At the end of 2014, more than 41m people globally were paying for music-streaming subscription services like Spotify and Deezer, according to industry body the IFPI. Since then, competition in the streaming world has only increased, from the debut of Apple Music to Jay-Z’s acquisition and relaunch of Tidal. In 2016, meanwhile, YouTube will take its YouTube Red subscription service – which includes music – beyond the US, while American firm Pandora will also cross the Atlantic
The headlines around this area are hogged by the important debate about how much musicians and songwriters earn from streaming, but as the streaming services intensify their competition to sign up music fans, their investment in new features should not be ignored. Here are some of the key trends.
The biggest buzzword around music streaming in 2015 has been ‘curation’ as the major services battle to be seen as more than simply 30m-song jukeboxes with a search bar attached. For most, the main plank in this strategy is an in-house team of editors creating and updating playlists based on certain genres, themes or activities. The most popular examples are increasingly powerful music-discovery channels: Spotify’s Afternoon Acoustic playlist has more than 1.7m followers, for example.
But these playlist collections go deep, niche and quirky – examples of the latter include Apple Music’s ‘Lads, Lads, Lads, Pints, Pints, Pints’ playlist (think Kasabian, Oasis, Ocean Colour Scene) and Google Play Music’s ‘Tea & Drake’ (“the soundtrack you would play if you were sitting down for a cup of tea with Drake”.
With playlists becoming an important way that music fans navigate the huge streaming catalogues, labels are catching on to the curation idea. All three major labels have their own branded teams making playlists for Spotify and Apple Music: THIS IS for Universal Music, Filtr for Sony Music and Topsify for Warner Music. Meanwhile, indie labels are creating their own umbrella playlists brand to compete, which will launch in early 2016.
The streaming services are keen to enlist musicians as curators, too. Apple Music has its Beats 1 live radio station, with shows devised by artists including St. Vincent, Josh Homme, Drake and Disclosure. Spotify has followed suit with a series of ‘In Residence’ radio-style shows with Jungle, Big Narstie and Tonga (the duo that includes The Streets’ Mike Skinner). Apple, for one, has framed the music-streaming market as a fight between humans – specifically, its human playlist curators – and the algorithms powering the music recommendations of rivals. “Algorithms are great but they’re very limited in what they can do as far as playing songs and playing a mood,” said Apple exec Jimmy Iovine in August.
Spotify is leading a pushback against that rhetoric, first by pointing to its own team of decidedly flesh-and-blood curators, but also by outlining how computer algorithms can still be valuable for anyone trying to discover new music. In July, the company launched a feature called Discover Weekly: a personalised playlist for each of its 75m users based on their listening habits, and those of other people like them. Once a week, a Spotify user’s Discover Weekly playlist is updated with 30 songs they may like.
“We wanted to make something that felt like your best friend making you a mixtape, labelled ‘music you should check out’, every single week,” said Spotify’s Matt Ogle, who worked on the feature, later describing the technology behind Discover Weekly as “an algorithm that makes playlists like a human” and which learned its craft from studying more than 2bn playlists created by Spotify users.
‘Machine learning’ looms large for all the main streaming services, as they evolve into much more than glorified search boxes. In May, Spotify added a feature called ‘Now’ that suggests playlists based on the time of day and habits of the listener. Apple Music’s main screen is called ‘For You’ and provides a similarly-personalised feed of music that it thinks matches the user’s tastes.
The benchmark of quality for a streaming service in 2015 is not about how many songs it has or which artist exclusives it has signed, but rather how well it understands each listener, and recommends music accordingly. It is no coincidence that the major services have all bought analytics companies to improve their smarts in this area: Spotify bought US firm The Echo Nest in March 2014; Apple bought British startup Semetric in January 2015, and Pandora snapped up US firm Next Big Sound in May.
