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I.B. BAD: THE SALES-TO-STREAMING SEGUE

TWO WORLDS COLLIDE: The business has undergone a sea change in the seven months since the release of Adele’s 25. If Adele and Taylor Swift can be legitimately described as the last superstars of the CD era, given their ability to move truckloads of physical goods in an increasingly digital market while emphatically withholding their albums from streaming, Drake has stepped up as the first superstar of the streaming era. He’s become 2016’s dominant artist by windowing his smash Views with one premium streaming service in Apple Music while going wide with his singles pre-release, but it’s likely that this savvy artist and businessman is just beginning to innovate. Whether or not Drake’s upcoming moves are linked to Apple exclusives, it looks like the Cupertino gang already got their money’s worth for that $19m they reportedly paid him. So it isn’t surprising that other major artists are closely studying his wildly successful next-gen blueprint. Some have already hitched their wagons to this thoroughbred, including Future, DJ Khaled and French Montana, all on L.A. Reid’s Epic. It’s interesting that Drake has chosen to give a lift thus far only to these three artists.

As the business has changed, so have the primary measurements of performance. During the last five years, the industry-standard metric has morphed from straight album sales to album sales plus track-equivalent albums (TEA, with 10 tracks equaling one album), and last year to sales plus streaming (SPS) and its key component streaming-equivalent albums (SEA, with 1,500 streams equaling one album). It isn’t surprising that Drake tops the SPS chart year-to-date, and Adele tops the sales chart. The fact that Justin Bieber has the highest number of track-equivalent albums, while coming in #3 in streaming-equivalent albums, meanwhile, shows how deftly the artist, manager Scooter Braun and Def Jam chief Steve Bartels have been able to straddle both of these worlds, making Bieber the poster boy for the transition. Further, the SEA Top 10 of the first half of 2016 is made up exclusively of acts that appeal to the younger demo, for now, at least, with Bieber’s EDM-flavored Purpose the exception to the prevailing hip-hop/R&B orientation. Generally speaking, then, the music industry’s transition from a distribution business to one based on licensing is being driven in large part by young, urban-loving fans.

Braun has enjoyed great success in streaming not only with Bieber but also with more recent client Kanye West, who famously (or infamously) abandoned conventional sales altogether with The Life of Pablo. Will Braun be able to bring his newest client, Usher, into the streaming age? The Kanye and Usher signings lead to a related question: Who’s next on Scooter’s list of targets?

Sony’s takeover of the singles sales chart continues this week, with seven of the Top 10 at presstime, led by Justin Timberlake’s chart-topping “Can’t Stop the Feeling” (RCA). But this surge isn’t reflected in the streaming sector, dominated by UMG’s hip-hop acts—which here again shows the dramatic difference between the two markets and the active listeners who comprise each one. The chart comparing the top-selling singles YTD and their streaming numbers zeroes in on this trend and the respective pacesetters.  

THE RISE OF TROY: Spotify’s hiring of Troy Carter lines him up to compete directly against Jimmy Iovine and his team at Apple Music. (“If he’s hitting against Iovine, he’d 
better bring a bigger bat,” one exec quipped.) With Carter in the house, will Spotify begin to window content on its premium tier and withhold it from the free tier, something Daniel Ek and Co. have refused to implement up to now? Many believe that Spotify will continue the freemium model and to operate under the “if it’’s not broken, why fix it?” principle, in that the company certainly appears to be winning. Either way, will Carter be able to ultimately transform Spotify from what is widely perceived as an adversary of artists and rights holders to an ally? Such an outcome would isolate YouTube/Google and SoundCloud as the last remaining outlaws in the Wild West of streaming.

SABER-RATTLING: ASCAP and BMI are still operating under the Consent Decree, enacted way back in 1941, and Irving Azoff calls the situation “deplorable.” During a keynote address at the NMPA two
weeks ago, Azoff continued to hammer away at the two PROs, while insisting that 1998’s DMCA legislation has outlived its usefulness as well, to the benefit of YouTube and SoundCloud, and to the detriment of the artists and rights holders they’re short-changing under the DMCA’s protections. The two renegade sites “should play by the same rules” as Spotify and Apple, Azoff persuasively argued.

SONY SIDE OF THE STREET: Big smiles were plentiful at Sony’s new offices on Madison Avenue as company execs tore open the envelopes containing those humongous bonuses we read about on WikiLeaks.

NAMES IN THE RUMOR MILL: Larry Jackson, Faisel Durrani, Grace Miguel, Brian Manning, Steve Greenberg and Randy Goodman.

REVENUE CHART:
FAST FORWARD
The Sony side of the street (8/5a)
NEW & DEVELOPING ARTISTS: Q3 EDITION
The lifeblood of the biz is pumping. (8/5a)
OLIVIA INKS WITH SONY PUB
Big score (8/5a)
THE HAPPIEST TOP 20
Billie's back...on her own terms. (8/5a)
NEAR TRUTHS:
CAVEAT EMPTOR
Vaxx mandate gains steam. (8/5a)
NEW & DEVELOPING ARTISTS
From tender shoots to mighty oaks.
MARKETSHARE MANIA
Let's do the numbers.
DELTA VARIANT
It is not the name of a Henry Miller novel.
IS IT TIME FOR ANOTHER ROCK STORY?
Could be. Dunno.
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