In this piece, David Emery muses on the changing face of the music industry, and how windowing and streaming exclusives are precipitating gradual but fundamental alterations to the way artists release music and listeners consume it.
Guest post by David Emery, VP Global Marketing Strategy for Kobalt Label Services
Releasing music is getting complicated, isn’t it? Once, you’d simply use huge factories dotted around the world to etch your record onto a small plastic disc, then use fleets of planes, trains and automobiles to get them into thousands of stores dotted around high streets hither and thither.
Now you just release it digitally with one retailer and go to number one in multiple markets with no traditional promotion. And it’s all just so complicated.
Now obviously, obviously, the Frank Ocean’s of this world aren’t and can’t be a blueprint for everyone else, for exactly the same reason that Radiohead’s pay-what-you-want scheme wasn’t something that any old band could make work (homework assignment: 1500 words on how In Rainbows was the first significant windowed exclusive release). And I’m not saying the release of Blonde was perfect. But I think the current crop of exclusive and windowed releases are a manifestation of some significant industry shifts.
The iTunes Store launched just over 13 years ago, and it’s taken that long for digital music to actually change how people release albums (it did the job with singles a fair while back, mind). It seems crazy to say, but while in certain markets (most certainly not all) the market share percentages have been swinging in digital’s favour for some time, it’s taken until now for a significant – although still small – number of artists to release their records in a way that is obviously geared around the digital release, at the expensive of the more traditional way you would release a CD or LP.
This doesn’t mean that physical is “dead” or any other such rubbish, as it’s still a significant part of the pie – which isn’t shrinking as fast as some thought it might – but it does mean that it’s not in the driving seat any more. A couple of years ago the idea of a new Kanye record without a CD release would sound crazy, but he did it this year.
Would he still sell a load of CDs if it was available? Yes, of course.
Did it need to come out at exactly the same time as the digital release? No, it didn’t.
Which I guess, ultimately, leads us to the death of the release date.
Everyone loves something “dying”, it makes for a great headline. But let’s hop back to the start of this article, with all those trucks driving around all those CDs to all those record stores. All of that infrastructure requires coordination. You don’t want one store selling a record before another store has got it yet; that would piss the other store right off. And you want to sell as many as you can as quickly as you can so that the stores reorder (because don’t forget, the fan isn’t your customer, the stores are), and to do that you spend lots of money to make sure people go out to buy the CD on release day.
Today, all of this is still true, but it’s getting less and less relevant by the minute.
We’ve all been working in this structure for too long to snap out of it easily, but the cracks are certainly there. If you are digital first in your release strategy, then the whole game flips on its head. Your goal is monetising listening, rather than selling units, which means you want to get the music on streaming services at the same time you’re calling attention to it. The build-up doesn’t work – there’s no such thing as a streaming pre-order.
Of course, releasing early screws with all the logistics and build-up we talked about before, so maybe your CD and LP come later. Which is fine for the consumer – see every other medium (films, books, tv) which has staggered format release dates – but is going to take a minute for the industry to get used to.
The music industry is very insecure. I’ve written about it before, and it’s just as true as it ever was. No one knows what they’re doing, because having a hit is not something that you can predict with any decent success rate. It’s all guesswork (insert a shrugging emoji here). So, to get a bit of reassurance on whether something is “good” or “bad” (whateverthehell that means), everyone looks for someone else sticking their neck out first.
We all know what those traditional “signals” are that something might be going to do well or not – is it on the Radio 1 playlist, is it “Shazaming”, has it been booked on Jools Holland/SNL/Graham Norton, is the tour selling etc. etc. Any one of these play some element in driving people to listen to the music, but any one of them on their own only does so much, and in fact you could make a very compelling case that this affect is being reduced significantly as media becomes more diversified.
What they do though is instil enough confidence in the rest of the industry – stores, radio, promoters – that if they were to do something with your artist they wouldn’t be sticking their neck out.
