thereport ISSUE 399 | 21 DECEMBER 2016 Subscriptions, YouTube, ticketing, VR, majors, indies and more in our interview special 2

ISSUE 399 COVEREND OF FEATURE YEAR SPECIAL 21.12.16 Contents

Beth Appleton...... 3 Ty Roberts...... 5 Sitar Teli...... 7 2016 review Rob Wells...... 8 Subscriptions, David Lowery...... 10 YouTube, ticketing, Gregor Pryor...... 12 VR, majors, indies Diluk Dias...... 13 Lara Baker...... 15 and more in our Martin Bandier...... 16 interview special Scott Cohen...... 18 Jen Long...... 19 2016 may go down in history as the year of Brexit, President Trump and all kinds of other upheavals. Elizabeth Moody...... 21 But for once, the music industry is entering the festive period feeling positively, well, festive. Or at least firmly optimistic at the end of a year that saw streaming subscriptions sparking growth that feels Ed Peto...... 23 genuinely sustainable for the industry. Spotify and Apple Music adding more than 22 million new subscribers between them is the big story of 2016. But it’s not the only one. Golan Shaked...... 24

ur final report of the year is an Among the more nuanced discussions YouTube’s $1bn of ad-revenue payouts in Beatie Wolfe...... 26 interview special, picking the in this issue: gauging streaming’s the last year. Some of our interviewees, brains of executives from labels, benefits for different levels of creators while agreeing that safe-harbour legislation Kevin Brown...... 27 publishers and digital services and rightsholders; Spotify’s increasingly needs modernising, also see opportunities – as well as artists, lawyers and powerful in-house playlists viewed through and hard cash – in the platform already. Syd Lawrence...... 29 Oinvestors. A range of themes has emerged. the lenses of globalisation and localisation; The other theme that emerges is one First is the way that as streaming’s and the question of which pureplay of urging musicians and music executives Alison Wenham...... 30 financial contribution has grown, so services can really go toe-to-toe with to use this year’s growth as a spur for the debates around it have evolved and Apple, Google and Amazon. more boldness, more risk-taking, and more Lauren Wirtzer-Seawood...32

report deepened beyond the binary ‘is streaming YouTube and the ‘value gap’ are collaboration with one another and with good or bad for artists?’ question that inescapable, of course, but this isn’t just the tech world. Read on to find out how Ian McAndrew...... 34 dominated the earlier part of this decade. about rightsholders giving short shrift to and why. :) the 3

ISSUE 399 21.12.16 Beth Appleton REVIEW SVP of global marketing, Warner Music Group

“2016 was absolutely about playlisting. If in the big playlists around the world. should remember that it’s passion that we could pick one word that sums up the “What’s critical in the next year – breaks an act. If we look [just] at skip rates industry’s year, that’s it.” definitely the year after but hopefully we’ll and ad collection rates, we’re killing our Beth Appleton, SVP of global marketing get there next year – is that we’ll have own ability to be part of culture. Because at Warner Music Group (not to mention these strong local playlists, that allows us the thing about culture is that it can be Outstanding Achievement recipient at to still bring new and developing bands something new, which might make you go music:)ally’s Digital Music Awards) is at the through, and not just be seeing the top of ‘what?!’,” she says. sharp end of the industry’s latest digital the pops,” she says. “If we see data telling us something isn’t transition. “At the moment it’s self-cyclical: Drake, doing so well, and we just stop, we might as That includes the question of Rihanna, Bieber… It’s becoming a little bit well shut the doors and go home. Because globalisation and homogeneity, where too vanilla at the moment. We need to do that means actually all we’re doing is It’s becoming a little bit too Drake, Rihanna, Justin Bieber and other big our job to bring a little bit more colour.” putting a song out and going ‘let’s see what vanilla at the moment. stars may elbow local artists out of the top Other marketing trends tracked by happens’. It should never be our job to just We need to do our job to bring a slots on the big playlists in some countries. Appleton in 2016 include a further tilting see what happens. It should be our job little bit more colour” Appleton hopes that this landscape will of emphasis towards individual songs to make things happen, and that’s about evolve, noting that in Scandinavia, Spotify’s rather than albums, with singles capable enthusiasm and passion.” big playlists are more focused on local acts, of peaking six months or more after their It’s also about taking risks, which is a thanks to the way they developed before initial ‘release’. Plus the challenges of skill that Appleton thinks has continued to that service launched in the US. making sense of a deluge of data from improve within the industry in 2016, despite “They’ve got established local streaming and social networks. the history that means some outsiders will playlists, which means they’ve got a “I actually think that simplicity is key. always see labels as risk-averse when it more established and more local chart. We can drown ourselves in data sometimes comes to anything digital. We’re in the world where we can That means it’s a lot easier for the music because we don’t know what we’re looking “The worst thing is if there is amazing hopefully be enabling a lot of industry to actually break local artists, for,” says Appleton, who oversaw a project technology, and it takes two and a half smaller partners, rather than just because they’re not competing in a global for WMG to create its own tools to make years to get some paperwork in place, then Today’s Top Hits world. But we’re just more sense of sales, streams, airplay, nothing happens,” says Appleton. having a few big ones” not there yet in some of the more recent charts and social media stats for artists. “When you’ve got things that are [country] launches,” she says. While enthusiastic about the way this happening, and you can see that they’re WMG famously worked with Spotify can inform decisions on a daily basis, happening, it’s important that you’re part of to break Danish band Lukas Graham Appleton thinks that 2016 was also a year that, and part of making it better, not part of

report worldwide thanks to heavy playlisting of in which the industry remembered not to stopping it. That’s the difference: in the days their track ‘7 Years’, but Appleton hopes discard its intuition. of peer-to-peer, it was literally ‘How can we that 2016 can be the start of more variety “As people in the music industry, we stop it?’ and not ‘How can we make it work?’. the 4

ISSUE 399 21.12.16 BETH APPLETON, WARNER MUSIC GROUP, continued REVIEW “Actually, most people who are out there go ‘Bang!’ – and want to use music, they want to use it you’d have your legitimately. People understand that music premieres on radio, is copyright and that it’s the livelihood of your playlisting on streaming services, the writers and artists, which maybe wasn’t and people doing really funny dances or so much the case when you look back.” amazing cover versions across YouTube,” Appleton has encouraged her team she continues. to say yes to every meeting offered by a “You suddenly reach an audience of X startup – “one in ten, at least, you’ll learn million. That would be really exciting, and something super” – while pointing to it’s very feasible: we’re not far off that. WMG’s first-mover status in licensing social You’ll reach a larger audience which means app Musical.ly as a sign of its intent in 2016. more people listening. And essentially “Our job is to find the new partners of we’re in a ‘listening’ business model now.” tomorrow, as much as to work really well Monitoring new trends in how fans with our partners of today. That extends interact with music is a key part of that. to YouTubers or somebody on Musical.ly or Appleton says the emergence of Snapchat Instagram with hundreds of thousands of is one of the trends that kept labels on followers,” says Appleton. their toes this year. “We’re in the world where we can “But if you look at the many production for example – worked with WMG on their “We’ve gone through a world of one- hopefully be enabling a lot of smaller houses building up, who will go and create videos. to-many, where YouTube is one-to-many, partners, rather than just having a few big music that people can use in their YouTube “Our marketing teams are going to Facebook is one-to-many and MySpace ones. It’s about all the different levels on videos? That is growing, and that says to YouTubers to get them to do something. was one-to-many. But we’re now in this which people can work with us and our me: opportunity! We have to look at how This is the new Top of the Pops. It’s the new world of Snapchat, where we’re going much content.” we can collaborate with our publisher MTV. You look at the audiences out there, more like one-to-a-few,” she says. Appleton has been thinking about partners and make that a model. At the and you just want your music to be part of “And the content may not be stored, so YouTubers, Musical.ly stars and creators moment there is no that. It’s not one partner, it’s one-to-few for a moment, which means on other social platforms a lot in 2016, value on the table [for it’s many partners, so it’s all about how we create amazing things and wrestling with the challenges of YouTubers] because we’re you need to be able to that could be one-to-few many times, and establishing partnerships with those not enabling it to happen.” network it,” says Appleton. for a moment. We have to keep thinking individuals that suit both sides. WMG has been trying “Imagine in a world about what we create, so it can fit.” It’s tricky on YouTube, for example, to find one. Appleton where it’s all licensed, Appleton thinks that this and other where if a creator uses a piece of cites the example about wouldn’t it be amazing trends in 2016 have shown there is even copyrighted music, the label can (often Zay Hilfigerrr and Zayion if on the same day you more opportunity for labels and artists to automatically) claim it using Content ID, McCall’s ‘Juju on that Beat’, dropped your song onto collaborate – with fans, with startups and and thus take all of the revenues. which became a YouTube streaming services, you with brands. “They could make the most amazing meme through fans and also had 100 creators “I feel optimistic because there’s more piece of content, but we go ‘no, we want creators uploading their around the world that had people to work with, and more people

report all the money’ so they don’t use our music. own dancing videos. Some done something fantastic means more ideas, which means more We haven’t got another model in place yet,” of those creators – South with that song.” creativity, and from that you get great says Appleton. Korean YouTuber DJ Soda “And you’d just stories that we can all enjoy.” :) the 5

ISSUE 399 21.12.16 Ty Roberts REVIEW SVP and CTO, Universal Music Group

Universal Music Group sprang a 50 different companies making different surprise this year when it recruited things to show off with VR, and we can be veteran digital media innovator and one of those. The format isn’t fixed yet, Gracenote co-founder Ty Roberts as its which is our opportunity to experiment,” new SVP and chief technology officer says Roberts. in April. “You see VRTGO as an application After eight months soaking up now, but really it’s an API. You could lessons from the many arms of UMG’s take that and put it inside another global empire and working on some application, and these things will play new product ideas, Roberts, whose back in a unique way, and provide more past includes producing some of the of a complete experience for which our There are 50 different companies first interactive music products with artists have delivered the components.” making different things to show artists including David Bowie and Roberts thinks that VR may be one off with VR, and we can be one of Brian Eno, has plenty to say about music/ However, UMG has also experimented of the first formats where musical products those” tech trends in 2016, and how things have with adding post-release bonus tracks are truly dynamic, but which also allow changed since the heyday of CDs. to albums on Spotify: something that used “multi-person interactivity” where fans “The big difference today is that the to involve a label shipping (and fans buying) experience music together within a virtual products are a combination of music, but a brand new CD. world created for (or even by) the artist also information and real-time information “The products in the past were static, responsible for the work. like social commentary. non-dynamic and fixed. In this world we It’s the kind of experience that’s The products themselves are dynamic can continue to evolve these things. That’s familiar for gamers, but much less so for now,” he says. a really big deal,” says Roberts. music fans. If fans can’t imprint themselves “A product today is more like an API. “And if we’re going to do that, we should “Games tend to be more competitive. on the media or around the media As a fan, you should be able to talk to the be starting to think about pulling together I want something more social, emotional in some way, it feels a bit static computer server at Universal which serves a better definition of a product: it’s not just and collaborative. It’s going to transform you back the latest thing: a package of the components. How do we want it to be it from a passive experience to an active and suffocating” music, information, ‘here are some people presented?” experience,” says Roberts. talking about it’, the lyrics and more.” One example of that from 2016 is “As an example: do you want to go on Roberts also notes the ability for an VRTGO, the virtual-reality app that a virtual date with someone you’ve met artist or label to continue developing a Universal released in October with a across the internet inside a Peter Gabriel

report music product after its ‘release’. Kanye selection of made-for-VR music videos. album, and walk around Peter Gabriel’s West tinkering with ‘The Life of Pablo’ may “There’s a great opportunity in VR because world together? That kind of experience is be the obvious example in 2016. there’s no established VR platform. There are going to be possible.” the 6

