Consumer Electronics Show 2017
A look at the trends that will matter at this week’s International Consumer Electronics Show in Las Vegas: Ultra HD TV, smart home and drones.
Source: What to Know About CES 2017 – The New York Times
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The Playlist Factories
At the most powerful companies in Silicon Valley, small teams of anonymous, diehard music fans race to solve the music industry’s toughest problem.
Source: The Playlist Professionals At Apple, Spotify, And Google
Music Market Fragmentation
The BPI announced that ‘album equivalent sales’ were up by 1.6% in volume terms in 2016, with vinyl and streaming identified as the key drivers. Many people retain a nostalgic soft spot for vinyl, so an apparently vinyl led revival is always going to get people’s attention. But not only is vinyl not the future (it was just 2.6% of sales in 2016), the big differences between the most popular vinyl, streaming, singles and album artists reveal just how fragmented the music business has become.
Stream Ripping
As music-streaming services blossomed over the past decade, so have mobile apps and sites allowing users to create MP3 files from songs streamed on free services such as Alphabet Inc.’s YouTube. Fans can listen to the songs without YouTube’s ads—and without having to buy the songs or pay for a subscription service such as Spotify AB and Apple Inc.’s Apple Music.
Source: Music Industry’s Latest Piracy Threat: Stream Ripping – WSJ
Music went ‘exclusive’ in 2016
Whether it was what she intended or not, Taylor Swift threw down the “exclusive” gauntlet with her 2014 Wall Street Journal op-ed about the future of streaming services. In it, she referred to music as something “important and rare,” and therefore, “valuable.” She was arguing about something only tangentially related to streaming exclusives, but she was also framing a mindset towards music that would morph into the industry standard over the next two years. And last summer, when she gave only Apple permission to stream her album 1989, she planted the seed of a powerful idea. In 2016, another year of war between the big three on-demand streaming services (Tidal, Apple Music, Spotify), having “important” and “rare” and “valuable” things like exclusive new albums from music’s biggest stars are the ultimate edge. While streaming was meant to make music more accessible and convenient, it’s now creating a series of walled gardens — beautiful houses for rare and important art. Let’s check in on how that’s affecting consumers and the industry at large.
Music Streaming Profit Surge
Five years ago, the demise of the music industry seemed almost inevitable. Recession, rampant piracy, falling CD sales and a fear that “kids just don’t buy music any more” had giant record labels, once oozing wealth, counting the pennies. Yet 2016 has seen a reversal of fortune – and the industry’s saviour is not what many predicted. Profits from music streaming, first championed by Spotify and now offered by Apple and Amazon, have given some labels their largest surge in revenue in more than a decade.
The Netflix Advantage
In the first scene of House of Cards, Kevin Spacey’s character strangles an injured dog. Netflix’s own data show that a lot of people stopped watching the show after that scene. In a broadcast world, that information might lead you to cut the scene: broadcast space is scarce and you need to get as many people watching as possible. Netflix was able to keep this scene because it isn’t selling a specific program in a specific broadcast slot — it is selling an integrated platform, with no fixed broadcast times. From Netflix’s perspective, viewers who were repulsed by this scene, probably found something else on Netflix that better matched their interests.
Source: Big Data and the Future of Entertainment Part 2 | The MIT Press
See also: Netflix’s Big Narrative Play: Why the Company Is Loading Up on Small Movies This Fall
How Millennial Media Habits Change
Millennials don’t have a uniform media palate. Their lives are in rapid transition as they finish their educations, join the workforce, move into their own homes and start families. And how they connect and what they connect with follows suit.
Why Pay for Streaming Content?
On one end they’re paying for premium TV shows and movies with little complaint (Netflix, Hulu). On the other end, they’re paying for amateur content from amateur broadcasters voluntarily and willingly (Twitch), when even YouTube stars with huge followings are having a hard time getting their fans to pay for content (YouTube Red). Everything in the middle seems to be a slog, even when the content is “premium.”
Source: Why People Pay for Subscription Entertainment Services – Medium
photo credit: 1959 6-Tube Pushbutton AM Radio via photopin (license)
Countdown to a Spotify IPO?
As Spotify begins to prepare for an IPO, which sources say the company is planning for late 2017, the relationship between the Swedish streaming giant and its trifecta of major-label frenemies (Universal Music Group, Sony Music Entertainment and Warner Music Group) is going through some drama. . . “The convertible debt is essentially a ticking clock,” says MIDiA Research analyst Mark Mulligan. “They have geared everything to a window and they need to have a certain narrative for Wall Street before that time.”
Source: Can Spotify Survive the Impending Storm As It Prepares to Go Public? | Billboard
Embrace Ad Blockers
The advertising industry is wringing its hands and shaking its fist at the use and growth of ad-block technology, but I am not above temptation. I installed it. I love it and probably won’t ever fully abandon it. So instead of excoriating people for using them, it’s time we reflect on how we got here, what its inevitability means and whether this might even be a trend worth embracing.
Source: Why the advertising industry needs to embrace AdBlock | TechCrunch
The Streaming Music Advantage
Because streaming music is demand-based, it reaches niche and highly engaged audiences.
Source: 5 Things Streaming Music Data Can Teach Marketers That Top 40 Radio Can’t | Adweek
How Well Is Streaming Really Doing?
All of the three major record labels announced strong streaming music revenue growth in the 2nd quarter of 2016. On the surface it is a clear cut success story, but as is so often the case with music industry statistics, all is not quite how it seems.
Source: Just How Well Is Streaming Really Doing? | Music Industry Blog
Why Aliens Will Never Ever Invade Earth
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YouTube Red
As artists and record labels clamor over YouTube payouts, some are skeptical that Google’s subscription service can change the equation.
Source: Google Hopes Taylor Swift Will Finally See Green In YouTube Red