thereport ISSUE 419 | 19 DECEMBER 2018 END-OF-YEAR REPORT 1

ISSUE 419 19.12.18

Hope and

No.1 glory

treaming subscriptions have trend, with three, growth excitement about the potential in brought growth back to the streaming is fuelling the China, India and Africa, there is much music industry – and in 2018 subscriptions the confidence to invest to celebrate from 2018. that has fuelled optimism and driving force. – in artists, technology and That’s not to say the year didn’t Sinvestment. The US, for example, saw copyrights alike. throw up some worries, arguments The global recorded-music industry 10% growth in the first half of 2018 for This is the key music industry trend and even the odd existential debate: lost 56% of its value between 1999 and both retail spending and wholesale of 2018. This is a growth industry once from Spotify’s growing pains, sluggish 2014, falling from annual revenues of revenues from recorded music, with more, and that is driving the decisions markets in Germany and Japan, and the $25.2bn to $14.2bn, according to the 46.4m music subscribers spending of the people within it, as well as failure to deliver (so far) of technologies IFPI. The memory of that 15-year period $2.55bn on their subscriptions – up 33% those outside with the resources to like VR and blockchain to the ever-tense should be enough to stop anyone in year-on-year and now accounting for invest in it. Optimism is back, although ‘value gap’ battles. our industry getting too carried away 55.4% of total spending. for now the memory of those darker This report is music:)ally’s review with the return to growth since. That’s not just important because times is a check on over-confidence or of the year, warts and all. We’ve chosen And yet… return to growth! Global the US is the biggest music market in arrogance. 40 industry trends, and for each revenues grew to $14.7bn in 2015, then the world. It’s also the headquarters From the steady growth of Spotify we’ve tried to say not just what

report $16bn in 2016 and $17.3bn in 2017. of the global major music companies, and Apple Music subscriptions, the happened, but what it meant – and Based on the mid-year figures from as well as the home of Wall Street and emergence of smart speakers, to what might happen next. Enjoy… and various countries, 2018 continued that the motherlode of venture capital. In all industry-friendly legislations and the roll on 2019. the END-OF-YEAR REPORT 2

ISSUE 419 19.12.18 Spotify adapts to life as a power player No.2

potify is a big and powerful company The option of direct distribution will whose actions have far-reaching inevitably affect the nature and terms of consequences for the industry within the deals that artists seek from labels (and which it operates. This is an obvious that labels are obliged to offer). Sstatement, but the trend running through Meanwhile, Spotify’s decision to choose Spotify’s 2018 is the company’s exertion of ‘preferred’ distributors to work with will that power, with a mixture of intended and contribute (along with Apple Music) to unintended consequences. determining the winners and losers in that We’ll start with a reminder of the scale sector of the market. we’re dealing with. Spotify began 2018 Spotify’s awareness of its own power with 159m monthly active users (MAUs), was also highlighted in an interview by including 71m paying subscribers. CFO Barry McCarthy at a Goldman Sachs By the end of September, it had 191m conference in September. His jabs at MAUs including 87m subscribers, and its Apple (“It’s not a software culture: it’s a current financial guidance predicts that by hardware culture”) and Amazon (“They the end of 2018, it’ll be on 199-206m MAUs don’t really care how engaged you are in and 93-96m subscribers. the music service as long as you become As its service turned 10 years old in a Prime subscriber”) were unusual in their October, Spotify was paying out around directness. $288m a month to music rightsholders, any future proceeds fairly too. News in June that it was offering some But it was McCarthy’s candid words with another $50m a month spent on R&D It’s not that long in Spotify’s history management firms and independent artists about Spotify’s major label partners – and $58m on sales and marketing. since it was seen as a punchbag as much six-figure advances to license their music “They have oligopoly power, and we can’t After going public, Spotify’s market cap as a partner: remember the days of intense directly was followed in September by tests be successful without them as partners[…] is now $21.8bn. And even the less positive pressure from labels over its freemium of a tool for artists and labels to upload We have driven all of their revenue growth numbers are huge: the company’s net loss model (including famously forcing it to their music directly to Spotify, all without and they can’t be successful without us over the first nine months of 2018 was impose a five-play limit on songs for free having to go through a distributor. as business partners” – that were most around $591m at current exchange rates. users) or the time when Apple played “Licensing content doesn’t make us a striking. Spotify is big. Comfortably the biggest slowcoach with the approval process for label, nor do we have any interest in being “I would say if you’re a drama queen, music streaming subscription service – Spotify’s first iOS app? a label,” stressed CEO Daniel Ek during his knock yourselves out! It’s going to be a Apple Music was on 56m in early December Things have changed. 2018 saw Spotify company’s Q2 earnings call in July. great show,” he added, about the next including trials – even if YouTube outstrips confident enough to discontinue its support “We want to grow the number of labels round of licensing negotiations. Punchbag it for monthly music listeners. for Apple’s in-app purchases for new and creators on the platform, as well as no more, even if labels (as seen by the Pretty much everything Spotify did in subscribers in its app, while also beefing up the number of creators using our tools and reports of a go-slow approach to licensing 2018 had a big knock-on effect for the that once-controversial free tier with more services. In some cases we license from Spotify in India, in response to its direct music industry. Its DPO saw windfalls for on-demand mobile features. labels, and in others from artists if they own licensing of artists) still have levers to pull Sony Music, Warner Music and Merlin, The most prominent (deliberate) exertion the rights to their own music.” in return.

report which were passed on to artists, with of Spotify’s power in 2018, however, came Spotify may not want to be a label, (Speculation that Spotify might be Universal Music hanging on to its shares with its moves towards even-more direct but the knock-on effects from all this are tempted to buy a stake in Universal Music but promising (via Taylor Swift) to distribute relationships with artists. still considerable. Group as part of Vivendi’s partial sell-off the END-OF-YEAR REPORT 3

ISSUE 419 19.12.18 Spotify adapts to life as a power player... continued

shows there may be more twists yet in That’s a key sentence, actually: with these relationships.) its public listing out of the way, what does Is Spotify entirely comfortable with its Spotify want to be as a company? Apart power? There were hints of growing pains. from ‘profitable’ of course: a goal that Ek Witness Ek’s comments at the company’s and McCarthy both maintain is attainable, investor day in March, saying that “making even if the costs of global expansion are a it onto one of our playlists can literally priority for the time being. change an artist’s life” yet also protesting We know that Spotify wants to be a (too much?) that “we don’t believe in “two-sided marketplace” for artists and gatekeepers”. fans, offering ever-more marketing tools (Contrast his then-colleague Troy for the former, and new ways to discover Carter’s claim at the same event that “our music and artists for the latter. Rolling editorial process is a unique meritocracy in these out while keeping investors happy an industry that was once controlled by just and not alienating music rightsholders a handful of gatekeepers” with a comment (too much) is one of Spotify’s more about the biggest streaming services at delicate challenges. Midem in June by Mom + Pop Music’s We know that Spotify sees itself as a Thaddeus Rudd: “There are 12 people progressive company: it has launched who control the playlists that have laudable initiatives around equality, global impact, and which have the diversity and the rights of refugees. How most impact on new music being as a platform owner. Spotify’s decision to this squares with the company’s desire to streamed on these services.”) remove podcasts by far-right conspiracy launch in some parts of the world where Spotify’s playlists are powerful, theorist Alex Jones was generally these issues are controversial (or, indeed, and not just the human-curated welcomed, but its ill-judged new policy illegal) is a point of tension to watch. ones. Its Discover Weekly and covering musicians guilty of ‘hateful We know that Spotify sees itself as Release Radar have become huge conduct’ blew up in Spotify’s face. an innovator – and that’s something to drivers of streams, with reports De-playlisting R Kelly and XXXTentacion look forward to in 2019. What can it do in September that its algorithms for actions that hadn’t yet resulted in with podcasts? How will its video strategy may soon be playing a role in its criminal convictions stirred up a hornet’s evolve? programmed playlists too. nest for Spotify. Why these two black Will it release its own smart speaker? We’ve barely scratched the artists, when a parade of white rock Can it take a leaf out of Tencent surface of Spotify’s 2018. There was legends with well-documented behaviour in Music’s book and have a proper crack the executive turnover: Troy Carter; the 1970s were still supported? at social features? Could Spotify lead CCO Stefan Blom; RapCaviar creator “I think we rolled this out wrong and the way in testing ‘user-centric’ royalties Tuma Basa; head of artist and industry There were battles to be fought against we could have done a much better distribution? partnerships Mark Williamson; CMO Seth Bulgarian scammers generating royalties job,” admitted Ek, after the policy was DPO and executive-turnover out of the Farbman, head of music culture and fraudulently; against startups offering abandoned. “If we were gonna penalise an way, 2019 is hopefully a year to turn on editorial Doug Ford; and marcomms boss ‘pay-for-playlisting’ services; and against artist on top of them being penalised by the afterburners, innovation-wise, while

report Angela Watts were among those leaving, hacks giving premium access to non- the criminal justice system — is that who ensuring that Spotify’s power is exerted with replacements including former Condé payers (2m of them, apparently). we want to be as a company?” said Carter in positive ways for the artists, fans and Nast big-hitter Dawn Ostroff. There were more exertions of power later in the year. partners that have brought it this far. :) the END-OF-YEAR REPORT 4

ISSUE 419 19.12.18 Legislation goes music’s way… or does it? No.3

and other music matters, but the unified resources criticising the plans. effort that drove the MMA may be a As music:)ally went to press on this template to follow outside the US. report, there was growing skittishness You might say the same thing about the among music rightsholders that these proposed new European copyright directive efforts were paying off, in encouraging the and its Article 13 section covering the trilogue to water down Article 13. responsibilities of user-uploaded content An open letter from Vivendi, the IFPI, platforms – YouTube and SoundCloud Impala and other music/creative industry included, in this industry’s context. signatories expressed “serious concerns Well, the unity was on the side of the about the direction of travel”, adding that music industry, with the representatives of “fundamental changes” would be needed artists, songwriters, labels of all sizes and to the text that was now being put forward publishers pulling together to persuade by the European Commission, if it were to European legislators that the ‘value gap’ properly tackle the ‘value gap’. was worth tackling. This is all building up to yet another YouTube took a different view, as did point of high tension as the European a variety of campaigning groups and Parliament votes on the final version of technology industry bodies. Yet come Article 13 next year. What rightsholders September, the European Parliament voted were hoping would be a rubber-stamp vote to approve a version of Article 13 that was now looks considerably trickier for their very much what the music industry was hopes. looking for. A month or two ago, 2018 might credibly e’ll start with the positive: legislative memory, the MMA never looked The theory was that following have been framed as the year of two the passing in the US of the like becoming a pitched battle between the vote, the ‘trilogue’ of European momentous pieces of legislation that went Music Modernization Act ‘music’ and ‘tech’. institutions (the Council, Parliament the music industry’s way. (MMA) was a high point for the (Although satellite radio firm SiriusXM and Commission) would quickly reach The Music Modernization Act certainly Wmodern music industry, not least because and, to a lesser extent, Blackstone – owner agreement on the final text of Article qualifies for that description, but as the the legislation was the result of disparate of PRO SESAC and rights management 13 – since the Commission and Council’s year draws to a close, Article 13 may yet industry bodies coming together to lobby in firm HFA – served time as potential villains texts were broadly in agreement with the turn out to be a crushing disappointment a focused way. of the narrative.) Parliament’s. for rightsholders and their representative The MMA looks like legislation that really But the MMA progressed through the YouTube, though, redoubled its bodies. Although note this: YouTube and could deliver on its promise of streamlining US legislative bodies and was signed lobbying efforts against the proposed the campaigners supporting its position the music licensing process, making it into law, with RIAA boss Mitch Glazier legislation, with public criticism from will see it as a heroic back-from-the-brink more transparent and filling in some long- and ASCAP boss Elizabeth Matthews CEO Susan Wojcicki and Lyor Cohen moment. lamented loopholes. both choosing the word “Herculean” to (see p6) and pop-up ads on YouTube In short, celebrate the passing of the Equally impressively, the bill was describe the industry efforts that went in itself encouraging viewers to “learn MMA, but hold your horses on judging

report supported from an early stage by to this progress. more” about how “Article 13 could have Article 13 – and whichever way the final music industry bodies and technology Chances don’t come around that often unintended consequences” by clicking legislation goes, there’ll be plenty of people organisations alike – unusually in recent to modernise legislation covering copyright or tapping through to YouTube’s own who will be furious about it. :) the END-OF-YEAR REPORT 5