ISSUE 399 21.12.16 TY ROBERTS, UNIVERSAL MUSIC GROUP, continued REVIEW In a speech at Midem in June, Roberts being part of the creative on the show floor,” says assistants on talked about the need for the music process on their mobile Roberts. smart speakers. industry to adapt to a “world of systems” phones. Their world is “We’ll be showing “Today it’s a despite historically not having been very not just ‘look what I’m people a lot better command-and-fetch robot: ‘Tell me what good at building databases and computer listening to’, it’s ‘look at product offering than the number one song was in 1989’ or ‘Play systems itself. what I did with it, here’s we’ve had in the past, me Lady Gaga’s last album’. But it has the He’s optimistic that the industry is how I interpreted it’,” says but it’s the beginning opportunity to evolve into a conversation,” adapting to the challenge, partly through Roberts. of the journey. We’re says Roberts. more tech-savvy staff in senior positions, and “If they can’t imprint at CES showing the As an example, he suggests Alexa partly through more collaboration both within themselves on the media or visions of the future. might ask if you want to learn about some the industry and with external tech firms. around the media in some We’ve got a couple of music you don’t know already, but which it “We’re working with the other companies way, it feels a bit static and major streaming services thinks you’ll love – “Would you like to learn and third parties better, which is great. A suffocating to them. And talking about what this about early jazz, the founders of hip-hop lot of the innovative ideas in the space are they don’t necessarily want means for them. or explore music from Chicago?” – before coming from third parties. There’s nothing to create something that “It could take a year taking you on a journey into whichever one like five budding entrepreneurs in a room lasts for hours: it’s something that’s very to get this into the marketplace, but we you choose. with an idea!” he says. snackable and short, that their friends look really think we can make this a mainstream “It’s an opportunity to get into a The Open Music Initiative, which UMG at and laugh and cry. We have to embrace product.” dialogue, to be a discovery experience is part of, is one example of the industry that.” Roberts adds that he thinks the music driven by dialogue. I don’t want it to be pulling together with third parties to work Roberts also talks about entering an industry has a chance to “take back the a school: it should be like when you talk on common goals, and particularly to era where a musical artwork is not just a living room” as an entertainment medium, to that great friend you have who knows create new standards for music data. reflection of the artist that created it, but capitalising on the fact that a growing about music. Conversation! But it will “I’m super excited about it, we’re all also the fans that are reinterpreting it. number of people not only have an HD probably take a few years,” he says. putting our best ideas in there,” he says. “Even with music videos, the artist can television, but also a decent sound system Overall, Roberts is optimistic about the “And you see from things like Wikipedia release their version or multiple versions, attached to it. music industry’s ability to forge positive that fans are happy to help us. Even if you but then release the raw components for “Part of the message is take off the relationships with the developers of all this have all the experts in the world, if you fans to make something else,” he says. earphones, play some music and look at technology, particularly when it’s smaller want to cover everything, you need help.” “That idea of a co-creative experience with some information and visuals while you startups. That’s just one way that fans have been the fans? The artists who will embrace that listen,” he says. “When those entrepreneurs come to seen as co-creators in 2016. Others include will really connect deeply with those fans.” “The music industry can take advantage our company, we embrace them: we try to social platforms like Musical.ly and Flipagram, As 2016 comes to an end, Roberts of these products to deliver high-quality understand what they’re doing and figure which have seen fans creating their own video has been preparing for the Consumer sound. But also the opportunity to create out how to work with them. content around and with music. Electronics Show (CES) which takes place a lot of new experiences around the music. “There always were technologists in While there are copyright questions in Las Vegas in early January. Universal will It’s not just delivering the sound: it’s the the music companies. The difference now to debate and licensing negotiations to be among other music companies backing credits, the visuals, the other assets. it’s is they are at the top of their food chain,” hammer out around these companies, the Hi-Res Audio pavilion at the show. hi-res both auditorily and visually.” he says. “This is really what’s changed it. Roberts sees the user-generated content “For CES, we have brought the equipment However, Roberts also sees plenty of This is how the world works now: there’s

report trend as exciting and services together, along with the other potential in new audio devices without always something new, and you have to “This generation of fans, the generation music companies and independents and a screen, such as Amazon’s Echo and embrace it. We have to figure out how to today, is very creative. They are used to created a mini version of Capitol Studios the emerging world of voice-activated empower all these people.” :) the 7

ISSUE 399 21.12.16 Sitar Teli REVIEW Partner, Connect Ventures

Sitar Teli led SoundCloud’s first round of In her Connect Ventures role, Teli has been at the seed level, and increasingly that’s institutional financing in 2009 at VC firm investing in other kinds of startups, including in opportunities outside of Europe too,” Doughty Hanson Technology Ventures. Auxy, with its app for creating music rather she says. One cloud on the horizon, Seven years on, she’s a partner at Connect than just consuming it. however, is Brexit. Ventures whose seed investments include “Creation is a really interesting one. There’s “With Brexit, one of my concerns is that music app Auxy and online dance-music a new generation of musicians, and for them I’m not feeling the effect of it yet. But they broadcaster Boiler Room. instruments are not flutes and drums, they’re may be invisible effects: founders deciding Teli also delivered a blunt assessment software,” she says. not to start in the UK but in other countries of the music industry’s relationship with “A lot of people view music creation on instead. Some people may not be sure they startups on a panel at Midem in June, when the phone as not something serious, but want to start their company in the UK, and she warned that music/tech startups were you need to create the next generation of that’s dangerous,” says Teli. “probably never going to be able to build a instruments… And the quality of the music “I think it’s critical for any country: not It’s a really great time for business” if they required a big catalogue of some people are creating already with these just the UK and not just in tech. My parents listeners, but I’m a little bit rights from labels. Is she more optimistic now? tools is excellent.” were immigrants to the US, and I’m very pro- concerned that there are only two “I wouldn’t say I’m pessimistic! That There can be snobbery around immigration in general,” she continues. or three providers” whole debate was more about the labels’ smartphone apps as music-making tools, “Tech particularly thrives on it, because role in what’s happening. As a music listener but Teli compares it to past rows about what you’re looking for in your employees are I consume more music than ever. The photography and Instagram. really exceptional people. It’s better not to consumer experience is better than ever right “If you look at the best of Instagram, well, assume that one country can produce them now,” says Teli. my photos don’t look like those photos! The all, especially in areas like artificial intelligence “It’s a really great time for listeners, but amazing thing about creation tools is that and machine learning.” I’m a little bit concerned that there are only they are democratic, especially when they’re Connect Ventures has made more two or three providers. It’s like what happened free,” she says. investments in those kinds of ‘deep tech’ with the labels in concentration of ownership “If you make the tool free, a lot of content sectors in 2016, and Teli’s view of the growing and power. The dynamics are best when there that you may not want to look at – or listen importance of AI and machine-learning are multiple players.” to – will be created, but also some incredible matches the music industry’s growing interest Teli thinks that the major rightsholders’ pieces of content. You start blurring the in how these technologies will affect the licensing strategies will play a crucial role in lines between who’s an amateur and who’s a industry and its creators in the years to come. fostering that kind of competition. professional.” “Everybody’s looking for what the next big “If they make it so that it takes a significant Teli also had a front-row seat for some of consumer platform will be, and you have to amount of capital and subscription revenues the trends around seed-stage investment in be close to these deeper, harder technology

report to become profitable, they’ll only end up with 2016, including music startups. trends,” she says. “A lot of the new platforms one or two providers. If you make it more “Seed continues to be really strong: will emerge from what’s happening on that affordable, you’re going to have more of them.” especially in the UK there’s a lot of money deeper technology.” :) the 8

ISSUE 399 21.12.16 Rob Wells REVIEW Music Media Inc

“Without sounding like a smug bastard, labels – and that was the easy-to-clear it kinda vindicates a lot of what we did in repertoire where publishing and masters the early days in pioneering some of these were in the same building,” he says. deals…” “I felt disappointed: now the business Rob Wells, former president of Universal is healthy, are they slipping back and Music Group’s global digital business, is tightening control again? I don’t sit on that casting his eye over 2016 – and specifically side of the table any more, but I’m not sure the upturn in recorded-music industry how easy it is to get deals done with the revenues that has been driven by major labels.” streaming subscriptions. Wells thinks that 2016 was the prelude “Back then, we had two issues: one was to more consolidation in the streaming I think Google are apathetic to fighting the piracy problem, and two was market, with most of the survivors already all content, not just music. the dominance of Apple’s iTunes music pencilled in. They’re a technology platform: store. We studied the pirate services long “At the end of the [streaming] transition they just care about eyeballs and hard to understand what it was that you’ll settle down with, I think, five global consumers were gravitating towards: first, partners. I think Spotify will survive, despite and ad revenues” it was free and second – equally important the fact that they’ve got profitability – was they had everything,” he says. issues. Apple will obviously survive because “There was always an inevitability, once they have other businesses,” he says. subscription reached network effect and “Google will be there, although we’ll got scale, that it was always going to drive see whether it’s Google Play or YouTube. the revenue and the traffic.” Amazon Music is the stealthy nuclear Wells adds that a whole range of deals interesting, colourful, creative deals were submarine in the market: they don’t do Service-by-service exclusives? from the 2000s planted the roots for 2016’s done with European music services: Last. things badly, they know their audience, and That’s idiocy. I don’t get that at streaming growth, from licensing South fm, Nokia, Spotify, Deezer,” he says. they’re so data-driven they’re a very well- Korean P2P service Soribada to Nokia’s While Wells is heartened by the run ship. But I also think there’s definitely all, and I never got it” Comes With Music – deals that gave labels industry’s growth in 2016, he expresses room for a fifth player.” valuable data on music consumption with caution about the possible impact on major Wells thinks Pandora may be more likely unlimited-access catalogues. labels’ willingness to strike similarly bold to secure that fifth slot than rivals like “The realisation hit us that the best way licensing deals. SoundCloud or Deezer.

report out of the problem we faced was more “I met a guy recently who had a very “I think Pandora have got a shot. If you courageous licensing. If you look at the interesting business model, but it took look at the global marketplace, the true period between 2006 and 2011, all of the him four years to get just one of the major scale – the true volume numbers – is only the 9

ISSUE 399 21.12.16 ROB WELLS, MUSIC MEDIA INC, continued REVIEW going to come from activating new markets AI, and how that can help spirit that’s about to until something around the world,” he says. “Pandora’s across social networks and flow back into music. I’m happens and even model is going to sit very sweetly across music curation. That’s very worried that they just lock then it’s touch and go.” the world: that interactive radio model is a exciting,” he says. down and forget about “I loved the time I was in the major- huge opportunity.” Wells is more sceptical being brave: that they labels world, but I’ve genuinely learned What about 2016’s other big music- about two of 2016’s become cautious and risk- more in the last 18 months than I did in the industry debate: YouTube and the ‘value emerging tech trends averse,” he says. previous 10 years.” gap’? Well-versed in the tensions between within the music industry: He also hopes that That includes the unhappy period of Google and the music industry, Wells gives blockchain and virtual labels and artists will Crowdmix’s collapse before the commercial short shrift to suggestions that the tech reality, describing them continue to move away launch of its app. giant is actively seeking to undermine as “very interesting from the idea of streaming “The Crowdmix business didn’t go bust copyright. technologies, but not the exclusives for big albums, because it was a bad idea. It went bust “I don’t subscribe to that: I think that’s silver bullets for the music for fear of angering because it was badly run. But it was a new bullshit, the music industry has always industry”. current subscribers and business in the ecosystem that was looking been really good at blaming other people. He thinks blockchain putting off potential ones to extract value from the conversation It’s always ‘Those guys, they’re bad guys!’. technology could play too. around music and remunerate stakeholders But I don’t think Google are that bothered a role in solving some “I think the industry around that conversation,” he says. about music: it’s just stuff that goes of the industry’s rights woke up to the fact “It did fix some problems, which is what through their pipes,” he says. headaches, but is less sold that giving exclusives drew me in. I think there’s an ecosystem “I think Google are apathetic to on VR’s potential for music. to individual services was a race to the around the core business of distribution all content, not just music. They’re a “As a gamer I get VR. As a massive bottom,” he says. “Service-by-service and listening to music that is undertapped. technology platform: they just care music fan, it doesn’t interest me. The worst exclusives? That’s idiocy. I don’t get that at I still stand by the concept. I really believe about eyeballs and ad revenues. The only thing I could possibly do is join the Rolling all, and I never got it.” that the promise of the platform was great.” technologist who really gave a shit about Stones on-stage in a headset. It would If Wells were starting in the music Like his former UMG colleague Beth music was Jobs, he was a fan.” scare the shit out of me! I don’t get that. industry in 2016, would he still want to work Appleton, interviewed elsewhere in this “The irony is that while creating But there will be opportunities,” he says. at a major label, or would he rather go to a issue, Wells thinks the music industry must music is a very creative process, so is “Machine-learning and AI and music/tech startup? not let fear of failure stop it exploring new generating software. A blank piece of music suggestive listening is far more interesting “I can’t say a bad word about working for ideas. manuscript is the same as a blank screen to me than what the blockchain or AR/VR one of the major labels: I spent 20 years in “That’s the way the industry grows, and with a blinking cursor. They’re both creative can do. It’s not quite as sexy and maybe that world and it’s a fantastic meritocracy. the way that new businesses are formed processes. The irony is never lost on me.” not as investable, but its impact on the If you want to to work hard, go to lots of and forged. You have to make mistakes. Post-UMG, Wells has been active in the music industry could be huge.” gigs and be close to the artists then go and Without being reckless, you have to try music/tech world, including running the Wells thinks that the growth from work for a major label or an independent – things,” he says. US arm of ill-fated social music startup streaming subscription services will fuel you’ll be well paid but you’re not going to “You can’t get a new idea signed off Crowdmix, as well as advising companies a new wave of investment around music/ get entrepreneurially wealthy,” he says. in triplicate and go off and justify the including Revelator and LoveLive. His tech, but hopes that rightsholders will meet “If you want to get rich and flirt with concept to the board, there’s just not the current project, Music Media Inc, is a it in the right spirit. music, grow a beard and have a nice time. Innovation has got to be done by the

report content/technology incubator. “My greatest fear is the industry gets haircut and work in Hipsterville, it might people at the front line. You’ve got to allow “Some of the early-stage stuff we’re comfortable, fat and complacent, and they be worth working for a technology the skirmishers to skirmish. Allow them to doing is focused on machine-learning and don’t take advantage of the entrepreneurial startup. But you’re going to earn peanuts fucking get on with it.” :) the 10

