6 Of 2016’s Key Music Marketing Trends

After such a tumultuous year, the music business community is anxious to see what 2016 has in store for them. In this article, we look at six marketing trends which are likely to feature prominently in the coming months.

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Guest Post by Lucy Blair on Hybrid LanguageNew year, new start, new stats. After a rollercoaster ride through the ups and downs of digital music in 2015, new figures from the BPI and Nielsen Music indicate that revenues are on the rise, bolstered by the latest reports that Apple Music now has 10m paying subscribers, and Spotify 25m. And in the UK and US recorded music markets, the growth of streaming seems to be outweighing the decline in track and album sales, So far, so good – but of course, there are always dark clouds to darken digital music’s silver linings. The music industry still has many urgent issues to solve – such as safe harbour, putting payouts and royalties to rights, and taking paid subscription streaming truly mainstream. With these developments heralding big changes in how music is released and promoted, let’s take a look at what these latest reports mean for the music industry, and ask: how will 2016 change music marketing?

1) VIDEO IS THE SOCIAL MEDIA STAR

Thanks to ever-increasing innovation in video technology, and an apparently unquenchable thirst among consumers for video content, video will be the key format for music marketing in 2016. As live-streaming and interactive video experiences go more mainstream, it will be crucial for the music industry to isolate and understand exactly what opportunities video presents – and how best to monetise those opportunities.We can expect to see more experimentation with live-streaming within streaming platforms, and live-streaming simultaneously on multiple platforms, as Universal did last autumn with their ‘This Is Dance 2016’ launch party. The multi-platform approach to this campaign represents a win for both fans and the label / artist, that I expect to see others replicating – enabling the former to access the stream on the platform of their choice, and the latter to increase their chances of reaching the widest possible audience. In addition, if mainstream platforms such as YouTube and Facebook introduce features to make live-streaming much more of an interactive experience – such as virtual tip jars, messaging, and the ability to up-sell merchandise and music – then we could see new opportunities for monetisation and audience development start to open up. Apps like YouNow, which already integrate such features, could well be acquired by one of the big guns in 2016. But when it comes to making the live-streaming experience truly immersive and interactive, virtual reality holds the key.

2) VIRTUAL BECOMES REALITY

While VR may be a long way off mass adoption, it’s not for a lack of trying on the part of the music and technology industries. Oculus has announced that its Rift headsets will ship from March for £499, while Universal Music plans to create a series of virtual reality concerts this year. Details have been few so far, but it will be fascinating to find out exactly how these concerts will be accessed by audiences. It’s easy to write off initiatives like this as gimmickry, but VR is about the long game. In a few years’ time, VR-capable technology will be commonplace, while mainstream media platforms like Facebook and YouTube already support 360-degree videos, and anyone with a smartphone only needs a cheap Google Cardboard-style housing in order to have a VR headset on their hands.

2015 saw plenty of initial flirtation with 360-degree, interactive and experimental video formats, such as The Weeknd’s ‘The Hills’ remix VR experience and Years & Years’ DeepDream ‘Desire’ video. We’ll see many more labels and artists move into creating interactive video experiences this year – although budget may prove a sticking point for some. And while the creative and marketing potential is huge, creators and advertisers alike must beware the risk of alienating fans with content that’s seen as a simple gimmick. Only by focusing on creating compelling experiences, which are tailor-made for each platform and each audience, can virtual reality truly go mainstream.

3) REDEFINING YOUTUBE’S ROLE IN MUSIC

As the dominance of streaming and video in digital music grows, so too does that of YouTube. Firstly, there’s its cultural impact. As music industry analyst Mark Mulligan has highlighted, YouTube has become the single most important content destination for younger generations. So much so that YouTube stars are creating a whole new youth culture, and reinventing the star-fan relationship as we know it. YouTubers are creating successful careers and revenue streams both on and off the platform; wannabe stars should aim to be the next PewDiePie. Artists need to think more like YouTubers do, and attract and build audiences by creating regular, episodic, bite-size content that is not only perfect for short attention spans and mobile consumption, but also for getting audiences addicted. As with all streaming platforms, artists and labels must play the long game and focus on developing a relationship with their audience, building a community, and keeping those fans coming back and consuming as much content as regularly as possible. Only then can that content and that audience be monetised.

Which brings us on to YouTube’s commercial impact. YouTube generated $9bn in revenue last year, significantly more than any other music streaming service; and video streams grew faster than audio ones. This means that the music industry must turn video from pure promotional tool into revenue-bearing product, by following in the footsteps of the YouTubers. We may see more big acts take an audio-streaming-first approach to releases this year, as the likes of One Direction and Ellie Goulding did last year, but that won’t dent YouTube’s power – so artists must ensure that they are monetising the platform as effectively as possible through their music marketing. The launch of YouTube Red should provide another incentive to create more content on the platform, although there is a huge question mark as to whether even the likes of Google can persuade people to pay for content that they’re used to getting for free. And it’s telling to note that YouTube isn’t just relying on music to drive subscription sign-ups, instead using the incentive of original, exclusive content from some of its best-loved creators such as gamer PewDiePie, producers and writers The Fine Brothers, comedian Lilly Singh and more.

