Troy Carter, Femi Kuti and Mathew Daniel were the keynote stars on the Tuesday of Midem 2019, capping a day of debate about the music industry’s continuing evolution through streaming.
Carter (above) was speaking in his new role as co-founder and CEO of Q&A, a company focusing on distribution, management and label services for artists. He was interviewed by journalist Cherie Hu.
He explained why he’s getting into distribution. “A lot of the distribution companies were like black holes where artists put their music into these pipes, and don’t know what comes out the other end,” said Carter. “Being inside Spotify [I saw that] a lot of music shows up on the platform without context.”
Carter also pushed back on some of the hype around artists working without labels in the modern industry. “There’s a false narrative out there right now: ‘Oh, every artist wants to be independent’. Taylor Swift doesn’t want to be on TuneCore! No offence. Taylor Swift was out of her deal and decided to re-up with Universal. She didn’t do it for the money. She doesn’t need the money. It’s the experience there,” he said. “There’s still business with major labels because of the support system they have around them, and the global infrastructure.”
Carter also criticised current industry structures. “Right now, it’s really really tough. You have three companies that have controlled the entire business. You have publishing companies that are in business with those companies. The structure of the business doesn’t really allow long-tail artists to monetise in a way that’s sustainable, and that can spread wide,” he said. That’s the challenge that Q&A is trying to solve. Read Music Ally’s full report on the session.
Nigerian star Femi Kuti is far more than just an artist: he’s a community leader, a UNICEF spokesperson and a key figure in the music industry’s evolution in Africa. His keynote saw him interviewed by Kam Tambini, music editor at OkayAfrica.
He started by fielding a question about the current cultural significance of Afrobeat music. “It’s exactly where I thought it would be!” he said. “I think it will get better, bigger… It’s fantastic.”
Kuti is keen to use his music to spread big, important messages about topics including climate change. “Music will be, and has to be, and is at the forefront of spreading this message, because everybody listens to music, and is inspired by music… so that’s the state of my mind now, making sure we understand we’re one people in one world.”
He talked about the importance of studying history. “There will always be a fight, so that’s why it’s always important for music and the arts to be at the forefront of fighting this… If we don’t have our voices in the forefront of suppressing evil, then evil prevails. But I believe there will always be evil, but we must always be there to point and say ‘no, stop, it’s not right’.”
Kuti also offered his vision of music’s role in society. “Music is not for fame and fortune and all those things we believe it is… Music inspires everyone. Whether you are in pain or not, your audience comes to watch you to relieve their pain. You are like a doctor. You have to give them love, all those things they desire when they come to watch you play or listen to your album. This is music!”
Mathew Daniel is VP International at NetEase Cloud Music, one of the big players in the Chinese music-streaming world, with more than 600 million registered users. In his keynote, he offered his views on why China is such an exciting market for local and international artists alike. Daniel was interviewed by Music Ally editor Stuart Dredge.
NetEase has 600 million users. Midem’s Alexandre Deniot reminded us in his intro. “A lot of people are attracted by the big numbers, but I call it the tyranny of big numbers“, says Daniel. “Artists (going into China) forget you have to make the music relevant to the audience, then build from that.”
One specificity of the Chinese market, Dredge pointed out, is that streaming services sublicense tracks to each other. “It is dysfunctional” when that happens, said Daniel. “There is a hierarchical exclusive system… and until that’s resolved, it’ll remain an unusual market.”
What about publishing? “We’re still struggling with it! It’s like the ketchup stuck in the bottle; why can’t we get it out? I’m not even sure who to pay sometimes,” said Daniel. “We do work with a number of publishers to ensure artists get paid. But the industry could do better.”
Earlier in the day, Indian star Divine – the independent rapper whose career inspired the hit film Gully Boy – also joined Midem 2019 to talk about the hip-hop scene in India, alongside Priyanka Khimani, founder and partner at law firm Anand & Anand & Khimani; Kataria Chaitanya, business head of Gully Gang Entertainment; and moderator Ed Peto, MD of Outdustry.
“I went out and I shot a video with my friends on a phone, because I didn’t have access to cameras at that time. We shot the video on a phone and we put it out in the world,” is how Divine explained his early strategy, with his switch from English rapping to Hindi forging a connection with fans. “It was the local language and the local slang that we use… That is what changed the game: we started using our local language.”
