Looking back and ahead, indie labels preach the gospel of patience


If nothing else, the 2017 edition of A2IM’s Indie Week – a gathering on New York City’s Lower East Side of over 800 representatives across the indie music spectrum, from indie labels and publishers to distributors, streaming services and startups – was a grand, prolonged call for patience.

The music industry’s constant hunger for data tends to color patience as a handicap, rather than as a virtue. After all, we’ve come a long way since the early days of terrestrial radio, MySpace and Napster, to the point where streaming services can give us a laser-focused, almost immediate gauge of how markets are reacting to the latest music.

As we learn to embrace rather than shun emerging technologies, many would argue that we’ve also earned our right to work more efficiently and make quicker decisions.

Yet, panel after panel at Indie Week this year strived to remind the audience about the importance not only of short-term, data-driven efficiency, but also of long-term discipline and development that looks beyond the numbers.

During the panel ‘Radio: Redefining Success’, William Dunn, Brand Manager of Townsquare Media’s WRRV, noted that 30 Seconds to Mars’ record-breaking song ‘The Kill’ never hit #1 on the Billboard charts, and took 11 months to mature on radio.

Eliah Seton, President of Warner Music Group’s Alternative Distribution Alliance (ADA) Worldwide, recounted how Warner-signed artist LP saw sporadic streaming activity on her 2015 single “Lost on You” – first spiking in Greece, Italy and France long before any stories started picking up in her current primary markets of the UK and the US.

Similarly, Def Jam artist Alessia Cara’s debut single “Here” was launched exclusively on The FADER, with no radio placement for months, and climbed from #95 to #5 on the Billboard charts over the course of an historic 26 weeks.

Richard Westover, Head of Music Data Services at Shazam and former VP of Promotion, A&R and Information Systems at Def Jam, claimed at Indie Week that Cara’s signing to Def Jam in 2015 was “a pure A&R move,” in contrast to the conventional narrative of modern A&R that dismisses any artists without robust social media and streaming numbers.

“At first, [Cara] had no traction in the marketplace whatsoever, and we had to build her socials from scratch,” said Westover. “A lot of people were skeptical about what the reaction was going to be. There are times when you have to wait for the data to react.”

Cara’s trajectory also points to a widening chasm between current and traditional metrics for success. For instance, several emerging artists, including Palma Violets, The 1975 and Post Malone, have achieved significant streaming and touring success alongside relatively poor terrestrial radio performance.

“As an small indie-label group, we don’t have 15 people on staff dedicated to pushing a great artist to radio,” said Risa Lawrenson, VP of Promotions at Beggars Group, the label behind Palma Violets. “We focus on growing an artist’s marketing everyone else but radio, and then leveraging radio channels only when we have a story to tell.”

Today, crafting such artist stories effectively requires mastering the oft-misunderstood business models of streaming services. Susan Butler, Executive Editor and Publisher of Music Confidential, made this the centerpiece of her Indie Week keynote, which unpacked the complexities and misconceptions behind notions of transparency and fairness in the industry.

“Streaming services are telecom companies, not record companies,” posited Butler. “Therefore, user acquisition and retention, not per-unit royalty rates, are key indicators for a healthy streaming business. Engagement can turn subscribers into lifelong customers, who don’t leave looking for free music.”

Butler went on to distinguish between good and bad models for free ad-supported streaming: The good ones “demonstrate a solid path to converting a healthy number of subscribers to paid,” while the bad ones show “no plan or attempt to convert, and below-market subscription rates that drive down music’s value.”

While streaming services do have a responsibility to pay rights holders fairly – Spotify learned this the hard way in settling a $43.4 million class action lawsuit with songwriters – many representatives of rights holders at Indie Week also acknowledged their own responsibility of adapting their strategies to the new streaming-first paradigm for consuming music.

“The importance of Spotify isn’t just about playlist placement, but also about how we can work on driving listeners there through campaigns like exclusive pre-sales, or getting fans to keep saving and sharing songs, so that we can work Spotify’s discovery algorithm to some degree,” said Rob Abelow, Owner of Roll Call Records, during the playlisting panel. “Spotify won’t do all the work for us off the bat.”

“Labels shouldn’t be thinking about unit sales anymore,” added Allen Kovac, Founder and CEO of 10th Street Entertainment and Eleven Seven Music. “We’re thinking about how to engage with the streaming fan, which means how to make the experience around our music sticky enough to become the soundtrack of these fans’ lives. This doesn’t take four weeks, or eight, or twelve. It takes a really long time.”

Nari Matsuura, a Partner at Massarsky Consulting, which has provided financial and strategic consulting to dozens of major and indie publishers and labels, agreed that streaming business models have the effect of both elongating and strengthening the life cycles of music catalogs. “Because of streaming, the growth cycle for music will take longer, and might start from a smaller base, but is also much easier to realize,” she said.

Of course, patience is not a substitute for staying informed; in fact, the former is a ripe opportunity to nurture the latter. As with most other industries, music rewards those who are not only creative, but also aggressive in using all the tools available to promote and distribute their work.

Two of the tech-focused panels at Indie Week – “The Mixed Reality of VR and AR” and “Connected Devices: Opportunities in Your Home and Car” – ruminated on how new developments in visual and voice-activated technology could open up new avenues of discovery and revenue for fans and artists.

