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.

What’s Next For Playlist Innovation?

This is a guest post from MIDiA Research’s Keith Jopling.

In this era of access to all music and everything about it, I do enjoy reading artist interviews, and pay attention to artists’ views on the modern music industry. What caught me recently were Mark Ronson’s remarks on songwriting in the age of the playlist in The Guardian:

“Everything has to be produced so it sounds competitively as loud as possible coming out of an iPhone or as loud as possible when it comes out of a Spotify hits playlist; you have to make sure the kick drum and the guitar have the same loudness and presence all the way through the whole fucking song or you don’t stand a chance. It’s kind of crazy how you have to think about music now.”

I have heard similar views from artists in recent years and they do have grounds, though you’ll be hard pressed to prove that streaming and playlists have truly altered music per se. After all how would that equate with the huge success of ‘slow music’ playlists, from Peaceful Piano to Esquenta Sertanejo to Your Favourite Coffeehouse?

There has certainly been an industry skew towards ‘streaming hits’ though. More artists are making “Spotify-core” (i.e. music that will do anything to avoid being skipped) and that’s a genre perhaps lacking in subtlety, But can it be accused of crowding out other, subtler types of music?

I would argue that playlists have changed the way we listen more than they have changed music itself. If the first port-of-call for music consumers is to hear songs on playlists, a lot of context around the music is lost. Already, research has shown that listeners are hard pushed to recall song titles, let alone the albums those songs are taken from. Speaking of albums, it strikes me as high time the industry now evaluate just what a ‘post-album’ world will look and sound like. So perhaps somewhere to start is to think about more innovation with the format that in essence, has replaced the album – playlists.  

Are playlists now set in stone as 30-50 tracks that are forever subject to optimisation tools and analytics? I very much doubt it. Despite playlists becoming valuable commercial music real estate in their current form (at least on Spotify) it seems to me that there is plenty of scope for further creative development of the format. We are far from ‘peak playlist’. A glance at the latest MIDiA global consumer data for Q4 2018 would back this up, with just 17% of music streamers claiming to listen to playlists regularly. though that number nearly doubles for Spotify subscribers to 31%. Critical mass for Spotify but hardly mass behaviour for the market overall.

That said, playlists do greatly reflect the way consumers interact with music: compiling or selecting, listening and sharing, sometimes adding context along the way. The opportunities these behaviours offer as a vehicle for promoting and monetizing artists are immense and perhaps still largely untapped, especially with regard to contextualization of new talent, as well as the creative resurfacing of songs from within music catalogues too.

A slowdown in playlist innovation

Spotify came to be the platform that really owns the playlist format, and it achieved this through a breakneck period of innovation between July 2015 and September 2016, with curated playlists brands like Rap Caviar and Today’s Top Hits augmented with the personalised “made for you” power triangle of Discovery Weekly, Release Radar and Daily Mix.

But since then, in over two years there has been little of that same calibre, other than somewhat lighter initiatives such as “Your Time Capsule”. More recently, Spotify has begun to fuse some curated playlists together with algorithmic suggestions (‘algotorial’). The strategy to personalise more playlists not only makes it harder for its competitors to copy, but introduces many more song slots for direct or independent artists to fill. The strategy is smart but perhaps lacks imagination.

Playlist Innovation Timeline: There has been a slowdown following 18 months of blistering innovation led by Spotify between July ‘15 and September ‘16.

Playlist-Timeline

Despite this, remarkably none of the major streaming competitors have made moves to innovate in the playlist space either, which seems a shame when streaming services are desperate for differentiation strategies. Instead, Amazon, Apple and Deezer seem to have largely played a game of follow the leader, with similar playlists themes, visual presentation and even ever blander names. In recent days Pandora has launched something called Stories, a mesh of podcast + playlist, which seems not only to lack imagination but to be muddled. Isn’t that just a tweak on radio?

Many artists and labels are concerned about the power that services have with regard to playlisting. While getting tracks on to the current raft of major playlist properties represents a challenge for A&R and marketers the music industry, the more accessible platform-hosted independent curated playlist have been around since Napster.

There are few, if any, limits to the potential reach of these playlists, and their value is determined in part by how creative they are, and in part how shareable they are. The recording industry’s earlier efforts to build playlists or influence playlists have fallen short though lack of imagination, global thinking, context and shareability, but that just means that the industry is free to work more creatively with the wider playlist community. It surprises me that Spotify, which plays host to independent curators still (and hopefully will continue to) doesn’t do more to tend to the community. But this perhaps creates room for others to do so.

Personally, I can see new exciting playlist platform tools like Soundsgood helping global playlist curators reach audiences more easily, providing many more opportunities for artists, labels and creators in the process. Other platforms like Stationhead and Lost are doing interesting things too with curators and tracks, but perhaps could get more traction if they switched focus to playlists?

Bringing back context

I like playlists as much as the next music fan, but like Mark Ronson and many other artists and music fans, I also feel they have commodified music somewhat. One thing I would like to see much more of for playlists is context. Why can’t we have sleeve notes for playlists about how they were put together (let alone by whom and why?). It looks to me like there is an opportunity to bring some context and personality back into playlisting. Mixtapes from the cassette age were lovingly compiled, often with handwritten notes and homemade cover art.

