Inside The Weeknd’s $92 Million Year – and the New Streaming Economy Behind It
Five years ago, Spotify was a fledgling music streaming service just months away from its US launch and YouTube had just begun its push towards original programming; Netflix was a year away from doing the same, starting with Card castle. For Celebrity 100 members–our annual review of the highest paid artists on the planet–Meaningful streaming revenue was a distant dream.
But sometimes profound changes happen quickly. Streaming is now the dominant platform for music consumption, and it’s growing rapidly, up 76% year over year, according to Nielsen. YouTube has given birth to a whole new breed of celebrity: the YouTube star. And Netflix plans to spend hundreds of millions a year on original content.
“It’s not just about music, it’s about all forms of entertainment,” says Nielsen’s David Bakula. “You don’t really have to own anything anymore, because for $10 a month you can do this: you can have everything.”
Members of our list have fattened their pockets accordingly. While overall Celebrity 100 revenue is flat at just over $5 billion in the past 12 months from a year earlier, direct streaming revenue jumped to $387 million from $177 million. dollars.
For musicians, the going rate of just under a penny per on-demand stream might not seem like a lot, but it adds up for the 14 artists on our list who topped 1 billion spins over the course of the year. last year. Comedians with devoted fanbases, from Adam Sandler to Chris Rock, have raked in eight-figure checks from Netflix. And stars turned impresarios, like Ellen DeGeneres and Dwayne “the Rock” Johnson, now have video streaming businesses they can call their own, just like Dr. Dre did with Beats Music and Jay Z with Tidal du audio side.
The indirect loot from streaming can be even greater. Abel “the Weeknd” Tesfaye has turned his play count — 5.5 billion streams over the past two years — into an estimated $75 million tour lead. For him, it’s all part of the pattern he’s followed throughout his rapid rise, a pattern that applies to all kinds of businesses: creating a great product, making it widely available, and flipping the switch monetization when the time is right.
“I really wanted people who had no idea who I was to hear my project,” he says. “You don’t do this by asking for money.”
Steve Jobs would have been the logical choice to headline the launch of Apple’s eponymous streaming service, but by the time the tech giant launched Apple Music two years ago, he was busy slashing distant universes. In his place was a pair of young musicians who oscillate between hip-hop, pop and R&B: Drake and the Weeknd. The latter stunned the crowd with the first-ever live performance of his new single “I Can’t Feel My Face”, which premiered on Apple Music and racked up over 1.5 billion spins across all streaming platforms. .
The Weeknd knows as well as anyone that streaming isn’t the future of music, it’s the present. As digital downloads and physical sales plummet, streaming is increasing overall music consumption — since appearances at Apple, Drake (#4 on our list at $94 million) and The Weeknd (#6, $92 million) dollars) totaled $17.5 billion. streams – and that creates other types of monetization, including touring revenue.
“We live in a world where artists don’t really make money from music like we did in the Golden Age,” says The Weeknd, 27. “It doesn’t really come until you’re on stage.”
Watch on Forbes: The highest paid artists in the world 2017
“The reason World Weeknds and World Drakes are exploding is a combination of global audiences freely consuming them at a young age. [and that] they keep dropping music,” Live Nation leader Michael Rapino said. “They provide an ongoing and engaged dialogue with their fanbase.
The model of making music available cheaply in order to profit from touring and endorsements was taken to its logical conclusion by Chance the Rapper (#95, $33 million). The 24-year-old has never sold a physical album or signed a recording contract in his life. he only freely distributed his work through streaming services. It generates enough spins to win several million dollars this way. And he’s cashing in big on lucrative festival gigs and arena dates, as well as deals with brands like Apple and Kit Kat. It’s akin to the freemium model that has worked so well for apps ranging from Tinder to Candy Crush – give your stuff to the most people, then soak a smaller group of followers.
This is the pattern the Weeknd has pursued since the start of his career. The son of Ethiopian immigrants who fled during the East African famine of the 1980s, he was born in Toronto and raised by his mother and grandmother. At 17, he dropped out of school and ran away from home. A decade earlier, that might have been the end of the road for him.
But in 2010 he started recording music – a mix of festive genres – and distributed it for free on YouTube in a series of mixtapes, choosing the Weeknd as his mysterious pen name. “I didn’t want to put a face to it,” he says. “I wanted to create a fan base that loved me for my art.”
In the old entertainment economy, he would have waited to be discovered by a record company. Instead, that fan base found him, and all those free streams allowed him to force record labels to bid on him.
As for the future, the Weeknd is smartly looking at other parts of the entertainment economy that have been impacted by the streaming revolution.
“I kind of treat my albums like movies when I write them, telling a big story,” he says, before revealing his next step: “More visual candy and hopefully an adventure in my first real love, cinema.”
Netflix, you have been warned.