MIDiA has intensely pushed the idea that given the rise of the attention economy in modern media, as a music service you are no longer simply competing with other artists or services for listenership but rather the entire media ecosystem.
Netflix CEO Reed Hastings once told analysts on a quarterly earnings call that sleep was his company’s greatest competitor; he recently changed his mind to Fortnite. Why does this shift particularly impact the recorded music industry?
The YouTube Economy
Because, as outlined in previous MiDia reports around music’s role in the YouTube economy, the present music format does not lend itself especially well from a monetisation perspective to the present digital economy.
YouTube plays ads every 15 minutes of watch-time in a viewing session – meaning content that keeps users watching for longer is rewarded. This has been posited as one of the reasons why gaming content gained an early advantage in the early days of YouTube and why gamers such as PewDiePie became so successful.
Gamers could upload half-hour walk throughs several times a week. A musician meanwhile was accustomed to around 12 songs every few years; YouTube’s economics do not favour this.
It is not feasible nor even possible that every artist would be able to make this switch. However, it does have a few significant ramifications for rightsholders. With direct uploads, Spotify is about to become a lot more like YouTube and, in an attention economy, is music getting in the way?
Spotify has already pivoted towards being an audio company, and their acquisitions have leaned more towards the podcast side of the business in recent months. With its new Stations proposition, on top of the already-popular playlist listening, it is transitioning from merely a search-and-stream tool to a soundscape developer.
This is what makes major label partnership and investment in soundscapes a notable area of discussion when it comes to music finance.
Soundscapes- the new tool for music companies
Soundscapes are typically an hour, longer than the average album, and with the format seemingly in perpetual decline on a listenership basis, soundscape collages are a format that people will have playing for an extended period of time and plays into the recent trends for participants in Yoga and general wellness.
Music has always had some functional use case. Sound has been as much a communal experience as it has been a weapon. The embryonic music industry of the 1950s was replete with various compilations credited with creating a certain mood.
By the 1970s, the emergence of ambient music through artists such as Brian Eno would revitalise this functionalist idea of music. Such records would prove influential on the nascent rave scene and in turn the 90s chillout trend.
Music to a degree has therefore almost always been used for its utility; perhaps the emergence of streaming through the nature of its UX has only now put a blatant label on it.
Many will bemoan the very concept of music being background noise, pining for the years of its unchallenged centre-stage place in youth culture as the focal point of fashion and politics.
Music’s emotional power means this will not drop away; those who think music fandom has diminished in an era of games and social media have clearly not been paying attention to the Billie Eilish phenomenon, according to the MiDia report.
Perhaps the best framework in which to view this space is that extended soundscapes may be to the streaming era what the best-of compilation was to the physical era: a place to make high-margin, less-volatile returns while investing these returns in the high-stakes creative work underpinning artists and repertoire.
Given the hits-based distribution of streaming, which is still riding on its celebratory narrative, this is one battle the labels will not want to lose.
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