The future of streaming and music marketing post Covid-19

After an introductory session offering views on Covid-19’s music impact around the world, Music Ally’s Sandbox Summit Global conference turned its attention to what happens next.

The online event’s ‘Future of Streaming Post-Covid’ strand began with some views from Chaz Jenkins, chief commercial officer at Chartmetric.

“If we’re to use one word to describe what we’ve seen happen in the marketplace this year, it would probably be ‘volatile’,” he said, adding that a number of trends that had been happening slowly suddenly went into overdrive during the pandemic.

“Where we listen to music, when we listen to music, why we listen to music, and crucially what we listen to has changed fundamentally over the course of the year,” he said.

He also talked about video consumption. “The influence that video has had on what people are streaming has been profound this year. In particular TikTok… but there’s also been significant usage of streaming video on demand services: Amazon, Netflix, Disney.” With a knock-on effect on what people are listening to on music-streaming services.

Livestreaming is growing, and “artists are gradually figuring out how to use livestreaming to retain audience engagement”. But: “We’re not really seeing any evidence yet of artists using livestreaming to grow their audience base,” suggested Jenkins. “But it will probably come as people learn to use these platforms more effectively.”

Finally, he said there’s been an increase in the correlation between social metrics, international reach and streaming activity for artists, with fans spending even more time on social networks, including sharing music.

“We have seen more emerging artists really grow their audience this year more than ever before,” he said. Yet in the upper reaches of the global charts, there hasn’t been a shake-up. “Right at the very top it’s almost complete stagnation”.

In the week of 15 September 2020, 29 of the top 200 tracks had been released within the previous 30 days, compared to 57 of the top 200 in the corresponding week a year ago. Meanwhile, the average age of tracks in the top 200 in the week of 15 September 2020 was 289 days, compared to 183 days a year ago.

Jenkins then joined a panel to discuss the pandemic’s effect on streaming with Cindy James, head of commercial marketing at Caroline and Amaechi Uzoigwe, manager and business partner for Run The Jewels and Songhoy Blues. The moderator was Anna Siegel, SVP of Fuga Americas.

James talked about the 11 tracks in the top 200 that her team is currently working, to point to two different trends. “Six of those tracks are new, they’re under nine months old, and five of those tracks are actually over two years old,” she said.

“The way people are consuming those tracks, it’s significantly over-indexing in search, and in people’s listens from their own collections.” Meanwhile, the big curated playlists on streaming services – Today’s Top Hits etc – are only accounting for 25% of the streams of the six new tracks in that group.

“It shows the importance of people leaning forward and streaming on repeat,” said James, before Jenkins offered some more views on what the charts show – and what they don’t.

“We’re so used to thinking of the charts as the place that is ‘now’… But now in a sense all the activity is below the charts,” he said. “What’s in the top 200 was what was happening yesterday, because it’s things which have bubbled and burned and made it so hot that they’ve crossed over to mainstream media and made it to the very top… but the action has actually moved on months beforehand.”

Uzoigwe offered his assessment of Covid-19’s impact on the music industry: a big slowdown in different ways.

“It’s like someone poured a giant jar of molasses over the entire industry, and everything’s taking time,” he said, noting that a lot of big artists pulled their plans for album releases, as a direct result of the shutdown of the traditional marketing pillars: touring and media.

“Those big artists need those pillars driving their projects, and if they’re not there, why release your records?” he said, noting that this had opened opportunities for emerging artists, who have seized them.

“When Covid lifts, you’re going to see an explosion of music from the big guys as well as from all these new younger artists who’ve found footing,” he said. Uzoigwe works with Run The Jewels, who opted to release their new album rather than delay it.

“We went for it and so far it’s turned out pretty well, but it is a lot about the ability to weather the storm, and you’re gonna see a lot of established acts who may not come back the same way,” he said. “They may not be able to get the footing again. And you saw a lot of new acts who were poised, and then Covid erased the possibilities for them.”

However, other new artists capitalised, not least because music listeners were stuck at home, eager to discover new music.

