Shock! Horror! Streaming was a hot topic at a music-industry conference! But there were some useful nuggets of opinion, plus the odd zinger of a quote, in the keynote sessions of our NY:LON Connect conference in London yesterday.
Universal Music’s SVP of digital strategy and business development Jonathan Dworkin hailed the impact of smart speakers like Amazon’s Echo and Google’s Home – “speakers and music go together like guns and drugs!” – but also made a bold prediction about streaming’s impact on the Chinese music market. “In the next ten years, China may well become the world’s largest recorded-music market,” said Dworkin, suggesting that thanks to local streaming services and (perhaps) global platforms, China could see a musical boom that “rivals the 1960s in the west”.
Dworkin also addressed industry worries about the sustainability of pureplay streaming services like Spotify, against competition from tech giants Apple, Google and Amazon. “Two of the industry’s top five accounts are operating with negative margins funded by other people’s money,” he said. “We need to find ways to ensure we have a balanced ecosystem of partners: platforms and pureplays… At Universal we are very mindful of the digital ecosystem’s fragility.”
Spotify’s chief economist Will Page offered up a stat worth thinking about: in the UK, recent research suggests there are now 8.3 million music subscribers, compared to the 7.4 million iTunes UK customers in 2012. “A tipping point where we have more people paying for access than have ever paid for ownership in this country,” said Page, who also talked about displacement effects in the sales-to-streams transition. “In the UK, for every pound we lose from downloads, we’re getting £2.20 from streaming. In the US, for every dollar you’re getting $2.18 from streaming.”
A subsequent panel session on streaming saw Pandora’s Liz Moody call for diversified models – “We can’t as an industry just focus on subscription. There’s a number of different models in different markets that are going to work” – while The Orchard’s Scott Cohen and Sony Music’s Dorothy Hui mulled music’s future in a world of voice-controlled devices.
“Marketing is going to have to be much more specific and much more persistent in terms of making the linkages to artist activity or music placement,” said Hui, before pointing to the challenges of ‘over-discovery’ in the streaming world. “26 new artists are discovered each month per user. How are you ever going to remember you even liked something?” she said. “It has to be a very OCD person that has a system of filing and starring, which I sometimes employ, to even have that discovery process be meaningful to an artist.”
Cohen and Universal’s Dworkin addressed suggestions that the standard $9.99-a-month streaming subscription price needs to come down. “It’s very hard to have price attrition at the top end, and then in a future and more mature market, move back up,” said Dworkin, who said experimentation with mid-tier and bundles is possible without “slashing prices wholesale at the top end”. Cohen agreed: “I don’t think we need to cut the top to bring in the bottom.”
But the overall message was optimism: “We all tend to focus on the big recorded-music markets, but solving things like payments and getting the offers right for markets like China, India, Indonesia… enormous growth is going to come out of those markets,” said Dworkin. “I think there’s a world where we get to two, three, four hundred million subs. It’s possible.” You can read the full reports from these two sessions via the links below.