ISSUE 419 19.12.18 Apple Music’s steady growth No.4

he iPod wasn’t the first digital and fans alike – and is now being music player and iTunes wasn’t retired. Apple’s status means the quiet the first digital music store – but announcement was widely reported, both quickly came to dominate but this misfiring element barely theirT respective categories. detracts from the longer-term story of Apple Music hasn’t yet managed Apple Music’s growth. that in the streaming world, and likely music:)ally has almost reached the won’t ever. Yet being in second place point of allergy to the term ‘a rising (in subscriptions terms) has arguably tide lifts all boats’ that is regularly been the making of Apple Music as the wheeled out when a new streaming company strived to close the gap on service launches. Yet Apple Music – Spotify. and the marketing heft (and nous) of As music:)ally has regularly argued, its parent company – has played an the “Who’s growing faster?” take on this important role in raising awareness of rivalry is less important than the fact that subscription streaming, benefitting the both are growing steadily, and without market as a whole. seemingly cannibalising one another’s As 2018 drew to a close, there was momentum. evidence that Apple is also willing to Apple Music had more than 30m play its part in the disruptive forces paid subscribers in September 2017, around streaming and the music and it reached 40m by April 2018. The industry. Absorbing analytics startup public metric then shifted: in May CEO Asaii then buying artist marketing firm Tim Cook said it had more than 50m, Platoon hints at Apple Music’s potential including people on free trials (they to spot talent early and work with had been excluded from the previous algo-personalised playlists, lyrics and including its music-streaming service. those artists directly – just another point of milestones). a comprehensive selection of localised In November Katy Huberty – a veteran intense competition with Spotify. By November, the Financial Times was charts. Apple-watcher – made the startling Rumours of an investment in reporting that Apple Music now had 56m Apple’s launch of its HomePod smart forecast that Apple Music will grow to 164m iHeartMedia, meanwhile, fuelled talk of subscribers – again, including free trials. speaker early in the year was a slow- subscribers by 2023, taking it from a $4bn Apple’s thoughts on traditional radio, which The year also saw claims that Apple Music burning sales story – it’s not thought to business in 2018 to one generating $13.7bn with SiriusXM buying Pandora could make had overtaken Spotify for subscribers in the have more than a 5% market share – but annually by 2023. for interesting times ahead in the US. US specifically – both were thought to be Apple signified its willingness to look One element of Apple Music that won’t The overall picture: Apple Music is a around the 20m mark there in July. beyond its own devices with the launch be part of that growth is Connect, the powerful player in the music streaming Alongside this growth came steady in December of Apple Music for Alexa, feature introduced at launch for artists economy, but in contrast to iTunes’ improvements, from the addition of music bringing the service to Amazon’s Echo to share photos, videos and even original dominance of the downloads era, this time videos in March and the rollout of its speakers. songs with fans: a combination of Twitter/ round it has strong, innovative competition.

report Apple Music For Artists data dashboard The growth played well with analysts, Instagram and SoundCloud residing within That’s good for everyone: for Apple, for the in beta the same month – winning warm who were excited about the bigger picture the streaming service itself. music industry and for the music fans using words from managers and artists – to new of the growth of Apple’s ‘services’ division, Connect failed to take off with artists its streaming service. :) the END-OF-YEAR REPORT 6

ISSUE 419 19.12.18 Smart speakers increase the volume No.5

n July, research firm Canalys introduced the ability to ask predicted that there would be follow-up questions before serving 100m smart speakers in use music hinted at a future of more globally by the end of 2018. That nuanced recommendations, for Iprediction may turn out to be a example. little cautious. Metadata is another un- The company’s own stats settled (and, indeed unsettled for suggest that 9m units shipped in Q1, some labels) issue around smart 16.8m in Q2 and 19.7m in Q3 – that’s speakers and voice assistants. 45.5m in the first nine months of the Labels have talked for some year alone, with the bumper fourth time about the importance of quarter to come, and an existing good metadata to ensure the install base at the end of 2017 right songs (i.e. the right songs (according to the company) of 40m. from their catalogues) are played We’ll have to wait for those Q4 when the algorithms of Alexa, figures to understand exactly how Siri, Google Assistant and their barnstorming a year 2018 turned Chinese peers are whirring. out to be for smart speakers and the The assumption has always voice assistants that go with them. been that the responsibility is with We do know that Amazon doesn’t labels to supply this metadata to have the market entirely its own the music services, as it always way. In fact, Canalys claimed that has been in the past. Google Home speakers outsold Amazon this one country alone. most popular use for a smart speaker, Amazon, though, has been open Echos in the first and second quarters of The big trend of the year, though, was certainly in the top two or three. One about its willingness to create its own the year, before the latter regained top spot the emergence of China as the second- report from Nielsen suggested that 90% metadata to fuel Alexa’s smarts, rather in Q3. biggest market in the world for smart of smart speaker owners listen to music than wait for labels to do it. Now imagine Both companies’ sales were boosted by speakers. on their devices, while 53% have an a situation where a label firmly believes their cheapest models: the Google Home Canalys claimed that China accounted audio-streaming app synced with their that a track is ‘summer’ music, but Mini and Amazon Echo Dot. In September, for 29.4% of shipments in Q3, behind only speaker. Amazon’s machine-learning algorithms research firm Consumer Intelligence the US (42.1%), with Chinese firms Alibaba music:)ally has been thinking and beg to differ… Research Partners claimed that Echo Dot and Xiaomi growing their combined share writing for a while about what this might Potential tensions don’t detract accounted for more than half of the Echo from 0.2% in Q3 2017 to 20.8% in Q3 2018. mean for artists and the wider music from the bigger picture, however: a install base, while Home Mini was around In November, Xiaomi’s CEO announced industry. What does it mean when a new and popular device category is an 40% of Google’s. that its smart speakers had more than 34m growing percentage of listeners are increasingly-powerful route to homes In the US, this is an increasingly monthly active users alone. Resist any interacting with music streaming services (and in the future, cars) for music mainstream audience. In November, temptations to see the smart speakers world with voice rather than a screen? streaming services.

report research firm Voicebot claimed that 22.9% as an Amazon/Google/Apple carve-up. Firm answers to this are thin on the Whether it’s 100m smart speakers or of the US adult population now owned at Nearly every study we saw this year ground, but we got some interesting more in use by Christmas, there is plenty least one smart speaker – 57.8m people in suggested that music remains if not the talking points in 2018. Alexa’s recently more growth to come. :) the END-OF-YEAR REPORT 7

ISSUE 419 19.12.18 YouTube ramps up its music ambitions No.6

top press! There were some ways These aren’t mutually exclusive claims: in which YouTube enraged the YouTube’s argument to labels, in fact, is music industry in 2018, and there that it can help them to identify emerging were others in which it proved to talent and then break it to a wider Sbe a strong partner. audience, including off-platform. In that sense, this was a year like any 2018 was also a year of regular other in recent memory: heated ‘value reminders of YouTube’s position in music gap’ arguments at one level, and practical in some of the most exciting music (often inventive) collaboration at another. markets in the world, particularly India, But, of course, this wasn’t a year like where the service had 225m monthly any other because 2018 was the year active users in March. of the ‘proper’ debut of the service’s The launch of YouTube Music’s global premium music-subscription tier, charts in May provided firm data on what YouTube Music, which will ultimately be also stressed YouTube’s positive efforts. Other welcome additions to YouTube this meant for Indian musicians. Google’s flagship music streaming brand. “We’re making enormous investment to more generally included the expansion Witness YouTube’s global top artists Veteran label executive Lyor Cohen, launch a product that you will be proud of its Official Artist Channels system; chart for the week of 7th-13th December. now YouTube’s head of music, was of. It combines the best of Google Play’s the addition of music videos to the In first place was Kumar Sanu with 209m prominent in the months leading up to context server and the breadth and depth Google Preferred premium-advertising weekly views, followed by fellow Indian the launch, making the company’s case of YouTube’s catalogue,” he told the programme; the launch of an Artist On artists Alka Yagnik (200m) and Neha for being a friend, not a foe, to his former SXSW conference in March. The Rise initiative to support new acts; Kakkar (197m) for a clean sweep of the industry. “We’re now layering in a programming the addition of ‘stories’ as a way for top three, with Udit Narayan in sixth “I consider this the year of music for division solely focused on building and artists to communicate with fans; and a (151m) – all ahead of the biggest US YouTube and Google,” he told music:)ally growing the playlists ecosystem that second bash at a channel-specific tips/ artist on the chart, eighth-ranked Ariana in February. “With the ability for us to users would love across both paid and subscriptions system (see p21). Grande (139m views). not simply play in advertising but also in ad-supported tiers.” YouTube invested in original content With Latin American artists figuring subscription, I think the music industry will Cohen promised that YouTube would and marketing campaigns, including its highly (see p14) in YouTube’s rankings recognise us as a huge value contributor.” “frustrate and seduce” its huge (1bn+) Artist Spotlight stories (Camila Cabello – Ozuna was its most popular artist Cohen’s pitch sought to point attention audience of music fans with ads and nudges in February; G-Eazy in March; J Balvin in for 2018 as a whole – the platform’s towards what he saw as an emerging to upgrade, to drive subscriptions growth. August; Shawn Mendes in October; Alan importance for artists in these territories duopoly of Spotify and Apple Music (or The team gathered under Cohen – Walker in December, plus a four-part is clear. perhaps a triopoly if Amazon is included) Spotify’s RapCaviar founder Tuma Basa docu-series on Ariana Grande kicking off A high-profile battle between Indian in the music streaming world. included – and the product that they in late November). film music company T-Series and gamer “The story that hasn’t been written, released at launch was impressive, YouTube also sought to align itself PewDiePie to be the most-subscribed- and that should be written, is that of a with clear thought having gone in to with artists who emerged on its platform. to channel on YouTube – T-Series was highly consolidated distribution network. personalisation and context, as well as Dua Lipa was one example. The music closing in on 76m by mid-December – That is way more dangerous than how to use the advantage of YouTube’s industry may see her as a label-fuelled brought this to wider attention.

report anything else that this music business mammoth catalogue of videos beyond success story, but YouTube regularly But... that ‘value gap’. Cohen was has to face,” as Cohen put it. the recorded-music itself. A good start, pointed to her early days uploading genuinely peeved in June when music:)ally However, his pitch to the industry with scope to improve. covers to her YouTube channel. brought up the topic in an interview for the END-OF-YEAR REPORT 8

ISSUE 419 19.12.18 YouTube ramps up its music ambitions... continued

The music industry will make less money from YouTube, not more. Emerging artists will find it harder to be discovered and heard on a global stage” – Lyor Cohen

the launch of YouTube Music, telling us money from YouTube, not more. Emerging vote in September, yet YouTube’s intense stripes and sizes. that “the first time I’ve touched this safe artists will find it harder to be discovered lobbying since has (if such a thing is There will be claims and counter- harbour [topic] in quite some time is this and heard on a global stage.” possible) only increased the bitterness claims, and continued arguments about morning with you”. Cohen’s arguments were accompanied around the whole ‘value gap’ debate. how much YouTube really pays the By November, however, Cohen was by warnings from other senior YouTube So where are we at as we head in to music industry (the latest figure from the playing a prominent role in YouTube’s executives targeted at the music 2019? The fury of music industry bodies horse’s mouth: more than €5bn from ads, lobbying campaign against the Article 13 industry. There was chief business officer if Article 13 is watered down will be including €1.5bn in the last 12 months, section of the proposed new Copyright Robert Kyncl’s suggestion that Drake, firmly targeted at YouTube, even as their including payments to collecting societies Directive in Europe. Dua Lipa and Alan Walker were proof members hope that YouTube Music can and direct payouts to music partners). “Let me be clear: we understand and that YouTube’s creative economy works grow the paid subscriptions market. Stop press (again)! There will be support the intent of Article 13. We need for artists, and CEO Susan Wojcicki’s There will be accusations that some ways in which YouTube enrages effective ways for copyright holders to citation of ‘Despacito’ as a hit that might YouTube is harming the livelihoods of the music industry in 2018, and there protect their content. But we believe that have to be blocked in an Article 13 world artists, even as the company continues will be others in which it proves to be a the current proposal will create severe due to confusion around who its royalties to put marketing dollars (and original strong partner. Whatever happens with unintended consequences for the whole should be paid to. content) behind big stars, deploys its YouTube Music and with Article 13,

report industry,” he wrote in his industry newsletter. The Article 13 lobbying battle seemed recommendation algorithms for emerging some defining characteristics of this Later that month, he returned to the to have been settled in rightsholders’ acts, and expands its analytics and particular relationship seem destined to topic. “The music industry will make less favour by the European Parliament’s monetisation tools for creators of all remain the same. :) the END-OF-YEAR REPORT 9

