It's been five years since Mark Mulligan of MIDiA Research gave the keynote at the first Music Tectonics Conference. This year we had him, along with Tatiana Cirisano, back to Music Tectonics. Instead of the standard conference keynote (because why would we do standard?) we had an election-year style debate that we called The Great Bifurcation Debate. Tune in as they each argue their side – “Play” and “Listen” and their observations for what the future may hold with each.
Read MIDiA’s report on bifurcation here.
Listen wherever you pod your casts:
Looking for Rock Paper Scanner, the newsletter of music tech news curated by the Rock Paper Scissors PR team? Subscribe here to get it in your inbox every Friday!
Join the Music Tectonics team and top music innovators by the beach for the best music tech event of the year:
6th Annual Music Tectonics Conference October 22-24, 2024 Santa Monica, California
Episode Transcript
Machine transcribed
0:00:10 - Dmitri
Welcome back to Music Tectonics, where we go beneath the surface of music and tech. I'm your host, Dmitri Vietze. I'm also the founder and CEO of Rock Paper Scissors, the music innovation, pr and marketing firm, and it's been five years since Mark Mulligan of Media Research was the opening keynote at the first Music Tectonics conference in 2019. That was the year we had the brush fires during our pre-conference and we had to move across town at the last minute, and you can go back and listen to that keynote from Mark Mulligan in the Music Tectonics podcast. Listen to that keynote from Mark Mulligan in the Music Tectonics podcast.
If you go back to 2019, Mark had some really interesting things to say at the time, five years ago. One of the big takeaways was that music streaming was a great opportunity but was a bit of a utility, and that the passion and excitement of music and the shifts around whether people treated music as the thing that formed their identity, especially youth, was no longer really as prevalent as it used to be. He talked about the attention economy and how people were getting so occupied with so many other forms of media and entertainment that music wasn't just streaming, wasn't just competing with physical product or with radio, but it was really competing with all the other things that draw attention from gaming to video streaming, to pretty much anything you could think of that you could do on your phone or your computer. And what he said was that music listening, or consumption, was kind of the gold of the music industry. Streaming is really what brought the music industry back into a very profitable place, but that if it was a gold rush, the picks and shovels of that would be fandom. And so he kind of left us with this idea of what would things look like in the music industry as music listening became more closely associated with what fans wanted engagement with artists, artists wanting with fans to engage with them. And so it was a really interesting keynote that kind of painted the picture of what music tectonics is all about the seismic shifts beneath the surface. So, on today's episode, I'm really excited to bring you a keynote. Well, it wasn't exactly a keynote, it was a bit of a debate. It was presented as a presidential debate at the 2024 Music Tectonics Conference.
Mark Mulligan from Midia Research came back this time along with Tatiana Cirisano, also from Midia, to do a debate on this concept of bifurcation, which is an idea they've been presenting over the last year on their blogs and in their research and reports, and the idea here because this was the week leading up to the presidential election was to use the debate format to talk about the traditional industry was represented with this concept of listen on one side of the debate and on the other side, play. So the idea of listen is that's where you go to listen to your music. That's kind of the position that music streaming services now occupy, but on the play side was maybe a little bit more nuanced, a little further developed concept of what Mark was talking about with fandom back in 2019, which is this potential for a different type of engagement from music fans, for a different type of engagement from music fans where they got a chance to speed up, slow down, interact with, remix, upload their own music, etc. Is this new bifurcation, this other side of this parallel universe that's coming into music versus the traditional listening.
So we have for you on today's episode, episode in full the debate between Mark Mulligan and Tatiana Cirisano to really push our thinking around. Where are we going after streaming? And you'll hear Mark say it himself there isn't actually an end to the streaming moment. It's just that there's this parallel universe that's emerging Really great conversation, lots of fun format. Mark and Tatiana really brought it and I hope you enjoy this keynote slash debate, slash podcast. I look forward to hearing what you think about it.
0:04:14 - Mark Mulligan
Camerico, Great Britain again.
0:04:18 - Tatiana Cirisano
You knew that was coming at some point, right.
0:04:20 - Mark Mulligan
Okay. So why are we here? So we're doing the bifurcation debate. What's bifurcation, you might ask? Well, if you don't know, maybe you're in the wrong conference. But for the uninitiated, here's a quick recap.
The music industry is splitting into two. We've got, on one side, the traditional music business. That's the one built around streaming, record labels, publishers, cmos, distributors, and then on the other side, you've got something new happening which hasn't really taken shape yet, but it's getting there. We've got social platforms, non-traditional DSPs, things like Discord and whatever all get sort of thrown in the mix as well. On the traditional side, we call it listen, and that's because that's mainly what it's about. It's about making people listen to music, and it's been. You know, it is how the vast majority of the music business makes its money today. And the other side we've got play, which is much more about people leaning in. It's the fun, it's the identity, it's the fandom, and that's why we call that one play.
Now I'm sort of defending the indefensible on this side of the equation, but I like to think I can spin any argument in my favour. So we're going to find out. So what we're going to do, we're each going to talk a little bit about making the case for each side of the equation, and then we're going to ask each other some questions, some closing statements, in good presidential debate style, and then you get a chance to ask us some questions. You get to vote. There's an app you can vote on. Think of that as like the exit poll and then, after the vote has been rigged I mean counted we'll then see that listen won.
