About Mark Mulligan

Music Industry analyst and some time music producer. Vice President and Research Director with Forrester Research

Take Five (the big five stories and data you need to know) October 14th 2019

Take5 (1)Fortnite black hole: In what may be the most audacious global games marketing stunt ever, Epic Games killed off Fortnite in Sunday’s end-of-season event, which one million people viewed live on Twitch. The game got sucked into a black hole, with Epic deleting 12,000 Fortnite tweets and all information on its website. Has Fortnite really gone for good? Did Elon Musk delete it? The likelihood is it will be back for chapter two sometime this week.

CDbaby, independent artist boom: Independent artist distributor CDbaby is now collecting $1million a day in revenue for its 750,000 independent artists. Earlier this year, ambitious publishing group Downtown acquired CDbaby’sparent AVL meaning the publisher is also now a top player in the independent artists space. Publishers are reversing into recordings.

Analytics curve ball:Little Big League baseball team Minnesota Twins isusing analytics to revamp its pitching staff, including figuring out which players should be throwing what types of balls. Sports has long been ahead of the performance analytics curve. Lots of lessons for media companies here.

Netflix Italy deal: Netflix has agreed a co-production deal with Italian media giant Mediaset. Under the deal the two companies will co finance seven movies that first will be distributed globally by Netflix then broadcast free-to-air in Italy one year later. Netflix needs to deepen its international content but can’t afford to do it by itself anymore.

Spotify/Apple – regulation storm brewing: It is a case of when, not if, tech majors (Apple, Alphabet, Amazon, Facebook) are going to be regulated. The effect could be like when the EU compelled Microsoft to unbundle Windows Media Player in the 2000s, instigating its long-term decline. Spotify’s complaint against Apple is building momentum with US law makers and could be the first step.

How Music Publishers Are Driving a Full Stack Revolution

Music publishing catalogues are gaining momentum fast as an asset class for institutional investments, with transactions ranging from large catalogue mergers and acquisitions (M&A) through to investment vehicles for songwriters’ shares such as the Hipgnosis Fund and Royalty Exchange. Since 2010 the number of publicly announced music catalogue transactions – across recordings and publishing – totalled $6.5 billion, with a large volume of additional non-disclosed transactions. This growing influx of capital has implications far beyond publishing, however, as ambitious publishers are using the access to debt and investment to reverse into the recordings business.

Streaming the change catalyst

As with so many music market shifts, streaming is the catalyst for these changes. Streaming represented 27% of publisher revenues in 2018 and is set to near 50% by 2026. However, songwriter-related royalties – incorporating publisher and CMO payments – from streaming are less than a third of what labels get. Small-but-important increments such as the US disputed mechanical royalties rate increaseare a) difficult to push through, and b) will not get publishing royalties to parity with label royalties. This means that publishers will underperform compared to labels in the fastest-growing revenue stream. The alternative is a ‘if you can’t beat them, join them’ strategy.

BMG Music Rights and Kobalt set the precedent with label services divisions alongside their publishing businesses, enabling them to play on both sides of the streaming equation. Now a wide range of publishers, both traditional and next generation, are expanding their non-publishing businesses. – from ole/Anthem buying production music companies Jingle Punks and 5 Alarm Music, through Reservoir Music buying Chrysalis Recordsto Downtown buying CDBaby parent AVL. All have the common theme of publishers diversifying away from their core businesses to ensure they compete across a wider strand of the music business value chain.

2019.10.14_Music Publishing Blog graphic

In the traditional music business, it made sense for artists to sign their recordings to one company and their publishing to another. The next phase is the emergence of full-stack music companies that not only combine publishing and recordings but also include other assets to create agile businesses that are primed for the streaming era. Many of these are publishing companies expanding into the recordings business by leveraging the inflow of capital into publishing catalogues to fund diversification. The potential strategic benefits presented by the full-stack approach are well understood by incumbents.

