The future of streaming, Latin music, entertainment legal matters and more from Midem 2019

Last month I attended Midem, one of the leading music industry events that takes place in Cannes, comprising conferences, keynote talks, showcases, exhibition and many networking opportunities. Here is a summary of a few of the many interesting topics presented. 

The Rise of New Streaming Market. Mark Mulligan (Midia Research) presented the big trends in streaming. It’s still a limited media, but every path seems to be leading to it right now. Streaming revenue growth is slowing down as it reaches maturity in key markets, but it will be sustained by emerging markets. Spotify is probably the service that is most concerned with commercial sustainability right now, as it can be considered “wholly independent”, as opposed to services backed by tech companies, for example. Streaming is said to have killed music retail and it’s contributing now to the decline of radio, especially because of free subscriptions, which is worsened by the rise of podcast services. Playlists are a trend, but curatorship still has limited penetration. Fragmentation of fan-bases and asynchronous consumption are a challenge to the traditional marketing practices; engagement levels are now higher in niches. Watch the presentation here.

Are Streamers The Future Labels? Scott Cohen (WMG), Marie-Anne Robert (Believe), Diego (Amuse), Marin Nielsen (Mdundo) and Helienne Lindvall (Veva Sound) discussed whether content distributors are well prepared and positioned to properly market artists. With the considerable volume of tracks being currently uploaded daily to the streaming services, it’s very unlikely that one’s track will be heard if you don’t have an appropriate marketing strategy. Many have declared the death of record labels, but they remain the entities that are catering for artists careers, not only single hits. Streaming services acting as labels doesn’t seem to be a strong trend. Direct delivery of tracks to Spotify has been limited to few use cases and are certainly not the core business. Even for mature artists, it’s not an easy decision to leave a label. Whose artist’s career has done better outside a label? Believe has a layered strategy to serve different artist’s profiles – from TuneCore DIY distribution to artist services. Amuse has entered the market offering free distribution (no upfront fee, no split), making money out of licensing deals and a royalties advancement mechanism, relying on their ability to break acts and global talents, despite their short time in this business. Watch the discussion here.

Will Music Streaming Ever Be Profitable? Sandra Gama (iMusica), Jungsu Han (Kiwi), Charlie Lexton (Merlin), Sylvain Morton (IDOL) and Bas Grasmayer (Idagio) discussed the issues of the streaming revenue model. Remunerating the tracks by the duration on listening instead of “per play” could be a good start, but it has some limits. Should a classical or jazz track count a stream every 4 minutes? On the other hand, is a 3min45sec track worth less than a 4min one? How to address the issue of the 30sec tracks polluting streaming services? User-centric payment model would direct the money to the artists that are being listened by a certain subscriber, which makes sense for the user that is choosing an artist and for the artist that is being listened. However, implementing this change would potentially mean someone will be making less money. For every happy label/artist there will be an unhappy one, and this puts distributors and streaming platforms in a delicate spot. Other practical challenges exist such as how to prorate the streaming data of million users of a platform. Nevertheless, not everything is about the subscription. Examples are a Coca-Cola sponsored online radio enabled by iMusica and a variety of other fandom-based revenue streams that are explored in Asia that complement music distribution. Watch here.

Beyond Smart Speakers: Ted Cohen (TAG Strategic), Scott Ryan (Nielsen Music), Benoit Rebus (Qobuz) and Darryl Ballantyne (LyricFind) discussed the future of voice technology. Smart speakers need much more intelligence to allow more flexible interaction with users. Lyrics are the main use case of music searches. Translation is something that will complete the picture. At the same time, interpretation becomes a bigger challenge as mood-based and context searches are becoming essential for new music discovery. Searching for “rainy day” may translate into different things depending on the curatorship or the intelligence of the platform. Watch the panel here.