His success has led to Divine launching his own music company, Gully Gang Entertainment, which is working with a new generation of Indian artists. “It’s not Bollywood that defines our music,” he said, before later expressing his optimism for hip-hop in India. “The sound is very fresh, it’s very new and it’s very promising. And it’s coming from all corners. It’s the best time, so let’s see where we go with this!” Read Music Ally’s full session report.
Today was also Midem’s streaming summit, with a series of sessions exploring how streaming is driving the industry, and how it might develop next. The day kicked off with a presentation by Midia Research’s Mark Mulligan on global trends.
“There’s a real danger about looking at the future and just thinking it’s going to be a bigger, brighter, shinier version of today,” said Mulligan. “It’s a really important time to think about what’s coming next… Streaming isn’t a format: it’s a business model. But streaming is still only one business model, and a business model that in many ways is so constraining, that we really only have one set of experiences in the market.”
Mulligan also warned the music industry that if Spotify can’t ultimately be a profitable business, rightsholders may lose out. “Is Spotify commercially sustainable? Spotify is the only streaming service of scale that has to worry about making music wash its own face,” he said, noting that its key rivals are all owned by big technology companies – Apple, Amazon and Google.
“If Spotify was to disappear out of the market then the mantra of west-coast tech companies is to bring efficiencies into the supply chain: and that means squeezing suppliers.” Those suppliers being labels, publishers and, by extension, artists. Read Music Ally’s full report on the session.
A later panel tried to answer the question ‘Are streamers the future labels?’ based on the moves of services like Apple Music, Spotify and YouTube to work more closely with artists.
“This notion of a streaming service as a label? I don’t know. Could you have signed to Myspace Music, how would your career be today? Or Nokia, or HMV? They’re a retailer, and they’re amazing at what they do, but that is not a label. And that is not how you make a career: by signing to Spotify,” said Scott Cohen, chief innovation officer, recorded music, at Warner Music Group.
Marie-Anne Robert, global head of artist development at Believe Digital, was also sceptical about the idea of streaming services taking over the functions of labels. “Labels’ mission is to provide the best services to artists, and streamers’ mission is to provide the best service to consumers, so when streamers get close to artists, it’s to leverage them as marketing tools to get closer to consumers,” she said.
Meanwhile, Amuse CEO Diego Farias talked about how this year’s breakout star, Lil Nas X, had a big hit with ‘Old Town Road’ outside the traditional label system – he initially distributed through Amuse, before signing to Columbia Records once the song had already gone viral. “A self-published artist with little means, who has incredible talent, comes through this system – this 40,000 tracks a day being uploaded to Spotify – and becomes a global star!” Read Music Ally’s full report on the session.
One debate that’s currently exercising minds in the industry concerns how the growth in paid streaming subscriptions can be built on. What do the streaming services need to do next, to ensure they don’t hit a ceiling of the number of customers willing to pay? A panel explored this topic too.
“At the moment streaming services are pretty similar across the board and they’re all trying to reach the same people, so perhaps more diversification,” said Nielsen Music VP Helena Kosinski.
“Short-term, the key question that will need to be addressed is the question of value. The question from an artist standpoint: we’re starting to see the limits of the current model, with a lot of legitimate questions around switching to a user-centric [royalties]model, changing the way the value is spread,” said Believe Digital group CEO Denis Ladegaillerie.
“Obviously the value of music in ad-supported services. But also regaining the customer relationship that we have as a label, that an artist has with the fans… With the streaming services, they now have the direct relationship with the fan, and I would like for us to take that back,” said Tracy Gardner, SVP of global business development and strategy at Warner Music Group.
Napster CEO Bill Patrizio said he’d like streaming services to have more social features. “I see the artist community wanting desperately to create this fandom and this intimacy with fans… So if the DSPs could find a way to be more social, and foster those connections,” he said. The Orchard’s COO Colleen Theis agreed, and added her own wish: “Paying more attention to pricing in terms of the family plans and all that stuff, to make sure we can protect some ARPU and have some sustainable business.” Read Music Ally’s full report on the session.
Meanwhile, another streaming-summit session looked at what might be coming next for smart speakers, the device category that includes Amazon’s Echo, Google Home and Apple’s HomePod. One question: can Spotify create a better voice-assistant for music than Alexa, Google Assistant and Siri? Can it afford not to?