4) TAKING STREAMING MAINSTREAM, AND THE BIG MUSIC BUNDLE

That problem of how to drive subscriptions is one of the biggest issues facing digital music in 2016 and beyond. It seems thatstreaming is indeed making up for the decline in single and album sales in the UK; Apple Music now has 10m paying subscribers; Spotify is rumoured to have at least 25m. And of course, that’s all cause for celebration. However, we should be cautiously optimistic; the struggle to take streaming truly mainstream, and to drive subscription sign-ups, is still all too real. Despite these positive developments, the market for music subscriptions still just isn’t that big. As yet, it’s not clear whether Apple’s sign-up success is at the expense of other services, or whether it really is growing the overall number of paying subscribers. The hard fact is, many listeners just aren’t interested in paying £120 a year for music. Nielsen Music’s latest 360 report shows that a worrying number of consumers still think that streaming is too expensive, this being the main barrier to them signing up to a subscription. Perhaps even worse was that “I can stream music for free” was #2 on the list of reasons why people would not pay, and that that 78% of respondents said they were ‘somewhat or very unlikely’ to pay for a streaming service in the next 6 months. Ethan Kaplan put it perfectly when he said that: “Music is wallpaper to most people.”Simply put, streaming services will have to keep changing their models in 2016 and beyond, and diversifying into new revenue streams, in order to achieve any kind of mass adoption. Prices will need to drop, more niche platforms may well emerge, the battle for content exclusives between the streaming behemoths will reach fever pitch, and it seems likely that freemium may well suffer the consequences of all of the above. In order to convert more casual listeners into paying customers, recorded music will increasingly be bundled with other content; and at the same time, the role of music streaming services may well change. Will streaming services look to emulate the success of platforms like Netflix by becoming original content creators themselves? An interesting by-product of this would be the potential for streaming services to replace, or at least lessen the reliance on, traditional record label services. It seems likely that we’ll see more content creation partnerships between streaming services and big-name artists; however, this will only further the superstar economy, and create more walled gardens, when getting people to pay for one subscription is tough enough. The ultimate solution to this could perhaps be that a platform like Spotify gets acquired by Netflix, and itself bundled with other entertainment content. But what would that mean for music industry revenues, for artists, for labels?

5) STREAMING COMBINES BIG DATA AND BIG IDEAS

As download sales decrease and streaming dominates and evolves, it will be more crucial than ever for the music industry to figure out what does and doesn’t work in streaming, how to make money and how to open up new revenue streams. The more that streaming moves towards making Ian Hogarth’s concept of ‘full stack music‘ a reality, and becomes more tightly integrated with live music and radio, the more marketing opportunities and revenue streams will open up for the music industry. Streaming services could also introduce more marketing and messaging features, and perhaps ones like artist subscriptions, but the potential for further innovation goes much deeper. For example, in the wake of Facebook’s announcement that Messenger now has 800m users, Music Ally suggested that AI chat bots could live within streaming services themselves, helping you to create playlists and find music that you’ll love. How important playlists really are will be another key question to answer in 2016; if Spotify was to follow up on calls for it to professionalise curators on the platform, this would add value for curators and creators alike. The key to all of this – and the real value of streaming – lies in data. The implementation in 2015 of new artist analytics platforms by the likes of Spotify and Pandora was a good start – but we’re still only taking baby steps towards being able to access the kind of data that will help the industry to understand who fans and superfans are, where they are, how they listen to artists, what drives streams and repeat listens, what drives a casual listener to become a fan, what drives listeners to buy tickets, merchandise and so on. Services like Spotify are data companies above all, and could still do more to help artists to build and reach audiences on their platforms, to develop communities on those platforms rather than via external social networks, and to drive repeat plays, engagement and time spent. 2016 looks set to be the year when we start to see exactly how all of this information comes together, and exactly how streaming data is influencing the way that music is released and marketed, and tours are planned.

6) MUSIC MARKETING GETS ANTISOCIAL

It’s time for the music industry to re-evaluate its social media strategy, which has become a game of diminishing returns for artists and audiences alike. It’s time to end the obsession with meaningless vanity metrics, and instead focus on building sustainable artist-audience relationships, the best ways of bridging the gap between sales and streaming, and metrics like customer lifetime value. After all, millions of followers doesn’t translate to millions of sales. Or streams. In an always-on, streaming-dominated attention economy, artists don’t sell their music anymore – they sell themselves. An artist’s most valuable asset is their time. And releasing one album every couple of years is not enough – younger audiences like to snack on content. Therefore, artists should focus on creating more frequent, short-form, bite-sized content for their digital platforms. And that goes for music, not just social media content. Many artists would do well to follow the example set by the likes of Drake and Gucci Mane in 2015 of creating and dropping multiple mixtapes, albums and other releases on a more frequent basis – more content, and less promo cycle. Yes, Drake is at a level that most artists can only dream of, but his strategy of releasing constant content saw him become Spotify’s most-streamed artist globally in 2015.2016 will see a seismic shift from marketing on social networks to messaging apps and platforms, such as WhatsApp and Facebook Messenger (the latter of which now has 800m users), and private groups. In time, this level of communication will surely be expected from brands and artists alike, and will be an ideal medium for bite-sized content consumption. However, the fact that these apps plan to become a one-stop portal to everything on your smartphone suggests that they may well go the same way as social networks – cluttered, noisy and time-consuming. And therefore far from an intimate way for fans and artists to truly connect. Another option could be that Facebook and its peers start to integrate music into their platforms much more effectively, through features like Music Stories, and perhaps even selling gig tickets directly from event pages. Ultimately, however, the music industry must be mindful of the importance of owning the relationship with your audience. Collect and own as much data on your audience as you can, and prioritise the power of your own platforms. In the face of all the technological innovation in the world, the humble website and mailing list are still the most powerful tools at the music industry’s disposal in 2016.