MIDEM DAY 2: Music Streaming 2.0 • Andy Ng Of China’s Tencent • The EC’s Martine Reicherts • More
Day 2 of Midem 2017 has just wrapped with Andy Ng of Chinese powerhouse Tencent, the European Commission's Martine Reicherts and streaming 2.0 all high on the day's agenda recapped in this post from Midem Blog in partnership with Music Ally.
Midem 2017 is now well underway, with first-day keynoters Andy Ng (photo) and Martine Reicherts sharing their knowledge with the audience, and further debates about the evolution of music-streaming, and what it means for the industry.
Ng is the VP of Tencent Music Entertainment Group, which has become a powerhouse in China’s digital music market, including through partnerships with the largest western labels.
Interviewed by Billboard’s Asia bureau chief Rob Schwartz — who described Tencent as “Asia’s most valuable company” — Ng talked about Tencent’s music strategy, including the startling stat that the company’s three streaming services have 600 million monthly active users, and 200 million daily active users between them.
Most of them aren’t paying: Tencent had five million subscribers in 2015, 10 million in 2016 and 15 million now, with hopes of reaching 25 million paying music subscribers by 2019.
“These are pretty amazing figures compared to the rest of the world. I have to be honest with you guys: the ARPU in China is much lower than the rest of the world. In China we are basically looking at the volume: the population,” said Ng.
“In China, the lower [the price]the better. This is an educational thing that we have been communicating with the users, because they have been doing the piracy stuff for so many years, and they have been used to not paying for content. So right now, this is a very good start in having them realise that content has a value. We are charging them a small minimum in order to attract the users who will pay for the services.”
Also keynoting on day one of Midem 2017 was Martine Reicherts, director general of the European Commission’s directorate general for education, youth, sport and culture. Music Week’s Mark Sutherland moderated.
She used her keynote to outline her vision for a music business equivalent of the EU’s MEDIA programme (designed to support the European film and audiovisual industries), under the banner of Music Moves Europe.
“We have started to work on a programme whereby we would have a similar MEDIA programme for music,” she said, adding that it has three years to talk to the industry to decide what to put in this programme. “This is not a quick fix and we will not save the world immediately,” she cautioned. “But in three years’ time we can make it better. The plan is to replicate the success story of MEDIA.”
The time, she felt, was ripe for something like this to be put in place. “We would like to create a specific European programme to support the music sector. We have our programme supporting the movies. Can’t we do the same for music?”
Music streaming has already been put thoroughly under the microscope at Midem so far, and that includes looking beyond what’s happening with the biggest global players: Spotify and Apple Music.
One session looked for “Music Streaming 2.0” models, and dug more into the market trends. A panel including 7digital CEO Simon Cole (above); Tencent’s Ng and XPERI’s EVP chief product and services officer Geir Skaaden spoke.
“There are 100 million people paying to stream and maybe another 200 million streaming for free. There are three billion people listening to the radio every day. Those people are going to be the streamers of the future,” predicted Cole.
“The people who are going to become engaged with digital music from now on… are going to be those people who want some help. The question for me is what’s the entry model for those people? What’s the pricing model? How do you get them into the industry?”
Ng also talked about the way many music listeners don’t want to choose their own tunes. “70% of our users actually choose the word ‘don’t care’. They just need music but ‘I just don’t care!’. Maybe they are doing exercise, having a shower. They just want some background noise, some background music,” he said.
“That’s how the behaviour is acting now, especially in the China market. They will tend to choose the themes fitting their mood at that very moment… Sometimes they are maybe working, or chatting with friends. Having dinner… That’s why the trends nowadays are pretty much on the playlists.”
Streaming isn’t just about global services either. Another session focused on some of the local players who are growing rapidly in their markets.
The panel included Sandra Gama, chief legal officer at iMusica; Eddy Maroun, CEO of Anghami; Brian Ringer, CTO of Napster; Siddartha Roy, CEO of Hungama; Oliver Lalouchez, CEO of Trace; and Val Segal, CEO of ELLO. SXSW’s head of music festival James Minor moderated.
Gama outlined the challenges in Latin America. “80% of the [telco]user base is prepaid. This impacts directly the way we charge users. The Latin users, most of the time cannot afford the monthly cost of streaming subscriptions, but when we divide it up in weekly prices, many times this service becomes possible for him,” she said.
Maroun outlined Anghami’s growth in the Middle East and North Africa. “We are now at around 41 million users, but we also need to grow our revenues so that everyone is happy. We’re not just in growth in terms of numbers, but also in terms of revenues,” he said. Those 41 million users generate 650m streams a month at the moment, added Maroun.
Another session focused on the role being played by digital distributors in the modern streaming economy: a world where grime rappers (for example) are finding success by going the DIY route with a distributor rather than a label.
Yoel Kenan, CEO of Africori; Marie-Anne Robert, VP international at TuneCore; Scott Cohen, co-founder of The Orchard; and Eliah Seton, president of ADA Worldwide debated this state of affairs, moderated by consultant Ralph Simon.
How to get onto big (and not-so-big) playlists at services like Spotify and Apple Music was one discussion point. “People tend to be focused a lot on their genres: ‘I want to be on the Rap Caviar playlist on Spotify’. But it’s more and more about moods as well,” said Kenan. “And we’re looking at getting into small playlists and using those analytics to then pitch to the bigger playlists. The guys responsible for the big playlists are also responsible for the smaller playlists.”
“It’s critical that you don’t focus on one. If I get on New Music Friday on Spotify, that doesn’t help me at Apple Music, and if I get a great feature on Apple Music, that doesn’t help my Deezer streams. You’ve got to have a strategy for each of them,” said Cohen.
Planning releases and post-release marketing campaigns properly was the crux of the matter. “Anticipation is still key,” said Robert. “People think with digital you don’t need to anticipate because it goes so fast, but you still have to plan your release properly.”
“Plan for success. What’s next? Great, we got it on New Music Friday this week. So what’s next week? What is your plan for next week, and the week after. The more success you have, the less you need to release,” agreed Cohen. If a track doesn’t take off, release another one the next month. If that doesn’t take off, release another the month after. But once you have a hit, it’s time to hit pause on further releases and work the popular track to its utmost potential.