Music’s TV opportunity: connected TVs and advertising revenues

TV is having a breakout moment, or perhaps we should call it a revival. For years, traditional TV, delivered via cable or satellite, has mostly seen their subscriber numbers dropping. This is mainly an issue in North America, followed by Europe and Latin America, while Asia and Africa still see growth in this department. However, TV is making a comeback over the internet, mainly through connected, or smart, TVs. When you buy a new TV from Samsung, LG, Philips, etc. you get access to a whole line-up of TV channels for free, but supported by ads. Data shows that viewing via these channels is growing fast and that streaming video now mainly takes place via connected TV devices.

For now, it’s the usual suspects of news, sports, and classic shows that attract people to watch those ads and pay with their eyeballs (and data). Now, music is primed to take a chunk out of this new revenue pie.

It’s Vevo time

Looking at what makes for popular viewing on what’s called FAST (free ad-supported streaming television) services, shows that it’s mostly a lean-back experience. It seems to be the kind of TV people put on in the background as opposed to sitting down and watching their favourite show on Netflix, Disney+, Amazon Prime, etc. Music’s, somewhat problematic, playlist culture, offers a way to tap into that market as it’s very well suited to a leanback experience. As such, there’s been a rush to release music-related channels on FAST services. From jazz to EDM and from karaoke to audio, the most obvious candidate to benefit from the leanback viewing experience is perhaps Vevo. First, they partnered with interactive music video TV channel Xite, and they’ve recently pushed into the world of FASTs launching on various services. Of course, Vevo was founded by major labels, helping it get access to both content and the artists who create it.

Reach and advertising

Since people who tune into a channel on a FAST service watch ads, it’s important to maximize the time they spend on your channel. A leanback listening experience is great for this, because it allows people to tune in do something else and have the TV on in the background. Of course, music will never beat the reach of sports, but it’s got something else. In the words of Bill Durrant, quoted in a recent DigiDay article:

“We are an industry that seeks out consolidation because it makes our lives easier and reaching a large number of people easier. But when we’re not doing that, we need [media companies] that aren’t microscopically small and still reach people around a specific passion point in consumers’ minds. That’s still relevant in driving involvement and consideration for brands.”

That’s where music comes is. A company like Vevo is not small and there’s hardly a better passion point than music. Moreover, a lot of brands are already familiar with putting their money against musicians and artists (I know you’re thinking of Travis Scott right now).

The music video format is also suited for advertising breaks with the added bonus for advertisers of utilising their brand partnership to combine their ad-buy with a deeper connection and product placement.

The future is on TV

Even YouTube shows that viewers are migrating from mobile to the TV. With the added bonus that on TV those viewers watch around twice as long as on mobile. Furthermore, eMarketer is expecting ad spending on connected TVs to grow by 52.9% in 2021. So while many of us will focus on TikTok, Snapchat, and other social media there’s a strong argument that a large part of what will happen for music in the near future will happen on the big screen. Various services, from TV makers’ owned and operated platforms to, for example, PlutoTV, are drawing viewers into their TV screens again. Brands will always be attracted to music and the dedicated audiences that come with it. Equally interesting are the laidback listeners who are willing to engage their eyes and ears to advertising while they enjoy a music video.

Endlesss studio

Music’s non-static future as seen through music making app Endlesss

For those unfamiliar with Endlesss: it’s a collaborative music making app founded by musician Tim Exile that has been on the market as a (free) mobile app for a while already. In December, Endlesss launched its desktop app which I’ve now given a go and it provided a glimpse of how music is reconquering a quality it has lost in the age of the recording: participation.

Why Endlesss is different

Instead of writing songs, the app’s users are encouraged to make ‘jams’ which essentially are iterative loops of up to 8 bars. Each iteration is called a riff. When you add an instrument or effect to a riff, it creates a new riff inside your jam which then plays as a loop. The audio keeps playing, the interface keeps staring at you, encouraging you to keep jamming.

Endlesss’ desktop interface. Instrument selection at the left. At the top right, you can see the visual representation of the riffs in your jam, allowing you to go back a few steps.
Endlesss’ desktop interface. Instrument selection at the left. At the top right, you can see the visual representation of the riffs in your jam, allowing you to go back a few steps.

