Topic: Music
Facebook Tries to Offer Music Labels a YouTube Alternative – Bloomberg (Feb 13, 2017)
Billboard reported at the end of December that Facebook was working on a Content ID-like system for policing music rights infringement on the site, and this Bloomberg piece suggests more of the same. There are several challenges here. Firstly, most Facebook video is published privately, so it’s impossible for outsiders to truly gauge the scale of infringing content. Secondly, a lot of the music videos shared on Facebook are covers, not originals, making detection tough. And third, though Facebook wants to set itself up as a more attractive alternative to YouTube, with advertising as its business model it’s unlikely to pay out at a much higher rate, and in fact may detract from the progress being made by paid streaming services in compensating artists more adequately by creating yet another massive source of free music listening. As such, I’m not convinced that the labels should jump too quickly into bed with Facebook. And that’s tough for Facebook because it clearly wants to take share from YouTube, but music is a huge component of the latter’s popularity.
via Bloomberg
Amazon, Apple, Google and Other Tech Companies on the Billboard Power 100 (Feb 9, 2017)
Billboard does an annual Power 100 ranking of the most important/influential execs in the music industry. Coming at this from a tech angle, there are several notable companies on the list: Spotify’s Daniel Ek takes the top spot, several Apple folks are at #4, Amazon at #12, iHeartMedia at #19, YouTube at #30, Pandora at #34, Facebook is at #54, and various others are scattered through the second 50. Amazon’s ranking is surprisingly high, but is entirely due to Billboard’s perception of Echo and Alexa’s role in transforming music, as illustrated by Billboard’s interview with Jeff Bezos and Amazon Music head Steve Boom. I think the take here is a little overblown, but there’s no doubt Echo and Alexa are changing the experience of music for the small minority of people who use them. YouTube’s relatively low ranking is surprising given how important a channel the site is for the music industry, but of course its relationship with the labels and artists is complicated. This kind of ranking exercise is always somewhat arbitrary, but it’s interesting to get a music industry take on the tech companies and their relative importance here.
via Billboard Bezos Interview (see also Power 100 rankings)
Music teams from YouTube and Google Play combine – The Verge (Feb 8, 2017)
It’s always been odd that Google has two separate music streaming apps rather than simply two on-ramps to a single streaming app, so it’s good to see it combining the teams behind them as at least a first step towards eventually having a single music experience too. Neither of Google’s apps ever shows up on industry charts of subscribers, so the numbers on both are likely small still, so this is a great time to make a change before foisting a lot of upheaval on a large base of customers. Note also the bizarre final paragraph in this piece, which somehow tries to tie Google’s move here into a narrative about apps in general falling out of favor with users.
via The Verge
New York Times Offers Free Spotify Service to Boost Subscribers – Bloomberg (Feb 8, 2017)
Spotify has long partnered with wireless carriers to boost subscription numbers with subsidized memberships, and it now looks like it’s going to do the same with the New York Times. The subscriptions are generally going to net Spotify quite a bit less than its standard US $10 per month rate (though it’s impossible to know how much), and that in turn devalues the paid subscriber numbers Spotify regularly releases. It’s the leader by paid subscriptions by some margin over Apple Music, but it’s quite possible that Apple Music could end up netting (and paying out) as much revenue as Spotify in the next year or two even with far fewer “paid” subscriptions because of this kind of discounting. And of course a discounted subscription likely means a lower margin for Spotify too, further complicating its efforts to try to turn a profit ahead of a possible IPO. Lastly, music and news are an interesting bundle, given that those are the two content categories for which Apple has launched its own app in the last couple of years.
via Bloomberg
Spotify may delay IPO to 2018 as it rethinks licensing deals – TechCrunch (Feb 2, 2017)
As I’ve argued for some time now, it doesn’t bode well that Spotify, despite being the largest paid streaming music service in the world, doesn’t seem to be able to turn a profit. A big part of the problem is that its relationships with labels dictate sharing a very high percentage of revenue with them, which leaves Spotify with very little margin to cover all its other costs. It sounds like Spotify is now considering postponing what was to have been a 2017 IPO by another year while it goes back to the labels to renegotiate those problematic deals. The TechCrunch piece linked here suggests than appetites for IPOs of companies without profits has diminished, but that isn’t really the problem here – Spotify’s real problem has been that there hasn’t been an obvious route to profitability even if all its current growth trends continue – unlike a SaaS business with no profits, there’s no obvious growth lever that turns things around eventually. It’s Spotify’s fundamental business model that’s the problem here, and absent renegotiated contracts with the labels it’s hard to see how that changes.