ISSUE 399 21.12.16 David Lowery REVIEW Artist and founder, The Trichordist

David Lowery started the year have something that looks more in the headlines for leading like the way GEMA works, or PRS one of two class-action with the mechanical rights body in lawsuits against Spotify the UK,” he says. over mechanical licensing. 2016 felt like a year when some They have since combined of the issues that Lowery has with the other lawsuit taking been talking and blogging about prominence. for years received a wider airing in That has left Lowery free the media: including the political to continue with touring life scene around big technology with his two bands, Cracker companies. People are a lot more aware, and Camper Van Beethoven, “People are a lot more aware, and a lot more sceptical, of your but through his activism and a lot more sceptical, of your classic ‘digital utopian’ talk” and The Trichordist blog, he classic ‘digital utopian’ talk. There’s remains closely engaged with a lot more of ‘okay, well we’re the issues that sparked those not really seeing the benefits’ lawsuits – and with the wider responses. More people are questions of fair streaming seeing that this is just old-school royalties. politics where you get your “It’s pretty clear that people in various executive branch the courts are going to do something for songwriters or not is unclear. The class- departments, or members of Congress, to with this: there’s going to be some sort actions did start the ball rolling: we just don’t protect your rights as a company,” he says. of action. The NOI system for licensing know where it’s going to end up… The fact “Silicon Valley used to be more immune I specifically worry about a streaming mechanicals in the United States it hasn’t been kicked out of the courts yet is to that sort of criticism, and they no longer YouTube, Amazon, Apple sort of is essentially broken. If we want to have positive for me.” are. Some of that’s coming from us, but streaming services that have more than a few Lowery thinks that one outcome might be it’s a general trend that’s out there. More triopoly. What happens if that million tracks on them, we can’t have that a revisiting of past proposals for solving the journalists are sceptical of the claims made by remains entrenched?” system,” says Lowery. issue: to allow the PROs in the US – BMI and these companies. There’s a lot more coverage “One way or another, this court case ASCAP – to issue mechanical licences for of the fact that there is very real, old-school should solve that problem. It should streaming as well as performance licences. back-room lobbying by the technology firms

report eventually establish a precedent, or have “There are some issues with that, but it like Google and Facebook.” the Copyright Royalty Board or Congress would be better than what we have now: Lowery has been keenly following and fix it. Whether that ends up being better that’s the nature of compromise! So we could participating in the debate around safe the 11

ISSUE 399 21.12.16 DAVID LOWERY, THE TRICHORDIST, continued REVIEW specifically streaming a back catalogue and a history. evidence now subscriptions – made a “I’m a legacy artist, and we had songs that through royalty real impact. But from the crossed onto the radio. So as a performer/ statements that they’re point of view of an artist songwriter who’s a legacy artist, you can certainly paying a higher rate on average than and an activist for artist really argue with a straight face that all of Spotify. On my catalogue it’s close to a [US] and songwriters, Lowery this social media and these technological penny a spin, all rights included. Spotify is still sees the other side of the innovations have extended our careers,” he down at half a penny,” he says. debate. says. “So in some ways, is that such a bad world, “I don’t see it trickling “I’m having a good year, and as an if Google or Amazon or Apple dominate, if our down to a lot of artists incumbent in this business, there’s something rates are higher? But in the longer term that yet,” he says, before noting about the structure of the market which concerns me.” that when he has analysed cements my advantage in place. We’re To explain why, Lowery looks back to data from a pair of “large managing to activate our email list, social the 1980s, when MTV essentially had a aggregated catalogues of media and all that, and keep touring. And I “monopoly” on music videos, and then independent recordings think the same is true for a number of my YouTube’s emergence over the last decade, and songs” he has seen peers.” when music has helped it build its platform that the decline of the 15 “If you’re an incumbent who can make amid controversy about rightsholders and harbour and the “value gap”. He thinks that years has levelled off for some rightsholders. money on the road still, it may not be better creators’ share of the proceeds. the arguments for removing safe-harbour “We’ve lost 70% of our recorded music than before, but it’s certainly not as bad as “We could have fought YouTube more, protection from services like YouTube have revenues since 1999/2000, so we’re starting it is for everybody else. My worry is for the but as artists we’re constantly sticking been better articulated in Europe than in the from a fairly low base. But if you look in younger artists: including the fact that they’re these things up on YouTube and building US so far. aggregate at stuff, it looks like it’s either competing with 50 years worth of other the platform. That’s a monopoly we created “In the United States, it’s an unfair levelled off or is coming up, and that musicians touring.” there,” he says. competition argument that would need to streaming is significant in that,” he says. Songwriting lawsuits aside, what does “I specifically worry about a YouTube, be made, because of the way our courts “If you’re a performer, or an indie label of a Lowery make of how 2017 has shaken out Amazon, Apple sort of triopoly. What happens work. Spotify, as much as I criticise them, certain size, it’s getting better. But I think we the music-streaming market? One concern if that remains entrenched? Do each year are licensed on the recording side. They are can pretty confidently say that for producers that has been floated by a few people this they come back and go ‘here’s our deal’? It good players in the ecosystem: if something and songwriters, their overall revenues are year – PRS boss Robert Ashcroft for example might be good right now, but maybe four shouldn’t be up there, it’s gone or it never gets still trending downwards, if not as steeply as – is the prospect of a streaming ecosystem years from now they cut those rates in half.” up there in the first place,” he says. before.” dominated by Apple, Google/YouTube and Lowery also highlights a recent story that “But they’re competing with YouTube Lowery still sees non-interactive streaming Amazon, where even Spotify and Pandora he thinks didn’t get enough coverage in the which is a bad actor, right? The safe harbours, services like Pandora as a problem: “That side could get squeezed out or swallowed up. media: that Rhapsody reported a quarterly in my mind, weren’t intended to be used as of the business, which is still significant, really Can the pureplays survive? “That does profit. a backdoor sort of licensing model, but that pays a pretty dismal rate to songwriters,” he bother me. If you were to make a wager on “It raises the question of whether these hasn’t been as clearly defined and discussed says. “And for on-demand streaming, we’re it, you would probably bet on Google, Apple streaming services could survive if their cost in the United States.” back to having to fix mechanical licensing: and Amazon being the only ones to survive. structures were different, if their executive How does Lowery feel about the how it’s licensed and the rates that are set.” That’s a good possibility,” says Lowery, pay was different. If Napster / Rhapsody with

report development of the music industry in 2016 He also draws a distinction between although he is keeping an open mind about an on-demand service can somehow make in other ways? Certainly for the big labels, the challenges for emerging artists and the consequences. a profit, maybe Pandora and Spotify can,” he it’s been the year when streaming – and songwriters, and those (like himself) who have “Apple seems to pay more: we’re getting says. “Or maybe not.” :) the 12

ISSUE 399 21.12.16 Gregor Pryor REVIEW Partner, Reed Smith

Exclusivity has been on Gregor Pryor’s mind independent digital distributors. When they That’s really interesting, and I don’t think in 2016, in his role as partner and co-chair of get big enough, they can form a creative anyone’s really hit that properly,” he says. law firm Reed Smith’s global entertainment partnership with one of the big digital music “But it’s going to have to be visual, which may and industry group. services. be bad news for SoundCloud, Spotify, Deezer “There’s no denying that at least for a “It’s interesting that many of them and Rhapsody, and probably a bit better news short-term shot in the arm for a DSP, an come from hip-hop, which is now for companies that do more in video. I would exclusive can be pretty powerful. You only dominating the pop scene too. It’s a very argue it’s Vevo’s big opportunity.” have to look at what’s happening in the innovative genre because the artform is Finally, when Pryor looks back at 2016, audiovisual world with ‘originals’ on Netflix about commercial autonomy. In fact, that’s events in politics loom large: the vote for and Amazon to understand that being able to its lynchpin,” says Pryor. Brexit in the UK and Donald Trump’s election offer differentiated content will help to drive “If hip-hop is one of the dominant popular as US president in particular. consumer appeal for your service,” says Pryor. commercial-music artforms, and if one of He thinks that the music industry will Brexit and Trump: the political “The awkward problem with exclusives its central themes is financial success and weather the economic fallout relatively well – moment? It’s the responsibility are the record labels, who have invested autonomy, then those things represent “more than any other industry, music is pretty of the music industry to fight in building an artist’s career. Not a threat to labels and an opportunity for recession-proof” – but sees Trump’s election against that” unreasonably, they want the broadest distributors.” as a challenge for the music industry on possible dissemination of that content, and Pryor has also been following the buzz another level. they also have relationships to manage: around virtual reality technology in 2016, with “Brexit and Trump: the political moment? they understand that they cannot easily British VR startups MelodyVR and Inception It’s the responsibility of the music industry to discriminate between DSPs.” among Reed Smith’s clients. He is bullish fight against that. I don’t like Green Day, but Pryor sees 2016 as a tale of streaming about their prospects. nothing pleased me more than seeing them services realising that they need to not just “It’s yet to hit, but I think a few things take a stand [at the MTV Awards],” he says. acquire new customers, but prevent their about it are really going to change the “There is a kind of call-to-arms for us as an existing listeners from churning to rivals. market. The whole idea of the live experience industry to stand up for love, peace, harmony “Because consumer acquisition costs are being replicable, or at least more authentically and all those kind of… well, cliches I guess – I so high, you can’t afford to churn people. replicable, through VR is powerful. 360 VR know this sounds grandiose for a lawyer! – but That’s why exclusives and original content are experiences like MelodyVR are going to the unfortunate truth is that there are a large becoming part of the new normal for these service a demand for that type of content,” number of people around the world who don’t DSPs. And I also think that it’s a huge threat he says. like diversity and inclusion.” to labels,” he says. Pryor admits that there is a “paucity “I think we need some strong voices in the Why? Pryor notes that some emerging of content” for the VR headsets already industry: not just the artists, but also label

report artists – grime stars in the UK for example – available, which he sees as an opportunity bosses, influential people within the business, are building their careers from the grassroots for startups. to speak strongly and clearly about how we up without a traditional label, working through “How can music videos be shot in VR? can make the world a better place.” :) the 13

ISSUE 399 21.12.16 Diluk Dias REVIEW MD, AEI Group

The conversation around YouTube and the ‘value gap’ has been dominated by major labels and publishers, as well as their representative bodies. You could take that as a sign that the entire music industry is anti-YouTube. However, the full picture also includes some companies and creators who have been quietly building thriving businesses on the platform. “I don’t have the time or the energy to Rumbling on about YouTube’s rumble on about the value gap. I’d rather business model is a bit like suing focus time and effort on figuring out clever your customers for filesharing ways to utilise YouTube to drive revenue in 2001” elsewhere – which is what we are doing,” is AEI Group MD Diluk Dias’ blunt summation of the debate. Rumbling on about the value gap is a prop for (among others) so they can be monetised “Rumbling on about YouTube’s business the music industry to negotiate better terms.” there. So far the model is working for the model, which is an advertising-based Equally, Dias believes allusions to pulling company, which is why Dias feels this is just streaming service, is a bit like suing your content from YouTube if it will not bend to the the start of something much, much bigger. customers for filesharing in 2001. To my mind industry’s will is a hollow threat – especially “I think it was a great year and the best there is a more productive use of your time.” given how powerful and central it is to music days are still ahead of us. Why was it a great Brands sitting under AEI’s umbrella industry marketing. year? This was the year that streaming really It’s a two-horse race between now include UKF, NoCopyrightSounds, “No one wants to take the music down came of age,” he says of 2016. Spotify and Apple Music – TheSoundYouNeed, All Trap Music and from YouTube,” he asserts. “If YouTube “I can’t see another format evolution the brand that first made its name, stopped existing tomorrow, the music coming along for many years to come. We but, at the moment, Spotify is Drum&BassArena. Dias sees their growth industry would be in a worse place.” can just get our heads down and focus on way ahead” as evidence that there is another side to the Dias is brimming with optimism as 2016 growing our streaming revenues because it’s YouTube and music debate. draws to a close, not just about YouTube but a mainstream proposition now. Especially “The old guard is using this as a also about the rise and rise of subscription with Amazon entering the fray.”

report negotiating platform,” he argues. “They are streaming. “Historically we have had CDs, we’ve clearly out of contract with YouTube and This is key to the AEI strategy – YouTube is had ringtones, we’ve had downloads. But want to use this to help their negotiations. used to drive fans to Spotify and Apple Music streaming feels like the end game that we the 14

