This is the fourth and final post in a series by Music Ally’s Stuart Dredge, giving you the low-down on Midem 2019’s biggest highlights and industry trends. This time, we’re looking at the innovation on show, as well as the discussion about what’s next for music-streaming.
We’ll start with Midemlab, the annual startups contest that reached its 12th edition this year, having been the launchpad in the past for companies like SoundCloud, Kickstarter and The Echo Nest. This year’s event was sponsored by Deezer and Recochoku, and attracted 177 entries, which were narrowed down by partners Music Ally and Bluenove to 20 finalists in four categories.
This year, there were two joint winners of the Music Creation & Education category. Jambl and Endlesss are both in similar territory too: smartphone apps that help people create and share their own music, using tactile touchscreen controls. “Our goal is to build a platform where 100 million active users create and consume riffs, express their identities and inspire each other,” said Endlesss CEO Tim Exile in his pitch. “We need to shift the perception that music is just for musicians. It’s for everyone: it’s for humans!” said Jambl CEO Gad Baruch Hinkis (who even rapped part of his pitch). Big Ear Games, Muzeek and Lonofi were the other finalists. You can watch the full session on YouTube, or read Music Ally’s report here.
ClicknClear won the Music Distribution & Discovery category, with its platform for performance sports – think gymnastics, cheerleading and figure skating – to properly license music to use in their soundtracks. “In the next 18 months we estimate to be addressing a total addressable market of $100m,” said CEO Chantal Epp. Alissia Music, Banding, ClapCharts and Soundtracktor were the other finalists. You can watch the full session on YouTube, or read Music Ally’s report here.
Legitary won the Marketing & Data Analytics category. The Austrian startup makes tools to help audit streaming royalties, spotting missing money and/or suspicious patterns of activity. “We can indicate if someone is cheating you, paying you too little money, or if someone is getting fake streams on the platforms,” said CEO Nermina Mumic in her pitch. MusicList, Musiio, Paperchain and Wedao were the other finalists. You can watch the full session on YouTube, or read Music Ally’s report here.
Finally, Tunefork won the Experiential Technologies category, with its technology to personalise audio for people with hearing difficulties. “An audio personalisation technology that allows the user to find his unique earprint, and adjust any audio content to his needs,” as CEO Tomer Shor put it in his pitch. Joué, Mi·Mu, MuX and Odiho were the other finalists. You can watch the full session on YouTube, or read Music Ally’s report here.
Overall, Midemlab was an exciting overview of some of the latest tools and technologies being developed for and around music. Indeed, 70% of entries for this year’s contest were by startups founded within the last two years. But back in the world of established music/tech companies, there was plenty of discussion about the impact of Spotify, Apple Music and other streaming services at Midem too, in Tuesday’s Streaming Summit.
The day kicked off with an introductory session from MIDiA Research CEO Mark Mulligan, outlining some of the current streaming trends, and delivering a warning against complacency about the current growth in recorded-music revenues – which according to global music body the IFPI were up by 9.7% in 2018.
“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.” He also offered a prediction: that by 2022, streaming revenues (at $33.3bn) will be larger than the entire recorded-music market was worth in 2018. Watch his full session above.
Several sessions at the summit looked to the future of streaming music, starting with the somewhat-sensitive (for labels at least!) question of ‘Are Streamers the Future labels?’ – referring to Spotify, Apple Music, YouTube and other services who are working ever-more directly with artists.
Warner Music Group‘s chief innovation officer, recorded music, Scott Cohen welcomed the proliferation of options for artists, but maintained that labels aren’t under threat. “When you look at what’s happening in the global music market and say ‘who’s having all the hits?’… it’s mostly the major record labels,” he said. “I don’t think the major label model in terms of identifying great talent, nurturing them, putting in the investment to make them global superstars is going away. All of the things discussed here are just complementary to that.”
Amuse CEO Diego Farias talked about his company’s role in the initial success of one of 2019’s biggest hits, Lil Nas X’s ‘Old Town Road’. “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!” he said. Meanwhile, Marie-Anne Robert, global head of artist development at Believe Digital, said that distributors don’t feel threatened by streaming services’ partnerships with artists. “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. Watch the full session here.
A later session explored more streaming trends: including a buoyant opening presentation by Nielsen Music’s VP of client solutions Helena Kosinski. “Streaming is now a huge part – the biggest part – of the global recorded-music revenue,” she said. “There are still new entrants, there are still new business models being played with, but essentially it’s a stable market. And it’s still a growing market.”
A panel then discussed the implications. “It’s now become such a truly global music market,” said Tracy Gardner, SVP of global business development and strategy at Warner Music Group. “It’s making us focus on the importance of local repertoire and having a local presence in territories where perhaps we haven’t in the past.” The Orchard‘s COO Colleen Theis agreed, noting the global popularity of bands like BTS even though they still sing almost entirely in Korean. “The new generation of music consumers, and people specifically on streaming: it’s about the feeling, and less specifically about the language… It’s about feeling a connection with an artist regardless of where they are from,” she said. “We see local artists that go global much faster, because their music is available everywhere,” added Denis Ladegaillerie, group CEO of Believe Digital. Watch the full session on YouTube.