ISSUE 419 19.12.18 Tencent Music strikes IPO tune No.7

018 was always going to be the The big opportunity for Tencent year of the Spotify IPO, at least Music in China is boosting its up until the point that Spotify conversion rate: its 23.3m subscribers revealed it was opting for an at the end of June represented 2alternative form of ‘direct public listing’ just 3.8% of its online music users. (DPO) instead. Compare that to the 14.1% of gamers But never fear: the streaming world who pay in China and there’s a sense of still got a high-profile IPO in the form potential. of Tencent Music, which raised $1.1bn Historically, China has been a tough in December, valuing the company at place for recorded music to make $21.8bn by the end of the first day’s money, thanks to its original wave of trading. unlicensed music services. The Chinese The IPO process gave the Western government put paid to those by forcing music industry a detailed insight, for them into licensing relationships – one the first time, into the mechanics of of the few countries where such a the Chinese company’s digital music policy could be carried out so swiftly. business. Not least the fact that Now that hundreds of millions of Tencent Music isn’t really a “music music fans there are listening to legal streaming” giant. free services, our industry has high Instead, it’s a “karaoke and live hopes that companies like Tencent video” giant that also offers music Music and NetEase can pull on some streaming. Tencent Music is far from levers (putting big new albums behind “the Chinese Spotify” that many reports the paywall for example) to drive up casually labelled it. their number of paying subscribers. The figures in its IPO filing made this users of its online music services, and streaming services is RMB 8.5 ($1.23) As we’ve said, Tencent Music shouldn’t clear. Tencent Music has more than 800m $1.18bn from the 228m users of its ‘social compared to RMB 118.5 ($17.20) for its just be viewed through the lens of its unique monthly active users across its four entertainment’ services – WeSing karaoke social entertainment services. streaming services: growing those karaoke biggest products: streaming services QQ and its livestreaming video apps. The The margins for the latter make Tencent and live video apps (and perhaps exploring Music, Kugou Music and Kuwo Music, and latter category was thus 71.3% of Tencent Music a very different business to that of how their success might translate to karaoke app WeSing. Some 23.3m of those Music’s revenues that year. Spotify: it generated a net profit of $394m western markets) will be key too. people were paying in some way at the end This reflects something we learned in the first nine months of 2018 compared music:)ally also sees great potential for of June. about China as a whole, again from the to Spotify’s net loss of $589m. Tencent Music as an investor in smaller The resulting revenues are strongly IPO filing. Research firm iResearch claimed In any case, IPO out of the way, Tencent music/tech startups, with the company skewed towards the ‘social entertainment’ that the online karaoke and music-focused Music can now focus on the future growth having said that it planned to reserve 15% side of Tencent Music’s business, which livestreaming market was worth $3.2bn in of its business, which the company claims of the money raised by its IPO for strategic includes WeSing as well as music-focused China in 2017, compared to just $640.5m will be laser-focused on China rather than investments and acquisitions.

report live-video services. for streaming music. expansion abroad – neatly keeping it out That could be a $165m war chest for In 2017, the company generated In Tencent’s case, the average monthly of the way of Spotify, following the two firing up the startups ecosystem around $476m of revenues from the 644m revenue per paying user for its music companies’ equity swap in late 2017. Tencent Music’s services. :) the END-OF-YEAR REPORT 10

ISSUE 419 19.12.18 Music catalogue Chinese app TikTok No.8 No.9 values rocket goes global

n the publishing world, one deal and 121 songs from UK production team usic:)ally reported valuation of dwarfed everything else in 2018 – also TMS (songwriting clients: Little Mix, Jess (that’s $70-75bn for Bytedance comfortably being the biggest catalogue Glynne). us) still in August, when it acquisition in years. Sony/ATV finally Also of note was: peermusic buying up mgets teary kicked off efforts to Itook full control of EMI Music Publishing Accorder Music; one77 Music launching when remembering the raise between $2.5bn this year, despite furious lobbying from with a catalogue of 6,000 songs and, distraught messages and $3bn of new Impala to block it on market monopoly backed by Virgo Investment Group, left on our office funding. grounds. revealing plans to invest in other publishing voicemail by kids the For the music catalogues; and day in August Chinese industry, all this is Shamrock Capital buying tech firm Bytedance simply a backdrop the publishing catalogue announced that it to the more practical of hit machine Stargate was merging social questions of what (songwriting clients: app Musical.ly (not artists and their Rihanna, Beyoncé, Katy us) with another app marketing teams can Perry, Ne-Yo, Shakira). called TikTok, under the do with TikTok, building This after Kobalt ended latter’s brand. on some of the campaigns that ran on 2017 by snapping up Those sobbing (no, really) youngsters Musical.ly once its scale was clear. Songs Music Publishing. thought Musical.ly was shutting down. In TikTok’s recent decision to re-record an Will 2019 see mega- fact, it was getting stronger: TikTok may English version of a song called ‘Say Meow deals on anything near not have been as well-known in the West, Meow’ that had gone viral on its app also the same scale? BMG but in China it already had hundreds of hinted at its potential as a hit-creator. boss Hartwig Masuch millions of users. (Although a comparison of the original warned at Midem of the Since the merger, it has gone from track’s 6bn+ views in eight months on dangers of a publishing strength to strength, topping app store TikTok with the English version’s 6.2k It was the biggest deal of the year – but catalogue “bubble” that could be burst by download charts in the US and other key streams on Spotify and 35k views on far from the only one. Snapping at its heals external economic factors, from interest western markets, as Musical.ly’s youthful YouTube a week after release should was Hipgnosis Music with a catalogue rates to new trade barriers. users dried their tears and migrated probably rein in over-excitement on that trolley dash of its own. With the securing Yet it’s also true that the streaming age to a new home for their 15-second front.) of a $262m funding round, the company is driving this sense of the value of song miming’n’dancing clips. TikTok’s interactions with the music (led by artist manager Merck Mercuriadis) catalogues, and the desire of publishers TikTok, known as Douyin in China, is industry, from licensing to marketing to immediately went to work. and institutional investors alike to believe now the most high-profile of Bytedance’s original content, will be an important trend The company bought up: 302 songs by they can maximise that value. apps internationally, although its Jinri of 2019. As will its (likely successful) efforts The-Dream (songwriting clients: Justin The fact that this is happening at the Toutiao news app rivals it in the company’s to fend off competition from Facebook’s Bieber, Beyoncé, Rihanna, Jay-Z) for $23m; very same time publishers and songwriter homeland. These and other apps fuelled a TikTok-like Lasso app. :) 100% of 214 compositions by Poo Bear bodies are agitating for a bigger share of (songwriting clients: Justin Bieber, Jennifer streaming royalties (see p21) and fretting Those sobbing (no, really) youngsters

report Lopez, David Guetta, Usher, Ludacris); a about sustainable income for songwriters thought Musical.ly was shu!ing down. 37.5% stake in the writing catalogue of the is a quirk of the current industry disruption, In fact, it was ge!ing stronger...” late Bernard Edwards, co-founder of Chic; yet not a contradiction. :) the END-OF-YEAR REPORT 11

ISSUE 419 19.12.18 Africa a!racts the global industry No.10

centre of much of it. In March, Universal players will sit alongside an emerging Music Group bought a 70% stake in network of local management companies, Kenyan label AI Records and its catalogue promoters and labels. The music industries of well-known East African artists, which of Africa are evolving rapidly, in some ways UMG would digitise and make available. informed by what happens in the most In July, Universal launched a new established music markets elsewhere, and division focused on French-speaking in other ways forging their own paths. African countries, based in Côte d’Ivoire, South African artist Black Coffee with markets including Cameroon, Congo, addressed a wider topic here in his Midem Mali, Senegal and Togo under its umbrella. keynote, after talking about his launch of a The same month, it launched Universal label and, soon, a streaming service-slash- Music Nigeria, to focus on that country social network called Gongbox to promote plus Ghana, Gambia and other nearby independent African artists. countries. “Africa is ready today to create a new In November, meanwhile, UMG Africa where we create solutions that announced a licensing deal with streaming are for us, and by us. That is my African and downloads service Boomplay, a service dream,” he said. “I’m trying to change the with 36m registered users (its monthly narrative of the continent. How can we active count in July was 17m), having been create things that work for us? How can launched in 2015 by Chinese-owned phone we stop plugging into things brought to us maker Transsion Holdings. by other people […] When are we going to This year we also wrote about local start creating our own things?” here’s a good argument that it’s of a continent with young, digitally savvy digital music services in Africa, from Songa We’ll see how Gongbox fares in 2019, patronising to think of anywhere as populations who love music. By one (launched by telco Safaricom in Kenya) especially as global streaming services a ‘developing’ or ‘emerging’ market, reckoning, a potential audience of 300- and part-label-part-DSP MyNyimbo and train their sights on Africa. The major labels when you could use the word 400m mobile-first music-streamers in the Tunelet, to MusicTime, launched by telco are equally alive to its potential. ‘exciting’T instead. next couple of years. MTN in December shortly after it acquired “Africa is particularly exciting. It has There was certainly a lot of excitement That conference also offered blunt streaming service Simfy. the youngest median age in the world […] within the music industry this year about opinions on some of the continent-wide MTN was also the partner for Tidal’s and the potential for African repertoire to the potential in Africa – accompanied by a challenges: from high mobile data prices launch in Africa in August, starting with travel to other continents is immense,” said necessary awareness that this continent charged by telcos to issues around a bundle deal in Uganda. The telcos are UMG’s EVP of market development, Adam is not one market, but rather a collection tracking, collecting and distributing digital important in Africa, not just because Granite, in April. of countries, each with their own specific royalties through collecting societies. In of their distribution scale, but because The football world has long speculated musical culture and (in industry terms) November, collecting societies body CISAC they hold the key to issues like mobile how long it’ll be until an African team structural challenges. said that just 0.8% of its music collections payments that will supercharge or hinder wins the World Cup. The music industry’s There were some continent-wide in 2017 came from Africa. the growth of streaming – including equivalent may be how long it’ll be

report generalisations that contained truth. Still, the anticipation of a streaming options like daily subscriptions adapted to until Africa generates a ‘Despacito’-sized The dedicated Africa day at the Midem boom ahead fuelled plenty of activity in these markets. global streaming hit. Our hunch is it’ll be conference in June presented a picture 2018, with the world’s largest label at the This blend of telcos, startups and global very soon. :) the END-OF-YEAR REPORT 12

ISSUE 419 19.12.18 A&R’s big-data Life beyond the No.11 No.12 moment biggest global DSPs

onference panels any people think of the music a net profit of $9.4m over the first three on A&R and big streaming world primarily in quarters of 2018, albeit with declining data tend to follow terms of the ‘big four’ global revenues (which for that nine months, were the same path: DSPs – Spotify, Apple Music, equaled by what Spotify makes in a week, Cobligatory references to MAmazon and Google/YouTube. Tencent for a sense of scale.) ‘gut’ and ‘ears’, and the Music should probably swell that to a ‘big Tidal, meanwhile, continued to consensus that data is only five’ even if its business is focused on a attract controversy in 2018. Its nemesis, useful to inform human single territory – China. Norwegian newspaper Dagens Næringsliv, decisions, rather than to There is life beyond the biggest beasts published claims of past data manipulation rule them. of the streaming world, however. Deezer favouring albums by two of its co-owners, It’s true enough, but it sprang a surprise with its $185m funding Beyoncé and Kanye West, before following too often crowds out useful round in August, complete with investment up with claims of delays in payments to insight on the mechanics from Saudi Arabia – and an exclusive deal major and indie labels. of how the data can inform in the Middle East for the catalogue of Tidal made some positive moves talent discovery. Rotana Records. – launches in Uganda and Brazil, and We didn’t necessarily own technology for uncovering artists and Deezer ends 2018 with 14m listeners a bundle with investor Sprint – but its answer that question in 2018, but we did tracks with momentum – was now part of including 7m subscribers – some of whom (reported) million-odd subscribers showed get a sense of the value being ascribed Apple. are ‘indirect’ payers through telco bundles its status in the streaming pecking order. to technology that might be able to play a (Opinions differed on whether this was – and in the encouraging position of having One important lesson from 2018: don’t role here. an acquisition or simply the hiring of the the resources to explore acquisitions forget about the local streaming services. In March, Warner Music Group bought company’s team: Asaii’s investor said it of smaller fish, while also remaining a For example, the hubbub around Spotify startup Sodatone, whose technology used was the former, but Apple seemed to be prominent target for the bigger players. and Deezer’s launch in the Middle East streaming, social and touring data to spot briefing some journalists that it was the Napster was another mid-tier player and North Africa included the reminder unsigned talent with early momentum. latter.) making some that local service “Sodatone will help to differentiate us in Two thoughts sparked by all this activity. interesting Anghami already the search for the superstars of tomorrow,” One: how many labels and managers will moves in 2018, has 70m listeners promised WMG’s recorded music boss Max be wary of investing too much hope in a including its in the region. Lousada at the time. clever new analytics platform (they’re still recent deal From Melon The same day this news broke, so did popping up: see Beatchain, for example), to launch an in South Korea the announcement of a $4.2m funding if it’s going to get acquired by a label or own-brand hi- to Boomplay in round for British startup Instrumental, streaming service and possibly shut down? res streaming Africa to NetEase whose TalentAI platform also scans Two: the fact that labels and streaming service for Cloud Music playlists and social networks to identify services are in the market to acquire this Sony Music in China, there momentum for artists. technology is an insight into the shifting Entertainment are plenty of Then, in May, another startup called industry dynamics. Labels aren’t just racing Japan. services that are TuneGo raised $7.7m of funding for its one another to spot new talent: they’re The company significant in

report own take on the ‘big data for A&R’ idea. also jostling with their biggest streaming also bucked the terms of scale, Plus in October, it emerged that analytics partners – who have their own internal streaming trend strategic potential startup Asaii – which had been touting its firehoses of data to work with. :) by generating or both. :) the END-OF-YEAR REPORT 13

