Latest / The Price of Music / UK government backs ticket levy on stadium and arena shows, Spotify hits 250m premium subscribers

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UK government backs ticket levy on stadium and arena shows, Spotify hits 250m premium subscribers · The Price of Music

• 0:07
  Hello and welcome to The Price of Music, the show that looks at
• 0:10
  the money behind the music industry with me, Steve Lamaca,
• 0:12
  Music Allies head of Insight. Stuart Dredge.
• 0:15
  So I've been to Minehead for the Shine Festival and before that
• 0:19
  was on the road with Fat Dog for a couple of days.
• 0:22
  So I barely feel human at the moment, or at least not not like
• 0:26
  proper functioning human. How are you, Stuart?
• 0:29
  I'm good, I'm good. Do you know?
• 0:30
  So I'm going to sound like the opposite now I'm back in the
• 0:33
  gym. I've managed to do that thing of
• 0:35
  not going to gym phrase then going back.
• 0:36
  And I've been listening to drum and bass basically exclusively
• 0:40
  really kind of help to help me run and do things and and bike
• 0:43
  and stuff. So yeah, I've had quite a
• 0:46
  healthy week. What what era of drum and bass
• 0:48
  are we talking about? Are we going back to the the old
• 0:50
  favourites or have you discovered a whole new wave of
• 0:53
  drum and bass? Do you know there is some new
• 0:56
  stuff? Got that.
• 0:56
  I'm a complete like I'm a, I'm a novice really at your own base.
• 0:59
  So I've been kind of exploring a bunch of playlists and then just
• 1:01
  marking things I like and creating this place.
• 1:04
  I think it's a lot, a lot of old school stuff.
• 1:05
  I like the the really fierce stuff that actually helps me not
• 1:09
  die on the exercise bike. So how was how was Fat Dog
• 1:13
  though? Because you were around the
• 1:15
  country, weren't you? Yeah, it was, it was terrific,
• 1:18
  really. I mean, I, I love getting out of
• 1:20
  London because, you know, you meet so many people.
• 1:23
  Some of them are listeners to Six Music and a lot of listeners
• 1:26
  to this podcast actually, particularly in Sheffield as it
• 1:29
  goes. And so it's nice, it's nice to
• 1:32
  get a different perspective on what's happening and what people
• 1:35
  like. But the geeks themselves, I
• 1:36
  mean, in fact, they've got absolutely on fire at the
• 1:39
  moment. I mean, it's, it's in some ways
• 1:42
  it's the best it ever gets for a band at this level because all
• 1:45
  the all the shows are selling out.
• 1:48
  You know, they've they've been working towards this.
• 1:51
  The set is, you know, it's, they've perfected this set that
• 1:56
  they do now and, and they're particularly in Sheffield.
• 2:00
  They were good in Manchester, Manchester Band on the Wall.
• 2:03
  That was a good gig. But then the the following night
• 2:05
  and they had some technical problems the the following
• 2:08
  night. But once it took off that gig,
• 2:09
  they looked like they were thoroughly enjoying it.
• 2:11
  And yeah, it's going really well.
• 2:13
  Well for them I allowed myself one song per night in the mosh
• 2:17
  pit right at the very end. But it's yeah, it was very, very
• 2:22
  memorable, very good. And yeah, nice to go to the
• 2:26
  Shine festival at the weekend where some of your old
• 2:29
  favourites were appearing. Who was who was good at Shine?
• 2:33
  Reverend in the Makers worked the crowd very well at Shine.
• 2:37
  But I'll tell you one of the one of the bands who always do well
• 2:40
  there and a massive sing along. Of course there is at the end to
• 2:44
  all together now The Farm pulled a huge crowd.
• 2:48
  Wow, massive massive crowd. And then I DJ Ed at 2:00 in the
• 2:52
  morning till 4. Hence as I say why I'm not
• 2:56
  entirely functioning as I as I would like.
• 2:59
  But we're back anyway. So after last week's chats with
• 3:02
  Annabella Coltrick from the Music Managers forum, which was
• 3:05
  really good, I thought had some really interesting points about
• 3:07
  music management and artist development and how managers are
• 3:10
  paid. If you missed it, do have a
• 3:12
  listen. I think it's worth it after that
• 3:14
  though. That means we have a fortnights
• 3:16
  worth of news to bring you in this episode, including what
• 3:20
  sort of money Spotify big weeks might trouser after the company
• 3:24
  released its latest financial report.
• 3:27
  Also, how much did UK music contribute to the British
• 3:29
  economy last year? And the Grateful Dead speak from
• 3:33
  the grave. Where should we should we start
• 3:35
  with pop and politics? This is has been a big story
• 3:39
  this week, reported extensively in response to the government
• 3:44
  Select committees report on the grassroots music scene.
• 3:47
  The government itself has now come back with its own thoughts
• 3:50
  and they've accepted some of the select committees
• 3:53
  recommendations, dismissed one or two others.
• 3:56
  But if you're new to all this, I mean, we covered this at the
• 4:00
  time. It comes up a lot on this
• 4:02
  program actually. But the DCMS, that's the
• 4:04
  Department for Culture, Media and Sports, set up a special
• 4:07
  committee earlier in the year to look into the challenges facing
• 4:10
  the grassroots music scene from venues through to artists and
• 4:14
  promoters. And they took an awful lot of
• 4:16
  evidence from a lot of people involved in music at the
• 4:19
  grassroots level. They then published their
• 4:23
  findings, which they then give to the ministers and officials
• 4:27
  at DCMS to see which of their recommendations would be
• 4:30
  accepted and taken on by government.
• 4:32
  And now after a few months waiting, the new government has
• 4:35
  come back with its own thoughts based on what the Select
• 4:38
  Committee had found and they've set out what they feel they
• 4:42
  would like to see happen next. Amongst the endorsement, Well,
• 4:45
  the the headline grabbing recommendation from government
• 4:49
  is that they would like to see the implementation of an
• 4:52
  industry LED levy on stadium and arena tickets to help fund
• 4:58
  grassroots music. I mean, I mean, I know you've
• 5:00
  looked through this yourself before.
