November 4, 2016:UMG digital boss sees 4-5 core music-streaming players

“We’re looking at a world with four or five players competing on the core proposition, and we’re going to see innovation at the high end and the low end.”

That’s Universal Music Group’s EVP of digital strategy Michael Nash talking in Billboard’s latest analysis of the streaming market, and it’s both an insight into how the largest label group sees this world developing, and an encouragement to speculate on who those four to five players will be.

The last year has seen more industry figures speak out about the risks of moving to a world where only Apple, Google and Amazon can sustain the business model of on-demand music-streaming, leaving a more uncertain future even for Spotify and Pandora, let alone rivals like Deezer, Napster and Tidal.

That’s a prospect addressed by veteran lawyer Joel Katz of Greenberg Traurig in the article, repeating views he expressed at Midem in June. “Eventually these companies have to make a profit for the ­overall industry to be healthy. If they don’t become profitable, that could disturb the revitalisation of the record label business, which is coming back in a really good way.”

This is the music industry’s challenge for 2017, and it cannot let Spotify’s IPO – if and when it happens – create a false sense of sustainability. 10 minutes perusing Pandora’s financial results is enough to scotch any hopes that going public is a panacea for the challenges of the streaming market.

If rightsholders’ goal is four to five healthy global streaming players, the question is whether Spotify and Pandora can join Apple, Google and Amazon – or whether Facebook can finally be enticed into the market through acquisition.

The other important thing about Nash’s comment is the “innovation at the high end and the low end” part, of course. For rightsholders, figuring out how to license and promote new niches in the streaming market while getting over any collywobbles about cannibalising the core on-demand services is 2017’s other key task.

Cür Media in the US is a stark warning that licensing relationships can end in tears, but from NOW Music+ in the UK to Line Music in Japan and beyond, there is evidence of a renewed willingness to experiment beyond the $9.99-a-month template.

Stuart Dredge
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