Downtown, Round Hill, Kobalt, ole/Anthem, Primary Wave and Create Group are examples that reflect just how diverse this strategy is, with each business building very different strategic stacks. However, the unifying factor is the access to capital for music publishing companies gives them the ability to build war chests that most record labels could only dream of.

One of the most interesting permutations is the breadth of capabilities that some of these companies are building, as illustrated by the structural maps of Kobalt and Downtown. These are companies that are both built to thrive in the streaming era and to ensure that their creators can monetise across a diverse mix of otherwise fragmented income streams.

Music publishers of all kinds are expanding their reach across the music industry value chain, from artist distribution to library music and in doing so are starting a rebalancing of the music industry value chain. These are exciting times indeed.

This analysis is taken from MIDiA’s new report Music Publishing|AFull-Stack Revolution. Clients can click on the link to view the report and its dataset. The 3,000 word report contains details of 45 M&A transactions, annual M&A trends and analysis of the strategies of music publishers. 

If you are not yet a MIDiA client and would like to learn more about how to become one and how to access this report then email stephen@midiaresearch.com.

Take Five (the big five stories and data you need to know) October 7th 2019

Take5 7 10 19Streaming pricing, emerging questions: Music Business Worldwide raised the question of why streaming is discounted in emerging markets when BMWs and Amazon Echoes are not. There are many layers to this, but the key one is – who is going to pay? High income urban elites can afford Western prices; the mass populous cannot. BMW is targeting thousands, not tens of millions, in India.

Streaming wars heat up: Video streaming competition is unlike music, with big studios launching their own services and thus competing with distribution partners. Disney’s decision to ban Netflix ads hints at just how messy the video streaming wars are going to get.

Air Jordan meets AI meets social commerce: Snapchat, Shopify, Nike and Darkstore teamed up to create an AI/social commerce push for the new Air Jordans. While this is clearly a tightly controlled marketing push, it nonetheless hints at how digital tech mash-ups can push boundaries.  

The Yogababble index:As we approach peak tech, the semi-mystical power of inflated company mission statements is beginning to lose its lustre. Scott Galloway has created his Yogababble index to illustrate the contribution of overzealous comms in peak tech.

The Fall 2019 TV shows to look out for: TV’s biggest ad buyers give their take on which new shows they think will fly. Winners: Mixed-ish, The Unicorn, Prodigal Son. Losers: Carol’s Second Act, Sunnyside.

Abbey Road 50 Years On: The Two Worlds of Music Listening

Half a century after it first after it first topped the charts, the Beatles’ Abbey Road is back at the summit of the UK charts. With the anniversary editions retailing for between $20 and $100, the impact on Universal Music’s revenue will be even more pronounced than the chart position, as we saw with the deluxe editions of the White Album (which had editions priced up to $145) helping the Beatles become the fourth-biggest UMG artist in revenue terms in 2018. The continued success of the Beatles tells us three main things:

  1. The band has enduring appeal in a way few bands have so long after their demise
  2. Universal is doing a fantastic job of managing the legacy of the Beatles with smart and effective catalogue marketing and product strategy
  3. Older, physical-focused music fans remain the quickest route to high-value, large-scale revenue

It is this last point that is going to be explored here.

Streaming is not yet everything, by a long stretch

While streaming is well established, it is still a minority activity (i.e. less than half of the population streams – the rate is even lower when you factor in emerging market regions such as sub-Saharan Africa). Most of you reading this will have been streaming for many years now, so this may sound a bit crazy, but we all live in our own filter bubbles, surrounded by people with similar world views and behaviours. The reality is that we are still in a transition period where the old and the new coexist. This dual-reality paradigm underpins the Beatles’ continued success.

MIDiA Index - Top Streamed and Top Listened to Artists - the Beatles 

Looking at data from MIDiA’s forthcoming artist insight platform Index, we can see that the top 15 biggest audiences ranked by overall listening is significantly different from the top 15 streaming audiences. The differences become far more pronounced as we work our way down the rankings. Mass market linear media (especially TV and radio) used to be the only way in which record labels turned artists into mainstream brands. The biggest artists of today (in fact all of the artists in both of the top 15 rankings) built their fanbases sitting on the shoulders of big, traditional media. Big media of course still plays a crucial role – as illustrated by the fact that the top five most-listened to artists have all recently been in major movies. In fact, movies are emerging as the mass medium that can still create globally relevant cultural moments in the way that radio and TV used to.