But in all seriousness, before we dive in, we are not saying that one side is going to destroy the other. That's why we're calling it bifurcation. This is the splitting of the business into two different industries. So these things will coexist side by side and that's hopefully even though it's a bit of a a fun format. Hopefully, what you're going to take away from this, if you don't already realize it, is that this is a pivot point for the music business. It might feel like everything's just mature. You know it's like streaming, sorted, it's slowing a bit, but we've got fandom and whatever else and it's you know, it's business as usual. It is not going to be business as usual and hopefully, what you're going to get from today is understanding just how big some of the change that is coming is going to be, so I'm going to hand over to Tati. You know losers. First Go and talk through the play side of the equation.
0:06:55 - Tatiana Cirisano
Thank you so much. That's so kind of you, mark. Hi everyone. Thank you so much for being here. We're really excited to bring this very different format than usual as. Thank you so much for being here. We're really excited to bring this very different format than usual.
As you know, I am on the side of play. So streaming got us to where we are. Nobody is arguing with that. It allowed the music industry to scale and monetize passive listenership much better than before, and it allowed hundreds and thousands of artists to reach audiences in a way that they really weren't able to in the past. Perhaps most importantly, though, it helped the industry move alongside consumer behavior, because, you know, there was no going back from the Napster era, and streaming simply helped legitimize and monetize a form of listening that was already happening. So, yes, streaming got us to where we are, but it won't take us to where we're going Not for fans, not for artists, and also not for labels. I think that, crucially, we're at a point where consumer behavior is starting to shift again, and it's again forcing the industry to adapt in response.
I was in high school when Spotify launched, and I remember that making playlists was the coolest thing to do. It was amazing to be able to do this for the first time. But the reality is that for today's high schoolers, making a playlist isn't that cool. It's something that they're kind of used to and feels a little bit one-dimensional to them. They want to create a TikTok video with their favorite song. They want to speed it up, slow it down, they want to remix it, they want to hang out in a music world in Fortnite or Roblox, and they don't just want to sit back and listen to music. They want to actively participate in it, and that's a good thing. We want people to be more engaged with music, and this is kind of helping that. And, just like Napster, we're not going back. But yet streaming services today don't really cater to that type of behavior. That's becoming the dominant consumer behavior, and just remember, there are graveyards full of companies and industries that failed to adapt to consumer behavior. But it's not just about consumers, it's also about artists and about labels too.
Streaming was supposed to be the savior for artists, but it's simply not working the way that it was meant to. The promise was that streaming would enable a middle class of artists making a living off of their music, but artists have spent the past decade reckoning with the loss of that broken promise. They've gone through the first four stages of grief. We had denial, anger, bargaining and sadness, and now we've moved on, thank you very much. We moved on to the final phase, which is acceptance. They've accepted streaming is not going to be the savior for their revenue that it was meant to be, and it's also becoming harder to connect with fans there and to build audiences. So they're thinking of streaming isn't going to make me meaningful revenue and it's not going to allow me to connect with my fans. Why am I spending so much of my effort there? Right, and they're looking for somewhere else to build and to connect and to monetize, and a lot of them are going to social for that. This is why the base of creators who upload music directly to social is growing faster than those who upload music to streaming services, which is according to media research. And it's not just independent small artists either. Think about the fact that Kendrick Lamar, the next Super Bowl headliner, released his most recent single in full to Instagram Reels and it's not available on streaming.
And finally, let's talk about labels. Yes, streaming has years ahead of growth still, but growth is slowing significantly and it's becoming clear that we need something else to bring the music industry into its next era. In the do-nothing scenario, labels will probably be fine, but fine isn't good enough. Streaming will simply become the radio for the next generation still a large part of the way that people consume music, but steadily declining in cultural relevance and listenership. We've reached the limits of listening. A new generation wants to lean in. They want to connect with the music and the artists that they love, and artists want a business model that rewards that type of connection and fandom building. Now is the time to empower them. Now is the time to play. Thank you.
0:11:11 - Mark Mulligan
But they're eating the pets you knew that was coming too.
Right, I mean, man, people have short memories, don't they? $41.7 billion that's how much a global streaming industry is worth in retail terms. Compare that to 2015,. Before the music industry started to recover, it's 65% bigger than the entire recorded music business was in 2015. $3 billion that's how much all this play thing is worth. You say the money goes around.
I was like, okay, the middle class artists do I want a slice of 41.7 or a slice of three? And this is the thing we can talk about, the potential. And you know what? It's true, there is a huge amount of potential and, yes, it's absolutely the case. People want to lean in and participate. But do you want to bank your future on the possibility of something that might work and risk destroying something that is working? And this is probably the biggest thing I said at the start about there's two worlds living side by side, and it's true and hopefully there's enough space for both. But what if there's not? What if the more time that people spend on social platforms, the less time they spend on streaming? How long before that starts turning into lower acquisition rates? How long before that starts turning into churn? How long before that stops people tolerating price increases? And suddenly you've went oh, 41.7 might not keep going up. So I think that is. You know. I can't really argue against. You know most of the things Tati's spoken about because they're all true. I think that is. You know. I can't really argue against. You know most of the things Tati's spoken about because they're all true and they are all you know.
