IMS Business Report 2019 - International Music Summit

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IMS Business Report 2019An annual study of the Electronic Music industryby Kevin WatsonIMS Business Report 2019 by Kevin Watson

IMS Business Report 20191RecordedMusic4Companies& Brands5IndustryValue2DJs & LiveActs3Clubs &Festivals2IMS Business Report 2019 by Kevin Watson

All GenresGlobal recorded music revenues grew by 9.7% in 2018,driven by streaming, and all geographies except EuropeYoY Growth in Global Recorded Music Revenues (2017-2018)By RegionBy Format17%21%14%12%(10)%10%5%Source: IFPI Global Music Report 2019IMS Business Report 2019 by Kevin Watson0.1%3

Electronic MusicDance share of recorded music fell significantly in theUSA & UK in 2018, but rebounded in Germany & CanadaDance / Electronic Share of Recorded Music by Country (2017-2018)Dance share fell forsecond consecutiveyear in the largestglobal market forrecorded music11.6%9.5%6.4%7.1%5.9%4.8%3.5%3%Total volume*Single salesTotal TurnoverTotal volume*Note: * Total volume Albums TEA On-Demand Audio SEASource: Nielsen Year-End Music Reports for USA & Canada, Bundesverband Musikindustrie (BVMI),BPI, IFPI Global Music Report 2019IMS Business Report 2019 by Kevin Watson4

Global ShareIFPI survey ranks Dance as the World’s 3rd most populargenre; an estimated 1.5 billion people typically listen to itMusic People Typically Listen To (2018)64%57%32%30%26%24%24%Equivalent to1.5 billionpeopleworldwidelistening toElectronicMusic23% A recent IFPI studyasked 19,000 peopleaged 16-64 in 18countries which genresthey typically listen to 32% of respondentsanswered Dance /Electronic / House,ranking it 3rd, ahead ofgenres such as HipHop / Rap and R&B Applying this to theglobal 16-64 populationwould mean over 1.5bnpeople typically listen toElectronic MusicNote: survey of 19,000 consumers aged 16-64 in 18 countries; genre based on participants own definitionSource: IFPI Music Consumer Insight Report 2018 (survey April-May 2018), Worldometers, IMS AnalysisIMS Business Report 2019 by Kevin Watson5

Beatport GenresTechno is consistently the best-selling genre; MelodicHouse & Techno up to #5 just a year after launchingBest Selling Genres on Beatport (Q1 2015-Q1 2019)1Techno2Tech House3House4Deep House5Melodic House & Techno6Drum & Bass7Progressive House8Electronica / downtempo9Trance10Indie Dance / Nu Disco2015201620172018‘196Source: BeatportIMS Business Report 2019 by Kevin Watson

GamingVideogames industry is worth 7x more than music, andrepresents a huge opportunity for Electronic DJs & artistsGlobal Revenues by Media(2010-2018)138VideogamesFortniteMarshmello played alive virtual concert to10m players, and hasa skin, glider & emote bn643215GTA: After HoursDixon & othersfeature as residentDJs at nightclub inonline GTA extensionFilms42Music19Source: League of Professional esports, industry pressIMS Business Report 2019 by Kevin WatsonSecret LabDeadmau5 createdbranded gamingchairs, and used oneat Ultra in Mar 20197

IMS Business Report 20191RecordedMusic4Companies& Brands5IndustryValue2DJs & LiveActs3Clubs &Festivals8IMS Business Report 2019 by Kevin Watson

EarningsEstimated earnings of highest-paid DJs fell significantlyin 2018; Top 10 total of 261m was lowest since 2013Forbes World’s Highest-Paid DJs Top 10(2013-2018)298300280268274 271261260 m240241 Ten highest-paid DJsestimated to have earned 261m in 12 months to 1stJune 2018, down 12% YoY Calvin Harris remained topwith 48m, close to the 48.5m he earned in 2017 The Chainsmokers had thebiggest YoY increase inearnings, up 20% to 45.5m,putting them 2nd on the list220YoY%INDICATIVE11%2%(1)% 10% (12)% Most DJs played more than100 shows in the year, withSteve Aoki managing 2009Source: ForbesIMS Business Report 2019 by Kevin Watson

