Yesterday’s keynote from Mark Mulligan at the NY:LON Connect conference was followed by a panel about the future of music distribution.
The distribution panel was focused on emerging and growth markets, with Michael Ugwu, CEO of African distributor Freeme Digital, explaining the rapid evolution of the market on that continent.
In its early days, Freeme had to explain to artists what a distributor did and how it could serve them. Now: “Not only are our clients more sophisticated, the market is a lot deeper now as well, in terms of players [music companies], and deeper in terms of capital,” he said.
“We’ve had a lot of investment come into the market. All the players in the space have had to up their game… Distribution companies have just had to get a lot better.”
Tricia Arnold, SVP of global label management and sales at The Orchard, noted that education is still a vital part of distributors’ roles. It’s just that what they are educating artists about has moved on.
“There is so much out there and so many platforms in different territories. There’s still that element in distribution that is so important: to be educating your artists and your labels what platforms make sense and how best to use them,” she said.
Anita Zagar, manager, business development Asia Pacific at FUGA, talked about how the strategies of artists and music companies are changing globally.
“Most of the Asian companies were really focused on developing really locally, now everybody is really trying to expand internationally as well,” said Zagar.
“Maybe a couple of years ago I would just talk to companies and say hey, let’s target the US! And they would say ‘who’s going to listen to our music? There is no audience there.’ But because we’re really connecting more on a global level, there’s actually companies and labels that see potential, and see that basically they need to also expand.”
“I think the distribution companies are there, basically, to educate them… And really show them if an artist wants to for example go to the US, what is really necessary to expand in the US? Or if they want to go to Taiwan, it’s a completely different market, and you need a completely different set of tools of course.”
‘There are music companies just releasing tracks on TikTok…’
Zagar also talked about the evolution of distributors beyond simply helping artists and labels to release their music, in an ever-more-complex landscape of streaming services and social media platforms.
“There are music companies just releasing tracks on TikTok to see if it’s going to go viral… and also then releasing it to other platforms… Artists and music companies that know how to gather the data from the distribution services and really apply those data, analyse them, and to see how to expand their music.”
However, Zagar also harked back to comments made earlier in the day at NY:LON Connect, with some concerns about the burdens being placed on artists.
“It’s not about just expanding music. It’s finding your fans, building your presence online. I think what matters here is social exposure. We already mentioned before that artists have too much work at the moment keeping up with the social media!”
Distributors are shouldering some of these tasks, taking on what Ugwu called “quasi-label type structures” to help artists break in markets outside their homelands, and helping them to find collaborations and platforms to perform and reach new fans.
Charlie Lexton, COO of Merlin, was also on the panel, and shared some thoughts on how the nature of music consumption is changing in some of the world’s growth markets.
Merlin noticed that when big western streaming services launched in one of these countries, the initial listening skewed towards western artists. But over time, this changes, fuelled by the launch of more distributors in these countries to help local artists put their music out.
“That’s tended to democratise not just access to the services, but to diversify the music that’s becoming successful,” he explained.
“As the local market develops, more and more local music starts getting access, and people want to listen to it. And even more so with the social side of services: those seem to sort-of take all the gatekeeping out of it, and increasingly the local music becomes more and more successful,” he continued.
“And then you start seeing exports of that music… You then start getting this virtuous circle, because that pumps more money back in, and then suddenly we [Merlin] have got distributor and aggregator members who tend to be the focus in facilitating and enabling local companies into business.”
‘We even had a regional Mexican artist that went viral in Turkey!’
There are a couple of trends going on here which may sound contradictory. On the one hand, you have local music and local artists getting a bigger share of streams in their home countries, which by definition reduces the share of international music.
However, at the same time, as Arnold put it: “There’s so many more opportunities across borders for music to translate to other places, which is so exciting… We even had a regional Mexican artist that went viral in Turkey! And of course, the music coming from South Korea. Nobody a few years ago ever would have thought K-Pop would become such a huge thing globally.”