In contrast to analogous panels at many other music conferences, Indie Week’s gauge on VR’s role in the music industry was refreshingly realistic. “Honestly, I don’t think music will drive the adoption of VR platforms,” said Christina Heller, Co-Founder and CEO of VR Playhouse, the startup that worked with American artist Dawn Richard on her latest VR music video. “Industries like gaming, healthcare, real estate, travel and education will do it.”

While very little premium content for high-end headsets have generated any revenue for the music industry, Heller saw untapped opportunities in the world of 360 video, particularly as advertised by social media sites like Facebook.

“People are already dismissing 360 video, but we haven’t even begun to maximize the creative limitations of what it has to offer,” she said. “We have the ability to take a traditional website URL and transform it from a flat surface with hyperlinks into an explorable, immersive environment. If you’re an indie artist looking to reach a tech-savvy, international audience, that format can really help you get a splash.”

Gaps to mass adoption of mixed-reality platforms include not just hardware affordability and accessibility, but also the integration of such platforms into the musical creative process itself.. “Mixed reality content will go beyond gimmicky and become the real thing when it’s created at the exact same time as the music, when that gap between releasing a single and filming the video closes over time,” said Steven Hill, Head of Marketing at Warp Records.

Beyond mixed reality, the rise of voice-controlled devices—which Seton called “an iPod moment”—is carving out a new frontier in screen- and friction-free music engagement. The rapid adoption of smart home speakers such as the Amazon Echo is catching the attention of major labels, and the indie world is no different.

“Rather than going through a set menu structure, you can just say ‘play the latest Father John Misty album’ or any other command, in a way that doesn’t require this codified set of instructions,” said Geoff Snyder, VP of Automotive Business Development at Pandora.

Who will benefit the most from these devices? According to the panelists, the answer seems to be everyone.

“Consumers are going to be winners, because of that unprecedented breadth and efficiency of access,” said Snyder. “Artists will also be winners, because consumers will be to choose whatever resonates with them, potentially giving new life to genres that haven’t thrived as much on digital streaming platforms.”

Tim Stevens, Editor-at-Large of CNET’s Roadshow, completed this stakeholder picture by adding that “companies like Google that can give other companies access to consumers and their devices wherever they are will also be the winners.”

Voice-enabled devices also fall hand-in-hand with the music industry’s parallel interest in chatbots and automated messaging. “Labels could potentially create bots for these devices, to allow for that additional layer of interactivity, whether it’s a voting app or a conversational app,” said Ananda Sen, Head of Music Partnerships at Google Hardware. “It hasn’t been built out yet, but that would be incredible to see.”

In terms of room for improvement in the industry, panelists pointed to how the rise in digital and mobile consumption both exacerbates and solves key gaps in knowledge and professional opportunities for artists. One such gap is that between early adopters and radio listeners, which radio broadcasters are trying to close themselves in competition with streaming services.

“Traditionally, you think of radio as a collection of big, branded stations with very limited slots,” said Tom Poleman, President of iHeartMedia’s National Programming Group.

“We’re trying to change this at iHeart by thinking of ourselves as a multimedia company, and using platforms like our mobile app as an opportunity to experiment with more music placement. For example, if you’re listening to a radio station in the iHeart app, we can put different, dynamic content in the commercial breaks, sourced from a collection to which labels of any size and stage can submit. It’s a chance to expand the slots on radio stations that have trusted relationships with their consumers in terms of music discovery.”

Financial management and data monitoring also remain key pain points for indie labels of all sizes. Andrew Kautz, COO of Big Machine Label Group, described his company’s struggle to incorporate its migration to asset management platform OpenPlay with other systems like QuickBooks and Microsoft Office that are already embedded in the label’s daily process.

“None of these systems talk to each other,” he asserted. “We want to learn how to work smarter, not just harder. Integrating all these systems together, and also building out a better point-of-sale finance system, is my next project over the ensuing 12 to 18 months.”

Third-party data collectors like Shazam are also acting on this opportunity to help streamline labels’ internal processes. “We’re trying to develop something that will notify executives about early indicators of popularity, like Marian Hill’s song blowing up from an Apple commercial,” said Westover. “As of now, there’s no reliable system for getting immediate notifications about how and where a song is reacting. Lack of communication remains one of the biggest obstacles in the industry.”

Overall, Indie Week promoted a positive outlook on the industry, and affirmed that indie labels are carrying more bargaining power on music’s increasingly global stage than ever before. Indeed, within the span of a few years, indie labels have gone from the periphery of digitisation in the industry to having a truly strong voice in negotiations with streaming services—perhaps best demonstrated by Spotify’s recently-announced multi-year licensing agreement with indie digital rights agency Merlin.

Of course, certain troubles remain unsolved: mid-tier artists and songwriters are still struggling in the access- and demand-driven payout model for streaming, and major labels are still capturing the majority of revenue in the industry, arguably at the expense of the indies.

“We worry that majors are scooping up independent labels and using that newfound indie market share to their advantage, without passing down that added value to the companies that are generating that value,” said Charles Caldas, CEO of Merlin, during the A2IM General Meeting at the close of Indie Week.

Figuring out the right tools and strategies for reclaiming and growing this value will require careful, measured persistence—and patience.

Written by: Cherie Hu