On Wednesday I joined a think session about the music business in 2025, organised by Peter Jenner and the UK Intellectual Property Office. They brought together an amazing set of minds to which I had the pleasure of presenting the following thoughts on music’s future.
It has been about 2 decades since ‘the great disruption’. If we look at the major achievement by the recording industry, it is that there is now an established model for providing people with legal access to music.
Yet, the recording industry didn’t solve the access problem. Networks and digitisation took care of that on their own. In the Age of Networks, people will always find a way to access what they want. Licensed, or not.
What the industry has been able to contribute is the licensing framework for it. This framework has now become somewhat standardised. But can the industry whose hand has been forced claim the accomplishment of making music accessible?
And there are issues which already threaten this new status quo.
The new standard is: $10, you get everything in good quality, and you can take if offline. It caps big spenders at $10. It ignores everyone in between 0 and $10. It would be interesting to see more services unbundle.
Because of the bet on the $10 one-size-fits-all model, certain companies are not interested in licensing new models, due to a fear of undermining the existing model (which has yet to prove itself).
This actually reveals that we haven’t figured out what consumers want: if they would pay $5 for just a few features instead of $10 for everything, then we’re creating artificial scarcity instead of selling something that people value.
Luckily there are signs that the licensing regime is loosening. Still, it would be nice to see something like a global startup license put in place.
Sure, there’s a marketing benefit to exclusives, but it’s bad for the landscape of licensed services, because it sends people back to pirate services which are always going to exist, unless you want to have a North Korean internet.
Increased competition between streaming services is making things worse, with regards to exclusives, with all major music streaming services engaging and Tidal giving this tactic a very central place in their strategy.
Transparency is a prerequisite for fairer licensing, payouts, and consumer trust in these platforms. Not enough has been done to increase transparency. It’s because of this, that people like Benji Rogers and Imogen Heap are setting up initiatives like DotBlockchain and Mycelia to solve this lack of transparency through technology.
Licensed streaming provides a stable income for the industry and a treasure trove of data to identify different segments of fans, their interests and behaviours.
What if we looked at streaming as a base layer, instead of as something that is supposed to ‘save’ the music industry?
We need to imagine what comes after the stream. What do we do with the attention and engagement of fans? What can we develop to build a more valuable relationship? How can we make sure both fan and artist can extract value from that relationship?
Whenever technology changes, music changes. The most significant change in music in the last century occurred with the proliferation of recording technology.
Powerful, connected smart devices offer a way out of the static music experience of the last century.
Music is about to become adaptive, reactive, and interactive. Not for us, but for new generations that are growing up to expect interactivity from everything in their environment.
The generation that is growing up trying to swipe magazines, televisions and windows, believing they should be able to interact with it.
For this generation, music is going to have to contain code, so it knows how it can recompose itself to better suit the listener’s needs, whims or taste.
This is great, because features monetize with much higher margins than content does. Just look at how the gaming industry has coped with this.
Virtual and augmented reality offer a great way forward. They are domains of creativity and monetisation to explore. People are already finding ways to compose music entirely inside VR.
Early adopters are hungry for new experiences to try on their high-end computers with VR headsets they’ve paid hundreds of dollars for.
For me, the most important question the music industry has to ask itself, going towards 2025, is this.