There's no doubt play is built on the behaviours of today and listen is based on the behaviours of yesterday. But just because something was yesterday doesn't mean it doesn't have a future. And there's this thing about new technology. We sort of think, oh great, it's all shiny, it's new and it's completely different. But nothing is new. You know the underlying behaviours that we have. Whether you're going to, you know it's like cave dwellers around a campfire, through to medieval peasants going into church to sing on a Sunday. People around you know sort of Victorian piano in the 19th century, through to some big rock act in the 70s, through to some kid making dance music in the bedroom. There's two things which people have always done with music. One is listen and the other is play. So of course, these two things, they're just part of what music is. Does that mean that today's streaming services haven't done enough to cater for the play part 100%. Does it mean they can't? Does it mean they can't be part of it? So you can see, I'm making a new inch case here. Tati can make a really nice, simple, clean case because she's just talking about something new and in the future she doesn't have to worry about accountability and you know all those sort of things.
But how much money is coming out of the play side of the equation? You know, because the social platforms, they're turning into fandom traps, you know. So record label thinks about, uh, marketing. You know, it's like getting something going on tiktok. It's the top of the filter, right, you put everything in and it turns into streams at the bottom. It's not. It's like panning for gold. What do you do with panning for gold? The stuff that comes out to the bottom is a stream of water. The stuff that's left behind is the nuggets of gold and that's what's getting stuck in the social platforms the identity, the connection, what it means to be a music fan. So that's amazing. But that's the superpower of music, right? And if that's not making it onto the streaming services, where there's the 41.7 billion dollars, and it's the three billion dollars is where all the fandom is, then is that good for the music business?
0:15:11 - Tatiana Cirisano
that's my case well, I gotta say Mark, as you were speaking, I was getting kind of deja vu to back when streaming was the next format in town and people were saying why not just stick with CDs, why not just stick with what we know and what's already working?
0:15:31 - Mark Mulligan
yeah, I was a future once too, all the times have changed.
0:15:36 - Tatiana Cirisano
Already working yeah, I was a future once too. All the times have changed. I mean, let's talk about growth, because we know that, yes, of course there's still growth to be had in streaming. There's still going to be more subscription growth, but it will be in regions where ARPU is lower and where Western labels don't have as strong repertoire share. So how can we expect streaming to bring the industry into its next growth period when growth is dwindling?
0:16:02 - Mark Mulligan
Well, I think you said it yourself it's not dwindling, is it? It's just it's coming from different places. Is growth slowing in the West? Yes, but there is a huge amount of growth which is going to come out of the global south. I would argue that is the you look at, say, the Look at India as a case study, right? So India has, you know, most really big, populous global south countries that have got low per capita GDP, the old music business. They didn't even register because the old music business was about selling units of stuff and if you're going to buy a unit of something, you need to have a decent amount of disposable income. Streaming changed that. You've got hundreds and hundreds of millions of people streaming in India. Now is only a few million of them paying Absolutely, but the hundreds of millions who are listening for free are still generating revenue. And so suddenly in India, india there's this whole wave of new labels and artists and genres where being in the music business is a viable option. That wasn't there before and, as a consequence, india's becoming an export market for music, first to the diaspora and beyond.
You look at the music surging, musicpora and beyond. You look at the music. You know the surge in music from latin america. You look at the music's beginning to come out. You know it's like sub-saharan africa and afrobeat and all of these things. That global world of music that's streaming. Does social play a role, absolutely, but it's streaming that has enabled that. So that will happen more.
I think you know we need to get beyond the point of thinking streaming's slowing here in the West. Therefore, streaming's slowing, no, streaming is about to have its best days ever. It's just not going to look quite as good if you're a Western record label, because not only is the ARPU low, as you say, but the repertoire share is much lower as well. So sure, you can be Universal music and go and buy, you know, majority share in, you know the biggest label in nigeria, and you can, you know, edge your way into the marketplace that way. But I think the really exciting thing that streaming is going to enable is the rise of global south to finally start chipping away at the west hegemony in music culture.
So let me throw a question back at you, right, I mean, I made this thing about 41.7 billion versus 3 billion. It's not just flippant. We haven't yet got to the stage where we've properly worked out how to extract real value for the music industry. And when I'm saying the music industry, I'm not just talking about the rights holders, I'm talking, you know, the songwriters and the artists as well, and we saw what happened with Universal and TikTok, right. You know this public brinkmanship, washing their dirty laundry in public because it got so bitter, this dispute over what is the actual value. I don't think anybody could say that social platforms are niche, that social platforms haven't yet got to scale. They have. There are billions and billions of social platform users generating tens and hundreds of billions of dollars of revenue, but only three billion is making it down to music. So when is play going to play fair?
0:19:17 - Tatiana Cirisano
music. So when is play going to play fair? I think that the key word that you said in that was yet. We have not yet figured out the monetization model for social. But first I want to challenge the notion that nobody's making money on social. It may not be making as much money as rights holders want it to yet, but there's plenty of artists that have built their entire businesses around social platforms. Youtube is a huge part of that.
