Music Business News, November 21, 2017

The Nielsen Music 360 report showed gains in streaming and the strength of radio. And Spotify said it will double the number of employees in its UK office. Also, SoundCloud added a new stat to show how its algorithm affects streams.

 

 

Nielsen Music 360 Report: Streaming Huge, Radio Still Strong

 

The latest Nielsen Music 360 report indicated that streaming platforms are booming, but radio is also still important.

 

Billboard reported that streaming is the method of choice for music listening, with 90-percent of the population listening to music that way an average of 32.1 hours per week. That number is up four percent and six hours weekly from last year’s figures in the same study.

 

The 360 2017 U.S. Report also indicated that listeners spend about $156 per year on music, with live performances taking the lion’s share of that figure. That is up $3 from 2016.

 

Live performances accounted for 54-percent of purchases, followed by CDs, LPs, downloads and music gift cards, which totaled 29 percent. Streaming took nine percent and satellite radio took eight percent.

 

Aside from concert attendance, streaming accounted for 41-percent of listening time, with terrestrial and satellite radio making up 24 percent, digital music libraries taking up 14 percent and physical music formats totaling 11 percent. In 2015, the percentages were 32 percent streaming, 26 percent radio, 23 percent digital downloads, 12 percent physical formats.

 

Among music streamers, the study showed that 58 percent used a combination of audio and video services, with 31 percent using strictly audio-based services and 11-percent only video services.

 

The Nielsen study also tracked trends across artists who made their music exclusive to a particular service or retailers. When taking these artists into account and their fans, 37 percent of streamers said that exclusive artist content from their favorite artists influences their decision to choose a specific music service.

 

However, the report also indicated that 45 percent of consumers prefer free streaming, with only 29 percent subscribing to the premium tier of a music service. Still, the study showed that offering free trials definitely helps turn free streamers into paying subscribers.

 

Among those who said they will not subscribe to paid tiers of streaming services, 49 percent said their decision was based on the subscription cost being too expensive, whereas 38 percent said they get all the music they need via free tiers and 33 percent indicated they do not listen to enough music to make paying worthwhile.

 

Data for the Nielsen Music 360 Report was collected in August across 3,000 consumers 13-years old and older. Surveys were conducted online and spread across a sample that reflected the U.S. census population based on age, gender, region, education and household size.

 

Spotify Expanding in the UK

 

Spotify said it will move from London’s West End to the Adelphi building close to the city center in order to expand its workforce, reported Music Business Worldwide.

 

It will set up shop in a 60,000 square foot office complex with a monthly rent in the millions as it doubles its UK workforce over the next two years from 200 to 400.

 

This latest move comes on the heels of Spotify’s announcement that it is increasing its employees by 1,000 in the New York office and moving into 4 World Trade Center.

 

Spotify did not make an official announcement or say when the new office would open, but it did confirm that it will be expanding Research and Development efforts in London, which will be another R&D hub alongside hubs in Stockholm, Gothenburg, New York, San Francisco and Boston.

 

VP Product at Spotify said, “London has made the decision of where to grow our next R&D hub an extremely easy one. It has a vibrant start-up community, and a wealth of great tech talent, making it the perfect location in which to build out our talented R&D team … London will be one of our major hubs where we’ll house key investment areas including expansion of our subscription-commerce capabilities.”

 

Mayor of London Sadiq Khan commented, “London is the best place in the world for ambitious businesses looking to expand and our technology sector continues to go from strength to strength. Spotify is the latest in a long line of companies who realise that London simply cannot be beaten for innovation, with a deep pool of tech talent and a complex business ecosystem that can’t be replicated anywhere else.”

 

The first jobs that will open up in London will be related to R&D and engineering across front end, back end, machine learning, data and leadership. Spotify will also likely go public in the first quarter of 2018.

 

SoundCloud Adding New Metric for Music Creators

 

SoundCloud said it is adding a new feature for music creators in order to help them see how the platform’s algorithm influences streaming numbers.

 

According to Engadget, the new feature will help the service better compete with Apple Music and Spotify and show artists how their music is discovered on the platform.

 

SoundCloud has been trying to stay relevant as subscription streaming services take hold and as artists find success on Spotify and Apple Music. The new SoundCloud stat shows how its algorithm can get more plays and bump themselves up in the ranks. The update is a part of SoundCloud’s new SoundCloud Pulse app, which includes information about playlist streams, top listeners, cities and countries.

 

Stats associated with these new capabilities drill down deeper than before, giving creators the ability to see how often their tracks are getting plays via algorithmic discovery features like “related tracks,” artist stations and “The Upload,” which is SoundCloud’s internal music feed.

 

SoundCloud’s ongoing challenge has been its ability to monetize music, and it almost went bankrupt in August as a result, saving itself by laying off hundreds of employees, getting a new CEO and getting an injection of cash.

 

Despite all these efforts to save itself, it has failed to capitalize on what built the entire platform: the success of SoundCloud Rap. Last month, Billboard announced that, starting in 2018, ad-supported streaming services including SoundCloud and YouTube will not carry the same weight as paid services in terms of chart rankings.

 

And SoundCloud also found the process of converting free subscribers to paying subscribers with SoundCloud Go.

 

Still, analysts agree that improving analytics is a good first step to being more competitive in a marketplace being overtaken by subscription music services. It will at least encourage music creators, who are the strongest part of the platform. The move could also help SoundCloud gain more influence as a distributor.