December 3, 2019
Music streaming has driven growth in what was a declining industry in the post CD boom. Following all-time lows in global music revenue, streaming has invigorated the industry with Goldman Sachs predicting the industry will be generating $41 billion by 2030. Now industry experts are looking to further developments and influences.
Reflecting the convergence of new media and the music industry, Steve Cooper the CEO of Warner Music Group and Tamara Hrivnak Head of Music Business Development & Partnerships met in November. Their valuable insights will help inform the strategies of CMOs and those involved in music royalty management. There were three major insights shared discussing augmented reality, service delivery and the growth of storytelling.
Streaming was in itself an innovation, but what impact will other technologies have on it. Cooper and Hrivnak have predicted that augmented reality will integrate with streaming to provide a more immersive experience for consumers. A 2017 Harris study shared that 82% of millennials desire to increase spending on experiences. The combination of AR and streaming will prove attractive to this market, providing the experience of live music performance on their devices. Also in the era of self curated social content, music’s integration with social media platforms will continue to develop. For example, this week pop star Marina and the Diamonds, launched an augmented reality filter so that her fans can recreate the music video of her hit Primadonna. As one of her earlier and most popular hits, this application of AR creates a strong sense of nostalgia, which is highly valued by Millenials. AR can bring music to the market in a more immersive way.
Both speakers highlighted the importance of service delivery for consumers, noting in the past that streaming offerings could have been more consumer friendly. Cooper discussed that improved and dynamic music organising and segmentation on streaming platforms will generate revenues for the industry. Currently, platforms offer similar music catalogues and services, the price is the only differentiator. Providing alternative services, options and categories will drive competition. One such development is the launch of Spotify Kids this year, a bespoke offering for children and young families.
The development of cross platform storytelling in music was also highlighted. As we have discussed in previous articles, the volumes of songs being uploaded to streaming platforms is staggering. Earlier this year Daniel Ek, Spotify Founder, shared that almost 40,000 songs are added to their platform each day, a figure that had doubled since 2018. This is set to continue growing, so how do artists stand out? Despite some independent artists finding success on streaming platforms, Cooper said that in this time of volume and noise, working with record companies is still very important. Sony Corporation has grown its signings by 93% since 2015. However as more and more consumers forgo albums for playlists, a song exists singularly rather than part of an album and may not convey the artist’s true expression or story. Hrivnak shared that social platforms, in particular, their video features, can help artists share their story with fans. Artists can drive engagement and build sentiment with audiences.
From CMOs perspective, there are major challenges presented by these developments – the volume of music data, the forms it will take and the diversity of its sources. With the music industry continuing to transform, these challenges could block the ability to match music royalties effectively. Talk to the Matching Engine team about your repertoire and current technology. The integration of our high performance cloud application can help you face the challenges of a changing industry.