We pulled a fast one on you! When everyone was wrapping up 2018, we launched the Music Tectonics podcast! Expect news analysis and interviews about all things music tech. Listen for your friends and partners in future episodes. In MT’s 2018 Music Tech News Roundup, host Dmitri Vietze and regular guest Tristra Newyear Yeager explored some of the deep seismic shifts in the music tech terrain, as well as the surprises no one saw coming when they made 2018 forecasts. Here’s a taste of the top trends Dmitri and Tristra identified with a few updates on stories that have developed since recording. For their expert commentary, give the episode a listen here or wherever you get your podcasts.
The year 2018 will be remembered as the moment smart speakers really took off, with users adopting them into their lives at an ever accelerating pace. Products have proliferated from Amazon, Google, Apple and now Facebook, and the major music services rushed to integrate with the new devices. There are many questions to be answered: how will voice interaction change how people look for the music they want? How will ongoing conversations about music metadata develop in this environment? What happens when music and technology become not just mobile but ambient, a part of the atmosphere in users’ homes?
The investor interest in music we saw in 2018 would have been unimaginable a few years ago, when doomsayers predicted the imminent death of the industry. Spotify went public with a DPO, while Sonos and TenCent opted for more traditional IPOs. Initial sales disappointed many analysts, but TenCent’s offering was still one of the largest of the year. Companies weren’t the only target of investor speculation—lots of buying and selling of catalogs happened this year that would never have had monetary value in previous climates. Diverse investment vehicles are springing up that allow artists and, potentially, everyday folks to invest in the music they care about.
A sign of the times in 2018 was Facebook’s move to license major-label music for user-generated videos. While Facebook’s plans for this service remain unclear, it’s an indicator of how essential music licensing has become. It can’t be an afterthought any more, even for start-ups. Sample clearance and licensing is being enforced more aggressively, as shown by the 2016 settlement of the Kraftwerk suit. In this climate, the time was ripe for licensing derivative works as pioneered by Dubset, which partnered with Soundcloud this year to support monetization of derivative works on that platform. As a result, DJ mixes and live sets can now gain more prominence on the biggest platforms like Apple Music.
The Year in YouTube
YouTube Premium and YouTube Music had their big roll-outs, but the multiplying YouTube product launches and rebrands may end up confusing people rather than converting them to subscription services. The year also saw another wave of the “adpocalypse,” the recurring scare over demonetization of small channels. More interesting to watch will be YouTube’s response to the EU’s Article 13 and Safe Harbor restrictions, which may finally be enacted after years of lobbying by artists and the music industry. Along with the Music Modernization Act in the U.S., these regulations are trying to address the current state of digital sharing and uploading, and we’ll be watching to see how they play out on the ground.
Shifts in Apple Music and Spotify’s features in 2018 point to a winding down of the social aspects they once toyed with. Everyone seems to agree that music ought to be social. While social apps like TikTok that have a content-creation aspect have built a huge fan-base, the major streaming platforms haven’t managed to make social music stick. What Spotify’s pull-back on social means for the service is up in the air, but it’s possible they may go the way of Facebook and try to monetize artists’ access to fans.
Testing the Direct-to-Artist Waters
Spotify played around with direct artist deals, which implies they may attempt to bypass labels to obtain original content on the Netflix model. Spotify’s own beta feature for uploading original tracks and their investment in a music distribution service represents another step in a similar direction. If Spotify commits to direct-to-artist tools, we wonder if they are contemplating a model switch. Apple also moved into that space when they acquired Platoon, although it’s hard to tell whether Apple wants Platoon’s data, some aspect of their back end, or just to play tit-for-tat with Spotify. Both companies are likely to find that going direct to artists is a challenging way to acquire content.
We’ve got more to say about 2018’s acquisitions in an upcoming post, but a 2018 roundup wouldn’t be complete without discussing Apple’s long-delayed purchase of Shazam. Industry insiders suggest that what Apple wants from Shazam is their powerful real-time data on what people in different regions are interested in across all streaming platforms, so Apple can tailor recommendations and strategize future artist and label deals. The other big move was Sirius XM Radio’s purchase of Pandora, putting a ring on the long-term investment relationship between the two companies.
Like 2017, blockchain continues to be a big buzzword with few breakthroughs. eMusic did announce that it would pivot to blockchain-based royalty management as part of an ongoing extensive rebrand, but the gamble did not stop eMusic’s continuing problems retaining catalogue (Naxos, INgroove, and The Orchard were among the distributors to walk away in 2018, claiming non-payment and non-reporting). While the talk about blockchain seems to always come back to revenues and crypto currency, decentralized ledgers have lots of other potential uses, especially for licensing and metadata.
Speaking of data, AI has been around for a while in the music industry doing data clean-up, but 2018 is the year when AI-generated music became a thing. There was some sound and fury around “fake artists” filling chill playlists on Spotify, but also some interesting projects with hybrid performers like Lil Miquela, who is (mostly) algorithmically generated. All this leads to questions over which humans own the rights to the work AI produces, and whether listeners will take sides the way they have over formats. For more on the big questions about AI-generated art, check out Tristra’s think piece on this blog.
Big in China
Awareness grew in 2018 about the huge music market in China, culminating in TenCent’s December IPO. As a result, we’re seeing some interesting culturally different uses of technology and ways people relate to music that are intriguing and potentially influential on U.S. culture. Chinese platforms offer a very different social experience around music that may appeal to younger westerners. But totally different licensing ecosystem in China shapes the environment for developing DSPs, and it remains to be seen how they will adapt to other markets.
Stay tuned to the Music Tectonics podcast in 2019 to follow how these stories unfold, and find out how future tech tremors shake up the music industry landscape. Subscribe on iTunes or wherever you get your podcasts.
Photo by Konstantinos Hasandras on Unsplash