MBW Reacts is a sequence of analytical commentaries from Music Enterprise Worldwide written in response to main current leisure occasions or information tales. Solely MBW+ subscribers have limitless entry to those articles. The beneath article initially appeared in Tim Ingham’s newest ‘Tim’s Take’ e-mail, issued solely to MBW+ subscribers.
On… Discovery Mode dodging a bullet
Someplace in Stockholm, Spotify‘s authorized staff are exhaling.
Drake’s incendiary authorized assault on Common Music Group was dismissed in its entirety on Thursday (October 9) by Decide Jeannette Vargas.
For the report: I assumed nearly all of Drake’s case was rubbish. I’m glad the choose sided with defending creative expression; Kendrick Lamar’s most controversial line in Not Like Us was clearly exaggerated within the context of an escalating rap battle.
Drake additionally accused UMG of intentionally practising streaming fraud to make sure the success of Not Like Us. His proof? A couple of Tweets and a DJ Akademiks podcast the place – as beforehand reported – even the supposed whistleblower fingered Kendrick’s administration, not UMG. Weak.
But certainly one of Drake’s different complaints had ramifications far past UMG. In reality, it may have pulled the curtain again on a shadowy ingredient of the trendy enterprise.
Buried in Decide Vargas’ 38-page opinion was a quiet victory for certainly one of streaming’s most controversial mechanics: Spotify’s Discovery Mode.
Drake’s petition explicitly known as out Spotify’s promotional program (the place labels settle for a 30% royalty low cost in change for an algorithmic increase) as proof of “misleading practices” by UMG.
Drake’s authorized staff tried to border this as shopper manipulation: customers unknowingly being fed Kendrick fairly than Drake, all whereas Spotify pocketed the distinction.
The courtroom rightly dismissed this declare as too speculative, missing proof.
However right here’s the factor: Drake wasn’t flawed to poke on the topic in query.
“The trade appears to have progressively and begrudgingly accepted Discovery Mode as the worth of doing enterprise.”
Discovery Mode is opaque. Most Spotify listeners have little concept which tracks are enrolled, or how a lot of our listening is being invisibly formed by labels agreeing to decreased royalties.
This issues as a result of Discovery Mode has been residing in a precarious state of trade acceptance for years.
Again in 2020, the Recording Academy blasted it as “predatory” and corresponding to “payola”. In 2022, members of Congress demanded Spotify publish month-to-month studies on each observe enrolled and the royalty reductions utilized.
That by no means occurred. The outrage subsided. The trade appears to have progressively and begrudgingly accepted Discovery Mode as the worth of doing enterprise.
Then in wades Drake, litigious arms flailing, threatening to blow all of it broad open.
Consider CEO Denis Ladegaillerie not too long ago gave us a special, extra constructive view on Discovery Mode, claiming that his firm is shifting “tons of of 1000’s of tracks each month” into this system – with 98% exhibiting commercially “constructive returns”.
Translation: Discovery Mode isn’t going anyplace… however upwards.
Due to the Drake dismissal, we’ve maybe misplaced a possibility to higher perceive the way it works – and at what scale.
Spotify will carry on raking in these 30% royalty reductions. Report labels will maintain signing them off. Shoppers will stay in the dead of night.
On… Ok-Pop Demon Hunters, Story, and Devotion
The music trade’s most prophetic quote of the yr was issued in February, from Dr. Luke’s impartial writer, Prescription Songs.
It arrived in a run-of-the-mill signing press launch which, I’m embarrassed to now admit, remained unopened in my inbox till this week.
Right here it’s: “She has a real expertise for writing nice melodies and cheeky lyrics – interesting to the worldwide plenty.”
The supply: Prescription’s Shari Fitch.
The topic: South Korean songwriter/artist EJAE, freshly signed to Prescription by A&R Nick Guilmette.
Six months later, six of EJAE’s co-writes appeared in an animated film that arrived on Netflix with little fanfare: KPop Demon Hunters. That muted arrival tells you every part about how the leisure trade initially valued this undertaking.
Sony Footage produced KPDH however didn’t give it a theatrical launch – streaming-exclusive, quiet license. The movie firm evidently didn’t holler loudly sufficient about it internally, both: the soundtrack ended up outdoors Sony, with Common Music Group’s Republic Data.
Hardly anybody noticed what was coming subsequent – besides perhaps Nick Guilmette and Prescription Songs. (Guilmette was promoted to Senior Director of A&R in June; go determine.)
“Music streaming providers optimize for engagement – measured in streams, saves, and skip charges. But when Netflix choices a present like KPDH, it’s betting on resonance – the form of cultural endurance that makes folks rewatch, suggest, and bear in mind.”
Quick ahead to now, and KPDH is the cultural juggernaut defining 2025. These “international plenty” are firmly on board; the GRAMMY voting committee might comply with.
EJAE (aka Kim Eun-jae) offered the singing voice of Rumi within the movie, whereas her musical co-writes included Golden, Your Idol, and How It’s Executed – all smash hits. As I write this, Golden stays atop Billboard‘s Sizzling 100 AND Spotify’s international high hits rankings; the KPDH soundtrack album simply returned to No.1 on the Billboard 200.
An enormous takeaway for the music enterprise right here? One thing Disney has identified for a century: don’t underestimate the facility of music as narrative.
Watch KPDH, and what strikes you isn’t simply the meticulous songwriting from EJAE and her fellow composers (inc. Jenna Andrews, Mark Sonnenblick, Stephen Kirk, Ido, Kush, and Teddy Park).
It’s that each tune is narratively embedded.
Golden isn’t only a banger; it’s Rumi’s character-defining second of transformation. Your Idol is the sinister-yet-sticky introduction of evil. What It Sounds Like scores a climactic eruption of non-public declaration to mass awakening.
The movie has been watched 300+ million occasions; its songs have generated over 3 billion streams. That 10-to-1 ratio tells you every part: audiences didn’t simply watch a narrative with good music – they absorbed music as story, then carried it with them into their each day lives.
Music streaming providers optimize for engagement – measured in streams, saves, and skip charges. They’re incentivized to prioritize quantity over emotional affect.
But when Netflix choices a present like KPDH, it’s betting on resonance – the form of cultural endurance that makes folks rewatch, suggest, and bear in mind.
An enormous problem for Spotify’s new co-CEOs?
Their firm is music’s international market chief – and earnings from shifting tons of of 1000’s of tracks by Discovery Mode each month.
However can it actually encourage devotion like Netflix simply did with one well-told story?
Music Enterprise Worldwide
