Playing AI's Tune: Goldman Sachs Envisions a Tech-Centric Music Industry Powered By Generative AI

I'm thrilled to announce the relaunch of Fast FWD, a newsletter conceived in the early days of the pandemic. As a part of the rebrand, expect a weekly issue published each Monday that will give you insights on an array of topics within the music business from key updates on platforms to insights on the most interesting brand partnerships hitting the market. The goal of this newsletter remains the same: provide you with insights to inspire your next big breakthrough idea. So, whether you are a music marketer, a brand executive, or even an artist manager I hope you all can take something away from the content of this newsletter.  

In today’s edition, I’ll be diving into the insights provided by the 2023 "Music in The Air" report by Goldman Sachs which was first reported by Billboard. This seminal analysis, watched closely by industry insiders, explores the financial health, trends, and forecasted changes within the global music industry, particularly focusing on revenue growth, structural shifts, and the impact of technology such as AI.  

Here are some of the key takeaways for you to know from the report:   

• Shifting Revenue Growth: The global music industry revenue growth is expected to slow from 8% in 2022 to 7.1% in 2023. However, streaming revenue, a major contributor to the industry's financial health, is predicted to maintain a steady 11% growth rate, indicating a reliable source of income for music industry stakeholders. 

• Impending Industry Challenges: The report anticipates a new wave of challenges due to under-monetization of music content and outdated streaming royalty payout structures.  

• A Dip in Revenue Per Audio Stream: The past five years has seen a significant 20% drop in the revenue earned per audio stream, highlighted by the fact that for every hour of music streamed on Spotify the revenue collected is four times lower than compared to say Netflix. 

• Potential for Revenue Increase: The report suggests the music industry should implement a differential charging model for distinct audience segments, such as super fans. The report found that this could generate up to $4.2 billion in additional revenue over time, offering a significant financial boost for the industry.  

• Need for Royalty Payout Structure Evolution: Stemming from the fact that there are more than 100,000+ new songs entering the music streaming ecosystem a day, the report advocates for evolution in the royalty payout structure which currently treats all streams of more than 30 seconds equally.  

• Positive Impact of Generative AI: The report shared a positive outlook on generative AI, highlighting the fact that the technology holds potential to lower barriers for artists, enhance music creation capabilities, and improve industry productivity.  

• The Rise of YouTube Music: Although Spotify retains its position as the leader among DSPs with a 34.8% total global market share in 2022, YouTube Music has emerged as a strong competitor, increasing its market share by approximately 3 percentage points over the last three years. 

Which insights surprised you the most? Let me know in the comments below. Want to connect further? Email me at claydurant@cadmusicmgmt.com.  

Until Next Week, 

Clayton Durant  

Fast Facts: Data That Inspires   

• Upgraded Points just shared a study that gives new context to the term super fan with the report noting that the average American would travel a whopping 608.7 miles to see their favorite artists.  

Fast Facts: Platforms & Technologies   

• Instagram has updated its Notes feature so users now can set their status as their favorite song. Anyone who sees the note will be able to hear a 30 second clip of the song directly on the Instagram app.
• Every musician and creator with a following on Instagram should sign up for Instagram’s new Twitter-like social platform Threads. Posts on Threads can be up to 500 characters long and include links, photos, and videos up to 5 minutes in length, making this the perfect place to share new content with fans. When users first open the Threads app, they are given the option to follow all or some of the accounts they follow on Instagram, giving your platform thousands of semi-automatic followers.   
• Spotify is upgrading its Desktop experience with redesigned Your Library and Now Playing views, offering a more customizable and immersive user interface. The update introduces a dedicated Your Library section for quick access to saved music and podcasts, while the Now Playing view provides additional information about the current content, including artist details and tour dates. The revamped features enhance user convenience and engagement and will be rolled out to all Desktop users worldwide. 
• The growth of audio streaming has led to a convergence between the music industry and mindfulness and meditation practices, creating opportunities for various businesses. Companies like Deezer, Fruits Music, and Universal Music Group have launched apps or collaborations that combine music with mindfulness exercises. Now, Live Nation has now introduced its own mindfulness app called Mindful Nation, which seamlessly integrates music into meditation sessions. The global meditation market is expected to reach $6.6 billion in 2023 and the market for meditation apps alone is projected to grow to $7.59 billion by 2031. 
• TikTok is entering the music streaming market with its new platform, TikTok Music, aiming to compete with Apple Music and Spotify. The platform offers a full catalog of songs, personalized curation, song recommendations based on viral TikTok videos, collaborative playlists, and social features like commenting. However, TikTok Music is currently only available in Brazil and Indonesia, with subscription prices similar to Apple Music. With Spotify and Apple Music dominating the market, the question remains if TikTok can successfully establish itself in the music streaming industry. 