I really enjoyed Ricky Tinez's talk yesterday that BandLab setup where he talked about. He's a musician and has a successful YouTube channel. He was talking about how you need a thousand subscribers to have a sustainable business on YouTube. Meanwhile, a thousand streams barely gets you in the thresholds for earning any revenue from streaming and, by the way, he has 177,000 subscribers, so he's doing pretty fine and there's many more where that came from. There's also new features that are continuously being added. I mean we saw TikTok recently added subscriptions. Youtube just came out again with a whole suite of different features for artists to monetize their followings.
So I think that there are already monetization mechanisms and I think there will be more. I mean, think about how much has evolved in terms of the platform's relationships with labels in the past 10 years, of the platform's relationships with labels in the past 10 years. I mean, we have licensing structures that we had never had in the past and that people were also saying, well, how is streaming ever gonna make us money? So I think yet is the key word. We maybe have not maximized the value yet, but that's where it's going. But I find it pretty ironic for you to talk about earnings here when you know for I'll get my coat.
When, when you know, when. The reality is that you know the vast majority of artists will simply never have the the audiences they need to earning meaningful revenue from, from streaming. So my question is if it's called a stream, why are artists in? Ooh?
0:21:11 - Mark Mulligan
very good. Play isn't playing fair, right? So does streaming need to change 100%, right? You know you've sort of, you've positioned, you know the list inside of the equation as being static, and you know what You're right. Has streaming innovated in any meaningful sense over the course of the last 10 years? No, I mean, if you compare when Rhapsody first came to market, what was that About the time of iTunes, right, 2003 or so? That basic model is still here Now. The bits around the edges have changed. You know the algorithms have changed and you know the look and the feel of the apps have changed, but basically it's all the music in the world in one place for one fee, and here's a royalty pot and we're going to divide it up.
So, 20 years into the experiment, should that still be the case? Absolutely no way. You know. So there is no doubt. And you know, when we look at things like streaming fraud, I'd say that's a feature, not a bug. It's like when you've got something built in this way where it's simply about there's one pot of money and if you manage to get enough streams, it doesn't matter what type of streams they are, because we don't differentiate. Is that a fan? Is it an active listen? Is it somebody just having it in the background? Are they even paying any attention?
So there's many, many things we can do to make streaming better, and that does need to happen. No doubt Do we need to work out ways to make sure that revenue can be I'm not going to say equitably distributed, because that's really loaded, but something which is much more related to the relationship between the listener and the artist. Yeah, and should we be doing more to put the artist at the center rather than the song at the center? Yes, so there's, there's a million and one things that should be fixed with streaming. The relationship between the dsps and rights holders, particularly the major rights holders, is going to need to evolve to allow that to happen. So, no doubt, streaming, it's not broken, but it does need fixing.
But when we look at the play side of the question, there's one really important thing. So that listen, that's what most of us do most of the time with music. Even the most active 15-year-old Gen Alpha is still going to be listening to music most of the time. Everybody's not a creator. Even creators spend more time listening than they do creating, and so we've got to have something in place that caters for listening as well as being a fan, and I think the risk is that this whole thing about bifurcation is we're splitting those two things apart.
Fandom is happening in one place and consumption is happening in the other, and the journey from one to another, I mean, can measure how effective a tiktok moment is in terms of driving streams. I mean you can do all this like sophisticated attribution analysis, but really do we really know how much wastage is happening there? Who's benefiting from that? The social platforms and the social creators have been paid to go and do some funky dance around some new release. So that, for me, is the biggest worry. It's like if we're putting fandom in one place and listening in the other place, it's splitting people into two. So shouldn't we just take play, roll it into listen and just make streaming better again?
0:24:49 - Tatiana Cirisano
well, look, I will have questions at the end. Um, I totally agree that we need something that has both. I completely agree with that. But I also want to push back on the notion a little bit that everyone just wants to sit back, because I think what we're seeing now I'm not just talking about super fans who want to be on the play side of the equation. I think this is a generational shift that we're seeing, where the everyday music fan actually is becoming a little bit more active.
For today's, you know, gen Z consumers getting on TikTok and making a video, or, you know, hanging out with their friends in Fortnite in a music world, these are things that are an everyday experience. So the things that we used to think of as the most active steps that someone could take are now just the tip of the iceberg, and that's a good thing. I mean, we want people to be more engaged with music. We know that we need to monetize not just consumption, which happens through listening, but also fandom. And how can you have fandom if you don't have those sorts of those sorts of engagement?
0:25:47 - Mark Mulligan
So I think you know it's in our best interest to make them more engaged.
0:25:56 - Tatiana Cirisano
But you're right, social is starting to encroach on passive listening as well, on those people that are just sitting back and you know, and listening and pressing play, not playing with the music. But I think we need to figure out a way to have both, because we know from our surveys that consumers are spending more time watching social video than they are streaming music, and watching social video is growing. But, like I said, I don't think we can push back on consumer behavior. If social is the place where artists want to engage with their fans and fans want to go to listen to music, we have to lean into that. And what's to stop artists from releasing full songs to streaming the way that Kendrick Lamar did, if they're thinking well, I'm not going to earn much money from streaming anyway, so I might as well release it there. So you're right, we are seeing this shift and it's super disruptive for listen and we do need to figure out how to integrate the actual music listening.
