Spotify reached 50 million paid subscribers. Also, Entrepreneur explored strategies that are bringing success to artists in the current industry. And Vevo announced it will start funding select music videos.
Spotify at 50 Million Paid Subscribers
Spotify announced on March 2 that it reached 50 million paid subscribers. According to VentureBeat, the company grew 25 percent in under six months, pulling further ahead of its biggest competitor, Apple Music.
With roots in Stockholm, it also announced a huge expansion in the U.S. last month. Spotify is one of Europe’s highest-valued venture-capital-backed startup companies and has made plans to move its office in New York City, now based in Midtown Manhattan, to the World Trade Center and add over 1,000 jobs.
Spotify had 40 million paid subscribers in September and launched in 2008.
Apple launched its music service less than two years ago and hit approximately 20 million subscribers in December.
Americans listened to 431 billion songs via on-demand streaming platforms including Spotify in 2016, said Nielsen in its year-end report.
Spotify has not seen a profit, even as it spends money to grow internationally and looks into going public.
Entrepreneur, on What Music Executives Can Learn from Artists
The music industry is “ripe with lessons for business leaders,” said Entrepreneur contributor Monica Zent.
Zent explained that the biggest lessons are in the need to collaborate, innovate and learn to personally engage with consumers in order to succeed in the industry.
Artists who collaborate with others are able to “create buzz, engage a broader audience and stay relevant.” Paul McCartney is a prime example, having collaborated regularly with other artists like Stevie Wonder, Michael Jackson, Rihanna and Kanye West from the 1980s to the present. Even after becoming iconic through his work with the Beatles (which involved songwriting collaboration with his band members), McCartney was able to build a long-lasting solo career, “evolving and growing his brand through collaboration.”
Executives both inside and outside the music industry who collaborate are able to reach new customers and “amplify” their brand.
Zent also pointed out that successful artists are always looking for “opportunities to innovate.” Artists and others get stuck when they fail to see an opportunity to reach new fans/customers or work around obstacles.
The music industry has been forced to innovate in the past decade with the decline in record and CD revenue. Sales have dropped from $18 billion in 2005 to under $6 billion in 2015. Musicians have led the way, adopting new revenue streams and leveraging technology in order to earn a living.
Radiohead made the news in 2007 when it let fans download the album In Rainbows via a “pay-what-you-want” business model. This created a new avenue for getting music to fans and helped circumvent piracy and big record labels. It also offered the band a feedback stream and allowed them to see which songs on their album resonated most with fans.
Executives and businesses that take advantage of technology and find new ways to innovate are better equipped to evolve than those who do neither of these things.
Zent added that personal engagement with audiences is also critical to succeeding in the current market: “Going to concerts and browsing record stores is no longer enough. Today’s listeners expect artists to engage with them more directly.” People need more than just a transaction; they need an “emotional connection” to a brand in order to become fans.
The band Train exhibits this idea and, since the ‘90s has created myriad ways to engage with their fans. The band recruits half a dozen musicians annually for a Caribbean cruise involving five days of music, wine tastings, karaoke and Q&A sessions. Pat Monahan, the lead singer, also communicates directly with fans through social media, podcasts and his own show on SiriusXM.
Zent explained, “It’s not just about your brand’s story; think about how your customer can be the hero in your story.”
Vevo Now Funding Music Videos
Vevo said it will now fund music videos, beginning with the single from Drake-endorsed British singer Jorja Smith, “Beautiful Little Fools.”
Music Week broke the news on Monday. In November, Vevo chose Smith as one of 2017’s “Dscvr Ones to Watch” artists.
Vevo’s foray into video funding is its biggest content change yet and goes alongside its recent commitment to support emerging, unsigned artists.
The video platform has worked with Smith since 2016 and premiered her second release, “A Prince” and the follow-up “Where Did I Go.”
The “Beautiful Little Fools” video was filmed at the Rivoli Ballroom and directed by Hector Dockrill (Donaeo and Ray BLK).
Senior manager, music and talent of Vevo, James Moodie said, “It was clear from the outset of meeting Jorjia that she has an amazing talent … It’s been a privilege to be part of her journey since, lending a hand to support her vision. It’s a great way to culminate everything we’ve achieved to date, including Dscvr Ones to Watch and Dscvr live in New York by supporting her not only with production, but also on a creative level to shoot the ‘Beautiful Little Fools’ video.”
An exclusive interview with Vevo’s Senior Vice President of creative content and programming, Tom Connaughton about the company’s decision to move into video funding is in the latest issue of Music Week.