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Well here’s a bit of good news. I know that most of us hate sitting through even the skippable 5 second pre-roll commercials that run before YouTube videos, let alone the 15 second ones that you have to watch all the way through. What’s even worse though, is having to watch a full 30 second ad that you can’t skip and seems to go on forever. It looks like YouTube now agrees with us as it recently stated that it will no longer allow 30 second un-skippable ads as of 2018.
The fact of the matter is that most people grow frustrated after about 10 seconds of an ad and leave for something else, especially if a timer tells them how much time is left. While that might be a factor, most observers feel that this decision isn’t based on users react to being held captive by an ad. They believe that the real reason that YouTube is taking these steps is because it’s fear of Facebook, which has recently revealed that it will soon only allow ads after a video has run for at least 30 seconds. That means no pre-roll ads, which I think will be a big selling point for users watching Facebook videos going forward.
That said, YouTube will still continue to have un-skippable ads, they just won’t be as long as 30 seconds. YouTube’s options for advertisers include ads that can only be skipped after five seconds, as well as un-skippable ads that run for 15 or 20 seconds. It also offers un-skippable bumper-style ads of up to six seconds.
Believe it or not, Google has said that those long video ads deliver results for advertisers even when users are able to skip the ads. Viewers who watched skippable ads all the way through, or for the full 30 seconds, were 23 times more likely to visit the advertiser’s channel and subscribe, and 10 times more likely to engage with it.
So even while they’ve been effective, the 30 second ad will soon become extinct on YouTube. 2018 can’t get here fast enough.
Here’s the Music Industry News Roundup for the week of February 17th, 2017. A lot went on in the streaming world, although nothing that you’d classify as major.. Let’s get into it.
Spotify just signed a big new lease in NYC and plans to add 1,000 jobs. The is a curious move given recent rumors about its IPO running aground. Could an acquisition be in the works?
Spotify also made a deal with the New York Times. You now get a free Spotify account with every Times digital subscription. That means the company should break 50 mil subscribers by the end of the year.
Apple Music is “well past 20 million” now. Of course, they didn’t say how much past. The last figure was estimated at 20.9 million paid subscribers.
SoundCloud lost 2 top executives. That’s not a good sign for streaming service that’s the backbone of most indie musicians.
Pandora is really trying hard to become a premium product with paying subscribers. It’s hoping to get to 9 million subs by the end of the year. It might be a futile effort as it has a lot going against it at the moment, not to mention fierce competition.
Facebook ads will now play automatically with audio. Ads used to be muted and you had the option to unmute if you wanted. Now we go to the dreaded autoplay with audio, so we’ll all have noisier news feeds. Why? Facebook says the mobile uses want it that way!?#!
Facebook also wants to steal music away from YouTube. It’s trying to make the labels an offer they can’t refuse.
It looks like big changes are coming to music videos either way. Industry analyst Mark Mulligan points out the many ways this sector is changing.
The movement to have radio pay music artists may be coming to a head. The hope is that the new administration will take the side of the artists instead of the radio industry so artists will finally get paid for airplay (only the songwriters get paid currently).
Prince’s music is back on most streaming services. There’s no reason to hold it back if the estate could be making money.
That’s the Music News Roundup of what went on in the music industry last week. Have a great week ahead!
It looked like Spotify’s strategy was to go public this year, but recent announcements have pretty much put that aside. The IPO (Initial Public Offering) market has changed recently, and tech companies can no longer be assured of the big paydays of just a few years ago. As a result it looks like the company’s new plan is to look for a buyer instead.
Now to be sure, Spotify has over $3 billion in revenue, but it also has been losing money as well. It currently has a lot of investors that want to cash out, and if an IPO is risky, then those investors are going to push for another way to get their money, which is through an acquisition.
Industry consultant Mark Mulligan thinks that a buyer probably won’t be Western. All the deep pocket companies like Amazon, Apple and Google already have their own services. Facebook is a possibility, but still not a good fit. Mulligan thinks that the only reason why Apple might be interested is to use up some of its off-shore cash reserves before it gets repatriated by the Trump administration, but that’s still a long shot. European companies don’t seem to be interested either.