Niche is the new mainstream

Now though, newer artists are building their fanbases outside of traditional media, using digital marketing channels to laser-target specific audiences rather than the traditional carpet-bombing approach. As a consequence, when we look at the top 15 most-streamed artists based on those audiences that actually know the artist we see a totally different picture with artists like Post Malone, Martin Garrix and Bille Eilish among the top performing. These are still-big artists; artists that have found global niches with genuine scale, but niches nonetheless. This is the era of fragmented fandom. Niche is the new mainstream.

The first global pop band, perhaps

The Beatles were arguably the first big, global pop band – I say ‘arguably’ because there are many other claimants to that title, but whether they were first, or among the first, they helped create the template for artist success that shaped the modern recorded music industry. Now, as part of our cultural history they have an additional emphasis. The film ‘Yesterday’ will have introduced new audiences to the Beatles’ music, as will the hype around the return of Abbey Road. However, the majority of Beatles fans are old (59% are aged over 45) with an average age of 46. This aligns with average age of consumers that still buy CDs and that still listen to albums.

This does not mean that young people are not listening to the Beatles also (and on streaming they skew younger), also even with an average age of 45 this means that a large portion of the core fanbase are not from the Beatles’ original generation.

However, it is a very different demographic from Spotify users (average age 34) and, for example, Billie Eilish fans (29). Beatles fans skew towards older consumers that are more likely to buy and listen to physical albums.

For all the chart modifications, actual album sales still have key impact

 With all of the reformatting of charts to recognise streams, album sales still carry much more weight, because:

  1. A lot of streams are needed to be equivalent to an album (1,500 in the UK, 1,250 paid streams or 3,750 ad-supported streams in the US)
  2. Newer, streaming-centric artists tend to be track artists rather than album artists, and tend to have a larger share of ad-supported listeners, so it is harder for them to top album charts

When a once in a generation event like Abbey Road at 50 comes along, and the older, CD and vinyl buying audience comes out in force, you do not need too many of them to create a chart-topping album. As I illustrated in my post on the White Album, 75,000 sales of a $100 deluxe edition can generate the same label income as more than 60 million streams – though how much Universal actually retains of that due to its commercial relationships with the band and its estates is another issue entirely.

The key takeaway from Abbey Road at 50 is that we still have a long, long way to go on the streaming journey. In fact, you might say it is ‘the long and winding road’.

Five Trends Changing Music Marketing

This is a guest post from MIDiA Research analyst Keith Jopling

Marketing music has never been straightforward. That’s why back in the day, label executives would use the single as the shortcut to finding an audience on which to propel the artist, and even more importantly, their latest album. Meanwhile, radio stations were largely in lockstep, since they would rather play the ‘catchiest’ hits as well as help build familiarity for those hits (those that got through dreaded call-out research). Still, neither side really knew which songs audiences would take to their hearts. The signal was foggy, at least until the record reached the shops. Even then, it was hard to know whether people liked the music, or just didn’t know about it. Hence the market was a constant flow of ‘push and pray’.

The single biggest change brought by streaming is the clarity of the signal. It has improved. It is clearer now which songs people really like. The art of marketing is to seed the song into the right places and wait to see what pops where. The challenge for label marketers isn’t so much to grasp this new world – they do. Their challenge is to have enough direct levers they can pull to make the new world order tip in their artists’ favour. The cause of many a migraine for marketers, however, is that they have very few direct levers and are at the mercy of gatekeepers, influencers and other layers that sit between their songs and the audience.

