AIM Music Connected 2016

Subwoofr attended the 2016 AIM Music Connected conference — a fantastic event that explored a number of important trends in the music industry. The major themes of the day were data, ownership and control and the future of the “album” format. In this post, we look back on the various talks and panels that provided some excellent insight into the future of music.

Keynote

Kicking off the day was Kieron Faller of CI, the main event sponsor. He focused on the importance of one single idea — “control your destiny” adding that we should be taking control and making decisions about our businesses rather than letting others do it for us.

Kieron used a great parallel example of Meantime Brewery, a craft beer company based in Greenwich. In May 2015, they were acquired by SAB Miller — who had a track record of letting the companies they acquire carry on doing what they’re doing. Eventually, AB InBev would launch a takeover bid for SAB Miller, and then look to divest their interests by selling off brands and moving on technology and people. Meantime Brewery were part of that process, and were sold to Japanese beer company Asahi. The entire process from acquisition by SAB Miller to being sold to Asahi happened within six months.

He then talked about how he talked to a genre-specialised label head at SXSW earlier this year who said they had their best year ever the previous year on the back of one of their acts having a major hit. This year, however, was not so good as that act was signed by Sony. He reinforced the point that you need to be aware of control, make the decision to be in control and then act to put yourself in control.

Meeting the digitals

Next up was a chance to learn about the various digital companies exhibiting at the conference. One thing that is absolutely clear is that there is no shortage of companies providing services around digital distribution and anti-piracy in the UK music industry! The running joke throughout the 2 minute pitches was the confectionary, or lack thereof, on offer from each of the companies! The highlight of the pitches had to be Summer Kim from CI saying that they do “very boring stuff” but “we’re very lovely people”, which was met with raucous laughter from the audience.

Know your customer

Chris Carey gave a great presentation with very insightful data on the UK market. Like the global industry, the UK market experienced growth in 2015 with revenues up 3.5%. The driving forces behind this were public performance revenues and streaming, which was up 50%. Streaming continues to cannibalise the market for singles.

Chris made an important point that while data can be very insightful and useful, it doesn’t always have the answer — pointing to the example of Leicester City, who are on course to win this year’s Premier League, who at the start of the campaign were 5000/1 to win the league, having narrowly avoided relegation last year. He gave some hilarious examples of events that were considered more likely than Leicester winning the league — Simon Cowell becoming prime minister, the Queen having a Christmas number 1 and Piers Morgan becoming Arsenal manager.

Chris also warned that data can discourage you from doing bold things. I think this is a very important, and often discounted, consequence of making decisions based solely on data. Data is typically historic, and doesn’t always tell the entire story. Our job as innovators is to lead the way, and realise that people don’t always know what they want. He cited a famous quote:

“If I had asked people what they wanted, they would have said faster horses.” — Henry Ford

When it comes to “Big Data”, Chris offered an explanation that is one of the better ones I’ve heard. He said that big data exists because people are doing the same things they’ve always done, but now they’re doing it online, which means it can be tracked. People have always liked stuff, but before you didn’t see that they did — now you do because they click the button on Facebook.

I won’t go into detail on all of the results of Media Insight Consulting’s consumer survey, but one that was particular interesting is where the audience for music lies today.

37% of UK music consumers mainly use YouTube to listen to music, while in the 16–24 age bracket this number is just shy of 50%. Very interestingly, very few people over the age of 35 use Spotify Premium. I was also surprised by the results for Apple Music and wondered if there was some confusion with the respondents as to the difference between iTunes and Apple Music.

Whose data is it anyway?

This panel session was interesting — I was a bit surprised by the format, it was structured to give each speaker time to talk and the interaction between the speakers was quite limited. On the panel were Robert Kaye of MusicBrainz, Will Page of Spotify, Tijl de Bie of University of Ghent and Paul Sanders of The State51 Conspiracy, who acted as moderator.

Robert Kaye spoke first. If you’re not familiar with MusicBrainz, I suggest you make yourself familiar with it. It’s basically an open source IMDb for Music. The level of detail in the database is absolutely incredible, and it’s all provided voluntarily by people from around the world. I had the chance to speak with Robert afterwards, and he told me that some volunteers have contributed as many as 1 million edits to the database — an absolutely staggering insight into the level of commitment this community provides.

Will Page provided some interesting information about Spotify’s Discover Weekly feature, which has in essence become a “perishable good” that expires each week on a Monday morning. He highlighted that Spotify see a rush of traffic on Sunday evenings now, as people hurry to save the current week’s playlist before it disappears forever. Spotify build 75 million unique playlists each and every Sunday night, and one time they updated it late and people were outraged!

The most amazing thing about the feature is that the marketing campaign for it kicks off in June. It’s become a sensation through word of mouth and organic means.

Tijl, a data scientist, showed some interesting information on how the audio of music has changed over the past number of decades — particularly interesting is how the loudness of music has spiked over the past decade.

