I normally don’t do predictions, because they tend to ignore the human factor and the influence that single, talented individuals can have when they appear in exactly the right moment.
However, having spent most of my career in streaming, building niche models that can live side-by-side with streaming’s status quo, I have various deep-rooted beliefs that allow me to project with more confidence.
The following predictions are based on a 5 to 10 year time horizon.
Streaming’s payment model will not significantly change
The gripes many artists have with streaming and the fact that they get fractions of a penny per stream will remain unanswered. Changing to user-centric payments or higher subscription fees will not change this in a significant way. One option could be metered streaming, but in an internet of abundance, that’s too complex an offering for most consumers. People don’t want to make a decision whether to listen to some music in the shower, where maybe they can’t hear it that well, or save those minutes for later. The friction of such a model is frustrating and cannot compete with streaming services who have the all-you-can-eat model. Nobody will want to make the first move.
Furthermore, the winners of streaming are the large record labels in the world. Are they going to undermine this business model or place bets on things that may undermine it? Probably not.
One could simply say: “streaming services should pay more – let them figure it out.” I think this leads us back to a similar scenario, but one where Spotify, Deezer and Tidal can no longer compete with tech giants like Google, Apple, Amazon, Tencent and ByteDance. The latter can afford to keep prices low for end consumers, creating an irresistible offering subsidized by other parts of their business. Still, while everyone would welcome more money, even getting $400 per year instead of $200 will not satisfy most artists.
Streaming should be seen as a base layer for the recorded music economy. It’s something to be built on top of and its data to be leveraged. For artists, they can utilize this layer to create a larger variety of revenue streams for their recorded music as well as other verticals.
Adaptive music will become normal
Our music players are no longer simple devices that read from a disc and play back the music… They’re fully fledged computers that are more powerful than the computers we had on our desks not long ago. It’s surprising that music is largely still following the conventions of the age of the recording. It’s static and it’s the same every time you hear it.
10 years ago, when I first started speaking about this topic at conferences, I expected that it would be artists leading the way in popularizing the medium. Looking back, I think advancements in media need a business case before the pioneering artists can set a new standard. Artists experimenting with recording music didn’t popularize the record: the business around records did and they needed pioneering artists to help.
The goal for streaming services is to capture as much attention as possible. This is either to sell ads or in order for people to justify their music streaming subscription fee. This has led to a “music for every moment” race and a utilitarian approach to music: music for doing the dishes, Monday evening detox playlist, workout playlists, sleep playlists, and the lo-fi hiphop trend going so hard that any background music that you can use for studying now sometimes gets referred to as ‘lo-fi’.
To further their business models, streaming platforms need to figure out how to fit into even more moments and I think making music more dynamic will play a role. Music that adapts when you’re running, when you’re in a loud environment, when you’re studying, when you’re driving. The challenge is that some of these improvements are marginal and may not significantly move the needle on metrics, whereas the investment in terms of development is large. I do think whoever figures it out will have something akin to the next Discover Weekly on their hands; something that wows consumers & gets everyone scrambling to copy it.
Metaverse integration
This is an easy one to predict, but it’s worth pointing out the strategic fit. A large amount of work at streaming services goes into integrations with hardware. Think different types of devices and their operating systems, think cars, speakers, voice-controlled devices, consoles, etc. When people pay for a streaming service, they want it to be highly compatible with how they play music. If someone has invested a lot of money into their sound system and your service doesn’t play nice with it, they’re very likely to switch to a competitor that does.
So now consider the virtual worlds in which a greater number of us are spending our time in. What role does music play there? How do we take our favourite music with us? Currently a lot of these things are integrated at the system level, for example in the operating system of a console or PC, or at the level of a game launcher like Steam. As virtual worlds and our behaviours therein grow in complexity, people will expect higher degrees of granularity in how they can control their music in these worlds. Should they hear their music constantly at full volume or should the music coming from that virtual stereo sound different depending on your position relative to that object? There’s value in immersion.
NFTs will not change the way streaming services license music
I just don’t see the scenario. Licensors like to negotiate and get the best out of their deals. The human relations in these scenarios are very important. It’s not in their interest to let everyone get default terms in an automated way, since it doesn’t let them leverage their influence. Keep in mind: these negotiations are not just about money, but also about visibility in playlists, frontpages, promotional partnerships, etc.
Given that so much must be done by people, I don’t think it’s worth the switching cost for most parties involved.
Where I do see a role for tokens is where artists, labels and other rightsholders interface with distributors. It makes sense for money and data to be streamed to a smart contract and automatically distributed based on whoever holds the tokens associated with that smart contract (note: there are other mechanisms to make this work too). The advantage of this is higher transparency and faster payments, as well as making it easier for DAOs to interface with streaming (e.g. as artist communities or community-run labels).
Competition will accelerate in the niche
While it’s unrealistic for anyone other than a tech giant to take on music streaming’s status quo, there are opportunities in underserved niches. These niches can be local or specific to certain use cases or genres (e.g. classical music & IDAGIO where I led the product org before). For these services to succeed, they have to be hyperspecific. They need to pick one thing and excel at it in a way that is hard to copy. This can be curatorial (e.g. very specific local curation, like MENA-focused Anghami) or based around a genre (e.g. classical music aficionados have a very specific way of navigating all the recordings of their favourite music or by their favourite performers and composers in their genre). Building a great music streaming is hard — the streaming giants’ weak spot is that they have to serve many different types of people with a wide range of different needs and behaviours… Apps that optimize for a specific niche, need or behaviour can stand out enough for people to justify the cost of another subscription and more importantly the mental cost of using 1 more app for music.
Social listening apps like the BPM Discord bot, that plays music NFTs from Zora and Catalog, come to mind. The niche is where Web3 can play a role… until it is no longer niche.