ISSUE 419 19.12.18 Managers at the centre of everything No.13

here are lots of healthy, trusting for Artists and Apple Music For Artists. relationships with artists. This is not quite development, with management taking on relationships between managers They can and do share this data cutting out the label as the middleman, most of that responsibility at the start. and labels in our industry, where with label partners – but often this is but rather opening up new channels of The bigger management companies their interplay has done great things on a conditional and, more importantly, communication that could run in tandem are also increasingly moving to what one forT artists. Equally, there are countless windowed basis, with access granted at with label talks or could, depending on the manager termed a “modular structure”, tales of these relationships souring into key points in campaign cycles but not in context, be the primary link with artists. something that the accessibility and mutual distrust or even antagonism. perpetuity. While labels are far from being taken out affordability of digital technology and the The streaming age is undoubtedly This all leads into a wider trend where of the equation completely, they are often proliferation of data sets is enabling. giving managers more power to take on the DSPs are moving to develop direct getting involved at a later stage in the act’s Within this, they are deciding on a case- more responsibilities and keep their artists by-case basis when or if they bring in third- outside the label system if they want to. party experts (or hand things over to labels The quality of the relationships mentioned to run) or if they can run it all themselves. above will define the extent to which they A jigsaw approach is the net result take that road. here. Managers can take on certain Chance The Rapper in the US and responsibilities in-house that used to a wave of grime artists in the UK are be the preserve of the labels, while the held up as examples of how artists can maturation of what key distributors offer manage their own business, with a for artists (see p15) also presents an team surrounding them to fulfil the past alternative to labels. responsibilities of a label. Let’s be clear: labels are also bulking These models of autonomy have worked up their teams in new areas (especially brilliantly for these artists, but they are not data, playlist pitching and – coming over yet a panacea for every act. Good labels the horizon – voice-based search and what still have an important role to play; and that that means for music access) so as to isn’t going to change in the short or even justify a central role. longer term. A good label, firing on all cylinders and Still, we find ourselves in a transition working in partnership with managers, can period – what we might term the growing still achieve more than most managers can pains of autonomy – and it is a fascinating on their own – even if the terms of the deals moment for an industry that has found being offered by those labels will evolve itself in accelerated upheaval and as a direct reaction to the availability of recalibration for close to two decades. alternative options. Speaking to a variety of managers and Disruption is not the same as being labels about these issues this year, Music made irrelevant and labels adapting Ally found that top of the agenda for both properly to a series of moving targets is was ownership and access to data. This is where they can guarantee their future.

report where the real power plays are happening, The label/manager partnership will especially as managers and their acts are remain; only the architecture of it will being given new levels of insight via Spotify change. :) the END-OF-YEAR REPORT 14

ISSUE 419 19.12.18 MeToo, Grammys- A reggae-ton of No.14 No.15 SoMale, MeNoMore... streams and listeners

all-women songwriting camps and a database of women working in the music industry. Other bright spots: SheSaidSo’s Alternative Power 100 list focusing on traditionally underrepresented communities, and its own mentorship scheme for young women; and the Keychange Initiative’s 017 was the year of ‘Despacito’, artists in YouTube’s Billion Views Club and he music industry hasn’t yet had ‘manifesto for change’ which was published and it’s possible to argue that 2018 today there are 41,” as YouTube noted in its ‘Harvey Weinstein moment’ in November, based on research on the didn’t quite see any global hits from November. in terms of a man at that level of gender gap within the music industry and Latin America at quite that scale. This is about Latin artists growing their power being accused of sexual suggestions for fixing it from 60 artists and 2Actually, the big picture was even more audiences globally, but what’s happening harassmentT and worse. industry figures. encouraging for artists from the region, as on the continent is exciting too. Countless Individuals, from industry executives to All of this was an encouraging riposte the likes of Ozuna, J Balvin and Bad Bunny non-Latin artists now see cities like Mexico musicians, have been called out publicly, to Recording Academy president Neil grew their global audiences and cemented City, São Paulo and Santiago among their while others have quietly left their positions Portnow’s ill-judged comments in January their status as stars far beyond Spanish- biggest streaming locations, for example – while keeping the details internal. that women “need to step up”, after speaking territories. the fact that Spotify ended September with What we have had, alongside that, is criticism of the male-dominated solo YouTube is the platform where this is 42m listeners in South America, which was some encouraging public debate about awards at the Grammys that month. most visible. In its review of 2018, published 22% of its global audience, helped. harassment, diversity and inclusion There’s plenty more work to do around this month, it revealed that eight of the 10 Indie licensing agency Merlin said in within the music industry, continuing diversity and inclusion of all kinds, to most-watched music videos on YouTube March that its members have seen their the conversation from 2017 and the help the music industry better mirror the this year came from Latin artists, led by the earnings from Latin America grow fivefold open letters from women in Sweden and demographics of its audience – and to (as 1.45bn views for ‘Te Bote Remix’, which had in the last three years, with Brazil alone Australia about these problems. Gerson suggested) rework the definition of only been released in April. expected to generate $60m in streaming UMPG CEO Jody Gerson set the tone in ‘power’ within the industry. Ozuna was the most-streamed artist revenues in 2018 – Merlin’s sixth-biggest January, with an interview about how “we “We know that when we have diverse of all on YouTube this year, while J Balvin individual market. need to teach young women in particular leaders, it drives greater creativity, it made it into Spotify’s top five. In fact, as In April the IFPI revealed that Latin to trust their instincts — and when it feels drives greater innovation, and ultimately music:)ally prepared this report, Balvin had American recorded music revenues grew weird or uncomfortable, it f***ing is — it drives business growth,” Spotify’s global an audience of 40.6m listeners on Spotify, by 17.7% in 2017, outstripping other tracked and men have to learn not to abuse their head of partner solutions Danielle Lee told with Ozuna (39m) and Bad Bunny (37.2m) continents. Our strong suspicion is that power”. music:)ally in June. close behind. 2018 will have generated more impressive

report Gerson was part of an initiative to do “This is not an HR issue. This is a This isn’t about a single tune, but about growth figures from Latin artists’ exactly that, She Is The Music, announced business necessity. It’s a business a constant stream of hits. “At the start of homelands, even as they built fervent in December with plans for mentorship, imperative.” :) 2017, there were five videos from Latin fanbases abroad. :) the END-OF-YEAR REPORT 15

ISSUE 419 19.12.18 So long, bare-bones distribution No.16

hen it emerged in June One quick response was to point out sprawling libraries of the DSPs, distributors and artist revenues come through these that Spotify was licensing that as big as Spotify is, it’s far from the can and will also offer marketing, major-owned distributors – 22.4% of the music directly from some only player in town: it’s one of hundreds advertising, playlist pitching, royalty overall independent music pie. Unrest independent artists, some of DSPs around the world, and no artist processing and data analysis. Acts can over whether that counts towards majors’ Wlabel executives were quickly on the phone wants a direct relationship to manage opt for all of these additional services or claimed market shares when negotiating to journalists expressing their anger – and with each of them. Aggregation will never create a patchwork of services as and with DSPs continues. reportedly stalling the process of licensing die, in that sense. when they need them. But, really, the hard This is not to suggest that the major- Spotify in India as a retort. But the more important point is that reality is that without any of them, they owned distributors are dominant. AWAL might as well be invisible. and Believe’s success in helping some of Spotify launching direct uploads (and its artists to build their streams, audiences rivals following suit, as they may well do and revenues was another reminder that in 2019) certainly poses questions for in distribution it’s not about what you do distributors, but those questions are only (in terms of getting music onto streaming existential if they fail to: a) understand services) but about how well you do all what additional services artists and the other things around it, to build an their team require; and b) do a great job audience for that music in an ever-more- of providing those services. There will noisy environment. undoubtedly be winners and losers from Getting back to the direct-uploads this process. topic, however, it’s not just an easy win for Will the DSPs be picking them? Both Spotify or any other streaming service that Spotify and Apple Music have published tries it. their lists of “preferred” distributors as a This isn’t quite ‘full YouTube/ guide for artists. Spotify liked its top pick SoundCloud’ in terms of user-uploaded DistroKid so much it bought a stake in content, as it’s artists with verified the company, while also recommending profiles. Even so, direct uploads bring CD Baby, EmuBands and FUGA. Apple responsibilities for content identification: Music highlighted CD Baby, The Orchard as 2013’s mysterious appearance of The and Kontor New Media in its top tier of KLF’s long-deleted albums on DSPs or partners. (more recently) the strange case of the This came alongside a growing fake Ariana Grande Zandhr album this awareness of how strategically important November showed. the in-house distribution arms (Caroline Even with music that does belong to When Spotify announced a beta tool for distribution is the easiest (comparatively (for UMG), The Orchard (for Sony) and the uploading artist, there’ll be a need artists to upload music directly to its service, in speaking) thing that ‘distributors’ do. ADA (for Warner) – are for the three major for accurate metadata – for example, September, chatter about the impact focused And for artists, it’s just the first step in a labels. publishing/songwriter details for covers. more on distributors and aggregators. What long process to get music in front of an This continued to stoke controversy DSPs disrupting distribution may well have

report hope for businesses based on being the route audience and generating royalties. in the independent community, with its own disruptive effects on the streaming to digital music services if those services Alongside the simple mechanics trade body WIN estimating in December services as they get this pipeline up and opened up their own pipelines? of ensuring music is ingested into the that nearly $1.5bn of independent label running. :) the END-OF-YEAR REPORT 16

ISSUE 419 19.12.18 Blockchain, huh? SoundCloud No.17 No.18 What IS it good for? rediscovers its mojo

he first music:)ally bulletin of 2018 Vezt and MusicLife, via the blockchain- highlighted the tale of The Long ticketing likes of Big Neon. Island Iced Tea Corporation. The Yet our takeaway from 2018 is that the drinks company had tripled its biggest value blockchain technology has valueT by rebranding as Long Blockchain for the music industry remains being an Corporation, despite no change to its core ingredient (but not an instant cure-all) in products of iced tea and lemonade. untangling the headaches around rights A fine illustration of the froth (well, fizz) ownership. around blockchain technology. Yet by the British startup Jaak revealed details of end of 2018, we’re well and truly into what its pilot with rightsholders including Warner research firm Gartner’s Hype Cycle theory Music Group, Warner/Chappell Music, terms the ‘trough of disillusionment’ around Global Music Rights and BMG. 017 was a tough year for approaches to clearing remixes on blockchain. Dot Blockchain revealed its own SoundCloud, with financial troubles, SoundCloud”, focused on another of That’s because of the many initial coin partnership with WMG and Warner/ staff layoffs and changes at the the platform’s historical USP – and the offerings (ICOs) Chappell in top. Yet 2018 suggested the music- difficulties in paying royalties out for mixes, for blockchain October, building 2streaming service could find a new lease of remixes and mash-ups. startups whose on its existing life under former Vimeo boss Kerry Trainor, SoundCloud sidestepped controversy products and work with who joined as CEO in August 2017. too, although it had to quickly fix some business plans SACEM, CD This year at least showed evidence of issues with the Premier programme’s terms were wildly- Baby, Fuga and a clear-sighted strategy: doubling down and conditions after they were spotted and overblown SOCAN. Blokur on tools for SoundCloud’s community of criticised in October. – or in some well- tested out its musicians, including features that would We didn’t hear much about the growth of publicised cases, rights-tracking help them make money from their uploads. SoundCloud’s subscription tier, which had outright scammy. tech with The SoundCloud Premier programme been so long (and tough) in the making An equally Massive Attack’s was at the centre of this, with improvements for 2017. In April, the company’s financial well-publicised Fantom app in in March giving more visibility to its results for 2016 revealed that its net losses plummet in the value of cryptocurrencies December. artists across SoundCloud’s service and had grown to €74.5m ($91.8m) that year. didn’t help. These companies purposefully avoided beyond. The programme then opened up Trainor’s response, in an interview, One of 2018’s big lessons was that a grand claims in favour of partner-driven to all SoundCloud Pro and Pro Unlimited was to point out that SoundCloud had startup should always be judged by its experimentation. “This is still the first step: subscribers – creators who pay for extra since “significantly reduced the burn” (in technology, by its business model and by we have to lay the foundations, build this tools to manage their content – in October. terms of cash) including a few cash-flow its team – and yelling ‘blockchain!’ isn’t a infrastructure, and build from there,” said There was also the launch of a positive months. satisfying answer by itself to any of those Jaak CEO Vaughn McKenzie-Landell. marketing initiative called First On SoundCloud’s position in a streaming questions. Blockchain hype may have taken a SoundCloud to highlight artists who built world populated by global platforms There were some blockchain-fuelled (necessary) battering in 2018, but as their first audiences on the platform. from Spotify, Apple, Amazon and YouTube startups trying interesting things around that hype dissipates, we’ll be left with an Deals with DJ-software firms to make remains a challenge; but regardless of

report music this year, from the Volareo smart understanding of how this technology can it easier for DJs to use SoundCloud’s its ultimate fate, its rediscovery of its speaker that let fans ‘tip’ artists by really help our industry in the years ahead. catalogue, and a partnership with Dubset mojo around creators was a welcome note clapping, to song-investment platforms And music:)ally thinks it can. :) to “test and develop next-generation in 2018. :) the END-OF-YEAR REPORT 17