He showed research that is predicting the genre of a song purely based on audio analysis, and how it can also predict and tag the mood of music. Anticipation in the room rose as he mentioned that there is information in the audio that distinguishes hits from non-hits, but warned label heads not to get too excited as he didn’t have any fairy dust that would allow them to predict future hits (at least not yet)!

The bots are coming!

The next panel, moderated by Stuart Dredge of Music Ally, took a much more conversational style, which was quite fitting considering it mainly discussed the role of messaging applications in the future of social marketing in music. The quote “Talkshow is the new Peach” set the tone, as once again we witnessed the pace of technology evolution — Peach launched in January 2016, and yet people talk about a newer product replacing it like it has been around for years!

Claire Mas of Communion Records made a very valid point about the prominence of WeChat in China and how it’s not just used for messaging between friends, but also to book taxis and do pretty much everything else you want to do online. Daniel Ayers responded with an equally interesting argument that WeChat doesn’t exist outside of China, and perhaps part of their prominence there was due to the lack of choice and competition in that market.

This led to a discussion about how artists and brands could leverage the new trend of messaging bots to engage and interact with their fans. The consensus seemed to be that bots could absolutely help target fans in a new way, but that it was important to execute it the right way.

One thing that struck me during this discussion was how we keep being pulled to platforms that bring us back to an unstructured method of engagement. Remember when Twitter first came out? You could basically enter a status update, there was no concept of conversations. The user community came up with the notion of using the @ symbol to mention another user, and it was much later that this feature actually would drive notifications. The same goes for the use of the #hashtag. Now we’re going back to a very simplified approach of engagement — chatting with automated bots to say what we want. While this is interesting, you can’t help but expect that eventually it will become such an unstructured mess that platforms will add features to provide structure around it, and when that happens we’ll move on to the next unstructured flavour of the month. Perhaps we crave a lack of structure, and the key is to provide a platform that keeps things unstructured but allows us to figure out how to manage it for ourselves?

This panel was the first to bring up the idea that the format of music may be about to change. In a world where the average human attention span is just 8 seconds, will 3 minute songs and 4 minute videos still work? Stuart Dredge provided the example of Beyonce’s new long form video, which has received universal acclaim, and how many people have started creating short animated GIF snippets of the video to share on various platforms.

Run The Jewels

The case study presented by Siofra McComb of The Other Hand and Darren Hemmings of Motive Unknown was the highlight of the day for me. At Subwoofr, we’ve spent the past seven months encouraging artists and labels to put a stronger emphasis on their own website. They showcased their incredibly successful digital marketing campaign for Run The Jewels, particularly their album launch for Run The Jewels 2.

The album was offered to fans absolutely free of charge, in exchange for their email address, directly through their website. The amazing statistic that followed was that over 450,000 people downloaded the album for free, but a staggering 130,000 albums were still sold, in spite of the fact that it could be had for zilch. Key to this was offering the product in any format so that fans could enjoy it however they liked.

Run The Jewels offered special packages to superfans, including a “Fuck you I’m on the guest list” package which offered backstage access at a gig of the fan’s choice. The key message was that they treat their relationship with their fans as sacrosanct.

To sum it up, Siofra said that Run The Jewels have built their own ecosystem of community and commerce as a way to build their brand. On the back of this, they have been on late night chat shows, morning chat shows (Killer Mike is a regular on The View) and US Presidential Candidate Bernie Sanders even introduced them at Coachella.

How did they do this? Through their website. Their website hosts all of their content and is central to their digital campaign. It gives them a full 3D view of their fanbase, a place where they can up-sell to their fans and paint a picture where they can see exactly where someone is on the fan scale. Run The Jewels send everyone to their website. They share content on all of the social channels, but the goal of everything is to drive fans to their website where they can engage deeper.

Shaping the future of the music business

This panel dug deep into what changes lie ahead for the music industry. Phil Hutcheon of DICE introduced his company’s ticketing platform, and their interesting model of not taking transaction fees or monthly fees. Steven Hancock of Melody VR talked about their very interesting Virtual Reality solution. Most of the interaction however, came from moderator Paul Brindley of Music Ally, PledgeMusic CEO Benji Rogers and Mark Mulligan of MIDiA Research. These guys had a lot to say, and it was a compelling conversation to say the least.

It was very interesting to hear that it was 8 years to the day since Benji registered the PledgeMusic name, and that the business had been up and running for 7 and half years already. Benji mentioned multiple times that their platform sees an average spend per user of $55 in the US, and posited that it doesn’t make sense to charge everyone $9.99 for streaming services when it is very clear that many people are willing to pay much, much more.

