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U.K. SPOTLIGHT: THE SHOCK OF THE NEW


First question:
What’s your assessment of the streaming marketplace now? Is the business on track to build a base of subscribers sufficient to make the model sustainable?

Outspoken Island President Darcus Beese opens the 
discussion in characteristically candid fashion, stating, 
“I fucking hope so!”

Beggars Group chieftain Martin Mills employs a metaphor in this take. “It’s hard to identify the effects of a storm when you’re in the middle of it,” he says, “but strategic planning becomes more long-term.”

Peter Thompson of PIAS was hoping for a more rapid adoption rate. “While I heartily embrace streaming,” he says, “it does seem to be stalling a little in achieving the penetration into mass market that will be the complete game-changer we are waiting for.  I’ve no doubt this will happen one day, but in the meantime, I do have some concerns with regards to the role streaming plays for independents. There are clearly some definite financial benefits, especially relating to catalog, but income for new artists can be slow, and obviously the public can now discover new music by streaming a couple of times rather than investing in buying a physical product. It also looks to me like streaming helps make the very successful artists even more successful, which does tend to favor the majors. However, we have to deal with this and focus on the benefits of streaming and get the best out of it for our artists.”

Cooking Vinyl’s Martin Goldschmidt also looks at streaming from a majors vs. indies angle: “The majors are far ahead on playlist strategy (Digster, etc.), but Sammy Andrews from Cooking Vinyl is leading the charge for the indie sector to develop and hopefully execute a united strategy. On the other hand, according to Merlin, the indies consistently out-index their marketshare on Spotify and other streaming services and do well on the holy grail of the most popular streaming-service playlists. However, the majors’ use of streaming to break new acts led Lohan from Ministry of Sound to say he thought it might have become impossible for an indie to have a #1 single in the U.K.—and then they did with ​Sigala!”

Polydor’s Ferdy Unger-Hamilton is the voice of reason on the matter. “Streaming is fine,” he says. “We are all going to be fine...and breathe...”

“I can’t answer the question with regard to the streaming companies’ economics, as I don’t see their numbers,” says Ames. “But it’s clearly a consumption offering that the consumer likes—for free, anyway! And in a world of bundled subscriptions, it seems like a no-brainer that it will lead to a huge windfall in the long term. I suppose the price point will need to become more sophisticated so that the light user pays less, etc., in the way a data plan now moves, but at this early stage the simple offering to get the market going makes sense. It took the record clubs years to build their subscriber base, so this seems very early but encouraging.”

And now a word from the trenches. “Streaming continues to grow across the U.K. and key European markets, with countries like Italy, Germany, Netherlands and Spain now reporting an expansion in their overall markets thanks in part to streaming and in large part Spotify,” Will Page, Spotify’s Director of Economics (pictured at right in the DJ booth), asserts. “What is noticeable in the U.K. is how Spotify is responsible for the vast majority of growth in revenues back to labels despite it being such a competitive market. The U.S. is different in that you have SoundExchange collecting revenues from Pandora, SiriusXM and iHeart Radio. These are not streaming services per se, but their sheer size makes the market unique when compared to Europe. Nevertheless, it looks like the U.S. market is now out of the woods, and Spotify now makes up over one in 10 of the monies flowing back to the industry.” 

Let’s get specific:

Do you think Apple Music is likely to get significant traction outside the U.S.? How do you feel about Apple’s world exclusives? 

Virgin EMI prexy Ted Cockle provides some historical context. “The first 12 months of iTunes I’m sure went pretty unnoticed and pretty unscrutinized, allowing this excellent company to tweak, modify and refine its systems and offering,” he points out. “Can we please allow it to do the same this time round, please? However, if someone could help set up my family-sharing function, I’d be very grateful indeed.”

Notes Capitol EVP A&R Jo Charrington, who has a way of getting right to the point: “Apple is a huge brand that changed the landscape globally with the iTunes Store, so I’d expect them to get traction outside of the U.S. with Apple Music.”

RCA topper Colin Barlow takes issue with the question. “Apple already has significant traction outside the U.S.,” he counters. “We fully support Apple. We all have to believe and help something that can enhance our business on a worldwide level.”

“Yes, it’s got potential to gain real traction around the world,” Dan Chalmers, who looks after ADA, East West and Rhino, agrees. “We actively look at global exclusives with all of our digital partners, but they have to make sense for the act and music.”

Ames is of two minds on the matter. “The obvious answer is that with that sort of scale and with Apple’s know-how, there is no reason why it shouldn’t,” he says, “but the current offering is just so user-unfriendly! I’ve not found a reason to switch from Spotify, but that could be because you tend to stick with the system you have learned unless the alternative is demonstrably superior, and I can’t see that this is. But one can never count Apple out. Hopefully, they both build a significant presence everywhere as certainly we all need there to be multiple options and choices."

Here’s a brain-teaser for our panel: How has the process of building an artist’s career changed as the marketplace and technology have evolved? 

“The rules of engagement may have changed, but the fundamentals have not—there is no business without great artists and great songs,” states SYCO President Sonny Takhar. “We cannot allow data and metrics to drive creative decisions.”