• 5:02
  I weighed in. What did you make of the
• 5:03
  government report? And then I'll give you what I
• 5:05
  have. Yeah, it was one of the, it was
• 5:07
  quite government Y in the sense that it says that's a positive
• 5:11
  things while carefully making sure it's not going to commit to
• 5:14
  anything it doesn't want to do. So there was, I think there
• 5:16
  there was backing saying grassroots venues do need
• 5:19
  support. We accept that.
• 5:22
  And like you say, the levy is the big thing.
• 5:24
  And it was very much like, we think it's a great idea this
• 5:27
  should happen and it's actually quite strong saying this should
• 5:30
  happen. It wasn't just like, it's a good
• 5:31
  idea and this should be industry LED.
• 5:34
  So the government is essentially saying you as an industry need
• 5:35
  to get together and agree how to make this work.
• 5:38
  And there's kind of a bit of there is a kind of backstop to
• 5:41
  it, isn't it saying, well, if you don't make it work, we are
• 5:43
  prepared to step in and we're prepared to make everyone get
• 5:46
  round the table and bang your heads to go to do it.
• 5:48
  So there is a little bit of like, we'll do it.
• 5:49
  They're not going to make it a law.
• 5:51
  So it's not like in France where I believe it's actually part of
• 5:53
  the legislation there to do this sort of thing.
• 5:56
  But yeah, I mean, they they, they were very much like this
• 5:58
  should happen. It's a good thing.
• 6:00
  I think it'd be the quickest and most efficient way to get money
• 6:04
  to the grassroot venues to stop them closing, which I think
• 6:06
  we've talked about somewhere like the Music Venue Trust has
• 6:08
  been very, very clear on the the urgency of this.
• 6:11
  Like it can't wait a year or two for a lot of venues to kind of
• 6:14
  not go out of business. It needs to be quick.
• 6:17
  And it's a weird what is it? Because I think the original
• 6:19
  report, there was kind of time scales on it when they were
• 6:21
  saying we want this to happen by the autumn.
• 6:23
  But of course then we have the general election and that kind
• 6:25
  of threw everything back a bit. So now I believe it's kind of
• 6:29
  early next year they're looking for this to be set up by and
• 6:32
  that's where the government may step in if nothing's happened.
• 6:35
  But you probably know more than me about kind of how this sits
• 6:38
  within the live industry and what the other things have said.
• 6:40
  Yeah. I mean, I looked through the
• 6:41
  report just before we come back to the levy because there were
• 6:44
  there were some recommendations which they won't be support
• 6:47
  supporting. So there were calls for AVAT cut
• 6:52
  on ticket prices, but government is saying they're not.
• 6:55
  They're not really that interested in this as an idea.
• 7:00
  They're not even that interested in another proposal which was
• 7:02
  that the live music industry should do some research into the
• 7:06
  economic impact of a VAT cut. But that seems to have been
• 7:10
  waved away, as has the suggestion of a fan LED review,
• 7:15
  which was in the select committee's report.
• 7:17
  But government for various reasons aren't planning to take
• 7:20
  that any further either, which I think is a little bit of a
• 7:22
  shame. But the left isn't it.
• 7:24
  Yeah. Because I mean, it's, you know,
• 7:26
  these and it's it's happened with with with football.
• 7:30
  And I think, you know, the behaviour and the relationship
• 7:35
  of the fans with live music, I think some of that could be
• 7:39
  quite eye opening. Maybe that's something we can
• 7:42
  come back to later. In response to this
• 7:45
  announcement, the head of the Select Committee, the original
• 7:48
  Select Committee, Dame Caroline Dynage, has said they would
• 7:52
  prefer a review of whether the levy is working or not sooner
• 7:57
  rather than later. So I think after after six
• 8:00
  months, rather than waiting a year to see whether it's had any
• 8:04
  impact, which I think just emphasises what you were saying
• 8:07
  about the urgency of the crisis. Because let's not forget, it was
• 8:10
  only a couple of weeks ago that we reported that the Music Venue
• 8:13
  Trust are following the recent budget, which included a cut in
• 8:18
  business rate relief for small venues.
• 8:20
  And that's going to have a terrific impact.
• 8:23
  MVC was saying hundreds of venues could be in imminent
• 8:26
  peril if nothing is done. So, so yes.
• 8:30
  So anyway, the government would like to see the industry take
• 8:33
  action, as you say, rather than putting this into some sort of
• 8:37
  statutory form as they have in France where you have to give
• 8:41
  up. The live industry gives up 3%.
• 8:44
  They are saying the live industry itself should implement
• 8:48
  this voluntary levy, which, and I mean, just a quick word about
• 8:52
  this because it's it's big news and it's obviously a triumph for
• 8:57
  the Music Venue Trust. As you say, you've been
• 8:59
  campaigning on this for, for a very long time.
• 9:03
  But the only thing about the levy is despite this, despite
• 9:07
  the public backing from government, I should add, I
• 9:11
  don't want to, I don't put a downer on this.
• 9:13
  I don't want to dampen these celebrations, but I think there
• 9:15
  is, there's still a bit of work to be done behind the scenes
• 9:19
  just to work, work out how it's going to be brought in and how
• 9:25
  it will work in practice. Because there is, I mean, it's
• 9:28
  not mentioned, I've not seen it mentioned anywhere, but there
• 9:30
  are behind the scenes, there are some disagreements over the
• 9:35
  implementation and whether an industry wide levy would
• 9:39
  actually even be legal. Because, and it's all to do with
• 9:41
  competition law, because if the big promoters, if they all sat
• 9:45
  down and worked together on this to introduce a levy across the
• 9:49
  board, could they be considered to be working as a cartel,
• 9:54
  potentially increasing prices of tickets for customers?
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  And if, if they if they do that, if they, if they work in
• 10:01
  collusion to do this, I mean, even if it is as it is, it's,
• 10:05
  it's for a good cause. But does, does that break the
• 10:08
  rules laid down by the competitions authority, the CMA?
