Record labels ceding control of mobile music experience to Pandora, Spotify
By Chantal Tode
November 1, 2013
Lady Gaga's new album will have a companion app
With digital music downloads declining and the influence of streaming services such as Pandora and Spotify growing, record labels are missing an opportunity to play a bigger role in how music is increasingly experienced by not investing more in creating first-rate mobile experiences.
With 140 million Pandora users having tuned in via mobile, it is clear that music lovers are spending a significant and growing amount of their time engaging with their favorite artists via their smartphones. However, the mobile strategies from record labels to date have mostly focused on one-off applications and fail to create the kind of deeper relationships with consumers that could drive sales.
“It is surprising to see that there are a few major untapped opportunities within mobile for the music industry,” said Sean Rosenberg, global head of mobile at Code Worldwide, London.
“If somebody comes to your Web experience for an artist or label and it is subpar, you are not going to go back there,” he said. “You are going to find other places that are optimized for this experience and are going to help you along your path toward experiencing new music.
“So if you go to places like iTunes, Spotify or somewhere else, they are highly optimized for the mobile platform, and if you are going to get the actual music, that is where you go.”
While the labels earn some revenue from music streaming services, they are much more interested in selling music to consumers via digital downloads or album sales.
However, digital song sales dropped 2.3 percent during the first half of this year, according to Nielsen SoundScan data, as more consumers switch to streaming services.
Mobile could help the labels develop the deeper relationships with users that will lead to more sales.
One of the big untapped opportunities for the labels is embracing the mobile Web, with many artists' and labels' Web sites still not optimized for mobile.
The Sting 25 app for iPad
With up to 40 percent or more of traffic coming to these sites from mobile, it is clear that this is where a lot of first impressions for a particular artist or album are being made.
The opportunity for record labels could be in aggregating all the streaming experiences around a specific artist because one area where the streaming services lack is in providing context for the music that is available.
“When you go to Spotify to find a song, you may find ten different versions and not know which the definitive version is,” Mr. Rosenberg said. “This becomes confusing for streaming users because how do they know which is the version they should be listening to.
“A Web site can be a really great aggregator of all of these streaming experiences, providing value through other services on that site,” he said.
“Labels need to come up with ways to curate that catalog so that new consumers can quickly explore and find the best versions of music."
One way that labels are leveraging mobile to encourage consumers to look beyond streaming is with mobile apps that come with the purchase of an album and provide an enhanced experience.
“If you are just going to Spotify or Pandora, you are simply listening to that album,” said Ryan Heuser, senior director of music integration at the The Marketing Arm, Dallas. “By creating this unique, interactive piece that comes along with purchase, consumers are going to consider purchasing as opposed to just streaming.”
When it comes to mobile apps, labels have mostly focused on creating one-offs tied to an album release with a one-size fits all approach.
The Pandora iPhone app
However, with consumers increasingly not willing to give up space on their smartphones for an app unless it provides an enriching experience, the stakes are higher for music related mobile apps these days.
“Music is listening, it is live experience and it is learning,” Mr. Heuser said. “In the past, the learning piece of that was always to sit down with liner notes and learn more about the lyrics and the album and the story that the artist was telling.
“Over time, technology has allowed artists to evolve from just the liner notes to adapt to the digital age and the mobile age,” he said. “And apps and things like that are allowing artists to tell that story again."
The marketing angle
There have been a few examples so far of musicians leveraging mobile.
Musician Sting did an app that was supported by Chevrolet and American Express and was retrospective on his 25-year career as a solo performer.
Lady Gaga’s upcoming album release on Nov. 11 is being paired with a mobile app that is being promoted as taking the app experience for an album to the next level.
A few months ago, Samsung purchased one million copies of rap artist Jay Z’s new album and gave them to Samsung Galaxy smarpthone users for free before the release of the album via an app.
The strategy was a success in that it garnered a lot of attention for both Jay Z and Samsung.
However, users reportedly experienced a lot of technical difficulties, pointing to the challenges labels face in learning how get it right on mobile.
Finding the ROI
On the horizon, labels also need to be thinking about mobile-enabled short form video social apps such as Vine and Instagram and their potential to drive music sales.
For example, earlier this year a Vine user posted a video showing women dancing to the song “Don’t Drop That Thun Thun,” by Finatticz, which had been released a year earlier. The video caught on, helping to drive a significant spike in sales for the band’s album.
Record labels face several challenges in mobile.
Early on, a lot of record labels jumped onboard with third-party mobile application platforms such as Mobile Roadie to get out into the marketplace quickly.
However, as mobile’s role has continued to grow, the problem with this strategy is that now the mobile experience is separate and not integrated into the broader digital picture.
Also, the picture is not clear on how mobile is impacting sales, making it difficult for them to earmark investment in mobile.
“They still seem to be shy about the investments,” Code’s Mr. Rosenberg said. “A lot of that comes from the fact that there is not a clear way to define how they increase the revenue.
“Nobody has been able to prove that mobile is a major driver,” he said. “So they are still waiting for the tracking to come.”
Chantal Tode is associate editor on Mobile Marketer, New York
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