ISSUE 419 19.12.18 Facebook makes its first music moves No.19

018 was, to repurpose Queen Elizabeth Lip Sync Live was almost its version II’s famous 1992 summary, an ‘annus of Musical.ly/TikTok: a feature for people horribilis’ for Facebook. It may remain to mime along to favourite songs and the world’s biggest social network with broadcast the results to friends. It launched 2close to 2.3bn people, but its daily active users in the US in June, the same month that (DAUs) count has been declining in Europe Instagram got a new ‘music sticker’ button and remaining flat in North America, even if to help people add licensed tracks to their revenues are still growing in both territories. story posts. But that’s just the backdrop to heavy By September, Facebook was testing the criticism of Facebook over algorithmic echo ability for people to add songs to their photo chambers and fake news, especially with and video posts on the main service, and regards to their impact on democracy, as well then in November Facebook launched Lasso, as the now-infamous Cambridge Analytica which really was its version of TikTok – an app privacy scandal. for creating and sharing 15-second videos One bright spot for Facebook in 2018 with special effects and music. was the music industry, which is welcoming The longstanding ‘teens deserting the company with open arms – a fact Facebook’ chatter certainly put music:)ally off closely related to the fact that Facebook labelling Lasso a likely TikTok-killer. In fact, is entering with an open chequebook for given that many of those teens had migrated music licensing deals. to Instagram, it would be more significant if Having ended 2017 with a high-profile Lasso’s features were built properly into that Universal Music Group deal, Facebook app in 2019. continued in 2018 with a series of agreements. They’re [Facebook] not coming in with a cookie-cu!er Facebook has yet to show any appetite for Sony Music and Warner Music in January and approach to create another version of something that launching a richer music streaming service, March; Merlin and other independents in April; be it video (the predicted Vevo distribution and a string of publishing/collecting society already exists, but they’re building something specific to partnership or even acquisition didn’t happen) deals taking in Kobalt, Global Music Rights, their own ecosystem...” – Charles Caldas, Merlin or Spotify-style audio. For its Portal smart- SACEM, SOCAN and the ICE joint venture display, Facebook opted for partnerships: between PRS for Music, STIM and GEMA. potential is largely untapped,” said WMG’s (There was also a note of caution, struck Spotify, Pandora and iHeartRadio. 2018 was also the year when Facebook’s chief digital officer Ole Obermann as that by managers body MMF’s CEO Annabella But hoping for Facebook to go it alone short-term intentions around music became label announced its deal. Coldrick in February. “We know that it is a on that front seems misguided. It’s more clear: it’s focused on user-generated content “They’re [Facebook] not coming in lump sum and that it is a two-year term,” positive to think of the social network playing (UGC), with licences that cover videos using with a cookie-cutter approach to create she said. “We also hear that they don’t have a positive role in helping our industry to unlock copyrighted music uploaded by Facebook’s another version of something that already decent enough content ID so it is going to be new income streams around UGC. community – including Instagram, Facebook exists, but they’re building something unattributable for now.”) What’s more, if Facebook’s deal making Messenger and Oculus VR. specific to their own ecosystem, and This wasn’t just about Facebook covering has a knock-on effect the next time

report “Fan-created video is one of the most working with us as an industry to find itself for videos uploaded by users though: the rightsholders are at the negotiating table with personal, social and often viral ways ways to add value to that,” said Merlin company also launched some new features YouTube, its impact on the music industry will that music is enjoyed, but its commercial CEO Charles Caldas in April. that capitalised on those licences. stretch well beyond its own payouts. :) the END-OF-YEAR REPORT 18

ISSUE 419 19.12.18 Podcasts on the AI music’s No.20 No.21 streaming agenda quiet progress

potify and Apple “If you can create audio here isn’t a Music are the content for people that debate about two biggest gets packaged with the whether artificial players in music music content in a way intelligence (AI) Sstreaming subscriptions, that doesn’t give them a technologyT can create but it emerged this year reason to go back to that original music. It can. that they’re also the top FM dial, then you capture The arguments are two (with their positions much more than just more about the quality reversed) in podcast the spoken word,” said of the results and what distribution. Pandora CEO Roger Lynch they mean for human Apple reached the in April. musicians. milestone of 50bn all-time Not having to pay 2018 was a year of downloads and streams royalties for podcasts quiet, mostly behind- for podcasts in April, is sometimes cited as the-scenes innovation while Spotify confirmed to another appealing factor, from the AI startups music:)ally in June that it although based on their and big-tech research was now the number two current share of listening labs engaged in this with the emergence of startups like in the market. Spoken- on these platforms (low discipline, with the odd headline project Amadeus Code and WaveAI, which are word content within music single-digits), the effect on along the way. pitched firmly as songwriting tools rather streaming services was margins is extremely small. One lesson from 2018 is to avoid making than songwriter replacements. a thing before 2018, but Still, from Spotify’s any blanket generalisations about the This year also saw startups like Mubert its perceived strategic investment in original quality of AI music: the nature of AI is that it and Endel exploring the potential for AI importance for these podcasts (and its improves in leaps and bounds. to whip up ‘mood music’ (for relaxing, companies was a new trend analytics for podcasters) A good illustration came in the video focusing or sleeping, for example) in apps this year. to Pandora’s Podcast published by Australian startup Popgun for consumers. “We’re very encouraged Genome Project to improve in November, showing how its AI had The case for AI’s ultimate ability to rival with the growth of podcasts. It’s growing recommendations, via iHeartMedia progressed from responding to human and even surpass humans is stronger really, really fast but obviously from a very buying podcast publisher Stuff Media in piano melodies in 2017, to playing drums, here, and given 2017’s brouhaha around small base today […] In the long term, September, there was plenty of activity. bass and piano in original backing tracks ‘fake artists’ on Spotify’s mood playlists, it’s unclear how big that opportunity is,” In June, a study by ads industry body IAB based on human vocals a year later. potentially controversial. admitted Spotify CEO Daniel Ek in July. and consultancy firm PwC claimed that, in Another lesson from 2018 was that, as Expect a few more arguments next year “I think everyone in the industry is trying the US alone, podcast advertising will grow things stand, AI music is more interesting then. “It reminds me of the people who to figure that out. It’s going to be a significant from $314m in 2017 to $659m by 2020. when it involves humans as collaborators, didn’t like it when Bob Dylan plugged in. portion of what we do going forward.” The efforts of Spotify, Pandora et al be it startup Jukedeck working with K-Pop Well, f**k it: he did!” said The Orchard’s Why, though? Podcasts are certainly will be an important factor in that growth. outfit Enterarts or YouTuber musician Scott Cohen in February. “Get comfortable one step music streaming services can In the meantime, we expect more labels Taryn Southern working with tech from with it. This is where we’re going.”

report take to become more ‘radio-like’ as they try and artists to explore the format, building Amper Music, Aiva, IBM and Google to Regardless of comfort levels, the to attract more radio listeners to the on- on the efforts of Atlantic Records, George make her I Am AI album. capabilities of AI music creation are only demand world. Ezra, Jessie Ware and others in 2018. :) That theme of collaboration continued going to improve more in 2019. :) the END-OF-YEAR REPORT 19

ISSUE 419 19.12.18 AR trumps VR Secondary ticketing’s No.22 No.23 for practical uses tough year

Facebook – which have oo-hiss to secondary ticketing, the UK, admitting that “secondary already made AR a daily right? 2018 was the year when sites just don’t cut it anymore and habit for hundreds of everyone’s favourite (non-value- you’re tired of seeing others snap up millions of people. gap) villain Viagogo seemed to be tickets just to resell for a profit”. It was a Laugh as much as Bgetting regular comeuppances, particularly big moment. you like at the world of in the UK. But back to those boos and hisses. flappy dog tongues and This was part of the ongoing debate Secondary ticketing in itself isn’t a bad doll-like visages, but the about the secondary ticketing market and thing: there are few complaints about fans face mask filters of these online touting. Some of the pressure from reselling tickets for face value or less if they social apps are (even more campaigning groups and artists began to can’t go to a concert. than Pokémon Go) what bear fruit this year. Ticketmaster’s pivot was to launch its has made AR mainstream We saw Google implementing a own price-capped ticket exchange, joining already. new policy for secondary websites, the likes of independent firm Twickets in So, when Ariana Grande requiring them to “radically increase their that space. StubHub, meanwhile, claimed used a Snapchat lens to transparency” if they wanted to continue that fans were already the driving force year that ended with former sell merch; when Years & Years made using its advertising tools. behind its platform: with 99% of its sellers One Direction star Liam Payne an inventive Facebook Camera effect to In the UK, advertising watchdog the ASA being fans, and 40% of its transactions for livestreaming a gig for startup promote their new album; when Deezer’s rapped the knuckles of StubHub, Viagogo, below face value. MelodyVR can’t be entirely Snapchat lens generated a million views in Seatwave and GetMeIn over misleading “People just need to start taking a Awritten off as a bust for virtual reality (VR) 24 hours... these were examples of artists pricing information on their sites. stance and within two or three years technology. experimenting with the medium and the Viagogo subsequently found itself taken companies like Viagogo are going to be The debut of Facebook’s standalone reach of AR content. to court by competition watchdog the kaput,” said Sheeran this year. It’s going to Oculus Go headset – something MelodyVR “I’ll put a global Snapchat lens on the CMA, while meeting a chorus of the tiniest be vital that what replaces them is fan and carefully timed its app’s launch alongside – table, and will watch it explode. We’re top violins from the music industry, fans and artist-friendly. :) was also a step towards VR’s long-awaited 10 in Shazam in 35 countries in 10 seconds politicians alike evolution into a mainstream tech. flat,” was how Geffen Records president when it complained Even so, the excitement around VR’s Neil Jacobsen put it during a Midem about Ed Sheeran potential for music simmered down in 2018, keynote session for that app. cancelling Viagogo- with its sister technology augmented reality Consultancy Deloitte claimed that bought tickets for (AR) finding more practical uses for artists 2018 would be a year when more than 1bn his UK tour. and labels. smartphone users would create AR content There is real As interesting as apps for CNCO, at least once, and 300m would do it on a change happening Eminem and (via American Express) Justin monthly basis. It was encouraging to see in this particular Timberlake were, this technology’s appeal a growing number of musicians and labels market, which isn’t really about artists launching their own rolling up their sleeves and exploring the other countries are AR apps. possibilities. Music Ally isn’t writing off following closely.

report It was about the opportunities available VR just yet; but it’s still more about future Ticketmaster shut within social media platforms with huge, potential, rather than the very-current down GetMeIn and global scale – Instagram, Snapchat and opportunities of AR. :) Seatwave entirely in the END-OF-YEAR REPORT 20

ISSUE 419 19.12.18 Playlist power continues No.24

s streaming grows, so too does There’s evidence of the streaming the power of playlists to drive services thinking about how they can help discovery and create hits. But also to build deeper engagement – the videos to create controversy, as shown embedded within Spotify’s key playlists Aby the farrago of Spotify’s ‘hateful conduct’ being the most prominent example. policy in May. Even so, figuring out how to make your Plans to scan for and remove music artist more than just a line on a playlist (or that had been flagged as ‘hate content’ not even that, in the voice/smart-speaker on existing international registers of such world) remains a key challenge to be material were welcome news. tackled with gusto in 2019. Rather than just But Spotify’s decision to de-playlist complain, we should get stuck in and relish “content that is not hate content itself, the task. but is principally made by artists or other From Alexa’s new commands to help creators who have demonstrated hateful people create and populate playlists with conduct personally” – starting with R. Kelly voice commands, to Spinnin’ Records and XXXTentacion – landed the company focused playlists on Spotify and Apple rebranding its big playlists to (hopefully) in hot water. Music? be found more easily with voice search, the There’s more on that in the section of Marketers may shriek when they don’t impact of smart speakers also looks like it this report covering Spotify (p2-3), but the bag the slot they were hoping for, but will shake up the industry’s thinking about fact that the policy was so controversial there was more awareness this year of how to make the most of playlists. was a reflection of the widespread how important it is NOT to put all your 2018 was also a year when playlists awareness of the power of playlists – and eggs in one basket: to build momentum in reflected some of the tensions and power thus the power being wielded by blocking other ways on the streaming services, and shifts between streaming services and artists from being featured on them. outside them. labels. On more general trends, the discussion And furthermore, that this kind of Ministry of Sound took its playlists around playlists continues to be dominated activity, rather than a magical one-shot to Apple Music as an exclusive, while by Spotify and (but even here, to a lesser pitch to the right curator, is what’s more Universal Music’s Peaceful Music playlist extent) Apple Music. likely to lead to steady playlisting support (also an Apple exclusive) was widely 2018 did see their rivals doubling down in the future. interpreted as a warning to Spotify after on their own curatorial ecosystems: the The second ongoing debate is around the ‘fake artists’ controversy of 2017. idea of ‘algo-personalised’ playlists like whether playlists grow long-term fanbases That said, this was the year real artists Discover Weekly and Release Radar rather than simply drive short-term stream (and labels) got a new tool to submit has spread to services like Pandora, generated the same listening data for counts. their tracks for consideration to Spotify’s SoundCloud and iHeartRadio. each, and an algorithm struggles to be any A million streams from a big playlist is curators. The company said that more than It’s arguably commodified as a better than the data it has to work with. nice, but how many of those people even 67,000 of them used it between July and feature, and it’s very difficult to weigh 2018 saw a continuation of the debates registered the name of the artist for a September: a pitch to the independent

report the comparative merits of the different around the impact playlists are having given track, let alone clicked or tapped community in particular that it doesn’t want services’ algorithms: even one individual on artists. First: are you really screwed if through to explore their catalogue and this most mysterious of ecosystems to trying to see who’s best is unlikely to have your track doesn’t get on the big, frontline- follow their profile? seem like a closed shop. :) the END-OF-YEAR REPORT 21

