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BPI boss talks streaming, globalisation and album exclusives


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The BPI AGM in London yesterday (7th September) saw the British industry body’s chief executive warn that global playlists could see the UK tumble down the global pecking order, while also sending a coded warning to labels to stop doing streaming exclusives.

Geoff Taylor used his keynote address to cover a wider range of topics – from calling for direct government support for the music industry (as the Minister of State for Digital & Culture was in the room, more of which below) to considering the implications of Brexit as well as (inevitably) attacking the value gap caused by YouTube and others.

But it was the part of his address devoted to the dark side of streaming that is perhaps of most interest to Music Ally readers. While going from praising the UK’s hugely successful export year in 2015 – where one in six records sold globally last year was by British acts – Taylor suggested that the rise of a globalised and increasingly homogenised streaming system could undo all this soon.

He warned that the UK will almost certainly see fewer global breakthroughs this year and that streaming may well be to blame.

“This year things look more difficult,” said Taylor of how new UK acts are competing globally in 2016. “There are fewer UK breakthroughs and there is a lot of US repertoire in the charts. So how do we make sure we have continuing creative success?

As streaming services increasingly cater for a global audience, one of the first casualties could be UK acts.

“Our business is a global business,” he said. “As more and more consumption is accounted for by streaming services, they are global platforms. Will British artists still be able to break through in the ways that they have over the past few years? Is that one of the reasons why we are seeing fewer breakthroughs?”

He continued, “Playlists are to some extent globally programmed by all of these global platforms. Is there a network effect that, as you see all over the internet, whereby the big countries will win? The US market has hundreds of millions of consumers. If they’re all streaming on Spotify, they will rate higher in playlists than British artist who have British fans streaming their music. That is something we need to think about for the future.”

He argued this is something British labels must urgently take on board and preempt before it gets to a stage where they are powerless to turn back the tide.

“We need to make sure that as UK labels we are well set up to market our music into those global streaming services,” he said. “It is not a question now of breaking an artist in the UK on Radio 1 and then exporting it. We have a global audience from day one that we need to market to. We need to make sure that we are set up property to interface with those global streaming platforms at a global and a regional level as well as in the UK. In an era of globalisation, we are going to face more intense global competition.”

Taylor also said that, while streaming is growing well, it still has some distance to go and that everyone in the value chain needs to think carefully about how to achieve this with the most amount of mutual benefit and the least amount of collateral damage.

“How do we make some most of the growth in the streaming market?” he asked. “How do we make sure that we get to as many households as possible? We have a bit of a miracle on our hands here with streaming. Consumers have the whole history of recorded music at the fingertips. That is an amazing thing.”

He, however, cautioned, “We cannot allow the streaming experience to become commoditised. We have to innovate and make sure that we are continuing to add value into the experience for the fan. Whether that’s HD video, higher quality audio, much better curation, editorial and playlists – so there is more value there for your £10 a month.”

Without explicitly saying it, he also sent a coded warning to labels and artists to step back from streaming exclusives – hinting instead that they should be focusing their efforts of windowing between free and paid platforms.

We also need to think carefully about things like retail exclusives – so that idea that some artists may only be made available on one platform,” he said. “Will that help us grow the streaming business long term? Or should we be thinking differently? This is a decision for all of you [label members] individually. But should you be thinking about trying to get windowing as other businesses have done between free and paid tiers?”

Predictably, the issue of YouTube and the value gap was addressed, although in a veiled way and with a sense of urgency to resolve this all before the UK withdraws from Europe as a result of the Brexit vote.

“We have a digital value chain in streaming that doesn’t work properly,” argued Taylor. “The biggest problem there is the competition between the different streaming services is heavily distorted by the fact that some of them can take advantage of safe harbour exemptions in legislation that allow them to pay a fraction of the royalties that others pay. This distorts the market and it brings down the value of the whole streaming business.”

This issue was picked up on by Matt Hancock, MP (the Minister of State for Digital & Culture) who was relatively new in his position (as a result of a recent post-Brexit cabinet reshuffle); but the music industry was keen to welcome him and get him onside.

“Over the autumn I will be taking the Digital Economy Bill through Parliament,” he told attendees. “This is, among other things, going to bring criminal penalties for online copyright infringement to bring them in line with physical infringement and make sure we have the right legal framework to support creators and content producers.”

He also said that the government is focusing on streamlining the connection between the creative industries and the technology industries in a way that is beneficial to both.

“One of the brilliant things that Ed Vaizey did in this job before me was insist that the digital brief and the culture brief go together,” he said. “People who don’t know the industry very well often ask me why I am doing museums and art galleries as well as the broadband infrastructure. But there is a really good reason for that. In the 21st century, the way we are going to earn Britain’s keep is at this nexus between the cultural/creative industries and digital technology.”

He concluded, “That is the sweet spot for Britain in the 21st century. You [the music industry] are absolutely at the core of it. Music is in the vanguard of the industries that are being affected by the technological changes.”

Eamonn Forde

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