James discussed some of the key trends she’s seen during the pandemic, from people waking up later and not having their traditional commute and/or gym time for music listening, to growing purchases and usage of smart speakers around the home. And, thankfully, a continued willingness to pay for music subscriptions.

“What we’re seeing from that is paid subscription is growing like crazy. Paid subscription in Q2 this year completely outpaced Q1, and in the US we’re on track to exceed 2019’s number by a billion dollars,” she said.

As for smart speakers, James noted that not only are people buying them, but they’re spreading them out in their homes, and that this – plus the niceties of interacting with voice assistants – is changing their music-listening behaviour.

She also cited some specific impacts for music marketing. “Clean versions are back! Largely because of the parental controls,” said James.

Labels are waking up to the fact that smart speaker-owning parents – who may also have been home-schooling their kids – may well have the explicit filter turned on, so if tracks do not have a clean version, even if they’re part of a big playlist from a streaming service, they won’t get played in that context.

James also said that the growth in home exercising is having an impact. “Fitness bikes like Peloton are exploding now. That’s bringing instrumentals back!” she said.

Uzoigwe said that the lockdown should have made the music industry realise how large the opportunity is in gaming partnerships.

“That audience is so infinitely larger than music can ever hope to be… in audience size, in revenue, all of that. If the music industry doesn’t develop a real gaming strategy that’s more comprehensive and robust and interesting fast, it’s going to lose out,” he said. “That’s where the audience is. That’s where the money is, and that’s where the youth is.”

One of the big pandemic topics has been livestreaming, and the extent to which it can help artists to make money, as well as to engage with fans.

“What we’re seeing now is 1.0, what you’re going to see next year is there’s tremendous innovation happening in the DNA of the technology,” said Uzoigwe, noting that Run The Jewels have yet to play a livestream “because we don’t feel comfortable with the technology out there being able to represent that show in the right way”.

He’s bullish on the potential though. “There’s no real revenue. That will change next year,” he said, adding that widely-shared concerns about live promoters driving down artists’ takings from festivals and concerts when those return may spark continued interest from those artists in livestreaming.

“It gives artists and managers and teams options in the future. Do I need to spend six weeks on the road to make some money, or can I do it in one night?” he said. Uzoigwe also looked forwards to an ever-growing audience for music streaming globally.

“The streaming pie is actually much smaller now than it’s going to be, and it’s going to decentralise,” he said. “When half of Africa’s online, when three quarters of it is online, you’re going to see way more African music rise to the top.”

“The days of western superstars dominating everywhere are pretty much over. Everyone’s going to have their superstars. The BTSs of the world. Puerto Rico alone represents a ridiculous proportion of success in music. I’m excited for that!”

Jenkins suggested that much of what’s been happening was not created by Covid-19, but merely hastened by it.

“What’s happened over the last six months has accelerated change at an incredible rate,” he said. Many of the pandemic’s music impacts would have happened without it – “just further down the line”.

After this, a second panel zeroed in on the impact that Covid-19 has had on music marketing, and what that might mean for the future.

Chaired by Music Ally’s Joe Sparrow, the panel included Aaron Bogucki, head of UK marketing and audience development at AWAL Recordings; Gaurav Wadwha, CEO at Big Bang Music; and Nikoo Sadr, director, artist and label services, Nordics at The Orchard.

Wadhwa said India has seen a big shakeup, partly due to TikTok being banned there – which led to seven or eight rivals springing up immediately – and partly due to Covid-19’s disruption of the Indian film industry, which has historically dominated the music market too.

“Because the shoots have stopped and film releases have stopped, that’s actually given rise to a huge independent culture,” he said, noting that streaming services in India have redoubled their efforts to build audiences for independent (non-film) music.

“That’s given birth to new genres, new niches. People are discovering new sounds, new artists,” he said. “All in all, it’s been a very good conversion from being on the back foot because you couldn’t do marketing the normal way, to finding new innovation.”

Sadr said that from her perspective, the pandemic’s big impact on music marketing has been “the awakening of all the labels and artists that had been sleeping a bit, or hesitant towards, social media. They are now realising how important that is for them”. And in most cases, the lockdown has ensured they have had more time to focus on doing social media well.