ISSUE 399 21.12.16 DILUK DIAS, AEI GROUP, continued REVIEW have all been waiting for.” swell of criticism of Spotify in particular, “We are swapping playlists with Ultra, that people are While Dias says that streaming came of fretting that its playlists ecosystem is an Spinnin’, Sony’s Filtr and so on,” he says of adding it to their age in 2016, what he really means is that increasingly closed shop to curators who how AEI is deftly picking partners to multiply collections – which is two services in particular enjoyed strong don’t work in-house at the streaming service. their opportunities. “It certainly feels like a probably the most important metric,” says growth this year, raising the prospect of a The stranglehold that radio used to have on more cooperative approach to promoting Dias. subscription duopoly for the industry and breaking music may be weakening by the each other’s music – which I feel is quite “That allows them to then amplify it artists to get to grips with. day, but is the industry simply exchanging healthy for the industry.” by including it on their larger playlists. “It’s a two-horse race between Spotify one gatekeeper for another? What about those concerns about the Responsibility lies with the rightsholders. It and Apple Music – but, at the moment, “The big theme of the year is how fact that Spotify’s biggest and most powerful doesn’t lie with Spotify. If you give them a Spotify is way ahead,” he says of where the playlisting has become the default way of playlists are created in-house, though? This good reason to support something, they will market is right now. “They are certainly more marketing your music now,” says Dias. “It isn’t just about fears of a new, all-powerful support it.” progressive and offer more opportunities used to be about radio campaigns and so on; gatekeeper for breaking new music either. “We are typically getting tracks on the to engage and interact. They are certainly but today it is all about driving early traction This summer at the AGM of British main Spotify playlists every week. We are innovating faster than Apple Music. That said, on Spotify through owned media, pulling industry body the BPI, its chief executive analysing the data from our usage and then Apple Music is growing. But it is not in the whatever data comes out of that, sharing it Geoff Taylor argued that big US-produced going back to them and saying, ‘This looks same league as Spotify as yet.” with Spotify and getting them to put it onto playlists could create a new form of cultural quite good. What do you think?’ It’s just about Back to that strategy of building acts on as many playlists as they can.” imperialism in which US acts dominate while contacting the right people at Spotify. But YouTube but monetising them on streaming He adds: “Spotify is a great discovery acts from other markets get pushed to the not just Spotify. They also look at influential services, though. In that second phase, and consumption platform. That is what margins. bloggers [and what they are playing] and take playlists have become increasingly important streaming services are – both discovery and “I don’t agree with that,” says Dias. “The that into consideration if a track is hot.” for AEI, with tracks extremely unlikely to consumption. Historically radio was the thing about radio playlists was they were Outside of streaming, Dias is fired up become hits unless they percolate up through discovery and iTunes was the consumption. finite and heavily curated. Streaming playlists about the impact that AI and machine- the playlisting hierarchy. Now we have discovery and consumption are almost unlimited in scope and every niche learning may have on music, as well as the In recent months, there has been a quiet rolled into one. That is very exciting. It is a can be dealt with. There are plenty of people marketing potential of chatbots. far more level playing building substantial playlists for every niche “To me, that is analogous to mobile field than radio ever on Spotify and it’s about targeting the right phone marketing in the last decade. was.” playlists rather than the mainstream ones.” Social networking is less about social Dias also highlights Dias paints a picture of a world where networking with the wider world; it’s about an under-the-radar as a label or artist, rather than sitting back communicating with your close network and trend of different and hoping Spotify picks up on your music, friends,” he says. (non-Spotify) you have to roll your sleeves up and give the “Around the late 1990s and early 2000s, playlisting brands service a compelling reason for backing your the mobile phone in general, and SMS working together music. in particular, was the default way of you to cross-promote The theory: if you can show Spotify communicating with people; and marketers their music, ushering that organic growth is happening on niche quickly grabbed onto that and started doing in a new era of playlists, it are more likely to promote SMS marketing campaigns. Messaging bots collaboration that tracks to bigger playlists, thereby putting a are analogous to that.”

report may have seemed a promotional rocket under the songs. “We have used them this year to engage far-fetched prospect “Spotify is looking for early signs that with our audience via the medium of their even a few years ago. music is connecting with an audience and choice. We will see more of that next year.” :) the 15

ISSUE 399 21.12.16 Lara Baker REVIEW Marketing and events director, AIM

From ‘Power Lists’ dominated by white to be the whole industry that joins in the support diversity from the ground up. men to all-male panels at conferences, the discussions. The more open we have these “I think things like the Young Guns music industry still gets regularly called debates, the better.” Network and FastForward are good for out for having a diversity problem. Baker thinks conference-organisers can building confidence and networks – helping AIM’s Lara Baker is one of the new do more, not just by avoiding the dreaded people through the ranks,” says Baker. “It generation of industry figures willing to do ‘manels’, but by getting a wider range of is scary speaking at a big event for the first that calling out, but also to put changes in women on-stage. time. But once you’ve done it a few times, place to address these issues. “When you look at women speaking it gets easier.” “A lot of things that are really helpful on panels, it’s the same few faces over Baker has also seen first-hand in terms of gender equality are taking and over again,” she says. “It’s just the dialogue with established music place, like the Women In Music Awards, unimaginative on everyone’s part to just conferences to fix the gender imbalances networking events for women in music, keep picking those people. There is a huge on their lineups that have provoked When you look at women shesaid.so and so on,” she says, before pool of talented people who perhaps just increasing criticism. speaking on panels, it’s the same adding a very firm caveat. haven’t been asked yet.” “We have been in touch with the few faces over and over again. “But I do keep seeing examples of Baker says that this relies on those likes of Midem about how to evolve the It’s just unimaginative” inequality all the time. I am not sure we are women feeling encouraged to put conference. They are pretty open to it,” actually moving forward all that much, to themselves forward, noting that organising she reveals. “There are a lot of events and be honest. It’s a shame that these events AIM’s own events has shown her some of networks springing up that exist entirely specifically geared towards women in the challenges around this. Baker estimates outside of that old framework. They are music have to keep happening. Until we are she is turned down five times more often really positive things, but are a threat to equal, that’s the way it is.” when trying to book women to speak than the more established industry events and Baker remains positive about the she is when trying to book men. framework as we know it.” potential for the industry to take forward- “I have ended up with an all-male There is clearly plenty more work to looking steps when it comes to diversity. panel in the past and a big part of that is be done here, but there are green shoots “I went to Off The Record in Manchester that there are a lot of women who don’t worth feeling optimistic about. While Baker recently and that was really good in terms necessarily want to speak publicly,” she would like to see things moving faster, at of gender balance – both the panels and says. “Training and public speaking courses least they are moving. the live music side of it. Live Nation now and confidence-boosting things would “It’s a very different industry to what it was has a director of diversity. I keep seeing be really useful for women in the music 10 years ago. It’s unrecognisable,” she says. things where I think, ‘That’s good and is industry to have access to.” “The young voices might only have five moving in the right direction.’,” she says. There is evidence that the younger years of experience – but they are the five

report “We need to get men involved in the generation in the music industry are years that count right now. We need to get discussions. Female-only networks only consciously defining themselves against them up there and hear what they have got go so far towards addressing this; it has ‘the old guard’, and building networks to to share.” :) the 16

ISSUE 399 21.12.16 Martin Bandier REVIEW CEO, Sony/ATV

With its $750m buyout of the Michael Jackson estate’s 50% stake in the company, 2016 has been a big year for Sony/ATV. It has also consolidated its position in the publishing market, with subscription streaming revenues comfortably making up for declining income from CD and download sales. However, the ‘value gap’ of ad-supported streaming in general (and YouTube in particular) as well as potential changes to the problem. How do you deal with the other paid YouTube might not pay music rightsholders US consent decrees are issues CEO Martin services if you have a free service like YouTube the royalties they would like, but it does pay YouTube paid out $1bn but, you Bandier wants to fix in 2017. which is ad-supported, but you are not being something. How, then, does a company like know what, we should have been music:)ally speaks to him the day that paid at the appropriate rates?” Sony/ATV feel about Facebook, which is paid $5bn” YouTube announces that it has paid out $1bn Bandier is pleased that German collecting moving aggressively into native video, but to the music industry from ad revenues alone society GEMA has ended its seven-year does not yet have royalty-bearing licensing in the last year. Bandier is less than impressed standoff with YouTube, but warns that the deals with the industry? Will that be a big with the online-video service’s latest charm deal does not necessarily offer a template for issue in 2017? offensive. other countries. “It doesn’t do anything about “It will be,” says Bandier, bluntly. “Facebook “I think YouTube is one of the biggest the issues we currently have,” he says. is on everyone’s agenda. What they are issues the industry has – not just music Recent months have seen speculation that doing in America, they are doing within the publishers. It’s affecting record companies as at least one major label may be preparing to rights that they have. Believe me, they are well,” he says. pull its catalogue from YouTube rather than clearly on the agenda of all music publishers, “It is difficult in terms of monetising our renew its licensing deal. Could Bandier ever all record companies and all of the trade Facebook is on everyone’s songs and getting proper payments. They see Sony/ATV making such a move on the associations.” agenda… Believe me, they are paid out $1bn but, you know what, we should publishing side? Facebook and YouTube are just two have been paid $5bn. It’s the largest music “Before we enter into a new deal with (admittedly huge) digital platforms among clearly on the agenda of all music service in the world and it’s an exceedingly YouTube, we are going to consider all aspects many for publishers. Bandier says that publishers” difficult service for all of us to deal with.” of the deal and how meaningful it is to us,” he subscription streaming really came into its He adds: “They are owned by a very says. “If we thought that entering into a deal own this year and he is confident there is aggressive digital company – Google – that with YouTube would adversely impact every greater growth to come.

report has lots of power and lots of money. That other music service, we might say, ‘We just “For the first time our streaming revenue is one of the primary goals for the entire can’t do that unless YouTube is in line with all was higher than the combined revenue from industry – to straighten out the YouTube of the other paid services.’” the sale of physical and digital downloads,” the 17

ISSUE 399 21.12.16 MARTIN BANDIER, SONY/ATV, continued REVIEW he says of this change. the issue that we “It mainly came from went to the DoJ with subscription services. The and so maybe there growth of subscription is an opportunity for dealing with partial services seems to be at withdrawal. It is totally unknown, but we are a rapid pace – and not optimistic.” slowing down; meanwhile Finally, Bandier addresses Sony/ATV’s the decline in physical buyout of the Michael Jackson estate, and downloads is also at a suggesting that it was a very specific rapid pace and not really deal rather than a harbinger of greater slowing down.” consolidation in the publishing sector ahead. Even so, the nature of “I think it was just a natural occurrence. consumption is changing, 50% of the company was owned by an with single tracks to estate and Sony saw it as the natural thing the fore rather than full for them to buy out the estate’s interests,” albums. That brings he says. “I don’t think the buying out of challenges for publishers. Sony/ATV signifies anything other than “The rate that we Sony’s belief in music publishing and receive on physical sales Michael Jackson’s estate’s belief about what is certainly a lot better as we are dealing a are now appealing it, says Bandier. “There study, they came out with a ruling that would be best for their beneficiaries.” lot with albums. This year the album was are years from a business point of view that made no sense at all, because no one Bandier thinks that 2017, regardless dissipated and, with rare exceptions with are difficult and 2016 was one of them; a asked them to address the issue of 100% of consumption habits and monetisation someone like Adele, it was very much being year that had a lot of those events, mostly licensing.” models, must be a year when the major driven by singles,” says Bandier. related to digital.” Publishers have taken note of the publishers are measured not on their “The revenue from singles is not as What, in an ideal world, were publishers election of Donald Trump as US president, business deals, but on their hits. meaningful as those from albums. But hoping for here? and see the incoming administration as a “The reason I got into this business, as then you look at streaming services and “About three years ago we went to the chance to revisit the decision. opposed to being a lawyer, is that I love the number of streams on a global basis is DOJ with the goal of trying to get them “We are all waiting for the new music,” he says. “For us, having a huge enormous.” to alter the consent decree to allow the administration in the US to take hold which number of hits is the thing that puts a smile Bandier also thinks 2016 has set up an partial withdrawal of rights so that we would mean a new DoJ,” says Bandier. on my face.” important fight in 2017 over the US consent could effectively license the digital services “We think that DoJ, on reflection, would He adds that, at the time of speaking decrees, after the Department of Justice’s ourselves,” Bandier says. probably look to try to resolve instead of to music:)ally, Sony/ATV writers have controversial decision to push for ‘100% “From an administrative standpoint, it litigate the issue of 100% licensing. I think it had songs at number 1 in the UK for 37 licensing’ – meaning songs can be licensed made all of the sense in the world. From an will open areas of discussion.” consecutive weeks, with the publisher with the approval of just one of their economic standpoint, it would be terrific for “They took three years to come up with dominating the top end of the charts for publishing rights-owners. songwriters because it would effectively take something that is totally inappropriate! most of this year. “We were not happy with the manner in the music away from the consent decree We think the new administration – like a “That’s an incredible accomplishment,”

report which the Department Of Justice has ruled which keeps rates at a very low place.” new broom – sweeps clean. Once that is in he says. “Those are the things that excite with regard to licensing; plus, the fact that a “We thought we were going to be place, I think there will be opportunities to me. Not the DoJ and consent decree, 100% judge told them they were wrong and they successful. At the end of the three-year resolve the 100% licensing issue. It is not licensing or YouTube.” :) the 18

ISSUE 399 21.12.16 Scott Cohen REVIEW Co-founder, The Orchard

is predicated on what is going through their pipes and who is using it. That is how they make their money. That’s what they sell. They sell that information. Advertisers pay for that. It is disingenuous to say that they fall under safe harbour.” With Facebook’s push into video, as well as the promise of these native uploads and live streams being bumped up the food chain of its news-feed algorithm, could the social network become the next target for the ‘value When will the turning point come gap’ debate? where Facebook has to pay for the “When will the turning point come where content that is being uploaded?” Facebook has to pay for the content that is being uploaded?” asks Cohen. “It is time to start to look at that.” He also warns that as social platforms become their own centres of gravity, arguments that promotion drives monetisation elsewhere must be treated with Much of this year’s ‘value gap’ debate position because they don’t have to negotiate a pinch of salt. in the music industry has focused on because of safe harbour provision,” says “They’ll say, ‘Everything is promotion’. No, YouTube, especially as its UGC counterpart Cohen. you have got to get paid,” says Cohen. “You I think it’s a very naive way to SoundCloud struck a series of licensing deals. “If it wasn’t just takedown notices and for are creating content and you want to get paid view companies – solely through The Orchard’s Scott Cohen is adamant stuff to appear on their site they literally had in every environment. So everything is for that YouTube should not distract the industry to license it, then it would be a very different promotion and somehow they are going to the lens of whether or not from training its attention on other platforms scenario and we would close that value gap. buy a T-shirt?” it’s profitable when that’s not – Facebook for example – where similar issues And it’s not even takedown notices. Even if it Cohen feels the music industry is living the goal” of consumption and usage versus payouts was take down and stay down – but it’s take less in a connected ecosystem of platforms are likely to emerge. down and pop up again.” and more in distinct silos that have little or no

report “Everyone loves YouTube. We love how it He adds: “It doesn’t make for a very fair relationship to each other. The idea of giving operates. Everyone gets that. At the same playing field to say you’re protected by safe music away in one place to make money in time, we think there is an unfair market harbour when their entire business model another is becoming increasingly chimerical. the 19