• 10:12
  Because there, there is a body of opinion, including some
• 10:15
  lawyers who say that the CMA will come down on promoters like
• 10:19
  a ton of bricks if they seem to be working together.
• 10:23
  So it's all well on goods, the government saying we support a
• 10:26
  levy, but I think they might have to, they might have to be
• 10:30
  one or two frank conversations about the practicalities of how
• 10:34
  it's set up. That's one headache.
• 10:37
  I mean, one way around this which has been put forward is by
• 10:40
  arguing that it's not the promoters who will gain if
• 10:44
  ticket prices go up. So even if they're colluding
• 10:48
  together, they're not colluding together to increase their own
• 10:50
  profits because the money will go to a charitable trust who
• 10:54
  will then pass it on to the venues and artists.
• 10:58
  But I can tell you one thing that I've, I've, I've learnt
• 11:01
  from the conversations behind the scenes around this is when
• 11:05
  it comes to competition law, one lawyer would say that's fine.
• 11:10
  And then two days later another lawyer will tell you, Oh no, it
• 11:14
  isn't. So until there is a definitive
• 11:17
  answer from DCMS and the CMA, I think it's a bit harder for the
• 11:21
  industry to, you know, we'll firstly agree to and then get on
• 11:25
  and deliver this levy. And so we shall see.
• 11:30
  But what happens, having said all this is still, as I say,
• 11:33
  it's, I mean, it's great news for the Music Venue Trust who've
• 11:37
  campaigned on this for a couple of years now.
• 11:39
  And I think especially the momentum behind this campaign
• 11:43
  really increased with the closure of Bath Moles last year.
• 11:47
  I think that really led to them stepping up their work on the
• 11:50
  the the levy, which they are describing in the Music Venue
• 11:54
  Trust announcement of this news. They were saying this is
• 11:58
  potentially this is the biggest shift in live music in 50 years.
• 12:03
  So, yeah, good week for the MVT. You also got another boost.
• 12:07
  You probably saw this as well when it was announced yesterday.
• 12:12
  We're recording this on Tuesday. The news came out on Monday that
• 12:15
  Katy Perry is the latest artist to commit to giving 1 LB of her
• 12:20
  ticket price to the Music Venue Trust.
• 12:22
  So 1 LB from all the tickets from Katy Perry's next UK tour
• 12:27
  or go to the MVT. I mean I haven't as it came out
• 12:30
  yesterday. I haven't had time to do all the
• 12:31
  maths so I can't tell you. Oh, have you?
• 12:35
  Do you know how many tickets and how much money that's
• 12:36
  potentially worth? Well, the capacities of the five
• 12:39
  venues are just over, just, it's under 86,000 people in total if
• 12:45
  she sells out because her latest music hasn't been doing that
• 12:47
  well in the charts. So, you know, assuming.
• 12:49
  So it's got, yeah, 85,600 tickets in theory.
• 12:54
  Yeah. But you know the best thing
• 12:55
  about this story that I didn't know?
• 12:57
  You know, you've seen Big Star doing a bit to support, but do
• 13:00
  you know where her first UK concert was ever?
• 13:02
  No, I don't. I don't.
• 13:03
  It was, it was, it was the Water Rats in Kings Cross right at the
• 13:07
  start. And I don't mean in like a big
• 13:09
  artist plays a grungy small venue as a publicity stunt.
• 13:13
  You know, it's right at the beginning when she was just
• 13:14
  coming out, she played the Water Rats and then she played to
• 13:16
  Scala. So she is actually an example of
• 13:20
  a arena act who genuinely did start off here in the small
• 13:23
  venues that will now be supported.
• 13:26
  For people who've never been to the water rats in Kim's cross,
• 13:29
  what does that hold? 200 people, possibly 250I.
• 13:32
  Used to go and see the darkness there in their early days.
• 13:34
  She used to play at friends clubs.
• 13:37
  Of course I. Did.
• 13:37
  Of course you did. Absolutely.
• 13:41
  Yeah, you know, that was and there's actually, there's a
• 13:43
  YouTube video you can go and search for Katy Perry playing
• 13:45
  the Water Rats. And it is like, it's pretty
• 13:47
  fascinating because you're on this tiny stage playing an
• 13:50
  acoustic guitar. You know, it's a far cry from
• 13:52
  arena set, but it's good. It's a nice little.
• 13:55
  I mean, again, that's that good thing back that entirely backs
• 13:58
  up with the music Venue Trust have been saying, isn't it about
• 14:00
  the pipeline of, you know, new music?
• 14:03
  It has to start somewhere before it makes its way to the arenas.
• 14:08
  Perry, of course, follows in the footsteps of Coldplay and Sam
• 14:11
  Fender in donating money from their forthcoming tours to the
• 14:16
  MVT. So some good news for the
• 14:18
  beleaguered live scene. If you have any thoughts on this
• 14:21
  or any of the stories this week, they're always welcome.
• 14:24
  You can e-mail us at the podcast e-mail address, which I'll give
• 14:27
  you at the end of the show, or get in touch via our various
• 14:30
  social media addresses. Like there are some big stats
• 14:37
  stories this week which I know you're looking forward to.
• 14:40
  Stuart, before I'm just going to save up the Spotify one for just
• 14:44
  a second. Before we get to the latest
• 14:45
  Spotify financials, here's some headline figures for how the
• 14:50
  record industry in this country is doing as a whole.
• 14:54
  Because apparently very well, the UK music industry's
• 14:58
  contribution to the economy hit a record £7.6 billion last year.
• 15:05
  How do we know do this? Who's calculated these figures?
• 15:07
  Where have they come from? Oh, just some bloke on the
• 15:10
  street who we've met this morning taking a coworker.