The app is also social, allowing users to participate in jams with others or just to listen in and explore riffs. There are prominent public jams that everyone can participate in as well as invite-only ones. Some of these jams lead to users sharing interesting moments of the jams (riffs) to the community, which can then be remixed and used to kick off another jam. Pretty cool considering some of the app’s users are popular producers themselves (Imogen Heap and Ninja Tune co-founder Matt Black joined Endlesss founder Tim Exile for livestreamed jams last year).

Endlesss Jams have chat rooms for participants (or observers) of jams to share thoughts, tips, expertise, or coordinate the direction of the jam.
Jams have chat rooms for participants (or observers) of jams to share thoughts, tips, expertise, or coordinate the direction of the jam.

How Endlesss redefines music

The social dimension, culturally speaking, is Endlesss’ most important aspect, because it changes the default meaning of music. For people who are not creators, music is something you listen to. It’s the same every time you hear it and it doesn’t change. If a remix or a cover version is made, it’s considered as ‘less real’ than the ‘original version’ (which in some cases may just be the most famous version, but not the first recording).

These are new qualities of music – at least as a default – introduced by the age of recorded music and mass consumerism. Music has become less participatory in that you don’t need anyone to play or sing a song if you want to hear it. The fact that it’s a new quality also means that it’s not inherent to music, meaning we can use the power of our devices (now easily amplified by connected AI) to experience music in new ways.

In the case of Endlesss, that means music is not a song, but an iterative jam. It’s something that happens, that invites participation, and that changes over time (though a snapshot of each iteration remains on the platform as a riff).

The age of non-static

This trend extends way beyond Endlesss and goes decades back to ‘affordable’ drum computers and samplers sparking the foundations of today’s most popular genres: house and hiphop. Then we got the rapid interchange of ideas and remixes enabled by Soundcloud which enshrined the platform’s cultural influence into genre names such as cloud rap. Outside of music, internet meme culture evolved through remixes and iteration, providing a non-linear visual culture detached from the channels of mass media and behaving according to the network reality of the internet.

They don't know where this song was originally sampled from People Line art Cartoon Text Head Arm Child Standing Human Organism
A recent example of a highly participatory meme format called They Don’t Know (and originally I Wish I Was At Home).

For the connection back to music, you only have to look at today’s hottest social media company, TikTok, which is completely based on remix culture. I’m not saying Endlesss is the TikTok of music production software; I’m saying that there’s a generation of people for whom the primary point of interaction with music is through a new set of interfaces that make music more than just its static, recorded self. It’s participatory and made to be engaging, like live music… but scalable.

The future is a robot K-Pop star

A couple of weeks ago Bas wrote about AI music stars. Discussions surrounding virtual stars focus mainly – what’s in a name – on the virtual. But what if they had an actual footing in the real world?

Step in Boston Dynamics. If you hadn’t heard of them yet, you’ll probably have seen this video over the past holiday period:

It’s great, it’s catchy, it’s eerie, it’s a feat of engineering.

Recently, Boston Dynamics switched ownership for the third time in the last 7 years. Hyundai Motor Group, a South Korean company, has acquired an 80% stake in the company from it’s previous owner SoftBankwho will keep the remaining 20% stakeTechcrunch’s Brian Heater summed up the need for the ownership switches succintly:

“Each owner served its function for the company’s bottom line — Google offered resources for exploration, SoftBank compelled it to productize and Hyundai will deliver the sort of engineering and manufacturing know-how required to scale up its products.”

The whole idea, it seems, is to be able to utilise Hyundai’s robotic production lines to step up the commercial path to profitability for these types of robots. Currently, Spot costs around $75,000. Of course, Spot looks cool on YouTube videos but it’s not really much more than a walking camera. With Hyundai, development could move much faster than before. And the question arises: what could robots do that will help propel them into the mainstream?

Back in 2019, a couple of South Korean students landed a little bit of internet fame with a set of robots they developed that mimicked well-known dances by members of BTS.