“Can Spotify build something that’s better? Absolutely. Will they? Who knows?” said Darryl Ballantyne, CEO of LyricFind, adding that Spotify must be concerned by the fact that the tech giants may be sitting in between its service and the raw voice-queries posed to smart speakers. “If you’re just getting it translated by Google or Amazon, is that a threat to your business? Is that something you need to be on control of? Can they afford NOT to be in control of it?” Read Music Ally’s report on the session.
New ‘high-potential’ markets are a big focus at Midem this year, as they are for the global labels. The Middle East and North Africa region (MENA for short) is one of those markets, with Spotify and Deezer recently launching into a territory that already has a strong local service in Anghami. A panel this morning explored whether the Middle East is ‘the new streaming eldorado’.
“When we launched, people didn’t understand why they had to pay for music. They’ve always thought it should be free”, said Eddy Maroun, of Lebanese streaming service Anghami, which has a reported 78 million users. “Now it’s less about how much they pay than whether the service’s convenience beats that of the piracy experience.”
“Education is a must in these markets. 60% of the population is under 25, so payment method (mainly prepaid) is key,” said Warner Music Middle East’s Moe Hamzeh; “plus we’re going to be investing more in talent, as there’s a huge pool. And we know people will listen to more & more music.”
So how does a Western streaming platform like Deezer approach MENA? And how can it help break artists there? “Algorithms are important for music discovery, but so are local curators“, said Deezer’s Hisham Aramouny. “We take this very seriously, as it can allow local artists to go national, and then global.”
Latin America is another market that’s getting labels hot under the collar globally in 2019. This afternoon saw a session in Midem’s Worldwide Village room about the ‘rapid growth, streaming future’ of that continent, as part of the ongoing Midem Latin American Forum.
The IFPI’s David Price kicked off with key data from his organisation’s study of 23,000 global music consumers. Latin American music fans are amongst the most passionate in the world, he said, and that passion is driven by streaming, which represents two thirds of music revenues, versus half in the rest of the world. There is, however, quite a value gap problem, as only 12% of music listening activity is via paid streaming.
That session was followed up by a talk with Jorge Mejia of Sony/ATV Music Publishing Latin America, who offered his views on the market’s evolution, from a publisher’s perspective. He described to moderator Leila Cobo, of Billboard, a very much single-focused world: “Today, it’s all about one hit single rather than albums; artists are putting out a new song every Friday. It creates a very rich carpet of songs, as every song gets that (album) treatment.”
Of course, Despacito is very much one of those songs; so Mejia described the extent to which it was a watershed moment. “There is definitely a before and after Despacito (which his company represents). Before, you’d get one-offs every 2-3 years. Since then it’s been an avalanche of songs all over the world, and in a very short time. It’s really Latin music’s time.”
Another music mogul, albeit of a different kind, also spoke today, about how hip hop stars can best work with brands. Cortez Bryant, of The Blueprint Group & Maverick (centre above), was joined by Matt Ferrigno, of MTW Agency, and moderator Samira Kaelin of Samira Kaelin Communications, to discuss working with megastars like Lil’ Wayne.
“15 years ago I was just Lil Wayne’s best friend, talking to these guys in suits… a challenge!” said Bryant. “But for one of my first deals, with AT&T, I got them to call their grandchildren & ask if they knew Wayne; the kids hollered, and we got the check!”
“The biggest deal we did was with Lil’ Wayne and Samsung; it enabled us to surpass iPhone for the duration of the campaign,” said Ferrigno. “Wayne didn’t even use Galaxy phones! But authenticity can be built.”
Cortez then eluded to a Lil’ Wayne TV series, coming out next year – without confirming on which platform, although Netflix was mentioned – you heard it first at Midem!
Then it was over to the main room for a chat with Michael Huppe, CEO of SoundExchange, sponsor of today’s Streaming Summit. MusicAlly’s Paul Brindley moderated. “SoundExchange paid out nearly a billion dollars in neighbouring rights last year; that is predominantly digital“, he said. “At our core is getting artists fairly paid. There’s immense wealth out there; the appropriate amount of money has to get back to creators.”
The distinctive musical approach of hit TV series Peaky Blinders was then addressed by its music supervisor, Antony Genn, who said he got onboard after season three, when lead actor Cillian Murphy asked him to select tracks for the show. He only accepted if he could compose and commission new music, rather than using other people’s. But definitely not for the money! “I accepted a while ago there’s no money (in composing) the cool shit. We just took the money and got really stuck into it. You have to lie to people! Make them think it’s their idea, then do what you want.”