FestivalsFemale Techno DJs dominated the festival circuit in2018; Nina Kraviz played 2x as many as the leading bandNumber of Festivals Played (2018)Top Performing DJs135227326424522Top Performing Band1 Nina Kraviz played 35different festivals in 2018according to Festicket This made her the topperforming DJ, and meantshe played nearly twice asmany festivals as the topperforming band The Killers Amelie Lens ranked 2nd with27 festivals played – a hugerise from just 4 in 2017 Charlotte de Witte also madethe top 5 at #4 with 24festivals played in 20181810Source: Festicket ‘Festival Heroes’IMS Business Report 2019 by Kevin Watson

Online FanbasesNina, Amelie & Charlotte have grown their Instagram,YouTube & Spotify fanbases faster than the Top 5 DJsIncrease in Followers – Year vs Last Quarter*(Selected DJs & Artists on Viberate, as at 28th April 2019) Viberate shows that overthe past year these threefemale Techno DJs haveon average grown theirInstagram, YouTube &Spotify fanbases fasterthan the Top 5 ranked DJs Charlotte de Witte hasachieved the highestgrowth on all platforms Her Instagram & YouTubegrowth was higher than#1 ranked DJ MarshmelloNote: * change in followers in last year / change in followers over last quarterSource: Viberate, Instagram, YouTube, SpotifyIMS Business Report 2019 by Kevin WatsonINDICATIVE11

Amelie LensNow adding twice as many social media fans as a yearago; Daily growth quadrupled after Time Warp 25 festivalAmelie Lens Monthly Growth inSocial Media Followers (2018-2019*)Amelie Lens Daily Growth inFacebook Followers (April 2019)43k2k8k8k25kAvg 0.5k5k2kNote: New Followers added in past month using Viberate.com in April/May 2018 and 2019Source: Viberate, Social Bakers, Instagram, YouTube, Spotify, Facebook, Resident AdvisorIMS Business Report 2019 by Kevin Watson12

TV AdvertisingLeading global brands are signing up female ElectronicMusic Artists to lead their TV advertising campaignsPeggy GouEli & FurAppeared in adverts tolaunch new Macan,alongside BakermatFeatured in TV advertsin UK, Spain, France,Poland, Brazil, MexicoAlison Wonderland‘Here 4 U’ used as themusic for 2019Superbowl advert13Source: industry press, social mediaIMS Business Report 2019 by Kevin Watson

Festival Gender DiversityPitchfork analysis showed only 19% of festival artistswere female in 2018; 150 events aiming for 50% by 2022Gender of FestivalArtists* (2017-2018)14%12%74% Pitchfork analysed the line-ups of 20 leadingmulti-genre festivals in 201819% Female11% Mixed70% Male Female artists made up 19% of those on theline-ups, up from 14% in 2017, with only threefestivals achieving a 50:50 gender balance There are a number of organisations focussedon improving this imbalance, including:Keychange – challenging festivalsto achieve a 50:50 gender balance by2022 – so far 150 have signed up#bookmorewomen – visualising extentof imbalance using line-up postersshesaid.so – harnessing the power ofa 13,000 strong network of femaleidentifying music professionalsNote: *Survey of 20 biggest multi-genre festivals, primarily focussing on AmericaSource: Pitchfork, Keychange, #bookmorewomen, shesaid.soIMS Business Report 2019 by Kevin Watson14

Mental Health73% of independent musicians have experienced negativeemotions, driven by fear of failure and many other factors73%33%And the main reasons given forexperiencing those symptoms were:**67%Fear of failureOf independentmusic makershaveexperiencednegativeemotions suchas stress,anxiety and / ordepression inrelation to theirmusic creation*Of those havehad PanicAttacks as asymptom, whilemany reportedsymptoms suchas negativepressure andstress, anxiety &depressionFinancial instability59%Pressure to succeed58%51%LonelinessBeing evaluatedby othersPressure todeliver44%40%Source: Record Union ‘The 73 Percent Report’ (March-April 2019, 1,489 Independent Music Makers)IMS Business Report 2019 by Kevin Watson15