ISSUE 399 21.12.16 SCOTT COHEN, THE ORCHARD, continued REVIEW “I recognised something in 2016 that was “I don’t think so. What we have seen is that “No – I think all of them are positioned our industry,” new – which is how much siloed behaviour you buy companies. The major labels weren’t perfectly. Spotify is in the growth phase of he says of where there is. Previous years we would have run best at 360 so they bought merch companies the company so it has investors saying, ‘We we are at the end of campaigns across multiple platforms because and got really good at it. I don’t see any issue don’t care about profit and loss; we care 2016. “When you take a step back and look at it would influence something. Now we just around that,” says Cohen. about growth. That’s why you have this the last 20 years of digital, there have been don’t see that,” he says. “Pandora don’t have a subscription service money.’,” he says. a few bumps and hiccups, but it has been “Now we run these campaigns in these so they looked around and bought one in “I think it’s a very naive way to view growing, growing, growing.” platforms only for those platforms. Facebook Rdio. I don’t see that as an impediment – companies – solely through the lens of Still, Cohen thinks that the music industry isn’t driving Spotify and Spotify doesn’t drive particularly when the companies we are whether or not it’s profitable when that’s must not rest on its laurels, but must instead Amazon and Amazon doesn’t drive YouTube talking about are cash-rich. Apple, Facebook, not the goal. The goal is to get from 50m continue shifting and adapting to the new and YouTube doesn’t drive Apple Music. They Amazon, Google, Spotify – they don’t have a subscribers to 100m subscribers; not stopping conditions. Indeed, he thinks any industry all seem to be somewhat independent of cash problem.” and taking profits out. That is not why they that gets too comfortable today will be each other. That was, to me, a big shift in the Spotify may have a profitability problem invested in the company.” roadkill tomorrow. overall market.” though: isn’t that something to worry about Cohen believes that for now, profitability “Digital continues to morph. There was Cohen thinks that the key players here given the resources at the command of the is the wrong success-metric to be judging a time when ‘digital revenue’ meant the will increasingly stop being specialists and four rivals named above? streaming services on. Crazy Frog ringtone. Then it meant iTunes instead become generalist hubs for wider “People who are not in finance find that downloads. Then it meant subscription music consumption and monetisation, as well a challenging concept – if a company is not revenue. It is going to mean lots of things,” as a means to own the entire music consumer making money. If you are running a corner he says. experience from soup to nuts. shop, I get it; if you are not making a profit, “But it seems to go in one direction and “If Spotify is first and foremost a place for you can’t pay the rent,” he says. it seems pretty healthy; but just as soon as all the music, they can then layer in discovery “These companies don’t have any problem we get comfortable with who are the main so you don’t have to discover music on, say, paying their bills. It’s not like they are not players, somebody else is going to enter the Facebook and go to Spotify; you discover it making profit and can’t pay their bills; it’s market. Because that is always what happens in Spotify. You will see the silos continue to choosing to use their cash resources by and something is going to disrupt us.” add the elements that they don’t have so that paying bills and investing into growth.” Cohen is also one of the industry’s they really become full-stack,” he says. “If Spotify wanted to become profitable enthusiasts about augmented reality (AR) “Each silo will add the things they don’t tomorrow, it could stop its marketing and technology, which he also thinks the industry have. So maybe you will see Facebook and development and instantly be profitable,” must take seriously today in order to reap the Twitter add monetisation. Right now you are he adds. benefits tomorrow. discovering and surfacing content there, but “They are fine. Amazon can do that with “We haven’t even scratched the surface you make the money somewhere else. If you different sectors of its business. To look at with things like augmented reality. Look could also make the money inside those silos, profit and loss is the wrong way to view those at Pokémon Go; we have to start to think then it keeps people in that ecosystem.” companies. All those companies are viewed in how the music industry would use those This echoes the recalibration of the major terms of their valuation.” technologies,” he says. record companies a decade ago to become Even against unprofitable companies and “You have to start using [new technology] 360 degree entertainment companies. But the challenge of the value gap, Cohen feels it to understand how the future use case will

report will music and social platforms have the right is important to use the long view to kill off any look. Forget about the money and start expertise to expand into new areas, or will dominant (or lingering) pessimism. playing with it. Start using it. If you are not, there be a metamorphosis struggle? “Overall, I feel incredibly optimistic about you are missing out.” :) the 20

ISSUE 399 21.12.16 Jen Long REVIEW Music editor, Dice

“We’ve got some algorithms, but we’ve also the ticket revenues going up, the number of the first Google AdWord that takes you to got great taste! That’s the beautiful merits of tickets going up and the number of people Viagogo, and halfway through the process human curation and tons of data…” using the app going up has been exciting,” realising that these aren’t primary tickets Jen Long is talking about ticketing startup says Long. after all. But there’s still quite a distance to Dice’s desire to champion new bands and Meanwhile, Dice has expanded beyond go on this.” help them find an audience, rather than just the original hand-curated list of gigs, with a Long is also enthusiastic about the impact sell tickets to their gigs. section of its app offering tickets for concerts of Dice’s two ‘Girls Music Day’ events in 2016, That’s epitomised by its talent-spotting that each user might like, based on their past which brought together 14-24 year-old women annual live awards, which have given early purchases. Another example of algorithms for talks from musicians and industry figures, nods to the likes of Wolf Alice and Slaves, bringing human recommendations to a as well as networking. A third event is already as well as artists like Rag’n’Bone Man, The wider audience, rather than replacing them planned for April 2017. Big Moon and Little Simz who mainstream altogether. “It was about doing something positive. This year it’s been so hard to industry polls see as tips for 2017. “I know there’s a more-righteous section of Let’s find a group of 50 girls who are under break an artist. Look at any chart, Long is excited about the potential for a the music community who think ‘algorithms 24, and give them a day listening to a bunch startup like Dice to support emerging artists, are terrible: we should not be told what to of amazing women who love their jobs being and it’s probably going to be whether through its awards or its in-app listen to by computers!’,” says Long. “But super-inspirational,” says Long. topped by Drake” recommendations. in reality, it’s just discovering more music. “It wasn’t about dwelling on how it’s hard “This year it’s been so hard to break an It seems crazy to me to shut the door on a being a woman, how this or that might go artist. Look at any chart, and it’s probably whole new world of discovering great things.” wrong. Horror stories and negativity was going to be topped by Drake,” she says. “It’s Dice has also been involved in the UK’s the whole rhetoric at times this year, but we great that the music industry is growing debate around secondary ticketing, although wanted this to be positive and encouraging.” again, and that streaming is helping recorded- Long thinks that if legislation is passed to Dice joined other groups – see Lara Baker’s music grow, but there is still so much to be outlaw ticket-buying ‘bots’ used by touts, it interview elsewhere this issue – in trying to done to help new artists who aren’t at that will spark some tougher conversations about foster collaboration, support and mentoring level: who aren’t dominating the Spotify chart the secondary market. networks for women in music. every week.” “If bots are illegal to use but tickets still “The funny thing was seeing the 14 and 15 Dice launched in September 2014, initially end up on the secondary market, more people year-old girls in the breaks chatting to each focusing on selling mobile tickets without a are going to start realising ‘hey, something’s other. ‘Let’s go downstairs and get a cup of booking fee to London concerts chosen by its not right here’. It’s so murky, you really don’t tea and a cake’. That’s them learning how to editorial team. 2016 has been an exciting year know where those tickets are coming from network!” says Long. for the company, from raising $6m of new half the time,” she says. “In four years time they can go out and do

report funding in August to providing ticketing for “But the younger generation are more that in bars. And maybe in 10 years time we’ll the Apple Music Festival and Adele concerts. demanding of transparency, and they are be seeing the impact of this kind of thing in the “Just on a month-to-month basis watching more savvy too: they’re not clicking on industry and at the top of festival lineups.” :) the 21

ISSUE 399 21.12.16 Elizabeth Moody REVIEW VP of global content licensing, Pandora

Next year for Pandora will be defined by a changing in the US in 2015 which meant that going to be very hard for new entrants in the huge bet – moving from the internet radio the company needed to start to put in place, webcasting area.” market it dominates (78.1m monthly active if not quite a pivot, then certainly a huge The company, due to licensing issues, has users as of Q2 2016) in the US and leaping evolution of what it was and where it saw its been primarily a US phenomenon (although into on-demand subscription streaming. 2017 place in the market – both today and in the it is also live in Australia and New Zealand) could also see proper international expansion. coming years. and has the sort of user numbers that Apple “It’s been a big year for Pandora,” says “We had a rate decision at the end of Music, Napster, Deezer and others would Elizabeth Moody, the company’s VP of December last year which dictated how non- desperately love to even come close to. global content licensing, with no sense of interactive radio services are going to be – or Licensing issues and directly negotiating exaggeration. “Pandora has gone through not able to be – monetised in the future,” she rates with labels and publishers has also quite a transition this year.” said of a key trigger in its refocusing. “It’s a stopped it going into on-demand, with the It’s a rate we felt would allow This was partly due to licensing structures rate we felt would allow us to grow. But it is webcasting rates it adheres to now being a us to grow. But it is going to be sore point with US content owners. very hard for new entrants in the Pandora is, in digital terms, an old timer – webcasting area” being founded in 2000 – and has witnessed many changes in the market, notably the rise and decline of iTunes, the emergence of YouTube and the shift into streaming. Its Music Genome project was one of the first attempts to weave together the human and the machine in terms of discovery and recommendation, something that Apple Music and Spotify like to blow their own Free on-demand is not the trumpets about but which are far from new. right way to get people onto “We are transitioning from a non- interactive service to, early next year, subscription. The industry delivering what we think is the first focus right now is on getting true premium Spotify and Apple Music people to pay” competitor,” she says. There is an argument that Pandora

report seriously dominates its market category but has left it far too late to go into on- demand subscription streaming. Even the 22

ISSUE 399 21.12.16 ELIZABETH MOODY, PANDORA, continued REVIEW SoundCloud, by comparison a much Even younger company, managed it this though year – although it is still refusing to Pandora has been, publish its numbers which is fuelling for most of its users, a free service rumours that uptake has been minimal. paid for by ads (it has had an ad-free Racing into an unproven market is version for several years, but the bulk risky and we have already seen Rdio of users are accessing it for free), she (whose assets Pandora acquired for $75m is not convinced on the viability of ad- last year) and others run out of money. supported on-demand streaming. Slow but sure might seem the better “I do believe that free on-demand option, but equally leaving it too late can is not the right way to get people onto mean you are left choking on the dust of subscription,” she says. “The industry multiple competitors. How does Pandora focus right now is on getting people hope it can find a space in this crowded to pay. We are seeing that customers market? By not fundamentally changing are comfortable with streaming and seems to be the strategy. that is the way it’s going. We all know “We are by far the largest streaming streaming is the future. The way to service in the US – with 100m quarterly make money from it is to drive people active users who are using it several into subscriptions; but if you make times a week,” says Moody. “What we are everything available for free, that makes going to do a little bit differently is still be it that much harder.” Pandora! We will stay true to ourselves With all the industry talk around and remain primarily a radio product, but the value gap in 2016, she feels that with the ability to go on-demand when 2017 could be less about words and you want to.” more about actions from the labels To that end, Pandora is looking to be grumbling about poor payments from as sit back in its on-demand incarnation free or freemium on-demand services. as it is in its sit back radio version and, by Something, she feels, is going to have doing so, scoop up consumers not yet lured years, Pandora is on an artist-pleasing charm exclusives more than the artists who may end to give. over to on-demand subscription streaming offensive, exclusives are not part of the deal. up alienating a good set of their listeners and “There is still so much free on-demand rather than trying to poach users from its “One of the biggest themes of the year forgoing important revenue streams.” and I am not sure how long the labels will soon-to-be rivals in the space. Or, at least, has been exclusives, with artists holding It is also important to remember that allow it to continue,” she says. “If you look that’s the plan. their music back from streaming entirely, the jump into on-demand streaming could back to three or four years ago, the artists While some services – mainly Tidal and like Adele, or doing what Jay Z, Beyoncé and make Pandora the biggest full-stack service were very supportive of it. That has changed Apple Music – doubled down on exclusives Kanye have done with just putting music on out there. When asked what it will be doing as the artists are concerned about revenue in 2016 as a means of growing market share, Tidal or Frank Ocean has done with Apple about the non-audio aspect of this – namely and see they are not going to make money Pandora is firmly of the belief that exclusives Music,” says Moody. ticketing – Moody hints it will take a back seat with all the free on-demand services. That’s

report are bad for the consumer and bad for the “It remains to be seen whether exclusives for a while until the on-demand side of things going to be the big issue for the end of 2016 market. So even though, following public are a good long-term strategy for artists. beds in – but will then become a bigger part of – free on-demand with at least some kind of attacks from the likes of Pink Floyd in recent They seem to benefit digital services with the the offering. windowing.” :) the 23

