ISSUE 367 | 27 MAY 2015

Contents thereport 06 Beyond music: Music’s future focus – it’s in the game 07 Pinboard: Stats, deals, startups and more 09 Country profile: Taiwan Play-ola

The new playlist powerplays 2

ISSUE 367 27.05.15 COVER FEATURE laylists are becoming one of the important currencies of the streaming music world, bringing with them big opportunities for labels of all sizes, Pbut also plenty of potential for shenanigans – including payola. is at the centre of this trend: it has the most playlists (whether created by users, labels or its own in-house team), and the most popular ones, with plenty of individual playlists accumulating hundreds of thousands of followers. The famous (and over-familiar) story of Sean Parker’s Hipster International playlist (pictured left) helping to break Lorde globally was just the start. Spotify’s recent launch of its “Now” homescreen put playlists even more front and centre on the streaming service. Remember the days when the big streaming services could be accused of being little more than “search boxes” stuck on top of a sprawling catalogue of music? In 2015, Spotify’s emphasis is fast becoming a programmed, radio-style music service, driven by its in-house-curated playlists and (to a lesser extent) by the popular playlists created by labels and individual users. “As we get more mainstream, and as people start changing their user behaviours with Spotify, I think we’ll see programmed playlists becoming more and more influential,” Play-ola said Spotify’s director of label relations, Will The new playlist powerplays Hope, at The Great Escape conference in Brighton (UK) earlier this month. Playlists have long been the selling point of Spotify – the idea being that you accumulate so many of “Especially as you get more and more them that it’s too much hassle to try and rebuild them somewhere else. Now playlists are becoming the people who would have only listened to radio before coming onto the service – they’re new battleground for labels – where there is playlist pitching, playlist “power-seeding” and even playlist bringing that use case with them.” payola. Within this, the indies are looking to rebalance things so they do not lose out to the majors’ These playlists have already changed the dominance; but they are all also looking for much richer data from services themselves so they can relationship between Spotify and labels in a

report way that couldn’t have been envisaged when better understand what playlisting strategies work best and why. Streaming has long been called “the the service launched in 2008: it’s now not just new radio” and now it is facing down the same plugging pressures. a distribution partner, but a key marketing the 3

ISSUE 367 MEASURING SUCCESS IN 27.05.15 COVER FEATURE Aileen Crowley of DigMark TERMS OF STREAMS RATHER at The Great Escape THAN FOLLOWERS AND THE partner too – able to drive streams (and now IMPACT OF “HARVESTING” chart rankings) of artists by “power-seeding” their tracks in its popular playlists. It’s tempting to measure the popularity of Look at Hozier, with 46% of first plays of playlists by how many followers they have. his tracks in 2014 on Spotify coming from Spotify doesn’t see it like that. In fact, it its programmed playlists. “The stuff we can sends a monthly chart of the 1,000 most really claim is the first listens: how we drove popular playlists on its service out to labels discovery of Hozier on the service,” said Hope. ranked on the number of streams, rather “We had a strategic relationship with him, than followers. management and the label […] Spotify’s It’s no surprise to find that 46 of the top strategic artist marketing can break artists 50 playlists for April were created by Spotify, and lengthen campaign periods.” And more including the top 32. The very top one, so under the Spotify Now design, where a Today’s Top Hits, has 4.8m followers, followed personalised selection of playlists based on pitch to playlists,” said Mark Muggeridge of important drivers of streams – and, indeed, by second-placed Afternoon Acoustic (1.1m) the time of day is now at the centre of its Evil Genius Media at the event. “We are seeing chart position in a growing number of and third-placed Top 100 Tracks Currently on mobile app. the needle move more from playlist pitching countries – so they will become leverage in Spotify (3.9m). (Remember, the rankings are than from almost any other area, especially any row over holdbacks of new tracks. based on streams, not followers.) THE NEW PLAYLIST PLUGGERS with new artists.” If a label is within its rights to grant an Marketers involved with playlist pitching Also speaking at The Great Escape, exclusive to, say, iTunes or to hold back a are also thinking in metrics beyond followers. It’s no surprise that “playlist pitching” is ’s UK & Ireland editor, Sam Lee, said, song from Spotify until weeks after its radio What’s more important is influence – just as becoming a big part of the music industry. “More so now than before, labels are really debut, Spotify is just as within its rights to not it was in the traditional print journalism and One of the most fascinating sections at The starting to understand that playlists are really scramble to add that track to its most popular radio worlds. “There are playlists of 10,000 Great Escape was an on-stage interview with important, so we are seeing them coming to playlists when it does eventually appear on that are super-influential and influence the Aileen Crowley of DigMark, which has built a us and pitching for inclusion.” the platform. larger playlists,” said DigMark’s Crowley at The business around identifying key independent He noted that the relationship is different Great Escape. playlist creators and pitching songs in to from the traditional interaction between PR them. people and journalists. “It’s not quite PR. It’s a The company has relationships with more different relationship because the streams are than 400 playlisters, pushing more than 75 monetised and count towards chart position, tracks a week into that community. “We have so it’s more of a digital sales thing for the a team of three full-time promoters that work labels.” If this life-cycle of a on those tracks, have specific genre expertise, Lee claims, “I know some people like to track or album or artist we tag all tracks with genres that they could keep their playlist people away from the fit into, and pitch them out to playlisters labels and have people in between to have is going to be 18 months around the world,” said Crowley. the conversations, but I’m more than happy to two years, you need “Pitching to playlists is becoming one of to talk to the labels directly.” This hinted at it in people’s go-to the top priorities that we do in campaigns. important questions to be answered as the playlists that they’re The return on investment we’re seeing from pressure grows, which it will, on streaming not changing that

