with Stephen Hunt - Universal Music Australia, Managing Director of Technology, Media and Content
“Consumers will get what they want one way or another.”
Technology has triggered a dramatic evolution in the music industry. Downloading changed everything and conquering the challenges of change has kickstarted a furious period of growth. At first offering digital downloads of albums and singles didn’t lure the digitally-savvy, younger generation to return to paying for music. The industry needed something much more radical.
And it found it - the monthly subscription, unlimited streaming model. Spotify saw its potential first. Now Amazon Music, Apple Music and Google are just the major players in a whole new market. Using algorithms, these services are able to offer personalised recommendations based on a consumer’s listening habits. These services also offer a new way to promote new artists and music, and for listeners, a new cost-free way to discover them.
Global revenue grew by 8.1% in 2017 - marking the third consecutive year of market growth and one of the highest rates of growth since 1997, according to the IFPI’s annual Global Music Report.
“I think the learning there is that consumers will get what they want one way or another,” Hunt notes. “If you provide a great experience to them, they’re willing to pay for it. However, if you provide no experience to them, they’ll find it for nothing another way.
“Like all creators these days, music artists have had to become business-minded.”
While record labels and media companies had to evolve to be future fit, so did the artist. Today, an artist’s musical talent isn’t enough to guarantee success. While the music still comes first, an artist has to be business-minded or have a team around them looking at all other avenues and commercial opportunities.
“It’s very rare these days that you can just rely on being a good musician and think you’ll succeed,” Hunt observes.
“The successful musicians are business people. And they understand data. They’re strategic in mining all the information coming in, and are nimble and ready to adjust accordingly. If they see a spike in streaming in a particular country, they’re quick to take action and capitalise on the opportunity by launching a tour.”
Mining all the data available, savvy artists are able to see who their audience is and where they are; what songs they like; other artists they’re listening to and enjoying - in order to make better, more informed decisions, such as who to tour with.
“There’s no such thing as resting on your laurels.”
While Hunt foresees industry growth will continue for the next few years (at the very least), he believes another era of transformation is coming. And just like in most other industries, its forces will be technological. The three biggest for the music industry, he noted, are:
Artificial intelligence. This is both a tool and a threat. AI is used to mine data and can help record labels identify the best talent to sign, and perhaps produce better music with these artists, but it’s also a threat for the industry. Stephen explains, “at some point, a computer’s going to write a better song than a human. That’s a scary proposition for a business like ours, which exists to serve human creators.”
Blockchain. Yes, it’s still unproven, but it could be an opportunity to reduce cost and enable the industry as a whole to be more transparent and efficient in paying royalties. “It’s an opportunity for us to become more efficient, to be able to pay people in a timely manner, accurately and appropriately, with transparency,” Hunt notes.
Virtual reality (VR), Artificial Reality (AR) and Mixed Reality (MR). This is where Hunt sees the greatest opportunity for future growth. Universal Music Group (UMG), and many others in the industry, have already been investing heavily in creating in-depth visual media experiences - like holograms performing with a band at a live concert - in an effort to get ahead in the game and stay future fit. It’s early days, which means a period of ideas that don’t always have fantastic results. Yet. Hunt believes most hardware that has come out so far has been “largely disappointing”, but he is absolutely sure that a “phenomenal experience” is just a few years away.
Just as the music video changed the game in the ‘80s, Hunt sees reality technologies reinventing the music scene again, and he reckons that AR is the one with promise. “It’s leveraging the table in front of you or the tree that you’re walking past, and creating a visual experience out of that which hopefully mimics what you’re listening to and is synced to it,” he explains. So perhaps by wearing a certain type of hardware, your life becomes a film clip.”
Branching out is an opportunity to stay relevant and generate growth.
Amazon didn’t begin with Amazon Music. Nor did Google. Or Apple. Coca-Cola isn’t letting a downturn in soft drinks dampen its momentum. It’s into coconut water, vitamin water and energy drinks. Neither is Universal Music staying within its boundaries.
The company sees branching out into other media as a way to stay relevant and generate growth. Music is inherently linked to films, TV shows, podcasts and fashion. These are all opportunities. “It’s about being resilient and taking risks outside the space in order to innovate, adjust, adapt and grow,” Hunt comments.
Universal Music has built its own creative and media agencies. They’ve grown out from the “mothership” to expand the business’ potential to achieve growth from a wider environment. They have the advantage of access to UMG’s talent, exclusive data and content, but they’re not locked to work within the core business. They could work with a variety of brands in different mediums - never touching the music industry - and grow on their own. UMG even has a handprint in apparel with its Bravado fashion business, a full-service merchandising company that has evolved from strictly music merch and memorabilia, and now even incorporates brand management.
Without a thriving future generation there is no future.
Little companies are nimble. New companies even more so. And what they lack in experience and resources, they make up for in innovation. Helping these to develop keeps big companies in the loop. UMG is helping to develop the next generation of digital music-based start-ups through the launch of its global Accelerator Engagement Network, which has partnered with the University of Melbourne. The program not only provides entrepreneurs grant funding to get their idea off the ground, but access to mentorship, expertise, industry insights and deals, and a variety of tools. As Hunt explains, UMG is helping to break down the barriers and inspire this new wave of start-ups to come in.
What does Future Fit mean to Universal Music?
“As a business, we look at ourselves as becoming the media company of tomorrow. For us, that means being the best content creators and audience aggregators,” Hunt says.
What does being Future Fit mean to Stephen Hunt?
“Continuously questioning everything and staying focused on the future and how it evolves. I’m also constantly testing, learning and iterating. If I see something I want to try, I put it into practice.”