But this shift and it's super disruptive for listen, and we do need to figure out how to integrate the actual music listening, but you're talking about bringing social on to listen. I see it the other way around. I also want to bring up the competition on streaming from other formats, because I think we're talking about music streaming as if these platforms are just about music, but they're not. There's also audiobooks, there's also podcasts, these things that are competing for time. I mean, spotify is even using the bundle to to pay songwriters less these days. So how are we expecting streaming to to be the future when it's not streaming, it's audio?
0:27:20 - Mark Mulligan
yeah. So I think that the problem and I mean this in many versions of the word, which I'll explain in a moment is music rights holders. So let me explain that You're talking about the creators being able to monetize 1,000 subscribers on YouTube, right, when you look at what TikTok and YouTube I mean, youtube does an amazing job of no longer being the enemy of the industry that it was, except sort of still in the background, being a little bit of a Bond villain, because what YouTube and TikTok in particular are doing is they're building these ecosystems for creators, which is amazing for creators, but making it less and less important for a rights-holding part of the equation. If you look at a superstar act, a superstar act might earn 20% of their income from recorded music. If you look at a 30,000 a year creator, they're making maybe 20, 30% of the money from recorded music. The superstar is making most of the money from touring, from sponsorships, etc. The 30 000 a year creator is making the money in about a dozen different ways. They're doing some mixing, some engineering, they're doing some music teaching, they're doing some mentoring, they're doing getting a bit of sync, they've got the pro income and they're doing all of these things because they, if you are a creator lower down the food chain, your life is just one hustle, and because so many unfortunately, diy too often does mean do it yourself they are having to work really, really hard.
Now, if you are a platform like tiktok, you might talk about the creator economy, really, tiktok. What matters to tikt, tiktok is not creators, it's creation. They just want there to be a constant amount of content for their audiences and as much as possible to lock it into an ecosystem. So what does TikTok have? You've got Gen AI tools. You've got the ability to make music in TikTok and then push it out to DSPs if you want to, but fundamentally, you've got your audience. You've got your creation. You've got your discovery. Everything is in there.
Distribution is fundamentally part of what it's about, and so this is why I'm saying rights holders are both a problem in two sides of the equation. They're the problem in that they are being cut out the equation. So that is a problem for rights holders, but one of the reasons why streaming services are busy pursuing particularly Spotify, pursuing non-music audio is because they're struggling to work out how to make the business as profitable as they want to be. Now you might all say oh yeah, but you can afford to go and spend hundreds of millions on investing in podcasts. Yes, absolutely, but they're making strategic bets in order to try to make their future more sustainable. So it's a problem for rights holders and rights holders are also the problem. So I think we're getting towards the stage of closing comments. So, if you want to do your little apology and then I'll wrap up, Was there a question?
The question is why are're even on the stage?
0:30:33 - Tatiana Cirisano
It's not very, very good etiquette from my opponent here. This is what you can expect from a world of listen people.
0:30:42 - Mark Mulligan
But they're eating the pets.
0:30:44 - Tatiana Cirisano
There he goes again.
0:30:45 - Mark Mulligan
It's weird.
0:30:47 - Tatiana Cirisano
All right, so are we moving on to closing? Is that what's happening? All right, let me get out my notes. So I wanted to close with telling you about my experience, an experience I had last year.
After this exact time slot when we did the keynote, I went and had lunch with a friend who works in the music industry and we talked about how it felt to experience music streaming for the first time after growing up on CDs for our whole lives. And it felt to experience music streaming for the first time after growing up on CDs for our whole lives, and it felt incredible, right to suddenly have all this music at your fingertips. I'm sure everyone here remembers the first time that you used Spotify or Apple Music or whatever it was. But just like we grew up with CDs, today's kids grew up with streaming. It's no longer this magical experience that the hard truth is, as it was for us, because they grew up with streaming. It's no longer this magical experience that the hard truth is, as it was for us, because they grew up with it. They grew up with having all this music at their fingertips. So for them, the coolest thing in the world, as I was saying in the beginning, isn't making playlists, it's going much deeper. So that day when my friend and I were talking about this, we ended up coming upon this question that I've been thinking about pretty much every week since, which was what format is going to give the next generation that sort of holy crap feeling of excitement and wonder that streaming gave us? And I think that feeling is already happening, and it's coming from the play side of the equation. I think interactivity is the format of the future, and this remix culture that we're in, where fans want to engage more deeply and be part of the music that they're fans of, not just passively listen, is happening not just in music but across entertainment, and it's only going to get deeper and it's only going to get more exciting, while for the next generation of fans, I think, pure play streaming is only becoming less exciting, and that's the hard truth of it.
Meanwhile, we know that artists are tired of streaming's broken promise to them, and many have moved on to that acceptance phase. They've realized that they're simply never going to make income there, or meaningful income at least, and so they're moving on to social. But the truth is that there's many more artists that have simply given up. They've been looking at the admissions from artists that they look up to, like James Blake and Little Sims, who have been open about how they haven't been able to build careers on streaming, and they're thinking if they can't do it, why should I even try? So the fact is that we need to give the next generation of artists a future they can believe in, if we're going to have a next generation of artists at all. So listen to me closely.
In these coming years, streaming will do just fine. It's going to continue to add subscribers in new regions. We'll see slower but still steady revenue growth, and most artists will continue to release there, even those that I'm saying are now prioritizing streaming. But don't let that fool you. Social and streaming will coexist for the next five years, as we've been talking about, and this will actually only make it harder to perceive the underlying and crucial shift that I'm talking to you about.
