streaming services win, it’s likely that government programs that support artists and independent broadcasters will see a decrease in revenue available to them. If was a Canadian indie, I’d be getting involved, posting, lobbying, and general showing my support for the new tax. Consider joining or supporting industry groups that represent indie artists' interests to ensure your voice is heard in these crucial discussions.

That's it for this edition of Indie Insider. As always, we love hearing from you. Got thoughts, questions, or news to share? Reach out and let's keep the conversation going.

Cheers,

Calvin

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