The Digital Innovation in Music Summit, appropriately in “Music City” Nashville, Tennessee, featured speakers from all walks of the music industry to discuss the future of the music world. Speakers included Phil Quartararo (Previously CEO of Virgin Records USA, President of Warner Bros Records, Executive VP of EMI, currently Chairman at Guvera), Jerry “Wonda” Duplessis (15x Grammy nominee and 3x Grammy winning producer), Mateo Rando (Senior Product Manager at Spotify), Jeremy Gruber (VP Digital Marketing & Strategy at Concord), Benji Rogers (CEO & Founder at PledgeMusic), Jesus Najera & Oscar Lafarga (CEO/CTO at Setmusic), and many more.
We grew up paying $12 for a CD of 12 songs and now we can pay $10 a month for an all-you-can eat music plan, or even free (if you’re willing to sit through the occasional annoying ad by Flo from Progressive or god-forbid a cerebrally deconstructing jingle from your local ambulance-chasing car accident lawyer referral service.) Music is more easily accessible than ever, yet artists, writers, and producers are being squeezed dry.The music streaming landscape is starting to look like a Royal Rumble. We have the tech giants battling it out for a position in the $25.3 billion dollar music industry, with hundreds of startups seeking a niche to solve the underlying problems. From the insightful presentations and conversations, these are some of the biggest issues and opportunities I picked up on:
1. The movement from record labels to more independent formats is going to continue.
The traditional record label way is an antiquated model desperately clinging to it’s poster children. Channeling all of their marketing expenditures into their cash cows, record labels aren’t likely to take a risk on cultivating new talent. New talent, however, has been taking charge of their own personal marketing and distribution through social media and music streaming platforms.The barriers to entry and exposure have been lowered. The possible overabundance of artists looking to break through on streaming platforms could saturate the limited market for our attention. This will raise new barriers to entry, giving streaming platforms an opportunity to capitalize on the opportunity to streamline exposure for certain artists. Streaming platforms would essentially be picking up where record labels dropped the ball, creating a new Darwinian landscape for musicians eager to be monetized.
2. Artists are fixing their gaze on touring and alternative ways to make money other than streaming.
The U.S. live music industry is expected to grow to 11.06 billion by 2019, up from 9.06 in 2014. Music streaming, as of 2015, is at about 3.66B. The rise of festivals is proving to be extremely lucrative not only for big names, but it also gives up-and-coming artists more exposure. Although the experience of opening up a CD may be a dead, the experience of seeing your favorite artists is coming back to life. The advice Jerry “Wonda” Duplessis is to “build yourself, get hot on the Internet, and go on tour. If you see any record labels offering to sign you, run in the other direction.” Setmine, for example, is a music beacon network that allows artists to pair with retailers to “lock” their content that can only be unlocked when a fan physically visits a certain location.
3. A new music format that would be a bigger shift as .MP3 and BlueRay.
There is a strong push being made towards a “Fair Trade Music Format” using blockchain, which will incorporate metadata (the basic data to identify writers, performers, owners, producers etc. of the music) and a cryptocurrency (digital currency that uses encryption techniques to regulate the generation of units of currency and very transfer of funds, operating independently of a central bank) such as BitCoin. The metadata factor ensures a database of music rights, ownerships, copyrights, and usage rights that is easily available to anyone to use it. Artists, songwriters, producers, performers, record labels, and everyone else involved with the track can assign rights and usage in real time. The cryptocurrency factor ensures fair payment for all involved with the track. Payments will be accurate and fairly quick (currently 10 minutes between blocks). More information on this can be found here and here.
4. Music is going to play a huge role in the Virtual Reality and Augmented Reality industry.
Soon, “Seeing” Kurt Cobain or Jimi Hendrix live in 2017 isn’t going to be as impossible as it seems. With sound playing such a huge role in these new innovations, it would be a complete shame to be the bottleneck in new innovations. 2Pac taking the stage at Coachella 2012 was one of the biggest steps forward in the commercialization of Augmented Reality, and that was about four years ago. Let your imagination run wild to what we can expect in the near future.