For the last few years, I’ve predicted that some kind of seismic shift is due in the music streaming world. The streaming sites don’t make any money, the artists don’t make any money. Only the majors seem to make any decent money out of this system.
For clues as to what could happen, I looked at the world of TV streaming. Two years ago, Disney made the decision to close down all their channels and withdraw all their programming from the streaming companies like Netflix. They then put everything on a new streaming service of their own, called Disney Plus.
And I’ve been wondering how long it would take for anything like this to happen with music streaming. So it’s with this in mind I read the following in Music Business Worldwide…
“WMG has confirmed to MBW today that its owned media brands now cumulatively reach more than 249 million unique visitors each month. For context, it’s not far behind the global reach of Spotify, which was attracting 381 million monthly active users (MAUs) in Q3… and will likely generate over a billion dollars in advertising revenue this year.”
Which begs the question. Why does Warner Music Group need Spotify anymore? They could reach almost the same number of people as before whilst not having to hand over 30% of every stream to Spotify, or any of the other streaming sites. They’re in such a strong position that even a dip in traffic will still result in an increase in revenue.
I’m beginning to think in the next few years, we’re going to see the majors setting up their own streaming platforms. It makes perfect sense for them – they can sell merchandise and tickets for gigs at the same time. They also have total control of the algorithm, and no competition from the other big two.
Where does this leave Spotify? In the unenviable position of having to reinvent itself as the friend of independent labels whom it wouldn’t make sense to have their own streaming platform, that’s where. And seeing many of these same independents absolutely hate Spotify, good luck with that idea.
Mark my words – the majors could soon be heading off in their own direction. And to a real champion of independent labels who can find a solution for the rest, they too could find themselves with even more money than Lucian Grainge…