The Global Latin Music Scene: Jorge Mejia, President Sony/ATV LatAm and US Latin was interviewed by Leila Cobo from Billboard Latin. Mejia said that every publishing deal with a songwriter is a bet and can be seen as an investment opportunity. Normally the relationship with songwriters starts as single agreements, but it’s always better to sing the author. A great volume of songs is being released every week. Before Despacito, we would have a great Latin hit every couple of years. Since then, many tracks have succeeded around the world. It’s truly Latin music time. But with the excess of releases, does it have a negative effect as the success lasts shorter? No, it all balances out, resulting in overall growth. Approximately 20% of streaming subscribers (both in free or paid tiers) are Latin American, which helps to push the tracks up in the charts around the world. In YouTube’s global music charts, currently, 5 of the global top 10 are Latin tracks. As a music publisher, Mejia has seen an increase in the demand for Latin composers or collaboration opportunities coming from US. Watch the interview here.

Legal Update: IAEL (International Association of Entertainment Lawyers) held its annual conference, which included an update from several countries.

• Site blocking: 57 cases of site blocking injunctions have been reported in France during the first 5 months of 2019, which has been successfully reducing the number of users of infringing sites. Claimants must show that these sites’ activity is exclusively dedicated to infringing content and often rely on legaltech services to produce supporting analysis and pieces of evidence. Dynamic blocking (which covers domain name changes), live blocking (important for live sports) and deindexing (removing from keyword search) are more advanced measures that are progressively being adopted. Spain reported one case where a user was blocked from updating infringing content.
• Consolidation of Societies: M&A is normal in many businesses/industries, but collective societies (PROs) have long been contained in their respective countries borders. Despite some cases - ie. Canada-, consolidation of collective societies is still unlikely to become a general trend because of the local regulations they are subject to. On the other hand, there seems to be a genuine need from global artists. Alliances like those between airlines could be a solution.
• Other updates included: the consequences of the Music Modernization Act in the US and the Spotify appeal against CRB ruling; Germany discussing sampling, host provider privilege for YouTube and public performance cases concerning rental cars; in the UK, impacts of Brexit on trademarks, contracts, customs and portability are not yet entirely yet; OCSSPs interpretations in Italy and article 14 conflicting the Italian cultural code in which concerns public domain visual arts; and, finally the Spotify vs Apple dispute concerning 30% charges over in-app purchases. Watch the full update here.

Music Cities Forum: Jordi Puy (Unison Rights & Sound Diplomacy) opened this first Music Cities conference held in Midem, organized in partnership with Sound Diplomacy. A structured approach to music as an economic activity helps cities to create jobs, can be a regenerative tool, increases the economic output, drives tourism, enhances social inclusion, supports the sustainable development goals, improve wellness, develops night economy, and much more. The benefits for the cities are clear, but why is that important to the music industry? It creates demands for music professionals and develops additional revenue streams. Watch here.

Sustainable Development Goals: 194 countries signed up for the United Nation's SDG agenda, but governments are only a piece of it. They need to provide the framework and support to enable all stakeholders to do their share. Many organizations are leading the change like Live DMA on the side of the venues. Security remains a concern for live events (especially after the attacks in Paris, Vegas…), apart from the usual security apparatus at venues that can be quite unwelcoming. Watch here.

International Festivals: Adam Ryan (The Great Escape), Joe Howard (C3 Presents), Silvio Huber (Arcadia Live!), Carlos Abrey (WME) and Paul Antonio (Live Nation) debated how to present the right mix of global, regional and local talents, in the ever-evolving global festival landscape. Festivals are becoming more and more experiential spaces, but the line-up still plays an important role in discovery festivals like The Great Escape, as well as for bigger festivals like Lollapalooza. The is a balance to be found between the headliners and the depth of the line-up. As an example, Lollapalooza tries to book 100% of the International acts for Argentina, Brazil and Chile, but some more regional acts may be more appealing to the Spanish-speaking countries, then to Brazil; the line-up is then completed with local artists.