report what is traditionally thought of as ‘online services. media’ is dwindling [so] we’re taking all of that That pressure may not be one-way. much” budget out of online and into agencies that As a streaming service’s playlists become Will Hope, Spotify the 4 The major labels’ marketing departments are not managing to control ISSUE 367 these services in the way that they maybe did with radio” 27.05.15 COVER FEATURE David Balfour, Record Of The Day

Deezer’s BBC 6 Music playlist Filtr Topsify Digster

That’s why even Spotify’s Top 1,000 some time that independent labels punch playlists in the UK, it found 51% of the tracks terms of the ones with most followers, while playlists chart doesn’t necessarily measure above their traditional market share weight were from independent labels, and another Spotify’s Hope made a point of saying that every type of influence. Why? Track on streaming services. In 2015, we’re getting 3% from major-distributed indies. 40% of the artists featured in his company’s harvesting. As BBC Radio’s digital editor, a sense of why that might be: and it’s not just “We expected to see major labels taking Spotlight On 2015 playlist were independent. Andy Puleston, explained at The Great that the early adopters of streaming music the bulk of this playlist share on Spotify, and “Obviously there’s a lot more music coming Escape, Radio 1’s playlist is very popular on are keen to hunt out new music. Playlists are this was absolutely not the case,” admitted out of the major label world, but we’re very Spotify and Deezer in terms of followers, but also having an impact. ROTD’s David Balfour. “The major labels’ serious about supporting indie artists,” he not necessarily by full listens. Recent research by Record Of The Day marketing departments are not managing to said. “It gets a lot of streams, but under 30 found that while 94% of Radio 1’s 50 most- control these services in the way that they Some indie labels would like to see Spotify seconds. People go to the Radio 1 playlist, played songs of 2014 belonged to artists maybe did with radio.” devoting a bit more promotional space on its they scan it and snack on it to see what songs on major labels, when it analysed 11 of He added that major-curated playlists Browse page to external playlists rather than they like, and then harvest them into their Spotify’s most popular in-house-curated seemed to be “under-performing” in its own. “There’s always been this grievance own playlists. So it gets less listening time that they post a lot of their own playlists than some of the other playlists we do,” he Sammy Andrews (centre) there,” said Romy Harber from Hospital Spotify’s said, adding that the 6 Music playlist attracts at The Great Escape Records at The Great Escape. “If they could similar behaviour. Will Hope start promoting some other people’s playlists Spotify itself sees harvesting as an more often, I think that’d be useful.” important behaviour on its service. “Getting Something that might help is the idea of into people’s music libraries is still really key,” a collective independent playlist brand to said Will Hope at The Great Escape. “If this compete with Filtr, Topsify and Digster, as life-cycle of a track or album or artist is going first mooted (publicly, at least) by Sammy to be 18 months to two years, you need it Andrews of Cooking Vinyl at AIM’s Music in people’s go-to playlists that they’re not Connected event. changing that much.” “It kind of seems mad to me that no organisation has stood up yet and said, ‘Let’s INDIES VERSUS do this’,” she said. “We’re represented with

report MAJORS (AGAIN) [independent record] stores, but we should be represented with playlists too.” Licensing agency Merlin has been saying for Spotify label relations executive Chris the 5

