The house on fire
Music is not worthless | part I
This is part 1 of a series that discusses the value of music in the age of streaming and how the industry can leverage online music beyond ads and the 9.99 model.
You have probably read headlines about vinyl generating more revenue than YouTube, Spotify Free and Pandora combined. And then felt bad not investing in your grand parents music format to support your favorite artists. You have also been patronized because you’re not paying for music and are instead using the legal but not “moral” YouTube. And even if you religiously pay the $10/month to Spotify, chances are you have heard about the pennies artists are fighting for with Spotify. And how you, the music fan, should be ashamed to support the Swedish pioneer of legal music.
Whether it’s YouTube, Spotify, Napster or even us the listeners. I don’t think finding who’s responsible for the industry’s collapse is going to help it thrive again. And as Jay-Z puts it: “The challenge is to get everyone to respect music again, to recognize its value”.
The industry and its players are wrong polarizing listeners into good and bad music fans.
But the reality is that most players in the industry are pointing fingers at who’s responsible for lighting the fire, while the house is burning down and everyone is still coughing in the living room.
The house on fire
One investor asked me once: “Music? Would you invest in renovating a house that’s on fire?”. I could not articulate a good answer at the time. But within days of questioning, I thought: “No, I would not. But the music industry is not on fire. It’s an old house in a changing neighborhood”.
We are playing more music than ever. Way over one trillion streams in 2016, and it keeps growing. Any other industry would drool to the idea of engaging people the way music does. So what’s going on?
We think the industry is not looking under the right carpet. But before we tell you where to look, let’s say that it’s only fair that people get upset when their neighborhood changes. Records stores disappeared, the album is dead and consumer audio companies are struggling to make decent margins on their hardware. Music knows the same digital deflation newspapers have known over the last two decades.
This change makes publishers fund music that’s worth less and less everyday. And leaves the industry with no currency and an aging mindset that does not fit the new landscape music fans live in.
There is no currency in music anymore. The album was king and the king is dead, victim of the digital deflation.
But a couple of blocks away, in the same neighborhood those exact fans are celebrating. Celebrating the unlimited and on-demand paradise online music has become. Having a 30 million songs catalog in their pocket and discovering new gems every day. Connecting with artists instantly and watching them perform has never been so easy.
This new neighborhood is now bigger and more connected. It is global and will create a new economy of its own.
We are barely on the cusp of this new economy. The $9.99/month model is the only one among many future ways to monetize the 30M songs catalog we all cherish so much. Curation will help, along with brand partnerships and ads. But the big money is going to come from hardware and software makers who will create the best experience that helps us navigate in the overwhelming sea of content we’re surrounded by.
