Feb 23

Does music streaming have the potential for a new ‘Golden Age’ for the recorded music industry?

The opinions about streaming as “saviour” or as “killer” of the recorded music industry¬†couldn’t be more diverse. Some participants of the industry see a huge long-term potential in streaming. Other participants compare the instant license opportunities of selling music on CD or as digital download with the payout rates of streaming. Fair enough, the (low) payment rates of streaming services require ongoing negotiation from the music industry in order to ensure a reasonable income for all participants of the music industry. Additionally, making a living from current music releases has become a difficult task, as music streaming must be a long-term calculation, instead of the instant income of sales. But this shall not be discussed in this article. This article only takes a look on the big global market figures.

Let’s see if there could be a bright future – a new “Golden Age” for the music industry with streaming…

Read More »

Posted in Digital Music, General, Music Industries | Leave a comment
Feb 15

Blog Recommendation: hypebot.com

Today’s article is a website recommendation for everyone, who wants to stay up-to-date on a daily basis about the latest news from the music industry, about comprehensive information about new trends in the business and technology around music, and wants to expand the knowledge about the music industries.

Hypebot, founded in 2005, is the best resource for insiders of the music industries in my opinion.

Here are some recent interesting articles, published on the blog:

A Complete Guide to SEO for Musicians

How the Music Industry can change for the better

101 Ways to break into the Music Industry

Two more older articles, but with a high value to read it:

How to survive the Music Industry in 2017

Well being in the Music Industry

Check out Hypebot regularly! [next to this blog ūüėČ well.. the frequency of articles is obviously much higher at hypebot]

Leave a comment, what you think of hypebot, and which other blogs and resources are a must-read in your opinion!

Posted in Digital Music, Media, Music Industries | Leave a comment
Feb 08

Predicting the Future of the Music Industry

On a regular basis, music industry experts, associations and research institutions predict the future of the music industry – how it may evolve, how big the “next big thing” will be, how spectacular the digital innovations are going to have an impact on the music industry.

Just now, MIDia Research published their latest forecast for the development of streaming subscribers for the next three years, which shows the positive but slowly saturating development of people becoming premium users of streaming services. The music industry blog by MIDia founder Mark Mulligan published an analysis for this forecast: https://musicindustryblog.wordpress.com/2017/02/07/streaming-music-pricing-inelastic-stretching/

Without any doubt, such outlook always provide a trend view, based on what happened in the past years and analysing the potential of the market. The combination of the numbers of the last years and expected numbers for the upcoming years makes such analyses interesting for the people and companies of the industry.

However, a view on the analyses of the German music market by the German music industry association “Bundesverband Musikindustrie” in collaboration with GfK panel services shows how the yearly analyses may vary and, therefore, why you shouldn’t put the full trust in these predictions:

Read More »

Posted in Digital Music, Music Industries | 3 Comments
Jan 31

Succeeding in today’s “Attention Economy”

Dorothy Hui, Sony Music Entertainment UK‚Äôs vice president of Digital, has been cited in an interview on today’s attention economy, which definitely affects the music industries as well:

“The focus is on building audiences and engaging them. When you look at the potential of the [streaming] market, there‚Äôs the factor of how many people are subscribing, but each person still only has 24 hours in the day,”

“It‚Äôs an attention economy now. How are we competing for those hours in the day? I read a stat that in the UK there are eight hours and 44 minutes of multi-task attention [per person per day] between audio, visual and social media.” (Resource: hypebot.com¬†)

As a lecturer for music industry topics, especially on artist development, I regularly put the focus on the changed situation for artist development. The variety of media channels, and therefore for of attention-grabbing channels, has become way larger than in the days before the digitalisation. Back in the days, there have been a limited number of (terrestric) radio stations, TV channels, CDs in your collections, games on your computer or console, and no smart phone. The opportunities for entertainment were limited in their absolute numbers and in their programm. Nowadays, you have the free choice of what and when you want to listen, to watch and to play on your devices. Due to the democratisation of production, distribution and promotion, the number of media products and channel of consumption (music, tv/video, games, etc.) is larger. And last but not least, you have the possibility to get access to the contents (free or with subscription fees) without buying single products.

So, how can you succeed in such competitive media environment?

Actually, it is not only a competition for the attention of the consumers, which is without any doubt the first step towards music exploitation. However, the most valuable consumers are those with a high identification for an artist. And this does not only require the consumer’s single attention, but additionally continuous attention and preference.

