SIRI Sirius XM Holdings Inc

By Anne Steele 

Joel Shaffer usually listens to current pop stars like Drake, Kygo and Migos during his 30-minute commute to work outside Boston. But when he recently stumbled onto Nine Inch Nails' 1989 song "Head Like a Hole," he was hooked.

"This led me down a three-day, binge-listening rabbit hole of Nine Inch Nails and Spotify's suggestions on similar music," said the 29-year-old engineer for a medical-device company, who found the song thanks to Miley Cyrus's cover on the Netflix series "Black Mirror."

Older music is the biggest growth area in music streaming, according to Nielsen. Labels are looking to cash in on "catalog" tunes -- officially, songs released more than 18 months ago -- both from veteran artists and more recent acts whose earlier hits still have traction, while the streaming services are tapping nostalgia to broaden their subscriber bases to include people more interested in Led Zeppelin than in Billie Eilish.

Over the past 10 months, major services including Spotify Technology SA, Alphabet Inc.'s YouTube and Amazon have created "head of catalog" executive roles, charged with promoting older music in ways that engage listeners of all ages. Apple Music, part of Apple Inc., has had such a position for several years, as has Sirius XM Holdings Inc.'s Pandora, which has been expanding its catalog team.

Music companies say they are now able to pitch older music for some of Spotify's popular mood and genre playlists. The "Summer Road Trip" list, for instance, recently included songs from 1970s-born bands the Cure and the Doobie Brothers alongside more recent hits from Lil Nas X and Meduza. "The Cookout" list mingles recent hits by Childish Gambino and Drake with oldies from Bill Withers and Kool & the Gang.

Streaming is more tilted toward catalog than sales have ever been, according to Nielsen Music analyst David Bakula. Retailers -- both online and physical -- have tended to display new material front and center, and sales of tracks and albums historically have been around half catalog and half new music.

On streaming services, focused on listening rather than sales, consumption is about 65% catalog. It is just as easy for subscribers to turn to familiar favorites as current hits, and the services employ automatically generated recommendations that don't necessarily emphasize new releases.

"In a buying world, that recommendation doesn't exist," Mr. Bakula said. "The lift of these songs is living longer than it would have in a sales world." And artists' home pages on Spotify and Apple Music often list their most popular songs, playlists and albums more prominently than their newest work, he said.

Labels and music publishers, eager to introduce older songs to younger audiences, are increasingly seeking to license catalog music to ads, television shows and films. And a proliferation of music-oriented biopics and documentaries is driving more people -- old fans and new -- to stream the music of the featured artists like Queen and Elton John.

For Led Zeppelin's 50th anniversary earlier this year, Spotify prompted users to create custom playlists with their names stylized in the band's logo font. Among those participating in the promotion were other musicians, such as Jack White, with a 10-song "Led Zeppelin x Jack White" list.

"The songs those artists identified as their favorites then became the trending growth tracks in Led Zeppelin's catalog," said Tim Fraser-Harding, head of catalog at Warner Music Group.

For the 25th anniversary of the Beastie Boys' "Ill Communication," Amazon Music worked with the group to create a documentary about the creative process in the years leading up to the landmark album.

"It gave us a reason to reach out to customers and reintroduce them to this music," said Ryan Redington, director of Amazon Music, part of Amazon.com Inc. "Or, for our younger customers, to listen for the first time."

When Spotify started, in 2008, it attracted mostly young listeners looking for the latest hits. The service has invested heavily in algorithms that create individualized recommendations for its users, who now number 232 million, and head of catalog Johan Lagerlöf said older subscribers are the next growth area.

"This older demographic needs to feel at home when they enter Spotify for first time, because if they don't feel at home the first time, they won't come back a second time," Mr. Lagerlöf said.

Spotify recently experimented with a feature called "storylines" to highlight Motown Records' 60th anniversary. Several playlists, including "Women of Motown" and "Evolution of Soul," include text boxes with stories from the studio, historical significance and what the artists said about the music -- material meant to replicate the liner notes aficionados once pored over on vinyl albums and CDs.

"For catalog music you always think of boxed sets," Mr. Lagerlöf said. "This is a way of taking that into the streaming era."

(Spotify earlier this year agreed to buy podcaster Gimlet Media, with which The Wall Street Journal has a content partnership. Meanwhile, Dow Jones & Co., publisher of The Wall Street Journal, has a commercial agreement to supply news through Apple services.)

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

September 03, 2019 11:59 ET (15:59 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.