That leaves Eastern companies and there are a number of them that could be potential suitors. China’s Tencent is already the streaming leader in the Asian market and the company has the money and the will for an acquisition. It would give the company an entrance into the West and immediately make it the 800 pound gorilla of music streaming.
There are a number of other Chinese companies also on Spotify’s radar. Alibaba, Dalian Wanda, and Baidu all have pockets deep enough to pull off an acquisition. Mulligan also suggests that a couple of telecommunications giants could also be in the running with SoftBank and India’s Reliance Communications being the most likely, although 21st Century Fox and Liberty Global may also see some synergy with Spotify in the fold.
One way or the other, it looks like Spotify is going to be going through some changes soon. How will that change its service? Probably not much actually. Until the license agreements with the major labels are renegotiated so the company can offer lower prices, things should still remain the same for some time to come.
Facebook may be the largest social network by far, but it appears to be suffering from a severe case of user fatigue in the United States. A recent study found that the satisfaction level of the platform has decreased across all age groups, with ages 35 to 44 decreasing the most.
Much of this has been traced back to the recent election, when more posts became political in nature. As a result, many users began to unfriend and unfollow in an effort to avoid the resulting online social confrontations that would happen. When that didn’t work well enough, many began to visit Facebook less and less, and now many have even fled the platform to other social networks.
Who’s the major beneficiary of this user fatigue? Instagram. One of the top 2 reasons why people use Facebook is to share photos and videos, and Instagram provides a perfect alternative.
The big question going forward is, “Will the number of negative posts decrease as we get further from the election, or will they maintain with the public so divided?” It’s too early to tell, but my guess is that we’re in a new world where the political differences are greater than ever, and Facebook posts will continue to reflect that.
That said, Facebook does have a very sophisticated algorithm that decides what you will see in your newsfeed. While there are reportedly thousands of factors involved in the algorithm, one of the major ones is what you tend to read or view. If you view politically oriented posts regularly, Facebook will gladly serve up more to you, so the simple way to avoid those types of posts is to stop reading them.
Unfortunately, most people don’t understand how the algorithm works and are inclined to react when they see something negative, so this will not work in in their or Facebook’s favor in the future, as more and more people flee to other platforms.
Here’s the Music Industry News Roundup for the week of February 3rd, 2017. This has been a big week for social media changes, but there are still some interesting record label-related developments. Let’s get into it.
Sony earned $1.2 billion from streaming last year. It still made more from physical sales, but not by much.
Streaming is changing music consumption, but is that good? Well, the measurements are no different, and this article doesn’t think they’re as fair and equal as they should be.
Investors are putting more money in the music business. That’s because they believe it’s finally coming back, and owning music publishing is an appreciating asset (which it’s always proven to be).
Vevo has now reached 100 million users. The music video network partially owned my Universal Music was seen by 43% of all viewers who watched YouTube in December. The funny thing is, most of them aren’t even aware that they’re watching it.
Speaking of Vevo, MBW thinks Facebook should poach it from YouTube. The article says that it could make approximately $32 billion a year if it did, which sounds a bit far-fetched to me. Still a good idea though.
Soundcloud’s getting deeper into advertising. Users don’t want to hear this, but the company is trying to increase revenue to look like a better acquisition target.
Snapchat is adding augmented reality. A new lense will allow users to identify environmental elements and superimpose digital effects on top. It’s still experimental so we won’t see it for a while, but it’s cool that it’s in development.
Hulu launched its virtual reality show On Stage. You need the service’s VR app in order to get the full effect, but it’s good to see the technology getting off the ground in music.
Facebook is going to start paying for videos. Both up front and revenue sharing from ads will make video content creators happy. It’s also a shot across the bow of YouTube.
People are upset that Instagram now does groups of photos. They feel it’s trying to become all things to all people and losing its focus.
Here’s the Music Industry News Roundup for the week of January 20th, 2017. We’re back in the swing of things as everyone hits the ground running in the new year. Here are some of the news highlights for the week.
