Welcome to SWOT by Sound Story, your weekly inside track on the Strengths, Weaknesses, Opportunities and Threats looming for the creative industries.
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⚡ Trending: A LinkedIn influencer has been trolled mercilessly online after using his proposal to his girlfriend as a lesson on business-to-business sales. Source: The Project.
🎵 Music: The nominees for the 2024 AIR Awards have been revealed. Source: The Music Network.
📰 Media: The three commercial free-to-air networks have teamed up in a new advertising blitz urging the Federal Government to amend its proposed changes to the anti-siphoning Bill to better reflect how people actually watch content in 2024. Words by Nathan Jolly. Source: Mumbrella.
💰 Advertising: Over $100 million in digital ad spend went to waste in the first three months of 2024, which accounts for 42% of the total audited digital media spend. Words by Rosie Drew. Source: Mumbrella.
📲 Tech: An Australian court on Monday sided with Elon Musk’s X (formerly Twitter) in an argument over graphic video. Words by Patrick Frater. Source: Variety Australia.
📜 Government: Kids TV creators, the National Film and Sound Archive, and music festivals are among the winners in the 2024-25 Budget, presented late Tuesday (May 14). Words by Lars Brandle. Source: Variety Australia.
🌶️ Spicy: A controversial ‘house giveaway’ promotion jointly created by Roxy Jacenko and two business partners will proceed without the PR queen after she resigned from the start-up company in emotional weekend social media posts. Words by Annette Sharp & Briana Domjen. Source: The Daily Telegraph.
Strength: How Streaming Saved the Music Industry
‘The Big 3’ record labels (Sony Music, Warner Music and Universal Music) have released various sets of financials, giving us an insight into what’s really going on with their revenues, and how streaming is impacting (or perhaps saving) the music industry.
👉 In Sony Music’s full-year financials, streaming revenue soared by 18.5% to 709.5 billion yen (AU$6.9 billion), accounting for 66.5% of recorded music revenue. Streaming revenue also accounted for 56.6% of publishing revenue at Sony Music, with 185 billion yen ($1.8 billion) coming in the door, an increase of 21.1% year-on-year.
👉 Sony, a Japan-based company, operates on the Japanese financial year which runs from 1 April to 31 March. Warner Music and Universal Music, meanwhile, released their quarterly results, telling a similar story of streaming growth.
👉 Warner Music (which runs on a financial year of 1 October to 30 September) said in its Q2 results that its “recorded music results [were] underpinned by an acceleration in subscription streaming”. As you can read on Digital Music News, recorded streaming revenue expanded 10.5% YoY, including 8.3% growth on the subscription side. All up, subscription streaming gave Warner Music US$615 million (AU$920.4 million) in Q2, while ad-supported streaming offered a further $213 million ($318.8 million), totalling $828 million ($1.239 billion). On the music publishing side, streaming accounted for $185 million ($276.9 million) of its total $187 million ($279.9 million) for the quarter. That's some percentage.
👉 Meanwhile, for Universal Music Group (UMG), its Q1 financials showed revenue of €2.59 billion (AU$4.22 billion), nearly 57% of which came from streaming. That’s €1.47 billion (or $2.39 billion). According to Digital Music News, the major record label is also poised to generate nearly 1% of its annual revenue from TikTok following its new deal with the social media giant.
👉 If all those numbers (with their millions, billions, yen, euros and dollars, both AU and US) are too hard to get your head around on a Friday, please enjoy this take on “Why the music industry is broken”.
Weakness: When A Rebrand Goes Bad
Sometimes you really need someone in a branding or rebranding meeting to stand up and say “Hey, are we really sure this is a great idea?”
👉 One example where such an intervention may have been useful was for dating app Bumble. Bumble’s previous positioning was all about “empowering” and protecting women, by having them “make the first move” and initiate conversation. In theory, this could limit pre-conversation harassment for women online and give them some of the power back in an otherwise unbalanced world. Recently, the app scaled back its point of difference, allowing both men and women to sling the first zinger.
👉 The issues arose, however, in its marketing push, which introduced the ‘New Bumble’ by taking aim at celibacy. The campaign didn’t go down well, and now not only is the brand’s point of difference gone, but so is a lot of its good will.
👉 Speaking of campaigns that didn’t go down well – did you see THAT Apple iPad ad?
👉 It’s been accused of being dystopian and destructive, creative crushing, and everything in between, with The Hollywood Reporter asking “Who thought this was a good idea?”
👉 In a predictable turn of events, Apple too has apologised, telling Ad Age: “Our goal is to always celebrate the myriad of ways users express themselves and bring their ideas to life through iPad. We missed the mark with this video, and we’re sorry.”
Opportunity: Show Me The Money
Happy Budget week to all who celebrate!
You can read various industry-specific Budget hot takes on all the trade sites including ‘Music Biz Welcomes Live Music Relief In Federal Budget’ (The Music Network), ‘Federal Budget Pumps Millions Into Kids Screen Content, National Film and Sound Archive’ (Variety Australia), ‘Budget 2024: What Jim Chalmers delivered for media industry’ (Mediaweek) and ‘‘Jim Chalmers has got to be a little bit worried’: Reacting to the Federal Budget’ (Mumbrella), or below we discuss: What was your key takeaway from this year’s Budget for the creative industries?
