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Music Marketing

Streaming, Social And Damned Statistics

ADE conference

Last week I was privileged to present on ‘Streaming, Social And Damned Statistics’ at Amsterdam Dance Event 2015. To celebrate the milestone 20th anniversary edition of the world’s biggest and best dance music conference, I was asked to take part in a series of special ’20×20′ talks. The idea behind the 20×20 series was for each of the speakers to talk for 20 minutes about a music business-related topic close to their heart.

The Importance Of Our Emotional Connection To Music

I chose to tell three short personal stories that illustrate the power of our emotional connection to music, and the power of music to bring people together. Music lies at the heart of human emotions and relationships; it evolved as a way for us to communicate with each other before we even had language, and it’s a key way in which we identify both with ourselves and with each other. The epicentre of music is emotion, and how and what it makes you feel; and that very primal power is where the real value of music lies.

Despite this indisputable fact, in 2015 we find ourselves in a place where our emotional connection to music is weaker than ever, and music is less valued than ever. The shift from sales to streaming and the dominance of social networks as the channels via which we consume media are diminishing the value of each of these platforms, the value of the artist-fan relationship, and the value of music itself. Discussions around streaming seem to focus solely on issues like transparency, payments, monetisation, curation and discovery, while our emotional connection to music is lost, buried or ignored; and yet, it lies at the heart of solving so many of these problems.

In my presentation, I decided to delve into recent research by music industry analyst Mark Mulligan, which demonstrated that the abundance of music available on demand on streaming services, and the seismic shift in youth culture being driven by the rise of a new generation of YouTube and social media stars, are leading to more fickle artist-fan relationships. Meanwhile, the music industry is still laser-focused on all the wrong things – release dates, campaign cycles and budgets, and the need to sell product right now. We’re still marketing and releasing music in the same cookie-cutter, set-template ways that stem straight from the heyday of the CD era. And we’re more obsessed than ever by meaningless vanity metrics like follower numbers, video views and chart positions. But numbers on their own mean nothing – if you have 10,000 Facebook fans, does that mean that you can sell 10,000 records, or gig tickets? We all know the answer to that.

How To Connect Artists And Audiences In A Streaming Economy

In a streaming-dominated attention economy, the challenge isn’t to reach more people, and nor is it to increase the amount of people that you sell to; it’s to make people care. Too often, artists and labels seem to approach digital marketing from a perspective of “What can this do for me and my career?” But now, the listener is the power player; in order to successfully build and monetise an audience, you have to start with your listeners, and put them first. You have to give people a reason to care about you, and to follow you – because the most important factor in any potential fan’s decision as to whether or not they want to support you is how you’re making them feel. The only metric that the music industry really needs to be concerned with is customer lifetime value; artists need to focus on turning fans into high-value, loyal, long-term customers, who keep coming back, and keep streaming their music. But you’ll only succeed in doing so if you get to know your audience, invest time into developing a more personal and direct relationship with them, and go above and beyond to add value for them. It’s a combination of data and engagement that holds the key to successful music marketing in 2015 and beyond.

Yet while many of the ways in which we’re now connecting to music are new, the scary and frustrating thing is that none of the points that I’m making in my presentation are. In fact, they’re all long-established tenets of wisdom in the world of marketing. So why aren’t more artists, labels and digital music services focusing on engaging listeners emotionally?

We need to stop selling product, and start prioritising our emotional, cultural and social relationship to music. It’s time to reconnect audiences to music and to artists on an emotional level – before those audiences switch the lights off on their way out…

NB: you can watch the full video of my live presentation below (apologies for the shakiness in parts, and the fact that the quality isn’t professional – this was shot on an iPhone. The darkness of the room isn’t down to the phone, but rather the choice of the ADE crew, so beyond our control). Thank you to ADE’s Gary Smith for the introduction (some of which has been edited out to make the video that bit shorter).

Music Marketing

How Digital Darwinism Can Drive Dance Music

Brighton Music Conference panel

Still only in its second year, Brighton Music Conference is the UK’s only electronic music conference, aiming to become the British answer to ADE. With a packed two-day schedule of panels, Q&As and showcases attracting some of the industry’s most influential workers, DJs, producers and exhibitors, this year’s BMC went way beyond beats, booze and beach parties to shine a laser-edged spotlight on the state of the dance music industry in 2015.

The stage was set with the conference’s opening keynote, entitled ‘Protecting The Dance Floor’, in which AFEM’s Mark Lawrence outlined the manifold threats facing the electronic music industry. These include nightclubs threatened with closure, fans exposed to life-threatening substances without information or protection, creators and rights-holders denied income that is rightfully theirs, and music stolen on an unprecedented scale. The keynote called for the industry to unite, to create a platform for communication and the catalyst for change, while the rest of BMC 2015 was dedicated to exploring exactly how the industry can continue to invest in A&R, develop artists and create world-class live events and releases in a world of diminishing revenues and returns.

Of course, digital distribution and monetisation – and in some cases, a lack of – dominated the debate. Believe Digital’s General Manager Lee Morrison pointed out that streaming makes up 45% of revenues for some labels, and that it’s key for discovery – which in turn drives sales of downloads, tickets and other products – but was also critical of the fact that a lot of labels don’t embrace streaming like they do downloads. While panellists were broadly positive about the promotional powers of platforms like SoundCloud, they stressed the dangers of putting a full-length track online pre-release: “Once the genie’s out of the bottle, it’s never going back in”.