I remember, back in my studies for my Ph.D. and for my book “Organisches Artist Development” (engl. “Organic Artist Development”, Amazon: http://amzn.to/2iDSb4f) , I intensively worked with the German book “Popstars als Marke” (engl. “popstars as a brand”; Amazon: http://amzn.to/2kmjC3f), by Marcel Engh. The author developed a “consumer-fan-pyramid”, which displayed the steps from awareness/attention to being a fan.

Why is it important to have more than only the attention/awareness?

Having passionate fans, who do not only stream your songs on Spotify once or a few times (which is the result of getting attention/awareness), but discover and start loving your full discography, buy your records on CD or vinyl, come to your concerts, purchase your merchandise articles and tell their friends about how amazing your music and you as an artist is… that’s why the artists love what they are doing and how they can make a living from their art! ¬†So, make sure that you do not only attract attention, but also take care for those who are involved more than that!

Many artists are unhappy about the small licence income from music streaming – for good reason. However, the major income for the music industries and artists always came from the highly involved artists, the so-called heavy users, who were highly emotional about their favorite artists that they did way more than only listening to the songs on occasion. So, artists should not lose their focus on such proper fans with high identification and loyalty.

Again: make sure that you do not only attract attention, but also take care for those who are involved more than that!

 

 

 

Posted in Artist Development, Artist Management, Brand Management | Leave a comment
Jan 20

Streaming payout rates (Spotify, YouTube, Apple)

Some thoughts on the latest news around streaming payout rates:

The well known resource for music industry article Hypebot just published a new article discussing the latest insights about streaming payout rates and market shares, highlighting the big players Spotify, YouTube, Apple and Pandora:

Many people in the business are annoyed about the decreasing payout rates of Spotify, for good reason. Spotify had a average amount of 0,00521 $ per stream in 2014, which is currently set at 0,00437 $ according to an analysis of The Trichordist. However, it is hard to get angry and react with a take down of your own label or artist catalogue from Spotify, when you realise that Spotify has a market share of 70 % within the streaming royalties displayed above. Therefore, there aren’t many alternatives to Spotify.

Another service to highlight in this article is YouTube. It is widely known that the majority of record labels put much effort in their YouTube channel, promoting videos and previews at YouTube in other social media channels. In terms of the payout rates, this focus on YouTube feels a bit like casting pearls before swine, as you have such a low payout rate. Spotify pays over 6 times more than YouTube for each stream, and we are already annoyed by Spotify’s rates.

Obviously, YouTube offers an essential advantage of playing the full video without any registration. Previewing a Spotify tune without account is only possible for 30 seconds. Nevertheless, comparing these two services, it is obvious that artists and labels should focus on directing their fan bases to Spotify, due to the higher payout rates.

Another argument for Spotify is the growing relevance of the artist in the Spotify algorithms, when it comes to curated playlists, verifying the artist account, developing a community on Spotify and set sails for the streaming-dominated future in the music industries.

A player to watch will be Apple iTunes (once more). The payout rates of Apple iTunes are nearly two time high in comparison to Spotify. If the market share of Apple iTunes grows in 2017, it will be a relevant player in the world of music streaming for the music industries. And probably, it will grow significantly.

Posted in Artist Development, Digital Music, Labels, Music Industries | 1 Comment
Jan 20

Blog reactivated!

It actually has been a very long time, when I closed this blog.

Back in 2013, I stopped writing new articles for this blog due to a lack of time.
More than three years later, my experience in the business and other businesses has highly increased. So, I will now again regularly add new posts to this blog.

You can now look forward to new articles, comments and reviews about topics on the music industries, especially artist development/management, digitalisation and the electronic music scene.

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Jun 19

[German] Kommentar zu “Kann man Popmusik lernen, Herr Wandjo?”

Vor wenigen Tagen erschien auf der Website WeCab ein Interview mit Professor Hubert Wandjo, dem Business Director der Popakademie, wo ich meinen Bachelor in Musikbusiness studiert habe.

Insgesamt trifft es das Interview absolut auf den Punkt, inwieweit Popmusik und deren Vermarktung lernbar ist. Daher zun√§chst die Lese-Empfehlung zum Interview: “Kann man Popmusik lernen, Herr Wandjo?”

