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This is the third in a series of in-depth posts, by Music Ally’s Stuart Dredge, giving you the full low-down on Midem 2018’s biggest highlights and industry trends. 

 

Big ideas were certainly not in short supply during the keynote sessions at this year’s Midem conference. From music companies to brands, streaming services and artists, each evening’s lineup provided plenty of food for thought.

Citi’s global consumer CMO Jennifer Breithaupt promised that the financial company wants to make it easier for artists to “get through the door” and talk about partnerships, while encouraging them to see these deals as creative rather than simply moneymaking opportunities.

“It’s not always about the cheque. It happens, there’s certain people that require payment, but there’s others who are getting really creative about how we can partner together,” she said. “And those people end up getting bigger cheques because we’ll put more marketing behind it, we’ll put more media behind it. Those people are playing the longer game!

Breithaupt also poured some cold water on virtual-reality technology. “We’ve done a lot in the music space, and it’s still a little bit clunky, and the experience is just not there. It really doesn’t replicate standing in an audience with a lot of other fans watching a live show,” she said. “It’s a technology to stay with… but we haven’t found a wow yet.” Watch the Citi keynote on YouTube.

BMG chief executive Hartwig Masuch has a reputation for plain speaking, and he did not disappoint with his keynote interview, in which he outlined his company’s ambitions.

“I think we can do whatever you think a major should be able to do. Yes, we are the fourth major,” he said. “A major for me means you have global access to the markets, and you are able to give artists a global perspective on several parameters: recording and publishing. To say ‘we’re the leading independent’ would be to shy away from the ambition that we have.”

Masuch also warned that the streaming era must be a time where music companies have true partnerships with artists, rather than the sometimes-exploitative relationships of the past.

“We thought the digital world would suggest very different relationships. Artists can take over much more control than they ever had before,” he said. “Actually, we shaped our company to be a service company. It’s very important that what we do is absolutely coordinated with what our clients want to do, and is in their interests… We are the good guys!” Watch the BMG keynote via the embed above.

Day two saw Snap Inc.’s VP of partnerships Ben Schwerin and Geffen Records president Neil Jacobson wax lyrical about the music potential in social app Snapchat.

“Really our business is about empowering people to express themselves, and very early on we saw that artists like Ariana Grande, Calvin Harris and DJ Khaled were using Snapchat to connect with their fans in a very personal way,” said Schwerin, comparing the ‘story’ posts of these artists to classic rock documentary films of the past, in terms of the interest from fans.

Jacobson offered another comparison. “I look at Snap in a lot of the ways I’d look at MTV. It feels the same as MTV did to me in the 90s: it’s a young demographic,” he said, while praising tech features like augmented-reality ‘lenses’ on Snapchat, which can be created by labels and artists. “For me, the future of this business lies in augmented reality.”

Schwerin also hinted that Snap Inc. may be willing to sign licensing deals with music rightsholders, matching those of rival Instagram. “We’d like to have music be an even bigger part of the app,” he said. “We ultimately want artists to be compensated for their work. We’ll see where this goes. Broadly we want to continue to build stronger relationships with rightsholders, and we want to see how music evolves on Snapchat.”

Another keynote saw three of Concord Music’s key executives – CEO Scott Pascucci, chief business development officer Steven Salm, and chief publishing executive Jake Wisely – talk about its growth so far, and its view of industry trends.

“Our revenues are in the good handful of hundreds of millions of dollars… By our measurements we’re the fifth biggest music company in the world,” said Pascucci. “Our margins are very good, and we have good cash flow. We’re a good, profitable company.”

Salm hinted that Concord Music could be in the market for more acquisitions, following its deal to buy publishing catalogue Imagem for a reported $500m-$600m in 2017.

There are more opportunities to make acquisitions than I have time in a day, week or month to do,” he said. “As I see it from my specific seat, I think the company is incredibly well positioned to do some fantastic things across publishing, recorded music and theatrical in terms of what I focus on specifically, which is the acquisition market.” Watch the Concord Music keynote on YouTube.

Ghazi Shami, CEO of Empire, gave a keynote about what he’s learned from working with artists from Kendrick Lamar to Anderson .Paak, and Cardi B to XXXTentacion.

“I think every artist has a different… I usually call them energy points. It really just depends on where that energy is coming from. Some artists have a lot of energy coming from social media, some have it coming from radio, some are heavy in the blogs, some are heavy on SoundCloud. Some might have a Spotify following,” he said.

