Streaming Report Card 2014

2014 was the year streaming broke through to mainstream consciousness, not because of the marketing prowess of Spotify but because Taylor Swift decided to withdraw her content from the Swedish streaming heavyweight and other freemium services. It was a mixed year of momentous achievement and intensifying controversy, which makes it an opportune moment for an end of term report card.

Growth – 8/10

No complaints here. Impressive growth for both paid and free streaming with a likely combined annual growth of about 50% and total subscribers getting to about 35 million. Although there are some signs of slowdown this is to be expected as much of the addressable audience for the 9.99 price point is reached. In fact the growth slowdown was less pronounced than expected in some markets. If it hadn’t been for the fact that download sales for the year will be down about 10% this would have been a 9/10.

Transparency – 2/10

Two years ago I asked the CEOs of 10 leading streaming companies what the coming years would hold. Unfortunately for 5 of them it meant looking for a new job. One thing most were in agreement on however was the need to introduce far greater transparency for artists. Two years on and the issue is every bit as problematic. For the most part the discontent has been voiced by smaller artists or those later in their careers, but not by frontline artists in their prime. Until last week that is, when Ed Sheeran told the BBC that it is ‘fact’ that labels are holding money back from artists. Some time soon, some time very soon, labels are going to have to get on top of this if they want the model to work.

Platform – 5/10

I had high hopes for Spotify’s app platform, it looked like it was heralding the dawn of the ‘music platform’ that the digital market has needed, well, forever. Unfortunately label wrangling ensured that Spotify was not able to get the deals to allow app developers to monetize their apps so the venture was effectively still born, save for the highly credible efforts of some traditional media brands, such as the BBC, Now! And Deutsche Grammophon who didn’t have to worry about making money from the apps. Luckily the streaming companies haven’t given up on the ‘streaming as a platform’ vision and a host of integrations with the likes of Bandpage and PledgeMusic have the potential to help artists transform streaming cents into digital dollars.

Pricing – 3/10

I’ve been banging the pricing drum for so long the stick has broken. Unfortunately there was pitifully little progress in 2014, with label fears of cannibalising 9.99 dominating thoughts. On the plus side there is a huge amount of negotiating activity taking place right now and that should bear fruit in 2015. Expect Apple to try to get to market with the same 7.99 that YouTube’s Music Key is currently in market with (and expect that short term promotion for YouTube to eventually become permanent). And if 7.99 is the new 9.99 then prices will have to cascade. 4.99 will be the new 3.99, 3.99 will become 2.99 and so forth. And there remains the super urgent need for PAYG pricing leveraging in app payments. I predicted pricing innovation in 2012 and 2013 and it didn’t happen. Here’s to third time lucky.

Global expansion – 6/10

Deezer had already set a great precedent for rolling out into a vast number of global territories and Spotify played an admirable game of catch up in 2013 which continued with another five new countries in 2014. Rdio’s acquisition of Indian streaming service Dhingana was another interesting move.  Meaningful revenue is yet to follow in these Rest of World markets though – the US and Europe accounted for more than four fifths of global streaming revenue in 2014.  But the foundations have been laid and that in itself is an important step worthy of credit.

Sustainability – 4/10

The ripple effects of Taylor Swift’s windowing antics will be felt throughout 2015 with countless other big artists and their managers already making it very clear to labels that they want to do the same. The sooner Spotify can agree to having the free tier treated as a distinct window the sooner the streaming space can start rebuilding.   The whole ‘changing download dollars into streaming cents’ issue continues to haunt streaming though. And with streaming services struggling to see a route to operational profitability the perennial issue of sustainability remains a festering wound. The emerging generation of artists such as Avicii and Ed Sheeran who have never known a life of platinum album sales will learn how to prosper in the streaming era. The rest will have to learn to reinvent themselves, fast, really fast.

Overall Streaming gets a 6/10 for a year that saw huge progress but also the persistence of perennial problems that must be fixed for the sector to succeed.