Fast Facts: Brand Campaigns to Know 

• As part of Bud Light's biggest summer campaign to date, the brand is launching the Bud Light Backyard Tour, a national summer music tour featuring fan-favorite artists like Tyler Braden and Seaforth, bringing intimate backyard sets and unforgettable live music experiences to fans across the country, allowing them to enjoy the joy of live music and create lasting memories in the comfort of their own backyards. 
• Hyundai has partnered with acclaimed artist Jannabi for a captivating heritage music project. The collaborative release features the poignant song 'pony' and its accompanying music video, designed to transport listeners back to the cherished Pony era. By teaming up with Jannabi, renowned for their sentimental style, Hyundai aims to evoke nostalgia and foster a deeper appreciation for their brand heritage. Experience the premiere of 'pony' on streaming platforms, while Jannabi's live performance awaits at the prestigious Hyundai Motorstudio Seoul on July 22. This collaboration signifies Hyundai's commitment to innovation and progress while honoring its rich legacy. 
• Smirnoff ICE is partnering with Women In Music as part of the Smirnoff ICE Relaunch Tour. The tour will have artists like Steve Aoki, Elena Rose, All American Rejects and Danielle Bradbery perform across different cities throughout the summer. All ticket proceeds will directly benefit Women In Music, an organization dedicated to advancing equality, visibility, and opportunities for women in the industry through education, support, empowerment, and recognition. 
• Google Chrome has partnered with Busta Rhymes, Lil Yachty, and McLaren F1 racing driver Lando Norris for a music video promoting the speed of the browser. In the video, Lil Yachty is challenged to come up with a rap that matches the speed of Chrome and the McLaren racing car. The artists will encourage fans to create their own raps on TikTok using the hashtag #ChromeSpeedChallenge. Google's partnership with McLaren allows the brand to reach Formula 1's global audience, while incorporating Google technology into races. 

Fast Facts: Music News to Know 

• Epidemic Sound, a soundtrack innovation platform, has launched Soundmatch, an AI-powered music discovery tool for content creators. Soundmatch uses AI to analyze frames in a creator's video and leverages data from over two billion daily views of YouTube videos with Epidemic Sound music to recommend tracks that suit each visual scene. The tool aims to save time and deliver better results for content creators, supporting their creative process and making it easier to add music and sound effects to their content.  
• Sound, a music NFT discovery and direct-to-community monetization platform, has raised $20 million in a Series A funding round led by a16z crypto. The platform allows artists to upload, stream, and monetize their music as NFTs while retaining ownership of their master and publishing rights. Sound claims that its first wave of artists earned over $5.5 million in the last year and aims to scale its model to become the leading destination for music discovery on the internet. The funding will support the platform's expansion and the release of new artist tools. 
• In accordance with the rise of Latin music in America, Live Nation Entertainment, has acquired a majority stake in Páramo Presenta, a prominent music promoter in Colombia. The acquisition further demonstrates Live Nation's commitment to Latin America and strengthens its global presence. Páramo Presenta is well-known for organizing Estereo Picnic, Colombia's largest music festival, among other events. The partnership aims to elevate the live entertainment landscape in Latin America and expand Live Nation's operations in the region. All future events will be ticketed through Eticket, the Colombian ticketing entity of OCESA, which is part of Live Nation Entertainment's ticketing platform. 
• Spotify is reportedly in talks to introduce full-length music videos to its app, aiming to compete with YouTube and TikTok in the video streaming market. The addition of music videos would enhance Spotify's video offerings and help attract younger audiences. The company has already introduced features like Canvas (looping GIFs) and Clips (short videos) to engage artists and users. With the growing popularity of TikTok, Spotify wants to respond to the competition and cater to evolving consumer preferences. However, there are concerns about the crowded nature of video platforms and the potential saturation of TikTok-like experiences on users' phones. In addition to video, Spotify has recently celebrated reaching over 100,000 video podcasts on its platform 

Fast Facts: New Music to Listen To 

• Crazy – RMR: RMR gained significant attention when his single “Rascal” went viral, earning recognition as one of Spotify's “Best Songs of 2020” by The NY Times' Jon Caramanica. He is known for his distinctive ski mask persona and recently returned from a 2-year hiatus with his latest single "Crazy" featuring Ryan Lewis. RMR's music style combines elements of pop and country, creating a different sound that sets him apart. Not only has he received recognition from the music industry, but also notable figures outside of music such as Sharon Stone, Ari Melber, Jaime King, and Will Smith. 
• Love Takes Time – Jonathan Hutcherson: The 22-year-old singer appeared on season 10 of The Voice, discovering his passion for pop and country music. After graduating high school, Hutcherson moved to Nashville to pursue his singer/songwriter career. Shortly after, he signed a publishing and artist development deal with Creative Nation a year later in 2019. Hutcherson cowrote “Love Takes Time” with Josh Jenkins and has just under two million streams on Spotify.  
• Tiny Garden – Jamila Woods featuring duendita: Jamila Woods, the Chicago musician and poet, has announced her upcoming album titled “Water Made Us,” set to release on October 13th via Jagjaguwar. This will be her first album since "LEGACY! LEGACY!" in 2019. The album is co-executive produced by Mcclenney and Jamila Woods and features collaborations with Saba, duendita, and Peter CottonTale. Accompanying the announcement is the release of a new song and video called "Tiny Garden" featuring duendita, produced by Wynne Bennett. The song explores the slow and steady nature of love, while the self-directed video visually depicts merging landscapes and the growth that comes with love.   
• No Romeo – DYLAN: A 20-year-old musician from Suffolk, England, who draws inspiration from AC/DC, Guns N' Roses, and Flume, has been chosen as one of Virgin Money's Emerging Stars. DYLAN will use the Virgin Money bursary development fund to record new music and perform live shows. Dylan's latest EP is out now and has King Ed on the production and writing credits of the tracks "No Romeo", "Someone Else", "You're Not Harry Styles" and "Nineteen", as well as production credits on "Live Without It". 
• Good Life – IDMAN: IDMAN (she/they) The emerging artist, singer-songwriter, model, and activist has released their highly-anticipated debut EP titled Risk. The EP, executive produced by Khris Riddick-Tynes, features their previous singles "Good Life," "Hate," and "Still," and is available on Arista Records. IDMAN describes the EP as a complete story that reflects their journey and the risks they have taken. They express no shame in sharing their discoveries, whether positive or negative. The EP follows the success of their single "Good Life," which resonated with fans worldwide and sparked a creative awakening.