ISSUE 399 21.12.16 Ed Peto REVIEW MD, Outdustry

Thanks to a combination of have been reluctant to releases are not available for premium government action to tackle throttle their free tier streaming during the download window piracy and continued innovation for fear of losing unless you have paid for the download from digital services, China as a users to rivals’ non- and are a premium subscriber, thereby music market is attracting more throttled offerings,” devaluing the premium tier,” he says. optimism from the industry than says Peto. “Also, when the window is over and the at any point in recent history. “Secondly, album moves into the streaming free/paid That optimism is something that we have seen an structure, the hardcore fans have already Ed Peto, MD of China music increasingly-wide bought the album and the overwhelming industry services company Outdustry, adoption of a paid- majority of casual fans have skipped the recognises when he looks at some of the download model for major whole shooting match and turned back to key trends in 2016, although he also thinks releases. In this model the illegitimate sources of some form. Both We are slowly seeing the end the market has created some new, thorny album is windowed as an exclusive paid cases seriously undermine the premium of the ‘Chinese consumers challenges for itself. download, normally for three months, subscription funnel.” “We are slowly seeing the end of the frequently as a full album only, at a price It’s a dynamic that’s particular to China will never pay for music’ ‘Chinese consumers will never pay for point of roughly US$2/album.” in 2016: Adele aside, few albums in the dogma” music’ dogma and are now firmly in the era “While the overwhelming majority west now make their debuts purely for sale of ‘how quickly can we make it happen?’,” of fans will simply find the album for rather than for stream. Peto says the issue he says. free via some other illegitimate source, is not enough to make him gloomy about The transition has had surprises along enough people – occasionally breaking the prospects for paid subscriptions in the way. Peto notes that after the initial the million barrier – will now pay to make China though. introduction in 2013 of freemium models, the endeavour worthwhile, certainly “While free tiers of freemium services 2015 was expected to be “the year the when when you set these download price are seen as being on-ramps for the hard- penny dropped in terms of more content/ points against the low per-stream minima to-impress digital consumer in the west value being pushed behind the paywall and available in the market.” - involving a good deal of user acquisition more restrictions placed on the free tier” in These paid-download album releases heavy lifting - the vast majority of Chinese order to drive subscriptions. can provide mini-windfalls for labels, digital consumers are already on the free “2016 has seen those efforts stalling to which may represent “a kind of win” in tier via one or more of the local freemium a degree, mainly due to two quirks. Firstly, the march to change consumer habits in behemoths,” he says. the market-wide effort never achieved China. However, Peto thinks there may be “All that remains is to convert this full market-wideness - largely due to a a downside to the strategy too. audience into premium subscribers within

report difference of opinions between Tencent “It actually represents a huge distraction their existing ecosystems of choice. Easier and Ali Music Group - the result of which from the wider aim of converting fans into said than done, but, in a sense, China has a is a Mexican stand-off in which services long-term subscribers. These frontline head start on the west in this respect.” :) the 24

ISSUE 399 21.12.16 Golan Shaked REVIEW Chief commercial officer, Deezer

At the end of 2015, things didn’t look seen ourselves making a transition in the last too good for Deezer, which cancelled its year or year-and-a-half where we really grow planned IPO that October blaming “market up our direct subscriber base,” he says. “That conditions”. growth is actually the biggest indicator of the 2016 has been more positive, helped by health of the business.” the €100m that Deezer raised in January from In fact, Shaked says Deezer has seen major shareholders Access Industries and “double-digit growth” in that metric in 2016, Orange. as the company reorients its business. He is Chief commercial officer Golan Shaked, keen to stress that telco deals are not dying who joined the company in January, sees out just yet. plenty of opportunity ahead for Deezer, Still, Shaked sees 2016 as a year when When you look at awareness of despite well-resourced competition from the streaming partnerships broadened out streaming in general, you realise likes of Spotify and Pandora, let alone tech beyond telcos to hardware makers like Sonos that many people don’t even giants Apple, Google and Amazon. and popular brands – Deezer’s latest partners understand the concept yet” “When you look at awareness of streaming Manchester United and Barcelona included. in general, you realise that many people don’t “All three are important. Telcos are the even understand the concept yet. There are ones that get you awareness and get you in; a lot of people who still really need to be the hardware gets you very native integration; educated about what streaming is,” he says. and the big brands bring you out to where “The fact that companies like Google, consumers are,” says Shaked. like Apple, like Spotify are paving the way users” – a figure that includes subscribers and With the bulk of its management team and creating the awareness for the industry: free users. joining the company in 2015 and 2016, Deezer although we see them as great competitors, “Numbers are always a tricky part of is gearing up for the competition with its Companies like Deezer, like we also benefit from them stepping in, our business. You do a promotion and your bigger, richer rivals. Spotify, like potentially Pandora because companies of their size definitely numbers jump by 30%, and that’s when you Shaked sees Deezer’s Flow feature, which increase the awareness of music-streaming in issue the press release,” says Shaked. “We’ve provides a constant stream of music based on will set the tone as to what the population.” got over 10 million active users, but we don’t the listener’s tastes and other signals, will play innovation is about” 2016 was the year when Deezer shifted the publish the paying users [figure] because we a crucial role. public figures it put out. Until the autumn, the could bump this number up just before I give “Spotify and us and Apple have created company’s boiler-plate description mentioned you the data.” playlists as something that represents music

report that it had “over six million subscribers”, but “We were a very telco-driven company up streaming, and that’s fine: playlists have got now the company has shifted to saying that until two years ago. We still are: we still have a their advantages, but they also have their it has “more than 10 million active monthly lot of our users coming from telcos, but we’ve limitations,” he says. “Users don’t necessarily the 25

ISSUE 399 21.12.16 GOLAN SHAKED, DEEZER, continued REVIEW know what they want to listen to: sometimes completely from it’s like standing in front of an open fridge and the free offer? I would deciding what you want to eat.” say in some areas of the Hence Flow, which Shaked sees as part world yes, and in some, not yet. So I think of a shift towards lean-back listening that is it’ll certainly be a conversation piece next partly influenced by consumer habits, but year between the labels and the streaming also by the new interfaces seen in devices like services.” Amazon’s Echo. Shaked also sees 2016 as a big year for the “By the time we educate consumers about growth of streaming music in Latin America, streaming and playlists and search and the where Deezer has been present for some lean-forward experience, the market will time, and is planning to double down on evolve into a lean-back experience. We see a localisation: for example, creating a similar lot of devices, not only for music, which are offering around gospel music in Brazil to its moving towards lean-back,” he says. grime channel in the UK. “If Flow is able to deliver that experience of He talks about how Latin American one-click [music] – which might change from as to what innovation is about. I think just to be replaced by the ‘value gap’ rows countries leapfrogged from feature phones a click to a voice command – that delivers you’ll see the small companies being much around YouTube. to 4G-capable smartphones, helped by the right music for the right time for the more adventurous, much more willing to “Remember that in the last year and a half, massive investment in the infrastructure by right context, we think that will be a massive experiment.” the labels started making serious money from the telcos, and how this is now having an advantage.” This, of course, could make those smaller streaming… The numbers are starting to be impact on music. With Apple, Google and Amazon companies acquisition targets for the biggest significant. It’s easier to live with the freemium “What you’ll see in markets like Latin poised to play a major role in the future of fish in our industry. model when you start seeing the growth of America, but also the Eastern European streaming music, does Shaked feel labels “Will the market eventually consolidate to premium,” he says. markets, even the African market, you’ll see are giving Deezer, Spotify, Pandora and big players? Probably. Every industry has a life “The labels, I think, are recognising that the streaming will become something other pureplay services the support they cycle, and eventually you’ve got companies the benefit of doing it, but it will still be a that people will just leap into immediately. I need to compete? that have the bandwidth to go and dominate,” discussion. It will always be a discussion.” think some of them will desert the CDs and “Not yet. I think that the labels are still in he continues. “Should you eliminate freemium? The risk go straight to streaming,” he says. the business of making money from music, “What delivers value in this industry is that the market is not there yet, and then “The streaming platforms also provide and naturally it would be a mistake for them is of course a brand, but also innovation of course if you eliminate it, you go to people data. I don’t know how much data the labels not to sign the deals with the likes of Apple around product and user engagement. User who have alternatives, and maybe go back [previously] had about consumption in South and Google and Amazon,” he says. engagement is going to be key, so if we are to downloading music illegally or to sharing America, or countries that were not your main “These are massive companies, they able to deliver an innovative product that sites,” he adds. ones for gigs and big shows.” promote streaming and they generate proves to be engaging, even if it’s for a certain “Then, you go to markets which are a “You can now look at streaming data in massive amounts of revenue. But there is niche in the market, I think that alongside the bit more mature like the US, and you see Latin America and map out the areas for a a question mark whether these companies growing Deezer brand we would become an companies like Apple who are actually not certain artist where you know they will do would really get us to where we think music asset. Either as a standalone or as part of a giving you a free service. They are giving well, because you’ve seen the engagement. streaming needs to evolve to, from an bigger thing.” you a three-month trial with a committed That opens up for artists and their

report innovation point of view.” Shaked also thinks that 2016 was a year in payment solution… and people are actually management companies the entire world: “Companies like Deezer, like Spotify, which industry arguments about the value of buying it.” they can use that data to expand beyond the like potentially Pandora will set the tone freemium streaming eased, even if that was “Is the market ready for switching off big capital cities.” :) the 26

ISSUE 399 21.12.16 Beatie Wolfe REVIEW Artist

“I had no plans to make a musical jacket or That’s been the intention with everything But the music still comes first,” she says. do a deck of cards. Or even make an album! I’ve done. When music has become quite “The music for me is the heart of But then I was at an event and met this compressed, both literally and creatively, everything, but that’s actually why I’m rock-star tailor who’d just moved into Yoko how do you bring back some of the stuff doing a lot of these weird and wonderful and Lennon’s first home…” that gives it that emotional charge?” things. I want people to be excited about Beatie Wolfe is telling music:)ally about Wolfe is one of several artists this music, as I am.” the train of events that led to her most year to have talked about digital music “The words, the music, the production: recent album Montagu Square, which was in the context of vinyl – or rather, of the that for me is so important and should released as a deck of cards with integrated “ceremony” of playing a vinyl record. never be compromised in any way. NFC chips, before being transformed into a “You’d open the record and think about The music comes first, and the tech wearable jacket. the world of the album. You’d put yourself stuff I see as presentation: an extension The British singer/songwriter is an in a frame of mind where you’d create time of the music.” How do you bring tangibility, example of an artist who found 2016 to to listen to it, without tons of things going Wolfe has been following the debates storytelling and ceremony be fertile territory for partnership with on in the background,” she says. around artist and songwriter royalties from technology companies to find new ways “So how do you bring tangibility, streaming services, but says her main into a digital music experience?” to get her music heard and talked about – storytelling and ceremony into a digital concern is less about whether to stream or without detracting from the songs. music experience so that people want to not to stream, but rather how to build up a “When you do something that’s a switch things off and make time for it?” body of work that fans will want to stream gimmick, people see through it. When 2016 was also the year when Wolfe in the first place. there’s a really great narrative, a reason forged a partnership with Bell Labs, “I’m putting a lot of time into this new for doing what you’re doing, it can be the Nokia-owned research company record, even though a lot of people are so strong,” says Wolfe, whose exploration with a storied tradition of technological saying I shouldn’t. ‘Everyone will just of tech led to her nomination as best inventions. listen to the one track that gets picked digital artist in music:)ally’s awards in She used its “human-digital orchestra” up for that popular playlist’. But it’s more November. platform to incorporate crowds into her important than ever to put together that “I never saw my musical career as being live performances, and is plotting a new catalogue of work,” says Wolfe. something limited to writing songs, being project with the company for her next “People who hear the song on the in the studio and performing. I saw it as a album in 2017. playlist can then go and discover the rest 360-degree artistic vision. I really wanted “We are creating an entirely new way to in their own time. The only worry I have to extend the music into other spaces, but experience an album, that will be streamed about the generation that we’re living in only with the right partnerships and the out of one of the quietest rooms in the at the moment is whether in 15 years time

report right fits,” she adds. world – the anechoic chamber in Bell Labs. there will be really great albums made – if “It’s a way of trying to bring back some They will be inventing new technology for there’s not so much reason to make great of the art of music in the digital age. the release: it will be a complete world-first! albums?” :) the 27

