In the music business we don’t kick off the new year with drinks at the office, we head down to Groningen for Europe’s largest music showcase and conference: Eurosonic/Noorderslag. Over 40.000 visitors enjoyed 424 live shows broadcasted in 34 countries. Together with professionals from the business we discussed consistent growth rates and the challenges that come with them.
The good news
To put it bluntly: live shows are booming! Not only do visitors spend much more, the target group is widening as well. According to Ticketmaster, ticket sales are climbing globally and the Netherlands is ahead with an increase of 29 percent.
By now live shows are the most important source of revenue for Dutch acts, both in the Netherlands and beyond. Buma/Stemra reported that Dutch music has an export value of 180 million Euro of which 150 million is generated by live shows. Since 69 percent of total revenue is accounted for by the dance scene it came as no surprise that Martin Garrix won the annual Popprijs.
Music labels around the world reported positive growth rates for 2016, a drastic break from the decline they’ve experienced for the last 20 years. However, consumption habits have changed completely. Streaming is more popular than ever and thanks to mobile providers offering “all you can stream” subscriptions we are not even close to the limitations of that growth.
Suggest is the new search
The mainstream consumption model puts “access over ownership”. Accessibility at the right moment is considered crucial which makes context king: consumers choose their music, or rather their playlists based on what they are doing at that given moment. Beastmode in the gym, FridayFiesta to start the weekend and Songs to sing in the Shower for well, you catch my drift.
Next to curated playlists, platforms are offering suggestions based on the consumers search history and his or her selected preferences. The music industry is definitely not alone, just think of how you scroll through YouTube or Netflix. According to the big players “suggestion is the new search,” leaving everyone to question if it will be the curators or algorithms that select our music in the future. Whatever the answer, if artists don’t want to miss out then it’s vital that their tracks are featured in those lists.
Artists, Brands and Marketing
Labels are looking for new ways to create a buzz around their artists. To do so they are actively looking for great stories around the band and ways to tell those stories to the fans and press. Some go as far to argue that these days an artist’s social media reach and streaming potential is just as important as their talent.
Danish band The Raevonettes are a great example: throughout 2016 the band released a monthly track with a music video solely based on what they lived through that month. At the end of the year they released an album featuring all twelve songs on vinyl - a great choice considering that vinyl sales exceeded downloads in the UK.
In 2017 Grammy award-winner John Mayer is set to do something similar. Starting January 20th, he will release his new album The Search For Everything spread over a number of EP’s. Mayer recently commented on his plans that “the album will be released four songs at a time. Every month. There were too many songs to ever get out the door at once.”
At the ESNS17 Conference, MassiveMusic founder and CEO Hans Brouwer participated in a panel on an entirely different source of income: making music for movies and advertising. “Brands are increasingly spreading content boosting the need for good music,” - great news for composers and producers catering to this side of the business.
Innovation & Rights
Revenues are increasing across the industry and whoever looks into different music applications will undoubtedly have a hard time keeping track of the myriad developments. However, rights over music remain a complex matter. It is difficult to create contracts that take all actors into consideration, putting a hold on innovation. Let’s take the example of our beloved 22tracks, they chose to trade their independence for a deal with Spotify. Which makes us wonder: is the future of the music scene in the hands of only the big players?
Also in 2017, the so-called “value gap” remains a hot topic: because of the volume of streams related to their payment model YouTube pays less to rights holders than streaming services such as Spotify and Deezer, therefore artists are wondering if they are being paid enough for their tracks – a discussion that has escalated to the European Court. That means that companies such as Soundcloud (175 million monthly users) must also produce answers on how they are going to deal with intellectual ownership and how they are going to pay the artists involved. There were rumours that Spotify was interested in acquiring Soundcloud, but have withdrawn since Soundcloud’s initial public offering. Reportedly, Google is still interested
Cutting the pieces
Since the digitalization of the industry, music consumption is thriving and more prevalent than ever. Artists profit in various ways: globalisation is a great opportunity for European artists to reach a much larger fanbase and the earning models have become more fluid. However, at this point changes are happening so fast that it is hard to say how artists can actually benefit from them.
Today, the question is not whether profits are growing, but how to value different actors. Eurosonic/Noorderslag was a great way to dive into the subject, but this question remains largely unanswered. The panel members at seemed to share the same opinions, leaving out fierce debates. Our suggestion for next year: let’s challenge our beliefs and welcome a few more heated discussions. It might just keep us warm during the winter cold at ESNS17 and help us figure out the industry’s next direction.
Back to business. Eurosonic/Noorderslag owes its success to music, and because talking about music is as interesting as listening to a book I compiled this years favourites in a playlist just for you!
‘Feel The Rhythm’, Def La Desh
‘What’s Going On’, Marvin Gaye
Making the cut