There isn’t a lot in the world right now that has more pop-cultural clout than BTS and K-Pop in general is in a strong moment. And BTS has been experimenting with creating experiences that allow their fans to experience something virtual in an offline real-life environment. Their pop-up showcase launched in Seoul last November was, according to Big Hit Entertainmenta preview of the online store, which is available in the Weverse app (both the pop-up showcase and the online store are available until 24 January if you’re keen). The South Korean connection makes a collaboration between Hyundai, Boston Dynamics and a K-Pop band like BTS not unimaginable. What would it look like?

  • Avatar-like robots that can act like BTS band members, or perhaps even start their own idol-type group.
  • It could be as simple as making the robots a part of the band, added in first instance as a kind of dance crew.
  • More interesting perhaps than matching the robots to a real-life group such as BTS is to match them to a mixed real-life & virtual idol group such as Aespa. In that case, the robots can truly become an extension of the virtual domain in the real world.

None of this will probably happen soon, but it does suddenly feel a lot closer. Virtual and real-life actors continue to mingle as fans experience music as much online as offline. Adding robots into that mix could be a way to bridge worlds. Of course, it can be a creepy experience. Where BTS can hardly do anything wrong, both offline and online, Aespa is much more divisive. Robots look cute when they’re doing some rock ‘n roll dances, but different responses will be evoked if we interact with them directly and ascribe them more anthropomorphic qualities.

What to watch out for in 2021: scarcity models, return to live, and sustainability

MUSIC x focuses on long-term thinking about music & surrounding industries, so instead of looking back at the year we’re taking a look at trends we expect to be influential in the coming months with regards to tech, the pandemic, and sustainability. Here’s what to watch out for in 2021.

This article is jointly written by Bas Grasmayer and Maarten Walraven-Freeling.

Tech: Scarcity

Music was once a scarce good; the only way to experience it was live. Throughout the twentieth century technological developments have driven music from scarce to ubiquitous:

  • The inventions related to recorded sound go back to the late-nineteenth century and the patent for the first gramophone disc stems from 1887. It wasn’t until the 1920s that recording techniques changed to make it easier to record music and this helped the spread of music beyond the live experience. It also spurred on the music industry as we know it today.
  • Moreover, the 1920s saw the advent of radio which brought recorded music into most homes. Not only did this broaden the scope of the audience for music, the medium also influenced the format of music itself and the popularity of it and its performers. Fan culture was born.
  • Of course, radio was thought to kill the phonograph industry. But it didn’t. The equipment used for radio broadcast helped to improve recording standards for music and with it the sale of records which doubled from around 100 million in 1921 to 200 million in 1929. 
  • We jump to the 1950s and the rise of television and film. New opportunities first and foremost for composers and musicians to find new revenue streams. But, of course, this new medium was thought to kill the old radio industry. Again, it didn’t. Fan culture got a massive boost.
  • The trend continued into the broader acceptance of video and the rise of MTV in the 1980sVideo killed the radio star may be a popular song, but it didn’t happen. The age of the CD broke and recorded music industry revenues grew astronomically. More people got access to more and more music. 
  • 1999, Napster. The internet did actually nearly kill the recorded music industry. Suddenly, all music was available for free at everyone’s keyboard-fingertips. The response? All bets on ubiquity: From the failed early experiments of the major labels through YouTube to Spotify. Music is everywhere and we, the listener and fan, expect to have it all, always. 
  • For more than 100 years the music industry has been on a wave towards ubiquity with technological innovations as a catalyst forever thought to do more harm than good. Moving into the third decade of the twenty-first century, in order to maintain growth, we’ll need to jump on the scarcity wave.

Where to find scarcity?

How many people, publications, musicians, labels, etc. do you directly support? How many in 2018? How many right now? It’s likely you support a few and that this number has grown in the past three years. To keep you supporting you’re usually given access to exclusive content. In other words, exclusive content = stickiness. 

This year, the virtual Music Tectonics conference provided a couple of days of being online together with some of the frontrunners in music and tech and you would have been forgiven if you came away thinking direct-to-fan is what everybody does. This isn’t true yet, but it has grown significantly in 2020. Three things to keep an eye on:

Equity investment

From major players such as BTS’ label Big Hit Entertainment going public and the ARMY taking a stake in their own fandom to something like Bumper Collective which allows fans to buy a stake in the future royalties of their favourite artists’ music. This investment idea – and subsequently the idea behind all the major catalogue acquisitions of 2020 – comes from the belief that the music streaming economy will grow. More and more people will become a part of the music industry of ubiquity, but that also provides opportunities around the scarcity of ownership. 

