Five Long Term Music Industry Predictions (And How Disney Will Rule The World)

The new year is typically a time for predictions for the year. But at the midway point of the decade, rather than do some short term predictions I think this is a good time to take a look at the longer term outlook for the music industry. Here are five long term music industry predictions:

1 – Disney will become the world’s biggest music company

Consumers are buying less music and there are more ways to easily get free music than ever before, both of which make selling music harder than ever. Major labels have addressed this by doubling down on pop acts (Rihanna, Katy Perry, Rita Ora, Ariana Grande etc.) which have a more predictable route to market. Video (YouTube) and very young audiences (also YouTube) underpin the success of these artists. While the majors have been pivoting around this very specific slice of mainstream, Disney has quietly been building an entire entertainment empire for this generation of pop focused youth. Unlike the majors, Disney has TV shows and channels targeted at each key kids and youth age group and uses them to bring artists through. They start them out kids TV shows such as The Wizards of Waverly Place (Selena Gomez), Hannah Montana (Miley Cyrus) and Sonny With A Chance (Demi Lovato). Disney then very carefully matures these fledgling stars as their audiences age so that by the time they and their audiences are fully fledged teens, they are fully-fledged pop stars. At which point they have shaken off most of their bubble gum imagery and have conveniently acquired a little edge, a specific positioning and a personality. It is a highly effective process. Each of those three Disney stars are only in their early 20’s but already have multiple albums under their belt. Disney will not only continue to excel at this model, they will most likely become the biggest pop label on the planet. Which given where music sales are heading (pop accounted for 44% of the top 10 US album sales in 2014) could well mean Disney even overtakes Universal to become the biggest music company of all.

2 – The western pop music industry will increasingly resemble Bollywood

2014 was the first year film soundtracks accounted for 2 of the top 10 selling US albums (‘Frozen’ and ‘Guardians Of The Galaxy’), generating 4.4 million sales and 30% of the top 10 overall. And both albums were Disney. In India music plays a supporting role to film in revenue terms but is culturally centre stage, the beating heart of Bollywood film. The music and film require depend on each other for context and relevance. We are set for this model to become increasingly pervasive in western markets. Just as video underpins the success of pop stars, it creates an audience bond to music in film and TV, turning the music into the soundtrack of memorable, fun and moving moments. Triggering the same emotional chemistry music does in real life. With music sales still tumbling but movie sales holding up, expect movie soundtracks to become an ever bigger part of music sales, and for the dividing line between film star and pop star to blur entirely. Expect Disney to, again, be the key force.

3 – Live music will lose ground to other live entertainment

Live has been the music industry’s ‘get out of jail free’ card, holding up total revenues while sales revenue declined. The balance of power has shifted with sales revenue now just a third of the total revenue mix, down from 60% at the start of the century. But cracks are already appearing with price increases underpinning much of the live revenue growth in recent years and the big revenue polarised between ageing rockers and pop divas of the moment. There are only weak signs of a next generation of stadium filling rock bands. The big live venues are already looking for alternative ways of getting bums on seats, with TV show spin offs in particular proving successful. Venues and promoters love TV show tie-ups because they bring big TV cross promotion which helps ensure commercial success.   TV comedy shows are now doing 10 to 12 night sell outs in 10,000 capacity venues. You don’t see many artists doing that. Shows like Disney On Ice (yes, Disney again) fill out the biggest venues with ease. And it is not just the top end that is moving away from music. Comedians like the UK’s John Bishop play tours that happily play a small club one night and an arena the next. Expect the live market to shift more towards a broader range of entertainment, especially TV tie ins, squeezing out many music acts in the process.