• 15:14
  No, this is this is not this is some bloke at some blokes and
• 15:18
  women at UK music. So this is the umbrella body for
• 15:21
  the music industry that covers live, it covers recorded, it
• 15:23
  covers everything. And they use annual economic
• 15:26
  report, which kind of, and we've talked about this before, the
• 15:28
  dynamic is usually here's all the way we're growing and we're
• 15:31
  big and important and it's telling government look how good
• 15:34
  this industry is, how you know, how, what good it is, while also
• 15:37
  saying, but we're also worried about XY and Z.
• 15:39
  Please help us with this. And this report falls into that
• 15:42
  kind of dynamic. So as you say, £7.6 billion is
• 15:47
  the contribution to the economy and that's up 13% year on year.
• 15:52
  That includes £4.6 billion of exports, which is another record
• 15:55
  high. And that's up 15%.
• 15:58
  And then, yeah, the industry employed 216,000 people last
• 16:01
  year, which is up 3% and then a new high, which I think is kind
• 16:05
  of significant because during COVID, I think people talked a
• 16:08
  lot about job losses and people were leaving the live industry
• 16:10
  especially. But in terms of the people
• 16:12
  employed by Music Andrew, that is going up.
• 16:15
  And so it is this thing of like saying, look at all the big
• 16:17
  numbers, look at the growth. This is a really healthy
• 16:19
  industry. It's worth the government
• 16:20
  backing it. And then the report also talks
• 16:24
  about grassroots venues closing, festivals shutting down.
• 16:27
  It talks about something we talked about recently about UK
• 16:30
  artists, globe streams globally falling in terms of the share of
• 16:33
  the other market. It mentions Brexit, which I was
• 16:36
  quite interested in because I don't know, don't you think
• 16:38
  about this? But in in politics, Brexit's
• 16:41
  kind of become this thing no one talks about really.
• 16:43
  Isn't it like Labour have been quite shy of mentioning it for
• 16:46
  fear of being accused of, you know, wanting to go back into
• 16:48
  Europe? And people who supported Brexit
• 16:50
  have been quite shy of talking about it because it's been a
• 16:52
  terrible disaster in some ways. But music is the key.
• 16:56
  I think this report talks about the fact that artists have been
• 16:58
  losing out because of some of the red tape.
• 17:00
  So that's kind of interesting. And it mentions AI regulation
• 17:04
  and it mentions giving children free access to music making.
• 17:07
  And it talks about the cap on secondary ticketing prices.
• 17:10
  So it's kind of a we're growing, these are things are great, but
• 17:14
  here's what we want you as the government to do.
• 17:16
  So it's that that sort of double problem message.
• 17:17
  But yeah, it's kind of a weird, weird to me that we're not
• 17:21
  weird, but interesting to me that music exports, we're up 15%
• 17:25
  of the record high. But there is this worry.
• 17:28
  Oh, hang on. But our artist's share of
• 17:29
  streams is falling. So that's one interesting
• 17:32
  parallel message I think where we're having to sort of talk
• 17:34
  about the good, but also warning about trouble ahead if if we
• 17:38
  don't get more support in various ways.
• 17:41
  We'll come back to music exports.
• 17:42
  If you're an aspiring artist, we have something on the, on the
• 17:47
  infamous Meg's scheme coming up. But later on.
• 17:50
  We must do this though, because this is this is where and I I
• 17:54
  imagine and hope I I'm not speaking too freely on your
• 17:58
  behalf listeners, but I imagine some of you will be gritting
• 18:01
  your teeth or grinding your teeth during this next story,
• 18:06
  which is the latest Spotify figures.
• 18:10
  It seems Spotify now has 252 million premium subscribers and
• 18:16
  402,000,000 users of its free ad supported service as a result of
• 18:23
  this. What's this done into Spotify's
• 18:26
  share price and who's going to benefit from these figures?
• 18:30
  Maybe run through the actual that's first and then tell us
• 18:34
  the financial implications. OK, yeah, so let's do numbers.
• 18:37
  So yeah, like you say, 252,000,000 subscribers, that's
• 18:41
  up 12% from this time last year. 402,000,000 free listeners,
• 18:44
  that's up 11%. So there's now 614 million
• 18:47
  people around the world listening to Spotify, which I
• 18:50
  remember the days when it was set up in the early days of
• 18:52
  streaming, when they were this idea of having 100 million
• 18:54
  people paying for streaming was kind of a pie in the sky dream.
• 18:57
  And now the biggest service alone has 252,000,000 pairs.
• 19:00
  So in, in, in the big long term story that that's kind of quite
• 19:04
  big and, and good. Its revenues are up 19%.
• 19:08
  So Spotify made around £3.3 billion last quarter.
• 19:13
  And this is quite important. It, it, it was at a record
• 19:16
  quarterly operating profit of 454,000,000, right.
• 19:20
  And, and the reason I pull that out is like a lot of people
• 19:22
  still have this idea of in the heads of Spotify as being it
• 19:25
  makes massive losses, it loses money every quarter.
• 19:28
  But actually this year that has turned around.
• 19:30
  And, and actually the CEO, Daniel Lex said in their
• 19:32
  earnings call, this is going to be our first full year of
• 19:35
  profitability. And so they've they've pulled on
• 19:38
  some layers, they've spent less, they've made some layoffs,
• 19:40
  they've done a bunch of things to kind of stop spending as much
• 19:42
  money and they're now a profit. And that and that is a big turn
• 19:46
  around. The other thing, yeah, you
• 19:49
  mentioned the share price. I mean, I, I took a look
• 19:52
  actually at the beginning of this year, based on its share
• 19:54
  price, Spotify was worth $37.2 billion.
• 19:58
  That was its kind of market cap. Right now it's worth $92
• 20:03
  billion. So it's not quite tripled in
• 20:05
  share price, but this year it's been, it had gone down the
• 20:08
  previous year and that was think of Spotify share prices falling.
• 20:11
  This year it's gone up. And that is something that Wall
• 20:14
  Street loves, but it's something in the music industry.
• 20:17
  Obviously it sparks discussion when people are criticizing
• 20:19
  Spotify for other things like artist payments.
• 20:22
  Yeah, yeah, yeah, of course. So the last time or one of the
• 20:27
  last times we reported on their financials, I think Daniel Eck
• 20:31
  himself offloaded quite a few shares.