ISSUE 419 19.12.18 Publishers rumbling Crowdfunding No.25 No.26 over royalties still evolving

he Music Modernization as crowdfunding had its day? domain of tips/donation economies from Act and Article 13 were Its peak in musical terms is the livestreaming video world) to big, two examples of the often still seen as 2012, when social platforms. different parts of the Amanda Palmer raised $1.2m on In March, Facebook announced plans musicT industry coming together HKickstarter for an album, book and tour. to explore ways for fans “to become and putting to one side some of ‘THIS IS THE FUTURE OF MUSIC’ a supporter of the creators they love” their deeper disagreements. claimed the placard in her promo shot via monthly subscriptions in return for It was effective, but those for the campaign. And then... it wasn’t. exclusive content and digital badges to fissures were covered over rather Or at least, it wasn’t followed by quite show their patron status. than healed. 2019 may be the the number of similarly high-profile (and In June, YouTube took another swing year when some of them re- lucrative) crowdfunded music projects. at channel-specific subscriptions: emerge into the spotlight. That said, while tech and games allowing channels with more than 100,000 The prime example: the way projects pulled in the big bucks, for music subscribers (later dropped to 50,000) to royalties from music streaming crowdfunding charge $4.99 a are divided between recordings became month – again, and songs – or rather publishers something with exclusive and labels. An August interview valuable on a content and by the Wall Street Journal with smaller, often badges/ Universal Music Publishing Group boss catalogues are seeing their value increase grassroots chat-emojis in Jody Gerson was notable. sharply, certainly in the perceptions of level, with return. While “having music so accessible to so potential acquirers and investors. Many Kickstarter, If Instagram many people is going to be a good thing individual songwriters still don’t feel it. PledgeMusic and Snapchat […] the fees are not where we want them Is there a resolution? Publishers and Patreon all were to put to be,” said Gerson. “We get paid much less clawing back more revenue share from playing a role. some effort than the labels.” labels is a battle fraught with risks As for behind fan- She went on to point out that for every participant – including the 2018, it was a funding in songwriters, unless they are writing the streaming services who’d be caught in the bumpy year for PledgeMusic in particular, 2019, things could get really interesting. biggest hits “or you have pieces of songs crossfire. with delays in payments to artists and And perhaps, just perhaps (although on enormous numbers of streamed Mercuriadis suggested that the internal the subsequent decision of CEO Dominic music:)ally has been saying this for years product”, are in danger of feeling left dynamics of major music companies favour Pandiscia to step down – replaced by co- without effect) music streaming services behind by the industry’s current revival. the recordings divisions, while at the same founder Malcolm Dunbar and the promise could explore the creator-subs/tip-jar In July, Merck Mercuriadis of Hipgnosis time expressing the hope that his company, of “a more rigorous infrastructure to model too. Songs also addressed the issue. “The song Kobalt and other ‘strategic allies’ might in underpin the company’s growth initiatives”. Mixcloud’s debut of subscriptions for and the songwriter is clearly the most time be able to push for change. Patreon is on course for $300m of DJs and podcasters was welcome, but important component of today’s music With licensing renewals in the air, payouts in 2018, although musicians imagine what platforms like Spotify and industry, but they’re not being recognised though, we can expect the value of remain a minority of its creator population. Apple Music could do if they layered fan-

report properly,” he said. songwriting – and how that should be There’s a wider trend that music:)ally funding on top of their billing relationships There’s a fine line to tread here: large reflected in streaming payouts – to be a sees as encouraging, however: the spread and recommendation algorithms. We live (and even medium-sized) publishing noisier topic in 2019. :) of crowdfunding tools (and the related in hope. :) the END-OF-YEAR REPORT 22

ISSUE 419 19.12.18 Creation stations: Japan and Germany’s No.27 No.28 online music makers streaming transition

usic:)ally’s main focus making process. We met HumTap (which may be on the business of uses AI to turn your humming into music listening, but new music); Vochlea (similar, but for a range mdevelopments in tools for of vocalisations, beatboxing included); music making were also on our mind in MusiciLuv (an edtech app that included a 2018, especially when covering some of the virtual band to play with); and still-stealthy moves made by companies building online SoundStorming (a social/music creation platforms for creators – both professional app founded by the leader of Apple’s global and amateur. advertising business). Examples? Splice and BandLab, which Google teamed up with OK Go for continued to make acquisitions, launch a music-making sandbox aimed at new features, and publish milestones (4m schoolchildren, while that band’s frontman users for BandLab, and 2m users plus $10m collaborated with VR firm Within on a VR in royalties paid out for Splice) asserting music-creation app called, gloriously, he excitable industry response to That continued in Germany in the first their relevance. Lambchild Superstar: Making Music In The the IFPI’s Global Music Report in half of 2018: revenues were down 2% Native Instruments was another Menagerie Of The Holy Cow. April was understandable, given its year-on-year thanks to a 24.5% drop in company regularly pinging up on Something we didn’t write much about headline figure of an 8.1% rise in CD sales, a 23.4% drop in download sales, our music-creation radar in 2018. Its in 2018 might turn out to be a bigger story globalT recorded music revenues in 2017. and even a 13.3% dip in vinyl sales. Again, loops’n’samples service, Sounds.com, next year: Spotify-owned online music It did not go unnoticed, though, that two a 35.2% surge in streaming revenues – launched in January with a $9.99-a-month studio Soundtrap, which the streaming of the world’s four biggest music markets now accounting for 47.8% of the market subscription model, under the wing of service acquired in November 2017. actually declined in value last year: second- – couldn’t quite make up for the physical former Beatport CEO Matthew Adell. Roli, In Spotify’s filing to go public, it ranked Japan was down by 3%, and third- decline. meanwhile, raised funding from Sony and described Soundtrap as “an online music placed Germany down by 1.5%. There’s an argument that these continued work on its hardware products. studio which will help us facilitate music It was a necessary reminder of the countries are simply not quite as far along This was also a good year for new creation by artists we work with”, from trends bubbling away below the surface of the sales-to-streaming transition curve, startups with new twists on the music- pairing up emerging artists in Sweden to the much-celebrated global growth figures: and that soon they’ll also return to growth. use it for collaborations, to in this case, that two of the markets most That’s more persuasive in Germany, but striking deals for the tool weighted towards physical formats have Japan still sparks concerns over whether to be used in hundreds of yet to see streaming shoulder the burden there’s an industry conservatism that is Mexican schools. of equaling the decline of music sales – let hampering the growth of streaming. Spotify’s ownership alone push into growth overall. The counter-argument, made by RIAJ of an already slick music Streaming is growing rapidly in executive director Yoichiro Hata this year, is creation toolkit feels Germany and Japan, but from a much that Japan’s physical and download market like an under-reported smaller base than in other prominent “could survive as well, retaining the current element (certainly western markets: in 2017 in Germany market size or declining conservatively, compared to direct streaming was up by 46.2% but accounted rather than full transition to streaming”.

report licensing and uploads) of for just 26.8% of the overall market, while 2019 should be the year when we get its strategy to work more in Japan, it was up by 27.8% but was just a better sense of which view holds more closely with artists. :) 9.7% of the overall market. water. :) the END-OF-YEAR REPORT 23

ISSUE 419 19.12.18 Amazon’s dark horse status is long gone No.29

e’ve been talked about listeners might want to interact with music frequently as one of the future through voice interfaces. giants of music streaming. Improvements included voice Those days are now behind commands to create playlists and add Wus. You can refer to us in the present songs to them (February); commands to tense,” said Amazon’s music boss Steve request music based on time like “Alexa, Boom in August. He was right: Amazon play the Taylor Swift song I heard last hasn’t been a dark horse in the streaming week” or “Alexa, play something I haven’t landscape for some time. heard in a while” (March); and the ability Amazon being Amazon, the specific to sign up for notifications when favourite numbers to back this up haven’t been artists release new tracks and albums published by the company itself. In April, (November). Boom said that Amazon had “tens of Most recently, there was the broadening millions” of paid music subscribers, and out to conversations starting with queries that the company had doubled the number like “Alexa, help me find dinner music” or of subs on its highest Music Unlimited tier “Alexa, recommend some new music” – in the last six months. with follow-up questions to refine the music The driving force behind Amazon’s that comes back (December). streaming growth is its Prime membership There’s an Alexa Accelerator for voice- scheme, and we did get a big, official focused startups (including music-oriented figure for that: in April, CEO Jeff Bezos told Bamboo Technology and Endel) and a shareholders that “we have exceeded 100m Music Skill API for other streaming services paid Prime members globally”. to patch themselves in. And while the As a funnel, it may pale next to (for number of artist skills was tiny this year, example) the estimated 780m iPhone percentage point behind Spotify and well the scenes, Amazon’s curators were putting inventive Alexa apps for Paloma Faith and owners – a figure put out by analyst ahead of Apple Music’s 7%. in the hours to serve their audience further Little Mix – both created by Sony Music – Loup Ventures in September – for Apple, Then, in August, Kantar Worldpanel down the playlist hierarchy too. showed the potential. but Prime is still a powerful weapon in suggested that in the four-week period We can’t talk about Amazon without There’s evidence that Amazon’s Amazon’s efforts to bring streaming to a to 1st July, Amazon Prime Music had a talking about Alexa and Echo, though. music-streaming services and its smart truly mainstream audience. higher penetration than Apple Music in the According to research firm Canalys, speakers alike are reaching a mass- In terms of subscriptions, Amazon is UK, making it second place (albeit some Amazon shipped 12.9m smart speakers market and not-traditional-early-adopters seen as a solid third-ranked streaming distance behind Spotify). in the first three quarters of 2018, with audience – fertile territory to expand the player globally behind Spotify and Apple Amazon is also working hard to match the traditionally bumper fourth quarter to streaming subscriptions audience without Music, although this year brought some its rivals in areas like artist marketing come. This after selling (in Bezos’ words) cannibalising the growth of Spotify and suggestions that in individual markets it’s and original content, as well as its playlist “tens of millions” of Echos in 2017. Apple Music. even higher. ecosystem. That install base, as well as Alexa’s With launches in India and Mexico

report In January MIDiA Research suggested The launches of global playlists like rollout to other devices from Amazon and this year, Amazon also signified its that Amazon Prime Music’s 18% Country Heat in April and Pop Culture in partners, has been the launchpad for intentions to make an impact in emerging penetration in Germany was only a single September were logical enough, but behind Amazon’s experimentation around how music markets. :) the END-OF-YEAR REPORT 24

ISSUE 419 19.12.18 User-centric debate Vevo seeks a No.30 No.31 gets louder new model

ell, not that loud still, but artists lower down the pyramid would gain, 018 began positively for music focus on distributing music videos and 2018 did see the conversation others would lose – even if, en masse, their videos platform Vevo, as it revealed also selling advertising around them – around whether the way share would increase. that its revenues had grown by 30% including looking for new partnerships streaming royalties are In August, Spotify’s chief economist in 2017 to $650m, with the company beyond YouTube. Vevo as a brand wasn’t Wcalculated and paid out could do with a Will Page and former ASCAP/PRS exec 2generating 25bn monthly video views by disappearing, but as a destination it was tweak. David Safir published their own ‘Money In, the end of that year – and breaking even. done. Specifically a tweak that would see each Money Out’ analysis, praising the Finnish The hammer dropped quickly, from the It wasn’t all bad news. In May YouTube individual listener’s subscription (or rather study while adding some extra elements: company’s long-time distribution partner announced that it was expanding its the portion of it paid out in royalties) be for example, the uncalculated impact YouTube. In February, YouTube expanded Google Preferred initiative for premium divided only between advertising to the artists they listen include eligible to – the ‘user-centric’ Vevo videos. model – rather than That was a step going into a service- towards higher wide pool divided by revenues for total streams on the the company’s platform. catalogue. Importantly, this There is also year, we got some new potential for Vevo studies. Important in a world where because the only the distribution previous examinations outlets for of the potential impact short-form video of user-centric payouts are growing were published in fast. Facebook, 2014, based on data Instagram, from Scandinavian service WiMP (Tidal’s of free-tier streams; and the question of its system of Official Artist Channels, Snapchat and Spotify all could be new forefather) in 2012 and 2013. whether the costs of moving to user-centric aggregating all musicians’ subscribers in outlets for Vevo’s catalogue – although we Anyone interested in this debate should royalties might mean a smaller pie overall one place – but in the process, relegating could have said this at the start of 2018 too, read the Finnish Musicians’ Union study for distribution. Vevo-branded channels in the discovery but those deals are yet to emerge. from March this year, based on a trove of Rather than trying to squash calls for interface. To look on the bright side, though, 2016 data from Spotify, and calculations user-centric models, the paper aimed to A security breach that (briefly) took the ‘music video’ as a category (which is about how payouts would have changed stimulate more debate about the model. video for ‘Despacito’ offline in April was now much wider than traditional ‘music under a user-centric model. That’s a worthy goal for 2019. It may followed by news of “significant” cuts to videos’) has so much potential. If Vevo And? It found that the top 0.4% of be optimistic to expect a major streaming Vevo’s product and engineering team, after and its CEO Alan Price – appointed in tracks, which account for most plays, service to try the user-centric model, the departure of its chief technology officer. September this year after a period as

report saw their share of royalties fall from 10% but more, larger-scale studies fuelled by Then in May, Vevo announced that it interim CEO – can help to unlock it, the to 5.6% under user-centric calculations. data from DSPs, collecting societies and was phasing out its “owned-and-operated” company’s role in the music industry will However, the study found that while some rightsholders would be genuinely useful. :) mobile apps and website, in order to be stronger, not weaker. :) the END-OF-YEAR REPORT 25

