Tuesday, May 24, 2016

8 takeaways from Music Biz 2016

By Emmanuel Legrand

The Music Biz 2016 convention, which took place May 16-18, was held for the second year in a (music) row in Nashville. The event is organised by the Music Business Association, which regroups companies from the physical retail sector as well as digital platforms, saw a rise in attendance by 15% to almost 1,500 participants from nearly 600 different companies and organisations, and with 200 of which speaking at the various sessions. Most of the sessions focused on data and on the state of the business. And since it was in Nashville, there were also some discussions about music and songwriting.

1 – It's the data, stupid! (and you'd better know the acronyms)

Data is sexy! Just ask the participants to Music Biz 2016's “Metadata Summit” attended by
A busy Metadata Summit
several hundred people. As Bill Wilson, Music Biz's VP, Digital Strategy & Business Development, noted it is a stark change from the first Summit, which gathered 12 people in a room is San Diego in 2009. Since then the Metadata Summit has become a major staple in Music Biz's agenda because, as Wilson puts it, “We have a lot of cultural procedural and technology challenges in our business.” And most of these challenges are data-related. There are data issues at the point of creation (what are the identifiers for the compositions and the recordings, as well as a whole sub-set of data standards) and there are data issues at the point of identification of the works (watermarking, fingerprinting, etc) and matching them with the appropriate rights holders. Paul Jessop, Founder & Director of County Analytics, made a comprehensive overview of the “acronym salad” that rights holders have to deal with, including ISRC (recording), ISWC (compositions), ISNI (name identifier), ORCID (open researcher and contributor ID), ISLI (link identifier), GTIN (bar-code) and DOI (digital object identifier), to name but a few. Add to that a series of standards to exchange digital files that the Digital Data Exchange (DDEX) is working on and you have a seriously complex data matrix. As Mark Isherwood, who runs the Secretariat of DDEX, put it, there are “too many versions of each standard, they are too complex, documentation is too abstract and there are inconsistent implementations,” which give s a sense of the task ahead.

2 – Even more data issues... (ever heard of GIGO?)

At every step of the writing and recording process and then at the distribution point, data is required. The key to make all this volume of data useful is accuracy and reliability, which can be summed up by yet another acronym, GIGO or Garbage In Garbage Out. Bad metadata means bad royalties tracking and in the end, no money flowing back to rights holders. Michael McCarty, Chief Membership & Business Development Office and Canada's society SOCAN highlighted the challenges faced by rights holders and PROs when he said that Canadian rapper Drake has worked with no less than 68 co-writers over the years, so data has to include them, their publishers, as well as the splits between each co-writer. “Dealing with the workflow is the most complex part,” said McCarthy. Many different solutions were discussed, from the use of workflow enabler like SongSplits to the use of a registry like the one built by Auddly. In the end, good metadata is of the responsibility of the rights holders, and everyone should contribute, was the consensus. Oh, we did not even talk about cue sheets, but that's a mess!

3 – PROs need to adapt to the digital world

The digital revolution has affected all the payers in the food chain, but none more so than rights holders and performance rights societies (PRO). Joe Conyers, General Manager of Songtrust and VP, Technology at Downtown Music Publishing, said the new age is one of “dealing with much more data than ever and in a much more globalised space” and this has forced PROs to changed their way of doing things from membership organisations to services organisations. Jeff King, COO of Canadian rights society SOCAN, agreed that the work of rights holders and PROs has been totally transformed by the arrival of digital platforms, with their billion of micro-transactions. Making sure that the right amount of royalties are collected for the right songs is the biggest challenge faced by rights holders. “PROs are tracking billion and billion of performances,” said King. Hence the need to have data standards that work, and systems that can deal with such volumes. “There are new expectations, because it's digital, everything can be tracked granularly,” said King. “And a big part is transparency. Who did what when and where is my dollar.” There are 50 million tracks commercially released in the world today said King and the role of PROs is to be able to match the use of all of them. A good PRO, he said, can match up to 95%. Hence SOCAN's acquisition the week before Music Biz of data platform MediaNet, which is “a is a treasure trove of data which will help SOCAN diversify and move faster.”

4 – Nashville is still the Music City, but...

