The music industry must take advantage of mobile-first strategies to stand out in a crowded marketplace
The rise of
the internet was, and continues to be, tough for music giants. In the heyday of
the industry – when vinyl and CD sales were strong – labels were profitable,
but illegal downloading took the bottom out of it. The fall hit everyone in the
industry hard, but mobile technology gave publishers and creators a new lease
of life.
To understand this, we need to ask a simple question: how is mobile
changing the world? The app economy isforecast to be worth $6.3 trillion in 2021, with the same report revealing that, in 2016, 1.6 trillion hours were
spent in apps – an increase of over 150 billion from the previous year. That’s
approximately 2 hours a day spent in apps.
The music
industry needs to adapt strategy in this new war of attention. The key to
succeeding in this new mobile environment? Data.
Working (hard) for the money
Music has
never been easier to access - but with so much music now readily available for
free, how is the industry making any money? Apps have been an integral cog in
turning potential customers into fully-paid subscribers. Each of the major
streaming services have had success in using the technology to drive revenue
and, ultimately, boost their bottom line. A prime example of this is Spotify.
Although this has now stopped, the company was initially very successful when
it pushed subscriptions through Apple’s App Store. This allowed
swathes of people to open a recurring subscription without having to enter any
credit card details, making the whole process frictionless.
Other streaming providers have also
looked towards app-based tactics to increase subscriptions. When Apple Music
first launched, it drove people through its native music app to the service.
This meant that it was able to attract customers who were already keen music
listeners. On top of this, by offering a free 3-month trial period when the app
launched, Apple was able to hook in a large,paying user base. This helped the company acquire 6.5m subscribed
customers in only three and a half months.
Deezer has also implemented some
inventive strategies for increasing its user base and improving monetisation.
One of the most successful of these was its partnership with Sonos, the
app-powered home music system. The company ran a campaign that – when you
bought some of its products – you were given a free year’s subscription to
Deezer. This meant that people who took advantage of this offer were embedded
in the streaming service’s ecosystem, meaning many continued their
subscriptions long after the free period. This partnership has also continued
with Deezer Elite – a lossless version of the streaming service
– only available on Sonos.
The
search for streaming
Streaming has outstripped radio, CD
and digital downloads, becoming the prime channel of music consumption,
especially for millennials. Data on Spotify released last year reveals
that 67.2% of the time millennials spent listening to music on the platform was
on mobile. For example, in the first half of 2017, the top 5 Music and Audio
Category apps averaged more than 70 million monthly active users on Android
phones*.
This move has been broadly beneficial
for the music industry, cutting down the number of illegal downloads and pushing labels further into profit.
Music streaming services – a type of technology dominated by apps – are leading
the way.
This shift has had a huge impact on the way music is made, distributed
and promoted. Such disruption means that the music industry must understand how
to implement and take advantage of mobile-first strategies in a crowded
marketplace. Only by harnessing mobile technology insights and measuring its
results will music industry leaders avoid diving blindly into an increasingly
competitive landscape.
The
production line
Mobile has quietly been changing the
way music is made right under our noses. Entire albums can be recorded
through apps (for example, the Gorillaz’ album ‘The Fall’) that once would have involved
a huge studio.
Mobile has even impacted how music
sounds. Most consumers of digital music listen to compressed formats like MP3s
through cheap iPhone headphones and low quality phone speakers. As well as
tackling the war of attention, the music industry entered the noise war. Battle
tactics include changing how tracks are mastered, with certain frequencies prioritised
and more subtle ones left out.Artistry aside, from a commercial standpoint
there’s fierce competition to get heard. The successful music companies are the
ones who understand that it’s crucial to strategize around consumer mobile
behaviour.
Far
and wide
The rise of mobile-first music streaming services, such as Amazon Music,
Apple Music, Google Music and Soundcloud, has made it easier than ever for
musicians to upload and, ultimately, share their music with people who might
enjoy it.
Alongside this, however, are the
‘quality wars’. While Spotify is the most popular streaming service, there are
those who would rather not listen to the compressed form of music it serves.
Instead, they move to high-quality, lossless services like TIDAL. However, it’s
likely Tidal won’t hold a monopoly on high res streaming for long, with Spotify planning on releasing its own service
in the same vein.
The opportunity to drive revenue for music streaming apps isn’t only reliant
on its subscription model or artist exclusives. The data-rich app platforms
they rely on provide invaluable insights into its users, priming a successful
in-app marketing strategy. For example, by exploring the profile of your user,
streaming services can more strategically execute in-app advertising campaigns
and create an increasingly personalised user experience which, in turn,
increases loyalty and engagement.
The
right listener at the right time
It’s likely that there are some in the music industry reticent to adopt
metrics as fundamental to their strategy, instead staying ‘loyal’ to artistry.
However, it’s thanks to mobile that otherwise unknown artists from small towns
can get in front of an audience of millions without moving an inch.
Thanks to the apps connected to the cloud, it’s now possible to have a
truly wireless and mobile music experience. From listening via Alexa while
getting ready for work, through your mobile streamed through Bluetooth in your
car (or even the Apple Music in-car app) to wireless home audio speakers in the
office. You can even pick up a track halfway through its duration. In the past
this access would have been impossible – just imagine carrying around your
entire CD collection on-the-go.
This
cloud-driven, app-enabled proximity to a wide range of music means there is
more data than ever on our habits, allowing greater connection between creator
and consumer.
Dancing
with discovery
The lower boundaries to entry into music platforms means, inevitably, a
discoverability problem emerges, with increasing competition to get heard.
Enter the algorithm. The fact we listen to most of our music on our connected
phones (rather than the previous trend of non-internet based MP3 players like
the iPod) gives greater insight into our habits. The more music streaming
services learn about its listeners, the more it can recommend. By personalising
the listening experience through recommended artists and playlists, the more
artists get pushed to the front.
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Spotify is perhaps ones of the best examples of a streaming service that
really understood the need to address its music graveyard. By understanding its
users, it unearthed otherwise unheard tracks and artists through recommended
playlists.
Discover
Weekly uses listener data to pick a selection of artists reflective of
the individual’s taste, displaying it in a playlist every seven days. This
works for a variety of reasons. Firstly, it’s a relevant use of data, something
consumers are roundly positive about. Secondly, it allows Spotify and artists
themselves to promote certain tracks – of course based on user habits and
behaviour – but at the same time delivering the indescribably intimate feeling
of stumbling across an artist you love. Intelligent action on data is changing
the prospects of artists as well as consumers’ own experiences with music.
Algorithms
and data are now the heartbeat behind modern music discovery.
Release Radar functions differently, in that it shows the listener a selection of new
releases from artists they already follow. Again, this is driven by data,
putting a user in front of a song they otherwise might have missed. This
feature can also be used to support concert dates, driving digital listeners to
physical places; Spotify recently partnered with Eventbrite and AXS to help users find concert tickets at
nearby venues.
Ultimately,
the app-first world of music streaming has turned the industry on its head. By
giving people an easy and powerful way to access music, the entire sector has
benefitted. Still, while it is easier than ever to get music out there, it has
never been harder to get heard. This means that artists and marketers need to
evolve. It’s no longer about big billboards and TV ads, but in-app
advertisements and progressive partnerships. More people than ever have their
ears to the ground, just make sure yours is the sound that they hear.
*Global (excluding China), and excluding
pre-installed apps like Google Play Music & Samsung Music
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