• 20:34
  Has that happened again now that the shares have reached this new
• 20:40
  level? Now they're back up to being,
• 20:43
  well, as you say, nearly three times as much as they were worth
• 20:46
  at the start of the year. Is the temptation maybe to cash
• 20:50
  out for some of them? Well, that's happening, yeah.
• 20:53
  So as a public company, they have to declare when people
• 20:56
  connect to the company as selling a bunch of shares.
• 20:58
  So in the days after the financials, yeah, Daniel X sold
• 21:01
  75,000 shares, which is value about $35.8 million.
• 21:06
  It's Co founder though. So the guy called Martin
• 21:08
  Lauritsen, who was the Co founder of Spotify, he sold
• 21:10
  nearly 9 or company owned by him, sold 960,000 shares nearly
• 21:14
  for 383.75 million, which is Christmas bonuses go.
• 21:20
  I mean, that's, you know, there's gonna be a single
• 21:22
  present. But then and a bunch of other
• 21:23
  executives and directors of the company sold shares more to
• 21:26
  millions, which so this is where I make everyone grit their teeth
• 21:29
  maybe even more because this is kind of normal.
• 21:32
  Like this is normal for a public company.
• 21:34
  Like the executives and directors get shares as part of
• 21:36
  their packages. And the responsible time to sell
• 21:39
  them is after you do your quarterly financials because
• 21:41
  you're not using secret insider information to kind of sell them
• 21:44
  investment. You know, you declare the
• 21:45
  financials, everything's public and then people will sell.
• 21:48
  So it is normal. And when you look at how
• 21:51
  Spotify's valuation has grown, how the share price has grown,
• 21:55
  this is not an unexpected phenomenon that the people
• 21:58
  who've been given those shares sell them off on his part.
• 22:00
  But it does. I mean, the optics of it in the
• 22:03
  music industry are always the same.
• 22:05
  I think people look at that and go, look, that guy who Co
• 22:07
  founded it has made 300 and, you know, $83 million from his
• 22:11
  shares. But artists are getting paid
• 22:13
  pennies. And that is the kind of the tone
• 22:14
  of debate sometimes. And there was another little
• 22:18
  story, another filing this week. Actually, we've talked about it
• 22:22
  before. They're kind of mechanical
• 22:23
  royalties in the US where they reclassified themselves as a
• 22:26
  bundle because they had all the books.
• 22:27
  That means paying lower royalties to publishers.
• 22:30
  And in a filing this week they said yes, actually that's been
• 22:33
  €94 million. So that's the amount, that's the
• 22:36
  amount they've paid. That's the amount they've not
• 22:38
  had to pay publishers in the US because of this change in how
• 22:41
  they classify themselves. So you've got that awkward
• 22:44
  juxtaposition of like, here's how much less we're paying
• 22:47
  publishers than we would have done.
• 22:49
  Here's how much money people are saying.
• 22:50
  So even though no one's did anything wrong, there's no under
• 22:52
  handshake behaviour. It's what happens with public
• 22:54
  companies. It's going to filter into that
• 22:56
  debate, I think. I mean, I mean what I mean, what
• 22:58
  do you think? I mean, I think you were saying,
• 23:00
  speaking for the listeners, what do you think about when you see
• 23:02
  these different figures and. I mean, obviously, you know,
• 23:05
  they look, they look shockingly big, don't they?
• 23:09
  I mean, if you go back to the, if you go back to the start, you
• 23:13
  had to have faith in Spotify. Someone had to put the money in,
• 23:16
  someone had to start it. It's been successful there for
• 23:19
  the person who helped at the start reaps the benefits of its
• 23:23
  success. But as you say, the optics are
• 23:25
  straight and also the that move where you should probably just
• 23:30
  run through that again just in case new listeners don't know
• 23:34
  what we're talking about. But there was, yes, they
• 23:37
  reclassified certain parts of their service into this bundle
• 23:41
  thing. So when they added, I think when
• 23:43
  they added audio books, there was a technicality which meant
• 23:46
  that they didn't have to pay the music publishers as much in
• 23:50
  royalties. Is that is that about right?
• 23:53
  That is it, yeah. So it's all, again, not illegal.
• 23:55
  Well, there's discussions about how legal it is, but in the US
• 23:58
  system, if you're a bundle, if you have music with other stuff,
• 24:01
  you pay lower mechanical royalties because you're not
• 24:03
  just a music service. And there was a huge argument
• 24:06
  about this, partly because of what they did, but also that I
• 24:09
  think publishers said it was Sprague on them.
• 24:11
  Suddenly one day they said, we're paying low royalties.
• 24:13
  Thank you, goodbye. And again, all this, I mean, I,
• 24:17
  I, I always have this view of I'm, I'm observing this and
• 24:20
  reporting on it. Like I don't sit there with a
• 24:22
  pitchfork or a placard. But I do see that when you have
• 24:27
  a figure about people making money on one side and when you
• 24:29
  have a debate about artists on the other side, it is, it's
• 24:32
  just, well, I think it's one of those challenges really, because
• 24:35
  I mean, Wall Street loves it. If Spotify makes a profit, it's
• 24:38
  share price goes up. It loves big bonuses that things
• 24:40
  are deserved. But it's also the company is
• 24:43
  also operating in this area where it's arguing to musicians,
• 24:47
  well, we pay off for you and here's how and here's how and
• 24:50
  you know. I think, I think when the two
• 24:52
  bits of news come at the same time and if they're saying look,
• 24:54
  we've paid 90, how much less are they playing now they've
• 24:58
  reclassified their services as a bundle.
• 25:01
  Basically they said so that they're being sued over this by
• 25:03
  by organization in the US So they said if they win this
• 25:05
  lawsuit, we'll have to pay €94 million more roles.
