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U.K. INDIES TALK SPOTIFY WINDOWING

Clockwise from top left: Simon Wheeler (Beggars Group), Adrian Pope ([PIAS]), Jane Third (Because Music)

After securing a renewed licensing deal with Spotify, how do the independent labels grouped under Merlin plan to use the ability to window albums on the streaming service's premium tier? A trio of indie label execs from across the pond share their thoughts.

The Spotify and Merlin deal revealed last week offers Merlin’s 20k member labels improved marketing and advertising opportunities and enhanced access to data. They also have the option of having releases exclusive to Spotify’s premium tier for up to two weeks post-release date—a feature of the previously announced deal with UMG

Beggars Group Director of Digital Simon Wheeler said that despite the existence of Spotify freemium, music released by the British indie label is mostly consumed via its paid tier—and streaming has been Beggars' #1 source of revenue for the past few years.

“Some of our artists see 80% of their streams on Spotify coming from premium usage,” he explained at AIM’s Music Connected conference in London Wednesday. “To me, that says we have less of a problem with the amount of free usage that more mainstream repertoire with audiences—which perhaps aren’t quite as committed or engaged—have.” While he’s interested in trying windowing, Wheeler said it must be used carefully to retain the rate of conversion from free to paid subscribers that Spotify has succeeded in maintaining. 

“Every album and every artist is going to be looked at through its own particular lens. It will be interesting to try it out, but I’m not going to say, ‘Oh thank god, let’s put everything behind a paywall.' Spotify’s strategy of having the ad-supported tier has driven a huge amount of subscribers and we’re all pretty supportive of that. It’s about getting the balance right. We certainly don’t want to kill that funnel of users turning into subscribers.”

[PIAS] Global Artist & Label Services MD Adrian Pope agreed, and said the new licensing deals could be another nail in the coffin for platform exclusives. “We tend to over-perform on premium, and saw [freemium] as part of an introduction at an acceptable level. I would hope that we’re not going to have loads and loads of windowed projects because it doesn't necessarily answer all of the questions.”

Because Music's SVP Jane Third told us that windowing for freemium should have been available to all from the beginning.

“Artists and rights holders need to have control over how their music is released,” she said, before pointing to an alternative royalty distribution model (like the one Deezer is said to be trailing) as a way to sustain continued growth of the streaming market.

“When it comes to the evolution of the streaming business, I would like the industry to find ways to truly connect artists and fans, rather than listeners and playlists. For example, a pay model where the subscription fee is distributed across the music listened to by each unique user would be a way of reconnecting fans and artists in a tangible way—allowing fans to feel they are directly contributing to the work of the artists they love.”

 

 

 

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