ISSUE 419 19.12.18 Eventbrite’s Game on for No.32 No.33 music moves the music biz

iants like Ticketmaster, bold The revamped division had a roster startups promising to be the of more than 1,000 venues, and 50 next Ticketmaster and people distribution partners including Spotify, shouting at Viagogo have hogged Pandora and Songkick, as well as (via a Gmany of the headlines around ticketing in deal in May) Instagram and (in October) recent times. For that reason, Eventbrite’s YouTube. growth in music has sometimes lacked the Eventbrite is clearly trying to build attention it deserves. momentum, after a period of integration The company’s ambitions were certainly with Ticketfly and other acquisitions, as clear in 2018. This was the year that well as the inevitable strains of going Eventbrite went public, raising $230m in public. September as its stock rose 60% in the first Many eyes will be on whether it can day of trading. At drive the wider hree announcements from within compilation and associated merchandise. the time of writing trend around the Universal Music empire this Ninja’s personality and gaming prowess in mid-December, it technological year woke the wider industry up to – particularly at 2018’s craze game Fortnite has a market cap of innovation the potential of esports – the fast- – had won him 19.4m subscribers on $2.46bn. in ticketing, growingT business based around competitive YouTube, nearly 12m on Twitch and 11.1m Live Nation’s particularly as it gaming, the audiences that watch it both on Instagram at the time. market cap of responds to the online and in person, and the potential for Three examples from within one label $11.34bn puts that cluster of emerging brands to partner with its key entities. group of the potential for partnerships with in to perspective, startups using Announcement one: in July, Universal the organisers, the teams and the stars but Eventbrite’s technologies like Music Canada kicked off a partnership of the esports world, but as music:)ally IPO filing gave us a blockchain (e.g. with esports team Luminosity Gaming, with outlined in a talk at our Sandbox Summit sense of its growing former Ticketfly plans to find ways to promote the label’s conference in October, it feels like there is business in music exec Dan Teree’s artists to the team’s followers – which scope for much more of this sort of thing. ticketing, with its Big Neon, which numbered more than 60m across Twitch According to research firm Newzoo’s predictions that the is going after and social networks. report in February 2018 would see the company would sell Eventbrite’s Announcement two: in August, Universal audience for esports totaling 380m people, 1.1bn paid tickets independent client Music Group Central Europe struck a deal including 165m classed as ‘enthusiasts’, in 2018, including base) to make their with esports tournaments organiser ESL to and total revenues of $906m. 437m for festivals mark. launch a joint label called Enter Records, Historically, the games industry’s and 358m for music More competition which would field submissions from artists relevance to music has been as a source concerts. in ticketing can only be good for the industry, and producers, sign the most promising, of sync revenues, and – at the peak of In November, Eventbrite unveiled its though. Plus, Eventbrite’s public status then promote them at ESL’s events around Rock Band and Guitar Hero – for dedicated new brand for music: Eventbrite Music, means we’ll get regular updates on how the the world. music games. In 2018, we realised that aimed at independent music venues, mechanics of its business are evolving, to Announcement three: Astralwerks and the personalities around gaming, and the

report promoters and festivals, following its compare against Live Nation’s Ticketmaster Capitol Music Group signing up YouTube tournaments and professional players, acquisition of Ticketfly in September and get a deeper understanding on the pulse and Twitch star Tyler ‘Ninja’ Blevins in could be another angle of attack to tap in 2017. of their market. :) October to launch his own Ninjawerks to gaming culture. :) the END-OF-YEAR REPORT 26

ISSUE 419 19.12.18 India sets its ambitions high No.34

Saavn, which had 22m monthly active claimed that 94% of the online Indian users at the time. population listens to music, averaging 29 The two services would become hours of listening a week. JioSaavn later in the year, with Reliance Some 21.6% of that listening came from talking openly about a potential music videos; 16.9% from audio-streaming; addressable market of more than 1bn 16.3% from their own collections; and listeners for the service – in India and 14.8% from watching music TV channels. beyond. You could see YouTube’s importance in August’s Dialogue and All About Music India from the service’s own music charts: conferences shed some light on the general Indian artists including Alka Yagnik, Neha trends too: in his report on the events, Kakkar and Udit Narayan have all been in Indian journalist Amit Gurbaxani noted that the top 10 artists on the entire platform, several attendees cited the figure of 100m in recent months. In fact, Yagnik was monthly active users for [audio] streaming a regular fixture at the very top of the services overall. rankings. That may sound puzzling given Gaana’s There was also the sight of Indian 75m stat, Saavn’s 22m figure, and other music company T-Series battling to unseat claims (Airtel’s Wynk Music says gamer PewDiePie as YouTube’s most- it has 12-15m daily active users subscribed-to channel – by mid-December for example). But that points to they were on 75.5m and 76.7m subscribers considerable overlap, a reflection of respectively, with T-Series expected to take ccording to the IFPI, India was the fact that 99% of India’s music top spot in the near future. the 19th largest recorded music streamers are free users, rather It all adds up to a moment in India’s market in the world in 2017. than paying subscribers. music industry history that’s ripe with However, having watched China As in China, driving up that potential, and plenty of subplots from the Abreak in to the top 10 that year, the Indian conversion rate while also getting debut of smart speakers to the thriving music industry is keen to follow suit – and free services into the ears of the independent artist scene. there is growing evidence that this should hundreds of millions of people who And all this with Spotify to come: that just be the start of its ambitions. aren’t yet streaming at all will be service is expected to launch in India Streaming will, of course, be at the what drives India into the top 10 early in 2019. It’s a mark of the country’s centre of this, and there were some big global markets. strategic importance to both sides that moves in India this year. listeners in the next three years. “We have You can’t talk about free music and India some labels were reported to be holding In February, Times Internet’s Gaana penetrated only 5-6% of India. Over the without talking about YouTube, however. back on licensing Spotify in India, in part service raised a $115m funding round, led next few years, we want to take this to It’s a true powerhouse there: in March, as a response to the company’s moves to by Chinese tech giant Tencent. At the time, 20-30%,” said CEO Prashan Agarwal at YouTube said that it had 225m monthly license music directly from artists. Gaana claimed 60m monthly active users, the time. active users in India for its overall service. The launch will happen, but it’s just one

report which grew to 75m by August. This was followed by telco Reliance Music videos (i.e. YouTube) are the more piece of the fascinating puzzle of The company is thinking much Industries’ decision in March to merge its most popular form of music consumption India’s digital music growth, rather than the bigger, though: it wants to grow to 200m JioMusic service with independent platform in India: a Nielsen study in September defining factor. :) the END-OF-YEAR REPORT 27

ISSUE 419 19.12.18 Green shoots for Some pirates still No.35 No.36 legal music in Russia haven’t been sunk

O COLLUSION!” he music Meanwhile, a was one of industry Kantar report for US president isn’t worried the UK’s Intellectual Donald Trump’s about Property Office in Nfavoured battle cries piracyT like it was July suggested that on Twitter this year. But at the height of the while the percentage over in Russia, another recorded music of Brits pirating music ‘c’ word was the focus market’s decline. dropped from 24% in for the music industry: That isn’t to say that 2015 to 18% in 2017, it collaboration. the industry thinks rose again to 19% this That’s collaboration piracy doesn’t still year. with local internet exist, nor that it has That long-term services, to build a legal stopped trying to drop still looks good, music streaming market fight it. but patient efforts in a country where unlicensed sharing and (in 2017) the 24th largest recorded music It’s just that the to identify and then consumption has been more the rule in market in the world. piracy-tackling shut down piracy the past. Russia isn’t entirely headache-free, from efforts are left to sites are still needed. Social network vKontakte had been its globally popular stream-ripping websites the relevant teams From booting stream- a villain in the eyes of rightsholders for to the debates around pirate links on big within rightsholders, ripping sites offline to exactly that, but having signed licensing search engines there. industry bodies and researching how new deals and launched a dedicated music Here, too, there was progress: the tech partners, while kinds of platforms service, it showed some progress in 2018. announcement of a piracy database everyone else gets (messaging app In June, the company said that it had to ensure piratical links were taken on with thinking Telegram and its 1.2m paying subscribers, plus another down AND stayed down, to create what about how to grow private groups, for 300,000 people on its free trial, making telecoms watchdog Roskomnadzor’s the legal market. example) might be facilitating piracy, there it the biggest subscription music service chief described as “the cleanest space for Those industry bodies still make were trends worth tracking and action in Russia ahead of Apple Music (which piracy in the world”. their case for piracy to be kept in mind. worth taking. had around 600,000 subs at the time, Western rightsholders are following In October, the IFPI said that 38% of Still, the idea of piracy as a truly reportedly). this closely, particularly the interaction consumers globally still get at least some existential threat to the music industry and “We have created a leading legitimate between Google and Roskomnadzor over of their music through infringement. to musicians’ livelihoods is beginning to music service while still keeping all of its these plans. More data to warn against feel like distant history. features and user-generated content,” said Still, in Russia as elsewhere in the complacency: piracy-tracking firm To a large extent, that’s due to the hard Boris Dobrodeev, CEO of parent company world, more and more energy is being Muso claimed in March that global work of streaming services in rolling out Mail.ru, at the time. focused on building the legal market for visits to piracy sites “dramatically features – curated and algo-personalised Once Yandex.Music and Google Play music rather than simply trying to clamp surged” in 2017: up 14.7% to 73.9bn visits. playlists being just one example – that were factored in, the Russian market was down on piracy. When the IFPI’s next Its launch of a piracy dashboard to fuel piracy sites have never offered. The

report north of 2m paying subscribers – tiny in the report comes out in April 2019, we’ll find the industry’s awareness of how this innovation around legal, licensed music context of the country’s 110m population, out whether these efforts have improved activity breaks down followed later in services was, in the end, the best weapon but a step towards improving its position as that 24th-place ranking. :) the year. this industry had against piracy. :) the END-OF-YEAR REPORT 28

ISSUE 419 19.12.18 Pandora set for Sirius business No.37

f you look just at the figures the deal was announced. “My has been made by Pandora, but also all artists, and continued to work in Pandora’s financial results, ultimate thinking in all of this by other firms from Spotify to YouTube. on its well-regarded Artist Marketing you might conclude that 2018 is no matter who comes into There’s a real opportunity here for all Platform. was a worrying year for the our trial funnels, as they exit these companies, particularly in Pandora’s Plenty of strategic thinking, in other Istreaming service. that trial that somehow, they homeland. words. The hope for 2019 will be that The company has lost 15% are in a funnel in which we are 2018 was also a positive year for closing the SiriusXM deal can supercharge of its monthly audience since monetising.” Pandora in terms of iterative improvements all this, rather than stymie it in a post- the end of 2016: it had 81m That phrase ‘the world’s to its service and partnerships: its Podcast acquisition reorganisation. Meanwhile, listeners then, which fell to 74.7m at the largest digital audio ad offering’ is Genome Project, its $14.99-a-month family reversing that decline in listeners will also end of 2017, and then 68.8m by the end of important, because 2018 was a year when plan; its Release Radar-esque The Drop be a priority, to reinforce that digital audio September 2018. Pandora had already some very interesting, playlist; its partnership with Facebook for advertising ecosystem. There are bright spots: Pandora has long-term strategic moves on this front. its Portal smart-display; and its early use The known (and unknown) unknowns of grown its number of paying subscribers It bought programmatic ad-tech of Snapchat’s ‘Snap Kit’ API being a few Pandora’s future as a SiriusXM subsidiary from just under 5.5m at the end of 2017 to company AdsWizz for $145m, and then examples. mean any long-term predictions carry 6.8m by the end of September 2018. struck a deal to sell ads for SoundCloud in Pandora also broke new ground with its an element of risk: eMarketer’s claim in The company’s revenues in the first nine the US, promising a joint audience of more March partnership with Linkfire to provide August that Spotify will overtake Pandora months of 2018 were up by 4.6%, although than 100m Americans. ‘advanced attribution data’ to help labels for US users in 2022 being one example. the fact that its ad revenues were nearly The argument that there is a huge, understand how their campaigns had led to But first things first: the acquisition flat ($777.3m in the first nine months of largely untapped pot of advertising spend plays, saves and shares. should close early in 2019, and we’ll hope 2017 versus $777.5m in the comparable for music streaming services to attract The company also opened up its Next to quickly see what Pandora can do under period this year) might be seen as another away from commercial radio stations Big Sound analytics to show more data on its new ownership. :) red flag – especially since overall US digital advertising revenues were up by 23.1% in the first half of this year according to industry body the IAB. However, talking about Pandora’s future purely based on these recent metrics would be foolish, since the announcement in September that US satellite radio company SiriusXM is buying the company in a deal valuing it at $3.5bn. Pandora will continue to operate as an independent service, but one that may benefit considerably from cross-promotion with its new sister platform. “The addition of Pandora will provide

report diversified revenue streams that will create the world’s largest digital audio ad offering,” said SiriusXM CEO Jim Meyer as the END-OF-YEAR REPORT 29