• 25:08
  So that's the so The thing is, so their profitability is
• 25:11
  benefit has benefited from the fact that they've changed this
• 25:14
  service, which means they're paying less in royalties to
• 25:16
  artists. So the profitability is helped
• 25:18
  by moves like this where they're basically not paid out £90
• 25:23
  million. That's a real sticking point,
• 25:25
  isn't it? Because that's basically saying
• 25:27
  we're more profitable because we've done this thing where we
• 25:29
  pay you less. That's not possibly a good, a
• 25:35
  good look. I, I, I understand everything
• 25:37
  else is fair in terms of, you know, the, the way business is
• 25:40
  conducted. But there are times where, I
• 25:43
  mean, particularly this week, because haven't, isn't Amazon
• 25:47
  doing a similar thing? Amazon Music, aren't they,
• 25:50
  aren't they adding audio books? Are they doing?
• 25:52
  Are they going down the same route?
• 25:54
  Yeah. So this is so as we're talking,
• 25:56
  this is about to be announced when this comes out, we'll have
• 26:00
  it in advance. So yeah.
• 26:01
  So you know, Amazon, Amazon owns a music streaming service,
• 26:03
  Amazon Music Unlimited, and it also owns Audible, the audio
• 26:07
  book service. So that's an Amazon company.
• 26:09
  So what's happened is they say, right, if you're an Amazon Music
• 26:11
  Unlimited, it's in the UK and US and Canada.
• 26:14
  For now, you can choose any book from Audio Audible, any audio
• 26:17
  book from Audible, and listen to that as part of your music
• 26:20
  subscription. OK.
• 26:22
  And if you want more than one, you have to subscribe to Audible
• 26:24
  or pay for it. But yeah, so when it's
• 26:26
  essentially it's it's a different a different kind of
• 26:29
  system to when Spotify added audiobooks.
• 26:31
  But essentially it's the same audiobooks are now part of your
• 26:33
  music subscription. And when Spotify did that, like
• 26:38
  we've talked, it made it a bundle.
• 26:40
  Lower mechanical royalties ever all hell broke loose.
• 26:42
  And so last night, I actually so ahead of this, this this news,
• 26:46
  they did some pre briefing for journalists.
• 26:48
  So I interviewed Amazon Steve Boom, who's their boss of audio,
• 26:52
  And I asked him, like, what does this mean?
• 26:53
  Like, are you going to be a bundle, too?
• 26:54
  Are you going to pay lower royalties?
• 26:56
  Will the publishers be waving pitchforks at you as well?
• 26:59
  And he kind of parried and said, oh, well, we're keen to work
• 27:01
  with a partnership, but he didn't really say yes or no.
• 27:03
  But then ahead of this story coming out, the NMPA, who are
• 27:07
  the chief kind of antagonists of Spotify in the US, They're the
• 27:10
  Publishers Association over there.
• 27:12
  They've been very critical, saying they're screwing
• 27:14
  songwriters. They put a statement out to use
• 27:17
  with the story saying we're optimistic about the Amazon
• 27:19
  bundle. Amazon is engaged with music
• 27:22
  publishing and songwriting industry in a respectful and
• 27:24
  productive way. So it's and they all said we
• 27:29
  don't expect this to decrease revenue for songwriters.
• 27:32
  So it's kind of interesting like this, this thing that Amazon's
• 27:34
  doing is logical. Like they have audiobooks over
• 27:36
  here, they have music over here. Bring them together in some form
• 27:39
  so you can listen to at least one audiobook a month.
• 27:42
  But it's also the NMPA is using it as a another sort of stick to
• 27:47
  beat Spotify with saying, look, they're doing this in a way we
• 27:50
  like. So it's possible and you didn't.
• 27:52
  So it's going to it's going to reignite that conversation about
• 27:55
  how Spotify did it and why Amazon is doing it differently
• 27:57
  and, and all that sort of thing. So so yeah, it's kind of, I
• 28:01
  think every narrative needs goodies and baddies, doesn't it?
• 28:04
  I think to to and that that's the kind of narrative being set
• 28:07
  up here that you can add audio books to music service in a nice
• 28:10
  way for publishers point of view or a not nice way.
• 28:13
  And Amazon is. Do you know what I think we I
• 28:17
  think they should just take it in turns.
• 28:18
  I think all those streaming services should just have a, you
• 28:21
  know, just have a month where they're the bad guys because I
• 28:24
  mean, constantly appears to be Spotify.
• 28:26
  But you know, let's let's bring in Apple, Amazon, let's all
• 28:29
  let's all have a go. Let's, let's, let's, let's just
• 28:33
  share, share the burden of being the bad guy.
• 28:37
  Well, that's it because you know, we talked there was a
• 28:39
  thing earlier this year, Spotify puts out an annual report called
• 28:41
  loud and clear where it's like, look at all the money we're
• 28:43
  paying to musicians and that's it's it's moment of like, look,
• 28:47
  we are the good guys really. So you're, I mean, you're right,
• 28:50
  there is a certain extent this of Spotify trace to get on the
• 28:53
  right side that they make sometimes and it's, you know,
• 28:56
  it's, it's ongoing. But yeah, I mean, I think that
• 28:59
  I, I mean, I'm interested because I, I don't listen to
• 29:01
  audiobooks. I don't know if you do.
• 29:03
  Yeah, I do. I've never I.
• 29:05
  Mean I'm curious and it's always been like I don't know if I've
• 29:08
  got another 8-9 quid a month for a different subscription.
• 29:12
  That's what's put me off really. Like I just I have I have a
• 29:15
  bunch, I pay for stuff and I have a bunch of descriptions.
• 29:17
  I have Netflix, but so on. So I'm curious to sort of see if
• 29:21
  I because I love reading. I love reading books, but I've
• 29:24
  never got into audiobooks, so when these come into music for
• 29:27
  me, I'm like, oh, I can try it out.
• 29:29
  I can see if I like this way of, you know, it's not really is it
• 29:33
  listening? Yeah, that's that's the thing.
• 29:36
  They're trying to tease people like you into opening up the
• 29:39
  wallets again, I think. I don't think these are bad
• 29:45
  guys. Certainly you were very excited
• 29:47
  by this social music service, Hangouts, who I'd never come
• 29:50
  across. Hangout has gone live.
