2013 was a pretty solid and important year for the music business. Some might argue that sales are continuing to decline, and labels are consolidating more and more by each day. But, that does NOT take away from the fact that there were some memorable and important events that occurred this year. Aside from MANY great music releases, here are some of the more talked about, important, and influential events from 2013!
The Jay-Z and Samsung Deal
One of the biggest events of 2013 was the Jay-Z’s new album “Magna Carta Holy Grail.” Not just the fact the Jay-Z released a new album, but more importantly is how he decided on releasing it. Jay-Z struck a groundbreaking deal with mobile company Samsung. His new album was made available for a free digital download exclusively for Samsung phone users downloading the JAY Z Magna Carta app on July 4, 2013, and released for retail sale on July 8, 2013. “Magna Carta Holy Grail” became available for free download on July 4, 12:01 a.m. EST, to the first one million users who own either a Samsung Galaxy S III, Samsung Galaxy S4, or Samsung Galaxy Note II.
According to Max Gale (Manager of Artist Development, Island Def Jam) the Jay-Z Samsung deal was “a groundbreaking music deal that made the record industry change the way sales are counted. Not bad for an ex-hustler from the Marcy Houses in Brooklyn.” The acclaim for Jay-Z’s bold business move has been unanimous thought the music industry. Rell Lafargue (Chief Operating Officer of Reservoir) said that ”Jay Z ushered in a new mode of record distribution and promotion with the Samsung-funded app release of Magna Carter Holy Grail. This could set a trend that furthers the transition away from traditional record label distribution deals for the next several years. Moving forward, we believe that both formats will continue carving out their own niches, and music fans will be better off for it.” Wendy Washington (Executive VP of artist and media development at RED/Sony Music) also publicly applauded Jay-Z for his innovative business decision. She said ”although brand partnerships are not new, the scope of this deal was remarkable. It’s a great example of how music companies are addressing the challenges of selling music with innovative, revenue-generating solutions and partnerships outside of the traditional route.”
The Summary Judgment ruling by Judge Cote in the ASCAP Rate Court Case
According to Matt Pincus (founder/CEO, Songs Music Publishing), “summary judgment ruling by Judge Cote in the ASCAP rate court was a threshold event in the music publishing business.” It was an unexpected move that affects rights holders of ASCAP songs. The ruling stated that rights holders of songs do not have the right to withdraw their digital rights from ASCAP, on a selective basis to get a better rate through negotiations with digital music providers. This affects and essentially breaks the back of the current performing rights collection system of the music business. According to Matt Pincus in this article from Billboard.biz, the ruling makes it “uneconomic for ASCAP and BMI to continue operating under the consent decree regulations they are subject to. It will change the entire system of performance royalties.”
Polarizing and Controversial Artists – They Kept Music in the Headlines.
There were a few artists in 2013 that made headlines due to their outrageous comments, outlandish performances, and their bold personalities. But no other artists had the impact that Miley Cyrus and Kanye West Had.
The Reemergence of Miley Cyrus in 2013 put a major music artist who was formerly a Disney princess in the homes of almost everyone in America. How? Because almost every news and media outlet continually mentioned her and what she was up to. Some of you might disagree with the general consensus that Miley’s cultural breakout in media and pop culture is an important and influential moment in the 2013 music business, but it is. People talking about her and buying her music caused a healthy spark in the music industry. It caused a widespread interest in a musician that was much needed today. According to Chris Vanderhook, (COO of Myspace) “after everyone picked their jaws off the floor, you realize it’s harder now more than ever for artists to gain awareness and penetrate. We’re living in an age of dominance — meaning you have to dominate to make real traction — and only the biggest superstars can break through. Miley created a fervor that proved she’s one of those superstars.”
Just like Miley Cyrus, Kanye West was all over the media. Not only for his polarizing and successful album “Yeezus,” but also for his antics and personality that was showcased through his controversial comments. Whether he was punching out a security guard, having a kid with 2013’s media queen Kim Kardashian, or telling reporters he was the most talented artist in the world, Kanye was everywhere. His album “Yeezus” came with mixed reviews, just like Miley’s “Bangerz” album has. You either heard media outlets like Rolling Stone Magazine declaring Yeezus “brilliant” and the declaring it #2 best album of 2013. Or you would read twitter post from his fans declaring his new album to be “complete garbage. ” According to Andy Cohn President/Publisher of The Fader), “It’s albums like “Yeezus” that whether you like it or not, keep music moving forward — and while not the most radio-friendly album by far, it definitely caused a passionate and extended conversation which is always a healthy thing for the industry.”