As competition heats up in the market, there has been speculation that the big services will start a war of exclusivity, flinging cash at major artists to secure their latest albums while keeping them away from rivals. Thus far, such exclusives have tended to be short-lived: one service might get a new album a week before the rest, but artists have rightfully been wary of throwing in their lot with a single platform, and alienating fans who pay for rivals.
There are other kinds of exclusives though. Every streaming service regularly records live sessions and makes them available, for example. Tidal has experimented with exclusive video streams of gigs by artists including Coldplay and Prince. Amazon has gone further and commissioned its own exclusive albums: a collection of children’s songs by Lisa Loeb and an Indie For The Holidays Christmas compilation, for example. Meanwhile, Spotify has worked with Tiesto and Ellie Goulding to create exclusive tracks for its ‘Running’ feature, where music adapts its tempo to the pace of the listener.
As Tidal’s moves show, video is becoming part of the streaming picture for services that traditionally focused on audio, with the boundaries blurring between the likes of Spotify and Deezer on one side, and YouTube and Vevo on the other. The Spotify app now has a ‘Watch’ section offering shortform videos from a range of creators drawn from YouTube, with plans to commission original shows based on music and musicians. From the other side of the narrowing divide, YouTube’s new YouTube Red $9.99-a-month subscription service will include streaming music as well as original shows from YouTubers like PewDiePie.
On the audio front, there is also a move by several services to become more radio-like in terms of incorporating spoken-word content. Both Spotify and Deezer have added libraries of podcasts to their services, while the latter recently struck a deal to offer live football commentary to its users in several European countries. In the US, Pandora has become the exclusive streaming partner for the second series of podcast Serial, too.
Perhaps the most interesting trend in music-streaming going into 2016, though, is the way these services want to help artists communicate with and sell to their fans directly. In Apple Music’s case, this takes the form of its Apple Connect feature, a blend of SoundCloud, Facebook/Twitter and YouTube where artists can post tracks, videos, photos and status updates that appear in the Connect feeds of fans following their profiles. The main problem so far is that few artists are using it as enthusiastically as those other services.
Other streaming services are focusing on connecting artists with their keenest fans to provide offers. In the US, Rhapsody has worked with technology firm BandPage to push-notify ‘superfans’ about merchandise and experiences – from backstage access to Skype guitar lessons – from their favourite bands. The simple (if technically difficult until recently) idea of identifying the biggest fans of an artist and asking if they want to buy tickets for an upcoming gig near them is also showing potential for the streaming services – not least as they try to persuade artists that they can boost their incomes beyond the royalties paid out for streams.
Spotify has worked with artists including Foo Fighters, Disclosure and Elbow’s Guy Garvey to email their keenest fans on its service with ticket pre-sale offers. It also recently deepened its partnership with British firm Songkick to provide users with a feed of upcoming concerts by artists who they’ve streamed, with links to buy tickets. Pandora, meanwhile, recently paid $450m for ticketing firm Ticketfly, with similar ambitions to link listening and ticket buying.
If there’s a central trend to all this, it’s the emerging importance of the big data being generated by music-streaming – according to industry body the BPI, Brits streamed 14.8bn songs in 2014, but another 11.8bn in the first six months of 2015 alone. Every stream helps Spotify, Apple Music and their rivals build up their profiles of individual users, and it’s those profiles that are key to much of the innovation in this market.
To put it another way: the better your music-streaming service understands your listening tastes and habits, the more likely it will be able to recommend you songs, artists or playlists that you’ll love; understand where best to spend its money when creating exclusive content – Netflix’s famously data-driven commissioning process may be a model here – and offer you tickets and merchandise without it feeling like spam advertising.
Just as importantly for their long-term prospects, the streaming services are hoping that all this, plus the analytics required to help them understand their audiences and plan tours, will persuade more artists that streaming’s value is about more than the micro-pennies it pays out for individuals streams of their work.
Stuart Dredge is contributing editor to Guardian Technology @stuartdredge