How stream­ing is chang­ing the mu­sic in­dus­try

Finweek English Edition - - IN BRIEF - BY LAMEEZ OMAR­JEE

The pur­chas­ing model of mu­sic has c hanged. St r ea ming, t hrough plat­forms such as Deezer and Spo­tify, makes mu­sic more ac­ces­si­ble to con­sumers, but it’s a con­tro­ver­sial is­sue for mu­si­cians.

Stream­ing pro­vides great value to the con­sumer, mu­si­cian Danny K said at a re­cent fo­rum at the Gor­don In­sti­tute of Busi­ness Science (Gibs). “From the mu­si­cian’s side, the roy­al­ties and the stream­ing money don’t re­ally bleed through enough to make it ex­cit­ing for us,” he ex­plained. Stream­ing is a prod­uct of scale and the re­turns are only sig­nif­i­cant if more peo­ple pay for stream­ing ser­vices, he said. “Artists would rather sell one al­bum than have 100 000 streams.” CD sales are dwin­dling and Danny K de­scribes phys­i­cal sales for the next 10 years as a race to zero.

Stream­ing adds an­other chal­lenge to the al­ready im­pen­e­tra­ble mu­sic in­dus­try. “I think we just try to make the most of what we have and try and plug into what we be­lieve is most valu­able,” said J’Some­thing, lead singer of house band Mi Casa. Ac­cord­ing to J’Some­thing, Mi Casa has re­lied on get­ting shows to pro­mote their mu­sic over the past four and a half years. “You hope­fully get bookings, which is where any de­cent money is right now in South Africa,” he said. The live per­for­mances are valu­able for mu­si­cians to dif­fer­en­ti­ate them­selves. “No other artist or ‘wannabe’ artist can copy what you lay down on the stage.”

Zakes Bant wini, mu­si­cian a nd ex­ec­u­tive head of A& R (artists & reper­toire) at Sony Mu­sic Africa, said mu­si­cians who aren’t “plugged into” the ur­ban space are fur­ther dis­ad­van­taged by stream­ing as con­sumers of their mu­sic of­ten don’t have smart de­vices. If phys­i­cal mu­sic sales dis­ap­pear, some gen­res will only be freely avail­able on the ra­dio, with­out other means to con­sume it. David Alexander, man­ag­ing direc­tor of Sheer Pub­lish­ing, agrees with Bantwini in that there are a large num­ber of peo­ple in South Africa who don’t have ac­cess to stream­ing ser­vices. This is keep­ing the de­mand for in-store sales alive, slow­ing the down­ward trend of phys­i­cal sales. Stream­ing has also had a neg­a­tive im­pact on com­posers and pub­lish­ers, Alexander said. The ma­jor share (60%-70%) of roy­al­ties goes to the record la­bel, leav­ing a smaller share for song­writ­ers and even less for the mu­si­cians, he ex­plained.

Stream­ing is more im­por­tant than ra­dio in some mar­kets, said Sean Wat­son, MD at Sony Mu­sic En­ter­tain­ment Africa. To get airplay on ra­dio, mu­si­cians have to build a rep­u­ta­tion, and how of­ten an artist’s mu­sic is streamed is a good in­di­ca­tion of how popular it is. The vi­ral im­pact of mu­sic is also im­por­tant. “So­cial me­dia is so plugged into th­ese stream­ing ser­vices, so the abil­ity for you to en­gage au­di­ences through playlists, com­mu­ni­ca­tions and so­cial me­dia is key.”

De­spite th­ese odds, th­ese dis­rup­tive dig­i­tal in­no­va­tions can stil l benef it mu­si­cians. They don’t need to be signed with record la­bels to break into the in­dus­try, said J’Some­thing. Mi Casa re­cently left their la­bel Soul Candi and are now man­aged in­de­pen­dently. “We have the great­est tool in the world that any artist ever had and it’s the in­ter­net.

“I be­lieve the in­ter­net is al­low­ing a lot of free­dom out there,” said J’Some­thing. Mu­si­cians can pro­mote their songs on­line, and pro­duce mu­sic us­ing soft­ware on lap­tops. “You can do it any­where in the coun­try or con­ti­nent. We don’t need the record la­bel’s money to in­vest in stu­dio time any­more.”

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