Moving To Streaming

Ladies and gentlemen, start your engines, the streaming era has begun. And it’s going to turn the music business upside down. So much of what now exists will evaporate. The game will be completely different. It will switch from one focused on sales to actual listening. Right now, Spotify is pioneering. It appears to be trumping its competitors, Rhapsody, MOG, Napster and Rdio. But the big behemoth Apple is waiting in the wings. If you study the history of the Cupertino company, it’s rarely first, that’s a recent phenomenon, it usually enters a sphere late, after the public is inured to the behavior, and Apple perfects it. Apple was late with CD burners, iTunes was not the first jukebox, the iPod was not the first MP3 player. But Apple employed design, both software and hardware, to create elegant solutions that were intuitive, simple to use, requiring no manual, and ultimately triumphed in the marketplace.

Don’t say Apple doesn’t rent, just look at movies and TV in the iTunes Store. Steve Jobs is famous for saying one thing and then doing another. Funny how he can change position and politicians cannot. Apple only strikes when the time is right, when a business can burgeon. Streaming is now here. Expect only one streaming service to triumph in America. Spotify has the early-mover advantage, but Apple has the installed base, and everybody’s credit card number. And when Apple moves, everybody knows overnight. Steve Jobs gets on stage and it’s bigger than any rock show. Furthermore, users spread the word and people trust Apple.

It makes no sense to own product. You want your music everywhere. Quality will improve with bandwidth. The ship has sailed. What does this mean for you?

1. It’s no longer about the initial sales transaction, but getting people to actually listen to your music. Your relationship doesn’t end when people buy your music, it begins when you get them to click.

2. It’s less about foraging for new customers than satiating old ones. An established fan streaming your track ten times is just as good and cheaper to accomplish than finding ten new fans to stream your track once.

3. Marketing and promotion are reminders to get people to stream as opposed to buy.

4. Historically, it’s been all about the release date. Stopping leaks and working everybody into a frenzy to buy the first week. Now you won’t care if a track leaks, you’ll just put it up on the streaming site and book revenue.

5. Sure, you’ll create events to stimulate streaming. But there will be many as opposed to few. And they’ll be more targeted. Today’s events reach many people who just don’t care. In the streaming future you’ll alert your fan base and then execute. Knowing who your fans are will be crucial. Whether it be Facebook, Twitter, e-mail or some unknown social network, you will go directly to fans. It will not be about pitching middlemen, print and TV and radio, to get the word out.

6. Recommendations will be key. When another band or a fan spreads the word via playlists, infecting new listeners. Radio is inefficient. It’s about advertising, not music. You want to be turned on to tracks by someone with the same sensibility, whose only goal is to turn you on to something great.

7. Playlist makers will be the new deejays. It comes down to who you trust. Anyone can publish, but not anyone can gain followers. Pandora and the like will fade, because they lack the human connection and their recommendation engine is just not as good.

8. You will get into business with he who can guarantee the most streams, not he who can pay you the most money. An advance means nothing. Marketing and promotion mean nothing without resultant streams.

9. There will be a streaming chart, which will cause people to check out winners. This will be determined by data, not influence. It won’t be about paying off the radio station, but reaching critical mass so that others will experiment by listening to you.

10. There will be multiple charts, based on newness and genre. Listeners will comb these to enrich their listening.

11. People will listen to more music than ever before. As a result, money will flow into other areas of the business, i.e. touring and merch.

12. Just because you can play, that does not mean you can win. Just because you’ve got your music on the streaming service, that does not mean anyone will listen to it.

13. Genre will no longer matter. You won’t complain that there’s no radio format for your track. Klezmer has equal footing with hip-hop. That does not mean as many people will listen to klezmer, just that the barrier to entry will be low.

14. To get people to continue to listen you will constantly release new material, make live material public, the album will become passe. It makes no sense to get everybody to listen for a short period of time, you don’t want one big bang, but a constant flood.

15. Every act will have its greatest hits. Album cuts will be for fans only. You will constantly produce, trying to reach the brass ring. You won’t care about the losers, that which does not gain traction. If you fail today, record and release tomorrow.

16. Creativity will burgeon. With it being so easy to get into the marketplace and be heard, risks will be taken.

17. You need someone to gain you attention, you don’t need someone to press and distribute, to get you on the radio, to pay off middlemen to get you exposed. The manager will be king. Record labels will fade. Tribes of like-minded artists are a better place to park your rear end than a conglomerate with a plethora of acts that don’t sound like you. You want synergy. It’s more important to be on the Bonnaroo or Lollapalooza playlist than be signed to the major.

18. Expect those with money and power to try and rig the game. I.e. major labels will try and game the system, generating plays and income for their acts. The streaming service will do its best to try and quash this behavior, but even Google has trouble weeding out those who try to optimize search.

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