Stop, Collaborate And Listen - The Future Of Music Streaming

22/03/2017 14:47 GMT | Updated 04/03/2018 10:12 GMT

From watching the latest blockbuster via Netflix or Amazon Prime to creating the perfect party playlist with Spotify or Apple Music, it's safe to say we're now in a streaming-first world. According to the IFPI Global Music Report, 2016 saw a jaw-dropping 93% increase in Americans using services such as Spotify and music streaming revenues increase by 45.2%. Thanks to streaming, digital has now overtaken physical sales. But with all this change happening, it seems that the traditional labels - Universal, Sony and Warner music groups (aka 'the big three') - are slow to react.

Big three take note: streaming providers are challenging your dominance and are prepared to take you on. It doesn't have to be do or die though; there is another option, namely for the newcomers to work alongside the established elite.

Collaboration seems by far the best option when you consider the positives. For the labels, the big three will want access to something that they currently don't have; unique data. It's well-known that Spotify, Apple Music and Tidal have been collating users' listening habits, locations and much more for years, with the addition of Amazon Music Unlimited from last year. The wealth of information music streaming services have is something of which the big three can only dream.

Next, the labels will want assurance that their content will not only be better targeted based on consumer behaviour, but will actually be consumed in the first place. With 20 million subscribers on Apple Music and over 100 million on Spotify - 50 million of which are premium users - it's safe to say that the streaming services are not short when it comes to consumer demand.

What's in it for Spotify and Apple?

The most obvious is the ability to offer exclusive content.

Streaming platforms are in a constant race to sign artists to exclusive deals, in the belief that such content encourages users to subscribe to their services. For example, Kanye West's Tidal exclusive 'The Life of Pablo' certainly proved the point, leading to subscriptions more than doubling on the platform from around 1 million to 2.5 million in the nine days after its release.

However, exclusives are causing huge issues across the industry, especially when it comes to Spotify.

In 2016, there were two prolific cases of the Swedish streaming service punishing artists that secured an Apple Music exclusive. Both Katy Perry and Frank Ocean witnessed Spotify's wrath, seeing their new tracks omitted from Spotify's biggest playlists; Today's Top Hits and New Music Friday, both of which have well over 10 million followers.

Whilst it didn't affect the success of Frank Ocean's 'Blond', experts say it did contribute to the flop that was Katy Perry's comeback single and US Olympic team anthem 'Rise'.

Of course there is no one magic solution, however there are a couple that I think are viable.

Rather than exclusives secured by individual artist, we could see exclusives secured by each label roster instead. This would keep streaming services from attacking artists for securing exclusives elsewhere, as they would have a fair distribution of exclusive content throughout the year. This could cut down on these forms of punishment, leading to greater revenue for both the platforms and the labels.

Another potential solution lies in Apple and Spotify moving from acting like broadcasters to becoming publishers too. Last year for example, Spotify launched its Spotify Sessions: Singles, a new singles section with exclusive covers of popular songs by an artist accompanying a new version of their own hit. Whilst not completely Spotify's own content, the fact it's branded to the point of exclusivity appeals to the platform, labels, artists and consumers all round. Content such as this provides the platform with exclusives to attract new and existing subscribers, in turn providing a wider pool of listeners to engage with the content, delivering bigger profits for labels and artists alike.

This all is just the beginning, as both Apple Music and Spotify have recently announced a move into the realms of Netflix by creating original video content. With series focusing on individual artists, from short documentaries to seeing two artists collaborating on their music, it seems the music services are aiming to become the MTVs of the streaming age. Not to mention we haven't even touched the sleeping giant Amazon and the power they could wield by adding music content to their prime memberships.

The financial advantage is clear. The stronger the collaboration, the better for artists, labels, platforms and, most importantly, consumers, but watch this space!