DJ Spins

The Past

For the past 30 years, the most important metric to measure a song's success was song sales, or for an album, album sales. The main reason is that when a label invests a significant budget in an artist, it views the artist as a business and needs to see a return on their investment. Any label you ask will tell you that the best way to drive song sales is getting the song played on radio. Radio was always, and still is, the best channel to introduce new music to the market.

The Present

Fast forward 30 years. Streaming services are taking over, growing rapidly, and attracting the younger, ideal audiences. Royalties paid by streaming services surpassed song sales revenues in 2014 and the trend is only growing. Less people buy music and more people rent music. Shouldn't the labels' metrics change according to the new music consumption habits? Of course they should, because the takeover of streaming music is inevitable.

While digital streaming revenue growth continues to offset the decline in digital album and track sales, the music industry still has the same problem it has wrestled with for over a decade: physical music's decline is outpacing digital's growth. - Billboard, July 2014

Then, how can a label strategically adjust itself to the new promotion opportunities that the digital streaming era has to offer? How can labels take advantage of the changing landscape and find new ways to increase revenues? The answer remains the same. Song spins. BUT, the media has changed to streaming services instead of traditional radio.

Labels should work very hard to get their songs placed in as many playlists as possible. Eventually, when people play more songs from a label's catalog, the label makes more money. How can labels achieve this?

  1. Approach trendsetters that have huge followings on platforms like Spotify, 8racks, Deezer, etc and introduce them to new songs with the hope that they add their songs to playlists. One addition to a high profile DJ playlist could result in millions of plays and increased royalty revenues.

  2. Make sure songs get played in online radio services. The more song spins on radio, the better the chances are that people get hooked to the song and add it to their private playlist on their favorite on-demand music service, which pays higher fees in royalties. The radio is still the best channel to introduce new songs to the market.

  3. In the streaming era, where users have their own customized radio station, labels have more airplay that's accessible. It's no longer about getting song spins for a very limited amount of their artists on radio. It's about doing a better job in targeting and helping their artists find relevant audiences in streaming services. And because it's digital, it's now possible to target songs to people according to their listening habits, which is a huge change.

For artists to become a profitable business, even 100K fans could be an amazing source of revenue. Streaming services allow labels, for the first time, to build small, medium and mega artists. They must avoid the current problem of having only successful artists or failures. It's now possible to help artists grow and meet their true potential in the market, even if they don't turn out to be a super mega artist.

The Future

The music industry is changing, and I believe many aspects of music promotion will change along with it. Labels that act smart and are the first movers in terms of new opportunities will dramatically increase their success and again see increased profits from investing in music.

How do you think music promotion will change over the next few years? I would love to hear your thoughts!