The Warner Music/Clear Channel Broadcast and Digital Royalties Deal
According to Ben Stauffer (Finance Director of Centricity Media), the Warner Music/Clear Channel broadcast deal is important because “a major label signing a deal to receive broadcast performance royalties (while sharing digital royalties) will positively impact Warner Music (and its recouped artists) by providing them with an additional income stream. However, it has big potential to shrink playlists even more and further impede the ability of indies to have their songs played.”
The Growth in the Digital Music Landscape
This year has seen a tremendous amount of growth in the digital music landscape, with a continued growth in digital sales, streaming, and new digital media platforms. This has helped empower more and more artists, by allowing them to be in control of the distribution, sales, and marketing of their music. According to Ted Kalo (Executive Director, musicFIRST), “the digital music landscape is going to present greater opportunities for artists and their ability to connect with fans like never before. A perfect example is Beyoncé dropping a digital album with no advance press and announcing it to her followers via Instagram. But it’s also going to present greater challenges than ever as music creators struggle to make the music economy work for all. We need to continue building a responsible, sustainable music ecosystem that rewards creativity instead of strip mining it. House Judiciary Chairman Bob Goodlatte has indicated that there will be Congressional hearings in 2014 focused on the music business. We will be watching carefully and working to make sure that music creators receive fair pay for their work whenever and wherever it is played.”
The Success and Dominance of Female Recording Artists
In a business that for years was predominantely dominated by men, the last few years have seen a continued trend in successful female recording artists come out and top the music charts. Artists like Miley Cyrus, Beyonce, Taylor Swift, Katy Perry, Haim, Rhianna, Lorde, and many more talented women dominated the music charts in 2013. Not only are they taking the sales charts by storm, but they are making amazing music as well that music journalists are eating up. Critics all over have rated music releases by female artists in 2013 as some of the years best music releases. According to Marcee Rondan (Senior VP of MSO) “we need to continue to support these artists, so that young girls with musical aspirations have role models.”
The Success and Dominance of Electronic/Dance based Music
Continuing the trend that was seen in 2012, Electronic and Dance based music has continued to grow and dominate the airwaves. It has also been a force to reckon with in pop culture and social media. Artists like Alex Claire, Daft Punk, Thundercat, Disclosure, Avici, and many more have been on the cutting edge of pop culture and social trends in 2013.
According to Julien Mitelberg (CEO of Bandsintown and COO/co-founder of Cellfish), “it was interesting to witness the chain of events surrounding SFX Entertainment, including an acquisition spree that included Beatport, Fame House, Totem OneLove, and Paylogic. The subsequent IPO in June showed how electronic music has moved to the forefront of both business and pop culture in recent years. This was a turning point for the genre that will have lasting ramifications on the live music industry as a whole.” In addition, electronic music producers have broke into producing music for major recording artists looking for edgier music with a broader commercial appeal. Everyone is having major DJ’s do remix’s of some of their songs, which these special mixes usually end up being the most loved by fans.
Artists Against Spotify
Many major recording artists spoke out against streaming giant Spotify for their controversial low royalty payments. This has been a major debate throughout 2013, and will probably continue through most of 2014. Major recording artists like Thom Yorke of Radiohead and Atoms for Peace, have come forward and made the fight against Spotify high profile. According to Tom Gimbel (General Manager of Austin City Limits), “music fans appear to want the streaming services and many are willing to pay for it, but can the business model produce meaningful revenue that will make its way to the musicians who are creating the art? If artists cannot earn a living, who’s going to make the music?” Pretty strong point that I continue to try to explain to numerous music fans who still illegally download music, and refuse to purchase it anymore due to the success of subscription streaming sites like Spotify and Pandora. Pandora has come into some of it’s own controversy. In 2013, Pandora sought out legislation to reduce royalty payments for rights holders. 2013 saw streaming services become more widespread, but unfortunately there has not been a fair balance in offering artists compensation in this new business model. According to Lauretta Charlton (Publicist for Joe’s Pub), “Outspoken artists like Thom Yorke and David Byrne can bemoan services like Spotify all they want, but the reality is most of us are not consuming music the way we used to. We have to adapt, and we have to find a way to do it fairly. Reducing royalty payments is not the way to go.”
