Features September 5, 2019

The music industry’s biggest threats are Netflix, podcasts, and sleep

The Australian music industry is undoubtedly back in growth following four straight years of a double-digit uptick, our industry surpassed half a billion dollars in revenues in 2018, but our biggest threat is Netflix, podcasts, and sleep.

Those were just a few of the key takeaways at Dan Rosen’s session at BIGSOUND today, Australian music: The state of play.

The ARIA CEO outlined the state of play across the music industry both in Australia and internationally on Day 3 of the Brisbane conference and festival today. He used the platform to stress the importance of a growth mindset.

“If I wanted to put it in a phrase of a great, Aussie band: We’re back in black,” he smiled.

“It’s a great feeling to be back in black. We have a growth mindset in this business now. There’s positivity and there’s optimism. When we came to BIGSOUND at the beginning of this decade it was a very different story, and it’s a wonderful thing to be in a growth business.

“[…] We’re a growth business, we’re a digital business, and we’re a business that matters,” he added.

Dan Rosen, artist-turned-CEO

Dan Rosen said that while Australians listen to 18.3 hours of music every week, music’s growth is now competing against some very loud and also very silent combatants.

Artists are now competing against Netflix and sleep, with the battlegrounds now being the phone, the car and the home speaker.

“Radio’s last stamp is the car. Can streaming services break into the car?,” Rosen asked. “That’s where a lot of people are listening to music. Unfortunately traffic is getting worse in our cities, that’s more time people are spending in the car.

“The other battleground is the home,” he continued. “[…] Australia’s been a little bit behind the US and the UK, this is a room of early adopters but the home speaker market hasn’t grown in Australia like it has [overseas] yet.”

Dan Rosen said the rise of the home speaker could in fact get older demographics on to streaming services however. “One of the battles for older people has been technology but they have no problem saying what they want to listen to.”

At Summit LA in 2017, Netflix CEO Reed Hastings was asked who his competitors were.

“He didn’t say Disney, he didn’t say HBO, he said ‘sleep. Sleep is my competitor’,” noted Rosen. “Which really is a metaphor to say I’m competing with minutes […] I’m competing for attention.”

Rosen said our best choice of weapon is to make music compelling.

“If we want to hang on to those 18.3 hours that people listen to music in Australia, we need to make sure that we’re working closely with tech companies, ensuring that music is still a key part of their strategies, and making compelling music. And selling that to Australian people and people around the world.”

Rosen added that governments, sponsors and tech companies are all looking at music as an opportunity at an increasing rate.

“It’s a great time to be in music. Wall Street’s investing in us, venture capitalists are investing in us […]. People are investing in copyrights, people are buying catalogues.”

“[…] We’re coming to the end of the decade in great style,” Rosen signed off. “We’ve gone from pessimism, to optimism, from decline into growth. We’ve gone from an old school industry to a digital industry, and we’re sexy again. So tell your parents it’s a good time to be in the music business.”

Other key takeaways from Dan Rosen’s session were:

– Radio is the most popular listening format, especially for over 35-year-olds. Meanwhile over 80% of those in the 16-24 demo listen to the radio – “I told Richard Kingsmill that this morning he was very excited,” Rosen quipped.

– Paid streaming is the next most popular listening format, and most popular for under 34-year-olds.

– Video streaming in the third most popular listening format.

– In Australia, Spotify and YouTube are fighting it out as the preferred music service. This is largely reflected globally in most territories except Sweden, AKA the birth place of Spotify.

– The impact of Amazon hasn’t been felt here in Australia yet.

– Australian artists have a growing opportunity for global careers.

– There has been a huge shift in the way copyright is perceived on a governmental level among thought leaders and policy makers in Australia.

– The second most popular method of discovery (after radio) is word of mouth.

– Australia’s music tastes are changing with hip hop becoming more popular among music fans, behind pop and rock.

– Australia’s music domestic business is worth approximately $1 billion between recording and publishing, but 20% of our business is via export at $195 million.

– In 10 years the global music business will be worth $130 billion.

This article originally appeared on The Industry Observer, which is now part of The Music Network.