Think of the same way that Netflix and linear TV still exist in parallel.
Everybody knows that Netflix is the future, even though linear TV still exists, and streaming is in danger of becoming linear TV to the next generation, and so it may feel like everything's fine, but the time to strategize is now.
It's yesterday and it's hard to reckon with these truths, I know, because it feels like we just got a handle on streaming and now it's time to build something new. But just remember, as I was saying earlier, how much resistance there was to streaming back when it first came to be. And yet it became the format of the future and it brought us to where we are today, which is a time when we're again asked this question of what is the next format of the future. So I urge you, when you leave here, to ask yourself that same question that's been keeping me up at night for the past year what is going to give the next generation that feeling of wonder and excitement that streaming gave us, and where will artists go to build businesses that reward connection and fandom and the value of the music that they're making? Again, I think the answer is play, and I hope you'll join me. Thank you.
0:34:47 - Mark Mulligan
Read my lips no more taxis so look, I'm going to be balanced. Read my lips no more taxes no, so look, I'm going to be balanced. Everything Tati says is right. You know, we, it's really difficult to understand. Change is happening until it's happened, you know. And it's like, because change happens quite slowly, even when it's happening fast. It's like because change happens quite slowly, even when it's happening fast, it's still happening quite slowly. You know, it tends things tend to take years to happen. And it's the, you know there's.
There's a quote I go back to all the time william gibson, the sci-fi author. He said um, the future is already here. It's just not evenly distributed, you know. And there's like all the bits of what the future are going to be are already here. They just haven't fully taken shape yet.
So I think what you've seen is streaming as it is at the moment. No, absolutely not. It is not catering for what is fundamentally a much more identity driven and participative experience around music. Right, because we have literally just spent the last 10 years commodifying music. We've made music convenient. It soundtracks the mundanity of our daily lives. You know, we select listen to music while we're going to work, while we're cooking. You know it's like cleaning the house. So, yeah, it's great to have a bit of music on in the background, but it's just as easy to have a podcast on. You know, if you just turn it into, well, you've got some buds in your ear or your smart speaker or whatever else it is, and I think it's that you know.
There's this whole drive that's been happening, for, you know, whatever it is is like 18 months or so now about the superfans, monetizing the superfans. Well, unfortunately, maybe superfans aren't super enough, because what we've done is we've spent 10 years telling music's just something you have on in the background and you know what, without trying to be conspiracy theorist about it, it is in the interest of the streaming services for your relationship to be with the streaming service, not with the artist. So, what do you value? It's my music subscription rather than it's that album, it's that EP, it's that single. And actually those moments are much more happening in social, because that's where the big buzz and everything is happening.
So I'm not going to argue against play. It absolutely needs to be part of the future and that's why this is bifurcation, it's not replacement. Need to be part of the future and that's why this is bifurcation, it's not replacement. There might be some displacement, that goes on, but it's not replacement. But when we think about, you know, the super fans, not everybody is a super fan, not everybody will be a super fan. The majority of people are passive listeners. Now we've done a really good job with streaming, turning the majority of passive listeners into actually really quite high spending consumers. But it doesn't stop the fact that most of the time they listen passively. It doesn't help that the streaming services have become much more like radio, again, very much in the interest of the streaming services, because they own the relationship. They own what music gets into your ears, unless you really go and fight against the system.
You know, I remember you're talking about. You know, first experience with spotify. I remember being on spotify beta. It was basically a search bar, you know, and it's like and so it's great that we've got all. You know the algorithm has done so much to be able to learn about us. But it's also a terrible thing. It's done so much to learn about us, you know, because what's one of the great things about music is that serendipitous discovery of something you didn't even know you'd like. And if an algorithm's just telling you all the time. Here's something you're going to like because it sounds like something else you've listened to.
Then music just becomes more and more commodified, more and more. Oh yeah, it's a bit more the same and in fact, there's an incentive not to make music stand out, because if you've got your relaxing piano music playlist on whilst you're doing a bit of work and suddenly something goes out and makes you whoa, the relaxing piano music playlist is no longer relaxing piano music. So there is a huge amount that needs to change. But when we think about the artists, you talk about the next generation and where they're going to earn their income. Well, if you are somebody who can invest your time doing all of the work that you need to do on social in order to build up a fan base and to keep them engaged, you don't have that much time left to be a musician because you're putting so much time into being a creator, and it's why we at Media we stop calling them artists and songwriters.
Nowadays, every artist or songwriter is a creator. They're probably doing production, they're making videos, they're doing a bit of graphic, graphic design, they're building the social audience, because the weight of marketing is now the burden of a majority of artists. You know, and there's only so much labels can do, because the whole thing about social and being so video centric is it's got to be the artist and you can't have. You know the days when it could be just you know the label pushing out posts onto facebook. Those days are gone. You, okay, maybe we can have something like Gen AI avatar that you know, to trick people into thinking it's the artist.
But fundamentally, it's really hard work being a creator in this creator side of the economy, and that's why I think you need streaming as well, because streaming is a way that, if you're of reasonable size, you will make really meaningful income from it. And even if you're not of reasonable size, it is the thing which unlocks everything else. It's by getting your streams, is what gets you the attention, it gets you the sync, it gets you the bookings, it's the marketing vehicle. Now, should it be that way that artists have to look at streaming as basically marketing that they get paid a bit for? No, absolutely not. And should we have this situation where we're putting in earning thresholds which locks up more of the money for the more successful artists? No, absolutely not.
