Michael Wolf: 'Gray Music' Set to Surpass Exclusive Streaming Tracks
October 25 2016 - 07:42PM
Dow Jones News
By Hannah Karp
Over the past year, music streaming services have been battling
for subscribers by offering exclusive access to releases by
big-name artists. Soon though, the content fight is likely to
shift.
The music industry's new driver will be the fans and the
lesser-known artists who create mixes, remixes, live recordings and
cover songs -- content collectively known as "gray music" -- argues
strategist Michael Wolf in a presentation at WSJDLive, The Wall
Street Journal's global tech conference.
Music services such as Spotify AB, Apple Inc.'s Apple Music and
rap star Jay Z's Tidal -- all of which charge about $10 a month for
unlimited, on-demand music -- are helping the music industry attain
its first significant growth in 17 years despite continuing
declines in CD and download sales.
These subscription services, which counted fewer than 100
million paying subscribers globally as of last year, have only
offered access to 30 million songs that they license from record
labels.
Alphabet Inc.'s free YouTube site, by contrast, draws more than
1 billion monthly users world-wide with the aid of more than 120
million pieces of gray musical content. That is in addition to the
standard 30 million songs it licenses from the big record labels,
according to Activate Inc., Mr. Wolf's consulting firm.
In total, about 700 million people a month listen to such gray
music. While paid-streaming services have so far largely avoided
offering gray music due in part to the difficulty of identifying
and compensating the artists who create it, such content "is likely
to become an important differentiator between services," Activate
estimates.
Exclusives won't drive subscription decisions for most
consumers, Activate's research shows, in part because they usually
last no more than a few weeks, after which record labels make them
widely available.
Subscription streaming is also likely to get a boost from
voice-activated speakers such as Amazon.com Inc.'s Echo, whose
users can subscribe to the music service Amazon Music Unlimited for
a discounted rate of $3.99 a month. Household penetration of smart
speakers is expected to increase 10-fold over the next five years,
Activate estimated.
Write to Hannah Karp at hannah.karp@wsj.com
(END) Dow Jones Newswires
October 25, 2016 19:27 ET (23:27 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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