The problems for music marketers are manifold. We’ve listed just some of them here, each with a kernel of a solution. Whether music marketers have it in their power to fashion the solutions into actionable marketing tactics is a different story. But, given that global marketing is one of the core competencies of a modern record label (and a modern artist manager), the broader solution is for marketers to push their agenda higher up the chain, and for more corporate-level innovation and investment to get the marketing engines changed up and fit for purpose. We argue as well that to succeed in doing this, marketers should change behaviours and start marketing for the environment now, not yesterday.

In this short report (download for free on the MIDiA webpages), Consulting Director Keith Jopling examines five problematical trends changing the way music is marketed, and points to potential solutions.

Problem (and solution) 1: Managing linear decline

The steady decline of linear radio and TV audiences is eroding these platforms’ contribution to music marketing effectiveness. The industry seems to live in hope that this will find a self-cure. A label’s power to get an artist’s song on the radio is seen by the artist as second fiddle to streaming, so the solution is obvious – either work with radio to improve its relevance or -get better at playlist pitching and see radio as a bi-product or bonus, not an essential. With playlist pitching getting harder, perhaps the former option is actually the better one.

Currently, radio is the only large-scale media that labels have for reaching national audiences at a shared time and place. But radio’s rolling playlist slots are too low in volume. One simple change would be for labels/publishers/managers to convince radio brands to expand their playlists to accommodate many more slots for new music (preferably with much better analytics to measure this, as audiences continue to migrate from broadcast to on-demand). For one thing, it would help radio’s issues in competing with streaming platforms if they could increase their capacity for song discovery by trading off new songs with catalogue plays or heavy rotation hits – ‘track of the hour’ rather than ‘track of the day’. Radio could argue that it is a better discovery platform than streaming, given it can add powerful context (daypart, presenters, artist stories) that streaming currently does not. Radio provides a sense of community. Streaming platforms are frozen wastelands in comparison. Radio can only make this argument however, if it can go further to compete with streaming on volume.

The plethora of branded radio apps now on the market is hardly a joined-up force to take on streaming, but if the market continues to evolve this way, then radio providers must use their brand equity and identity to serve super-niches, and serve them better – be it genre, demographic, a particular scene, theme or location. The most successful will begin to stem the loss in audience reach, but also fill the gaps left by streaming services to hold onto those audiences in terms of engagement and emotional attachment. For all the rhetoric of streaming platforms, one of those gaps is music discovery.

Download our free report to read the following further problems & solutions:

  • Managing streaming economics and higher song volumes
  • Managing post-album creativity
  • Managing global-local culture
  • Managing music value

Fan upsell is the money left on the table

In the mainstream pop world, the upsell potential to super-fans remains a gaping hole in the potential growth for the industry. Labels have acquired merchandise companies for incremental revenue but have so far stayed clear of the one sector in which the artists’ ‘product’ remains a scarce premium – live performance. Yet, real estate and demand can be created outside of the main live sector dominated by Live Nation and AEG. Companies like Dice and Sofar Sounds and even City Winery in the USA have proved this.

Some horizontal thinking is required on the subject of music’s value problem – whether it be that previous ‘promotional’ channels be abandoned unless there is directly attributable consumption as a result, or that labels can create more live real estate (through monetising showcases or converting tour support funding into direct ticketed appearances). Artists remain super-valuable brands. Average revenue per artist must go one way – up. Artists must use this as the benchmark for choosing their preferred means of representation, not just the size of their streaming numbers.

Take Five (the big five stories and data you need to know) September 30th 2019

MIDiA Research Take 5 20 9 19Music licensing hubs: Monokromelaunched its Rights Hub, contractual rights and file management platform for rightsholders, while Soundfeed put its label sub-licensing platform into open beta.Fragmented fandom sees streams more widely shared among middle class artists which means more small rightsholders in need of services.

Fortnite – you bot!: Fortniteis adding computer controlledplayers.  The stated rationale is to ensure newer gamers are matched against similar skill opponents. This suggests there aren’t enough new gamers to create enough even matches. Mega-hit free-to-play games franchises burn bright and fast (Angry Birds, Candy Crush, Clash of Clans) but when their time is up, it is up.

