The $300 Billion Industry Music Tech is Ignoring

What if the biggest opportunity in music monetization isn't streaming, social media, or live concerts? It's the $300 billion pro AV industry, and most musicians and music tech innovators have never thought about it.

This week on the podcast, Graeme Harrison, vice president and general manager of Bluesound Professional, joins Dmitri to break down how commercial audio is reshaping the way brands use music in physical spaces. From 15,000 7-Eleven stores to NFL stadiums to the US Senate, Graeme's work sits at the intersection of music, technology, and brand experience in ways the music industry rarely talks about.

In this episode, Graeme and Dmitri dig into why congruent audio and visual together are 1,200% more effective than either one alone, how commercial music licensing pays artists significantly more than residential streaming, and why the rise of AI-generated music in public spaces could trigger a second era of elevator music that cuts artists out of the equation entirely.

They also get into the growing world of biophilic soundscaping, adaptive AI playlist curation, and what it means for a brand like 7-Eleven to use music not as background noise but as a core part of its identity.

If you work in music tech, artist services, or brand strategy, this episode reframes where the money is and where it's headed.

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Episode Transcript

Machine transcribed

[00:00:00] Dmitri: Our guest this week is Graeme Harrison.

He's the vice president and general manager of Bluesound Professional. Bluesound, you might know, it's a high-resolution, multi-room speaker and listening system with both hardware and software, and Graeme specifically oversees the commercial market, designing systems for retail, bars, restaurants, gyms, amphitheaters, all that kinda stuff.

And as a longtime member of the TED Talk community, and a friend and advisor of innovative artist Imogen Heap, and a big thinker himself, he's here to help us wrap our minds around ideas like soundscaping and elevator music 2.0, and some of the other themes often hear on Music Tectonics. Welcome to the show, Graeme.

[00:00:39] Graeme: Hello there. Nice to see you, Dmitri.

[00:00:42] Dmitri: Great to see you as well. I didn't mention that Graeme and I are both in Portland, Oregon too, so we've gotten to know each other at local meetups that we do here in Portland, and, um, yeah, it's been great coming into your world, Graeme. So let's get oriented.

Why should the music tech innovators that are listening, why should they be paying attention to the world of professional AV? And if you would, describe your industry, including the size of it.

[00:01:05] Graeme: Sure. Yeah, so I work in the pro AV side, specifically in the installation side. Uh, my history is more kind of the live side.

We did Live Aid back in the day, in the '80s, and, uh, large-scale touring with all sorts of people, AC/DC, INXS, A-Ha, Status Quo, lo- tons of people. But over the last few decades I've been really involved in, the install part of the pro AV industry. And, uh, I grew, a company to a decent size, um, that made networked DSPs, and DSP in my world is digital signal processor.

so we made, uh, networked DSPs that we sold to meeting rooms all around the world. and then a few years ago, that company was acquired by private equity, and, I founded, uh, Bluesound Professional And our goal is to bring hardware into commercial spaces to allow people to stream music. Um, why that's important is there's a ton of reasons, but the first of which is the size of the industry.

So if you look at... By the way, I'm a, a long time, an avid kind of watcher of the, podcasts and, and I'm really interested in what you're doing and I'm a, a musician myself. I, you know, I have a lot of musician friends. You mentioned Amy earlier on, and she's doing some really interesting stuff, so I'm super fascinated about that side of the industry.

And if we take the figures of MIDiA Research that you quote often, the size of the, music industry is about $60 billion, of which about 30 billion is live sound, and the other 30 billion is recorded. About 20 billion of that's, um, streaming Size of the Pro AV industry, the install part of the Pro AV industry is five times that size.

It's $300 billion. And we have integrators in our industry who are installers who are, you know, close to $2 billion as, companies that do installations. We have many manufacturers over a billion dollars. and what we do is we put hardware, to stream audio into all sorts of spaces, from we do all of the big stadiums in the US at the moment.