• 29:52
  What is Hangout and why should it be of interest to our
• 29:56
  listeners? What's the difference?
• 29:58
  What's the What's the story? OK so like you know how people
• 30:01
  might reminisce about post punk bands of the 1980s music fans?
• 30:06
  Yeah. I'm very, very much aware of,
• 30:08
  aware of that, yeah. But this is the equivalent for
• 30:11
  like music start-ups. So.
• 30:15
  So back in 2011, there was a a company called Turntable FMI.
• 30:18
  Don't know if you've ever heard of it at the time.
• 30:20
  Right. No, I don't think I did.
• 30:22
  It was an avatar chat room, which is where I might start
• 30:24
  losing you, but you'd start creating your little cartoon
• 30:27
  character and you'd go into this visual chat room and you could
• 30:30
  DJ, you could like choose songs to play to everyone else who's
• 30:33
  in that room, and people could chat.
• 30:35
  So it was like a sort of chat room where your little
• 30:37
  characters and you played music to each other.
• 30:39
  And for about a year it was the hottest thing in like music
• 30:41
  tech. It was like, wow, we're all
• 30:43
  going to be like Lavatars deejaying to one another
• 30:45
  forever. And this service turntable FM,
• 30:49
  it was really popular. And then two years later it shut
• 30:50
  down partly because it it eventually got licensing diesel
• 30:55
  labels and it couldn't make the numbers work.
• 30:56
  Like there wasn't enough money coming in to anyway.
• 31:00
  So one of the people who was involved in an earlier decision
• 31:02
  that has has basically brought the idea back as something
• 31:05
  called Hangout. So there's a guy called Joseph
• 31:07
  Pearler. He was in Turntable FM very
• 31:09
  early on the staff there. And it's the same thing.
• 31:12
  It's you create a little cartoon figure, you go into a little
• 31:14
  chat room, you DJ to your friends or strangers.
• 31:17
  But this time it's got label deals from the start.
• 31:20
  So it's kind of on a legal footing.
• 31:22
  It's like all sorted from day one.
• 31:25
  And it's kind of fun. Like I, I'm a sucker for things
• 31:27
  like this. Like whenever there's a kind of
• 31:29
  cool, fun new service, I'm like, wow, that's cool.
• 31:33
  And I suppose we were in it last week kind of a musical.
• 31:35
  I team, we were kind of in there DJ into each other, which again,
• 31:39
  I mean, it's it just reminds you of of why playing records to
• 31:43
  friends is fun. You know, that's just an age-old
• 31:46
  thing of having people round to your to your house, to your room
• 31:49
  at your university or wherever. And playing the music like this
• 31:53
  is just trying to make that digital, which I know some
• 31:55
  people were like, I would rather have my friends there in front
• 31:57
  of me, you know, and that's that's fair enough.
• 32:00
  So the only question I have about this is I wonder if it's
• 32:05
  going to just appeal to people like me who remember turntable
• 32:08
  FM and a nostalgic for it, you know, like, like people remember
• 32:12
  Myspace fondly and want something like that, you know,
• 32:14
  because I think if you're making this for young people, you'd
• 32:17
  probably build it in Fortnite or in Roblox in one of these
• 32:20
  platforms where everyone is 10s of millions of kids are already
• 32:23
  playing and chatting. So that's my kind of one
• 32:26
  question is this is this is a fun idea, but I wonder if if
• 32:31
  you're going to you'd go somewhere where those people are
• 32:33
  already rather than trying to get into a new thing, but.
• 32:37
  I know what I'm wondering what is.
• 32:39
  What is your DJ avatar? Oh, so I'm a Penguin currently
• 32:44
  because. It gives you.
• 32:47
  I don't know why? I asked.
• 32:49
  It gives you all these human sort of cartoons to choose from
• 32:52
  and I'm like, well, none of them look like me, you know, so why
• 32:55
  not pick an animal? But the Penguin does.
• 32:59
  Well, you know, you might as well go if you're not going to
• 33:00
  be, you know, not going to be a human doesn't look, you might as
• 33:02
  well be an animal that you know, but the funniest the the, the
• 33:05
  thing I love about it a little touch is when you're deejaying
• 33:08
  in this room, your avatar starts sort of bopping up and down, you
• 33:11
  know, like a DJ is enjoying its thing.
• 33:15
  And the other people who are deejaying with you, they just
• 33:17
  stand there motionless like they're really unimpressed
• 33:20
  unless they tap on like a a green thumbs up, in which case
• 33:24
  they start bopping in time with you.
• 33:26
  So. Wow, tough kind of this is this
• 33:29
  is all the this is all the pressure of when I go out and do
• 33:32
  a DJ set, but in the comfort of my own room.
• 33:35
  Exactly. Anyway, I might give that a go
• 33:37
  hang out. We've got a couple of more
• 33:39
  stories. Well, actually this this one is
• 33:42
  less of a story and more of a public information service
• 33:45
  really, if you happen to be a, well, an aspiring musician.
• 33:51
  The UK's Music Export Growth Scheme is opening up for new
• 33:55
  applications once again. MEGS is back again For newer
• 34:00
  listeners who are probably already drowning in acronyms
• 34:03
  this week, tell us about MEGS, Stuart and what we can get out
• 34:07
  of it. Do you know Megs is that rare
• 34:09
  thing and it's something done by the UK music industry that no
• 34:12
  one fights about. Although having said that will
• 34:15
  probably get a letter there for someone saying I think Megs is
• 34:17
  terrible. But it's one of those things
• 34:19
  genuinely it's a universally good thing.
• 34:21
  So it's a fun basically that independent artists and the
• 34:24
  companies they work with can apply to to kind of assist them
• 34:27
  with marketing campaigns is the wording.
• 34:28
  So if they're doing stuff internationally, if they're if
• 34:30
  they're going on a tour to the US or if they're preparing a
• 34:33
  release campaign somewhere else in the world, they can apply.
• 34:37
  They can get a grant of between 5000 and 50,000 lbs.