Bogucki agreed – “All the things we were trying to get artists to that maybe they were hesitant to do, they were forced to do it!” – but warned that this “put a lot of pressure on them: we saw a lot of platform fatigue, and we still are”.

He said that there have been silver linings of the pandemic, like online advertising costs falling considerably as bigger brands suspended their budgets – “CPMs were super cheap!” – but also challenges, like the loss of commuting listening “which I think we took for granted in our industry” and the challenges of shooting video safely.

In this panel, too, the speakers touched on gaming. Wadhwa said that it’s been particularly important in India, with its thriving mobile games market, and a growing community of gamers on YouTube using music in their videos.

There have also been opportunities to work with new (or newly-popular) companies in other sectors. Big Bang has been working with a food delivery startup, promoting music through QR codes on the boxes it delivers to customers.

“We’ve suddenly built a new distribution model that essentially drives discovery!”

The conversation came back to artists and social media platforms. “Covid took a way a bit of the scaredness that artists had around social media,” said Sadr, adding that other global events – the Black Lives Matter protests for example – had given some of those reluctant artists a reason to share more of their views on these platforms.

In India, there was another factor. “As they started getting more time on hand, they started developing an affinity for platforms. And they started realising if they are not on these platforms, they are going to lose relevance,” said Wadhwa.

“So they were forced to use these platforms. And all these platforms are paying top-dollar to these artists to come on… so it’s a new revenue stream.”

Bogucki sounded another warning bell for young artists, and what they might be losing besides revenues from the live music shutdown, which livestreaming can’t replace.

“Everything that happens around a tour for a young artist is so important. Being on stage, trying out your music… seeing what works, what doesn’t work, what gets a reaction… That’s where stories happen, where songs get written… that helps them develop,” he said.

“That’s one of the things we’re seeing young artists missing. You’re not going to sit on Twitch and develop, as an artist! I don’t really believe that artists sitting on Twitch or these live platforms, although it might be great to engage an audience, it doesn’t really further your creative development.”

Sadr offered another take: that artists have been finding new ways to be creative on the social platforms, giving Nina Nesbitt’s use of TikTok as an example.

Wadhwa, meanwhile, talked about how Covid-19 has fuelled the latest iteration of a dynamic that’s been present for the entire history of the music industry: the creation of the music adapting to new technologies and listening methods.

“We are now seeing artists are creating 15-second demos, because a lot of the bigger songs in the market are getting discovered by the 15-second sound on TikTok,” he said. “People are definitely changing their styles of making music… based on what is working on platforms. Earlier it used to be what worked on radio or on live. Now it’s about what works as a 15-second sound.”

As the panel drew to a close, Sadr talked about two parallel trends of the music industry’s globalisation: on the one hand artists like BTS from South Korea and Bad Bunny from Puerto Rico are becoming massive global pop stars, but on the other, there are hyper-local scenes – hip-hop in a number of European and Nordic countries for example – that are as huge in their homelands as the big international stars, but which don’t necessarily cross borders.

She also talked about 2020 being an important moment for the music industry getting to grips with tips economies: “For a long time it was only Twitch and YouTube that had the fan-funding system. But you can in a way see it on Spotify [with its direct funding links] and you can definitely see it on Facebook with the stars. That’s coming, because we need to generate those types of income streams,” she said.

Meanwhile, Bogucki said that whatever the new opportunities are for artists, one traditional principle still holds true: that if you’re building an audience on someone else’s platform, always make sure you’re also bringing them back to somewhere or something that’s yours.

“You’re renting audiences on Twitch. You’re renting audiences on Facebook and Instagram. You don’t own those audiences,” he said. “Give them a reason to follow you to somewhere [that you do own].” And that doesn’t mean being overly pushy about it. “Don’t be shameless. Be smart!”

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Music Ally’s Sandbox Summit Global is taking place online this week, with two hours of talks and panels every day starting at 3pm BST (4pm CEST / 10am EDT / 7am PDT).

It’s broadcasting live on Zoom and – thanks to our sponsors Linkfire, Chartmetric and MQA – is completely free to access. You can see the agenda and register here.