ISSUE 367 PIAS now a view that was But people are also being dicks about it and 27.05.15 COVER FEATURE updates its New reiterated at The asking for money for placement on playlists,” Indie & Alternative Great Escape a few said Sammy Andrews at The Great Escape. Stoneman, speaking at the same event, Weekly playlist weeks later. “Payola has raised its head.” added, “There is definitely a gap in the market on a Monday, “It would be This shouldn’t come as a surprise: for an independent playlist curator – on its Throwback really good if we it’s essentially repeating a pattern seen Spotify, at least,” said. Thursday playlist could get some previously in the world of music blogs, where music:)ally understands that Andrews’ of older tracks on feedback in an some bloggers saw their growing audience suggestion is well on the way to becoming a Thursday and its automated way as justification to ask for payments without reality, although exactly who’ll be responsible Friday Takeover [like], ‘Your song necessarily declaring it. for coordinating submissions from hundreds playlist (curated is being featured “Some of them do ask to be paid,” of labels – let alone curating the resulting by a different artist in these playlists’,” admitted Aileen Crowley of DigMark about playlists – remains under discussion. every week) on said Adam Cardew, the playlisters her company pitches to. In the meantime, labels of all sizes are Friday. The PIAS New Indie & Alternative Weekly digital director at Sometimes, DigMark stumps up cash as testing different strategies for using playlists Domino playlist on Spotify Absolute Label requested. “Sometimes, yes. It’s under $100 as part of their marketing campaigns for has similarly Services. Spotify [per track]. Way under.” artists. For example, Prodigy and The Clash downscaled its focus to four core playlists, has clearly been listening to these demands. Is this a good or bad thing? Opinions vary. have both recently launched playlists that which are all updated weekly. The updating “We agree, and we’re working on it,” Hope told “For the right playlist, I would happily pay,” mixed spoken-word interview clips with the rhythm is strikingly similar to the strict Cardew during that panel. said Mark Muggeridge, CEO at Evil Genius artists with their own songs and those of their schedules operated by many successful In the meantime, companies like DigMark Media, at The Great Escape. But Andrews influences. YouTubers to ensure that fans know when to are plugging the gap: it has created a warned that independent labels and artists “Stories that 18-24-year-olds are interested expect new content on their channels. database to monitor more than 1,500 playlists could wind up the losers if this becomes in, and that’s their way into The Clash,” said “If people are actively subscribing to your from users, labels and Spotify, identifying popular. Niamh O’Reilly (then at Sony Music) of the playlists, they want to be the first to hear, when songs are added and dropped, then “It’s a dangerous thing to start. If people latter campaign at music:)ally’s recent digital so you have to be really methodical about providing reports on this every week to its are used to getting money, it puts it back marketing event. “And on Spotify that’s updating it,” said Domino’s Jason Reed at clients. into the hands of the majors, who have the monetised. But it’s not just about monetising: Music Connected. money. Indies are fucked if that happens! I it gives listeners an insight into the artists.” As labels get more involved in playlist PAY-PER-STREAM: THE NEW don’t think we should be encouraging it.” curation and promotion, so their expectations PAYOLA IS PLAY-OLA Spotify is aware of the issue. “It’s certainly UPDATE: UPDATES of Spotify and its rivals are increasing. One something we’ve heard is happening, people ARE ESSENTIAL of their key demands is more data – not just The growth in influence of streaming playlists asking for money,” said Stoneman at Music on how their artists and tracks are being is currently throwing up two controversies: Connected, before warning that the results Labels are also refining their strategies for streamed but also on how their playlists are payola and ownership. The former in may be counterproductive for the curators. their own playlists. At the recent Music being listened to. particular, as it has emerged that some “People only follow a playlist because it’s Connected conference, both PIAS and “I would love all the streaming services independent playlist curators – when pitched good. People aren’t going to follow a playlist Domino talked about a moment of truth when to be able to give you much more granular by labels to add songs – have been asking that is throwing tracks in because it gets they realised they had too many playlists with data on when your track is being included on them for money. money,” he said. too few followers and so decided to refocus. playlists, and where, and by who,” said Motive “If a track gets dropped in the right There could be legal headaches ahead “Since the turn of the year, we’ve made Unknown’s Lucy Blair at Music Connected, playlist, it can get propelled from nowhere. for playlisters who sell placement – and 99% of our playlists hidden, and have just for the platforms they do it on. In the eight of our playlists shown at any one UK, for example, there’s a parallel to past If people are actively subscribing to your playlists,