“Some of the older legacy artists actually still sell a lot of downloads! We try to look at all those different energy streams, and figure out how to build a conversion point. If you have many of those different energy streams going at the same time, that’s where you have potential for some serious success.”

He noted that Empire has never taken VC money, but is successful and profitable from its own organic growth. “People often described me as a jack-of-all trades, and I think the mantra is ‘jack-of-all-trades, master of none’ and in my situation I was a jack-of-all-trades, but I was a master of one: I was a master of my company! And my company was built through all the different skillsets that I learned over so many years.” Watch the Ghazi Shami keynote on YouTube.

Streaming services were represented by Napster CEO Bill Patrizio in this year’s Midem keynotes. He offered his views on why there’s room in the market for services beyond the biggest global players.

The market will still be dominated 80% we believe by those dominant players: Spotify, Apple… We expect it’s going to be a market size of about $7bn, moving towards potentially $20bn or $25bn… and that increasingly leaves opportunity for other players to participate,” said Patrizio.

“Even a 20% slice of a $20bn market is a $4bn market… and that’s what we’re going to focus on… This is not going to be about just bringing to market the $9.99 product that we have today. This is going to be about innovation, about new forms of experience.

Napster is also exploring new technologies like blockchain. “Blockchain, Ethereum, not a new issue for the music industry: particularly around connecting artists and royalties… utilising smart contracts and blockchain and cryptocurrency to simplify that is something we’re participating with some of our peers in the industry,” he said. Watch the Napster keynote on YouTube.

The highlight of Midem’s final day keynotes was undoubtedly manager and investor Scooter Braun – and not just because he happily continued answering the audience’s questions long after the scheduled end of his session.

Braun encouraged the music industry to invest in young executives, as well as young artists. “It’s more important you meet each other. If you want to know how to find the next Spotify, it’s somebody in this room who hasn’t done it yet. Bet on each other… It’s a youth-driven business, it’s a youth-driven world. Speak to each other, invest in each other, and one of you guys is the next Daniel Ek,” he said. “Build relationships not with the people on the stage, but with the people in the crowd!

Braun also had some valuable thoughts on wellbeing in the music industry. “Don’t get your self-worth out of what this business gives back to you. We’ve had way too many suicides in this business… This is not real, this is a privilege, this is fun, it’s a very cool business. But it’s not reality,” he said.

“Your family, your friends, that’s your real life. Don’t try to find your self-worth in this business: find it in the simple moments… And the best part of this business is human interaction. It’s not the achievements.” Watch the Scooter Braun keynote via the embed above.

The other Midem 2018 keynotes were South African artist Black Coffee; Oak View Group chief Tim Leiweke; and Michel Magnier, the European Commission’s director for culture and creativity. You can read about all three in our first Midem 2018 review post.

Artists made their presence felt at Midem beyond the stages at the Midem Beach venue. Besides Black Coffee’s keynote, there was the visit of musical royalty – Yemi Alade, known as the ‘Queen of Afropop’, to tell her story.

“The people that are most important to me when I sing are the people who would connect with me in terms of originality. I sing for the youths, definitely. I sing for Africa, I sing for the world. I sing for anyone who cares to listen and share, even without me being physically there!” she said.

Alade also talked about the growth of her audience well beyond Nigeria, and indeed, beyond Africa. “To become a big African brand… I had to research, and I had to ask a lot of questions. And everything came down to the simple plot: when you start with nothing, you must have an aim, you must have a goal… You must have a semi-plan,” she said.

“My first plan was to spread my music among my neighbours and the people on my streets. So the minute you become popular on your streets, you can now move on to your community… and then your state, then a few more states, and then you can move on to the country!” Watch the Yemi Alade session on YouTube.

British artist Emma McGann also appeared on the Midem conference stage, as part of a session titled The Power of Video. She talked about how she’s managed to build a fanbase through video-livestreaming app YouNow.

I use livestreaming every single day to connect with my audience. They come and they watch every single day, and they pay to do so. And I’m earning a full-time living from that, and have been doing so for the past four years!” she said.

“I organically grew on YouNow about four years ago. I had a moderately small fanbase already on YouTube, but I wanted to grow that,” added McGann. “Within a matter of months my fanbase had grown tenfold.” Watch the Power of Video session via the embed above.

