As 2016 drew to a close, much of the industry animosity targeted at streaming seems to have been replaced with a largely favorable outlook. Here Nick Susi examines the state streaming today and what its long-term impact might be.
Entering 2017, a popular topic of conversation has been focused on streaming’s impact on the music industry. It wasn’t long ago that the industry and media coverage of streaming had a widely negative connotation wrapped around it. 2014 ended in Taylor Swift’s stand against Spotify’s royalty payments. 2015 ended in David Lowery’s $150 million class action lawsuit against Spotify. Here we are only a year or so later and the conversation surrounding streaming has shifted to a largely positive outlook. Streaming has now driven a favorable increase in global recorded revenues, with Spotify and Apple combined driving $7 billion with over 60 million subscribers.
Although attitudes toward streaming have been increasingly positive, the era of streaming is still largely nascent. The long-term impact is entirely unknown.
How Engaged Are Streamers Anyway?
There are a number of factors that make it difficult to estimate per-stream rates. Varied rates by country, paid subscriber rates vs unpaid subscriber rates, and so on. There are reports that have been released in 2016 providing esti
I have been asking myself though, what is the actual long-term value to the artist for garnering these millions of streams on an individual song? What is the likelihood of replicating the streaming success of one artist’s song into their next release? I began tracking and monitoring a few releases over the course of 2016 through Spotify’s Fan Insights. I started to notice that in many cases, the number of streams that an artist was receiving in a given month, that that number was nearly the same number of streams that the artist was receiving within playlists in the same month. Meaning, the user experience of listening to that artist was almost always within a streaming platform’s major playlist, where that artist was only 1 of 20 to 100+ other artists.
This user interaction with the artist is a passive impression, wherein the user has chosen to engage with a playlist’s purpose and context, like New Music Friday or Release Radar for discovery, or Cardio for the gym, more so than the direct intent to engage with a particular artist. And that the conversion rate of a user taking a further step towards a meaningful engagement with that artist, such as venturing outside that playlist to see who the artist is and listening to the rest of their catalogue, was incredibly low.
This is all to say that when the user’s primary interaction with a given artist is only within a playlist, even if that user has chosen to save or add that artist to their own playlist, there is no identity building for that artist. Who they are, what they look like, what their story is, and so on. Will Bloomfield, manager of One Direction, recently supported this notion stating, “Our greatest challenge is breaking artists [...] You’re not even in the artist’s eco-systems anymore. You’re in ‘Fresh Hits’ or ‘Spotify Dance’ for example or whatever other playlist you’re listening to. We have to think about how we convert a song in a playlist into the next arena or stadium act.”
If the streaming ecosystem is showing trends in user behavior towards the discovery of songs within the purpose and context of a playlist, over strengthening the identity of individual artists, what might the long-term impact be? Is there a disparity growing between the success of an artist versus the success of a song? And how can artists and streaming services better work together to build stronger identity into the streaming ecosystem, interface and user experience?
I began to take a more granular look at this trend, conducting a few one-on-one interviews with middle school to high school age students. I asked them about their weekly listening habits. How they discover music, what their relationship is with streaming, and so on. Trends began to emerge in their responses. The sheer amount of music they consumed on a day-to-day basis was impressive. The limitless, always-on access that streaming gave them to listen to any music at any time made them excited to discover songs that they may not have listened to otherwise. Indie, jazz, soul, hip-hop, electronic – they listened to virtually every style and genre of music. They were discovery-obsessed, looking at music as a talking point among their friends, almost as if it were a competition to see who would be the first and the fastest to come upon a new song before the rest of their peers. More often than not, the music served as a background soundtrack for a specific mood or moment while another activity took place, like working or reading or playing video games. And the vast majority of this listening occurred within playlists filled with single songs, versus listening to entire albums.
I thought, surely though, there must be at least one artist that each of these students actively seek out and consider themselves that artist’s “super fan.” I asked each of them, despite largely listening to single songs in playlists, who is their favorite artist that resonates with them and why? The most common responses were Chance The Rapper and Kendrick Lamar. Interestingly, much of their feedback had less to do with the artists’ actual music, or even their celebrity. Instead, they were drawn what these artists stood for in relation to politics, race, independence in the music industry at large, and how those viewpoints aligned with their own belief systems and aspirations.
But the most interesting and peculiar answer came from a student who named not a single artist. Instead, he rattled off a few very specific sub-genres and subcultures of music that he was obsessed with at the moment. He cited a collective of minimal electronic artists he recently found on Soundcloud, as well as a community of basement noise punk bands from close to his hometown in New Jersey that were starting to receive considerable critical acclaim.
While this particular response was an extreme example within a relatively small sample size of students, all of the students’ feedback did point strongly towards the same trends. Their behavior favored the importance of the purpose and context of listening, with an added layer of cultural and communal significance and how the collection of songs, more so than any one specific artist, were a reflection of the listener’s own life story, choices, interests, aspirations and ideologies. If the streaming ecosystem and user experience is largely playlist-based for often passive listening, is it offering artists, especially at an emerging to mid level, the necessary tools to build identity in this way that is resonating with the user beyond what the music sounds like?
How Powerful Is Curation?
Coming up on their sixth anniversary, Soulection has been leveraging this notion of cultivating a community and culture through curation. Functioning as a hybrid between a record label, creative collective, events promoter and radio show, they have been fostering a very specific sub-culture and community in Los Angeles. The name Soulection has come to stand for something palpable. They sit at the convergence of underground west coast off-kilter hip hop and electronic beats, cut from a similar cloth of Stones Throw Records. This movement is not necessarily something they have started from scratch on their own. Rather, they tapped into a community that already existed and through the medium of music, empowered the culture and its voice to grow and scale exponentially through the platforms they provide. They curate an Apple Beats 1 radio show, collaborate with lifestyle brands like Stussy, curate events with brands like Red Bull, and curate a constant output of new White Label Series EPs, singles and playlists. Their work to empower this community in many ways transcends the specific individual artists they represent. Just take a look at the size of Soulection’s aggregate digital-social following in comparison to the artists they represent.
This idea of cultural curation as a business model should not be underestimated. It feeds into this idea of a discovery-obsessed user. Soulection is not the only one finding benefit in this. On a smaller scale, Noon Pacific falls somewhere between the lines of a singles label and a blog. They act as a subscription service that releases a playlist of new song discoveries every week, directly into the user’s inbox.
On a larger level, major labels are beginning to grab up successful singles within their roster that are not dedicated to a specific artist’s album, and creating compilation-esque “playlist albums” around these songs. The major labels are essentially leveraging single songs’ streaming successes to propel these playlists into album-based charts. For example, this past summer, Epic Records took some of their top performing singles, including DJ Khaled’s “For Free” feat. Drake and French Montana’s “Lockjaw” feat. Kodak Black, and packaged them up into a playlist titled Epic AF. The success of the playlist, by virtue of each single’s streaming success, caused the playlist to spend four weeks in the Top 10 of the Billboard 200, based off streams alone and no sales at all.
These models are likely to become even more ubiquitous - tapping into specific subcultures through the music that embodies them, and packaging these songs into playlists with clear context and purpose for discovering and supporting these communities. This method is clearly leading to budding businesses and charting success for curators, but what does this mean for creators? Curation has always served an important purpose throughout the history of commercial music, and streaming and playlisting culture has significantly raised the importance and impact of curation. But has the curation of a collective gained equal or more importance than the creation by an individual?
(We will continue exploring the future impact of streaming next week in Part II.)