Non-fungible tokens

In our recent update on blockchain in 2020 we dove into so-called ‘NFTs’. One week later, a digital artwork by Beeple sold for $777,777 on Nifty Gateway, a platform that makes it possible to own digital goods, making them scarce again. Days later, rapper Lil Yachty sold a digital collectible for $16,050 through the same platform. While earlier auctioned collectibles relied on being physical, such as the infamous single-copy Wu-Tang Clan album purchased by Martin Shkreli (the story of which is being turned into a movie on Netflix), the phenomenon has now gone digital.

Gated content

When Cardi B signed up to OnlyFans earlier this year, she announced it would be a place for only her and her fans. While doing stuff out in the open may get you fans and makes it easy for people to spread the word, gating content allows fans to feel like they’re accessing or are part of something special and helps the artist feel like they’re talking to their ‘true fans’. Cardi B and OnlyFans are far from the only examples. Membership models are rising in popularity through Patreon, Substack, and good old YouTube, among many others. If 2020 didn’t do so already, 2021 will see membership access models for artists go mainstream.

Corona: live/stream

Andrea and Virginia Bocelli during Believe in Christmas
Andrea Bocelli’s Believe in Christmas livestream

The pandemic and the enforced lockdowns have accelerated many changes that were already bubbling right underneath the surface of the music industry for years. None of these accelerations went faster than with livestreaming. While the live music industry was decimated, livestreaming took centre stage. At first most everything was free and poorly produced but that thankfully changed and we’re now faced with ticketed events of high production value from major artists like Dua LipaBillie Eilish and BTS. Similarly, there are artists who started going live often with good productions and on a subscription basis (exhibit A being Melissa Etheridge) leaning hard into their superfans. Meanwhile, the return to live seems to creep further into 2021 as we flow from lockdown to lockdown. With the vaccines, there will surely be live concerts as we head into the second half of 2021 but how will they be organised? Thus, the double-headed beast of live, streaming events and in-person events, is the trend coming through pandemic 2021

The livestream will develop into an ever more interactive medium, both for fans and artists. There will be more productions that will include elements like BTS’ geotagged lightstick, the ARMY BOMB, during their Bang Bang Con virtual concert. Similarly, the way Billie Eilish provided engagement even the day before the show and pulled up 500 fans during one song as they were watching from behind their screen will be further developed to enhance interactions between artist and audience. Once live music returns these livestream events will remain a staple of the touring artist. Take, as an example, the Genesis Reunion tour, postponed twice due to the pandemic and now scheduled to start in April 2021. Let’s imagine for a moment this tour will go ahead, but the band has no interest in touring beyond the UK and Ireland. One full month of touring and most of the world is left without an option to attend. They can decide to bring a full camera and production crew to one of their gigs and film the whole thing as is. The other option is to take one extra date, create something more interactive and bring that as a live event around the world. Instead of 18 months of touring the globe, the band can perform once and â€˜tour’ from one geofenced url to the next. This will be attractive to artists not eager to tour full time and to fans who are traditionally in geographical locations where most touring musicians don’t visit.

Pandemic, or even epidemic, in-person concerts will see new hygiene regimes enter the everyday vocabulary for concert- and festival-goers. We’ve reported before about the scientific trials taking place in Germany, the Netherlands, and Spain, among others. What these show is that a combination of rapid testing, staggered entry, mask-wearing, ventilation, and protocols pertaining to movement will become normal. You won’t have to decide whether you want to watch the support act, instead you’ll arrive at a very specific time to be able to enter a venue. Tickets will become just that little bit more expensive as the cost of the rapid test will be included in the price. It will be a long slog and hard work to put these types of events on and to attend them, perhaps also to perform them.