• 34:41
  And they can use that to help them build their audience
• 34:43
  overseas. And like it's got some good
• 34:44
  names like Self Esteem did it, Dave Jungle Wolf, Alice Kay,
• 34:49
  Tempest, Bicep, Biba, Doobie, Young Fathers and Ezra
• 34:53
  Collective and Rena Sorayama. Some some artists who have been
• 34:56
  proven have had success on the global stage from Britain got
• 35:00
  money from this scheme early on. And yeah, so it's, I think it's
• 35:04
  the 23rd round of it now. So it's been going a long time
• 35:07
  and the government has backed it with some extra cash fairly
• 35:09
  recently. So yeah, you could apply to it.
• 35:12
  So this is my plan, this is what I want to use the money for.
• 35:14
  And they reckon this is something the BPI, they always
• 35:17
  really talked about because it runs it that every pound spent
• 35:20
  on this scheme, we reckon it's generated 14 lbs back in
• 35:22
  earnings by those artists. So in terms of I was going to
• 35:26
  say bang for your buck, but we need like a British phrase,
• 35:28
  don't we, for bang for your buck.
• 35:29
  I don't know, like punch for your pounds or something.
• 35:33
  But you know what? But like, it's, it's, it's this
• 35:36
  thing that's actually worked and it's helped British artists kind
• 35:38
  of, you know, with their international ambitions.
• 35:39
  So if you are in that position now you can search for Meg's and
• 35:45
  and go and apply. Excellent.
• 35:46
  And finally for this week, the Grateful Deads Jerry Garcia is
• 35:51
  the latest AI generated voice to be added to 11 Labs roster of
• 35:57
  Dead celebrities who can read out articles, audio books and
• 36:01
  newsletters in its mobile app. Here you go.
• 36:05
  What? What's the what what's?
• 36:09
  What's the point of this? What is the point?
• 36:13
  It's an eerie thing, but it's like a new part of this AI
• 36:16
  future we're heading into like, you know, like it or not.
• 36:19
  So it's interesting. I mean, 11 labs, an interesting
• 36:21
  company. So it's a company that's got
• 36:22
  like a reader app. So they'll read out to you like
• 36:24
  say articles, audio books, newsletters, even PDF files.
• 36:29
  And the twist being it's dead celebrities voices reading it
• 36:31
  out that they've recreated using AI.
• 36:34
  So like I wrote about them earlier this year when they had,
• 36:36
  they announced they had like Judy Garland and James Dean and
• 36:39
  Burt Reynolds, AI versions of them to read to you.
• 36:42
  But now they have Jerry Garcia too, which the important thing
• 36:45
  about this is all of this is licensed.
• 36:47
  So they've worked with the estates of these celebrities
• 36:49
  and, and got their permission. They often have quotes from
• 36:53
  their children who often run these estates saying we really
• 36:55
  approve of this. It's a really nice thing, but it
• 36:57
  is weird like Jerry Garcia reading things to you that he
• 37:00
  wouldn't have even known existed.
• 37:02
  Maybe like I had him reading the music.
• 37:04
  Hello, report on music start-ups, which, you know,
• 37:07
  wasn't really his. But it's it's we are at this
• 37:11
  time when people are talking a lot with worry about deep fakes,
• 37:15
  AI deep fakes. And, you know, you could make
• 37:16
  Taylor Swift voice say things she never said.
• 37:18
  Yeah. And this is an example of
• 37:20
  there's an industry emerging as well that actually licences it
• 37:23
  and says, well, maybe people want to have them reading things
• 37:26
  and maybe we can pay them their estates and money and do it.
• 37:29
  But I know I was trying to think which dead musician I want
• 37:31
  reading bedtime stories or, you know, articles to me.
• 37:34
  And it's it does seem I can't, I couldn't think of anyone, but I
• 37:37
  don't want Kurt Cobain reading out my emails to me.
• 37:39
  Or have you got any dead celebrities you'd like to?
• 37:43
  I don't think I have, no. I mean, maybe, maybe Joe
• 37:48
  Strummer maybe was because he had a great voice.
• 37:51
  Great. Oh.
• 37:52
  He did, didn't he voice. So that's might be it's maybe
• 37:55
  it's the reassuring W London voice of Joe Strummer.
• 38:02
  I'd say that's now you. It's always the way, isn't it?
• 38:05
  When you drop something like that on me and I'll be in about,
• 38:08
  I don't know, two hours time, I'll have a much better
• 38:10
  comprehensive list of dead people.
• 38:13
  I would like reading those audiobooks there.
• 38:17
  Was a thing a few years ago when it was I think it was ways when
• 38:21
  the navigation apps got Snoop Dogg to do the voice for that.
• 38:23
  So when you were hearing like turn left in 50 meters, it was
• 38:26
  Snoop Dogg's voice doing it. And there's going to be a whole
• 38:29
  world of this stuff. And the good thing will be if
• 38:33
  it's companies that are doing it by the book and saying right,
• 38:35
  we're going to go to and it could be living, it could be
• 38:37
  Snoop Dogg, it could be Taylor Swift, it could be anyone you
• 38:40
  think of. If they decide they want to do
• 38:42
  it, they could license their IO clone to read whatever you want.
• 38:45
  So I think we'll see more of this.
• 38:47
  But yeah, it's, it's it's slightly eerie to me that when
• 38:50
  it's dead celebrities, you know, I feel weirdly more comfortable
• 38:53
  with living celebrities doing this.
• 38:55
  But, you know, if you're, I mean, the Grateful Dead have a
• 38:58
  huge fan base still, don't they? And they still have people who
• 39:00
  go and see the latest duration live.
• 39:02
  So I think there'll be an audience for this.
• 39:03
  So. Yeah.
• 39:05
  Well, that's where we'll leave it on that bombshell.
• 39:08
  That's where we'll leave it for this episode.
• 39:11
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• 39:13
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• 40:00
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• 40:04
  next month or so. And then last but not least, of
• 40:07
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• 40:27
  Cheerio. None.