ISSUE 399 21.12.16 Kevin Brown REVIEW Head of European label relations, Spotify

“At Spotify, we have had a great year,” playlists in the world are produced in-house, eclipsing that of UK artists,” says Brown. says a predictably bullish Kevin Brown, the raising fears that Spotify is becoming too “The reality is that US repertoire has been company’s head of European label relations. powerful a gatekeeper. incredibly strong this year, and there are a “The numbers speak for themselves.” On top of that, some – notably Geoff number of factors aside from the undeniable Those numbers are the 40 million paying Taylor of the BPI – are worried that North quality of it driving its success – not least of subscribers the company announced in American acts are dominating many playlists, which is the globalisation of culture generally September and more than 100 million users and that is pushing domestic repertoire to the and connected nature of lifestyles.” in total. It is expected that the company margins. Brown, unsurprisingly, disagrees. “The impact of our global playlists is will soon announce 50m subscribers: sharp “Our global playlists are one factor among relatively overstated by people who do not growth despite the arrival of Apple Music last many, and I think they have been used as an have knowledge of the statistics that show August, and its rise to 20 million subscribers. all-too convenient scapegoat for the success the reality of the impact. We are invested The impact of our global “Things are pointing in the right direction, of US repertoire in the UK to this year heavily – not just in the UK, but in many playlists is relatively overstated and I think 2016 was the year that streaming by people who do not have became the business. It has become such a knowledge of the statistics” critical part of the business that it is no longer a specialist sport or a niche activity; it is mainstream,” says Brown. “A corner has definitely been turned in the industry relationship with streaming as a whole. It is core to the business and the numbers are self-evident. Everything came together this year.” Indeed, artists that were previously We believe that exclusives are holding the service at arm’s length are slowly bad for fans and bad for artists. warming to it. Radiohead’s full catalogue is now on the service, and the band came At the absolute best, it is a zero- close to windowing A Moon Shaped Pool for sum game” subscribers earlier this year. Coldplay have just put out an exclusive live EP recorded at the company’s London offices, meanwhile.

report One area where Spotify is facing criticism concerns the power of its playlists: the lion’s share of the most popular streaming the 28

ISSUE 399 21.12.16 GOLAN SHAKED, DEEZER, continued REVIEW markets – in local curation, focusing on local inextricably in our big data Tidal and Apple tastes and local artists,” adds Brown. linked, to benefit Music (Beyoncé, “That more than balances out the particularly with artists and Drake, Frank Ocean, impact of global playlists. The amount of Facebook and rightsholders. Kanye West, Rihanna, Chance The Rapper) consumption in a market like the UK from Twitter, as our Our marketing is something Brown is not exactly enthused Today’s Top Hits, our biggest playlist globally, integration with efforts – both about. is relatively small compared to our flagship those platforms on-platform “We believe that the biggest benefit for UK playlists.” is so seamless,” and off- fans and artists is for music to be available By way of illustration, he says that artists he says. platform – everywhere where fans want to consume it. in one country are finding their music taking “We see have become We believe that exclusives are bad for fans off in other markets that were previously streaming increasingly and bad for artists. At the absolute best, it is a (for the most part) closed to them. Spotify is happening more zero-sum game,” he says. seeing German electronic acts booming in from embeds sophisticated “But generally any short-term benefits Brazil and Mexico, for example: one example on those and more that may be derived are overwhelmed by the of a much richer musical cross-pollination platforms and targeted. That’s greater long-term negative consequences. that is happening on Spotify. that generates revenue for artists from enabling a more direct connection between The real core guiding principle is artists’ music “There are huge dividends for artists to audiences outside of the core Spotify artist and fan so that fans of an artist are should be heard by as wide an audience as benefit from the global nature of our platform. user base. It drives more consumption more aware of artist activity – a good example possible. We believe that music should be There is a lot of focus on the homogenisation and builds audiences for those artists. If being gigs,” he says. widely available through legal services for of the top end of the charts which is being anything, I think the whole online world is “We recently announced a relationship fans to consume wherever they want to.” blamed on global platforms like ours,” he says. more inextricably linked than ever.” with Ticketmaster where their shows Brown feels that acts being on all “That is a cultural phenomenon generally Brown also suggests it is a generational display alongside the existing Songkick services will benefit everyone, but also at the moment – the globalisation of shift to be omnivorous when it comes to concert listings within Spotify. This is argues there is an important symbiosis everything, not just music. The flip side, which digital platforms, and that music is the thread another significant enhancement to our happening as streaming becomes the is very exciting, is the myriad opportunities running through them all. ecosystem in helping artists connect with mainstream – and it is only going to for artists anywhere in the world to have their “With younger music fans, you’ll see them and build audiences.” accelerate next year and beyond. music heard and monetised by audiences jump from platform to platform, and music “The really interesting thing to me this “We are all about building audiences for all over the world. That is a much more is the constant that underpins their use of year is to see the virtuous circle between artists and breaking artists locally, regionally interesting story. They go hand in hand. You different social media and different apps. The audiences on streaming and the live and globally. We will be continuing to harness can’t have one without the other.” kids consume music in whatever environment business,” continues Brown. the power of the platform to advance artists’ Elsewhere this issue, Scott Cohen of The they are in. Increasingly that is underpinned “Across the board, the creative community careers through 2017. We have only just Orchard talks in detail about a process of by Spotify – such as through embeds on is seeing that manifest itself – building an started unlocking the capabilities of the ‘siloing’ that he believes is happening, where social media and via our API.” audience on Spotify who then buy tickets platform as we build more sophisticated tools social media and streaming platforms are Brown is also keen to flag up just how to go and see shows – and then they stream to market artists to our users,” he says. almost becoming fiefdoms in their own right, powerful Spotify is as a marketing platform, more music on Spotify. The effect of that is “We are only going to get better at it, with little impact on one another. and how that is having a measurable impact growing audiences and revenue for artists at and we will benefit more artists’ careers Brown politely disagrees and suggests on not just building acts in the streaming all levels.” at more levels – big and small. That is our

report Spotify is becoming more, rather than less, space but also helping them unlock revenues While, as you might expect, keen to mission with the creative community - to connected to other platforms. in other areas – most notably live. stress the positives of the year, the trend connect artists with fans and help build “I think activity on other platforms is “We are finding ways to unlock the value of long-term and short-term exclusives on audiences and build careers.” :) the 29

ISSUE 399 21.12.16 Syd Lawrence REVIEW CEO, We Make Awesome Sh

Syd Lawrence is not quite betting the farm “I need to spend a week “We are seeing a lot of on chatbot technology being the next big coming up with the concept. that at the moment with thing in music marketing, but digital and We need to spend a week AI – with AI being this interactive agency We Make Awesome Sh’s doing the development. And big thing that apparently founder says it has great potential. then a week testing it. As you can just plug into The company has already built bots for well as other bits and pieces. something. No one actually Hardwell and Olly Murs, and is launching So it ends up that you have understands what that is or The Bot Platform to help other artists and made no money and you have what it means,” he says. “AI businesses get chatty with their fans and just had a lot of stress. Music marketing has to learn something because you have customers. Lawrence is no blithe evangelist budgets seem to be lower this year – to actually train it. Training something like though: he is well aware of the limitations except for the odd one or two.” that takes time.” of current chatbots. Lawrence also hopes that 2017 will see Lawrence is also not yet sold on We are getting lots of “Bots are never going to be able to be music executives looking below the hype Snapchat’s geofilters, even though a recent people asking us about VR, intelligent in the short run. They are also that often surrounds new technologies poll in our Sandbox report found that music not meant to be used out of context. They hailed as a potential revolution for music. marketers are enthusiastic about them. often with no budget” are meant to serve a purpose – whatever “AI and VR are the two things that have “They are expensive and the problem that purpose might be. I don’t see them annoyed me most this year, and the hype with Snapchat is that there aren’t any as this fully-powered machine that can with regards to bots and thinking they ways to interact with people on Snapchat,” respond to everything,” he says. are going to answer everyone’s questions. he argues. “The only way to do it is to “They are never going to be super- Everyone in the marketing bubble needs to go through their official channels. I think intelligent – and they shouldn’t be… They dial down their expectations,” he says. Snapchat is going to make a fortune. It’s serve a purpose and it’s about knowing “We are getting lots of people asking a great business model for Snapchat if what that purpose is.” us about VR, often with no budget. There marketers want to go down that route. But Lawrence thinks that the sports and was one client that had a lot of budget, I am too old and too grumpy for Snapchat!” retail industries are about to go heavy on but they wanted to make VR non-geeky. Lawrence highlights a wider challenge: bots, and he thinks that they will have I have to admit that I struggled with that. that of measuring the effectiveness of significantly bigger budgets than the music My opinion on VR is that it’s a cool piece of campaigns using whizzy new technology. business for this kind of technology. tech. For gaming, I can see it working really “Can you track the results? Do they “We are doing fewer and fewer music well. For other stuff, not so much.” generate any results? If someone can show projects, mainly because we realised that Lawrence is equally dubious about me that they totally make a huge amount we can’t do as many music projects as we people talking up areas like artificial of results, I would be impressed,” he says.

report once did in a sustainable manner. Most intelligence without really understanding “One of the biggest things we have of their budgets are less than £3k, maybe what they are, and how that technology learned this year as a company ourselves is £5k,” he says. might be deployed. that it is all about proving results.” :) the 30

ISSUE 399 21.12.16 Alison Wenham REVIEW CEO, WIN

“The third ‘c’ word is community. There is very majors and other industry stakeholders – “Another scenario is that the independents little antagonism across the world between was the growth of subscription streaming. will continue to steadily grow their market competing independent companies. They Opportunity or threat? Actually, a bit of both. share. It’s one of the most undiscovered celebrate each other’s successes.” “Certainly streaming is very valuable to the treasures in the musical world.” Alison Wenham, boss of trade body independent sector, and on the subscription Wenham’s argument is that in the Worldwide Independent Network (WIN), platforms we are over-indexing and growing. physical era, a lot of independent music is talking about the prevailing spirit of the We are also fans of the freemium tiers: we never got played on the radio or stocked independent music industry in 2016. think try-before-you-buy helps the industry by retailers, limiting the number of people (In case you’re wondering, the first and in terms of combating piracy,” says Wenham. who’d ever hear it. second ‘c’ words were ‘collectivity’ and “There are some concerns around the “It was a very crowded market: a finite ‘connectivity’.) way that playlists are being hyped over opportunity that the majors were very This community is unique in “This community is unique in the record radio as the tastemakers’ platform. The good at manipulating to their advantage. the record industry. They are industry. They are competitive, they fight majors are obviously very keen to control But if streaming is more of a consumer-led competitive, they fight hard, but hard, but they’re not adversarial. And they that part of the market, so it’s something industry, the independents are going to they’re not adversarial” share a lot that you would never find being we’re looking at closely.” thrive,” she says. shared amongst the majors,” continues A famous study by Record of “Why? Because they have always been Wenham, who recently moved across from the Day in March 2015 found good at finding good artists and working UK indies body AIM. that in the UK, independents with them. We are close to those Her weeks since then have been spent accounted for 51% of the streaming platforms, and they enjoy building a small permanent team at WIN, tracks in Spotify’s most the relationship they have with the and preparing for a year of “issues and prominent in-house playlists. independent sector. It’s a fertile campaigns” ahead in 2017, working with the That was good news for the one, and there is much more 29 local trade-association members of WIN’s indies, but as streaming has we can do together.” There are some concerns around network around the world. become increasingly mainstream, In 2016, there has the way that playlists are “We are very well-structured to respond to making those playlists even been a lot of buzz threats or opportunities in the marketplace more influential, has that share around artists going it being hyped over radio as the wherever they may arise,” she says. “There been eroded? alone, from Chance the tastemakers’ platform” is a lot of sharing of best practice and “It has actually stayed very Rapper’s global success knowledge of how to craft those responses consistent. It is possible that as to the continued and campaigns. The collective experience is streaming itself becomes more resurgence of grime in

report now very rich, and we can tap into it.” popular, the independents’ share the UK (and beyond) One of the key issues for the global will be slightly more diluted, but that’s – a genre where many independent community in 2016 – as for the only one scenario,” says Wenham. artists still work with the 31