And, of course, tours could get cancelled. How the risk of cancellation will be attributed will be a spearpoint for 2021: artist, promotor, venue? What role will governments play? One of the reasons everything has been postponed is that this has deferred the losses that would have come from cancelling. At what point, however, will it become impossible to postpone a tour – again? As these risks become real as the year advances more governments will step in to make sure venues, promotors and artists alike will feel safe to plan events (Germany leading the way again). This type of risk deferral will look different for major artists and companies like Live Nation and AEG than for smaller artists and independent venues and promotors. The former rely on more long-term planning and have access to different types of funding (see AEG’s staff cuts and its owner’s loan). They will certainly be able to hold out one way or another until live and in-person events return. Smaller artists and independent venues will depend more heavily on support structures, both from governments and fundraising activities.

Sustainability: think local

European Commission Executive Vice-President for the European Green Deal, Frans Timmermans.

Will sustainability be on anyone’s priority list in 2021 as many feel they’re making up for lost time, and revenue? Hard to answer, but it absolutely should be as our environmental crises are of an order of magnitude disproportionate to one pandemic. No music on a dead planet, as they say. Before the pandemic broke out, climate and the environment in general had a lot of momentum as topics in popular culture. This was, in part, due to movements like Extinction Rebellion and Fridays For Future, the latter of which spawned movements of school kids protesting weekly in countless cities all over the world. The latter has largely moved their protests online, while also trying to figure out pandemic-friendly protests offline that can easily be amplified through social media. While this cultural force has become momentarily less visible, it’s ready to mobilize as soon as it’s possible again.

While you can find an overview of initiatives and resources regarding this topic on MUSIC x GREEN, what we think you should be watching out for next year is the following:

Regional collaboration between the music sector, government, and other industries.

In many countries, but more specifically cities, we’ve been seeing various levels of cooperation and coordination between the music sector and (local) governments & institutions. This can be over restrictions and limitations, corona-proofing venues, scientific experiments, layoffs & furloughing, or bureaucratic aspects like insurances and cancellation. This relation should be preserved coming out of the pandemic in order to drive positive change around music & sustainability.

A prime example of this is Massive Attack’s work on decarbonising live music and coming to the conclusion that the primary partner for this are cities, rather than promoters or venues, because it’s about transport infrastructure, power, and waste. For this type of innovation & problem-solving, live events can be useful trials (as we’ve highlighted before). This echoes some of the thoughts put forth by Shain Shapiro, founder of Sound Diplomacy. In a multi-part series, Shapiro points out new trends in localism such as the 15-minute city and the fact that the music sector is as organised as it’s even been. Those are two very important ingredients to actionable change. While change is also anticipated in other areas, such as more artists employing more circular models for their merchandise, 2021 will be a year of disruption with a local focus being an easy way to counter risks, and an important opportunity for bringing about sustainable change.

The decade of the virtual tour pass

Hands up if you’ve had to pivot to livestreaming this year. Many parts of the music ecosystem have made considerable investments of time and resources into livestreaming. Now, what’s going to happen to all that experience, expertise, and infrastructure when live music comes back at some point next year?

2020 has introduced us to a new era of fan culture. Virtual shows and other types of digital experiences have been normalized, opening up new sources of revenue for artists as well as new ways to keep fans engaged. Inevitably, tours will become hybrid phenomena with fans attaining a rich experience rather than being relegated to clips on Instagram and getting a few streamable singles thrown at them every so often. Artists will start taking fans on tour, digitally.

The virtual tour pass

It’s an idea so simple that I expect more than a handful of the companies who experimented with or pivoted towards livestreaming this year, will roll out a service for bands to allow them to sell passes for fans to join the tour and get access to the all the shows — something which may also be rolled up into a membership on Patreon.

A few years ago I was at a small party by a collective of internet culture researchers and artists. Due to the nature of their work, their network is spread over many cities with just enough critical mass locally in order to organise a gig. In order to not leave the bulk of their network out of the loop, they made sure to stream the party out to them while simultaneously streaming the remote attendees in. They were visible on a screen inside the venue and by logging into a special chatroom on your smartphone, you could interact with them through text (though making provocative gestures at the venue’s webcam also worked).