ISSUE 419 19.12.18 Country goes Tapes ‘n Tapes No.38 No.39 streaming (‘n music as merch)

ylie Minogue’s latest album Golden has found success Kin one format whose age is worthy of the album’s title: cassette. BMG sold 5,500 cassette versions of the release this year; and when a later run of 1,500 collector’s hen we were making our There were milestones to get Nashville edition tapes went predictions for 2018 at the and DSPs alike excited. Spotify’s Hot on sale, they were start of the year, we somehow Country passed the 5m follower mark in snapped up within 90 didn’t forecast ‘giant Jason August; while country duo Dan + Shay minutes. WAldean and Kelsea Ballerini crop circles in reached 1bn on-demand career streams We’re familiar with Kansas’. Shame on us. earlier that month, buoyed by 200m for the vinyl revival, but Spotify’s field-based marketing for their hit ‘Tequila’. in 2018 the cassette they may stream it. Music wasn’t just its Hot Country playlist in July reflected Country-pop crossover ‘Meant To Be’, by revival was a bona fide trend. In the merch in 2018, for some fans it was the a wider trend: streaming services loved Bebe Rexha and featuring Florida Georgia first half of this year, music tape sales ticket to... tickets. Nicki Minaj’s spat with country music this year; and it seemed that Line, racked up 593m Spotify streams and were up 90% in the UK – and this after Travis Scott in August focused on bundling country fans might finally be loving them 658m YouTube views by mid-December – doubling in 2017. albums with early access to tickets for a right back. buoyed by its ability to nestle comfortably Admittedly this growth comes forthcoming tour. We explored this trend in our August within non-country playlists on streaming from a small base: those 2018 first-half Ariana Grande also did this for her report (click here to read it) noting services and radio alike. sales were 18.5k units from more than Sweetener album: fans buying a $10 that the streaming services all now have Nashville hopes that streaming will be 80 releases. Sweetener Pass got a laminate badge in boots on the ground in Nashville and are the gateway to bigger audiences (online More globally, the website Discogs said the post to get “priority entry” (i.e. early investing more in their country playlists and and in venues) for country around the its cassette sales had grown by 29.5% dibs on buying tickets) to a future concert, artist partnerships. world. When Amazon launched its flagship in 2017 and 35.2% in 2018 (as of mid- as well as a download of the album. As our interviewees explained, the Country Heat playlist, it went live in more September) – a trend that encouraged it When people talk about ‘the value of country demographic is strategically than 35 countries, for example. to launch the inaugural Cassette Week in the album’ they generally mean as important to Amazon, Spotify, Apple But if the famously loyal country October, including Cassette Store Day in a creative project, rather than a Music, Pandora, YouTube and other DSPs: fans back home continue to migrate to the UK, US and Japan. limited-edition cassette or an incentive this audience has been slower to adopt streaming subscriptions, the DSPs will have The trend here, as sometimes with to buy tickets.

report streaming, and thus now represents a large much to gain too, as they seek to push the vinyl, is music as merchandise: an object But if these tactics help artists find new new source of potential subscribers in the prospect of market saturation in the US fans want to treasure, even if when it income streams to fund their craft, it’s world’s biggest music market: the US. further into the future. :) comes to listening to the actual music, hard to argue against them. :) the END-OF-YEAR REPORT 30

ISSUE 419 19.12.18 More music/tech No.40 startups? You got ‘em! VIP PEILIAN SUPER HI-FI www.peilian.com www.superhifi.com he number of new startups that music:)ally writes about stretches easily into Very much ‘new to us’ We first wrote about Super three figures every year: and often, the majority of them are out of business rather than ‘new’, VIP Hi-Fi as a startup that within two or three years. That’s not unusual in the startups world, and even Peilian has been going turned news stories into if it’s hard to see the next Spotify emerging, often these startups offer ideas since 2014, providing audio segments for music thatT will eventually have an impact somewhere – even if it’s via bigger companies. online music education lessons to children streaming services, via a partnership with Such is the case with 2018’s crop. Here are some of the startups we wrote about for for more than 500,000 users. It bounced AP. Actually, its AI technology – focused on the first time this year, which we think are worth remembering. onto our radar with a hefty $150m funding “the space between the songs” – is about round in early November: a sign that a more than just news: from mixing songs BIG NEON LIRICA category (music education) that’s fairly seamlessly together, to stitching in ads, www.bigneon.com www.lirica.io cash-strapped in the West is capable of artist interviews and other audio. There are almost enough Lirica was one of the raising big bucks in China. blockchain ticketing winners in the Midemlab CANOPY startups now for their startups contest this June, SEATED www.canopy.cr founders to be able to fill with its app that used music www.seated.com Our interest in Canopy a small venue in their own right. Big Neon for a specific purpose: learning foreign “We make sure fans get stems partly from its stood out this year for its team (including languages. Its initial launch focused on seated,” is the slogan of this team – The Echo Nest’s Ticketfly co-founder Dan Teree and Spanish, with users able to watch music startup, another category co-founder and CTO Brian cryptocurrency Monero’s lead Riccardo videos and see lyrics, while learning words winner at Midemlab 2018. Whitman, and former Spotify director of ‘fluffypony’ Spagni); for its technology (its and phrases as well as their translations. It’s a way for fans to be reminded that music publishing Annika Goldman – and own open-source blockchain protocol, Investment from Sony Music ensured some tickets are going on sale (or, if they’ve partly from its mission: to help people Tari); and for launching with venue and big-name artists were included. stored their payment details, to have them discover new music, news articles and promoter deals already in the bag. bought automatically) while also collecting places without building up profiles of them WRKSHP data that artists can use for marketing on its servers, thus protecting their privacy. BLINK IDENTITY www.wearewrkshp. purposes. www.blinkidentity. com AMADEUS CODE com The name WRKSHP may ENDEL www.amadeuscode. Fresh from taking part not be familiar, but this www.endel.io com in the Techstars Music developer’s first hit mobile Endel is one of the startups One of the startups hoping accelerator, Blink Identity game should be: Beat Fever. By October exploring the potential for to prove that artificial made waves with its facial-scanning 2018, the music rhythm game was being music to be created and intelligence can be a technology capable of recognising fans as played by 9.1m people and starting to adapted in real-time, based compositional tool rather than a threat to they walk in to a venue, and thus not have explore ways of partnering with artists on what the listener is doing – relaxing, human songwriters’ livelihoods. Trained to even show a ticket. Interest was shown and labels on marketing campaigns. It focusing or trying to sleep, for example. It on “history’s most beloved songs”, the by a $1.5m funding round in July which reminded us of Tap Tap Revenge, whose launched as an iOS app, but its participation app aims to quickly whip up melodies included Live Nation, with the promise of time in the spotlight was relatively short. in Amazon’s Alexa Accelerator also for musicians to work with – using a pilot programmes in various venues to test 2019 will tell whether Beat Fever is here for highlighted its plans to make a version for subscription model to make money from

report out the tech. the long term. smart speakers. this business. the

WEYO END-OF-YEAR REPORT 31

ISSUE 419 19.12.18 Startups continued...

www.weyo.app BAMBOO LEARNING CHOON CLICKNCLEAR Weyo used to be a social www.bamboolearning. www.choon.co www.clicknclear.com music video app called com Blockchain technology Focused on one very Kombie, but reoriented Like Endel, this startup isn’t a magic wand to specific niche – licensing its technology this year came to our notice through give a fledgling music music for sports, starting for an app for Australian Amazon’s Alexa Accelerator, streaming startup a with cheerleading – children’s-music stars The Wiggles. It which is trying to boost some of the most better chance of taking on Spotify, ClicknClear showed strong signs of blends Snapchat-style facemasks with use talented young startups using voice Apple Music and the other big players being able to unlock a significant extra of the camera to put kids in their favourite technology. In Bamboo Learning’s case, in the space. But these startups may be revenue stream for the industry. The songs’ videos. There is plenty of potential it’s being put to educational use, including testing out ideas that find a place in the company was working hard to strike deals here for children’s brands and pop artists a service called Bamboo Music that helps future strategies of even those 900lb with publishers and labels, while also alike. people learn music theory through their gorillas. Choon, founded by DJ Gareth convincing cheerleading organisations of Alexa device. Emery, was one worth watching, with its the merits of legally licensing music for GONGBOX determination to launch a working service their routines. website tbc NUMBEREIGHT rather than just a white paper. It hadn’t launched at the time www.numbereight.me BEATCHAIN Music Ally went to press, but NumberEight’s software LAYLO www.beatchain.com the description of Gongbox is designed to sit within www.laylo.fm Another music analytics by its founder, South African artist and label iOS and Android apps, Call us old cynics, but startup? Yes but this owner Black Coffee, whetted the appetite. using data from the various sensors on when we saw Laylo pitch at one is already attracting It’ll be part streaming service, part social the smartphone – from accelerometers Midemlab, its mobile app praise for its technology, network/artist marketing platform, aimed at and light sensors to barometers to gamifying music discovery deployed in two versions: one for independent African artists wanting to build understand the context of its owner. In a reminded us of how much we liked past independent artists (Beatchain); and their audiences. music sense, that could be used to tune efforts at this – Thesixtyone, HitMaker, one for labels, managers and promoters recommendations or target ads, with the TastemakerX for example – and how none (Fancoda). The focus will be on AI-driven REPERTOIRE company having completed three trials of them had succeeded. Still, Midemlab tools to help artists grow their online www.repertoire. with music streaming companies. judges thought there was enough here audience; promote their events and network to make it a winner, and we’d love to be run more efficient social advertising Repertoire hasn’t (publicly) SENDMATE shown that the app can find a big audience campaigns, among other features. done anything yet, but it’s www.sendmate.io of competitive talent-spotters. another blockchain startup Emerging from the ashes of whose personnel makes it worth watching. consumer-focused startup Founder Erik Beijnoff’s background Record Bird, Sendmate Don’t forget sandbox 2018

DECEMBER 12 2018 includes playlists startup Tunigo is one of a clutch of firms trying to make sandboxMUSIC MARKETING FOR THE DIGITAL ERA ISSUE 218 (acquired by Spotify in 2013) then product messaging work more effectively for music- Our other end-of-year report this month is from our sandbox development at that streaming service. marketing. It claims 90% open rates and music-marketing brand. Its annual review profles 40 of the Repertoire is late to the ‘decentralised 20%+ click rates for campaigns run using best digital campaigns of 2018 from labels, management

report music rights index’ party, but given that its technology on Facebook Messenger, companies and other music frms. nobody’s yet solved this problem, it can with The Prodigy, Imogen Heap and Alt-j DOWNLOAD IT NOW BY CLICKING HERE make an impact. among the artists testing it out. thE year’s best music marketing campaigns the 32 Music Ally is a music business information and strategy company. We focus on the change taking place in the Music Ally is an ISSUE 419 industry and provide information and insight into every aspect of the business, consumer research analysing 19.12.18 example of perceptive the changing behaviour and trends in the industry, consultancy services to companies ranging from blue journalism at its chip retailers and telecoms companies to start-ups; and training around methods to digitally market your best, with unrivalled artists and maximise the effectiveness of digital campaigns. We also work with a number of high profile music Andrew Fisher, events around the world, from Bogota to Berlin and Brighton, bringing the industry together to have a good CEO, Shazam coverage of the commonsense debate and get some consensus on how to move forward. Entertainment digital music sector”

ANTHONY CHURCHMAN STUART DREDGE Contact: music:)ally Business development Editor at large Studio 11, Holborn Studios, 49-50 Eagle Wharf Rd, [email protected] [email protected] London N1 7ED Tel: +44 (0)20 7250 3637 b www.MusicAlly.com e [email protected] EAMONN FORDE WESLEY T. A’HARRAH

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