What Is happening to streaming’s superstars? That was the big question asked in this very column two months ago. The answer, delivered by a myriad of game-changing stats: they’re getting squeezed.
New data now shows that this trend isn’t going away – and is, in fact, calcifying. Industry monitor Nielsen recently released its half-year U.S. music trade report, which revealed the total number of interactive audio streams played in the first six months of 2019. This figure stood at 333.5 billion – up 28% year-on-year.
Within Nielsen’s report, the body also confirmed the artists who attracted the most on-demand audio streams in the States during this period. The top five for the first half of 2019:
- Drake (2.66 billion streams);
- Ariana Grande (2.59 billion);
- Post Malone (2.35 billion);
- Billie Eilish (2.23 billion);
- Juice WRLD (1.91 billion)
Guess what? The cumulative amount of audio streams accumulated by these Top 5 artists (11.74 billion) was actually smaller than that racked up by the equivalent Top 5 acts from Nielsen’s H1 2018 report (11.83 billion). The top five for the first half of 2018:
- Drake (3.33 billion streams);
- Post Malone (3.15 billion);
- XXXTentacion (1.92 billion);
- Migos (1.90 billion)
- J.Cole (1.53 billion)
It must now be beyond doubt: There is a very significant shift in the democratization of music industry revenues taking place, with the momentum swinging away from blockbuster megastars and towards a much larger “middle tier” of artists. A juicy takeaway stat: according to Nielsen’s midyear reports, Drake was the biggest audio streaming artist in the United States in both the first half 2019 and the first half 2018. But, from one year to the next, his streaming tally actually fell by approximately 670 million plays.
This, remember, happened amid a macro streaming marketplace which continues to shoot up by a double-digit percentage every year.
Stats like these fit neatly with what Spotify – the world’s biggest subscription audio streaming platform – calls, to this day, its “mission”: “[To] unlock the potential of human creativity by giving a million creative artists the opportunity to live off their art and billions of fans the opportunity to enjoy and be inspired by these creators.”
We don’t yet know how many acts relevant to that “million creative artists” goal are “making a living off their art” but we do know this: According to MBW research, the three major labels jointly saw their streaming revenue growth shrink in the first half of this year; simultaneously, Spotify’s revenue growth grew faster than ever.
The most likely conclusion, there: Spotify is increasingly paying more of its royalty money to acts outside the three major record companies.
This trend – the clear commercial emboldening of a “middle-tier”‘ of artists at the expense of megastars – is, it transpires, also bleeding into the live music arena.
One recent hard data point shows this fact very clearly. The biggest concert promoter in the world, Live Nation, saw its total concert revenues grow by 16% year-on-year in the first half of this year. The driver of this uptick? Ticket sales for shows by artists operating outside LN’s Top 100-grossing acts.
This sub-100 club saw their concerts revenue grow by 32% in H1 2019, Live Nation revealed last month – double the size of the percentage increase across its entire business.
“[We’re] seeing more artists than ever in the history of this business selling between 2,000 and 4,000 seats [per show] right now.”
The rise of the “middle-tier” artist has definitely been noticed by the world’s other largest concert promoter, AEG Presents – the owner of Coachella, which also works on tours for huge artists such as Elton John, BlackPink and The Rolling Stones.
Rick Mueller is President of AEG Presents in North America. “I don’t know whether to call it a golden age or a renaissance, but we’re seeing more artists than ever in the history of this business selling between 2,000 and 4,000 seats [per show] right now,” he tells me. “I’ve been in this business for 25 years and I’ve never seen anything like this. Artists are coming out of the club world into theater venues at an incredible rate.”
Mueller is certainly well-versed on this subject. AEG owns theater venues including Los Angeles’ Shrine Auditorium – which he says is now hosting roughly 65 shows a year. Meanwhile, the city’s Hollywood Palladium, owned by Live Nation, is hosting closer to 100 shows a year. And over in New York, the recently-opened Brooklyn Steel – co-owned by AEG and Bowery Presents – laid on a whopping 220 shows in its first 12 months of operation.
“These are astronomical numbers in major markets, but even in the smaller markets you’re seeing a significantly larger quantity of shows taking place,” says Mueller. “Bands just keep coming out of nowhere and filling these rooms.”
AEG suspects that this trend is closely related to the “middle tier” streaming artist phenomenon, with services like Spotify, combined with social media, putting the ability to build significant audiences back into the hands of performers and their teams.
“Rewind 20 years ago, for a band to get the scale and following they needed to [sell out] a 2,000 seater venue, securing radio airplay was critical,” says Mueller. “But the advent of social media, streaming and viral media in general has changed everything.”
This is all excellent news for artists hoping to quit their day jobs. Industry insiders suggest that a typical U.S ticket price for a 3,000-capacity theater venue today sits at around $40, and that, depending on production values and other factors, an act can expect to take home a 65% margin from that pricetag.
Playing ten sold-out theater shows like this across the States would therefore gross $1.2 million, from which 65% would see $780,000 retained by the artist in question.
Willard Ahdritz, the founder of artist/songwriter services company Kobalt – and the originator of the “middle tier” epithet – estimates there are currently more performers than at any point in history making a living from their recorded music catalogs. Presumably the same goes for the touring market?
“I think that’s a fair suggestion,” says Mueller. “Between what an artist can make on the shows themselves, then adding in merchandise sales, there’s a good living to be made at that 4,000-cap level.”
So what’s the catch? Evidence suggests that, just like in streaming, as the earnings of the “middle tier” of artists explode in live music, so the relative success of global superstars may inevitably start to dwindle.
According to Pollstar data, the volume of ticket sales to the world’s Top 100 tours fell 6.1% year-on-year in November-May 2018/2019 compared to the same period in 2017/2018. Revenue from those ticket sales also fell, down 3.8%. Meanwhile, there is a notable lack of new artists breaking into the ranks of mega-grossing touring artists: As Rolling Stone noted last week, the average age of an artist behind a Top 10 global tour is now a creaky 53.
Mueller says that AEG is not blind to the difficulty of elevating artists beyond the ranks of those 2,000-4,000-cap venues and into 10,000-plus cap arenas or huge stadiums. “I won’t call that a problem, but it’s definitely a challenge,” he says. “There is just so much music out there now; how do you get scale and [consumer] focus to grow someone into a true superstar?”
Mueller refutes the idea, however, that the age of the mainstream breakthrough icon may be grinding to a halt. He points to recent Rolling Stone cover star Billie Eilish, who he says has “shot right past club and theater level into an arena superstar within literally 18 months”.
And then there’s Ed Sheeran. At 28 years old, Sheeran is now a conspicuously young face amongst the world’s biggest-grossing live artists. Earlier this month, the British singer/songwriter broke U2’s all time record for a world tour’s total gross, generating a startling $736 million on a Divide-themed trek which will eventually see him play a jaw-dropping 255 separate nights. AEG is one of a handful of concert promoters that Sheeran has worked with on this global jaunt.
“What I find most impressive about Ed is that he built off his first [global] touring cycle to get even bigger second time around,” says Mueller. “That’s one of the most challenging things for artists today: after earning that early success, how do you sustain it and grow it?”
He adds: “Ed Sheeran continually puts out monster hit records. At the end of the day, that ability to build and build your audience comes down to one question: did you keep on writing songs that resonate with people?”
As some elements of the music industry rulebook get torn up in front of our eyes, it seems, other passages remain resolutely unchangeable.
Tim Ingham is the founder and publisher of Music Business Worldwide, which has serviced the global industry with news, analysis and jobs since 2015. He writes a weekly column for “Rolling Stone.”