We do, you know, governmental stuff like the US Senate, South Carolina Senate. We do universities and things. But we also do some very big deployments. So, um, a little while ago we did, about 15,000, 7-Eleven stores. We're currently, in the middle of a 13,000-store deployment. We're just gonna start another big one in Mexico.

we're working with, about 15 or 20 different brands, and so the size of what we do is, very different. And it, there's a real crossover because we talk, or, or you talk, about monetization, how artists can make money in the digital age, and one area that I haven't heard talked about is how artists make money from the commercial replay of, of their art.

and we work a lot with commercial music services, business music services, and we try and guide people to use those licensed services in commercial spaces. And typically, the, uh, subscription to a commercial music s- um, service is at least three times the size of, uh, a residential music service. So if you think about it, if you listen to an artist, say, on Spotify in your cafe, which is technically illegal, but lots of people do it, and then you compare that to listening to it on a licensed commercial service, the business owner's paying at least three times the license and often more, which means the artist is making probably at least three times, maybe more.

So it's a really important, revenues can be a really important revenue stream for artists.

[00:05:12] Dmitri: Hmm. Wow. Great, really great point. Well, that's really helpful to hear the, the size of the market and how it intersects with the business that we talk about a lot at, Music Tectonics. the other thing that I like talking to you about is, like, you're always looking, like, 20 years down the road.

[00:05:26] Graeme: Yeah.

[00:05:26] Dmitri: And I'm curious, when we, when we widen out, what are the possible music innovations in your professional AV space? What direction is your industry headed in? Help us think about that.

[00:05:36] Graeme: Well, I mean, one part that's really central to us at the moment is how brands use music. so I'm really fixated about bringing people back into brick-and-mortar environments.

Obviously, coming out of COVID we were, we were talking about that, but it's still an issue. Whether there's brick-and-mortar environments in the workplace or hospitality and retail, really f- interested in bringing people back together face-to-face. This sort of thing is great, but it's more fun if we're actually together, and one of the things that that can help with is understanding and tolerance and reducing polarization, which is so easy online and so much more difficult if you're face-to-face to someone.

And so what we're interested in is helping brands to use music as not just as an alternative to silence, but as a really positive experience in, building the brand. An interesting... I'll ask you a question. I don't think I've asked you this before.

[00:06:40] Dmitri: Uh-oh.

[00:06:40] Graeme: If you have a audio stimulus and you add it to a visual stimulus and each of them is 100%, how much more effective do you think those two together are if they're congruent?

[00:06:55] Dmitri: You ha- you have asked me, but I

don't remember

the

answer.

[00:06:59] Graeme: Well, most people would say, I don't know, 10, 20% more effective if you add a visual stimulus to an aural stimulus. It's actually 1,200%. It's 12 times as effective. And if you screw it up by, I don't know, playing heavy metal in a fine dining restaurant, it's only 14% as effective as doing either one or the other.

So if you get it right, it's great. If you get it wrong, it's disastrous. And w- a lot of the brands we work with, um, like for example 7-Eleven, they're... What we're talking to them about is not putting audio gear into shops or even particular artists. It's how they're using- aural stimulus to transform their brand.

So for example, for 7-Eleven, they've got 15,000 stores. They're kind of boring convenience stores. They're trying to reinvent themselves as a hip, urban hangout spot, and they're using music as part of that. They have a thing called Gulp Radio. And so we talk to a lot of brands about what role music plays in the brand itself.

So there's a lot of that sort of conversation going on that's really relevant. There are other, trends in our industry. there's certainly a real bifurcation, um, in the pro AV industry. On one side you've got the UCC space, the unified communications and collaboration space, which is huddle rooms and meeting rooms, which is becoming ultra commoditized.

And on the other s- side you have the experiential space, where you've got the Sphere and Cosmo and Lightroom and Meow Wolf and Team Labs, and a whole load of people bringing these really immersive experiences in. And so the industry's kind of doing like this, and, a lot of what our industry is comfortable in is the middle ground, and, and it's going one way or the other.

So there's some really interesting trends going on in our industry. However, I think the most important thing, for this conversation is how we use music and, and soundscapes in some cases, and I'm sure we're gonna talk about those, um, as a way of really mindfully, uh, enabling brands to create more immersive experiences

[00:09:19] Dmitri: Wow, there was so much in that, Graeme, starting with this sort of just what's the value add of audio with visuals, and, and sort of what role music plays for that.

It's so interesting to have somebody like you who's listened to all the podcasts and, and, um, you know, follows along with the Music Tectonics conversations to start to take these things from your world and, p- put these lenses together, to overlay the lenses, and I start to think about, well, if we're gonna talk about increasing the total addressable market of music, and then you start talking about, well, actually, we're increasing the, the value of life experience, whether it's video or events, uh, restaurants, experience of what's the economic value that music and sound brings to that in itself?

