Why Innovation is the Music Industry’s New Best Friend - Record Of The Day Editorial
Anthony David King
London, 2nd March 2017 -
The music industry will not stop changing. We need to get this in our heads.
According to BPI data, in 2014, total UK record company revenues fell by 4 percent. But streaming income increased by 50 percent. In 2015 the following year, overall company revenues fell once again, by 1 percent. Yet streaming, as a consumer format increased by a staggering 82 percent. You can see a picture unfolding here. One that many of us within the industry have been watching unfold for quite some time. Which is that while some parts of the music industry are slowing down, such as CD sales, there are parts that are continuing to grow – namely those parts operated by tech companies.
It is for this reason that a group of us working with the BPI - Vanessa Higgins of Regent Street Records and the BPI Council, Charles Fitzgerald from PIAS, and myself – and with the support of Geoff Taylor and Chris Tams, decided to relaunch the BPI’s Innovation Hub in September 2016.
Our aim is to match forward-thinking music labels and innovative tech start-ups. In my mind, the premise is simple: Record companies have artists (talent) and audiences (fans), and are always looking for new, exciting talent, ways to market and distribute content and connect with their audience and grow their artists fan base. Tech companies on the other hand, especially start-ups, have amazing tools to distribute content and connect it and talent to undiscovered audiences. And by doing so, also position themselves to scale up and grow. So what would happen if we were to begin developing partnerships between the two, in ways that are advantageous to both? At the BPI Innovation Hub, we have a few ideas of things we will begin to see as a result of this remarkable work. New business models
As the music industry continues to fragment into more and more separate pieces, with individual companies focusing on niches as fine as storing and distributing artists visual content, we will see opportunities for new models emerge. Exclusiph, a visual content company for artists, managers, labels and photographers joined the Innovation Hub and are now exploring exactly this. For example how they might support the BRIT Awards to share nominees, winners, red carpet and the event’s photos through their platform – potentially creating a new avenue to experience the BRIT Awards content.New distribution channels and revenue streams
As revenues within the industry fall and ways people access content shifts, the need to explore new distribution channels and create new revenue streams become more necessary. DooWap, a tech start-up in the Innovation Hub are a great example of this shift. They enable snippets of your favorite songs to be shared as part of your instant messenger conversations. A friend messages you asking how your day is, you reply saying “I’m having a Good day” and up pops a list of songs with ‘Good Day’ in the title. Allowing your recipient to play (a tiny part), stream or download the entire song right there in the message. And with billions of instant messages sent daily, this would open up a whole new music experience to fans and consumers, and distribution channels to artists.More accessible data
Currently, many of the big techs are sitting on goldmines of data. Who played what, by who, how many times, etc. Spotify and a few others share some of this data as part of their service to artists and managers. However over the coming years new players will begin to emerge that will enable us to access more of the data that artists, managers and labels need to make better decisions about how they navigate the industry and plan ahead. For example aggregating fan engagement and breaking it down, not only by numbers per country or even the city, but also possibly as finite as their areas, and then presenting options for nearby venues and their cost to hire. And if the tech is really good, it’ll map out the best tour route with several other options, like directions on Google Maps. More investors
Few people saw streaming as dominant format 10 years ago. One of our goals at the Innovation Hub is to champion and develop the next big format (whatever that may be) early on. This as well as the opportunities for growth for many music tech start-ups like those joining the Innovation Hub has begun to attract investors back to the music industry, where the previous levels of uncertainty and risk didn’t make it as attractive as it once was. One of the ways we will be doing this at the Innovation Hub is by running music focused tech accelerator programmes. Which aim to take music-tech start-ups through a process to grow and achieve in months what might otherwise take years - with opportunities for labels, brands and investors to work with some of the most innovative start-ups involved. The Author:Anthony David King is the innovation and funding advisor at the BPI Innovation Hub. And is also the founder of an innovation consultancy based in London that represents and develops new ventures, and designs large-scale innovation programmes for start-ups, organisations and government to address big challenges in society – which spans 200 ventures across 15 cities and impacts thousands of people ever year. About the BPI (British Phonographic Industry) Promoting British Music
The BPI is the record labels’ association that promotes British music and champions the UK’s recorded music sector. Its membership is made up of over 380 independent labels and the UK’s three ‘major’ companies, which collectively account for around 80 per cent of domestic music consumption and one in six artist albums sold worldwide. The BPI certifies the Platinum, Gold and Silver Awards Programme, co-owns the Official Charts, organises The BRIT Awards – which has raised more than £16.8m for music education and wellbeing charities, including the BRIT School – and is home to the Mercury Prize.