Major labels still rule; AI's music's youthful edge; and why Spain's live music is surging
Edition 12 🎉
Hi folks
Happy Wednesday! Welcome to The Industry Playlist 🎵
A friend referred to the Substack as ‘TIP’; the acronym sounds a lil tacky but I guess its a good shorthand for what I am trying to do here. 👀
Welcome to TIP’s 12th weekly edition! 🎉 This has been an interesting learning curve for me - mostly cause I have come to realize is that trends in music business, as with any other business, is cyclical. There are long-term trends; but they are always seeped in tension (deviating or converging, push or pull, bundling or unbundling) - which is to say that you can build a music business in both directions, betting with or against the market. The true insight is to figure out when and where you want to stand when multiple trends come colliding.
In the near future, you’ll see me getting into more long-form writing; diving deep into trends but also situating super interesting music companies amongst amongst them.
If you have enjoyed reading the Substack, please share with your other smart friends:
It’s the middle of the year, and a slew of new reports, surveys, and trend analyses are out. This week, we’re confronting some harsh truths for independent music: the necessity of major distribution for mainstream success and the possibility that young people might inadvertently set the stage for AI music's dominance. But there’s a silver lining—Spain’s live music scene is booming with more young people attending concerts than ever before.
Finally, I’m really enjoying listening to The Funk District, a producer from Mexico. No prizes for guessing the sound - neo funk with a Latin flair. Check out Love 2 Dub You 🎵
Now, let’s get to it.
🪁 SONIC SHIFTS
Going mainstream still needs major distribution
This is a tough pill to swallow if you are part of the independent scene. Luminate’s 2024 Mid-Year Music Report [PDF] reveals a critical insight for independent artists: major distribution still holds a significant advantage in terms of high-volume streaming. The inflection point comes when you hit 10M streams, post that point is when major distribution can change the game in terms of reach and independent distribution falls short.
The future holds promise though. Independent distribution didn’t just get here without reason - you are seeing the big majors restructuring themselves to meet the market (tl;dr centralizing data operations). With host of music distribution companies entering the market, we will see independent distribution moving upwards, some of whom will eventually become the new mainstream/major distribution. In the last edition, I wrote about how music distribution companies have a differentiation problem - once that glass ceiling is broken, expect this chart to look different.
Worst of social media is showing up in young people’s relationship with music
This is a tricky topic - are we at a cusp of redefining sound or things just getting trashy? I like to keep an open mind but its hard to tell. The ‘Sound of the Next Generation” report [PDF] by Youth Music offers intriguing insights on this topic. Two things stood out for me -
Young people feel that genres are not relevant anymore - not surprising, since everything on social media is an amalgamation of everything, of different sounds/artists/inspirations. Let the industry folks be busy organizing sound in genres, don’t box the young listeners.
Fast food generation of music listeners - New fast and bite-sized consumption habits is making music increasingly disposable. For young people, if it is not viral, it is not successful. Ouch.
The bottom-line is content has trumped art/music (at least when it comes to digital discovery and consumption), firmly placing AI music in an advantageous position.
Something exciting is happening in Spain’s live music scene
Spain's live music scene is booming, with record ticket sales and thriving festivals, a stark contrast to the crisis faced by UK music festivals. There’s been unprecedented growth in ticket sales and event attendance. Time will tell how this plays out - whether its a one-off surge or an actual change in direction for Spain’s live music scene. Some positives that are unique to Spain seem to be 1) more and more festivals are shaping their identify around local acts (perhaps not intentionally from the get-go, but that’s what’s helping them get fans in); 2) mini-residencies and touring artists playing multiple nights in the same cities (this is an interesting new model that’s increasingly coming to light in mature markets); 3) exponential growth of Latin and urban music (very dance-able).
📚 CURATED INSIGHTS
🚨 Geeks, MOPs, and sociopaths in subculture evolution - Subcultures were the main creative cultural force from roughly 1975 to 2000, when they stopped working. Why? One reason—among several—is that as soon as subcultures start getting really interesting, they get invaded by muggles, who ruin them. Subcultures have a predictable lifecycle, in which popularity causes death.
For Gen Z, music is its own social media - From Spotify Wrapped to apps that turn your listening habits into receipts, music taste is now a new kind of social currency.
Social Media is increasingly just Social Video - OTT killed cable, now short-form video is replacing OTT. Chart below shows video consumption is going up across all dominant social media.
From stealing to Spotify: the story behind how music got free - A two-part docuseries looks back at the history of piracy and how the music industry found itself in such a precarious place.
The Stormzy Effect - Great example of converting one’s ascending success into a cultural force.
Converting his own spectacular ascendency not into a story of Black exceptionalism, but into a belief and platform that allows Black British talent to rise. Faced with his majesty, people cannot help but believe in their own. This is The Stormzy Effect.
🔥 KEEP TRACK OF
Big indie record labels launched a think-tank to undertake research that maximizes the value of music - Organization for Recorded Culture and Arts (ORCA) is a superb idea, someone has to put out research that counters big tech’s false narrative of democratizing music. They have released their first report ‘Setting the Stage: How Music Works” [PDF] laying out the basics of the music economy.
DICE expansion in India looks likely - DICE first launched in India in Oct’20, focusing on live streaming of music acts. Currently its in talks with at least 3 private equity firms to get fresh investment in, which begets the question on their growth plans in new markets such as India. Expect more DICE activity in India this year.
❄️ INTERESTING STUFF
The age of average - The interiors of our homes, coffee shops and restaurants all look the same. The buildings where we live and work all look the same. The cars we drive, their colors and their logos all look the same. Our movies, books and video games all look the same. And the brands we buy, their adverts, identities and taglines all look the same. However, the age of average is the age of opportunity. It’s time to decline the indistinguishable.
Make the Internet Fun Again - Our obsession with optimization is slowly killing the internet. Slop has taken over - slop is just mediocrity in pursuit of metrics. Once the algorithm’s preferences are known, people throw as much algorithm-shaped slop at it as they can in hopes of winning the engagement lottery. Is it too late or can we do something about it?
My last 6 months Spotify receipts are here!
Some one made a cool web-app that allows you to get your own Spotify Wrapped snapshot whenever you want. Check out Receiptify
That’s all for today. We’ll be back in your inbox next week.
Thanks for reading,
Rohit