How streaming is changing music marketing
By Andy Malt | Published on Monday 18 May 2015
Kicking off the ‘Music Marketing Is Broken: Let’s Fix It’ strand on day two of CMU Insights @ The Great Escape, Spotify’s Director Of Label Relations Will Hope delivered a keynote speech on how streaming is changing the way music marketing works.
Here are four points we took away from his presentation:
1. The relationship with fans is changing
“Our biggest problem is that everything that came before no longer applies”, said Hope. “All the best practice, the way you set up a release, timelines, everything before was quite short-termist – first week sales, quarterly targets”.
“One of the biggest issues we’ve had at Spotify, when working with labels, is trying to get away from that”, he continued. “We’re constantly trying to make the old way work for the new and, well, it doesn’t really. Labels always focused on unit sales, but that is really just one piece of the puzzle, and trying to judge streaming in the same way doesn’t really work. We need to look at success in a different way, and we think that comes down to fans”.
Under the old system, one fan would equal one sale, where the value of each fan is the same. In the streaming world, the economic value of each fan varies based on how many times they play a song over a long period of time. Before the aim was just to get more fans, now it’s to get more fans and then keep them engaged.
“For us, that means the 60 million music fans on Spotify every day, and that’s a massive opportunity. Spotify as a platform allows you to find those fans and keep up engagement”, Hope went on. “And that works especially well when we work together”.
2. How Spotify approaches artist marketing
“We recognise that the two main things that Spotify can offer is a fanbase, and this more long-term monetisation”, said Hope.
Spotify takes three different approaches to the artists the service promotes through its own playlists, dividing them into three categories: Spotlight, Partnership and Superstar.
• Spotlight: Flagship campaigns to develop new artists and find their audience.
• Partnership: Partnering with established artists to reconnect existing fans and grow their audience.
• Superstar: The biggest campaigns to support the biggest artists.
“The main thing is, these are all engaging users over time”, Hope explained. “In the past, you just had to engage a user once to gain revenue from them, now you have to repeat it again and again. You use a mix of content, and a mix of marketing tools, and you use it over time”.
“We started playlisting Hozier in December 2013 and it’s still going on now”, said Hope, as an example. “You have to use different pieces of content to keep the users interested – a track, a session, the single, an EP, and the album itself. If you frontload the content, people will get bored, so we try to to structure everything over a longer period”.
3. Timeline of a hit
Hope broke down three different types of ‘hits’ on Spotify, using examples of artists who saw their music gain momentum on the platform from different starting points.
Viral hit (Mura Masa – Love Sick Fuck)
• Track is discovered and saved by early adopters who search for the track and save it to their own playlists.
• Spotify becomes aware of the track and adds it to relevant playlists.
• Spotify playlisting drives discovery.
• New fans share the track with friends.
Spotlight hit (Kygo – Stole The Show)
• Early Spotify playlisting drives saves to user’s personal libraries.
• Initial playlisting success drives additional plays and then entry into chart playlist.
• Further playlisting grows audience who share track with friends.
Superstar hit (Mark Ronson & Bruno Mars – Uptown Funk)
• Track already popular with Spotify editors and users.
• Track moves up chart playlist and drives saves to user playlists.
• Track remains a staple in users’ libraries and playlists.
4. The power of playlists and personal libraries, and the importance of traditional marketing
“One thing I’ve noticed in all this is that getting into people’s personal music libraries is still really key”, said Hope. “Spotify playlists and third party programmed playlists will only become more and more important, but they change a lot. Playlist owners need to keep them fresh. So they’re really important for discovery”.
“But if the life-cycle of a track, or an album, or an artist is going to be eighteen months to two years, you need your music in users’ own playlists, which they’re not changing that much – their go-to playlists if they’re at the gym, commuting, or whatever it is they’re doing”.
However, while Spotify itself can boost a track through various means, and further momentum around buzz songs as they get playlisted, Hope said traditional artist and label led marketing is still key for initial discovery.
“All these things that are part and parcel of traditional artist marketing, they still have an effect. I guess you just need to change the objectives a little. It’s not just about getting fans to spend more today, you’re using the campaign as an engagement piece. And you need to build other things you’re doing on streaming services like Spotify around that”.
But how should that traditional marketing adapt, bearing in mind Hope’s insights and comments? This was the topic in the spotlight for much of the rest of the CMU Insights marketing strand – more on which later.