There is a drawbridge being pulled up around streaming at the moment to lock out the long-tailed creators. And here's the harsh reality. The likelihood is bifurcation is going to happen faster because the big players are trying to stop it happening. You know, by putting in a thousand stream cap, it just makes more creators spend more of their time outside of streaming Doesn't mean they're not going to release onto streaming, but they're putting their efforts into play. And if they're putting more of their effort there of streaming Doesn't mean they're not going to release onto streaming, but they're putting their efforts into play. And if they're putting more of their effort there and they're doing more there, the audience spends more time there. And the more that the audience spends there, there's more of a cultural shift. And so you end up in a situation where it is going to be harder and harder for streaming to be able to say this is the home of music.
So I'm closing by saying you can't vote for play, you can't vote for listen. You've got to vote for both of them because they're both part of the future. Thank you, but if you have to vote, it's listen, right? So we've done our talking time for questions. Yeah, I'm going to start here. Hi, thank you very much. So we've done our talking Time for questions Hands.
0:41:51 - Tatiana Cirisano
All right, I'm going to start here.
0:41:55 - Speaker 1
Yeah, hi, thank you very much, sacco. Riff Raff App. Definitely ultra play. Ultra fan site, great debate. I'm surprised by the absence in the whole debate and the whole conference about the live performance. Why is there no one from the live economy here and why are we just talking about Spotify versus TikTok? Which side claims the live performance as their own?
0:42:22 - Mark Mulligan
Well, if you heard my penultimate sentence or so, that's how you get, how you get seen by festivals, how you get seen by bookers, it's like. It's like it's the. It's almost like the way that radio used to be, radio used to be. If you got a spin on national radio, that was a sign that you got to certain sides and people paid attention to you. And live absolutely depends very heavily on streaming. In the same way the sync market does. People look at it, say what's happening? There is a sign of success. Is it beginning to happen for social too? Yes, but I would say the exact same dynamics in the new in streaming are beginning to manifest in life and that is a concentration of revenue in a relatively small number of artists that are sucking money out of the equation lower down the chain. So we've done work over the last couple of years asking live music fans about how they're spending and more and more of them saying I'm saving my money for the big ticket concerts and going to fewer small ones. As a result, and we know, post-pandemic, the amount of small venues that have closed and we're already in an era result, and we know, post pandemic, the amount of small venues that have closed and you know we've already in an era where more artists are not having, you know, not performing that much. You know they're, they're releasing thread streaming and, as a consequence, they're not as rounded musicians because they've not done. They're going up and down the country in some beating up a van and playing to 20 people on a wet tuesday night. Um, that's probably going to get worse, right, it's because it's like the If we're seeing that it's harder for artists to go, smaller artists to go and play because there are fewer venues and the money's going to. You know, you look at the ERA's tour. It is everything that is good and bad about live all rolled into one.
At the moment, it's like the big events are being marketed not as live events. They're cultural moments, right, and because it's a cultural moment, you can charge incredibly high prices and people will go and travel to a different country and the amount of money that they spend to go to that one thing I was part of it. Because you're part of it, you've probably spent about the same amount of money. You could have seen 100 small gigs, you know. So, anyway, that's what I'd say. So it's like we're not ignoring live absolutely not. But this is much more conversation about the creation side and the recording side. Tatty, anything to add?
0:44:43 - Tatiana Cirisano
yeah, I would also say I think social is doing as much for live as streaming is.
I think both are important for building that, because, of course, the first step of becoming a fan is liking the music. But we know that becoming a fan of music and not just a listener comes when you know more about the artist beyond the sound of their music. When you understand their personality, you like their style, you learn their backstory, you identify with more things about them, and one of the big issues with streaming is that there isn't that next step. You know there aren't that many ways to learn more about who the artist is beyond their music, and so fans are going to social for that, on Spotify and other platforms that have started integrating live. I think an issue with it is that you have now the listening in the same place as the ticket buying, but you don't have that bridge in the middle of how to build the fandom that motivates someone to buy a ticket in the first place. So I think both have a role to play, but don't underestimate the role of social in that.
0:45:43 - Mark Mulligan
Yeah, I think there's just one last thing here which I think is really, really important, which is it's no coincidence that festivals have boomed when streaming has boomed, because what is a festival? It's a playlist, it's a live music event. Right, it's like you've got, whereas music used to be a whole series of monogamous relationships. You get the album and you just spend your time listening to that and you'd spent all your money and you couldn't afford another album for another month and even if it was a bit crap, you'd listen to it enough times. You started actually quite liking it and because you'd listened to it, you're way more likely to buy the second album, the third album, and you're still going to see the damn band 20 years on.
But if you just it's one new song, oh, there's another new, oh, yes, one of the hundred new songs I've heard today, your relationship is with songs more than it is with artists, and I'm not, by the way, I'm not making an doing an apologist argument for albums and saying we should be back to albums, because most people don't listen to albums, but the thing about an album was it was an artist-centric experience. It was you immersed in the artistry, and I think that is fundamentally the foundation of a long-term life career for the majority of artists. So the likelihood is that the future will be much more about festivals, multiple artist tours, et cetera. And then you've got to ask where are the big stadium acts of 20 years from now? You know it's like the dystopian future, but who's going to be in the next Coldplay, coldplay.