Artists are also taking part in some of the big music-industry debates around copyright. Miranda Mulholland, spoke at the Music Canada Lunch (pictured above) and was on the panel that discussed copyright reforms in North America at this year’s Midem. She was less than impressed with some of the debates around where companies (or entire industries) should get ‘exceptions’ from paying royalties under copyright legislation.

“All these exceptions that are being discussed are people trying to find reasons not to pay us!” she said. “It’s a little difficult as an artist to listen to these negotiations, and people arguing for exceptions, when the landscape has changed so drastically for us.

She also said that artist activism can be more effective when it goes beyond the biggest stars. “There is a grassroots campaign with artists who are speaking up. And one of the most successful things we’ve found in Canada is not actually approaching those superstar artists and asking them for their opinions on copyright,” said Mulholland.

“It’s great that they have them, but what actually matters are working artists who are trying to make a living in this new landscape, who are credible, who actually have a body of work, and yet who are still having trouble making rent. That is actually the more persuasive argument.” Watch the Copyright Reforms in North America panel on YouTube.

Managers were also speaking at Midem 2018, talking about the challenges and opportunities for their artists as well as the wider industry trends. Allyson Toy, DJ and artist manager at Tiger Mom Management in China, talked about the need for more transparency between streaming services and managers, for example.

“On the biggest streaming platforms, they don’t share the streaming numbers for your songs publicly. I think the only metrics that you really have to work with are the comments and the shares and the likes that are part of the social timeline functions,” she said, of Chinese services.

“But even if you have access to the artist back-ends, basic demographic information – How old are my fans? Where are they located? I just don’t have access to this. And furthermore, there are certain platforms – no names named! – where to even apply for the privilege of monetisation, you need to have an internal rating that is at a certain level. And the criteria for said internal rating is just not publicly shared anywhere.” Watch the Stop! China Time! panel on YouTube.

Juan Paz, manager of Visitante in Colombia, talked on the Pasito a Pasito: Latin Urban Music Goes Boom! panel, giving his management-eye view on how the market is evolving – and why western artists are so keen to work with their Latin American peers.

“We will see more collaborations, I guess,” he said. “They need those numbers from Mexico, they need those numbers from Brazil, if you want to succeed in the global charts… And it’s the opposite as well. What J Balvin is doing or Nicky Jam is doing or Maluma is doing: reaching out to global audiences. It only means opportunities.”

He also talked about concerns around labels simply copying what has been successful so far. “We have to keep an eye on new sounds, on new trends, because reggaeton won’t be there forever. We need to develop new music, new mixing or collaborations. That’s a challenge, because if you look at the major labels, when these things have happened, the good thing is they have more resources to do more stuff. But the bad thing is that because it’s doing great, they will do more of that.” Watch the Pasito a Pasito panel via the embed above.

Diversity and inclusion were on the agenda of Midem 2018, with a Women’s Global Leadership Summit organised by Women in Music (WIM) and sponsored by HMUK, Nielsen and Fox Rothschild.

There were awards as part of this: Jennifer Newman Sharpe, general counsel of digital distributor ONErpm and owner of music-community sharing service Sparkplug was presented with WIM’s inaugural Guardian Award. She spoke up for more mentorship within the industry. “Mentorship is about recognising greatness in someone else, championing it, and being a great role model for it,” said Newman Sharpe.

Neeta Ragoowansi, senior vice president at music-licensing firm Nprex, also received a Trailblazer award, and drew attention to another aspect of diversity: the music being featured on prominent streaming-service playlists. “Let us look for more gender and culture diversity in our playlists,” she said.

Another session developped in association with the PRS Keychange Initiative put the spotlight on ensuring women get the opportunities they deserve, whether they be artists or industry executives. Molly Neuman, global head of business development at Songtrust, picked up on the playlists theme, after a recent article identified a hugely-male bias in some of Spotify’s popular playlists.

What I have struggled with is the companies in our ecosystem not accepting that there’s a majority of women in the world,” she said. “Something’s wrong with the ratio of only 13% of a playlist being women… It’s just not really okay, and we have to think more deeply about what we can do, and put more strategy in place.”

MusicTech Germany founder and VP Claudia Schwarz said that diversity and inclusion is just as important in the parts of these companies where recommendation algorithms are being developed and refined.

We need more diverse workforce in the development community to address these changes, because otherwise you write for your persona. You write as if you’re looking into a mirror,” said Schwarz. Read Music Ally’s report on the panel.

