The music business is all about the stars. Stars for being the best, stars for being liked and stars for being awarded. So what better place to feature a conference on the future of music then the Estrella Damm Factory in Barcelona. For two days the world music industry has gathered here to discuss the consequences of big data, gig funding and streaming at the crossroads of music and technology. Barcinno stopped by the Wednesday morning session and here’s what we heard…
“Music impacts our life because it transfers emotions”, chairmen Mike McCready enthusiastically exclaims to the audience. “And it will continue to do so in close collaboration with technology and social media. The pop culture is alive and kicking. But our business models change.”
This is exactly the topic the second speaker, Scott Cohen from Orchard. He puts an emphasis on the attention economy. “The industry is obsessed with measurement: who viewed my tweets, how many YouTube views do I have, streams, etc.” Of course, this also generates business opportunities, since some have there whole business on based on data measurement. But Scott questions whether we measure the right unit. He believes the industry should not be concerned about # CD, stream or download. Focus should be changed towards the people, the fans. The time a fan spends to interact, listen and view the artist. How intense will be the future metric. This gives room for new business models, having two basics elements in place:
- People value those things that are rare/ special. Implication: make use of limitations and exclusivity. Just have a look at the art world, which strives on limited and unique pieces.
- People value experience: make them engage and experience the product. Translated into the music industry, facilitate meet& greet/ backstage additions.
The two combined results in a “special VIP all access package.” When a fan purchases this unique possibility, likely he/she will share and promote it on social media. Hence, free publicity. But, it even gets better; most of the items in the package are already free. Having the cool experience of being on a guest list to a concert, getting a signed playlist, going backstage and see the repetition, meet & great… they don’t bear additional costs for the artists, but it does create a special band with the fans, making them even more loyal and willing to become an ambassador.
Scott’s business model is based on dealing directly with the fans and touching their life. Making a connection and paying attention to the fan will be more profitable then anticipating on huge streaming or CD purchase fees. Additionally, it is worth considering adding a social cause in the experience package or artists work, since 66% of the people prefer to buy from companies who do positive things for society, adds speaker Jack Horn.
Social media also asks for new propositions. People are consuming information and music at different times in different places. A five minute video clip can be perfect in the evening, but during work you don’t have time to watch something for such a long period. Hence, there is a need for short time content that can be consumed on mobile devices. The trend of micro content combined with the attention economy, requires regular new content that engages the audience. It does not replace the current clips, but will be an addition. The new generation asks for 30 seconds videos and songs. Not summaries or abbreviations of an original version. No, specific content made for this micro purpose. We can expect a whole new area of music to be written, composed and produced soon.
Although physical sales drop, the shared believe is that there is still a lot of money in the music pot. You just have to know how to get your share from it. An example of retro innovation, the vinyl sales are growing again boosted by the digital music. Streaming is growing faster than download. Download is declining. Growth is back due to the digital and mobile efforts. A new way we interact with music: the smartphone kicked out a revolution in this field. Exponential growth is spurring this technological shift. For example, Shazam has 10% of ITunes sales (being the lead generator channel).
Streaming provides platforms on which business providers can build new services. A big need in this new ecosystem will be curation. Investor Rodolphe Menegaux from XAnge sees opportunities for #social targeting, #crm software, # right management tools, # big data, and #personal cloud. Streaming is an example of the end of ownership, completely in line with the trend of sharing and swapping. Possible markets: the second hand digital market and the integration of all the social media tools. But also other supporting tools to the music industry evolve. For example, Glownet works on innovative RFID access control solution and cashless payments for events.
Question: What is the next big sound? Alex White is working on this question on a daily basis through data artist research development. Finding breaking artists by putting the attention economy into practice.His company monitors and accelerates the rising star of artist. Just as in any ‘product’ development process, investing in an artist has its risk which requires making predictions, assumptions (decision support systems) and work on the progress. Alex made a business of developing a support tool for the music venture capitalist to spot the new star. Most artist get labeled before they reach the 20.000 Facebook fans.
Also old media as radio is looking at the new sound. And a way to keep heads up in the competition with Spotify, YouTube and Facebook. Radio is very alive. In the UK 91% of adults listen to radio every week, of which 21% through smart phone and 48% through online media. Toney Moorey, with his pleasant chocolate radio voice, is searching for a way to alter the declining advertising expenditures for radio. How? By offering a tool to limit the exposure to ads when listening to your favorite music or trusted presenter. At Absolute Radio they work with digital ads for direct targeting. People could also buy a premium in stream account to have less general ads, smaller targeted ads which provide extra time for the song they love. Putting the micro content into practice. For example, they cut an interview with Mick Jagger in several parts with cliff hangers, to promote their new album. It resulted in a rise of logged-in listening and more brand awareness.
And then to end, a little bit of music: the new Gangnam style YouTube hit is going to be The Fox.
Want to know more about the future of music?
The whole conference is being reported by Industria Musical in Spanish.
The Future Music Forum organization will publish a video and material from the conference.