The recent release of the movie Yesterday, a film about a musician who discovers one day that he is the only person in the world who remembers the Beatles, is an interesting starting point to study the music catalog in the era of streaming.
The music catalog (music that is more than 24 months old), was the largest money lever in the music industry during the time of the CD onwards, where the products of great margin and the monopoly of the distribution meant that the gains could be very high. Certainly, perhaps the epitome of this era, was the Beatles compilation 1, released in 2000 without new music, but still managed to sell about 31 million copies.
But those days are gone, and now the option of compilations without new music to offer is not viable in this era of streaming, where all content is easily accessible. Record companies are still trying to figure out how to keep catalogs still on stage.
The Queen catalog for example has enjoyed a good pay after the launch of Bohemian Rhapsody, just as Elton John did after the launch of Rocketman. While it is true that it is not a biographical film, Yesterday's release is another case to study to test the theory of how catalogs work in the post-streaming era.
The question of the catalog can be defined in terms of return on investment that a popular artist already has, while earnings tend to be less than a booming artist. However, the change in the discovery model means that the following situations could occur in the future of the catalog:
– The framework for catalog discovery has changed: In the era of musical scarcity, many people listened to older songs thanks to the compilations their parents had. Classical artists could also see the revival of their careers, due to a media shortage, as happened with The Monkees, who had a show in the eighties and were able to take a reunion tour.
Now, consider that young people are not growing in that context; their parents no longer have any of those songs at home, and now they have access to everything – there is no longer the limit of music at home. They can go further and discover what they want, and now there is much more music than ever, also having music created based on demography.
These young consumers have very little motivation to return to the catalog. They are also growing in a world where their attention is requested by everything from Snapchat, Netflix, YouTube … Before 1980, music used to be the only form of entertainment on demand in homes, when television was still local and home video and the game systems were not yet very popular.
Not to mention that music no longer has the same emotional value as before, but it does have more competition to get attention. Now that streaming directly monetizes attention and consumption beyond sales, this is a crucial distinction for profit opportunities. Record companies expect movies like Yesterday to provide the same momentum for streaming as with compilations.
– The mix of sales and streaming radio favors the first line: Since the music industry has changed its perception of the Spotify option with ads, and since it is now seeing the medium as a replacement for radio rather than something that cannibalizes sales, ad revenue generated is now in A good position. While it is true that advertisements tend to fall behind consumer adoption – especially in emerging markets – they are, at their most basic level, designed to capture the attention of those people who advertisers believe are the recipients of their product or service Now that those revenues are going to be flowing to the music and the podcast through streaming services, those who are going to benefit are all who can capture the attention of their audience.
As streaming changes to look much more like radio, you can expect the first line to be the main beneficiary. Successes have become major money achievers, but much of the catalog will not have the same fate – with the exception of mega-successes.
– The most popular playlists emphasize the new: With the playlists emerging as the main point of streaming, it is not surprising that when we look at the most played songs of Spotify we find that there is a disproportionate flow towards recently released music.
Together with the absence of advertisements and the possibility of playing without the internet, all new music is one of the central propositions of paid streaming. The new is also driven due to playlists, which serve a promotional purpose for the new works, unlike the retrospective functions that are believed to have.
This is demonstrated by the fact that 13% of all the songs on the list Today Top Hits They were added to the list on the day of the premiere. Something that shows that a novelty is something extremely important. In an industry that has historically driven the compilations of hits through the monetization of its successful catalogs, this has strong implications for record labels if they can no longer depend on the revenue from previously released catalogs.
For all the above, Yesterday is an interesting case study.
Are we heading towards a path where financing can be obtained through music movies (shared profits from what is not obtained from streaming?), Or is it that streaming consumption trends are too far apart to favor the catalogs?
It may take much more than a biographical film for catalogs to reach their old glory.
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