via TechCrunch
Sprint Acquires 33 Percent of TIDAL and Creates Game-Changing Partnership – Sprint Newsroom (Jan 23, 2017)
The one thing missing from this Sprint/Tidal press release? Subscriber numbers for Tidal, which have been the source of recent controversy. As I said in commenting on that news, Tidal may have a tough time surviving if its subscriber numbers are as bad as they seem, and I’m guessing this Sprint investment is designed to stabilize things a bit. Partnerships between streaming services and wireless carriers are old hat – Spotify has lots of these in Europe, and they’ve helped its paid subscriber numbers enormously, while we’ve seen several others here in the US too. From a Sprint perspective, this can be seen as a response to T-Mobile’s Music Unlimited program, which offers free music streaming from every major music service, though Tidal is a much more niche approach, which means it’ll likely have limited benefit unless Sprint heavily subsidizes the service for its subscribers.
via Sprint Acquires 33 Percent of TIDAL and Creates Game-Changing Partnership | Sprint Newsroom
Jay Z Is Fraudulently Inflating Tidal Numbers, Report Says – Digital Music News (Jan 20, 2017)
Tidal has been one of the second tier music streaming services that often gets rolled up into the “Other” slice of streaming music subscriber number pie charts, but its reported numbers have been big enough in their own right to be broken out in some cases. There are only a handful or so of major music services around the world with more than a million paid subs, and Tidal is one of them, along with giants Spotify and Apple and fellow medium sized players Rhapsody/Napster and Deezer. But this report suggests Tidal has been exaggerating its actual subscriber numbers, which have always seemed surprisingly high, and that its real numbers are much closer to one million than the three million it has reported publicly. The reality is that Spotify and Apple between them dominate this market, with Spotify quite far ahead, and everyone else well behind Apple, which has also been growing rapidly. The other players have all struggled to find meaningful growth here, though the ad-supported streaming business is far more popular (though it also delivers far lower revenues to the industry). I wouldn’t be surprised if Tidal exits the market in the near future if this is the true state of its business.
via Jay Z Is Fraudulently Inflating Tidal Numbers, Report Says – Digital Music News
Pandora Reducing Workforce by 7% – Variety (Jan 12, 2017)
Pandora is one of the longest-standing music streaming services in the US, and yet it is perennially challenged to make a decent profit. Today, it announced it’s cutting 7% of its US workforce to refocus its business, though it hasn’t said which bits are being cut and which are now considered core. My guess is that this is a reflection of the imminent launch of its subscription all-you-can-eat service and perhaps a de-emphasis on its traditional radio-style business, but more clarity will likely emerge soon. This is just another indicator of just how tough it can be to make money in streaming music, despite the boon paid music subscriptions have been to the music labels in the last couple of years.
via Pandora Reducing Workforce by 7% | Variety
How Snapchat will change the music industry in 2017 – Mashable (Jan 10, 2017)
This is really mostly about what Snapchat is doing today with musicians, and the answer is pretty interesting – adding audio to filters, for example. In contrast to Snapchat’s general unwillingness to engage in a special way with celebrities, this approach shows it is willing to provide tools for musicians and others to promote themselves and new content. Music has always held special appeal for mobile platforms because of the emotional appeal, and Snap appears to on board too.
via How Snapchat will change the music industry in 2017 – Mashable
Facebook Developing Copyright ID System to Stem Music Rights Infringement | Billboard (Dec 31, 2016)
It’s been clear for some time that Facebook is setting itself up as a competitor to YouTube, and of course a big investment in video requires an investment in copyright policing too. Unlike YouTube, of course, much of the content shared on Facebook is private, which means it’s almost impossible to properly gauge the scale of infringing material. Instagram already does some of this for recorded music, but this article implies a lot of the infringing videos on Facebook are covers rather than the originals, which is quite a bit harder to detect.
via Facebook Developing Copyright ID System to Stem Music Rights Infringement | Billboard
Music streaming hailed as industry’s saviour as labels enjoy profit surge | Technology | The Guardian (Dec 29, 2016)
The headline is right on here – streaming has been a boon for the music industry, arguably the second time the tech industry (and Apple in particular) has come to its rescue. But it doesn’t go far enough – it’s paid streaming that’s saving the industry, while the best that can be said for ad-supported streaming is that it provides a useful funnel for the services that really drive revenue. That tension between paid and free streaming and their respective economics is a key one to watch in the music industry over the next couple of years.
Apple Music: Platform? Promoter? Both. – The New York Times (Dec 22, 2016)
Competition in the streaming music market is tough – everyone is offering roughly the same catalogs for roughly the same monthly price. So competition happens at the margins – in recommendations, user interfaces, and exclusive content, which is the subject of this interview with Apple Music execs.
via Apple Music: Platform? Promoter? Both. – The New York Times