 “Technology certainly adds additional tools to our ammunition belt,” Cockle points out. “However, the artist’s talent, voice, charisma and showmanship and their ability to captivate a room (or not) remain the key deciders on whether all the other platforms start to swirl.”

 “It takes longer and feels more fragmented, but ultimately I have to stay focused on the artist and the quality of their music,” says the all-business Charrington.

Barlow avers that today’s music biz is “more global, and with so much information, this allows us to reveal genuine artists who love and believe in what they do.”


According to Ministry of Sound MD David Dollimore, career-building these days “is becoming increasingly challenging”—especially for the independent labels. “Given that streaming rewards those with the biggest catalogs, i.e., the majors, the revenues that the indies are receiving are minuscule in comparison and go nowhere near replacing those from downloads and physical sales. Majors are dining out on income from long-dormant catalogs; the more subscribers, the more they get. Add to that the fact that the majors have bought up or have established the big playlist platforms like Filtr, Topsify, etc., and are cramming those playlists with their own repertoires in order to drive share in their favor. They now all have huge teams focused on playlist strategy and artificially hyping streaming numbers, which now count towards the chart. It’s tantamount to payola—how can an indie possibly compete, let alone be paid fairly?”

“It’s much more complicated,” Ames notes, “as everything has fragmented, and the puzzle is a lot more complex, though the fundamentals remain the same. Have ‘hits’ in whatever form, i.e., not just track hits or Top 40, or just radio at all, in fact, and develop live, etc., off the back of that. When you see multiple tracks turning up at the same time on Spotify, it seems to indicate the new-album paradigm might in fact be with us. To balance the complexity of the landscape, though, once a fire starts, it spreads much more quickly than in the past. And of course an artist’s career is no longer just about music and touring as the only sources of income or exposure.”

Final topic:

How has the global release date affected your process, if at all? Has it made life simpler or more complicated? 

The supporters of the move weigh in…

“Columbia Co-President Mark Terry views GRD as “a healthy and necessary change. We now work in a truly global market. It made no sense for records to come out at different times in different markets over the course of a week. It has simplified the process and ultimately benefits the artist as releases are aligned around the globe, which provides a much greater impact.”

Sony International’s Mark Collen seconds that emotion. “I welcome it wholeheartedly,” he says. “In practical terms, it makes life far easier. To be fair, we’ve been using a global release date for some years on key global releases such as One Direction. And in a world of global retail partners and immediate global digital delivery, it makes complete sense.”

For Dollimore, it’s business as usual, whether records are released on Monday or Friday. “In terms of the global release date, you first have to look at what the U.K. is doing,” he begins. “It doesn’t affect our approach; we always do what’s right for the artist. U.K. labels are still doing preorder, even though six months ago it was all about on-air/on-sale. Let me use a movie analogy. Launching a new movie is enormously expensive, isn’t it? The marketing rollout is absolutely key to making people want to come and see the movie. You wouldn’t think of launching straight from the film studio with no promo or movie trailer—nor would we.”

“It took some time to adjust, but now we are really seeing the benefits,” notes Sony Music COO Nicola Tuer. “Most obviously, it makes setting up of campaigns for our global superstars like One Direction and Calvin Harris so much simpler, as we are able to have one conversation with our global retail partners. They have responded really positively, and we are getting bigger, much more joined-up campaigns as a result. There are also benefits that we didn’t anticipate. A global release date means that music from our development artists is available worldwide from the moment we start to work it in the U.K. We have seen some of our artists start to get significant traction outside the U.K. at a very early stage in their careers, which wouldn’t have happened before. It also works the other way round; we can watch how material from international artists is building in the U.K. and then decide when the optimum time to take the track to radio is.”

Says Young Turks XL main man Caius Pawson, “We always think of every territory when breaking an artist—and now that streaming is as big as it is, it’s impossible not to.”

Chalmers finds both pros and cons in the new reality, pointing out that “It requires more upfront planning in terms of marketing, and there’s a little less flexibility in the initial phases of campaigns. At the end of the day, great music will sell irrespective of the release date; what GRD does is address consumer demand, which is what really matters.” 

The detractors counter…

“We weren’t asked our opinion on the global release date in the first place,” Domino honcho Laurence Bell points out. “We don’t think it’s helped at all, but it is a fait accompli, so we’re learning to live with it, just like everyone else.”

Thompson is even more dismissive. “In my mind, the global release date was neither needed nor beneficial,” he asserts. “It was forced through despite the protestations of many labels (and retailers), and the way this was communicated and pushed through was worrying.”

“You still need to work records market by market, and one can’t be everywhere at the same time,” Ames points out. “So for new acts it’s complicated, but the upside is your record is out everywhere, and that’s a lot better than it not being out everywhere. Even if it made the ‘import bin’ obsolete.”

Here again, Unger-Hamilton suggests that everybody chill out and roll with the punches. “It’s complicated now,” he says, “but it won’t be for long—it will actually be much simpler.”

Leave it to Beese to deliver the last word on this divisive subject. “It’s totally fucked up our weekends,” he says. “No, but seriously, it has.”

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