We(don’t)Work:Troubled WeWork has parted company with CEO Andy Neumann.The tech-wash veneer has worn off WeWork and investors are seeing it for what it is: an office rental business with huge costs that doesn’t own its buildings.

Netflix, burst balloon: Momentum is everything with tech stocks. Investors want to see perpetual growth and market transformations. Netflix excelled at delivering both, until now. Poor Q2 results, loosing shows and impending competition from Disney, Warner and Apple have wiped off all Netflix’s 2019 peak stock price gain.

NBA, go East: eSports is becoming a great export vehicle for sports leagues. NBA’s eSports league NBA 2k features teams each affiliated to NBA clubs. But now it has just announced a Shanghai addition for 2020. The eSports vs traditional sports dichotomy is false. Instead their futures will be intertwined.

Have We Reached Peak Tech?

In last week’s Take Five I highlighted a Vox story which reported that over the last year the number of companies using terms like ‘tech’ or technology’ in their documents is down 12%. This is an early indicator of a much more fundamental concept – we may have already reached peak in the tech sector, the business sector that has driven the fourth industrial revolution. While some may quibble whether the internet-era transformation was the predecessor to a new industrial revolution built around AI, big data and automation, the underlying factor is that tech – for better or for worse – has shaped the modern world. More in the developed world than the majority world perhaps, but it has shaped it nonetheless. Now, however, with tech so deeply ingrained in our lives and the services and enterprises that facilitate them, has tech become so ubiquitous as to render it meaningless as a way of defining business?

Tech is the modern world

When Tim Berners Lee invented the World Wide Web in 1989 he could have had little inkling of the successive wave of global tech superpowers that it would incubate. As we near the end of the second decade of the 21stcentury it is hard to imagine daily life without it. The pervasive reach of the web and the Internet more broadly is perfectly illustrated by Amazon’s recent launch of twelve new devices, including a connected oven, a smart ring (yes a ring) with two mics and a connected night light for kids. All of which follows Facebook’s connected screen Portal, which for a company that trades on user data, raises the question: ‘Is this your portal to the world, or Facebook’s portal to your world?’ However, regardless of why the world’s biggest tech companies want us to put their hardware into our homes, this is simply the latest new frontier for consumer tech. Now that we carry powerful personal computers with us everywhere we go, we remain instantly connected to our personal collections of connected apps and services. Tech is the modern world.

The rise of tech-washing

With tech now powering so much of what we do, it raises the question whether tech is any longer that useful a term for actually distinguishing or delineating anything. If everything is tech, then what is tech? It is a question that the world’s biggest investors are starting to ask themselves, too. In fact, we have now reached a stage where a) tech is a meaningless concept – everything is tech, and b) there is the realisation that many companies are ‘tech washing’, using the term ‘tech’ to hide the fact that they are in fact anything but tech companies which happen to use technology platforms to manage their operations. In the era when everything is tech enabled, you would be hard pushed to bring a new business to market that does nothave tech at its core. Companies like Uber, WeWork and just-listedPeleton have managed to raise money against billion-dollar-plus valuations in large part because they have positioned themselves as tech companies. In actual fact when the tech veneer is removed, they are respectively a logistics company, a commercial rental business and an exercise equipment company. If they had come to market simply with those tag lines, they would undoubtedly have secured far smaller valuations and many of their tech-focused investors would not have backed them. Investors are beginning to see through the ‘tech-washing’, as evidenced by the instant fall in Peleton’s stock price, WeWork’s crisis mode sell-off and Uber’s continuing struggles.