Ich kann aus eigener Erfahrung sagen, dass die Popakademie in Mannheim sowohl die Musikbusiness als auch die Popmusikdesign Studenten sehr gut auf die Herausforderungen der Branche ausbildet, so dass man als Absolvent gut ger√ľstet in die Branche gehen kann, wenn man nicht eh schon w√§hrend des Studiums reinkommt. Neben dem Gelernten und Angewandten konnte ich mir ein breites Netzwerk aufbauen und die Absolventen der Popakademie arbeiten weit gestreut in der Musik- und Medienbranche.

Trotz allem ist die Situation in der Branche nicht einfach. Nach mehr als einem Jahrzehnt Krise der Musikbranche (genauer gesagt dem Kerngebiet: die Tonträgerbranche) steht sie im Tal (der Umsatzzahlen) und vor den Herausforderungen mit dem neuen digitalen Umfeld umzugehen. Aber nicht nur das digitale Umfeld und dessen Monetarisierung ist eine Herausforderung, sondern es gibt weitere wirtschaftliche Einflussfaktoren wie verändertes Konsumentenverhalten, veränderte Formatpräferenzen, das Ende der CD-Ersatzkäufe alter Vinyl-Sammlungen, zusätzliche Entertainment-Inhalte und -Geräte, eine veränderte Handelsstruktur und ökonomische Veränderungen (Details dazu hier)

Hinzu kommen noch strukturelle Entwicklungen bei den Labels in der Musikbranche: Major Labels investieren nicht mehr langfristig in K√ľnstler, weil die Aktion√§re der Mutterkonzerne gute Quartalszahlen sehen wollen. Somit liegt der Fokus st√§rker auf dem schnellen Umsatz. Ein Punkt, der gegen langfristigen und nachhaltigen K√ľnstleraufbau spricht. Zudem ist die Investment-Budgets der Tontr√§gerbranche eh signifikant geringer als vor der Krise, weil die Ums√§tze insgesamt einfach sehr stark eingebrochen sind. Zu diesem Thema habe ich auch vor l√§ngerer Zeit einen Artikel geschrieben: Readjusting Artist Development.

Die Musikbranche steht also nach wie vor vor großen Herausforderungen, die aber mit einem breiten Sachverstand besser zu bewältigen sind. Somit kann man die Notwendigkeit einer fundierten Ausbildung bzw. eines Fachstudiums, wie sie an der Popakademie angeboten wird, nur unterstreichen!

Ich hoffe, dass dieser Artikel nicht als “Werbeartikel” f√ľr die Popakademie wahrgenommen wird. Man kann die Inhalte mit Sicherheit auch hervorragend an anderen Einrichtungen oder Ausbildungsm√∂glichkeiten vermittelt bekommen. Ich kann selbst allerdings nur das Studium an der Popakademie beurteilen. Mein Ph.D. in England war ja kein klassisches Studium, sondern sogesehen ein Selbststudium.

Posted in Artist Development, Digital Music, Music Industries | Tagged , , , , | Leave a comment
May 27

Sustainability of music streaming

In the past, I have written a couple of articles with relation to music streaming services and their impact on the music industries. Sweden and Norway announced a growth of their recording industry due to streaming services.

However, a few days ago, the established music industry researcher Peter Tschmuck published an analysis about the question whether music streaming services are sustainable business models. The article is in German language, which you can find here: Is streaming the next big thing.

Tschmuck investigates different models of music streaming, as there are types like Spotify as a typical streaming service, YouTube as a video streaming website, Cloud Drive, Google Play or iTunes Match as cloud-based plattforms, personalised webradios like Pandora and Last.FM and classic webradios.

The critical aspect in making streaming services sustainable are the conversion of free / freemium users to paying customers, because the licensing costs of music are too high for ad-financed business models. However, this is not caused by too high licensing rates by the content providern (e.g. record labels) or collecting societies. Tschmuck provides an example of the royalty costs of Pandora to the US collecting society SoundExchange, which reveals that the rates are lower than originally set by the US copyright board.

Tschmuck expects a market consolidation, because the competition is high and the market doesn’t provide high profit margins currently, because of the low percentage of premium/paid users.

A lot of people call music streaming as the next big thing in the music industry. There is no doubt that streaming has a large impact on the current music industries. For consumers, streaming services offer a fantastic opportunity to explore and listen to music. The revenues for artists and labels, however, are quite low, which also questions the sustainability of streaming for artists and labels. It must be noted that streaming requires a long-term analysis regardings its revenues, because the services pay for each stream, even next or in a few years, contrarily to the download purchase. It is one question whether songs are streamed that many times in the consumer lifetime that they make the same revenue as the purchase. SpotiDJ reveals a number of 140 streams as equal number to one download. With the high amount of releases and fast moving music industries, this is a quite high number to reach.

