Unpacking the Holy Grail
The spins and spends of music services.
Its incredibly rare for an artist to drop a commercially successful song on SoundCloud at its release, let alone put the track out on almost every single online platform at the same time. But last year the Jigga Man delivered huge collaboration with Justin Timberlake on nearly every platform.
Using publicly available data, partially available data (things like relative track popularity on Spotify) and some gross estimations I put together two charts for Holy Grail; one of the plays for each platform and another that estimates of the rough earnings Jay and Rock-a-fella walked with from each channel.
I’ve cited the sources and estimate procedures in the comments of every number and flagged all estimates with an asterisk.
Plays of Jay Z — Holy Grail
- Rdio — 700,000*
- iTunes — 2,5000,000
- Spotify — 3,500,000*
- SoundCloud — 8,400,000
- YouTube — 60,000,000
Payments from Jay Z’s Holy Grail
- SoundCloud — $0
- Rdio — $5,880*
- Spotify — $28,000*
- YouTube — $330,000*
- iTunes — $1,750,000
A few things jump out.
Rdio is tiny by both measures of importance — it doesn’t drive much listening or plays (even though it is my favorite music service). It will be very interesting to see how Beats, starting from scratch on January 21st, will make a meaningful impact for musicians and labels. (I believe it will, but that’s another post!)
As far as streaming goes, both Spotify and Rdio are blips on the radar compared to YouTube — the platform generates nearly 10x the revenue of the other services combined. YouTube continues to be the master of streaming and it is difficult to imagine that changing any time soon.
iTunes is still king of the hill. iTunes contributes 5x+ the revenue of their closest competitor. While streaming occupies a major place in the news, track sales (and album sales which are omitted from this analysis) are still where a vast majority of money is made.
So why would an artist like Jay Z use Soundcloud? What is the opportunity cost — how many of these streamers would have streamed somewhere else that monetizes plays or bought the track on iTunes instead of listening for free? A few thoughts on this:
- SoundCloud primarily competes with streaming services — not with the major revenue generators.
- If SoundCloud significantly cannibalized sales you wouldn’t expect such strong track sales.
- SoundCloud touches a different (and potentially valuable) audience than YouTube and the other streaming services. If they didn’t why would 8,000,000 people have played it there?
- SoundCloud may not be unmonetized forever. Even with $50M from Sequoia (maybe even because of $50M from Sequoia) its not unreasonable to expect SoundCloud may monetize these tracks in the future.
- SoundCloud may already be providing indirect revenue via their buy button or alternate channels of monetization that we aren’t accounting for in this analysis.
These advantages and minimal downside have me hoping other artists will utilize SoundCloud more in the future.
In brief: Audio Streams < Video Streams < Track Sales.
I would love to add radio, Pandora and satellite radio playcounts, if you have any data on how I can get reliable data or a reasonable estimate please connect with me on twitter at @aten.
I would expect some of the estimates to be off by as much as 50% but don’t think even that amount of imprecision would change the conclusions one would draw from the data.
If you’d like to cop some Jay Z merch, check out my company: CopThis.
Thanks to @__aston__ for helping with these estimates.