It's just so interesting. And you know, the larger conversation is about culturally we seem to value music so much, but we just don't spend money on it in, in the way we do with other sectors. and then to, put that lens over culture, not just around music specifically is super interesting.

 and then the whole, like, functionality of soundscapes. what happens to people in spaces when you put the right kind of music? Not just any music or, uh, not just replacing silence, as you said, but, uh, there as well. yeah, would love to hear more about soundscapes in those spaces too.

I know you've done a lot of work there. I wanna throw out one other thread How will AI impact music in public spaces? Because-

[00:10:39] Graeme: Oh ...

[00:10:40] Dmitri: that's, that's the one thing, like, we're hearing a lot in the music industry about production music, background music being one of the first spaces that's, quote, "replaceable" by generative AI because there isn't as much artist identity or celebrity involved with that listening, or there isn't necessarily vocals or whatever.

but how does that impact your world?

[00:11:00] Graeme: Sure. There, I mean, there's, there's a lot of ways that AI, um, impacts our world. And, um, one of the things that's a little different with what I do to what a lot of, your community do is we're putting music into spaces where it's being heard by hundreds, maybe thousands of people that aren't necessarily fans of that particular artist.

So it's not a one-to-one engagement. And one of the issues is even if you curate music really, tightly, to the demographic, you can't know the emotional resonance of a particular track to a particular person. You know, because when you listen to a track, when I listen to a track, it brings back all of the memories I have when I heard that track and, and it does for every single person.

So the curation element can be a little difficult, and that's why soundscaping... And we work, uh, you've had Endel on, on the podcast, and they do some really interesting work, uh, more in the, the residential space. We work with a company called Moodsonic, uh, who are the world leaders in, in biofilic soundscaping, and we put that into the workplace and healthcare environments.

But, and that's really AI-based and also adaptive. so, we use sensors in the space and, and the content changes depending on how busy the space is, that sort of thing. Also, with the music services, the, the most intelligent one we use is, is a company called Qusic, an Australian company, and they again use sensors in the space, and they use that for, to control the volume, but also the, uh, playlist curation is done dynamically.

And then they use AI for, um, advertising, intelligent placement of advertising and promotion, and that advertising drives the adoption of, music in spaces. Now, I don't love advertising in spaces, but I do love the fact that it's our way in to get music into spaces curation is really impacted by, um, AI.

We use, uh, AI curation a lot to, really hone playlists. And I think you alluded to it, something I'm kind of particularly n- nervous about, I suppose, is this advent potentially of elevator music 2.0. So back in the day, we had Muzak, which was actually a company producing kind of royalty-free music, elevator music, like sounds like the Beatles.

Um, and, you know, an orchestra playing something that sounded vaguely like the Beatles on a one-off fee to, bring this inoffensive music into elevators and lobbies and things. And then we decided we actually want to hear the Beatles. So then we got into licensing and actual artists being played in public spaces.

And now where you can get sounds really like the Beatles or Justin Bieber or Drake or whoever, you've got this potential of this kind of second generation elevator music where it sounds super like the actual artist but isn't the actual artist. And what do we do to, to guard against that, um, is something that, that's, you know, top of mind at the moment to, to us

[00:14:20] Dmitri: Yeah.

Super interesting weaving all those, pieces together. it's wild to think about the physical space as the, the pla- 'cause you think so much about digitally and the internet, all the virtual spaces where things start to come together. But in your world, uh, we're seeing them all come together in, in physical space, which I, you know, I think we're in this pendulum swing back to analog and to IRL experiences as well.

So you're at a really interesting place for this. Hey Graeme, I think that was a great kind of overview of where things are in the space. thank you for joining us for this interview and bringing in this conversation.

It's really interesting. Looking forward to continuing these conversations.

Let us know what you think! Find us on LinkedIn, and Instagram, or connect with podcast host Dmitri Vietze on LinkedIn.

The Music Tectonics podcast goes beneath the surface of the music industry to explore how technology is changing the way business gets done. Weekly episodes include interviews with music tech movers & shakers, deep dives into seismic shifts, and more.