Make Way for Dance Music’s New Generation

I was lucky enough to be producing dance music during the late 1990’s.  There was a real energy and sense of doing something different, of breaking new ground.  The rave and acid house scenes of the late 80’s had of course been the original breakthrough but during the early 90’s the dance music scene slowed a little.  But as illegal raves and warehouse parties were eradicated, dance music lost its way, grappling with moving from its nomadic origins to throwing down routes in club venues.  During this period though the seeds were being sown that would flower into the next big chapter of dance music: the Super Club era.

The Rise of the Super Club

From the mid-90’s onwards club brands such as the Ministry of Sound, Gatecrasher, the Gallery, Slinky, the Arches, Renaissance rode and drove the wave of success that dance music enjoyed in this period.  It was the birth of the age of the superstar DJ. DJs such as Sasha, Paul Oakenfold, Carl Cox and Paul van Dyk found themselves with all the trappings of popstars, with magazine front covers, screaming fans at their gigs, headline billings and even paparazzi.  Dance songs were routinely topping the charts, national radio stations were hiring dance DJs for peak time shows and big brands were starting to use dance music on TV ads.

Acid house, rave and (though to a lesser degree) mid-nineties dance had the energy and freshness of punk.  They gave the music industry a much needed kick up the proverbial posterior but sooner or later pop always eats itself and with the success the rot set in.  Cynical opportunists jumped on the bandwagon, the music became clichéd and tired.  Vast improvements in affordable technology made production more accessible to more people which unfortunately also meant greater numbers of poor quality producers. Dance music lost its edge.   Music instrument shops that had started stocking record decks in place of guitars started stocking guitars again as kids rediscovered rock.  Dance music became polarized between vapid chart-seeking dance-music-by-numbers on one side and puritanical reactionaries on the other making music so counter-commercial, so uber-sophisticated and clever that it alienated all but the most beard stroking of train spotters.

The Wilderness Years

I’d begun to lose faith in dance music.  There were still some gems, and even a few interesting sub-genre scenes, but on the whole it had lost its sense of identity, originality and purpose.  But now, with hindsight it is possible to see that this was a necessary state for dance music to go through, the trough it had to travel through to reach new heights. Since the late noughties dance music has gone through something of a Renaissance.  A new generation of young producers is making dance music their own with a new attitude and a new approach. For them the days of Acid House and rave are as distant as the 60’s were to the New Wave generation, the 70’s to the Brit Pop generation.  They claim dance music as their own in a way the early noughties generation couldn’t.  For the early noughties producers and DJs they were following the footsteps of the still dominant big names like Paul Oakenfold, Sasha, Todd Terry, Richie Hawtin.  For the new generation of producers in their teens and early twenties dance music has always been part of pop culture which means they can claim it as their own.   Just as the Beatles claimed blues based guitar pop as their own, the Sex Pistols rock based music as their own and so on.

The New Wave

A fresh new wave of producers is appearing across all genre. From the likes of Tim Berg and Sebastien Drums in mainstream house, through Barem and Gaiser in minimal techno, to Arty and Ashley Wallbridge in progressive trance.  And what makes this new generation all the more exciting is that for many of them the carefully constructed sub-genre walls of the nineties and noughties are there for jumping over.  Many productions from the likes of Norman Dooray and Arno Cost defy being defined as either house or trance or progressive. The truth is they are bit all of them.

But despite all this freshness, one thing remains the same: the older generations still dominate in a way that doesn’t happen in other music genres.  It is the DJ’s who built their careers in the mid to late nineties heyday that are the big names of dance music today: Ferry Corsten, Armin van Buuren, Paul van Dyk, David Guetta, Adam Beyer.  In pop music or rock music they’d still be big but it would be the new generation which would be headlining the events and topping the charts.  Even the last old generation of Oakenfold et al still a force to be reckoned with.

Perhaps we’ll know when dance music has really reinvented itself when the new generation rebel against and reject the DJs and producers old enough to be their dads and truly claim dance music as their own…