report time. And we’re very clear about updating controversies around YouTubers who’ve taken them,” said PIAS’s general manager of digital they want to be the first to hear, so you have to be really money from brands to feature their products distribution, Will Cooper. methodical about updating it” Jason Reed, Domino in videos, without making it sufficiently clear the 6 ’s Soundiiz tool Rdio has been investing in its curated stations ISSUE 367 COVER FEATURE 27.05.15 SPOTIFY INFLUENCERS

that money has exchanged hands. In a blog post in November, the UK’s The 10 most popular Spotify Advertising Standards Authority (ASA) made playlists (by plays, not followers) its stance clear: “It’s all about payment and in April 2015 that come from control. Where an advertiser has paid for and individual users (not labels or has editorial control over content produced Spotify). by a third party, in this case the vlogger’s YouTube videos, this has to be made clear fold, there is no legal obligation to hand over of curators it inherited from Aspiro’s WiMP ChillStep upfront.” that data to their users. A related point is the service. Kent Christensen 255,830 followers Currently, there is no way of doing this question of how easy it is to export playlists if And then there’s Apple, with playlists within a Spotify playlist, and it’s also harder to someone wants to switch streaming services: certain to play a central role on its re-launch Acoustic Lounge even know when tracks have been placed for as shown by Tidal’s recent launch of a tool of Beats Music this summer. And not just Joe Vuong 355,489 followers payment; it’s certainly more difficult than (to (via Soundiiz) to help Spotify users recreate because the company has poached DJ Zane quote the most infamous example) a group their playlists in its service. Lowe and (just as importantly) several key EDM 2015 by Zoedic of prominent YouTubers are suddenly all However, the question of who owns a producers from Radio 1 – a trend that ex-R1 Elaine Lin 606,257 followers uploading “Lick Race” videos featuring Oreo playlist also applies to whether people have DJ Jen Long described to music:)ally as “the cookies. the rights to sell it. We’ve heard several cases Apple crumble” for her former employer. Watch this area very carefully: streaming of major labels buying (or trying to buy) music:)ally recently learned that Apple Verano 2015 services may need to lay down some rules popular Spotify playlists from their creators is paying music journalists to write copy for Bruno Navarro 320,463 followers on paid placement in playlists – including in recent months, to add to those that they’re thousands of playlists ahead of the Beats punishments for flouting them. Spotify, for curating in-house. It’s another potentially re-launch. They are being paid handsomely Just Cry, Sad Songs example, has its “tastemaker” label flagging thorny legal tangle that may need some firm (by the standards of music journalism) to Carlos López Casany up influential playlisters, and this is something guidelines from the streaming services. write around 50 words per playlist, from 298,389 followers that potentially could be removed from A lot of this feature, and the wider introduction to particular artists and genres, any found to be accepting payments from discussion around streaming playlists, has to deep cuts by classic acts and playlists for Tomorrowland 2015 labels or marketing agencies. Alternatively, focused on Spotify. That’s no surprise, since sports workouts. Robaer 350,464 followers streaming services could come up with a clear it has the most developed ecosystem of It will be interesting to see whether way of showing when tracks are promoted in playlists – its own, those from labels and Apple’s service also provides Spotify-style Twitch.tv/nightblue3 playlists. those from individual users. opportunities for labels to curate and promote Nightblue3 89,147 followers Rivals are keen to catch up, both by hiring their own playlists, as well as for individual their own teams of editors – Deezer has been users to do the same. But however Apple OWNERSHIP (AND CONTROL) Simply Love at this for a while, Rdio has been investing plays it, its re-launch is likely to reinforce the Carlos López Casany The second controversy around playlists in its curated stations, and Tidal looks set to fact that playlists are going to be key to the 220,676 followers involves ownership. “There is a question of add starry curators to the experienced team future of streaming music. :) who owns the data,” said Spintune CEO, Brittney Bean, at The Great Escape. “Who It’s a dangerous thing to start. If people are used to 100 Essentials owns the playlist? You grant Spotify the non- getting money, it puts it back into the hands of the Roger Sales 237,217 followers exclusive licence to do whatever they want majors, who have the money. Indies are fucked if that

report with that: you don’t necessarily own that Relaxed Driving Music playlist data. Rdio is about the same.” happens! I don’t think we should be encouraging it” mcs1992 243,807 followers Her point was that if these companies Mark Muggeridge, Evil Genius Media the 7