Pseudo-tech

Calling yourself a tech company has become a get out of jail free card for new companies, an ability to raise funds at inflated valuations, and a means to persuade investors to focus on ‘the story’ and downplay costs and profit in favour of growth, innovation and of course, that hallowed tech company term: disruption. I have been a media and tech analyst since the latter days of the original dot-com boom, and the mantra of the companies of that era was that ‘old world metrics’ such as profitability didn’t apply to them. Of course, as soon as the investment dried up, the ‘old world metrics’ killed most of them off. Today’s ready access to capital, enabled in part by low interest rates, has enabled a whole new generation of companies to spin the same yarn. But whether it is the onset of a global recession or growing investor scepticism, a similar fate will likely face today’s crop of ‘disruptors’. The dot-com crash separated the wheat from the chaff, wiping out the likes of Pets.com but seeing companies like eBay and Amazon survive to thrive.It also took a bunch of promising companies with it too. The imperative now is to strip away pseudo-tech companies from the tech sector so that investors can better segment the market and know who they should really be backing through what will likely be a tumultuous economic cycle. As SoftBank is finding to its cost, building a portfolio around pseudo-tech becomes high risk when the tech-veneer can no longer hide the structural challenges that the underlying businesses face.

Tech is central to the modern global economy and will only increase in importance – at least until the world starts building a post-climate-crisis economy. It is imperative for genuine tech companies and investors alike to start taking a more critical view of what actually constitutes tech. The alternative is that the tech sector will get dragged down by the failings of logistics companies and gym equipment manufacturers.

The Future of Music: A Vision of Post-Format

Formats have shaped and dictated the evolution of recorded music. The constraints that formats set have, in turn, become the creative frameworks within which music has operated. Now, in the internet era, formats are becoming a thing of the past – and yet the way in which music is made and distributed still conforms to the old physical world. It is time for a change in how we think about music, right from the creation process through to what a song actually sounds like. Here is a vision for what the future of music could be.

Bringing dead sounds back to life

When Edison invented the phonograph, a denigrator called it a machine ‘that brings dead sounds back to life’. Conditioned by the recorded era, it is hard for us to conceptualise a time when music only existed in the moment and was never heard exactly the same way twice. Nevertheless, this is a historical anomaly – a legacy of physical media. Songs became fixed, static and permanent because that was the only way we could squeeze music into little discs – mummified echoes of live performances.

Over time, as recording techniques and technology improved, the recorded song developed into its own art form, with multitrack recording, effects, synthesis and programming enabling the creation of sounds that could never be truly replicated live. Now, with physical media accounting for an ever-smaller share of music consumption, there is no need to adhere to its constraints. We have 14 track albums because CDs were designed to fit Beethoven’s 9thSymphony; we have static recordings to serve legacy distribution models; we have three minute songs to fit radio schedules. All three straightjackets can be discarded. Here is how:=

  • Write and produce for the medium: We are already locked into a process of music being designed for Spotify success, through so-called Spotify Core and with the industrialisation of song writing seeing songs stitching together the best hooks from multiple songwriters. Much of this can be reductive, dumbing down to the lowest common denominator.However, it is the execution and intent that requires attention, not the strategy. In fact, it needs pushing further – much further. TikTok, YouTube, Instagram, Snapchat and Spotify are all dramatically different propositions with equally diverse use cases. So why would we expect a song to perform equally across each one? What video producer would create a meme for Netflix, or a two-hour movie for Snapchat? It is time to follow video’s lead and write for where the song is going to be listed to most. Lil Nas X when writing Hometown Road was focused on making something viral, something that would blow up on TikTok. The idea that songs should have fixed lengths, choruses, verses – all of this can now be played with in the mainstream in the way that it has been on the experimental fringe of music for many years. This time, it is to give listeners what they want rather than for avant-garde expression.
  • Ditch / evolve the album: Just 16% of consumers listen to traditional albums and an even smaller 10% listen to full albums on streaming. 59% of consumers say they are listening to albums less because of streaming playlists. The album is not dead, but its addressable audience is far smaller. Now a new generation of artists is coming through who grew up with playlists, not albums, so do not even think in album terms. Of course, many artists, especially older ones, still want to write albums and they absolutely should do so. They should not, however, expect the majority of their audiences to listen to them in full. There will always be exceptions (Ed Sheeran, Adele etc.) but the direction of travel is clear. Artists and labels need to rethink what the album should be. We’re beginning to see artist contracts that stipulate numbers of tracks rather than albums. This is hugely positive and will enable far more creative freedom. Artists need to start pushing the boundaries, pulling every lever available (e.g. more tracks, fewer tracks, all tracks at once, over time, mixing in spoken word, images and video, EPs etc.). The only rule should be that there are no rules.
  • Fill the space between recorded and live: Despite its ‘dead sounds’ origins, the recorded song is an established entity with established consumption patterns that is not going to disappear in any meaningful timeframe. But that does not mean that it has to be the only entity. Technologies such as live streaming, real time tipping, comment streams, virtual gifts and collaboration tools can be used to create music experiences that are neither live nor recorded, but something in between. Imagine an artist doing a pay-to-view live stream in the studio, with a set of beats in a shared folder that the audience can drop in and out but that only changes what they each individually hear. Then the guitarist starts cycling through a few riffs, and the viewers upvote their favourite one in the comment stream. Then as the keyboard player starts, listeners change the synth patch, but again just for their own stream. Think of this not as a blueprint for what the format could be, but an illustration of how to think about it. To create something that is unique, that exists in the moment and creates an indelible bond between artist and fan. 