4 – Old world copyright establishments will lose relevance 

The fragmented nature of global music rights, especially on the publishing side, has long been a thorn in the side of digital music.   The system of multiple national rights bodies and commercial rights owners administering different parts of music rights across the globe hinders the ability of the digital music industry to be truly global. A handful of rights bodies are pushing the innovation needle, others are not. The distinctions between recording, performance, mechanical etc. served well in the analogue era when there was a clear distinction between a sale and a performance. But in the streaming dominated landscape they are less useful. Additionally the entire range of audio visual elements that an artist comprises in the digital era can be prohibitively difficult to put into a single product. This is because the rights are usually held by so many different stakeholders, each with different priorities and appetites for risk. Expect music companies, artists and their managers to increasingly collect as many rights as possible into one place so they can create multimedia experiences without having to navigate a licensing minefield. In doing so, more and more monetization will happen outside of the traditional licensing frameworks. Whether that be because all of the revenue occurs in a single platform (e.g. YouTube) or because new licensing /collection bodies are used such as Audiam or Global Rights Management administer the rights. Creative Commons might play a bigger role but the real focus is going to be on being able to license more easily AND monetize more effectively.

5– Labels will become agencies

Finally we have agencies or what you might call labels, but I’m going to call them agencies, because that is what they need to become. The label model is already going under dramatic transformation with the advent of label services companies like Cooking Vinyl’s Essential and Kobalt’s AWAL, and of fan funding platforms like Pledge and Kick Starter. All of these are parts of the story of the 21^st century label, where the relationship between label and artist is progressively transformed from contracted employee to that of an agency-client model.   Labels that follow this model will be the success stories. And these labels will also have to stop thinking within the old world constraints of what constitutes the work of a label versus a publisher versus a creative agency versus a dev company. In the multimedia digital era a 21^st century labels needs to do all of this and be able to work in partnership with the creator to exploit all those rights by having them together under one roof.

Streaming is changing the music world right here, right now, and there is an understandable amount of focus on it. But it is just one part of a rapidly changing music industry. This decade has already wrought more fundamental change than any previous one and the rate of change is going to continue to accelerate for the next five years. All of the rules are being rewritten, all of the reference points redefined. This is nothing short of the birth of a new music industry. The blessing of a generation is to be born into interesting times, and these times are most certainly that.

Just How Much is Curation Actually Worth?

Dance music powerhouse Ministry of Sound have commenced legal action against Spotify for breach of copyright with regards to user generated Spotify playlists replicating Ministry compilations and sometimes including Ministry labeling.  The case obviously raises some important legal issues, but more significantly it raises the question of just how much is curation worth?

All of the big streaming services have been falling over themselves to state that curation is at the core of what they are and of what makes them different.  Unfortunately the term curation means nothing to most consumers other than conjuring up images of fusty old librarians.  But leaving that small inconvenience aside, the value of curation to the industry side of the equation is clear…or is it? The problem with 22 million songs is that the consumer is paralyzed by the tyranny of choice.  There is so much choice that there is effectively no choice at all.  Curation, editorial, programming, whatever you want to call it, is crucial.  People are sheep, they need leading.  Some need leading a little, some need leading a lot, but all of them – or at the very least the vast majority of them – need leading.

In the analogue era when media companies controlled the distribution channels most audiences relied upon professional ‘curators’ to show them what to consume.  These curators were radio DJs, newspaper and magazine editors, TV show hosts etc.  They were trusted voices whose influence status was validated by dint of the fact that they were paid to shape the tastes of millions. One of the founding ideologies of the internet was that these curators would be brushed aside in a groundswell of democratization of consumer choice.  These curators suddenly became labeled gatekeepers and became a symbol of the old control-era. The problem is that not only have those gatekeepers been replaced by the algorithms of technology companies, but the algorithms that have replaced them inherently lack the years of human experience and expertise the old curators brought.  Initiatives such as the Music Genome Project and the Echonest are standout examples of technology-driven recommendation best practice, but few would question that the human touch also plays a crucial role in curation, whether that be personal recommendations from friends or family, or playlists selected by Pitchfork. But wherever you stand on the human vs robot debate, the value of curated discovery in a boarder sense is universally recognized.

