Thursday, September 24, 2020

Streaming panel calls for more innovation from DSPs and labels | Music Ally

Are the big music streaming services too similar to one another? And if so, how can they break out of that box to innovate and differentiate themselves?

A panel at Music Ally’s Sandbox Summit Global online conference yesterday, had some ideas. Angel Gambino, partner at venture development firm Prehype and until recently chief commercial officer at Napster, set the ball rolling.

“One of the things that I’m struck by from a consumer standpoint is that there isn’t so much differentiation between the streaming services from an experiential standpoint,” she said.

“One of the things that needs to happen is looking at not just expanding into other genres of programming – i.e. podcasts – but what can the DSPs and the wider ecosystem of startups, of people who are working in music/tech on a daily basis, what can we do from a product and service and experiential standpoint to help take playlisting and discovery to the next stage?”

Gambino suggested that finding “ways that we can make it easier for DSPs to partner with startups” would be one useful step, although it has its challenges.

“I think a lot of the DSPs have kinda become like the big labels or big media companies, in the challenge that innovators and creators have in engaging. A lot of artists know how difficult it can be to get into a playlist. Well, it’s very similar for people developing new applications that can help drive participation and consumption,” she said.

“We really need to make it easier for us to partner together so we can create new experiences that help drive new discovery, that help drive new consumption behaviours.”

The panel, which was moderated by MQA CEO Mike Jbara, also included Arun Sajjan, who heads content and licensing at Middle Eastern and North African streaming service Anghami. He talked about how the company has been trying to innovate in recent times.

“We started realising that there had to be some differentiation. What we started looking at was how could we be different from the other services that are available in the market?” he said. “We were the first ones to start livestreaming.”

Initially, that involved inviting artists to perform live via Anghami’s social channels – Instagram for example – in the early stages of the Covid-19 lockdown. However, since then it has explored something else: live, user-generated radio.

“We don’t have live radio channels, but we let the users become live radio personalities. They can get their friends on the platform to join him on his radio session. He can be a DJ, and then people can follow him and he can become his own little radio personality,” he said.

The live radio feature is explained here, and is similar to the model pioneered by US startup Stationhead. It’s the first time (as far as Music Ally is aware) that an established streaming service has explored it though.

“There are super-influencers, and we want the users to become those influencers, rather than just relying on our curators or AI for tastemaking, or even the artists for that matter. Every user is basically a tastemaker now,” said Sajjan.

The panel also discussed the value of music streaming as it relates to pricing: how much listeners are prepared to pay. If the streaming services are going to innovate more, do they also need to charge more to fund that?

“I do think value is important, but we have definitely gone in a direction, in my mind, where paying $12.99 a month for access to all of the music in the world is quite a value. So I do think where we’re looking now is around differentiation in experience,” said Sheryl Allen, who heads creator and programming product at SiriusXM and Pandora.

“I do think that’s where consumers are looking now, because music and podcasts have become in some ways a little too commoditised, and we need to move a little more into this direction of extending those new experiences.”

Gambino outlined the challenges. “I think most of us who have worked at DSPs, or worked closely with DSPs, know how extremely tight the margins are at the current price point,” she said.

“A lot of this innovation we’re talking about is difficult. It requires resources, people and technologies… and when the margins are so tight it’s very difficult to do.”

Gambino also warned that raising the price of a music streaming subscription is no easy task, and not just because we’re in a global pandemic with a looming threat of economic recessions around the world.

There’s also the question of subscription fatigue, she suggested: that as people add more subscriptions: video, music, meditation, games and so on, they may feel “well wait a minute, I was trying to ditch my cable bill to save some money and go over the top with these services, and when I look at what I’m paying for all these services, I’m paying more!”

“It’s going to be tough to increase prices even when you’re adding a lot more value and experiences and content… We have to recognise that if we can’t raise the prices and the margins aren’t changing any time soon, then it’s also going to be hard to continue to invest in these new differentiated services, or innovation as a whole.”

Sajjan pointed to another potentially inhibiting factor for streaming services: that the greater the innovation, the more likely a DSP is to need approval – and perhaps even a renegotiation or two – from its licensors.

“We are also dictated by the major labels in terms fo what we can do and what we can’t do. There’s are a lot of times when we are stuck,” he admitted.

That can apply to pricing too. In a region like the Middle East and North Africa, there’s a wide range in terms of the wealth of countries, but label deals can place restrictions on a service like Anghami’s ability to drop its subscription price too far in, say, Egypt.

“We are sometimes stifled by the dictation of the labels. But y’know, that’s the world we live in,” he said.

Gambino sees more mileage in an idea that’s been around throughout the digital era, and has occasionally been tried with varying levels of success: sandbox-style licences for startups.

“One of the things I think is kinda disappointing is that the labels have these embryonic digital innovation licences, and they call them different things, but they haven’t really gone anywhere and they’re complicated because you also have to get the publishers on board,” she said.

“But I think there is a room for a SoundCloud or even a BBC or some new startups to say ‘Hey, we’re gonna start from scratch, and these are the licensing terms up until an app gets a certain amount of consumption’.”

“So for example any artist can come on board, but it’s going to be basically free until we hit a certain number of streams, and then it’s going to trigger a whole new commercial model where people have to pay for access, whether that’s transactional, through virtual item sales, through subscription,” she continued.

“We have to create more of a sandbox both for the creators, whether that’s musicians or other creators, users who want to create new mixes, and we have to make it easier for them to be able to at least get up to a stage to see whether or not there’s any demand for these things.”

“It might be more DIY artists, more unsigned artists who are more willing to do this.. but I would love to see some of the bigger artists just saying ‘Hey, I personally want to be part of creating new music experiences. So I’m willing’ – whether it’s the label, the artist, the publisher, everyone who needs to come together – ‘I’m willing to put my music out there, but as soon as we see some good streaming consumption going on, that triggers all the normal licensing.”

Looking to the future, Sajjan suggested that bringing music streaming together with short-video platforms will be one fertile path for exploration.

“We will have to somehow look at a way we can integrate with these short-form video platforms. Video is gonna be key for us: we’re still looking at whether it’s going to be long-form video content or short-form, or an amalgamation of that,” he said.

Gambino sees bundling as key. “I think that there could be lots of opportunity to create more personalisation, and not just commercial bundles, but bundling of different types of content. It’ll be interesting to see how we can look at the consumer not just from our own specific lens, but their total streaming consumption, and ways that we can personalise those experiences around what they want,” she said.

“And we have to anticipate those wants and desires as well: a lot of people don’t tell you what they want, so you have to experiment. I hope we get to a stage where we’re experimenting more.”

Allen agreed. “Those bundles are really going to be key, and ensuring a seamless transition from listening in one place to listening in the next, to the next, and being able to personalise that audio content and those bundles,” she said.

“Whether someone wants to listen to news in the car, then walk in the door and listen to music, and then wake up in the morning and start hearing the latest sports. Tailoring those personalised bundles and also tailoring them to the space that the listener is in at the moment, is what we really need to start focusing on.”


Music Ally’s Sandbox Summit Global is taking place online this week, with two hours of talks and panels every day starting at 3pm BST (4pm CEST / 10am EDT / 7am PDT).

It’s broadcasting live on Zoom and – thanks to our sponsors Linkfire, Chartmetric and MQA – is completely free to access. You can see the agenda and register here.

Stuart Dredge


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