ISSUE 367 27.05.15 BEYOND MUSIC Music’s future focus – it’s in the game

Gaming’s booming growth is everything the music industry covets, and while the gaming industry enjoys disposability problem that only affected significant advantages music could learn a thing or two from its focus on depth and absorption games once the player had completed every level (after that, there was little point he global recorded music industry in playing it again). Disposability in music was worth just shy of $15bn last was heightened because of digital but it year, dipping slightly (only by has also been exacerbated by the music 0.4%) and suggesting we are now industry itself – accelerating the thrill of throughT the worst of the past 14 years. the new by demanding listeners listen Growth, when it comes, will be slow. HERE and now OVER HERE and then OVER It is painful to do, but compare the HERE. The machine is drawing on the recorded music industry to the gaming fairground slogan of “Scream if you want to industry and music’s importance (when go faster” and it risks becoming a race to boiled down to the harsh realities of the bottom. consumers’ willingness to pay) pales It would be a terribly backward thing for significantly. Analyst company Newzoo the record business to return to the days forecasts that the global gaming market of scarcity when all of recorded music is will be worth $91.5bn this year, a rise of 9% available online in an instant. from 2014, and that it will charge ahead to a It used to be a case of supply value of $113bn by 2018. desperately trying to keep up with It also adds that three-quarters of and second-guess demand (over- gaming income this year will be digital. Last manufacture discs and lose money year, digital managed to gain parity with versus under-manufacture discs and physical in music sales on a global level lose out on money); but now it feels like for the first time; so even though it was Gaming enjoys the sort of obsessive ‘immersion’ in the product that music used to enjoy. The reboot supply is geared towards whipping demand disrupted earliest by digital, music has not of the Guitar Hero franchise (pictured) is an opportunity for music to engage the consumer once more into a greater state of frenzy, risking managed to drive the transition faster than rate, successfully transforming into a The biggest thing that gaming has over collapsing into a disconnect with the other entertainment sectors. predominately digital business, breaking music is that a snacking culture – put in actual thing consumers are supposed to be On top of this, it states that China will China. place by Napster in 1999 and subsequently connecting with. be the single biggest market for games this There are a lot of parallels, too. refined in a legal context by iTunes and The resurrected Guitar Hero brand and year, with revenues of $22.2bn, edging past Gaming is a huge focal point of cultural then Spotify – does not apply to anywhere the growing importance for musicians the US with its £22bn. China is seen by identification for young consumers, the near the same extent. The nature of game of a platform like Twitch should be a record labels as tantalising but incredibly biggest releases of new titles are events play means you have to put in the hours timely reminder for the music business difficult to sell records in. (like album releases used to be) and gamers irrespective of if you bought the game on that gaming is not just a way to bring in From the outside looking in, it would spend weeks or months, obsessively a disc or downloaded it to your computer, synchronisation revenue; it’s proof that

report appear that the gaming industry is absorbing themselves in games as decades whereas music in the digital age is now all encouraging the consumer to focus on doing everything the music industry ago people would play a new album over about promiscuity of listening. the depth rather than the surface can pay wishes it could. Growing at a staggering and over for weeks. Ultimately, music is facing down a dividends. :) the 8

ISSUE 367 27.05.15 TOOLS Pinboard » Deals Tweets

PANDORA LINE #Spotify Line is testing a new in-app streaming music service in @jherskowitz Thailand, costing 60 Bhat I get news and (circa $1.79) a month. It has podcasts - woven curated playlists and lyrics, into music and Pandora has acquired data and analytics company with subscribers also able to it becomes Next Big Sound. Deal terms were not disclosed. This share tracks with other Line analogous to follows Spotify buying The Echo Nest and Apple users. broadcast radio. I don’t yet buying Musicmetric. buy into video on Spotify.