However, the clock cannot simply be turned back. The streaming genie was freed from the bottle a long time ago, and the time for windowing releases on streaming or promotional platforms in order to protect sales is over. As Merlin’s CEO Charles Caldas stated in this recent interview with Music Ally: “As the value of the streaming market grows, people are starting to realise that consumption is the new sales. Anywhere that people are listening to music is actually the end-game now.” Industry analyst Mark Mulligan nailed it in his post about SoundCloud’s transformation: “The discovery journey has also become the consumption journey but the change is happening so fast that it is easy to confuse the two. This is why we have the paradoxical situation where 10 million streams on Spotify is considered to be x amount of lost sales while 10 million YouTube views is considered a marketing success. Right now a large chunk of digital marketing activity that is driving streams on YouTube and SoundCloud is tactic without purpose. It is marketing for marketing’s sake without a clear enough sense of what the end goal is.”

Promotional platforms such as SoundCloud are becoming destinations where discovery and consumption are monetised; while monetised platforms such as Beatport and Apple are diversifying to become promotional platforms. The music industry has to adapt, and accept that the future of music marketing lies on the streaming services themselves. With new features like Apple Music Connect being introduced, there is a huge, as yet largely untapped opportunity for artists and labels to interact with fans both new and old in the time and place where that person is discovering and consuming their music; which in turn is likely to forge a much more meaningful connection than in a social network feed cluttered with cat videos. With organic reach and engagement on the likes of Facebook and Twitter increasingly becoming a race to the bottom, social features on streaming services will once again empower artists to reach all of their fans on with a simple update or notification. This is particularly crucial since further research by Mulligan shows that the abundance of choice offered by streaming is leading to more casual and fickle artist-fan relationships; features that help artists to deepen that relationship again, to keep fans on streaming services and consuming more of their music, are increasingly important.

Downloads, meanwhile, may not be dead just yet; but as industry journalist, podcast host and DJ/producer Ben Gomori noted, “People are downloading even free music much less than they used to, because streaming is becoming so all-important” – while Dave Clarke opined that “iTunes is done…even Beatport is changing…it’s all about streaming.” And it’s fair to say that nowhere is the growing dominance of streaming over downloads more noticeable than at Beatport. In a clear effort to manage the transition between the two without cannibalising its core business of the Beatport Pro download store, VP of Music Services Terry Weerasinghe confirmed that pre-orders are coming soon, across both the Pro download store and its nascent streaming service. Users will be able to stream tracks and pre-order them for purchase on Beatport Pro; and a pre-order will count as a sale on the day of purchase, not when the track goes on sale. How that will affect the Beatport charts? Will streaming drive download sales, or perhaps the other way around? How much is a stream on Beatport worth to an artist or label, compared to the likes of Spotify or Apple? Only time will tell.

It was also confirmed that Beatport is becoming a UGC (user-generated content) platform, where anyone will be able to upload their own content or a mix and content will be fingerprinted against Beatport’s catalogue. With uploads looming large, and mixes already available on the platform, there is a clear opportunity for Beatport to become as key a promotional platform as something like SoundCloud. Could it be that Beatport will become a cross between Spotify and SoundCloud, with a huge catalogue of promotional, UGC content sitting alongside licensed mixes and fully monetised releases? If anyone call fill that gap, Beatport can; but it needs to follow in the footsteps of Apple and integrate the same kind of direct artist-fan interaction if it’s going to really become a one-stop shop for dance music and maximise all of its monetisation opportunities to their full potential.

And it’s certainly not just Beatport that has work to do. Spotify data economist Glenn McDonald rhapsodised about streaming giving artists the ability to see exactly who’s listening to your track, when, where and how; but let’s face it, the data that Spotify et al currently make available to artists and labels is limited to say the least. Data that enables the electronic music industry to identify their audiences, interact with them and monetise them is where streaming’s core value lies for artists and labels, but streaming services must make it easily and freely accessible. In addition, initiatives like creating proper label profiles on Spotify and making it easier for artists and labels to identify and interact with key playlist curators would also increase the value of streaming exponentially for the music industry as a whole.

So what of streaming’s impact on the dance floor itself? Dave Clarke noted that “in the future, DJs will even stream live in clubs” – but as Weerasinghe pointed out, “DJs won’t switch to streaming until the likes of Pioneer develop the equipment, and that equipment is installed in most clubs around the world.” There’s a long way to go before streaming dominates the dance floor in the same way as it does the mobile device and the desktop – but, in time, could that development open up a whole new revenue stream for artists and DJs? In a panel on AFEM’s ‘Get Played, Get Paid’ initiative, Mark Lawrence noted that “a play in a club is worth roughly 30-50p” – a lot more lucrative than any streaming service, and a rate than could enable labels to recoup their promo investment. However, there is still approximately £100m a year in performance royalties reportedly lost or incorrectly distributed; partly due to incomplete or missing data on what music is actually played in clubs, and partly due to the fact that far too many writers, artists and tracks aren’t registered with collection societies, meaning that the organisations don’t know who to pay. A significant pay packet is being missed out on because, as Lawrence put it, “The biggest problem facing electronic music is that it doesn’t know what its problems are.” That is to say that a large part of the industry still isn’t even aware of this issue, and AFEM and the various collection societies still have a huge amount of work to do in order to raise awareness and educate artists, DJs, labels, managers, promoters, publishers, agents, retailers and broadcasters on how to make the most of this missed revenue.

In this increasingly fragmented and constantly changing digital landscape, the dance music industry faces bigger challenges than ever when it comes to marketing, monetisation and making sure that the music doesn’t get lost in the middle. Nobody has all the answers; nobody can be certain of streaming’s implications for music discovery and consumption; but it’s abundantly clear that in this period of time of transition, innovation and investment in every possible digital revenue stream is the only way to drive dance music forward. Streaming in particular is ushering in a new era of digital Darwinism at an unprecedented speed, and in order to not just survive but thrive, electronic music must not only adapt but also actively innovate in this brave new world. The last word goes to Lawrence: “You have to embrace change, follow up on every revenue stream, but your A&R has to stay true to itself.”