The Evolution of Music
Streaming, Ownership, and the Future of Immersive Entertainment
Welcome to this week’s newsletter, where we dive deep into the shifting landscape of music ownership, streaming dominance, and the rise of immersive entertainment experiences. Whether you're an artist, a fan, or an investor, the music industry has never been more dynamic.
The Basics: The Messy World of Music Ownership
The world of music ownership is a labyrinth of contracts, royalties, and rights management that often leaves both artists and fans confused. Who actually owns the music? Where do streaming revenues go? Why do artists like Taylor Swift fight for their masters? Let’s break it down.
Labels (e.g., Universal, Sony, Warner) sign artists, fund recording sessions, handle marketing, distribution, and promotion in exchange for a percentage of profits.
The master recording is the original recording of a song. Record labels typically own these unless the artist negotiates ownership (e.g., Taylor Swift’s re-recording strategy).
Music publishing controls the song’s underlying composition (lyrics, melody, arrangement), generating royalties when the song is covered, played in media, or streamed.
Performance Rights Organizations (PROs) like ASCAP, BMI, and SESAC collect royalties for songwriters and publishers when music is played publicly.
Revenue split after Spotify takes its 30% cut:
80% goes to the label & master owner; artists get a fraction (15-50%) based on their deal.
15% goes to songwriters & publishers, split among multiple contributors.
5% goes to PROs for performance royalties.
Advances: Artists and songwriters often receive advances from labels or publishers, essentially loans that must be recouped before they earn royalties.
A wide range of deal structures exist, from traditional label deals to 360 deals (where labels take a percentage of all revenue streams) and distribution deals (where artists keep most revenue).
The above is grossly simplified. If you are interested in the space, I recommend "All You Need to Know About the Music Business" by Donald S. Passman for an in-depth look at industry structures.
Spotify: Riding High
Once considered the villain of the music industry, Spotify has emerged as the platform that saved it. Despite initial resistance from artists and record labels, streaming turned a declining market around and helped music revenue reach record highs.
Streaming saved the industry. After Napster and piracy decimated CD and digital sales, streaming revived revenues, doubling the industry’s worth since 2013.
In 2023, global recorded music revenue hit $28.6 billion—twice the 2013 level.
In 2024, Spotify turned its first full-year profit with a net income of €1.14 billion, marking a turning point after years of losses.
Expansion into podcasts, audiobooks, and video content is seen as the next major growth opportunity for the company.
From Equipment to IP: Deals Are Being Made
The battle for music ownership isn't just about artists and labels anymore—investors are pouring billions into music assets, treating them like high-value commodities. Some deals have been massive successes, while others have been costly failures.
HongShan Capital Group acquired a majority stake in Marshall Group for approximately €1.1 billion ($1.16 billion), expanding its footprint in the audio equipment market.
Blackstone is exploring a $3 billion+ sale of Sesac, including music from Bob Dylan, Adele, and Ariana Grande.
Apollo Global Management Inc. pumped $700 million into Sony Music Group, which is itself in talks to acquire Queen’s music catalog in a deal that could total $1 billion
Lessons from past failures:
Terra Firma’s $5.8 billion acquisition of EMI in 2007 ended in collapse due to declining CD sales and piracy, leading to Citigroup selling EMI’s assets to Universal and Sony.
Hipgnosis, which aggressively acquired artists’ catalogs, struggled to monetize them and was sold to Blackstone for $1.6 billion in 2023.
Investing in music rights can be lucrative, but history shows that success isn’t guaranteed. Understanding market trends and structuring deals carefully is essential for profitability.
Learning from Hipgnosis: The Rise of Immersive Music
With music rights being sold at high premiums, investors are looking beyond streaming—immersive experiences may be the future. Virtual reality concerts, AI-driven experiences, and interactive performances are reshaping how fans engage with music.
Pophouse Entertainment, co-founded by Conni Jonsson, acquired Mamma Mia! The Party, aiming for global expansion.
ABBA Voyage, an immersive digital concert, has sold over 2 million tickets since 2022.
Layered Reality launches "Elvis Evolution" in May 2025—a 110-minute AI-powered experience bringing Elvis Presley’s career to life.
Coldplay debuts "A Film for the Future" (January 2025), a 44-minute immersive 360-degree visual experience tied to their Moon Music album.
Las Vegas Sphere hosts high-grossing immersive concert residencies:
U2's UV Achtung Baby Live grossed $244.5 million over 40 shows.
Dead & Company earned $131.4 million over 30 shows.
The Vegas Residency Boom (and Bust)
Once a haven for legacy acts, Las Vegas residencies are now attracting top-tier artists—but not all are profitable. While some artists secure massive deals, others struggle to sell enough tickets to justify the costs.
Céline Dion’s 2003 residency redefined Vegas entertainment, with A New Day... grossing $385 million from 717 shows.
Today’s residencies are riskier:
Casinos often pay huge fees upfront, expecting gaming revenue to compensate.
50 Cent secured a $15 million deal for six shows ($2.5M per show).
Black Eyed Peas' 2025 residency was canceled due to "current circumstances"—a sign of market oversaturation.
Behavioral Science Insight: Contextual Priming in Music
Music doesn’t just entertain—it subtly shapes our decisions in ways we rarely notice. One famous study demonstrated how background music influences purchasing behavior, proving that sound can be a powerful marketing tool.
Researchers played either French or German background music on alternating days in a wine shop.
When French music played, sales of French wine tripled. When German music played, German wine outsold French wine.
Most customers were unaware that music influenced their choice, demonstrating priming bias—a subconscious nudge toward culturally associated products.
Music is more than just background noise—it can shape behaviors, emotions, and even financial decisions. As behavioral science continues to unlock the power of sound, expect more brands to harness music’s hidden influence.
Final Thoughts: Music’s Ever-Changing Future
The music industry is evolving faster than ever. Streaming has dominated, but questions remain about its sustainability for artists. Meanwhile, new frontiers in immersive experiences are challenging traditional concert models, and the battle over music rights is still raging. Whether you’re a musician, investor, or fan, one thing is certain—music will always find a way to innovate.