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Alive and Kicking: Live Streaming is Here to Stay

The industry’s resilience to the global pandemic has been noteworthy, and clearly, even where there have been setbacks such as with live events, technology has stepped into the breach to facilitate real-time alternatives

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Sector Report: Audio Q3 2020

Contact: John F Lambros

EXECUTIVE SUMMARY

Q3 2020 Music Sector Wrap-Up

Alive and Kicking: Live Streaming is Here to Stay!

  • It has been a busy Q3 for the digital audio marketplace globally, with Q2’s strong momentum carrying through the quarter. The industry’s resilience to the global pandemic has been noteworthy, and clearly, even where there have been setbacks such as with live events, technology has stepped into the breach to facilitate real-time alternatives
  • The re-platforming of the music industry continues at a rapid pace, setting the stage for an exciting 10-year cycle of industry-specific growth. Here are trends that we are tracking closely:
    • Alive and Kicking – Live is Alive
      • Live concert streaming has entered the void created by the global live venue shutdown – and the early returns are impressive; concert streaming is here to stay with some highly creative monetization and engagement options ahead (think gaming, think real-time microtransactions)
    • Jukebox Heroes – Song Funds Headline the Macro Trends
      • With $1.5Bn raised in Q3 to buy music catalogues, the “song as an asset class” thesis continues to draw greater and greater interest. SONG’s breakneck deal pace throughout Q3 was unrivaled but it won’t be the only publicly traded fund for much longer, as Round Hill Music announced its listing plans for Q4
    • Streaming’s Fast Forward – Markets Embrace the Growth Story
      • Both Spotify and Tencent Music have seen impressive market growth since April 1st (SPOT +99.5%, TME + 45.9%), with the rise in streaming and paid subscribers paving the way
    • Indie Rocks!
      • The independent artist market, and all its associated touchpoints, continues to demonstrate why it is the fastest growing segment of the music market – and not to be underestimated – with an estimated $2Bn market size for 2020. A “Fourth Major” that is tech native is widely anticipated by the industry
    • Taking Care of Business at WMG
      • As the only publicly traded, pure-play global music publisher and recording label, Warner Music Group is well positioned to benefit from the broader secular tailwinds driving the music industry. The company wasted no time since its IPO in June to make a few acquisitions, including HipHopDX and IMGN, and expects to see WarnerMusic Boost, its seed-stage investment arm, continue to support tech innovators in the sector
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