(I wrote about this event 3 years ago in my piece Postinternet Music â€” scroll down to Instreaming if you don’t get directed there straight away)

This concept of instreaming is something that we’ve also seen during online events this year. There will be a main stream that people can tune into on Twitch or YouTube and various Zoom-sessions where you can stream yourself partying in your room to other fans. Occasionally, fans get featured in the main stream with an effect somewhat similar to the kiss cam popular at sporting events in the US.

An example of a fan dancing in his room being featured in the livestream of Q-Dance Qonnect last spring.

When we go back to live, some artists may choose to start or close a tour with a virtual performance, either through livestreaming channels or an experience similar to Lil Nas X’s performance in Roblox or Travis Scott’s Fortnite gig. It could even be an exclusive for virtual tour pass holders. As I’ve pointed out in previous newsletters, these types of virtual environments are primarily known as games, but they also offer non-gaming experiences… so it’s not inconceivable that Fortnite might actually partner with a tour, allowing the fans to virtually experience every real-world gig as a livestream on its platform.

Other artists may go for something more personal and keep something of a diary through videos, text or drawings and include that in the virtual tour pass. In fact, I’m aware of startups with similar concepts as far back as 2009 that never really took off. What’s changed since then is that everyone now has smart phones, paying for digital media is normal, the social landscape has shifted towards video, and then there are all the shifts in consumer attitudes and behaviour created during the pandemic.

There will be tours again! If you’re active in livestreaming now: start thinking long-term. Where will this experience sit when live kicks up again? How can additional value be created for fans using this year’s investment of time and resources? How do you keep your fanbase connected beyond this challenging time and make it feel like a movement?

I’m looking forward to writing about all the cool stuff many of you will be pioneering.

Your own personal AI music star

Could virtual music stars reach millions of people without doing so through communal experiences? It’s something we’re bound to find out in the next decade.

Virtual stars are not a new thing. Vocaloid avatar Hatsune Miku has been around for over a decade and opened for Lady Gaga in 2014. Another type of avatars are virtual YouTubers who have been around for about half a decade. Arguably the most well-known avatar of that group, Kazuna AI, recently performed at Porter Robinson’s online Secret Sky Festival. Chinese streaming giant iQiyi’s research into virtual idols has shown that 64% of people aged 14 to 24 in the country follow one or more avatar stars.

Thus far, the music stars in this area of entertainment have followed a similar strategy to real-life pop stars: getting on a (virtual) stage and singing to many fans. An AI-powered chatbot named Xiaoice shows the potential for another approach.

Visitors view the Xiaoice booth at the World Artificial Intelligence Conference 2019 in Shanghai, Aug. 31, 2019. Chen Yuyu/People Visual

Xiaoice is a virtual assistant designed to keep users engaged by forming deep emotional connections to them. The result? Over 600 million people have tried the bot out over the past years with many of them becoming hyper-engaged. The company, spun off from Microsoft, estimates that “half the interactions with AI software that have taken place worldwide have been with Xiaoice.” The AI’s fans are 75% male and reading about some of the ways they describe interacting with her may remind one of the movie Her.

Xiaoice is a type of mass media to which each user feels a personal connection, because instead of one-to-many communication (like pop stars), the virtual friend is able to have one-to-one communication at scale, much like Siri and Alexa. The communication model it uses is hard to apply for a human being who can only do one thing in one place at one time, but with improvements in AI and the increasing virtualization of music the one-to-one model is easier to utilize by the music business.

I’m not aware of a one-to-one virtual music idol at scale (do leave a comment if you know of something), but I have no doubt that something like this will emerge over the next years, no doubt using channels like TikTok as part of a user acquisition funnel and becoming part of mainstream consciousness that way.

Interestingly, I think this discussion mimics one of the cultural discussions we are having around music right now as exhaustion sets in trying to attain higher streaming numbers for unsatisfactory incomes. So as musicians explore models beyond extracting small amounts of money from giant numbers of listeners — such as membership models like Patreon â€” we may see virtual idols mimic the cultural shift in music, but apply the dynamics at a scale that non-AI creators can’t employ.

As long as that doesn’t lead to a situation where AI idols start cannibalising the membership revenues of non-AI performers, that scale may not be an issue beyond the fact that the bargaining power may distort other markets that musicians rely on for income. While the next year’s theme will be a return to normal, the next decade will stretch and upend the meaning of normal.