But genre’s listeners slower to adapt than those of other music
By Nate Rau Tennessean.com 2/16/14
A year of massive growth in music streaming has created more conversation about how country labels provide music to leading streaming services such as Spotify or Beats Music.
It’s a central issue facing Music Row heading into this week’s crucial Country Radio Seminar in Nashville.
Streaming was one of the few components of the music industry to see growth in 2013, but country listeners have been much slower in adapting to the new technology.
As was the case when compact discs entered retail music in the 1980s and digital music emerged a decade ago, country fans have not switched to the latest listening format as quickly as fans of other genres. Only one country artist, Taylor Swift, was on Billboard’s year-end streaming chart, and only three country singles cracked the list of the top 75 streamed songs, according to Nielsen BDS data.
This has resulted in country labels taking varied approaches to music streaming services such as Spotify,Rhapsody and newcomer Beats.
At one end of the spectrum is Big Machine, Swift’s label, which chose to hold back from licensing her 2012 hit album, “Red,” to the streaming services for six months. Big Machine, led by President and CEO Scott Borchetta, has similarly held back other albums from the streaming services for a few months after their release to major music outlets such as Target, Wal-Mart and iTunes.
At the other end of the spectrum is Warner Music Nashville, which released country star Frankie Ballard’s album“Sunshine & Whiskey” on Spotify one week before it was available to those same traditional retailers — even as Ballard’s single, “Helluva Life,” surged up the country radio charts.
Streaming services are typically free or require a modest subscription fee to listen to music without commercials. Their royalty rates are also modest.
Radio still rules
While music streaming across all genres in 2013 increased 32 percent from the year before, traditional radio continues to dominate the country music industry.
“I’m sure that a major topic of conversation (at CRS) will be the balance between programmed radio and the streaming services,” said Sony Music Nashville Chairman and CEO Gary Overton.
An analysis of music streaming data for 2013 shows that, despite growing noticeably, country still lags behind the other genres.
Of the top 10,000 streamed songs last year, 28 percent were rock songs, 28 percent were hip-hop/R&B songs, 19 percent were pop songs and 8 percent were country songs, according to Nielsen data. But on traditional radio, country music outranks all other genres as the most popular format.
David Bakula, senior vice president for industry insights at Nielsen, views on-demand streaming totals, which do not include songs that go viral on YouTube and other video services, as the ideal metric for how a genre is performing on the major streaming services.
Despite the overall numbers, on-demand streaming numbers for 2013 do show tremendous growth for country music, Bakula said. The top 10 country songs in 2013 saw 96 percent more streams than the top 10 songs from the year before. But, just as in 2012, only four country songs cracked the top 100 songs on the on-demand streaming chart.
“With country, it’s so similar to the way it followed along the digital sales path,” Bakula said. “Country’s always been one of the slower genres to adopt digital purchasing, and it looks like it’s a little bit slower to adopt streaming. Certainly slower than pop, R&B and rock.”
While country music has improved its performance among the popular on-demand streaming services, royalty revenue has not compensated for revenue loss because of the decline in album sales. Streaming services typically pay fractions of a penny for a single play. By comparison, a single download on iTunes typically costs about $1.
This has led country record labels to take a wide variety of strategies for how they offer up their new releases to major streaming services. And the label family generating the most buzz regarding its streaming approach is Big Machine.
Multiple label executives told The Tennessean that 2014 will be a telltale year in finding out if other labels copy Big Machine’s approach with “Red.”
Borchetta said his strategy was based on two factors: the significant amount of work artists put into each album project and the large number of fans who still want to buy CDs or pay for “an album experience” through digital retailers such as iTunes.
“For the people who want to own this and have a piece of those artists, we want to protect those people and not just puke out everything we have the minute the album is released,” Borchetta said. “If you don’t care enough about the artist (and) you don’t really have a desire to own it or hear it in its entirety when it comes out, then just wait.
“I’m not McDonald’s. I’m not 1 billion served,” Borchetta said. “I’m much more in favor of building a Harley-Davidson or a Ferrari and take that 1 or 2 percent of the population who love what we do and super-serve them.”
Borchetta said the strategy of asking fans who want an “instant digital jukebox” to wait a few months for Big Machine records was the same as studio companies holding back their new movie releases for weeks or months before making them available to services such as Netflix.
“If you look at what’s happening to SoundScan (the album-sales chart compiled by Nielsen), we have done a huge disservice by providing every possible (streaming) outlet that turns its lights on with the music the instant it comes out,” he said. “It becomes less special.”
Big Machine’s approach is not mirrored by others. Warner streamed Ballard’s new album exclusively on Spotify one week before its full release to retailers. Ballard’s song “Helluva Life” from his “Sunshine & Whiskey” album still cracked the top 10 of the country radio airplay chart.
In an effort to make inroads with Music Row, Spotify hired industry veteran Copeland Isaacson as its Nashville label rep last year. Toby Keith and Joe Nichols are among the country artists who also have done early releases through Spotify.
“Our experience has been that it’s the labels wanting to work with us more and more and seeing the value in our services,” Isaacson said.
Jeremy Holley, senior vice president for consumer and interactive marketing at Warner Music Nashville, says there is a misconception that country music fans aren’t adopting new platforms and technologies.
“We’re seeing really good growth across the board, in terms of adoption of streaming services,” he said.
Holley said Warner noticed that Ballard’s streaming numbers grew after Spotify made him one of its top 10 country artists to watch.
“His streaming numbers were already so good that working with Spotify on this campaign was an easy decision to make.”
If history is any indication, country music is in store for continued gains in music streaming. Bakula noted that while country listeners were generally slower to buy music through online retailers, once they embraced services such as iTunes, the growth was dramatic.
Last year, Florida Georgia Line, another band in the Big Machine family, saw its hit “Cruise” become the most-downloaded song in country music history.
Similarly, the top country song for on-demand streaming in 2012, Luke Bryan’s “Drunk on You,” hit only No. 63 on the year-end chart. By comparison, “Cruise” finished at No. 17 last year.
“When you look at the four big genres — country, pop, hip-hop/R&B and rock — country has always been the trailer when it comes to digital conversion,” Bakula said. “That was the case with sales and it seems to be the case with streaming as well.
“But as is exactly the case in sales, once you break over, the accelerated growth that country sees is really pretty impressive.”
Streaming rankings for 2013
Percentage of top 10,000 streamed songs from each genre:
28 percent » Rock is tied with R&B and hip-hop for the top genre
19 percent » Pop
8 percent » Country
Tags: digital streaming