@mr_trick SPOTIFY THE ORCHARD Headline of the Day: “Spotify Spotify has signed a deal smashing new with Starbucks, initially media paradigms in the US, to create with something Starbucks-branded called ‘video’” theregister. playlists for use in the The Orchard is moving into the funding and co.uk/2015/05/21/spo… coffee chain’s cafés as distributing of original TV content with the @eldsjal well as its official app. creation of The Jamz, a sitcom about a radio To challenge station which is currently in pre-production. the status quo you need to SOUNDCLOUD OMNIFONE be willing to be misunderstood for long periods of time. But true rebels hate their own rebellion.

Omnifone is powering Q.SIC’s new streaming SoundCloud has paid out $2m to creators music service, aimed at the retail and hospitality businesses in Australia. and content owners from its On SoundCloud Follow Music Ally report advertising initiative since its launch last August. on ... twitter.com/musically the 9

ISSUE 367 » Stats TOOLS 27.05.15 Pinboard LINE STICKER SALES SNAPCHAT USERS Source: Line, May 2015 Source: Snapchat, May 2015 NEW SERVICE WEAV 500k 100m 390,000 Daily active users 100%

Registered creators on Line Creators’ Market 100m 65%

Send snaps (images and videos) daily 100% $75m

Total sticker sales in past 12 months 60% 500k US 13–24-year-olds who use it $421,000 2bn What is it? Average earnings in past 12 months Upholding the noble tradition of misspelling words Videos viewed daily within the app of top 10 sticker sets to get around SEO obstacles, Weav is positioning by US 13-24-year-olds itself as a brand new “interactive format”. Those long enough in the tooth to remember MXP4 might shrug as they say “What? Again?”, but there is enough $360m happening here to elevate it above also-ran status. Firstly, it’s been co-created by Lars Rasmussen (pictured, who co-created Google Maps and was, $60m until recently, ’s engineering director). EDM MARKET VALUE $800m Source: Association for Electronic Music, May 2015 Secondly, it’s taking a SoundCloud-style “be Festivals Streaming/video $600m $140m everywhere” approach. “The new format relies on two $1.03bn services pieces of software – Weav, a mixer for creating tracks Las Vegas and a player that can be embedded in any third party club dates Sales of DJ hardware app,” the site explains. It coincides with Spotify’s and software Other club latest update that includes special mixes of dance Value from other gigs globally tracks that adapt to a jogger’s running speed. There is platforms (including $2.4bn $800m something in the air and Weav is hoping that this time Traditional recorded SoundCloud)

report interactive music will be more than a ripple on a still music sales DJ earnings from pond and actually break into a proper wave (or should other ventures that be “weav”?). the 10

ISSUE 367 27.05.15 MARKET PROFILE Taiwan

$29.5m. For the moment, then, Taiwan remains a predominantly physical market TAIWAN – but this will surely change very soon if current trends continue. “I think digital will overtake physical STATS market within the next one or two years,” f says Danny Tuan, head of new media affairs Population 23.4m at Taiwan’s Rock Records. “Especially when the YouTube music service and iTunes

d streaming join the game in Asia.” Similarly, GDP per capita US$43,600 IFPI Taiwan’s Robin Lee estimates that h digital music will take two years to overtake physical in Taiwan, based on current digital Internet users 17.9m growth rates. c This growth in digital music is being Broadband households 5.8m driven by subscription services, which accounted for around 80% of digital music

j revenue in Taiwan in 2014 ($19.51m of a total Mobile subscriptions 29.4m $25.5m). The second largest tranche was i taken by ad-supported streaming ($2.23m), followed by mobile personalisation ($2.15m), Active smartphones 24.8m while downloads have historically counted Active tablets 8.3m for a very small share of total digital Sources: IFPI, CIA World Factbook revenue. Revenue from single track downloads in Still predominately a physical business, digital income in Taiwan is centre stage in the ethnic Chinese music Taiwan was just $0.7m in 2014, down from world, exporting countless musical acts an unimpressive five-year high of $0.86m in expected to overtake that from CDs next year. Its revenues have into mainland China from its high-quality 2011. Revenue from full-album downloads, been flip-flopping in recent years; but subscription streaming, now production facilities. meanwhile, grew slightly from $0.81m in 80% of digital income, is the great hope and will achieve what Taiwan is also very much a market in flux. 2013 to $0.84m in 2014. The last five years have seen year-on-year The upshot of this is that Taiwan is a rare downloading never managed to do in the country – breaking from growth in recorded music revenue alternate music market where subscription services a niche into the mainstream. with decline: the market shrunk 8.8% in have dominated the digital industry since 2012, grew 3.5% in 2013 and contracted 2010, when they accounted for 62% of hen most foreigners think of biggest music market in 2014, with revenue 1.2% in 2014, with leaps in digital sales often digital revenue. Taiwan, the first thing that from recorded music of $58.3m. That makes insufficient to offset sharp declines in This is largely thanks to KKBOX, a comes to mind is possibly its it the fifth biggest music market in Asia, physical music. Taiwanese streaming music service that