I’ve played with some of these ideas with my own playlist site the Song Sommelier. The Song Sommelier was created as a passion project to bring mixtape and vinyl values back to playlisting. Each playlist is accompanied by bespoke artwork by ‘resident’ artist Mick Clarke, and a reader or ‘digital sleeve notes’ by the playlist curator. For this project we chose to use the Soundsgood player to allow users of any streaming service access the playlists, doing away with those widgets that direct the music fan to either Spotify or Apple. It’s still more than a two horse race after all.

My hope is that with the artwork, sleeve notes and more original themes for the playlists, will make fans and listeners listen to playlists more like they used to with albums – paying more attention and hopefully connecting with the song collection on a deeper level. At least that might make Mark Ronson cheer up a bit (though his new “Club Heartbreak” playlist on Apple Music suggests it might be a while).

Perhaps a key question is how important is context to the music itself? It depends on your point of view, but context may be the thing that divides the passionate music fan from the casual one. Really, who wants to listen to a collection called “Get Home Happy” or “Prime Chill”, whether it’s curated or personalised? Except I guess some people do. Mostly, I would welcome some more creative thinking and innovation that can take playlists to another level.

Guest Post: What’s the Future for Ad-Funded Music Services?

Today we have the first in a short series of guest posts by leading music industry consultant Keith Jopling.

Keith is also one of the panel of judges for the Music Industry Blog Start Up Showcase and you can view Keith’s bio on the Start Up Showcase page here.


What’s the Future for Ad-Funded Music Services?

I recently gave a short talk at the IAB entitled “What could happen if the music market truly opened up to advertising?” The point of the talk wasn’t to answer that questions exactly (who could?), but to explore why ‘ad-funded’ music is less of a buzz these days. It was an opportunity to reflect why ad-funded hasn’t delivered on the heady expectations back when it all started in 2005/6.

The IAB event was back in May and since then there have been one or two developments and fresh comment. Most significantly, the UK’s number two ad-funded music streaming service, We7 was bought by Tesco for £10.8m – presumably in time, re-positioning the ad-funded pure-play music service to something of added-value to Tesco music buyers (and presumably, no longer funded by ads). Watch that space.

I also read something from Alexis van de Wyer, President of AdsWizz Inc, suggesting that Spotify had taken its eye firmly off the ad-funded ball and become too focused on premium subscriptions and partnerships for its API platform. I’m not one to doubt the brilliance of Spotify’s strategic plays but I thought this was an interesting viewpoint (even if it was a thinly disguised sales pitch from an advertising salesman).

In its early stages Spotify would wax lyrical about ‘new advertising products’ and various forms of innovation in online advertising. But did it sometimes feel like there really wasn’t much advertising on Spotify, or for that matter, innovation in ad formats? With several strategic shifts since it does to some extent look as though Spotify has accepted that ad-funding isn’t a primary revenue model – but more a springboard to other revenue streams (the so called freemium model).

Wherever this takes Spotify, the other question is – where does it leave ad-funded music as a ‘sector’.

The IAB talk highlighted a few facts of note, as follows:

  • The UK online advertising market was worth £4.8 billion in 2001 (the IAB’s official figure)
  • The UK online ads market grew by 14% year-on-year
  • The BPI reported ad-funded music revenues to labels (therefore trade revenues at the labels’ agreed share) of just £11.4m in 2011
  • From the BPI figure – adding in publishing and partner shares – the IAB estimated a total figure for ad-funded music in the UK of circa. £40m

Thus, music’s share of the online advertising market in the UK is well under 1%. As a share of revenues to the music industry (to labels anyway), ad-funded is just under 4%. And it hasn’t grown since 2010.

Why is ad-funded music so small and why is it no longer a growing revenue model?

In a way this is more a European problem. With Pandora generating $250m in advertising revenues in the 2011 and label-backed Vevo bringing in $150m, there are at least two cases studies of success across the pond (provided Pandora can keep it up!).

By mapping the existing music service landscape, it’s possible to make some observations:

  • In music streaming – Spotify and ‘3rd generation players like MOG (also now acquired) and Radio have shifted away from ad-funded
  • In music video ad-funded is still the primary model (for You Tube, Muzu and Vevo for example)
  • In discovery there is a range of models, but the latest buzz start-ups like Soundcloud and Songkick have stayed clear of ad-funded

What mapping current services doesn’t show is the number of promised or planned ad-funded services that have never materialised – including high-profile flops like the notorious Spiral Frog and Qtrax. More recently Oz-based Guvera’s arrival to market seems protracted even though it is still raising investment.

Is there opportunity to re-energise the sector? What is its real potential in Europe?

The IAB seems interested in this space and continues to examine it, so we may hear more views from the advertising camp. But there are at least a few possibilities:

  • In video – original programming and digital music channel creation – exemplified in the UK by the massive successes of SBTV, UKF and the more recent indie play Noisey.com
  • Format Innovation – audio ads have lagged behind other formats such as display and didn’t quite live up to early expectations, but perhaps there are breakthroughs still to come here
  • New markets – with brands now becoming publishers and ‘Content Strategy’ the buzz section of digital marketing plans, it’s only a matter of time before online sync services such as Cue Songs or others can crack-open a scaleable new way to license music to the millions of small scale uses in corporate video, blogs and other branded content

Ad-funded has places to go then, but isn’t the buzz it used to be. But then part of the music industry’s ‘problem’ is the apparent need to pin big hopes on the next panacea. Currently, it’s cloud services enjoying some time in the sun. But what’s really unfolding is a patchwork economy for music, that’s far more interesting to view as a whole.