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The Guardian | As dust from the gold rush settles, big record companies and elite artists emerge firmly on top. With the streaming revolution breathing new life into a once-moribund music industry collapsing under plummeting CD sales and rampant piracy, the world’s biggest record companies – Universal Music, Sony Music and Warner Music – have got their financial mojo back.

After facing financial ruin a decade ago, the trio, which control the vast majority of the world’s biggest hits with a roster of talent spanning Taylor Swift, Ed Sheeran and Coldplay to the Beatles, Adele and the Korean megaband BTS, are now valued at a combined $100bn (£73.8bn) as investors bank on the titans being the biggest winners of the streaming boom.

“Fundamentally, music is a superstar business,” says Mark Mulligan, an analyst and the managing director at Midia Research. “The streaming economy is working really effectively in many ways. Music is now seen as stable, so big institutional investors are flooding the space as they see streaming as a safe and predictable asset. But they want to invest in the biggest companies and the major labels have that market share, they have more artists – the biggest – they have more streams, more everything.”

It is the sustained streaming gold rush that sent shares in Universal Music – the world’s biggest music company which was floated by its French parent, Vivendi, earlier this month – soaring, giving the business a €45bn valuation. Bought for $3.3bn in 2011 by Sir Leonard Blavatnik, Warner Music, the world’s third biggest music company, has rocketed to a $22bn market capitalisation since being floated last year.

The big music companies have been able to use their muscle to strike increasingly advantageous deals on royalties from streaming with leading platforms such as Spotify. The basis of that negotiating power was highlighted in a report from the Intellectual Property Office published last week, which showed that the top 1% of artists account for 80% of all streams, and that 10% account for 98% of all listening by fans.
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This article was amended on 2 October 2021. The IPO report found that 47% of UK musicians earn less than £10,000, and 62% earn less than £20,000; not that 64% earn £30,000 or less as an earlier version said. That last figure relates only to those whose income is entirely based on music.
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Read the lengthy article here but full of important info for musicians:
https://www.theguardian.com/music/2021/oct/02/odds-are-against-you-the-problem-with-the-music-streaming-boom

[Thanks to Alex Teitz, http://www.femmusic.com, for contributing this article!]

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