0:47:13 - Speaker 5
So I really enjoyed this debate. I wanted to really bring attention to, I think, a difference between viewership and attachment. My current hypothesis, what I'm seeing, is we're getting more people viewing things nowadays, but it's harder to find attachment, as you said. It's harder for you as a customer, when you first view something, to go from viewing to purchasing, and I feel like my question for you is I feel like when we go towards play, we're going to have even more viewership, as you said, but I think people's tolerance is going to build up the more stimulating things we give. Streaming is more stimulating to me than CDs, and this is more stimulating to streaming. So my fear with this is that we will get more people consuming this, as you said, but I think the attachment, the consuming ratio to attachment, will decrease even more than streaming and we'll have even more situations where, if you don't make a thousand streams, you won't get any money and the smaller artists will get paid even less because there's less to pay, because the value per customer decreases. So what's your answer to that question?
0:48:16 - Tatiana Cirisano
Yeah, it's a good one, and it's my fear too.
I mean, I think a lot of the issues with streaming when it comes with social, when it comes to burnout and artists having to release all this content and getting maybe some views, but people keep scrolling.
I think a lot of it also goes back to what streaming is incentivizing, because I find that a lot of times the creators that are feeling the most burnt out by the content treadmill and the most frustrated with that are the ones who are using social only to try and get people to stream their song, and often they're pressured by labels to do that, and it's also this whole system is also bad for labels because they're incentivized to just sign anything that moves, squeeze all the streams out of it and don't have time to develop an artist. So I think all of this goes back to an issue that streaming kind of created, however accidentally, of the pressure to just have a massive audience at all costs. And if we can move to a future where the incentives instead reward fandom and connection, I think a lot of that, the way that people strive for that will change and we won't see as much of this content glut, if that makes sense.
0:49:23 - Mark Mulligan
I think just building on the other side of the incentives is motivation, and you think about what are the motivations of the people in the equations, right? So the motivation of social platforms is to make users stay there as long as possible. You know, and we all know all this. You know the academic papers about. You know it's like algorithms designed to, you know, drive the dopamine fix and you know what it's doing to. You know teenage mental health and all of those sort of things. They are because the motivation is so strong that it outweighs all of those things. We know that. You know, because of leaked documents, that Meta knew what. You know what Instagram was doing to the mental health of teenagers. But we're still pushing ahead because the motivation is to drive stickiness, to drive engagement to, to get as many people to stay there as long as possible, and that affects all of the decisions.
Right, streaming service, if you're spotify, and spotify gets a huge amount of, you know, negative press. But the thing that spotify is that virtually every other western dsp isn't is that virtually every other western dsp isn't. Music is what pays its bills. You know, amazon, apple, youtube. Music is a way of helping the other things pay the bills right. So for as much as spotify is, you know, potentially screen over songwriters with a bundle and whatever else, they're still relying upon music to pay the bill.
So the motivation there is to try to make sure that people spend as much time listening to music as possible. So I think that's. And then, when we think about the motivation of an artist, a creator will be I want to be successful, I want people to be moved by my music and I'll do whatever it takes to go and do that. And if I'm music a bit here and a bit there, and if I burn out, okay, well that's, you know what will happen, whereas a rights holder is going to want to make sure that their music is generating income wherever it can be. So none of that is an answer. What it is is there are competing motivations and misaligned incentives, and it's causing a bloody mess at the moment.
0:51:28 - Tatiana Cirisano
Eleanor, just before you wrap up sorry, this isn't a debate point I just wanted to say before I forget that please vote for whichever side you believe in, but know that Mark and I both actually co-authored a report on all of this, and you can read a free summary version of it at our website. So we have a new page that we just launched a few days ago, midiaresearchcom slash resources, and if you go there, you can read a bunch of summary reports, and bifurcation theory is one of them. So if this was interesting to you, I encourage you to check it out.
0:51:57 - Mark Mulligan
And I'm sure what you've realized is we both bleed in both sides of the equation.
0:52:00 - Dmitri
All right, Thanks for listening to Music Tectonics. If you like what you hear, please subscribe on your favorite podcast app. We have new episodes for you every week. Did you know? We do free monthly online events that you, our lovely podcast listeners, can join? Find out more at musictectonics.com and, while you're there, look for the latest about our annual conference and sign up for our newsletter to get updates. Everything we Do explores the seismic shifts that shake up music and technology, the way the Earth's tectonic plates cause quakes and make mountains. Connect with music tectonics on twitter, instagram and linkedin. That's my favorite platform. Connect with me, Dmitri Vietze, if you can spell it, we'll be back again next week, if not sooner
Let us know what you think! Tweet @MusicTectonics, find us on LinkedIn, Facebook and Instagram, or connect with podcast host Dmitri Vietze on LinkedIn, Twitter, and Facebook.
The Music Tectonics podcast goes beneath the surface of the music industry to explore how technology is changing the way business gets done. Weekly episodes include interviews with music tech movers & shakers, deep dives into seismic shifts, and more.
Comentarios