Funnel Music Limited
The Company contends that the dominant focus of music streaming platforms on the larger global artists, coupled with the outdated model of artist/major label, offers a commercial and disruptive opportunity to offer a shared outcome to artists, rather than the label taking the major share of revenues.
For this reason, the Company is seeking to establish a digital platform by which new musical artists are selected, and then progress these artists through the Company’s development programme, and in doing so enable the artists to receive expert guidance from musicians, producers, publishers, mentors, writers, businesses and managers with experience, understanding and empathy. Specifically, the platform will efficiently manage the numerous aspects of the artists career, without the traditional heavy overheads of a major label.
The advent of music streaming and downloading over the Internet, combined with the ubiquity of smartphones, has made it possible for consumers to listen to more music than ever before. The traditional music industry has experienced a major struggle to identify how it can structure this emergent behaviour and format into a viable business opportunity. As a consequence, it experienced a declining market in monetary terms, however, revenues derived from recorded music have now started to grow again.
In 2016, the global recorded music market grew by 5.9%, the fastest rate of growth since the International Federation of the Phonographic Industry (IFPI) began tracking the market in 1997. This was a second consecutive year of global growth for the industry with revenue increasing in the vast majority of markets. This growth, however, should be viewed in the context of the industry losing nearly 40% of its revenues in the preceding 15 years.
According to the Global Music Report 2017, published by the IFPI, digital revenues grew by 17.7% to US$7.8 billion in 2016, driven by a sharp 60.4% growth in streaming revenue, the largest growth in eight years. Streaming now makes up the majority (59%) of digital revenues, and for the first time, digital revenues make up 50% of the share of total recorded music industry revenues.
Music streaming services like Spotify, Apple Music and YouTube have increased consumer choice but this has made the consumption of music more concentrated and potentially more conservative, as such platforms tend to focus on high-selling music artists which deliver more certain revenues. This is reflected in the fact that fewer and fewer artists account for an ever-increasing share of the download market.
Therefore, as global artists then to be the principal drivers of this growth in revenue, the outdated artist/major label model means that the cost and risks of taking on new artists are great, and such new artists are not being nurtured or developed as they once were.