A quick example – look at Christine and The Queens, and how she’s broken in the UK. The first significant exposure, beyond some great tastemaker press, was a stunning performance on Later… With Jools Holland in May. That performance took the album from doing less then 200 copies a week to something just in the thousands, which is a great increase but still not huge. But that performance no doubt was the reason she got a slot on the Graham Norton show, and when she did that she shot into the top 10 and since then is well past a Gold record.
So, in this new model, given that we’re not driving media and fans to a focus point release date, and we can’t rely on a breakout success like Christine and The Queens, who is the cheerleader that gives the rest of the industry the confidence to get on board with something that’s different from the norm?
Well, that’s where the digital services – Apple and Spotify – come in.
With the shift to streaming all of them are doubling down on curatorship, as a necessity – they need to drive both differentiation and customer use. The more people listen, the more likely they will keep paying their subscription, the less likely they are to switch and the more likely they are to get hooked to a curatorial voice that is unique to that service.
As they build their curatorial voice their position in the industry is shifting slightly. Once they were viewed simply as another retailer, so someone like iTunes committing big to a release didn’t really mean much more then HMVdoing the same. But now, they are both building a significant voice that means that if they commit to a release, it means something.
Spotify’s Today’s Top Hits playlist means something.
Apple, who have clearly committed significant dollars to Frank Ocean means something.,
The more these unconventional releases keep happening, the more times people don’t release physical at the same time as digital, or announce a record the same day it’s released, the more this voice will grow.
And they will keep happening.
Another change that adds into this mix, made clear by Frank Ocean parting ways with Universal the day before the release of Blonde, is the shift in power towards artists and managers.
This is not to say, or course, that the labels are screwed and the whole industry is going to flip on its head, with Universal, Sony and Warners left standing in a pile of rubble, eyes blinking, never having known what hit them. They’re not going anywhere, anytime soon. But as revenues shift, streaming takes a greater slice of the pie and it becomes less and less about the massive global logistics (the trucks, again), artists and managers are taking more of a core role on the recordings side.
The major labels all flaunted with the concept of 360 rights a while back, which didn’t really work out for them too well (turns out it’s difficult to do them all well), but managers have always been in that space, and are increasingly expanding their remit as the labels shrink in their resources. It’s not a coincidence that Frank Ocean’s management company has a Head of Marketing, and that’s by no means unique.
This is where the debate about “exclusives being bad” gets complicated. You can make a very compelling case for streaming exclusives being bad for the major record labels. It is in their interest to have multiple significant players in the market, so that one doesn’t have dominance and hence more negotiation power then they do.
But if you look at it from the artist’s point of view, is it?
Let’s assume you’re doing an exclusive with Apple. What you can potentially get, right now, is significant exposure on the 2nd biggest streaming service, simultaneously with (still) the biggest music retailer on the planet (iTunes). As well as that, you get significant funding for videos and content, which is something the labels are finding harder and harder to spend on. And you’re almost certainly getting some marketing money thrown in as well.
You have to weigh all of this up against what you’ll lose, which at the very least is going to be a week or two of not being on Spotify (depending on exactly the flavour of exclusive vs window you’ve gone for) and the consequent lack of coverage. And, if it’s a digital window only, as many are, that’s it. And, as ever, piracy is grossly overstated in its relevance here. It’s a simple sum: how many listeners do you lose by not being on one platform, versus how many do you gain by the extra exposure on another?
The answer – as with, well, everything in the music industry – is going to vary artist to artist, band to band. There is no right answer right now.
With artists and managers in the driving seat, that means that they’re not going anywhere until one of these two things happens:
- The market reaches a point where there are at least two platforms that you can’tnot be on, even for a week
- Apple, Tidal, Amazon or even Spotify if they go down this path, all stop offering good enough incentives for an exclusive release for it to make sense
Both of these things could very plausibly happen, even in the relative short term of the next couple of years. But they could also not, as the streaming services are only going to get more and more competitive against each other, looking for more and more differentiation points. These exclusives drive subscriptions and user adoption, at least in the short term, and that means everything is going to be pretty dicey before it settles down.
But then, who would want it to be boring?