Among the other panels at the Streaming Summit: a debate on how and when (or even whether) music-streaming will ever be profitable. Within that was one concern, voiced by Merlin chief commercial officer and general counsel Charlie Lexton, about a future in which music may be increasingly bundled with other kinds of entertainment. “Where you’re looking at subscriptions that involve some music and film, or music, film and TV – even books – and where you’re there moving to a model that’s based on time rather than content, I think that there are pitfalls that need to be carefully looked at for music-content owners,” he said. “That could be a road where you’re heading down towards a $9.99 subscription where you’re looking at ‘Oh well, only 30% of the time was spent listening to music, so suddenly you’re looking at three dollars a user instead of ten.”
Sandra Gama, chief legal officer at Brazilian service iMusica, offered her view on the future. “We believe that the streaming on-demand by a monthly subscription is only a part of the music business in the future,” she said. iMusica has worked on sponsored initiatives like Coca Cola FM in Latin America – an online-radio, non-interactive 24-hour music broadcast, sponsored by Coca-Cola. “This kind of business makes it possible to monetise our streaming platform, and also to aggregate value to users that don’t have access to premium services in Latin America.” So perhaps brand-sponsored streaming has a bigger role to play ahead. Watch the full panel above.
SoundExchange‘s president and CEO Michael Huppe travelled to Midem to offer a US perspective on the streaming world’s challenges, including the problems the industry has in creating and sharing accurate metadata for recordings and compositions. “I’ve been in the industry over two decades. They were talking about it long before I came!” said Huppe. “It’s kind of tragic that our industry doesn’t have a better handle on who owns what. We sent a person to the Moon four decades ago and we still don’t know who wrote a song?” He urged the industry to work together on solving the problems. “You can have a great solution, but if enough people don’t adopt it, if you have this group of parties who want to do metadata this way and you have this group who want to do it that way, you can’t get a common solution… So we need to think with one voice and speak with one voice.” Watch the full session on YouTube here.
Another session at the Streaming Summit looked at the impact of smart speakers like Amazon’s Echo and Google’s Home, and voice assistants like Alexa and Google Assistant. Including the question of whether Spotify needs to develop its own AI-powered assistant to compete with them. “Can Spotify build something that’s better? Absolutely. Will they? Who knows?” said Darryl Ballantyne, CEO of LyricFind. “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?” Watch the full session on YouTube here.
The Streaming Summit was capped off with a keynote featuring Mathew Daniel, VP international at Chinese streaming service NetEase Cloud Music, which has more than 600 million registered users in a market which – according to the IFPI – was the fourth-biggest country in the world in 2018 for music-streaming revenues.
“A lot of people are attracted by the big numbers… I don’t think there is a proper grip on where the market is. People are not really sure. I call it the tyranny of large numbers,” said Daniel. “There are artists going there without doing any homework. Labels thinking ‘Ah, I just go to China, I can just sell a lot of stream a lot of music’. But they forget that sometimes you have to make the music relevant to the audience, and then build from that. There are hundreds of millions of users, but I think it’s still a work in progress of getting to the next stage… It has progressed over the years, but we still have to monetise it in a better way.”
Daniel continued that theme in his advice for western artists hoping to make it big in China. “International artists also need to put in the effort to make their music relevant. There’s no Facebook, no Instagram, Twitter,” he said. “One of the things I always ask labels is ‘Would you do a release without Facebook, Instagram or Twitter?’ and they say ‘Never!’. And I say ‘That’s exactly what you do in China!’… Lots of people are just sitting back: ‘Show me the formula!’. It’s never gonna happen. Just like when you want to go and break any other market, you’ve got to put in the effort and the answers will be there.” Watch the full keynote above.
Around all these sessions, there was plenty of innovation to be found simply by strolling around the Palais and the nearby Midem Beach venue.
Cap Digital’s ‘French Tech’ stand returned for its sixth year at Midem, for example, as a partnership with IRMA. Startups including SounddBirth, Studiomatic, Groover, Playzer, Deedo, Mewo, Digizik, TradeSpotting, Simbals, Cassette and Midemlab finalists Muzeek and Lonofi were among the French startups showing their tools and services in the sun.
Midemlab winner Tunefork was also part of a new installation at Midem: the Israeli Technology Innovation Pavilion. MyPart, an AI-driven hit-spotting startup, was also on board for this showcase of some of the music/tech developments emerging from Israel. The cumulative effect of these stands plus the Midemlab contest was that Midem attendees were never far away from bumping into a talented music startup – a good thing for an industry that, as Mark Mulligan pointed out in his Streaming Summit introduction, needs to continue seeking out innovation rather than resting on its laurels.