Original article posted Mar 15th, 2016 by Dan Griffiths, on Midem
How streaming services adapt to the need for community and social engagement within their platforms over the next 12 months may well determine who will succeed and who will fail.
Apple Music have perhaps been the most prominent or public-facing to date, with the Facebook-like approach taken with Apple Connect. It’s also hard to deny the online community Spotify have achieved, with playlists and built-in messaging capabilities, even with those being less visible to the more novice user. Ultimately, the social success of either platform will result in how many users engage with the platform, with Apple choosing to adopt a ‘closed’ in-platform environment, and Spotify leveraging an already established social network (Facebook) that has appeal outside of the music ecosystem.
What’s been missing across all major streaming platforms for some time now, though, is a lack of in-depth analytical data to back up what social engagements actually mean (both in platform and on external platforms).
Whoever finds this solution can help artists and labels further understand what implications their social activity has on follower numbers, streams and ultimately revenue. Spotify have made positive steps towards this with their Fan Insights tool, but what’s available to the public, the independents and industry-wide varies hugely.
I disagree with a lot of articles I have read in the trade press about demands being made for Spotify and other providers to furnish labels and artists with fans’ email addresses, because I’m realistic about the implication of territory privacy laws. I do believe, however, that there is the need toprovide artists and labels with tools that will help optimise streaming strategy and therefore increase the opportunity to expand revenues. The sad reality is the data and tools already exist but the music industry has not worked as a collective body to enable these to be shared industry-wide.
The difficulty faced by artists and labels at the moment is that it’s the streaming services themselves that appear to have most of the power. While these platforms continue to develop and adapt to consumer needs, simple updates to services can remove potential promotional opportunities, and therefore revenue. The most recent of these changes with potentially significant ramifications was Spotify’s removal of the ability for artists and labels to approach playlist tastemakers within the service’s messaging client. For many labels this meant that if they had not established a relationship with these playlists in Spotify’s infancy then they may have already missed the boat. However, well-established playlist brands that were built at Spotify’s inception, driving traffic and ‘followers’ via adshare, continue to operate like label-owned radio stations, increasing plays to artists’ new music.
This does however provide a huge opportunity for independent companies or official bodies (BPI, AIM, PPL etc) to create tools or a data hub for the independent sector that could be leased to artists and labels for a monthly fee or in exchange for data. This would allow them to gain a greater understanding of what works socially on streaming services and in-turn create a more level playing field.
What is perhaps most surprising is that social platforms are yet to integrate monetising streaming into their offering and that it’s always been the other way around. Facebook’s integration of video over the last few years surely means that we will see monetisation on the platform at some point during 2016. Regardless of video being brought to the social network to drive further ad revenue, surely labels will demand monetization in order to claim mechanicals for UGC on unsolicited uploads. If monetisation was in place, and understanding the demand for full-album audio on YouTube, it’s not hard to imagine single track artwork videos making their way to Facebook. Couple that with Facebook’s pop-out in browser video player, analytics that surpass their rivals and an inclusion in their mobile app and suddenly the offering becomes very compelling.
We have of course seen Facebook and Spotify work closely for some time. Initially Facebook provided a platform to share Spotify listens socially and ultimately brought the streaming service to a much larger audience and more recently we have seen its ‘Add to Spotify‘ player integration and Facebook Messenger adding Spotify sharing capability. Having said this Facebook have worked closely with partners before using them as a test bed to develop their own technology (i.e. using Skype to improve video calls).
This year is going to be a hugely important one for anyone in the social media or streaming business. Will Facebook begin to monetize video (and therefore music content)? Will Apple’s rebooted Connect encourage artists and labels to fully embrace the platform? Will newbie Crowdmix crack what all the big players have failed to achieve and successfully monetize music content socially? Only time will tell.
Currently a lot of sales and streaming traffic is driven by social activity. It’s therefore easy to reach the conclusion that whatever company cracks the social element of streaming will be the one with the golden ticket. The difficult question right now is whether it will be a social network that integrates streaming or a streaming service that ups their social game. Regardless, artists and labels are are going to need to be armed with better analytical tools and data to fully embrace any streaming platform, whether this comes from better tools being built or streaming services granting more access to the data they control.