Music Everywhere
16 June 2023
Share with a Friend
All fields required where indicated (*)Chances are that, like me, you grew up on cassettes, taping your favorite songs when they were played on the radio, thus creating your own unique playlist that you could take with you in your Walkman. Those were the first days of portable and personal music. Prior to that, we would mostly listen to music in our homes and cars using radios and stereo towers.
Today, music is everywhere, in our homes and on the go. Of all the forms of entertainment within our smart homes, music is omnipresent, both in itself and as part of our other activities. Technology has profoundly changed the way we consume and produce music, but it hasn’t changed who we listen to: people making music. Will AI change that as it becomes capable of generating music?
We Are Engaging With Music Everywhere
We use music on our personal devices during our daily activities. It energizes us when exercising or cleaning our homes and it helps us to relax and fall asleep. Moreover, with music accessible on our personal devices and through smart speakers, our homes and lives are filled with music.
People Engage With Music in Many Different Ways
Source: IFPI, 20221M1
We engage with music in more ways than ever: through streaming services, social media platforms, short-form video apps, live music, but also live and on the radio or TV (see graph). According to the IFPI (the organization that represents the interests of the recording industry worldwide), music fans listened to an average of 20.1 hours per week in 2022 (up from 18.4 hours in 2021).
Those hours are not just spent listening to music on streaming platforms; music is also an important part of other entertainment forms. Music-focused TV shows or films are very popular, with 58% of people watching those, according to IFPI1. And 44% of gamers watched a virtual music concert on a gaming platform in the last three months1. On social media, music is used to make reels more engaging, a practice that is made even easier with most social media platforms licensing popular music from the major labels.
When looking at all innovations, it is striking that each one has resulted in us consuming more music. From vinyl to cassettes to CDs to MP3 players and most recently to streaming, each new technology increased the number of accessible songs, the quality of the music, and the ease with which we could get to the song we wanted to hear.
Everyone Can Now Create Music
Today, with AI, the number of tracks is increasing faster than ever. Luminate2, who monitors the entertainment market and provides insights, recently found that in the first quarter of 2023, streaming services added on average 120,000 new tracks per day, up from 93,400 per day in all of 2022.
More Tracks Are Added to Streaming Services Each Year (Tracks Per Year in Millions)
According to Universal Music Group’s CEO Sir Lucian Grange3, AI contributes in part to this oversupply. While most of this content is of poor quality created by prior generations of AI, newer generations are getting better at making music. In April, an AI-generated track called "Heart On My Sleeve" mimicked the popular artists Drake and The Weeknd so well that it went viral before it was taken down for copyright infringement.
However, Will We Listen to All That Music?
Back in 2004, Chris Anderson published an article in Wired (later turned into a book) about the Long Tail. He described how the democratization of production and distribution in combination with a reduction in search costs would reshape how we consume content by driving more attention away from traditional hits and to the long tail of niches and small publications and creators.
When applied to music, we indeed see a long tail. And with the help of AI that long tail of niche content will probably get longer. Nevertheless, this long tail mostly applies to production, but not so much to consumption. In his book Tarzan Economics, Spotify's former chief economist Will Page points out that people spend 90% of their time listening to less than 2% of all songs on streaming platforms. It is the left side and not the long tail that drives music consumption and contains most of its value.
When considering all the innovations that music has incorporated, all the technology that has upended the value chain, the one person who remains standing is the artist. In a sea of artificially created content, they are likely to stand out even more. Moreover, these artists will probably use AI. In a recent interview, Neil Tennant from the Pet Shop Boys4 said that AI is a useful tool in a songwriter’s kit, for instance to help overcome writers’ block
It's not so long ago that the internet and digital piracy could have been the death of the music industry. Yet another innovation, streaming, saved it. Similarly, AI and other innovations could potentially improve quality and create new music experiences, in and out of our homes.
Important Disclosure
This is a marketing communication. Please refer to the prospectus of the UCITS and to the KID before making any final investment decisions.
This information originates from Dasym Managed Accounts B.V. with registered address at Flevolaan 41 A, 1411 KC Naarden, the Netherlands (DMA), DMA is an investment company incorporated under Dutch law and regulated by the Dutch Authority for the Financial Markets (AFM) and the Dutch Central Bank (DNB). The information prepared by DMA is intended only to provide general and preliminary information to investors and shall not be construed as investment, legal or tax advice. The views and opinions expressed in this presentation are those of the author(s) but not necessarily those of DMA. DMA and its associated and affiliated companies (together “Dasym”) assume no liability with regards to any investment, divestment or retention decision taken by the investor on the basis of this information. Dasym makes no representation or warranty, express or implied, as to the accuracy or completeness of any of the information contained in this blog. Dasym undertakes no responsibility to update the information prepared by it and contained in this blog.
This information is published by VanEck (Europe) GmbH. VanEck (Europe) GmbH, with registered address at Kreuznacher Str. 30, 60486 Frankfurt, Germany, is a financial services provider regulated by the Federal Financial Supervisory Authority in Germany (BaFin). The information is intended only to provide general and preliminary information to investors and shall not be construed as investment, legal or tax advice. VanEck (Europe) GmbH and its associated and affiliated companies (together “VanEck”) assume no liability with regards to any investment, divestment or retention decision taken by the investor on the basis of this information. The views and opinions expressed are those of the author(s) but not necessarily those of VanEck. Opinions are current as of the publication date and are subject to change with market conditions. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results. Information provided by third party sources is believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. VanEck assumes no liability for the content of any linked third-party site, and/or content hosted on external sites. Brokerage or transaction fees may apply.
VanEck Asset Management B.V., the management company of VanEck Smart Home Active UCITS ETF (the "ETF"), a sub-fund of VanEck UCITS ETFs plc, engaged Dasym Managed Accounts B.V., an investment company regulated by the Dutch Financial Service Supervisory Authority (AFM), as the investment advisor for the Fund. The Fund is registered with the Central Bank of Ireland and actively managed. Investing in the ETF should be interpreted as acquiring shares of the ETF and not the underlying assets.
Investors must read the sales prospectus and key investor information before investing in a fund. These are available in English and the KIIDs/KIDs in certain other languages as applicable and can be obtained free of charge at www.vaneck.com, from the Management Company or from the following local information agents:
UK - Facilities Agent: Computershare Investor Services PLC
Austria - Facility Agent: Erste Bank der oesterreichischen Sparkassen AG
Germany - Facility Agent: VanEck (Europe) GmbH
Spain - Facility Agent: VanEck (Europe) GmbH
Sweden - Paying Agent: Skandinaviska Enskilda Banken AB (publ)
France - Facility Agent: VanEck (Europe) GmbH
Portugal - Paying Agent: BEST – Banco Eletrónico de Serviço Total, S.A.
Luxembourg - Facility Agent: VanEck (Europe) GmbH
Performance quoted represents past performance. Current performance may be lower or higher than average annual returns shown. Discrete performance shows 12-month performance to the most recent quarter-end for each of the last 10 years where available. E.g. '1st year' shows the most recent of these 12-month periods and '2nd year' shows the previous 12 months period and so on.
Performance data for the Irish domiciled ETFs is displayed on a Net Asset Value basis, in Base Currency terms, with net income reinvested, net of fees. Returns may increase or decrease as a result of currency fluctuations.
All performance information is based on historical data and does not predict future returns. Investing is subject to risk, including the possible loss of principal.
No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of Dasym and VanEck.
© VanEck (Europe) GmbH / Dasym Managed Accounts B.V.
Sign-up for our ETF newsletter
Related Insights
05 June 2024
15 May 2024
12 March 2024
09 February 2024