Congratulations to our client CD Baby on a huge year for digital collections.
We recently learned that Spotify now sees over 60,000 tracks uploaded to its service. The stat could only mean one thing: the combined power of self-uploading artists grew yet again in 2020.
Sure enough, Midia Research revealed this week that the global revenues generated by DIY artists on streaming services rose by 28% YoY in 2020.
That same year, the combined market share on Spotify of the three major record companies (including their in-house indie distributors) plus Merlin reduced on Spotify to 78%… down by nearly 10% on where it stood just four years earlier.
Meanwhile, DIY artists collectively uploaded eight times the volume of music to Spotify that we saw from the major record companies in 2020.
In short, then: an avalanche of new music being uploaded by independent artists to streaming services is now meaningfully eating into the market share of the biggest record companies on the planet.
All of this is useful background to a fresh set of stats today from CD Baby, one of the world’s largest distributors of music from DIY artists.
The company has today (March 4) confirmed that it paid out $125.4 million from digital and streaming services to artists across the course of 2020. That’s around $2.4m every week.
The $125.4m annual figure was up by 13.9% on the $110.1m that CD Baby paid to indie artist clients from digital platforms in 2019.
CD Baby – which counted 950,000 active distribution clients as of the end of Q2 2020 – has also broken down exactly where this money came from in both years. (You can see a full listing of these figures at the end of this article.)
Some 40% of CD Baby’s digital royalty payouts in 2020 were from Spotify, which contributed just over $50 million.
That was up by $6.3m on the figure CD Baby collected and paid out from Spotify in 2019.
Apple Music was once again the second biggest contributor of digital revenues to CD Baby artists in 2020.
The distributor paid artists $23.15m in Apple Music royalties last year. That was less than half the figure CD Baby paid out from Spotify, and around 18.5% of CD Baby’s total digital revenue distributions in 2020.
Apple Music’s contribution to CD Baby’s artist payments grew by $3.7m on what it paid the service’s acts in 2019.
Perhaps the biggest surprise of CD Baby’s numbers in 2020 was the performance of YouTube Music.
YouTube‘s music app (including its subscription element) contributed $10.5m to CD Baby artists last year, more than doubling its contribution from 2019.
In fact, YouTube Music’s YoY growth in revenue paid to CD Baby artists was +$5.5m in 2020. Of all digital services, only Spotify (+$6.3m) provided bigger YoY growth in real monetary terms.
The overall lump of money paid out by CD Baby to its artists in 2020 – from all sources – stood at $126.8m, says the distributor, up 26% year-on-year.
(Those additional sources included Facebook, Instagram, sync, and physical sales, as well as YouTube Content ID, which is counted separate to YouTube Music revenue.)
CD Baby was acquired by Downtown Music Holdings in 2019 as part of a buyout of AVL Digital for around $200 million.
Earlier this week the founder and CEO of Downtown, Justin Kalifowitz, made the case on MBW as to why wider economic interest in the music business shouldn’t ignore the fast-growing contribution of the independent services sector.
“What we’re seeing now is an industry maturing and evolving,” he wrote. “The convergence of technology, global scale, and a greater demand for a service mentality is blurring the increasingly faint lines between label and artist, between executive and creator, and between major and independent.”
Added Kalifowitz: “With more creators making more music that reaches more people in more countries than ever before, both financial and strategic investors are taking note.”