Nashville Mayor Megan Barry with Music Biz Jim Donio
“Music is an integral part of Nashville’s DNA,” said Music City's Mayor Megan Barry. Despite a shrinking Music Row, the city still boasts one of the highest concentration of songwriters, musicians, producers, studios, music publishing companies and labels is the USA and probably anywhere else in the world. However, it has become harder for songwriters to make a living from songwriting, according to Nashville-based Lynn Morrow, from law firm Adams & Reese. “There is now an 80% decline in songwriters capable of living from this craft,” she said. What has also changed, according to John Ozier, GM, Nashville Creative at music publishing house olé, “five writers control about half of the charts in country” and “producers are getting hugely important in Nashville.” And it is not about country music anymore. A lot of pop songs now originate from Nashville too. More non-country publishers set boutique in Nashville and Sony/ATV recently grabbed headlines because it was the first major publisher on Music Row to have a specific A&R person to focus on songwriters outside of the country realm. Trent Dabbs or Meghan Trainor have penned pop hits recently. Ree Buchanan, founder of independent boutique publishing Wrensong, said what has changed in Nashville as elsewhere is the timeline to develop new talent. “The labels are not doing development any more; they are waiting for us to develop the writer artist. They look at sales and streaming and pick artists that we develop,” she said. And being patient can sometimes pay dividends. Olé's Ozier said that in 2011 his company acquired a catalogue with a song named 'Fire Away' co-written by in 2008 by Danny Green and “a guy named Chris Stapleton.” The song eventually made it onto Stapleton’s album Traveller album, which sold more than one million copies.

5 – If streaming is going even stronger, traditional formats are down, except... (see below)

The ongoing rise of audio streaming consumption in the US in 2015 does not show signs of slowing down in 2016, according to new statistics unveiled by Nielsen in Nashville during the Music Biz 2016 convention. While overall on-demand weekly streaming volume has increased by 203% in just two years, the volume of on-demand streaming rose to 149.8 billion during the first 19 weeks of the year, up 61.7% from the same period on 2015. Audio streaming was driving the growth and accounted for 53.3% of that volume at 79.8 billion streams, up 96.2% compared to the same period of 2015, while video streams reached 70 billion up 34.7%. "Audio streaming share surpassed video in January and hasn't stopped growing," noted David Bakula, SVP, Product Leadership and Analytics for Music, at Nielsen. Russ Crupnick, Managing Partner at research company MusicWatch, concurred with Bakula that streaming was the most active segment in music consumption. He predicted that by the end of 2016 some 175 million Americans would have listened to music via streaming for at least an hour and that the total listening share would be up 10% (Crupnick also predicted that the drop in download sales will happen faster than the drop in CD sales). Comparing the first 19 weeks of 2015 with the same period of 2015, Bakula noted that physical albums were down 9.9%, digital albums down 17.8% (combined down 13.5% at 75 million units) while digital tracks sales were down 23.7% at 303.6 million units. The overall volume was up 9% for the start of the year, with streaming growth offsetting sales.

6 – Vinyl is the industry’s “Energizer Bunny”

That's how Music Biz President Jim Donio described the state of vinyl sales in the US. The surge of vinyl has indeed been one of the happy news for the music industry. Nielsen's Bakula said that during the first 19 weeks of 2016, Nielsen tracked 4.7 million vinyl album sales, up 11.5% compared to the same period of 2015, more than during the whole year of 2012. In 2006, 900,000 vinyls were sold and each year since has experienced a year-on-year growth culminating with 11.9 million sales in 2015. Similarly, the share of vinyl compared to total physical album sales grew from 1.8% in 2011 to 9.0% in 2015. The main genres sold on vinyl are rock (62%), R&B/hip hop (9%), pop (6%), dance/electronic (4%), jazz (3%), country (2%) and the rest (8%). In 2015, the top vinyl sellers in the US were Adele's 25 (115,500 units), Taylor Swift's 1989 (73,800), Pink Floyd's The Dark Side Of The Moon (50,000), the Beatles' Abbey Road (49,800), Miles Davis' Kind Of Blue (49,000), Arctic Monkeys' AM (48,500), Sufjan Stevens' Carrie & Lowell (44,900), Alabama Shakes' Sound & Color (44,600), Hozier's eponymous album (43,100) and the soundtrack to Guardians Of The Galaxy (43,000). In the case of catalogue albums, vinyls represented from 50% to 70% of the total physical album sales.

7 – Exclusives? Consumers are not interested...

