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Music Business News, November 8, 2017

Björk agreed to pair her new album with blockchain technology. Also, Snapchat announced an overhaul. And Google Assistant added Shazam-like song recognition feature.

 

Björk Accepting Cryptocurrency for Utopia

Björk announced she will accept cryptocurrencies as payment for her 10th studio album, Utopia, plus gift 100 AudioCoins as an incentive to fans with their purchase.

 

According to Forbes, this is a strong signal that blockchain is making its way into the music industry.

 

AudioCoin is a cryptocurrency created by British blockchain company Blockpool, whose goal is to “reward fans and artists simultaneously” by providing an alternative beyond streaming platforms like Spotify, Tidal and Apple Music. Fans will be able to buy Utopia with AudioCoin, Bitcoin, Litecoin and Dashcoin, thanks to a partnership between Blockpool and One Little Indian Records.

 

There has been a buzz surrounding blockchain technology and bitcoin for the past several years, and indications have been strong that these technologies are slowly making their way into the industry, changing the way the Internet works to purchase and stream music.

 

Björk is not the first well-known artist to embrace Blockchain. RAC released his last album, EGO on Ethereum this past summer, and Imogen Heap let users buy her single, “Tiny Human” using Ethereum’s cryptocurrency as well.

 

Kevin Bacon, CEO of Blockpool, explained, “People have done things with crypto and artists before, but this is the first time a global artist has done anything like this … While it will be interesting to see how the crypto community responds to this, Utopia is also a gateway for people to go into crypto for the first time. Björk is the best artist in the world we could imagine doing this.”

 

Since Björk announced her latest endeavor, the value of an AudioCoin has gone up threefold. But, how will this impact the music business?

 

According to Forbes’ Jesse Damiani, the answer lies in looking at the philosophy like the one behind Radiohead’s “pay what you want” digital release, In Rainbows ten years back. Radiohead’s effort was considered a revolutionary move, but Björk’s may have even more of an impact because blockchain’s philosophy is actualy tied into facilitating a personal relationship between fans and artists.

 

Analysts expect that blockchain will help facilitate a distribution system that gives fans and artists more power and freedom. In the blockchain universe, “the collective” is responsible for the growth of the system. If fans and artists are successful, the system grows and the value of the assets (cryptocurrency) goes up. Those who participate the most in the system have the ability to reap the most benefits.

 

Therefore, Björk’s embrace of blockchain “amplifies” the “legitimacy” of AudioCoin and may thus help drive growth of the network. She is encouraging more fans to enter the sphere, which may bring more artists over.

 

This model is in opposition to the one created by streaming companies: fans are charged a flat rate for using the services with no incentive for engaging; the streaming companies keep a large portion of the profits that are driven by artists’ music.

 

Björk’s strategy, according to Damiana, also indicates that an artist’s popularity can be used to drive their revenue. How AudioCoin feeds into this remains to be seen, but the cryptocurrency is not exclusive to Björk; it can be purchased on its own. The fact that its value has already increased triply in just a few days shows there is faith among users in the possibilities of the lager network. The results will begin to show themselves after the release of Utopia on November 24.

 

Damiana also pointed out that blockchain encourages fans and musicians to engage with each other in new ways. Björk’s endorsement of it shows eh believes it is part of an ongoing strategy instead of just a flash-in-the-pan concept. She has said that she intends to enable her fans to unlock new “crypto rewards” for continuing to engage with her and her music.

 

If AudioCoin succeeds as a new currency, it will help foster new relationships between fans and artists. It allows fans to “put their money where their mouth is” in a way that isn’t just hyper focused on one artist’s success. Everyone is an equal part of a larger community, and the system becomes a collective reflection of the bigger music industry.

 

Blockchain technology may also free up artists to offer multiple methods of engagement to their fans. Because there is no larger entity taking all the revenue, artists can provide experiences like concerts, album release parties, etc. at a lower cost. In an ideal scenario, fans will have more opportunities to engage directly with artists. In other words, blockchain may be able to turn of some of the most impactful aspects of Kickstarter and Indiegogo and turn them into opportunities for ongoing engagement.

 

Snapchat Getting a Major Overhaul

 

CEO of Snapchat’s overarching company, Evan Spiegel said on November 7 that the app will soon undergo a total redesign in order to make it appealing to a broader base of users.

 

Billboard reported the announcement.

 

Spiegel explained, “One thing that we have heard over the years is that Snapchat is difficult to understand or hard to use, and our team has been working on responding to this feedback … There is a strong likelihood that the redesign of our application will be disruptive to our business in the short term, and we don’t yet know how the behavior of our community will change when they begin to use our updated application. We’re willing to take that risk for what we believe are substantial long-term benefits to our business.”

 

Snapchat has been struggling for the past year. During the third quarter of last year, it added 4.5 million daily active users after adding 7 million during the previous quarter, a user growth rate of 48 percent. One year later, the rate is down to 18 percent.

 

Snapchat’s stock also dropped 20 percent on Tuesday before settling into a 16 percent drop due to the slowing of user growth and low quarterly revenue.

 

Snapchat’s revenue was up 62 percent from the same period last year, but still a great deal less than the $237 million that Wall Street predicted. Its stock also dropped more significantly than expected per share.

 

Spiegel claimed the slower revenue growth was due to the company’s switch to a different advertising platform, which had a lower CPM: “I am grateful that this transition is nearly behind us, and look forward to the many advantages our programmatic auction brings to our advertising business in terms of scale and ROI.”

 

Snapchat’s redesign will focus on better content discovery features. Spiegel indicated that “there is a big opportunity to surface some of this content on a personalized and more relevant way.” This will include improvements to Snapchat Stories that make them more customized to each user. Snapchat will also improve its creator community perks with distribution and monetization opportunities in 2018.

Despite this being the biggest overhaul of the platform since its launch, Spiegel said the app will continue to focus on being a way to communicate with friends.

The CEO admitted in October that his company has faced challenges since going public in March 2017: “One of the things I underestimated was how much more important communication becomes.”

Snapchat’s shares dropped in the months after its IPO, but the stock has rebounded slightly in the past few weeks.

 

Google Assistant Adding Song Recognition

 

Engadget reported that Google’s Assistant will soon include a Shazam-like song recognition feature.

 

Google/Android phone users will be able to ask Assistant, “What song is this?” and get the title and artist plus info including the title of the album, the date it was released and embedded links to Search, YouTube and Play to make it easier to get the song.

 

A future version of Assistant will have a “What’s this song” function in its carousel of queries for those who have voice as their preferred input. Google debuted its “always-on” music ID with the latest version of Pixel devices, which are able to compare tunes to a database of over 10,000 popular tracks. The Pixel 2 has this feature locally, but an internet connection will be necessary on other devices.

 

For the time being, this new song recognition feature will only be available in the U.S.