IMS Business Report 20191RecordedMusic4Companies& Brands5IndustryValue2DJs & LiveActs3Clubs &Festivals16IMS Business Report 2019 by Kevin Watson

USAMore people than ever are attending live music events,with festivals showing the highest YoY increase in 2018U.S. General Population Attendanceof Live Events by Type (2017-2018)33%35%23%18%22%18% 52% of the USA population saidthey attended a live music eventin 2018 according to Nielsen Festivals saw the biggestannual increase from 18% in2017 to 23% in 2018 Club Nights with a live DJ alsoincreased from 18% to 22% These numbers are based onattendance of at least one event,and do not reflect any change infrequency of attendanceLiveConcertMusicFestivalClub Nightwith DJ Fans of Electronic Music have ahigher propensity to attend livemusic events (74%) than thoseof any other genreSource: Nielsen U.S. Music 360 reports, Billboard, industry pressIMS Business Report 2019 by Kevin Watson17

ClubsHowever, the decline in nightclub venues is accelerating,with a number of high-profile closures around the worldTotal Nightclubs in Great Britain(Dec 2013-Dec 2018)-1%per annum2,1972,128-21%1,673 The number of nightclubs inGreat Britain fell by 21% in the12 months to December 2018,compared to a 1% decline peryear between 2013 and 2017 Several high-profile ElectronicMusic clubs have closed,including Output in New York Drivers of the decline include:! Attendance of fewer, biggerevents, such as festivals! Gentrification, property prices! Health and wellbeing trends! Social media and online datingSource: CGA Market Growth Monitor February 2019, IMS Analysis, industry pressIMS Business Report 2019 by Kevin Watson18

Las VegasAfter a peak in 2016, the proportion of visitors going tohotel clubs and pool parties has dropped significantlyProportion of Las Vegas Visitors That HaveBeen To Different Venues (2014-2018)15%Hotel Nightclubwith Cover These proportions fell to 7%and 4% respectively in 2018,potentially impacted by thelack of new club openings11%8%A Pool Partyor Day Club2% In 2016 15% of visitors to LasVegas said they had been to ahotel nightclub, and 11% apool party of day club7%4% New venue KAOS may helpboost visitors in 2019 with anumber of high-profileElectronic DJs as residents Art of the Wild event showsnew genres of ElectronicMusic are finally gainingtraction in Las VegasSource: Las Vegas Convention and Visitors Authority: 2018 Las Vegas Visitor ProfileIMS Business Report 2019 by Kevin Watson19

BerlinA recent study found 40% of Berlin’s 280 clubs playTechno, with clubbers spending on average 200 per dayBerlin Club Commission Study (2018)Genres Played by Clubs47%47%40%Other Findings280Total clubvenues11Clubs earn 2m pa 200 Averageper day30.2years Club Commission studyhighlights importance ofclub scene to Berlin 280 venues made 168mlast year and employedover 9,000 people Most popular musicgenres are House andIndie, followed by Techno Visitors to these clubsend up spending a total of 200 per day, in clubs,Average agebars, restaurants & hotelsspend ppof clubbersSource: Berlin Club Commission, The LocalIMS Business Report 2019 by Kevin Watson20

IMS Business Report 20191RecordedMusic4Companies& Brands5IndustryValue2DJs & LiveActs3Clubs &Festivals21IMS Business Report 2019 by Kevin Watson

SoundCloudSubscription service helped revenue reach 100m in 2017;Tracks can now be distributed directly to Spotify, AppleSoundCloud Revenue(2016-2017)YoY % Chg90.7 Total80%18.1 Advertising52%72.6 Subscription 89% m50.3 Most recent financialaccounts show revenuereached 90m ( 100m) in2017, up 80% from 2016 Subscription grew 89%,driven by the launch ofSoundCloud Go in Mar 2016 As of Feb 2019 users cannow distribute their musicdirectly to all majorstreaming platforms,including Spotify, AppleMusic, Amazon MusicUnlimited & YouTube Music11.938.4Source: SoundCloud, UK Companies House, industry pressIMS Business Report 2019 by Kevin Watson22