One of the music industry’s big ideas in recent years is the ‘value gap’ – the term used to refer to the gap between consumption of music on platforms like YouTube, and the royalties that they pay out to rightsholders and collecting societies.

Since Midem, this debate has exploded into more bad feeling, as music-industry bodies on one side and Google and other technology companies on the other lobbied politicians ahead of a vote in the European Parliament on ‘Article 13’ of a new copyright directive, which could place user-generated-content sites like YouTube under new obligations for how they deal with copyrighted content.

At Midem, this was still in the future, but the opinions on the ‘value gap’ were blunt. A panel on developments in Europe chewed over the implications. “Part of our aim in tackling this question is to find balance, and to basically talk about where the value is in the platform, not to put music fans in the frame when it comes to liability. We’re really not in that game: we’re in the game of working with music fans and working with artists to maximise revenue,” said Helen Smith, executive chair of Impala.

David El Sayegh, general secretary of French collecting society Sacem, added his views. “Most of all, what we need is a clarification between several stakeholders who play a very important role in the content distribution,” he said.

“You could not imagine that a company such as YouTube is just a mere host provider. The task of YouTube is to provide content to their users. This is the reason why we need to enforce copyright as regards to those actors. They play in the same field as Deezer and Spotify and all those content providers who fulfil all the rules regarding copyright!” Watch the Value Gap debate via the embed above.

Midem’s Legal Summit, in association with IAEL, saw plenty of discussion of copyright and other legal issues, with a cast of experts drawn from law firms, rightsholder bodies and music companies across the world.

Sophie Goossens, counsel at Reed Smith, talked about another aspect of the proposed copyright directive: Article 3, which would create an obligation to license datasets comprising copyright material when they are reproduced or extracted from databases. Why is this important? She explained that it would affect the new wave of startups exploring artificial intelligence (AI) and music.

“When you look at all the conversations that is happening in Europe at the moment around AI, you always go back to the question that AI is relying only on the analysis of underlying data. And a large amount of data needs to be analysed in order for any AI algorithm to function,” she said.

“Whether or not those AI algorithms are going to be able to run and to feed and to train on copyrighted material is going to be decided, and there’s going to be a big impact of this Article 3 on how AI is going to be understood and construed under European law,” she said. Watch the Legal Update for Entertainment & Technology session on YouTube.

The main seminar at the Legal Summit focused back on the ‘value gap’ however, with a large panel of speakers giving their views on how this issue will be resolved, and what impact that will have on the music industry and artists. The 94-minute panel featured speakers from across the ecosystem, and can be watched in full above.

Cary Sherman, RIAA

Over in the US, meanwhile, much of the legal activity in 2018 has focused around the Music Modernization Act (MMA), which industry bodies have come together to support. RIAA boss Cary Sherman visited Midem 2018 to talk about the bigger picture in North America, as well as some of the lessons from his four decades spent working at the centre of music-policy issues.

“What is music policy? It’s when government decides that broadcasters don’t have to pay artists and labels for the recordings they play on their radio stations. It’s when government decides that songwriter royalty rates will be decided by a court instead of negotiated in the marketplace. It’s when government decides that tech platforms don’t have to pay royalties for music uploaded to their platforms, as long as they take it down on request… Music policy touches each and every one of you,” he told the audience.

Sherman also talked about finding support from across the US party divide (Republicans and Democrats) for music-policy issues. “It is one of the best things about intellectual property generally: it tends to be bipartisan, but music in particular,” he said. Watch the Cary Sherman session on YouTube.

Sherman is a bona-fide industry veteran, but ideas at Midem 2018 came from the younger end of the spectrum too. Andre Benz, for example, is the founder and CEO of The Nations, including the Trap Nation YouTube music-curation channel which he set up as a high-school student in 2012. He explained why he’s since launched a spin-off label as part of the company.

I think record labels are really valuable, especially in today’s world. I think people that own platforms creating record labels is extremely valuable, because if you go back five or six years ago – when major labels knew YouTube existed, they knew it was pretty big, and they knew it was going to be pretty big – most of them could have done what I could have done six years ago, and they obviously should have!” he said.

“I think a lot of them ignored it and said ‘why would we create these channels that have nothing to do with our brand or music, and upload music? And they didn’t really get it, but now obviously they see it was a pretty valuable thing.” Watch the Andre Benz session via the embed above.


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About Author

Stuart Dredge

Stuart Dredge is a freelance journalist, and a regular contributor to Music Ally, The Observer and more... including midemblog :)

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