This was not a definitive list of what post-format innovation needs to do but instead three principle areas of focus and illustrations of how to structure thought. Now it is time for creative artists, writers, labels and tech companies to pick up the baton and run with it. Standing still is of course an option, but in the increasingly competitive attention economy, if music does not up its game there can be no complaints if it loses share to video, games and social.

Take Five (the big five stories and data you need to know) – September 16th 2019

Spotify – small step, big step: Spotify has announced that it is acquiring musician marketplace company Soundbetter. Back in July, Spotify halted its artist direct offering. Some quarters viewed that as the end of Spotify’s disruptive label-competitor strategy. We thought differently, and this acquisition confirms it. Being a next-gen label means being so much more than what labels used to do. Spotify is building it from the ground up, starting with artist collaboration.

Apple, half-bundle: While launching new hardware, Apple announced it will be bundling a year of Apple TV+ with new device sales.This feels like it is more about Apple not feeling that it has enough value to expect standalone subscribers yet, and that it expects to be in a stronger place 12-18 months from now. Nevertheless, Apple’s future is bundling. Two to three years from now, expect an all-in-one bundle of everything Apple has to offer, fully integrated into its devices. That’s how to drive up device average revenue per user (ARPU) in a saturated market with slowing replacement cycles.

Apple, SKU skew: Lots of announcements from Apple – including Arcade. The very fact that there were so many (e.g. three iPhones) points to one of Apple’s most important post-Jobs transformations: fragmentation. In the 2000s Apple had a far more concise product line-up than its traditional Consumer Electronic (CE) competitors. Now it has dozens of products and services and looks every bit the traditional CE company. Gone are the days of the simplicity of one iPhone, replaced by a suite of segmented, highly-targeted product SKUs (Stock Keeping Units). Clarity of single purpose is a luxury no longer afforded.

 

Peak tech, sort of: The title of Vox’s peak tech piece turned out to be much more promising than the piece itself(which focuses on what terms companies are using to describe themselves). But there is a bigger story here: we have now reached a stage where a) tech is a meaningless concept – everything is tech, and b) there is the realisation that companies that use tech to maintain networks of services and customers (Uber, WeWork etc.) are highly vulnerable with little in the way of actual assets. If the tech bubble bursts, investors will need somewhere else to put their money.

Space lift – yes, space lift: Years ago, sci-fi author Arthur C Clarke wrote of a tower that would act as an elevator for spacecraft to launch directly from the edge of the Earth’s atmosphere, thus saving the huge thrust energy required to leave the earth’s orbit. It turns out that no known materials would support such a vast structure. Now two astronomers have proposed an alternative – a 225,00 mile long,pencil-thin, zip wire hanging down from the surface of the moon…you couldn’t make it up.