report complicated relationship with behind only Japan, South Korea, China and From 2010 to 2014, revenue from digital launched in 2005 as a PC application, WChina rather than its music business. India; not bad for a country of just 23.4m music sales grew from $8.4m to $25.5m, making it one of the first music streaming And yet Taiwan was the world’s 27th people. What’s more, Taiwan occupies while physical sales declined $53.2m to services globally. KKBOX provides limited the ISSUE 358

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ISSUE 367 27.05.15 MARKET PROFILE Taiwan continued...

0.8 2.23 Other 0.5 1.58 physical 0.6 Single-track downloads CD 19.51 Full album downloads 4.0 0.5 0.4 3.6 15.67 Mobile personalisation 11.45 2.8 Subscription streams 7.35 2.3 2.1 5.24 Ad-supported streams140.5 10.2 2.52 2.5 2.57 2.6 2.15

2010 2011 2012 2013 2014 2010 2011 2012 2013 2014

Taiwan: recorded music sales volume (millions of units) Source: IFPI Taiwan: digital sales by format (US$ millions, trade value) Source: IFPI free streams for its users as well as an find it difficult to make an impact in Taiwan. network, is important for reaching Chinese unlimited, integrated mobile, tablet and “In Europe and the US, you just have to deal fans. “Since the user of Weibo in Taiwan is desktop service for paying subscribers. with three major labels to own 80% of the still limited, we don’t use Weibo very often Chris Lin, the company’s founder and content coverage,” he told TechinAsia. “But when the target is Taiwanese fans,” Tuan CEO, told the IFPI that he set out to create if you are in Asia, you have to deal with the explains. “But our artists all have their You can get free music from a superior experience for consumers used to local labels, which is very, very different.” Weibo account since it’s powerful as a free unlicensed services. “You can get free YouTube, from piracy, but there’s The close relationship between the communication tool when they’re in China.” music from YouTube, from piracy, but there’s something that you cannot get, Taiwanese music industry and Chinese Ultimately, with musical exports something that you cannot get, which is which is a closer feeling with consumers also influences labels’ use of booming, a well-established streaming a closer feeling with artists – interaction,” . Facebook is the most popular business based on strong local services artists – interaction” he said. “That’s what we’re trying to build social media site in Taiwan, according to and the general strength of the Taiwanese – a VIP-club type of feeling.” To do this, Chris Lin, KKBOX Tuan (a recent survey found that 95.8% of economy, the music industry in Taiwan looks KKBOX has used magazine-style editorial internet users in Taiwan had used Facebook, set to expand in 2015, joining Asian markets to differentiate itself from unlicensed followed by Google+ in a distant second). such as China, South Korea, Indonesia and competitors. “Most artist have their own Facebook Singapore in growth. Other big digital music services in Taiwan fan pages,” Tuan says. “Also WeChat and Tuan says the future is bright for digital include local streaming platforms myMusic Line are frequently used to communicate music in Taiwan. “As new international digital and OMusic as well as iTunes and Spotify with fans. Social media is now becoming a platforms are joining the market, it will

report (which launched in Taiwan in 2012 and 2013 major location for fan events and marketing stimulate labels to create more interesting respectively), according to Danny Tuan. campaigns.” content and also encourage fans to become KKBOX’s Lin believes that Spotify could But Weibo, China’s biggest social consumers/subscribers,” he says. :) the 12 Music Ally is a music business information and strategy company. We focus on the change taking place in the Music Ally is an ISSUE 367 industry and provide information and insight into every aspect of the business, consumer research analysing 27.05.15 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”

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