Original Article Here
One of the most dramatic impacts that streaming has had on the record industry is been the democratization of listening.
The logic goes like this: In the pre-Spotify past, consumers would have to make a committed decision about the next record they wanted to buy. That transactional buying decision was narrow, and largely guided by media and broadcast channels – the fabled ‘gatekeepers’ – who were limited in the number of artists they could recommend to the great unwashed.
These days, there is no transactional buying decision required. No consumer need ‘gamble’ their money on an untested new record – they just need to load it up on Spotify/YouTube Music/Apple Music etc., click play, and see if they’re into it.
If they like it, they can keep on listening. If they don’t, they can simply skate off to some other auditory delight.
Year-on-year, this phenomenon is dramatically diluting the concentration of total music listening claimed by a handful of the world’s biggest megastars.
As a result, in any given year, an ever-greater share of total streams is drifting away from the Top 10 biggest hits, and towards a much wider array of ‘middle class’ artists with significant, but not necessarily chart-bursting, fanbases.
This phenomenon isn’t exclusive to the record industry.
In an upcoming interview in Music Business Worldwide‘s 2022/2023 Yearbook, Jay Marciano, the CEO and Chairman of AEG Presents , notes that the democratization of listening on streaming services has had a significant impact on his company’s “bars and theaters” business – i.e. venues that typically hold hundreds, rather than thousands, of ticket-holders.
“A club that would do 100 shows a year in 2012 is now doing 180 shows a year,” says Marciano.
“That’s a direct result of there being more talent [with a viable fanbase] available. It’s a great byproduct of the benefits of streaming.”
He adds: “What’s new is the frequency that the fans are going to [these] shows: The quoted stat, years ago, was that the average concert-goer goes to 1-point-something shows a year.
“In our experience, at the clubs and theaters level [today], where the audience is primarily 22- to 32-year-olds, it’s more like eight times a year.”
All of this, in turn, has impacted on the A&R strategy of major music companies.
You might remember that back in September, the outgoing CEO of Warner Music Group, Steve Cooper, noted that – thanks to streaming – his company had moved towards a “portfolio” A&R strategy.
This strategy, Cooper explained, meant that WMG was now spreading its A&R budget amongst a wider range of artists, thus reducing the company’s financial “dependency on superstars”.
Or to put it another way: Warner is investing a smaller proportion of its growing A&R budget each year on a select handful of global stars, and spread-betting a bigger proportion of this budget on artists who haven’t yet troubled the Top 5 of the Billboard Hot 100.
Steve Cooper took the time on Tuesday to explain some of the causal reasons behind the decline in revenue share of Warner’s Top 5 artists over the past decade.
He noted that, in addition to losing share to ‘middle class’ artists – as described above – today’s clutch of the very biggest superstars are also doing battle for share of listening with (i) artists from many more countries than ever before, and (ii) artists from many different eras.
Point (ii) was summed up this year by the Warner Music-distributed Running Up That Hill by Kate Bush, which was officially the world’s most popular hit on Spotify this summer following its appearance in Netflix‘s Stranger Things.
Point (i) is summed up when you look at the range of major-league stars from different parts of the world that have signed to Warner labels these past few years – including Anitta (Brazil), who’s just been nominated for a Best New Artist Grammy in 2023, as well as Burna Boy (Nigeria), Twice (South Korea), and Paulo Londra (Argentina).
Indeed, just this week, Warner announced a global deal with Dalia Mubarak, described by WMG as one of the ‘most influential female superstars in the Middle East”.
Said Steve Cooper on Tuesday’s earnings call: “As we broadened and deepened our artist roster, and prioritized a global approach to domestic music, our revenue composition has evolved… We’ve also proved once again that music can come from anywhere and resonate everywhere. Not only do we develop Anglo blockbusters, but also superstars within their domestic regions.”
Added Cooper: “Ten years ago, we were an Anglocentric company. Today, we’re a truly global music entertainment company, operating in over 70 countries.”
Comments