Thursday, January 7, 2016

A Turbulent Year in the Music Business

Written by Ben Sisario — For the music business, 2015 was an exciting and tumultuous year, with huge hits, big battles behind the scenes and the continuing evolution of an industry that has been transformed by technology and the Internet. Here are some of the stories that shaped the music world last year.

The Streaming Wars

It was the year that streaming music finally hit the mainstream.

After dominating digital music for more than a decade through its iTunes download store, Apple in June made a belated entry into streaming with Apple Music — putting the world’s biggest company in the position of challenging Spotify, a nine-year-old start-up from Sweden.

Apple Music had a modestly successful arrival, attracting 6.5 million subscribers by October and earning wide praise for Beats 1, its Internet radio station. But Spotify, with at least 20 million paying users — and 55 million more who listen free to an ad-supported version — has begun to make its mark on the charts, with albums by Justin Bieber, Kendrick Lamar, Drake and the Weeknd reaching huge audiences through streaming. Another potential giant arrived last month when YouTube finally introduced its new music app.

Right before Christmas, music from one of the format’s last major holdouts, the Beatles, was made widely available on streaming services.

Other players struggled. Rdio, a Spotify competitor, went bankrupt with $220 million in debts, and Pandora scooped up its assets for $75 million. (Watch out, Spotify and Apple Music.) The French streaming company Deezer abruptly postponed an initial public offering after investors balked at the company’s valuation of $1.1 billion.

Tidal, bought by Jay Z for $56 million, was a public relations disaster after trying to reposition itself as an artist-friendly alternative; critics saw a money grab dressed up as populism. Yet so far Tidal has succeeded where many others have not — it has survived, reaching the symbolic milestone of one million subscribers. Will Tidal survive another year, or will Jay Z find a buyer for it?

The Power of Stardom

The biggest news in the music business was that people would still pay for an album if the artist excited them.

Adele, the British singer with a huge voice and an endearingly self-deprecating manner, sold nearly 3.4 million copies of her album “25” in a single week, breaking all existing records. After so many years of sliding sales, the industry had long assumed that people were simply no longer willing to buy albums.

But as the Adele episode showed, consumers will plunk down their $10 for a CD or download if they really want it — and if they do not have a cheaper alternative. In a decision that is still reverberating throughout the business, Adele withheld “25” from all streaming services. The question now facing every artist, manager and record label: Is Adele’s success repeatable, or is she the ultimate outlier?

(CDs and downloads, by the way, were not the only formats that surprised the music industry in 2015. Vinyl records, once left for dead, continued a decade-long resurgence. The format is so in demand that manufacturers are having a hard time tracking down enough machines to press new records.)

The Power of Stardom: Part 2

In another decision that shook the business, Taylor Swift challenged Apple — and won.

As Apple was preparing to introduce Apple Music in June, the company told record labels that it would not pay royalties during customers’ 90-day trial periods. The major music companies acquiesced and the indies balked, but nothing changed until Ms. Swift wrote a polite but firm blog post asking Apple to reconsider its policy.

Within hours, the company came around — instantly making Ms. Swift a kind of folk hero among musicians of virtually every stripe.

Copyright Battles

Accusations of plagiarism involving popular songs are part of the music business’s constant hum of litigation. “If you get a hit, you will get a writ,” one industry lawyer said. But last year featured two huge decisions in copyright cases.

In March, a jury found that Robin Thicke’s 2013 song “Blurred Lines” had copied from Marvin Gaye’s 1977 hit “Got to Give It Up,” and ordered Mr. Thicke and Pharrell Williams, his co-writer, to pay $7.4 million to Gaye’s family. (The award was later reduced to $5.3 million.) But aside from the famous personalities — at one point in the trial, Mr. Thicke played a medley at the piano — the case drew attention for what some worried would be damaging implications for creativity: Would the case open the door to more lawsuits and accusations of infringement?

The effect is still unclear. For one thing, negotiations over writing credits are usually made in private, long before a song comes out. But just weeks after the “Blurred Lines” verdict, five writers from the Gap Band, the 1970s funk group, were quietly added to the writing credits of Mark Ronson’s hit “Uptown Funk” — a move that may suggest business in the post-“Blurred Lines” world.

In another closely watched case, a judge ruled in September that the long-claimed copyright to the song “Happy Birthday to You” — the reason the song has been able to earn an estimated $2 million a year in royalties — was invalid. If the judge approves a settlement in the case, the song will join the public domain, with one likely result that movie and television producers will now make much more use of the song instead of resorting to copyright-free workarounds.

Is E.D.M. Booming or Struggling?

The world of electronic dance music, or E.D.M. — the booming bass, the huge festivals, the elaborate fan costumes — has been growing at a breakneck pace for years.

But last year the dance world shook a bit with the financial troubles of SFX Entertainment, a three-year-old company founded by the longtime media mogul Robert F.­X. Sillerman. The company went public two years ago, and after a bid by Mr. Sillerman to take the company private again never materialized, its stock plunged and a company once valued at $1 billion was now causing investors and talent agents in the music world to worry about bankruptcy, and about what wider impact a collapse could have on the interconnected dance world.

The fate of SFX is still unclear, but for now for the beat goes on in the E.D.M. world, and in the live music business over all, which closed what was expected to be a record year, thanks to the popularity of festivals and the continually rising price of concert tickets.

The Sound of Apps

A constellation of mobile apps like Vine, Periscope, Snapchat and YouNow have emerged as new platforms for musicians and their audiences, just as YouTube did a decade ago.

Many of these apps are still invisible to parents and anyone over 30, but in April the app music world reached an important milestone when Shawn Mendes, a 16-year-old Canadian singer who first made his mark with six-second videos on Vine, scored a No. 1 album (with the help of a major record company, that is). How long until we see the first YouNow or Snapchat superstar?

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