Benji contributed an excellent overview of the potential benefits of blockchain to the music industry. He put forward the argument that music has a data problem, and blockchain solves many of the problems by only allowing data to amended, never re-written — keeping a full changelog of the data over time. Mark Mulligan responded that while he absolutely saw the potential of blockchain, he was skeptical about its potential adoption in the mainstream music industry. Major players have too much to lose by making everything completely transparent and opening up accountability. He did believe, however, that with momentum we could see a parallel, alternative industry emerge with artists that wish to opt out of the traditional mainstream industry. This could then act as an agent for future change with enough scale.

On the subject of future revenue sources, Benji cited a 2013 Nielsen report he was involved in that put forward that as much as $2.6 billion in revenue was being missed out in the United States annually because the industry doesn’t offer enough in terms of deeper engagement and features for superfans. He reiterated the point about superfans spending $55 on PledgeMusic over $9.99 on streaming platforms, and made a powerful statement:

“Artists that offer me what I want get my money. Those that don’t get $9.99.” — Benji Rogers, PledgeMusic CEO

And of course, it’s even worse than that, as artists only get a tiny fraction of that $9.99 each month. The $2.6 billion figure is something that we at Subwoofr mention a lot when we talk to artists and labels — it frustrates me to see the latest IFPI Global Music Report’s editorial focus on pending EU and US legislation (are we really going to keep making the same mistakes?) when we have a huge underserved market waiting right under our noses.

Bas Grasmayer believes that streaming should be considered a base layer on which we can offer additional features and products. He pointed to the video gaming industry as a great example — they’ve suffered the same woes in terms of piracy but they changed their approach and searched for where the value was. Discussion around livestreaming and Minecraft led to the notion that gaming has nailed down the concept of giving access away to “time rich, money poor” users who spend massive amounts of time in online game worlds creating value, and then charge “time poor, money rich” users money to access that value faster.

Death of the album

Throughout the day there was much discussion about the pending doom of the album as a format, and even potential changes ahead for the typical duration of a song, which originated in an era where radio airplay was important and physical limitations restricted how much audio could be pressed onto a record.

The most heated conversation on this topic was the final panel. Chaired by Tim Ingham of Music Business Worldwide and featuring Adam Cardew of Absolute Label Services, Justin Barker of Slice Music, Sammy Andrews of Entertainment Intelligences, David Emery of Kobalt and Zac Vibert of !K7, much of the discussion centred on whether the dominance of playlists in the streaming era is going to lead to the death of the album as a format.

An excellent point raised that is easily missed is that playlists form a huge part of the experience on mobile for Spotify Free users. Up to 70% of income from streaming is driven by playlists rather than albums. By drip feeding releases, artists can ensure that more of their tracks are featured in playlists than they would if they released all tracks simultaneously via an album. Drake is held up as a champion of this approach, constantly releasing surprise mixtapes and new tracks, only releasing a new full album every 3 years or so.

Consensus was arrived that the album is not dead — people still buy CDs, there’s a reason why LPs are making a comeback — but that playlists need to be a very important part of a modern artist’s release strategy. In fact, we need to consider many different formats when releasing an album these days. Beyoncé’s Lemonade long form video was mentioned throughout the day, but its success shows that in a world of constant distractions, there is still a market for a good and innovative release. Kanye West’s Life of Pablo was also brought up several times, with panelists pointing out that the “living album” could very well be the future standard when releasing music.

The final discussion point on this panel was on the increasing popularity of platform exclusives. Kanye’s Life of Pablo (at least initial) exclusivity on TIDAL, as well as Lemonade, definitely hit a nerve with Sammy Andrews. She highlighted that it is incredibly dangerous to release platform exclusives when we are still nurturing streaming as a new music ecosystem. When users can’t access the music they want on their favourite service, it drives them back to piracy — and the biggest artists in the industry are being self-serving and as a result pushing a lot of people back to torrents and piracy. It was noted that this was incredibly short-sighted and poses a threat to the significant progress we’ve made in recent years.

Beer o’clock

Whew, what a day. At 5pm we flocked to The Rake for some very tasty independent beer courtesy of event sponsor CI, a fitting end to a great day.

I’ve been to many conferences over the years, mainly tech and publishing focused. This was one of the most in-depth and thought-provoking one-day events I’ve been to. I have to say the panels were absolutely fantastic and very enjoyable. I was surprised not to hear any music at all throughout the day, but this only reinforced the purpose of the event — insightful presentations, engaging panels and fantastic networking.

I think the main reason I found the event so invigorating was that it reinforces the ideas behind why I started Subwoofr in the first place. We are on a mission to help artists turn followers into superfans, to unlock their potential untapped revenue by offering a complete digital experience that is centred and focused on the artist. We don’t want to build another ecosystem that artists and fans both need to buy into — we want to help artists build their own ecosystem where they can engage and interact with their fans, much like how Run The Jewels do. If you’d like to hear more about our vision for the future of music, reach out to us. We’d love to talk.