Q2 Music Industry Trends, Insights, and Sentiments

In Beats + Bytes by Nue Agency

What a year! Can you believe we are halfway done? Here are some themes we saw in Q2:

Music Business Outperforms NASDAQ and the Dow
As Q1 earnings wrapped, companies ONCE AGAIN delivered much better profitability than street expectations, but music business stocks, specifically, outperformed the NASDAQ and The Dow this quarter.

The Music “Harvesting” Continues
Labels are working to preserve music’s value. DSPs are looking to optimize by raising prices.

Streaming Economy Thrives but Changes Are Coming
Overall, Netflix won the streaming wars and now they are coming for live events. Prices continue to rise and bundling is on the horizon, but with music, the streamers are saturated. There is a continued shift in cultural value from streaming to social, which is bifurcating the music industry into two parallel consumer worlds: LISTEN, where streaming plays the role of passive consumption and PLAY, where social platforms have a grip on culture.

The Creator Economy is Thriving and Driving Culture
Music has a big opportunity to grab hold of this landscape.

AI Demand Is Far From Its Peak
AI is the game-changing technology that is sweeping through the industry and posing both a great opportunity and threat. The next great companies are coming up. It’s still too soon to tell as we stare down the barrel of the technology and the full power of its use cases, but expect big tech to dominate this world.

Conflict Sells
Kendrick vs Drake was the biggest story in music this quarter. The Juneteenth Pop Out was a KO.

Live Events Can’t be Stopped
Live had a tremendous Q1, driven by Live Nation, TKO Group, and Madison Square Garden Entertainment, but things are starting to slow down as there are a lot of choices. All of a sudden, shows are canceling and tours are falling because of slow ticket sales. The biggest winners are going to be live events that also nail live streams. Kendrick and Amazon did that with the Pop Out. More of that energy!

Will Live Nation and Ticketmaster break up?
And what will that mean for the music industry as a whole? I think this will have big implications and open up new doors for ticketing, data, and fan-to-artist relationships, not to mention Live Nation’s stock. If and when it happens, this will open up the next era of the live business.

New Brands are Coming Into Live Music
It’s great to see more brands entering the music space. The Gov Ball sponsorship roster was a great example.

Social Media Woes
The Surgeon General is considering slapping a warning label on social media. How will that change things? And what will TikTok’s court battle bring? The next court date is in September, so TikTokers are safe for now, but in the meantime I expected a lot of hedges with creators picking up other platforms. My go to is YouTube Shorts.

Sports are Leading the Way
Media giants relied on sports last year when they had to woo advertisers mid-actors’ strike during Upfronts. And NIL (Name, Image, Likeness) is taking a whole new shape now that private equity is getting deeper into the industry.

Catalogs Continue to Climb
When you aren’t minting new superstars, the value of old superstars goes up! Queen’s catalog sold for a billion dollars, showing that the value of music is still on the rise for legacy acts. If everybody knows your name in an era where that’s nearly impossible to accomplish, you’re in the money! The question is how do emerging artists generate value for their music IP?

IMAX Movie Experiences
The realest works. IMAX is winning with their movie experiences. This is a space where artists can innovate, too. The demand is there and so are the venues.

Search is Being Reinvented
It’s not just the way “Googling” is being redefined by AI; social media is becoming a major search engine, Reddit searches are also soaring, as is music. Music services – with their 100,000 new songs per day – are also creating a fascinating new search dynamic. Google your name or your favorite sports team on Spotify. You never know what’s going to come up.

AR & VR Not Winning Yet in 2024
I’m still a believer. The products keep getting better and more accessible. I picked up a pair of Meta Ray Ban glasses this quarter and I’m loving them. Expect a price drop across the board as these get in more and more hands. Apple Vision Pro won’t work at its current price, but what if you cut it in half?

Web3 Remains Choppy but Builders are Building
There is so much action and opportunity in this space. It still feels like a weird and a foreign land but there remain big, interesting ways to disrupt ticketing, fan clubs, music ownership, payment royalties, and live experiences. This is happening. Beyond the ETFs, marketing manipulation, and missteps, builders are building and strides are being made that we don’t all see and feel yet.

Growth of Saudi
It feels more and more like this is the next growth frontier for the entertainment industry. Sports is leading the way and music is next.

AfroBeats Is Winning
So many of the next, great international stars are rooted in this sound.

Music to Watch
Chappell Roan is next and people want personalities. This interview was another tipping point. That said, the charts don’t lie: it’s the summer of country music crossing over.

I’m looking forward to Q3, 4th of July, Summer Music Festivals, The Olympics, more blockbuster releases, and the back to school rush. I expect the election to whip us into a complicated frenzy, with the debates, conventions, and the slow march to November 5th.