2018 has been a disruptive year for the music industry, with more change and innovation expected in the years to come. With that in mind, we asked some of the brightest minds in music industry analytics and journalism to talk through their predictions for the trends and issues that will shape 2019.
Mark Mulligan – Managing Director of MIDiA Research
Spotify will sign a starting 11 – Spotify’s difficulty managing investor impatience will continue throughout 2019, and Spotify needs to plan for higher margins. Podcasts and direct artists are longer term bets. Striking deals with established artists will provide a near term margin boost, especially if Spotify goes old school and owns the copyright. You think Drake’s Scorpion takeover was bad? You ain’t seen nothing yet. Look for Spotify in 2019 to start building a ‘first team’ of artists.
Another strong year for streaming but mature market slowdown – Subscription revenue will continue to grow strongly in 2019, adding another $1.6 billion with the US continuing to be the largest revenue contributor. Mature markets such as the US and UK will slow, while Germany, Japan, Brazil and Mexico will all grow strongly in 2019.
Next-generation labels will pick up pace – Finally, investors want to put their money into music. With the barriers to entry so high for streaming, don’t wait for 2019 to herald a new wave of streaming services. But where investors will put their money is next generation music companies. The likes of 300, United Masters and Hitco have started carving out a path that others will follow in 2019, rewriting the old school’s rules as they go.
Glenn Peoples – Consultant & Founder of Curio Dojo
In 2019 there will be more consolidation of streaming and radio – Liberty Media already owns some of iHeartMedia’s debt. It’s going to make a play when iHeart comes out of bankruptcy in February. The odds are good the deal would go through—the DOJ green lights just about every acquisition. Will anybody buy Deezer? Along with Rhapsody, Deezer seems to be caught in the wake of the big services, Spotify, Apple, and Amazon.
In 2019, expect more content diversity at streaming services – They are ramping up podcast content and putting them in the foreground. Pandora is making a genome project for podcasts, similar to the Music Genome Project that powers its song selection.
The festival business is at an inflection point – Expect more attendance at festivals with high-end experiences like food & drinks. BottleRock is a great example.
Set aside the blockchain hype in 2019 – There will be little movement on practical uses of blockchain technology in music. Old royalty and metadata systems are entrenched, and large labels won’t simply jump in without a great deal of thought and planning. As for blockchain-based streaming services, they face two challenges. First, as streaming services they are subpar, to say the least. Second, tokens aren’t yet a sensible way to pay royalties. Over time, however, tokens could carry value when there are services to purchase on the platform. For example, at least one blockchain streaming service wants to create a marketplace where artists can spend royalties on such items as loops and stems.
Finally, too many publications will run too many articles about artificial intelligence and machine learning. These technologies have already been deployed by streaming services that “learn” your listening habits and provide a personalized experience. AI-created music is an interesting topic, but I expect far more talk than action.
Juliana Koranteng – Founder/Editor-in-Chief of International Publications MediaTainment Finance & TechMutiny
More artists will seek greater control and ownership of their careers as technology becomes more scalable, more affordable and, even, vulnerable. The days when music creators were in awe of and virtually at the mercy of what Big Tech could do for them should be disappearing. Now that we’ve seen regulators probe, customers boycott and employees protest at one or other of the Big Tech conglomerates (Facebook, Google, Microsoft, Apple, Uber, Amazon et al) in 2018, we know their business models and strategies are fallible. So, tech should be about empowering and enabling artists, not owning them.
Spotify is allowing indie acts to upload their own recordings. Apple, which has started investing in original content, has bought artist-discovery start-up Platoon for artists who want to determine their own careers. Amazon’s Alexa Skill Blueprints lets anyone personalise the voice-activation device, something fans can customise to access their favourite tracks. Artists have always known who the fans are and how best to reach them. Tech has always been an interface between what artists need and the services provided by third parties, from record labels in the past to tech giants today. It should be a partnership between creativity and business, not the dominance of one over the other. As for who actually owns the music, it will always be a matter of getting a good supportive lawyer from the get-go.
Cherie Hu – Journalist & Author of the Water & Music Newsletter
Three trends that I think the music business cannot afford to ignore in 2019 are the growing popularity of live video streaming, the ongoing improvement of creative AI, and the role of tech platforms in solidifying A&R infrastructure across Asia, Africa and Latin America.
From rappers like Drake, Danny Brown and T-Pain broadcasting live on Twitch, to Ariana Grande attracting over 829,000 concurrent viewers for the live premiere of her record-breaking “thank u, next” music video on YouTube, musicians are increasingly realizing that success is not just about releasing songs or posting social-media updates—it’s also about creating compelling cultural moments where fans can bond and connect with each other in real time. The importance of live fan engagement in a sustainable music career is nothing new, but the global scale of the platforms and tools for orchestrating these moments—including mobile apps like TikTok in addition to Twitch and YouTube—are unprecedented.
Both venture capitalists and big-tech companies like Google and Facebook are pouring more and more money into researching, and productizing, AI-generated music. A diverse range of artists are also opening up to the technology, releasing songs and even entire albums with the help of artificial intelligence (see Holly Herndon’s Spawn, or Taryn Southern’s I AM AI). We will continue to see AI pushing the boundaries of what’s possible in songwriting, and challenging our assumptions and definitions of creativity and originality along the way.
Previously overlooked music markets are also asserting their importance on the world stage. This year, Universal and Warner have both expanded their operations on the African continent; Chinese giant Tencent Music launched its IPO on the New York Stock Exchange; and Spotify and Deezer both launched in the Middle East, and the former is reportedly expanding into India within the next six months. With an influx of both local and international capital, these historically piracy-heavy markets are flourishing into legitimate digital-music economies reaching potential billions of new users, a shift that the music industry can no longer afford to ignore in 2019.
David Turner – Journalist & Author of the Penny Fractions Newsletter
Live Streaming isn’t new. The idea of recording one’s life has existed on the internet in some form for the last two decades. Even musicians aren’t new to the idea, as rap producers like Lex Luger in the early part of the decade would record themselves producing beats for an small, but dedicated audience. Even with those facts, it’s taken a while for the larger industry to become aware of this mode of performance. Yet that changed this year when Drake hopped on the Twitch streamer Ninja’s channel in March and got over 600,000 people to watch them play the video game Fortnite, and Ariana Grande got over 800,000 people on YouTube ready to watch the premiere of her video “thank u, next”.
These might not be the numbers that inspire collective gawking like a single Spotify playlist add or what constitutes viral in the YouTube standards, but that’s okay. Musicians and labels in 2019 should start to push against omnipresent passive consumption. Instead more conversation should start to move towards what it might mean for artists and fans coming together in digital spaces. 1,000 paying Twitch subscribers is worth more than 1,000,000 Spotify Monthly Listeners, perhaps next year the industry will start paying attention to that math.
Dan Runcie – Journalist & Author of the Trapital, the Hip Hop Business & Strategy Newsletter
Next year, I expect more hip-hop artists to try and launch their own podcasts. A lot of rappers are eyeing the media presence that Joe Budden has built. His partnerships with Spotify and Revolt have proved that there’s money to be made. A lot of older rappers have still got something to say, and a podcast gives them another channel to reach the masses.
NBA stars are slightly ahead of the game in podcasts. CJ McCollum, Vince Carter, and JJ Redick all have their own podcasts that release weekly. Rappers and basketball players have always had an eye on each other’s moves. It’s only a matter of time until more of rap’s elder statesmen join the game.