There’s speculation that Sony Japan is tiring of the entertainment business and might now want to sell out. That means Sony Music and Sony/ATV publishing as well. Could the 3 major labels soon be down to 2?
It looks like Sirius XM is still interested in buying Pandora. But only at the right price. Pandora is in trouble, so that price is sure to be coming down to where Sirius likes it soon.
There are predictions that the US radio industry is going to change big time soon. Back to local and away from big station groups, as iHeartRadio is in big financial trouble that could start the change. This is a good thing.
The long term trends in radio don’t look good. Despite what you might read, fewer people are listening to radio, a figure that looks like it will only decrease. Is it because of the product (too many commercials) or the format? Could a big industry shakeup change the trend?
Norway shuts down its analog radio system. It’s trying to make a clean shift to digital. This is for national stations only though, as lots of independent analog stations will still stay on the air.
Facebook has decided to stop paying publishers for live videos. It seems like this was just a short term deal to establish the format and now it wants to put more emphasis on long-form videos instead. This is no-doubt because it will soon be inserting mid-roll ads after 20 seconds, so the longer the video, the better.
Apple is looking to produce TV content. Could this be Netflix/Amazon envy, or has it just lost confidence in the core product of Apple Music?
The hottest selling metal records of 2016 holds a surprise. Metallica holds 6 of the top 10 spots and is still selling physical product like crazy.
Music streaming now has more paying users than Netflix. Of course, Netflix is only one company, while the more than 100 million music streaming subscribers is across all the streaming networks world-wide.
10 virtual reality observations. Will it be the next big thing? It could be, but probably not in the way you think.
Content creators have been complaining about the fact that there’s no way to monetize their content on Facebook the way you can on YouTube. Those days look to be coming to an end, however, as industry insiders now say that Facebook will start testing mid-video ads soon. As with YouTube, the revenue from the ads will be shared with the content owner. The bad news is that the revenue split is the same as YouTube, with Facebook taking 45%, a figure that artists and labels feel is way too low.
The catch is that the viewer has to watch the video for 20 second before the ad runs. It will be interesting to see how many people abandon the video at that time. The length of the video must be at least 90 seconds long to be able to insert an ad.
Why, mid-video? Apparently that directive came from the top, as CEO Mark Zuckerberg hates pre-roll ads and forbid them from happening on Facebook videos.
This will again bring up the question of what exactly constitutes a “video view” on Facebook. Right now its any time a viewer watches a video for at least 3 seconds, even with the sound off or if she didn’t click on it. With the new 20 second metric, you can be sure that video views will be looked at differently in the future on the platform.
The good news here is the fact that Facebook will finally reward content creators with some revenue for sharing their work. The bad news is that the split is controversially low and will certainly be a major talking point in licensing discussions with labels and publishers.
Happy New Year, and here’s the first Music Industry News Roundup of the year for the week of January 6th, 2017. We’re just coming off a major holiday and things are slowly ramping back up. Let’s see what happened.
The Blackstone Group acquires SESAC. Just think about that for a second. A big investment group now owns a performing rights organization.
SoundExchange could lose a lot of revenue this year. The government collection agency is losing out thanks to direct deals with labels and publishers by Pandora
Chinese giant Alibaba is about to spend over $7 billion on entertainment content. Move over Apple, Google, Amazon and Spotify – you’ve got competition and it has deep pockets.
It looks like Facebook is getting close to their own version of Content ID. That means that content creators can finally get paid for their music and videos playing on the service. Word is that it won’t actually be released until the Spring though.
Indie labels claimed 35% of the market last year. Good news for DIY artists and labels not affiliated with majors, but this is based on rights ownership, not revenue.
A vinyl pressing plant is going out of business. It’s pretty hard to do in this market environment, but Canada Boy Vinyl can’t make a go of it.
YouTube lost it’s dominance to streaming music. People are now finding streaming networks way more convenient than the YouTube experience.
A full-time YouTuber shows how much money he makes. And of course he does it on YouTube. Doesn’t make all that much, but he’s not a very big channel either.
