Streaming Economics

Been running around NYC for the past few days… don’t have a good reason why I’m here other than the good old “why not?”

Today I stopped by AWAL’s Northside Festival artist lounge in Williamsburg and got to hear a really enlightening panel by Will Page, Spotify’s Director of Economics.

He touched on a ton of truly fascinating points, looking at the music industry from a perspective of behavioral economics as it relates to streaming and contemporary digital strategy.

Firstly, Page was adamant that “catalogue” as a category of music was obsolete. The 18-month cutoff for new music, after which it becomes catalogue and ineligible for charts, was the product of the transition from vinyl to CD, in which people replacing their vinyl collection with new CDs drove up sales of old records and led to them outpacing new music on the charts.

But this makes no sense today, a transaction-based ruling in an era where music data is consumption-based. Page touched on the specific case of Imagine Dragons, whose streams of an album rose 177% in the 18 months after the first 18 months of its release.

He compared streaming-equivalent albums to “fax-equivalent emails” and deemed catalogue music a square peg in a round hole.

Then he transitioned to the next segment of the panel by declaring that it is much more prudent these days for an artist to be optimizing for audience rather than optimizing for streams.

This led into a data-driven examination of Tom Misch’s release strategy leading up to and following the recent release of his album Geography (an AWAL release). There was much comparison of demographics down to the percentage, and a discussion of the merits of the “drip-feeding” single release strategy to maximize fan engagement.

I liked what Page had to say about scaling independence, e.g. the possibilities for streaming services like Spotify to help an artist out via programmed playlist to get to a place where they don’t “need” them anymore, with fans having reached a critical mass of loyalty.

However I did have to agree with one of the question-askers during the Q&A afterwards, who expressed discomfort with the idea of maximizing fans instead of streams, given that other areas of the industry such as festival bookers, publicists, agents, and press still like to see those big streaming numbers.

In order for the fan-focused strategy to truly take precedence, the numbers would need to be given as much prominence by the service and importance by the industry as streaming numbers themselves.

Also, I am always slightly dissatisfied with the idea that tastemaker approval is necessitated for success and engagement. I’ve had a lot of experience that says otherwise…

But overall, it was a really enlightening afternoon, and the free tacos were really good.