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The Money-Go-Round

Date: 1st February 2016

The Money-Go-Round

Music is all things to all people. For some, it’s a welcome respite from the cruel world – a way of escaping the stresses and strains of everyday life. For others, it’s a soundtrack to their best times, giving melodic and rhythmic accompaniment to those special moments. Music can be trivial and meaningless, or politicised and uplifting. It can be tenderly romantic or almost violent. It’s an extremely powerful form of communication, and a massive money maker too…

Indeed, there has never been a time when music hasn’t been tied to power. Europe’s great classical composers were consummate political operators, winning favour and funding from the monarchies or aristocracies for which they wrote. Warp forward a couple of hundred years and Elvis Presley sent teenage girls wild, to the sound of record store cashier tills ringing. The Beatles and ABBA earned more for the UK and Sweden in the nineteen sixties and seventies respectively than most of their countries’ major corporations. The eighties saw Britain exporting another wave of synthesiser-toting youths around the western world, as record companies swelled their coffers.

The way this power has been dispersed has changed with the technology. Mozart would perform concerts in Vienna in the presence of his patron, Emperor Joseph II. Led Zeppelin’s income stream came from vast worldwide LP record sales, and sell-out concerts in Britain, Europe and the United States. Nowadays though, the money goes round in a different way. The advent of streaming is making an enormous difference to the way artists are reimbursed for their services, and indeed how normal people get to hear them. 

Right now, we’re seeing battles between Pandora, Deezer, Apple, Google, Spotify and Tidal (and others), with each platform looking to differentiate itself in some way. Spotify has customisable playlists, for example, while Apple is giving artist exclusives. And things can only get hotter. YouTube Red and Soundcloud streaming services are on the way, so competition will intensify and we can expect packages far more closely tailored to the end-user – whether they’re hi-res obsessed audiophiles or casual pop fans who just want chart music on in the background. 

This isn’t the end of it though, because record companies – as they quaintly used to be called – are looking to squeeze every last penny out of their artists. This means strategic tie-ins with other companies, working outside music but very much in the realm of popular culture. Big brands are developing Music Marketing Strategies, well aware of its power. According to Nielson 360, nine tenths of Americans listen to over twenty four hours of music a week, which means it’s a huge part of their lives. Big brands want a part of this, and are now integrating artists into their brand image, in a bid to get to more savvy, harder-to-reach consumers. They’re now using the data about listening habits that streaming providers supply to find certain types of music that their customers will approve of. Marketing men speak of these as ‘engaged consumers’, whereas you and I just call ourselves ‘music fans’!
Aside from streaming, another major money spinner in the music business is the live festival. Whereas hippies would once lie in Somerset fields drinking cider to the sound of their friends’ playing on a nearby stage, now the likes of Glastonbury and Lollapalooza are huge business. We’re talking lucrative TV and online broadcast rights and a sense of occasion to rival any Formula One Grand Prix. These have become prime opportunities for sharp-suited marketeers to tie brands up with punters. In the old days, we’d talk about The Stones at Knebworth driving the audience wild, whereas today it’s just as much of an opportunity for the music industry to capture key data and analytics…

The question then becomes, what to do with all this? Now that the music industry can digitally ‘connect’ with its consumers and link to like-minded brands from outside its tent, then expect tie-up with app makers, smartphones and smart watches. Many music listeners get out and about and go to gigs. Expect the likes of Apple and Samsung to find ways of enhancing the user experience of live music via virtual reality and other ingenious new ways of enhancing both the concert-going experience and listening to music indoors. Indeed, the BBC Research & Development department is now working on some really rather ingenious, immersive apps for its live outside broadcast events – and will be making an announcement on this very subject soon.

Music isn’t being threatened by new technology then, it is being incorporated into it. Because dCS equipment is highly firmware-upgradeable, our customers will be able to enjoy meaningful new developments as and when they appear. But rest assured that we’ll continue to support Compact Disc – a format that’s still capable of superb sound via a dCS front end, despite now being many decades old.