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MUSIC BIZ 2015: ON THE RECORD, PART 1
We Ask Top Players in Retail and Distribution a Question, and For Some Reason They Answer

Here at HITS, it’s a NARM/Music Biz tradition to address a timely question to members of the retail, label and tech communities. This year’s question is a provocative one: 

“In the past year, there has been a lot of discussion regarding the cannibalization of digital downloads by streaming services. Do you see a way in which downloads (and physical retail) and streaming can coexist and even benefit one another?”

Presenting our first round of answers.

Steve Savoca, Spotify

Spotify’s users are leading the global conversation around music and music discovery. We want to help drive more listening and discovery to influence more unit-based consumption, from LPs to CDs to downloads. We’re still seeing increased sales in tandem with tremendous streaming volumes resulting in healthy SEA percentages for both brand new artists (Hozier, Sam Hunt) and established artists (All Time Low, Drake). But the music industry is in dramatic transition. Reducing what is happening to a cannibalization debate is far too simplistic. We’re seeing a format shift, like many before it. Consumers want the ease of access. This behavioral shift has been hastened by the enormous traction of mobile consumption on smartphones—particularly Android—and a move away from collecting files on hard drives.

Lars Murray, Pandora

Absolutely, and Pandora’s nearly 10 years as a streaming radio service is proof positive that it can work. For most of that period, the download business was growing in unison with Pandora, and we have long been a leading partner in driving download sales at digital retail. 

Doug McVehil, Vevo

I think Vevo is a perfect example of streaming driving sales. Every Vevo watch page has a buy link. We frequently hear from our label partners that a video premiere promotion or the launch of a piece of original content featuring their artist has had an immediate impact on paid downloads. Labels also report that their 30-second spots perform exceptionally well on our platform, with high click-through and conversion rates.

Savoca, Murray, McVehil, Pandiscia and Morelli: Streaming into the conversation.

Dominic Pandiscia, Caroline

 For a large percentage of the history of the recorded music business there has been an interplay between the notion of access (e.g., commercial Radio, sharing vinyl, etc.) and ownership (purchasing an LP, cassette, CD, download, etc.). The modern era in its most simple form is not much different. There is more access to the discovery of music than ever before, and the opportunity to engage the consumer to a point of ownership is something all artists and labels must embrace. Ownership, whether it begin with a T-shirt or the purchase of a deluxe package, CD or download, will become the true new beacon of a deeper connection to an artist.

Bob Morelli, RED

There is a reality of the market trends that is based on statistics, and that part is real. Having said that, consumers do have several ways to consume music. I often hear streaming or downloading fans talking about patronizing an indie store for the vibe and to buy vinyl, or a longtime fan talking about buying CDs, downloading tracks or discovering a streaming service for the first time. At RED and stache media, we will do cross-promotions to include playlists in physical promotions and or utilize socials to drive consumers to purchase a download and or CD. Consumers are ultimately looking for great music in a variety of formats. 

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