“So although markets have become very local, it’s a balance between that and also just how many global opportunities there are. And that’s why I think distributors are so well positioned. They’re getting that data. They see that data faster than you really can on an artist level a lot of times.”
Ugwu talked about some of the frustrations in seeing music from Africa spread globally. As good as that trend sounds, there are sometimes issues with the way the music is curated and presented.
“When a lot of people talk about music from the continent, it’s captioned under the term ‘Afrobeats’, even though from country to country there are various genres. You have your dancehall genres, you have your amapiano, your kwaito, your highlife music. You have different genres from different corners of the continent,” he said, citing his past experiences trying to break this music globally.
“We were trying to break a sound internationally, and that’s a completely different thing from trying to break a track or artist. A lot of it is about education,” he said.
“At some point, our music was just classified as ‘world music’. I think that now, some radio stations, streaming services, they understand that okay fine, this is a huge continent with a billion people who listen to different types of music! They have adjusted accordingly, so a big part of our job has been education.”
However, Ugwu said that this is where local streaming services still have an important position in the market, even against the competition from the big global DSPs.
“Realistically, these issues mostly happen with the bigger DSPs. The fact of the matter is this is where the local DSPs have a role to play, because the local DSPs are much more sensitive to genres and to where to place artists. And as they grow locally, the major DSPs are then forced to be like ‘okay, actually, we need to put this into this playlist or into this category’.”
What’s next in the evolution of distributors? Arnold said that continuing to help clients navigate brand new streaming and social platforms will be key. “No one was talking about TikTok the way they are now a couple of years ago. There will be more platforms like that.”
Zagar said that collaborations will be even more important. “And there will not just be English or Spanish, they will all be intertwined… It just would be basically genreless, multi-language to reach to as many audiences as possible. We even have Chinese artists who incorporate Spanish into their refrains just to reach the Latin American territories! So really more intertwined, and maybe more collaborations etc.”
‘Things like NFTs are going to become way more prevalent’
Lexton chose another trend: a greater ability of distributors and independent labels to invest capital in artists.
“Traditionally, a big advantage that labels had over distributors, or a big difference between labels and distributors, was labels had available capital to invest in artists, and paid advances and signed talent in that way,” he said.
“Everything’s changed in the music industry, right? 10 years ago it was difficult for independent music companies to raise finance. Now you’re reading about deals every week… If distributors and aggregators are businesses that people are interested in investing in, I think that you may start seeing more money flying through in that way to enable them to become even more competitive with labels.”
Ugwu agreed with that, and talked about fast-emerging technologies like the metaverse and NFTs as new areas that distributors will increasingly get involved with.
“With NFTs, artists will be able to sell different levels of ownership to their fanbase, and the whole concept of ‘1,000 True Fans’ will really come true,” he said.
“Things like NFTs are going to become way more prevalent… Distributors and label services companies have to be able to understand where the puck is moving, and be best prepared. It goes back to education.”
“The onboarding process into the NFTs space is quite difficult. It’s much more difficult than uploading content to an artist distributor. You have to talk about building community, you have to understand what web3 is,” he continued.
“We’re talking about operating on different rails: blockchain rails, crypto rails. So it goes back to that education: figuring out what works for certain artists. TikTok works for some, it doesn’t work for all. IG [Instagram] works for some. YouTube works for others. NFTs will work for some, it may not work for all.”
The panel was part of the ‘The Future of Distribution’ track at NY:LON Connect, which was sponsored by The Orchard. Music Ally co-runs the conference with Music Biz, and you can read our other reports from this year’s event here.
While you’re here… There’s a new module on the Music Ally Learning Hub, our online learning platform training people in music marketing and the wider music business. The module is called ‘Distribute: How to Pick the Perfect Distributor for Your Music‘. It focuses on the process of distributing your music to streaming services and different types of service providers on the market.
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