Or so it seems, if we heard correctly the figures that Russ Crupnick, Managing Partner at research company MusicWatch, unveiled at Music Biz 2016. When asked “what do you want from streaming?” consumers answered: first and foremost the free option to listen to music. Exclusives only come at number 12 in their wish list. “It is not their No.1 priority to get exclusives,” said Crupnick, who added that it is not even the best advertisement for services who have the exclusives. During a recent market research, consumers were asked if they knew the various streaming sites picking from an existing list; and guess what, Tidal, home to exclusives from Kanye West and Beyoncé, could only be identified by... 9% of the respondents. “So with all this activity, 91% do not know what Tidal is. They probably still think it is a detergent,” joked Crupnick. “We have to start questioning exclusives.” He added that what people listen to on on-demand services is catalogue (66%), recent music (27%), new releases (5%). “So to think that a new song will change at how we look at on-demand is not accurate,” he said.

8 – And in the end Music Biz is happy

Artist of the Year winners Little Big Town with Donio
The success of an event Music Biz 2016 rests in the hands of the team around Jim Donio who has been in charge of the organisation since 2004. At its peak, the convention by what was then known as NARM could attract several thousand people. The event has been in a re-building mode for the past few years with dividends showing this year. For the second year in a row, the conference was in Nashville and attracted 1,500 people, up from 1,300 last year (and 900 in 2013). Donio is keen to say that there has been a Nashville effect. “The fact that Music Biz was coming to Music City was a no brainer,” Donio says, adding that bring in Nashville introduce Music Biz to a community to which it was largely unknown but who understood the value of hosting such event in the city, and many took part in it.
“Our attendance grew 40% in two years and the reasons for that are multifold,” Donio says. “First, the business continues to pivot and there are new entrants to the community; secondly, as a business there are lots of issues and we continue to be that singular nexus of content and commerce where the debates can take place; and now we are in Nashville which is a very creative city and the third piece of the triangle. There is no industry quite like that in the US.”
Donio says that the relevance his organisation is highlighted by the recent arrival of online radio platform Pandora among Music Biz members, which followed that of Spotify and reflects the changes in the business. “Pandora joining us was a milestone for us in terms of how we've changed,” says Donio. “We are transitioning from a physical market to an access model and we will do so for the foreseeable future. We have been doing this for 30 years. We will never stop changing and we need reflect the times and what is important for our members. [With the conference] we capture a moment in time and it won't change.”
So will it be next year in Nashville too? “We haven't signed a contract yet, but we are looking very seriously into it,” responds Donio. 

10 quotes from Music Biz 2016

"Nashville you have been so good to us. We are blessed to work with so many great songwriters.”
Karen Fairchild from the band Little Big Town, after receiving the Music Biz Artist of the Year Award. 

"We are lucky to have the creative class in Nashville.”
Nashville Mayor Megan Barry who seemed more excited at the prospect of turning Nashville into a hub for start-ups. 

"It is difficult now for songwriters to make a living in the city of songwriters.”
Nashville-based lawyer Lynn Morrow who did not get the memo from the mayor. 

“Songwriters? It's about work ethics: Do they want to work harder than me?”
Boutique music publisher Ree Buchanan who is a hard working woman. 

"A lot of people want to have babies, write songs and write songs, but very few people want to raise babies.”
John Pisciotta, Founder /Managing Partner of MusicSynk/LoudLab Ventures, who likes raising babies. 

"More money flowing in the music eco-system, whichever pocket it goes to, is a good thing." Nashville-based lawyer Steve Bogard, who is not peaky about where the dollars go. 

"Data is key to all. We don't know what we don't know, and what we don't know we can't pay.”
Scott Jungmichel from rights society SESAC, who does a Rumsfeld. 

“It is really a digital world and we are still working in a vinyl industry. If we do not do something about it we will not have an industry anymore. The ecosystem needs to be updated for the digital world”
Jeff King, COO of Canadian performance rights society SOCAN, who does not seem to like vinyl. 

"You're lucky, I lost my voice. Thank you!”
Cheap Trick guitarist Rick Nielsen delivering the shortest acceptance message upon receiving. He's usually more talkative with his guitar.

Warner's Esposito and Music Biz's Donio
“All I ever wanted was a backstage, all-access pass.”
John Esposito, the recently promoted Chairman/CEO of Warner Music Nashville, upon receiving the Music Biz Presidential Award for Outstanding Executive Achievement, and who obviously has earned his all-access pass. 

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