Adding YouTube Views to Billboard Hot 100 Chart
In 2013, the Billboard hot 100 added Youtube views to their chart metric numbers when accounting for artist’s weekly figures. According to Joe Riccitelli (Executive VP/GM, RCA Records), “Adding in YouTube streams into the formula made a big difference for artists, especially those who may not have to have a major label pushing. It completely changed the strategies on a No. 1 Hot 100 campaign.” Joe Riccitelli is by far not the only industry executive to praise the industry’s decision to incorporate YouTube views in the Hot 100 charts. Caesic Brox (Chief Marketing and Financial Officer, Raleighwood Records) said, “Billboard’s decision to add streaming to the way it calculates the Hot 100 has had a significant impact on the business of music. Coupled with the services that have popped up to enforce IP rights on streaming videos, marketers are now further incentivized to create multi-platform campaigns and fully embrace YouTube as a revenue generating platform.” Although traditional music sales are down, the demand for music is not. It is actually in demand at a higher level than it ever was. Fans just consume music differently today then they did in the past. Incorporating YouTube views was long overdue.
The Launch of iTunes Radio
Apple must literally be on a mission to take over the world. iTunes is the biggest retail sales outlet for music today. Almost everyone has an iPhone. The iPad changed the way we surf the net. Everyone wants the newest iMac. Now we have iTunes Radio. iTunes Radio was long overdue. We all had heard about it for some time, and wondered what it would be like, and when it would actually launch. Well, in 2013 it finally did. iTunes Radio’s launch has confirmed what we all pretty much knew. With the success of on demand streaming services like Spotify, we all knew that access to streaming services would quickly dominate the consumer landscape, and greatly affect the power structure of the music business as we knew it. In regards to the launch of iTunes Radio, Robb McDaniels (Founder/CEO, INgrooves) said “it will change how we market, consume and monetize music for many years to come.” Although iTunes Radio came with much hype, it has not been met with the type of success and dominance that Apple products are usually expected to have. According to Dmitri Vietze (Founder/CEO, StoryAmp.com) “iTunes Radio launched and nobody noticed.”
It came and went…
Great part of the unique “failure” of Twitter Music is that dominate companies and platforms launching new services do not have the ability to monopolize new media anymore. It is fair game for anyone to come out with an innovative platform for fans to get music, and have a legitimate shot at success. According to Dimitri Vietze, “In other words, we learned that entrenched players do not have the advantage.”
Indie Artist Platforms
2013 showed that the Indie artist could have a chance at creating a viable music career in the new music business. Sites like Soundcloud, Reverbnation, CD Baby, TuneCore IndieGoGo, Kickstarter, and a slew of other sites independent musicians can showcase and sell their music, engage with fans, and raise funding without the support of major corporate labels.
And Then There Were 3
2013 saw the continued reshaping of music business, with major record labels merging, and buying one another. Now the 3 major labels are:
- Universal – which bought EMI (parent company of Capitol, Virgin, and more.)
- Warner Music Group – They bought Parlophone
Live Streaming is a form of media streaming that refers to content delivered live over the Internet. It requires a camera for the media, an encoder to digitize the content, a media publisher, and a the use of a content delivery network in order to distribute and deliver the content the end users. 2013 saw the increase and popularity in bands, musicians, and other types of artists media being streamed live online directly to fans. According to Neda Azarfar (VP of communications, for Myspace) “It’s not necessarily a new concept, but it seemed as if any time more than 20 people got together this year, it was live streamed. Myspace started doing event livestreams in a bigger way this year, and I saw firsthand that people really do tune in and watch. A lot of people, actually. As a result, more brands and content owners are asking for this capability because they want to extend their offline events and expand their audience reach. I’d say that live streaming is at a pretty basic Phase 1 right now, but the interest and growth of the category make me think we’ll see people layering more interesting and interactive elements on top of the streams in 2014.”
Just like in all years past, 2013 had its share of both good and bad moments. The theme I continued to notice in 2013 is the music business continuing to evolve into a new business driven by social media and digital media platforms, indie artists, and fans as hungry as ever for good music. Any events you feel I might have missed? I would love to hear some additional events YOU think were important to you from 2013. I can’t name them all…