Posted in Digital Music, Media, Music Industries | Tagged , | Leave a comment
Jan 16

HMV’s insolvency – bad company strategy or inevitable victim of digitalisation?

In these days, the news are filled with articles about the insolvency of HMV (e.g. here), which is facing British music culture. HMV was the record shop in the high streets. But with the digitalisation of music and new big players such as iTunes or Amazon, the high streets lost their significance for being the place to buy new records. Music fans listen to new music online and can buy music online, saving the effort to go to the city.

However, those who grew up in the 1990s and before might be unhappy about this development. Sure, it is easy to research and buy music on the internet. But the experience in the record shops is a different one. Unfortunately, HMV and other large record shops didn’t work on their strategy how to offer services and building values and emotions, which download shops and online traders cannot provide. Shops like HMV started to offer diverse products like phones, clothes, etc, which are not particularly connected to its core competence: music. I don’t blame offering DVDs or games, because this is entertainment, too. Anyway, these traders should have focused on personal emotional ¬†connections to their customers, collective experiences, media experiences (which are not available in downloadshops). Maybe this can be compared with music events. Purchasing music at high street record shops should have been music events! In the past years, the live music experience on concerts, festivals and in clubs has become a growing instance in the music industries. These events cannot be copied and not consumed via Internet (of course, you can watch event videos, but certainly this is not comparable to being at the event).

Returning back to the news around HMV, fortunately, this doesn’t need to be the end of this legendary music shop. Deloitte is searching for new investors for the HMV. Maybe this insolvency is a wake-up call for high street record shops to improve their strategy, how to address potential customers better than online shops can do.

However, it is questionable if record shops can survive in the long run, when physical records sales are decreasing. I can imagine that physical records still keep some relevance as fan and collector’s item, because music still provides some identity building and representing to music consumers and digital music collections or the access to streaming services may not represent fandom as much as physical records can do.

Nevertheless, the insolvency of HMV is definitely bad news for all British music fans, who love to browse through physical records and buy them in record shops.

Posted in Digital Music, Media, Music Industries | Leave a comment
Jan 11

“Spotify-Effect” on Music Records Income: Norway 2012

Last year, the Swedish music market announced a big surprise for the Global music industries: Its revenues noticed a large increase due to streaming services like Spotify, which made more revenue than iTunes in the first half year of 2012. As I mentioned in the article about the Swedish music market, there has been a lot of discussion how the music sales and income evolve with the opportunity to access all music via Streaming services. The Swedish top-line was one of the first large “Hurray”s in terms of this discussion. However, this was in Spotify’s original country.

Norway, the neighbours of Sweden, brought up a new positive news around music records revenues and Spotify: A plus of 8 % in 2012 due to a growth of subscription services of 116 %. Overall digital revenues reach 61,5 % now and, therefore, have taken over physical revenues. Another benchmark: Streaming in Norway accounts for 45 % of all record sales income. Digital sales are also growing, albeit less than streaming income. Physical sales decline.

How can we evaluate these news? It needs to be mentioned that Norway has the second highest spending-per-person on music (28 US-$ per year; Japan is first with 32,3 US-$, Germany: 20,8 US-$, UK: 22,3 US-$). So, either they have passionate music consumers, or low illegal music consumption, or both.  Techdirt reported that the Scandinavian countries could strongly motivate former illegal downloaders to use legal streaming services, which is one big hope of the Global recording industry to achieve this effect with pushing streaming services forward. So, this might be the largest advantage of streaming services to the industry.

One large “question mark” is still the impact of streaming services on those consumers, who have previously bought downloads and physical records. My personal consumer behaviour has evolved to a streaming and physical records combination. I am using Spotify, Podcasts and (Web)radios, and often buy physical records of my favourite artists and albums.

But, which impact have streaming services on download sales, respectively consumer behaviour who generally buy downloads? There is little difference in the usability between streaming music and playing purchased downloads from the hard drive.

I will keep my eyes open for answers on this question. And certainly on the development of streaming in large music industry countries like Japan, USA, Germany and UK.

Posted in Digital Music, Media, Music Industries | Leave a comment