Streaming : a fast growing segment
Streaming is the fastest growing segment of music consumption. Goldman Sachs expects the recorded music streaming market to be worth around $37bn by 2030. In this context Midem held the inaugural Streaming Summit and a keynote by Bill Patrizio, president and CEO, Rhapsody International-Napster.
Rhapsody International-Napster has been in the music streaming subscription business since 2001, and as a result has data on paid user/subscriber behaviour that spans 16 years. “What we have witnessed is truly remarkable,” Patrizio said.
“Listeners have consistently increased their consumption and are increasing the breadth of music they enjoy, discovering new genres and artists based on AI and smart algorithms that personalise their experience and drive satisfaction. During my keynote, I shared my perspective on Rhapsody International-Napster — where the company is today, looked back at an amazing journey and offered a vision of where the company is headed for the future.”
A fast changing pace
According to Pete Downton, deputy CEO of European digital music and radio services platform 7digital, we are approaching an inflection point for music and the pace of change will be much faster than the music and radio industries are currently prepared for.
“The digital music services we have today are amazing resources but have historically lacked depth and context around the songs,” Downton said. “Smart speakers and voice recognition are helping to bring digital music to the mainstream, lean-back listener in their homes, while the continued convergence of radio and streaming puts curation skills and discovery at the heart. The next battleground for streaming services will be the car, and voice is sure to play a significant role, to enable seamless, hands-free discovery on the move.”
Awa Girard, founder & CEO of pan-African streaming service Deedo, agreed:
“Streaming services are already playing a major part in our daily routines. Whether it is video, music or gaming, the frequency with which we use these services is rapidly growing. Studies show that a billion people will have access to wi-fi in airplanes by the end of this year. In Africa, 660 million people will be equipped with smartphones by 2020 representing half a billion Internet connections. The main challenge will be to find a model that will equally benefit all stakeholders.”
Streaming is an opportunity
Thabiet Allie, CCO, music, at Tencent, South Africa, sees great opportunities on the continent in the long term: “Globally the music industry has seen great results from changes in consumer behaviour as a result of streaming services. Africa is no different, although we face some challenges. These include factors like the high cost of mobile data, smartphone penetration and copyright protection.”
Scott Cohen, founder and vice-president, international, at distribution company The Orchard, sees parallels with the early web:
“Streaming music has changed consumption in the way that Google changed the web. The moment someone thinks of an artist or track they instantly listen to it. No waiting or remembering or spending additional money,” he said. “Search has changed. In the days of record stores people searched alphabetically. In the download world it was about genre. Now it is so much more complex. It is based on the user habits, mood and history. I believe streaming services will add more content beyond songs. This could be everything from interviews to videos which will create a richer consumer experience.”
For Alexander Holland, chief content and product officer at France’s Deezer, investment is still key. “Subscription audio streams now represent more than half of overall digital music revenues annually,” he said.
“At the same time, global penetration is still low but growing faster than ever. We are already profitable in a number of our key markets, but continue to invest in growth through marketing, new content genres, original content and by developing our editorial capabilities.”
Voice : The future of streaming ?
For Pieter Van Rijn, CEO of Dutch music tech company Fuga, it’s about the metadata and voice recognition. “Following Spotify’s free-tier changes I can see bundle pricing and pricing structures altering in the coming years,” he said.
“To achieve a better focus on publishing rights payouts we will need better metadata alignment between compositions and recordings. I would also hope to see improvements in YouTube’s returns to licence holders. Spotify will continue to enhance their video offerings and I would expect to see new metadata requirements around voice-recognition technology.’ Rami Zeidan, vice-president, partnerships, at Anghami, a leading music streaming company in the MENA region, agreed with 7digital’s Downton. “Technology will have major influence on the evolution of music streaming, with smarter phones, smarter car dashboards, and the maturing of smart speakers,” he said.
“The accessibility to music on the go, in the car and at home will become ever easier, and more engaging. Smart speakers and connected devices will allow high consumer engagement beyond the screen, and advanced technologies will allow further social functionality at scale within music platforms. Anghami today is experimenting and seeing potential with [a number of technologies]which we believe will place music streaming services in the midst of the social sphere.”
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