Which brings us to the Ministry of Sound situation.  Ministry have spent years building the expertise of knowing how to put together a dance compilation and as a result building a brand as a trusted curator of taste.  It is all too easy to dismiss the role of compilations as superficial and irrelevant in the age of the playlist, but there is a reason that some compilations, such as the ubiquitous Now series, do so well and others do not.  As a former DJ I know only too well the depth of thought and preparation that goes into building a set, into identifying which songs mixes well into the next, ensuring that one track does not play out of key with another when it is pitch shifted into the next, of how build a progression of sound that ebbs and flows, that balances consistency with variation.  There is a reason that Spotify users have been recreating Ministry of Sound playlists rather than creating their own dance music playlists.

As the Ministry court case progresses there will be a stern test of whether the copyright of a selection of songs holds legal water in the digital arena in the way that sound copyright does.  Whether it does or not though is almost not the issue.  The core question here is just how much do streaming services like Spotify truly value curation? Do they value it in terms of ‘yes it’s a nice little extra to have’ or do they view it as ‘it is a crucial part of our users’ experience and therefore of our future success and we thus value it at x’?  If it is the latter it is time for them to put the money where their proverbial mouth is.  If it is not then it is time for streaming services to stop talking about the value of curation.

Note: I am indebted to Eli Pariser’s ‘Filter Bubble’ TED speech for some of the ideas in this blog post

Are EMI Censoring the Coldplay vs Joe Satriani Debate on YouTube?

You’ll almost certainly know by now that US ‘axe-hero’ Joe Satriani is suing Coldplay for plagiarism.  He claims that Coldplay’s ‘Viva La Vida’ (an EMI recording) stole from his 2004 track ‘If I Could Fly’ (a Sony recording).  This was becoming a PR disaster for Coldplay and a couple of videos on YouTube comparing the two songs were each getting a couple of million views.  In short the controversy was generating a lot of online buzz.  Some commentators were advising that Coldplay should kick their PR machinery into action.

 

Well it looks like that advice has been heeded.  As of today those videos on YouTube comparing the two songs (and other similar ones) have been removed, in their place is the following message

 

This video is no longer available due to a copyright claim by EMI Music

 

Because YouTube has licensing relationships with the labels it has to be sensitive and responsive to their requests.  It looks like copyright infringement has been used here as a pretext for removing an awkward embarrassment.  Indeed a quick search finds other non-official copies of ‘Viva La Vida’ available for viewing, some (such as this one) with nearly 1 million views i.e. videos that are infringing copyright on the same song but not including reference to the Satriani controversy.  It’s somewhat ironic that copyright infringement has been used as the reason for pulling a video that discusses a copyright infringement controversy.

 

 

But this isn’t the first time the ‘copyright claim’ has been used to cover up YouTube embarrassments.  Back in July 2007  Beyonce Knowles took a dramatic tumble at a gig and mobile phone video footage spread like wild fire on YouTube.  In a desperate bid to airbrush out history SonyBMG got all the offending videos pulled, under the cover of the same ‘copyright violation’ tactic EMI have used here.  Similarly as now, plenty of other bootleg Beyonce live footage, some from the same gig, remained untouched.

 

What I said in my post at the time about Beyonce’s fall applies here also:

 

 

“What I find particularly interesting about this though is the fact that it is YouTube’s close ties with the record labels that has resulted in them filtering out the footage. To much of its audience this will feel like police-state style censorship and the curious will look elsewhere. Perhaps this an early sign that YouTube is becoming too closely aligned with ‘the establishment’ for ‘the kids’?”

 

 

 

And finally, if you want to judge on the Satriani / Coldplay controversy for yourself, here are YouTibe clips of both songs.  For ‘If I Could Fly’ move in 50 seconds and you’ll hear the part in question.

 

 

 

 

Joe Satriani ‘If I Could Fly’

 

Cold Play ‘Viva la Vida’

 

 

What do you think?