Full stream ahead | Spotify, Qobuz, HDtracks and Mastered for iTunes
Are fans of core classical recordings ever going to be won over to digital downloads? Or is online streaming the future? The first of two reports on digital marketing.
Phillip Sommerich - 3 April 2014
UK recording industry body the BPI recently held a seminar on digital marketing of classical repertoire, which attracted 25 representatives from labels and distributors.
Katie Ferguson, who oversees that area for digital distributor The Orchard and was the speaker at that session, warned that they needed to do much more than offer releases as downloads.
‘Digital marketing is a broad term,’ she says. ‘It is a combination of offering your product on all of the services available ‒ iTunes, Amazon, Spotify ‒ and everything from Facebook and other social media to YouTube channels, websites and blogs, to make sure you are driving sales on all available platforms.’
Reliable statistics on how such activity affects classical sales is elusive but Ferguson argues that labels must go digital or die. ‘Physical sales of classical are decreasing at a slower pace than other genres but they are still decreasing and digital sales are increasing.’
Like many in the field, she believes streaming is the real digital driver, though. ‘Globally Spotify saw users jump from 11 million to 20 million in the year, with 5 million paying subscribers.’ The BPI recently announced that in the UK streaming income was up 41%, with subscriptions at £54.7m accounting for 71% and ad-supported services up 31% at £19m, while nascent Cloud-related sources such as Google, Apple and Amazon’s locker services contributing over £3m.
The Nordic countries are showing the way to the digital future, Ferguson says, pointing out that in the first half of last year in Sweden, recorded music revenues were up 12%, with 75% of all recorded music revenue coming from digital delivery and streaming accounting for 94% of that digital revenue.
Spotify and other streamers have had a bad press, mainly because of the minute amounts ‒ fractions of a cent per play ‒ they pay labels and artists.
The streamers argue that over the long term the revenue is reasonable. Ferguson points out that she spends £10 a month subscribing to Spotify. ‘I would have a hard time justifying spending £120 a year on downloading.’ It is the inertial consumption of streaming ‒ once you sign up, you tend to remain a subscriber ‒ versus the conscious buying decision that downloads and CDs require that many see as a crucial difference. And, they argue, if subscriber numbers continue to increase, those fractions of a cent will multiply into real income.
Ferguson points out another attraction of streaming for consumers. As a classically trained musician from Ohio who had aspirations to work in the pop sector but stayed in classical by joining Naxos ‒ and as a mother who wants a wide music education for her children ‒ she values being able to play music from a range of genres as often as she likes, for a fixed fee.
YouTube, she says, is a platform to watch ‒ because in many countries which do not have download services, it is the way many consumers listen to decide what to buy. Its revenue-sharing system, albeit imperfect at present, could attract labels.
Yet many classical labels shun the relatively low audio standards streamers offer, tailored to subscribers listening on mobile phones, tablet PCs or laptops. Ferguson says that is likely to change, in the same way that download standards increased as more classical collectors became buyers, with the Mastered for iTunes range focusing on classical releases and Linn’s Studio Master downloads, HDtracks and Qobuz finding a growing market.
But even labels that insist their future lies in the CD need to look at digital media for marketing, Ferguson insists.
Labels such as LSO Live and The Sixteen’s CORO put a lot of marketing effort into social media, possibly because they can build on the fan bases their associated ensembles already have. ‘If they send out an email blast it will generate activity, it is a real call to action,’ Ferguson says.
‘I don’t think there is any label that does not need to be active in social media. I recently encountered a label that did not have a Facebook page and they have missed out on a lot.’
She suggests an easy experiment for the diehards. Many have on their websites links to retailers of their CDs. ‘They could embed on their websites a “buy” link to a digital outlet such as iTunes or Amazon. It is a really easy thing to do.’
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