📌 Zanda: The biggest headline for music is the Revive Live announcement, to support live music venues and festivals showcasing Aussie bands and artists. This sees an increase in funding to $8.6 million compared to the previous Live Music Australia program, and has been received well by the industry. It’s incredibly important though, that this funding not become an isolated cash injection and that key stakeholders work together to address the very real crisis facing live music, seen most acutely in the music festival space in recent years. The focus needs to be on helping put Aussie-owned and grown festivals, as well as those that continue to bring in strong audience demand, to be in a position to thrive sustainably into the future, not propping up events with multinational parent companies on an ongoing basis.
📌 Vivienne: Is it uncouth to say this was a Boring Budget? This isn’t an isolated incident. I do think it’s been a while since we had a Budget with game-changing vision and ambition. Plus, so many announcements come out ahead of Budget Night, that sometimes it’s hard to know what’s new, and what isn’t. Luckily, Sound Story client Darkwave, can sort through the Boring and the Banal, and pulled out the key creative moves for you in a chat today. Founder and director Meredith Fannin summarises what you need to know below.
📌 Meredith Fannin: There were a couple of things in the Federal Budget that are great for creative businesses. The first one is the $8.6 million for Revive Live, so that would generally give funding to festivals and live music venues to put Australian bands onto their bills and onto their lineups. Hopefully that will then create more people being able to see Australian bands, and hopefully generate an interest in them, which then, in turn, across the whole music ecosystem will generate more income, more jobs for people wanting to be in the music industry. That’s ideally how that will pan out.
There was also $14.5 million for Australian screen content, in particular for children’s screen content. That’s going to be really great. There’s been so much saturation of US content on our screens, that having Australian stories that Australian children can relate to is important for their general growth, and it also gets them in the habit of watching Australian stories, so that when they grow into adults, they continue to watch Australian screen content, rather than going to the US all the time. It will also bring a lot more revenue into the Australian film industry. There will be a lot more opportunities for emerging producers to develop their own stories within that space. And similar to the music industry, it should provide a greater ecosystem for more jobs, more opportunities, more experience for everyone wanting to work in those industries.
And there was $115.2 million to eight national arts training organisations, and that’s essentially to help train the next generation of talent so we can continue hearing great music and seeing wonderful screen adaptations across theatre, film, TV, everything.
In all – given that there’s such a focus on the cost of living at the moment – the fact there was still funding for the Arts was a great result.
Threat: Radio Gaga
We have written previously in SWOT about how the hype (and hyperbole) around the radio industry and its talent lately has worked in the medium’s favour. This week, however, the headlines paint a less confident picture.
👉 News emerged over the weekend that the Anchorage Capital Partners-backed deal for ARN to acquire rival SCA was on the brink of collapse. The AFR’s reporting was confirmed on Monday when ARN announced Anchorage was no longer backing the deal.
👉 “Following a period of due diligence engagement with SCA, ACP has notified ARN of its withdrawal from the Consortium. As part of its due diligence, ACP and its advisers completed an extensive review of Regional TV. In light of a continued decline in the trading performance of Regional TV since the Consortium Proposal was made in October 2023, the further deteriorating outlook for Regional TV, and the existing long-term contractual obligation of SCA for outsourced TV broadcast transmission, it does not support ACP's Regional TV investment thesis. As a result, the Consortium must withdraw the Consortium Proposal,” the ASX announcement said.
👉 Despite this bleak assessment, SCA still believes it has real value to offer a purchasing partner.
👉 SCA chair, Heith Mackay-Cruise, said. “Over the past seven months, SCA’s management team and advisers have worked diligently and collaboratively with the Consortium to evaluate the Consortium’s proposal and to enable the Consortium to substantially complete its due diligence. This has required considerable cost and management effort by SCA. It is frustrating that the Consortium has now withdrawn its proposal in circumstances where any potential material concerns should have been identified much earlier in the process. I wish to acknowledge that the SCA management team has supported the due diligence process without losing focus on daily business activities. Broadcast advertising markets continue to be challenging, but SCA has grown its share of metro radio and digital audio markets during this year. In addition, our LiSTNR digital audio ecosystem delivered positive EBITDA [earnings before interest, tax, depreciation and amortisation] for the first time in April and is on target to do so for the June quarter. We remain open to considering proposals that would deliver fair value and be in the best interests of all SCA shareholders.”
👉 A lot of time, effort and staff anxiety has been tied up in this (now defunct) deal. At least Kyle Sandilands is still having fun though…
The Fun Stuff
Quote of the Week: “With COVID kind of disappearing from the news agenda, we’ve seen consumer behaviour really swing back towards the reason people fell in love with podcasting in the first place – which is entertainment, listening to great conversations, funny conversation between two charismatic hosts and feeling like a fly on the wall in that conversation. And I think that holds true globally as well. I think from a podcast creation and a consumer standpoint, Australia really stands up with what’s happening in more mature markets,” Acast AU/NZ’s managing director, Henrik Isaksson, on consumer podcast trends in an interview with Mumbrella.
🎙️ Podcast of the Week: UNIFIED Music Group’s Founder, Jaddan Comerford, recently went to India and appeared on The Music Podcast. Jaddan shares insights into fostering collaboration within the music community and delves into his curiosity about Indian music culture, business and industry dynamics. You can watch and listen here, and read more about Jaddan’s Indian insights here.
🏆 Win of the Week: Following on from the successful Twilio Segment Variety Australia CMO Dinner last year, the entertainment trade bible will now host its inaugural Variety Australia and Twilio Live Business Breakfast, handing out awards including Festival of the Year, Best Australian Theatre Show, Promoter of the Year, and others, plus the prestigious Live Business Award.