George Michael Best-Of Sales skyrocket. They improve by over 5,000% in the UK alone.
Speaking of the UK, the biggest album seller last year wasn’t a musical artist. It turns out it was a 56 year old game show host. Well, that’s probably the demo that still buys physical product.
That’s the Music News Roundup of what went on in the music industry last week. Have a great 2017!
It looks like you can expect a lot more from Facebook in 2017 in more ways than one. The company is advertising for an in-house composer to add to its in-house sound design team. According to the advert:
The in-house Music Composer role requires 10+ years of professional experience in the music industry, plus experience in ProTools and the ability to “work closely with a wide variety of sound artists”.
“CANDIDATES MUST HAVE EXCEPTIONAL COMPOSITION SKILLS AND MASTERY OF MODERN PRODUCTION TECHNIQUES. THE ROLE COMBINES MUSICAL RECORDING AND COMPOSITION CHALLENGES WITH PROJECT MANAGEMENT LEADERSHIP.”
The link turns out to be dead, which either suggests that the position is now filled, or that it was getting to much visibility. Facebook is under fire for still not having a way for artists, labels and publishers to get paid for songs and videos that are played on the network, so everyone is a little chagrined at the fact that the company is trying to develop what looks to be in-house production music first.
That said, rumors still persist that 2017 will be the year that FB finally puts their own version of YouTube’s Content ID in place, which will compensate creators when their works are played on the platform.
This is much more problematic than it sounds given the fact that Facebook measures video views much more liberally than YouTube, so potentially it will be paying out more as a result, even if the royalty rate is the same as YouTube. The royalty will undoubtedly be higher though, since the music industry views YouTube’s 45% cut way too high and out of line with the other delivery systems, so any license from the major labels or publishers will no doubt go beyond that rate.
That said, it should be interesting to see exactly what Facebook has in mind for its new composer in residence, and how the sound design team will be implemented.
Here’s the Music Industry News Roundup for the week of December 23rd, 2016. Surprisingly enough, there’s a lot of music business-related and social news this week, despite the Holiday season.
iHeart Radio is in big financial trouble. Radio is dying in general, and a few years ago when the hedge funds bought in they didn’t realize that fact. The company probably won’t change much because of the problems (at least in the short term) but the investors will take a haircut soon.
Apple Music is trying to become more than a streaming platform. It’s now more of a quasi-label, offering lots of promotion in addition to streaming. This interview with two Apple Music execs is revealing.
Not to be outdone, YouTube is quietly beefing up promotion for some artists as well. Not that it helps the indie artist much, but you can see where all this going. [subscription required]
There are indie artists making it on streaming alone though. Yes, it’s not only possible, but this article outline a number of indie artists in different countries with massive streaming numbers.
The VR revolution is here, but it has yet to break with consumers. Many think that this will change in 2017, but the consumer uptake so far is disappointing, and understandable.
Dance music hit a big speed bump in 2016. This article outlines 11 things that broke the hearts of EDM aficionados.
The album cycle is pretty much dying, with Drake the perfect example of the new singles paradigm. But playlisting plays a big part in streaming success as well, and this interview with Spotify’s Troy Carter is enlightening.
Streaming is changing music again, finally making the Long Tail concept viable. This Harvard Business Review article shows how streaming is turning the music industry into a singles business, and is killing the album. Oh, and more people are listening to music other than the hits along the way.
Streaming apps aren’t keeping pace, and user experience is the thing to concentrate on. Industry analyst Mark Mulligan makes a number of good points about music falling behind in engagement to non-music apps like Snapchat, Instagram and Buzzfeed.
Twitter is toast, according to one financial analyst. The company is experiencing plateaued growth and a brain drain, and the stock is expected to take a dive soon.
Finally, Facebook is correcting its metrics for ad reach, streaming reactions, Likes and Shares. It looks like the numbers we were seeing weren’t really true after all. If you advertise on Facebook, you should read this article before placing another ad.
That’s the Music News Roundup of what went on in the music industry last week. Let’s see what next week brings.