BeatportStrong growth continued in 2018/19 with a 10% increase inunique users and a 17% rise in the number of tracks soldBeatport YoY Growth (Q1 2018-Q1 2019)17%13%10%3% Track sales grew 17% in the12 months to Q1 2019, thethird straight year of growth Beatport will launch twonew services in 2019 Beatport LINK streamingservice aimed at DJs will beintegrated into leading DJsoftware applications Joint venture with DJ City inthe USA will enable thelaunch of Beatsource – aplatform dedicated to openformat DJs23Source: BeatportIMS Business Report 2019 by Kevin Watson

Apple MusicWorldwide paid subscribers have reached 56m just 3.5years since launch; USA subs. now higher than SpotifyApple Music Paid Subscribers (2015-2018)56m Apple Music has amassed56m paying subscriberssince launching in June 2015 In February 2019 paidsubscribers in the USAovertook Spotify for the firsttime (28m versus 26m)m Apple has recently increasedthe focus on ElectronicMusic with the introductionof the ‘DJ Mixes’ section inpartnership with Dubset, andexclusive playlists curatedby Printworks in London6.5mSource: The Wall Street Journal, ft.com, Statista, industry pressIMS Business Report 2019 by Kevin Watson24

MixmagOfficial YouTube channel generated 74m views in 2018, up67% in 3 years; print magazine now just 10% of businessMixmag YouTube Views (2012-2018)746657m4421122 Since 2008 Mixmag hasaccumulated over 280million views on YouTube Annual views have risenfrom 2m in 2012 when ‘TheLab’ launched to 74m lastyear, with an average watchtime of 14 minutes Mixmag now reaches almost100 million people a monththrough all channels andhas 16 offices around theworld25Source: MixmagIMS Business Report 2019 by Kevin Watson

CercleMore than 135m YouTube views achieved since launch inApril 2016, and averaging 2m a week so far in 2019Cercle YouTube Views (2016-2019)136m32mm Official YouTube videos havebeen viewed more than135m times, accumulating2.2 billion watched minutes77m Scope has broadened fromunique venues in France, toother locations across theworld, a Cercle festival, anda new channel for Urbanartists called ‘Drop’27mPerweek0.3m Cercle began live streamingElectronic Music events inApril 2016, and now streamsone show every 2 weeks1.5m2.0m26Source: Cercle, IMS AnalysisIMS Business Report 2019 by Kevin Watson

CercleVideos are attracting a young global audience: 5 out of 10countries with the highest watch time are outside EuropeYouTube Watch Time by Geography (2019)ContinentCountry Share of Total 3.6%Eur.3.6%Eur.3.2%Eur.Instagram Audienceby Age Range (2019)4%45 14%35-4448%25-3434%18-242.5%27Source: CercleIMS Business Report 2019 by Kevin Watson

IMS Business Report 20191RecordedMusic4Companies& Brands5IndustryValue2DJs & LiveActs3Clubs &Festivals28IMS Business Report 2019 by Kevin Watson

Industry ValueOverall Electronic Music industry value dipped 1% in2018/19 to 7.2bn as period of stabilisation continuedEstimated Value of Global Electronic Music Industry(2012/13-2018/19)86.977.17.47.37.26.26 bn5 Growth in 2018/19came from value ofrecorded music,festivals andhardware & software This was offset by adecrease in the valueof clubs, andearnings of DJs &artists4.54 Overall the globalindustry continues tomature and stabiliseYoY%37%12%3%3%(2)%(1)%INDICATIVESource: BPI, Nielsen, Billboard, IFPI, Google, Forbes, Economist, BPI, BVMI, SNEP, PWC, EVAR Advisory, UK Music, FT, Pioneer,CIA World Factbook, electronic-festivals.com, NAMM, Reuters, DDMCA, Ticketmaster, Mixmag, DJ Mag, Viberate, Beatport,YouTube, Soundcloud, Statista, Ultra Worldwide, iiMedia Research, Music Trades, IBISWorld, industry press, IMS AnalysisIMS Business Report 2019 by Kevin Watson29

IMS Business Report 2019 by Kevin Watson

IMS Business Report 2019 by Kevin Watson 5 Note: survey of 19,000 consumers aged 16-64 in 18 countries; genre based on participants own definition Source: IFPI Music Consumer Insight Report 2018 (survey April-May 2018), Worldometers, IMS Analysis

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