ISSUE 399 21.12.16 ALISON WENHAM, WIN, continued REVIEW management and a digital distributor rather to terrestrial radio at best,” she says. general terms the law, is an inconvenient of the market is than a label. “The value gap is real, and it hurts truth, but one that pre-existed the invention independent, and if “Artists have an incredibly wide choice everybody apart from YouTube. I don’t think of the internet,” she says. you take outliers out, in how they come to market and how they they have done a great job of explaining why “It’s rather more beholden unto the tech you could argue the market share is even engage with fans. It’s never been like this they should have safe-harbour protection industry to get this right than for the law to higher,” she says. before, where you could have a Skepta, in order to run a business that has become move aside: than for decency and human “It obviously doesn’t help the majors a Stormzy or a Chance the Rapper,” says a behemoth in the music industry, at the values to move aside for the pursuit of profit.” when they’re negotiating their deals, but Wenham. expense of everyone in the supply chain from As she looks forward to 2017, Wenham is I didn’t want it to. I wanted to help the “They are surrounded by good people artists to other services.” keen to build on WIN’s launch this June of independents. Many times we’ve found that providing a range of services. It’s a new way With the European Commission its ‘Wintel’ report, which analysed the global the independents tend to be the last to be of running a music business. One of the nicest still working on the final version of its market share of the independent sector. The licensed, and that the services are looking at a things this year was the speech Stormzy modernisation of safe harbour rules, Wenham report claimed that this share was 37.6%, lower market-share than is correct.” gave at the AIM Awards: he understood that accepts that it is not the EC’s job “to transfer accounting for $5.6bn in 2015. The figures may also play into another everybody in the room was cut from the same revenue from one industry to another, from WIN is just starting work on a follow-up, looming debate for this community: how cloth as him. Everybody was independent.” YouTube to the music industry”. which Wenham hopes will be published in charts around the world are evolving in the What about 2016’s other big industry trend: However, she sees a renewed appetite September 2017. She also suggests that the streaming era. It’s something Wenham raised the ‘value gap’ debate and continued tension from legislators to stand up to large first report has already had an impact. regularly in 2016. between rightsholders and YouTube? technology companies, Google included. “It has generated a lot of interest. The “The charts concern me. Whether the Wenham is a veteran of such battles: in “What the technology industry is facing services are interested in it, and we needed charts are relevant going forward is a 2014 she spearheaded independent protests is the fact that copyright, and also in more to put that number out there. Nearly 38% question I’m not capable of answering, but if about the terms in licensing contracts sent they are, the decisions that have been made by YouTube to indie labels for its (at the time) over the last year and a half have favoured in-development music subscription service. the majors’ business model at the expense of “I was told that Larry Page was allergic independents,” she says. to press. So I advised them to get some Among the decisions that Wenham is very very strong medicine, and give him concerned about are chart methodologies – my number,” was one of Wenham’s press- as in the US – that equate a certain number conference zingers back then. “Because if of streams to an album-equivalent sale. he’s allergic to press, he’s going to get a very “It’s something I’m still struggling to very serious dose of hives.” understand, and I’m not sure whose interest Two years on, what does she think of the it’s serving in the long term. It’s certainly not ‘value gap’ debate in 2016? Wenham says serving independents’ interest,” she says. she thinks that the music industry has “been Radio is also a potential headache. pretty effective” in arguing its case for reform “Traditionally that’s been where repeat of safe-harbour legislation. listening has established the popularity of “It’s a problem of relativity. This is not a song. Things that are new always take a a radio service, although YouTube would little time to embed, so how does any song

report like to describe itself as a radio service. have that time in the streaming world?” says It’s on-demand, end of. That’s where that Wenham. “That’s something the streaming conversation stops dead. Yet its rates are akin services need to get their heads around.”:) the 32

ISSUE 399 21.12.16 Lauren Wirtzer- REVIEW Seawood Head of music partnerships, Instagram

The last time music:)ally caught up with Lauren Wirtzer-Seawood in late 2014, she was head of digital at Parkwood Entertainment, the company that functioned as management firm and creative studio combined for its CEO, Beyoncé. Back then, Wirtzer-Seawood explained why her boss was keener on Instagram than Twitter. “Beyoncé really prefers to Artists like that idea of being able communicate in images. It’s very hard to say to share in the moment, without what you want to say in 140 characters, she feeling that the content lives on said then. forever” Fast forward two years, and Wirtzer- Seawood is now working at Instagram as its head of music partnerships, helping a wide range of artists make the most of Facebook’s photo and video-sharing subsidiary. It has been a busy year. 2016 was a year when Kanye West joined Instagram (although yes, Justin Bieber left it); and when Drake, it as an essential tool as an extension of front of fans, and interact with them around it. Radiohead, Zayn Malik and Beyoncé were their creativity,” says Wirtzer-Seawood. “Previously when album artwork was Selena Gomez’s posts are very among the artists announcing new projects “They cherish that opportunity to share that made, you had these third-party tools that relatable. She really understands and/or unveiling artwork on the platform. creativity directly with fans.” had to be enabled: you had mail, billboards, It was also a year when Instagram’s scale Artists being creative visually as well as point-of-sale, record stores. Now you can how to interact with fans” became apparent both in general – it reached sonically certainly isn’t a new trend: there’s bypass those things if you choose,” she says. the milestone of 600 million active users in a long history of musicians with singular “The best example of that is Radiohead, December – and specifically for artists like visions for their album artwork, videos and who chose to release their video content on Selena Gomez (103 million followers), Taylor Swift stage shows. Instagram directly to fans first this year. And

report (93.6 million) and Ariana Grande (89.6 million). But Wirtzer-Seawood suggests that what it was perfectly aligned with the Radiohead “We have just really seen across the platforms like Instagram have brought is a brand: cryptic, animated Instagram posts.” board that artists love Instagram, and see more direct way to put those visual ideas in The latter half of 2016 has also been busy the 33

ISSUE 399 21.12.16 LAUREN WIRTZER-SEAWOOD, INSTRAGRAM, continued REVIEW for Instagram in terms of new features. In tools that allow you to share all your join in and widen its August it launched a feature called Stories moments in between,” is how Wirtzer- reach. which, like the same-titled feature on Seawood puts it. “An artist can now “Fanning those Snapchat, enables users to post photos and give a full view of all the things they’re flames is really important, and I do the best videos that disappear after 24 hours. doing, not just the perfect moments.” I can to try to bubble up those moments to Then in November, Instagram added She says that the launch of make sure labels and managers are aware the option – US-only so far – for its Stories has sparked a wave of “off- of them. They’re incredibly smart people, users to broadcast live video within its the-cuff and behind-the-scenes” content on not just the content you may see in her feed: globally, who are now running digital efforts Stories section. These too are ephemeral, Instagram, which would not have previously she interacts in messages with fans on a fairly at labels,” she says. disappearing as soon as the broadcast been posted in its main feed. Stories has also regular basis too,” says Wirtzer-Seawood. “But you also see on the artist side, the ends, rather than being archived. become part of the impact-building process “It’s having that connection that really [younger] digital natives understand the Wirtzer-Seawood is enthusiastic about around album launches. Wirtzer-Seawood propelled her account to such a massive platform in an inherent way, oftentimes in the potential both features have for artists. cites Lady Gaga as a recent example. place. The way she uses the platform to a way that the stakeholders at labels and “I spent a huge chunk of last night watching “She posted these really raw behind-the- interact is spot-on. And her photos are management teams don’t understand if they Calvin Harris go live for about an hour in his scenes moments, with her family or her dog, beautiful!” didn’t grow up with it.” home studio,” she says. or listening to herself on the radio. Fans want Like any social platform, Instagram is For 2017, Wirtzer-Seawood is looking “He was fooling around with the boards to feel connected to an artist: they want to having to think hard about safety issues, even forward to working with more of those and a few instruments, and then kept turning feel like they can relate to what an artist is if it is seen by many artists, managers and digital natives within the artist and industry back to camera and asking fans if they had doing,” she says. labels as being a safer, less troll-y space than community, particularly around Instagram’s any ideas of what he should be creating in “Those regular moments that make artists some other platforms. live video features. the studio – then teasing that he would steal feel like they’re attainable friends. Making that Justin Bieber’s high-profile account “I’m really excited to see how creativity those ideas and use them!” connection is very important, and it’s why a deletion seems to have been more about evolves with the launch of live. We now “He was taking questions from fans too, lot of artists are so precious about Instagram: his personal demons, despite his claim have a whole new creative tool for artists to and it was all ephemeral: it went away if they won’t necessarily share access to their that “Instagram is for the devil”, but the connect with fans, and to share bits about you weren’t tuning in and watching it as it account with the teams around them. They company has recently introduced features themselves that they haven’t before on the happened. Artists like that idea of being able want to make sure it’s authentic and direct.” enabling comments to be turned off on platform,” she says. to share in the moment, without feeling that What about Instagram’s most popular individual posts. Wirtzer-Seawood is also intrigued to see the content lives on forever and ever, and artist – and indeed, most popular user of all – “We take safety very seriously, and whether more labels and managers turn to without having to be perfect or polished.” Selena Gomez? have given not just artists but everyone Instagram as an A&R platform, or at least a That’s an interesting cultural change for A startling stat: her most popular the opportunity to better control the more prominent signal in their overall talent- Instagram which, more than any other social Instagram post in 2016 has more than 6m conversation,” says Wirzer-Seawood. spotting efforts. platform, has often felt like it has an intrinsic likes – four times the 1.5m likes for Drake’s “We want to convey how important it is “Discoverability is interesting,” she says. emphasis on polished perfection. most popular post this year. Yet on Spotify, that Instagram is a safe space, and we want “We have a handful of people who are Those beautiful images helped define Drake has more than 36 million monthly to continue working on that so it retains its currently doing that in a compelling way: its identity in the early years, but to some listeners while Gomez has just over 10 million. position as a positive place for conversations.” just by being plugged into the platform people looked like a drawback once the rawer, Both are globally-popular artists, but 2016 has also seen Wirzer-Seawood talking and knowing how to comb through all of ephemeral Snapchat started making waves. Gomez has made a particularly strong to labels, managers and artists about fan the content in a meaningful way, and sort

report “Instagram traditionally has been the connection with fans on Instagram. Why? activity happening on Instagram, ensuring out content that is bubbling up. That is platform where everyone would show their “Her posts are very relatable. She really they know when their music is part of a meme definitely relevant on the label side with highlights, but now we have these creative understands how to interact with fans. It’s or popular video, and encouraging them to their A&R teams.” :) the 34

ISSUE 399 21.12.16 Ian McAndrew REVIEW Wildlife Entertainment

2016 was a year when – in the UK at least – “During the recent Culture, Media and resentment, media focus and parliamentary the artist and manager community stepped Sports Select Committee hearing into ticket interest suggest the timing is right for reform.” up several gears in their criticism of the touting, FanFair was among witnesses invited One challenge is that the artist and secondary ticketing market. That led to the to provide evidence to illustrate the scale and management community is not yet united UK’s Culture, Media and Sport Committee nature of the issue,” says McAndrew of the on these issues. While a growing number of recommending a new investigation into the latest developments. people will criticise secondary publicly, others issue, while in Italy and New York there were “This hearing alerted the Committee to a continue to cut deals behind the scenes to moves to crack down on secondary too. number of serious failings within the ticketing get a share of secondary profits. The launch of the FanFair Alliance market and provided clear evidence that No one is prepared to name and shame, campaigning body in the UK this July was consumer protection was not being observed but it’s an open secret that some big names a significant moment. Representative Ian or enforced. The committee is now reviewing are complicit in this. Does that represent a McAndrew of Wildlife Entertainment, whose these findings.” barrier for the anti-secondary campaigners to For the most part, the major clients include Arctic Monkeys, Royal He adds it is not just a parliamentary and get the regulatory changes they want? secondary platforms are not Blood and Travis, sees 2016 as a year where regulatory issue and that education amongst “Part of the job of the FanFair Alliance is to influential opinions tipped away from the both the artist community and – most unite the artist and management community ‘fan to fan exchanges’ but ‘tout to secondary market. importantly among consumers – needs to on this issue,” says McAndrew. “At the end of fan exchanges’” McAndrew says that a few years ago, happen in lockstep. the day, it is in the best interests of all artists politicians were “unwilling to intervene and If the FanFair Alliance ran into political and their representatives to enjoy the trust calls for new legislation were rebuffed” but apathy five years ago, have things – both in and support of their fans and promoting that this year the climate has been more the UK and internationally – changed the greater transparency will encourage that.” encouraging for artists and managers rules of engagement? As other countries He also hopes that the campaign can protesting about tickets being resold for profit. and US states start to address this, is there a connect with music fans as well as with “Since launching in July this year, the groundswell of activity that FanFair can use to politicians and the music industry in 2017. FanFair Alliance, with support from the MMF, amplify its message? “The fantastic support we have enjoyed has helped highlight the issue of industrial “The growing frustration, confusion and from large areas of the media is now ticket touting and the failings of existing anger, particularly among music fans and acquainting the public to the reality that, for consumer protection measures to both the theatregoers, mirrors the growing scale of the most part, the major secondary platforms media and government,” he says. secondary ticketing both here in the UK and are not ‘fan to fan exchanges’ but ‘tout to fan Representatives have given evidence elsewhere,” says McAndrew. exchanges’,” suggests McAndrew, pointing to politicians and forced a potential re- “It is evident that, unless this issue is to May’s independent secondary ticketing investigation that so far had been kicked into addressed now, consumers will continue review for evidence. “Consumers are unclear

report the long grass by government amid oblique to be ripped off and the reputation of our where to buy tickets and what the face value talk of “free market economics” and allusions industry further damaged… The combination of the ticket is. This is a consumer issue that to self-regulation within the ticketing business. of excessive secondary prices, consumer the industry must respond to.” :) the 35 Music Ally is a music business information and strategy company. We focus on the change taking place in the Music Ally is an ISSUE 398 industry and provide information and insight into every aspect of the business, consumer research analysing 23.11.16 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 KARIM FANOUS Contact: music:)ally Business development Head of research Studio 11, Holborn Studios, 49-50 Eagle Wharf Rd, [email protected] [email protected] London N1 7ED Tel: +44 (0)20 7250 3637 EAMONN FORDE PAUL BRINDLEY b www.MusicAlly.com e [email protected] Reports editor CEO & founder [email protected] [email protected] Registered company number: 04525243 VAT number: 858212321 STEVE MAYALL STUART DREDGE © Music Ally Ltd. For the purposes of personal, private use the subscriber may print this publication or Director & founder Editor at large move it to a storage medium; however, this publication is intended for subscribers only and as such may [email protected] [email protected] not be redistributed without permission. Subscribers agree to terms and conditions set up on the Music Ally website, except where a separate contract takes precedence. Music Ally has taken all reasonable LIL PATUCK endeavours to ensure the validity of all items reported within this document. We do not assume, and hereby disclaim, any liability for loss or damage caused by errors or omissions. In particular the content is Research & development not intended to be relied upon in making (or refraining from making) investments or other decisions. We [email protected] cannot be held responsible for the contents of any linked sites.

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