Exclusive streaming deals with artists have become a powerful, but controversial, source of ammunition in the digital music battle.
In an interview with GeekWire, Napster CFO and Head of Label Ethan Rudin added his voice to a growing chorus of criticism over deals that give streaming companies exclusive rights to distribute an artist’s music digitally.
At a Seattle concert two weeks ago, Kanye West ranted about the “Tidal/Apple bullshit” that prevented a verse he and Jay-Z recorded from appearing on the album version of Drake’s “Pop Style” track. He was referring to Drake’s agreement to stream his music exclusively with Apple. Tidal, which is owned by Jay-Z, holds exclusive deals to his music, as well as albums by his wife Beyonce and other stars.
The deals Tidal and Apple Music have secured are the most high-profile, but Amazon is emerging as a dark horse in this race. A week after announcing its Spotify competitor, Amazon Music Unlimited, the Seattle-based e-commerce giant revealed a deal to exclusively stream several albums from country music star Garth Brooks.
Universal Music, the world’s biggest label, and Spotify, the king of music streaming, are vocally opposed to the digital exclusives. Still, it’s not hard to see why these companies are eager to gain any edge possible in the increasingly crowded digital music space.
To discuss the rapidly evolving music world, we caught up with Rudin, an exec from the Seattle-based music streaming service Napster, formerly known as Rhapsody in the United States. Continue reading for our edited Q&A.
GeekWire: What do you predict will be the biggest change in the music industry over the next five years?
Ethan Rudin: I think we are going to continue to see a shift in the way people consume music, with an emphasis on how to better integrate music into people’s daily lives, whether in the home, at the office, on the road, etc. Mobile’s inherent ‘mobility’ means that apps must support a much broader array of use cases than the PC did. Hanging out at home in a multi-device setting, driving, riding the bus/train, hiking, shopping — whatever it may be, mobile apps have to remain adaptive to a much broader set of user interaction needs than ever before.
Today, a key driver to gaining brand loyalty is to provide relevant content as an engagement tool. In our case, that is delivering music that is contextually relevant, while also making sure our users have a consistent experience wherever and whenever they are. In a mobile-dominant world, we’re focused on making it easy to listen to music you enjoy, and delivering a relevant, personal experience to every type of music lover. We continue to iterate and innovate to serve up products that achieve that goal and create a seamless user experience across devices.
GW: Do you think Amazon Music Unlimited can compete in the crowded music streaming space?
Rudin: It’s an incredibly exciting time for the music industry, where anyone can access millions of songs digitally from virtually anywhere. Amazon’s biggest advantage is having the variety of products and services to offer consumers. They’re smart to create a music offering at a lower price point to get customers in the door, win their loyalty and make up the margin through other revenue streams. Regardless of who the key players will be in streaming music, the most important priority is continuing to find ways to deliver the easiest, most personal experiences for people to listen to music, and we’re excited to see what’s in store.
GW: What do you think of exclusive streaming deals, like Drake’s agreement with Apple Music and Beyoncé’s history with Tidal?
Rudin: To be very clear, exclusives are very anti-consumer and are actually anti-artist. Napster believes in providing access to nearly all the music the world has to offer in one location rather than parsing it out across a variety of services. Although I can see how streaming exclusives would seem appealing from a business standpoint, they have not traditionally driven massive revenue or subscriber spikes for services like Tidal. Ultimately, artists create music for their fans to enjoy, not for streaming services to use to bolster subscriber numbers. If consumers want to listen to an artist they will likely find a way to do so without subscribing to additional services. As a music lover myself, I think that exclusive streaming deals do a disservice to both fans and artists.
GW: Why do you think vinyl record sales are on the rise? Is it a reaction to the streaming revolution in music?
Rudin: I don’t think that vinyl record sales are reflective of consumer reactions to streaming services. Streaming numbers are rising daily, and will continue to do so as services like Napster expand into more foreign markets. Sure, people love the novelty of having their favorite albums on vinyl, but that doesn’t mean they aren’t also streaming said albums. The beauty of vinyls is they memorialize the album while streaming service brings the music to you in real-time without extensive equipment. Why shouldn’t consumers be able to enjoy both?
GW: What’s Napster’s strategy to compete with big streaming titans, like Spotify and Apple Music?
Rudin: Our goal is to increase the amount of music people listen to on a daily basis, wherever they are. We’re staying focused on building the simplest, most personal streaming music experience. To do this, we’re paying attention to the way members use our app and creating functional improvements that better meet their needs.
We realized early on that partners like Telefonica, T-Mobile and Moviestar can connect our product to the right people at the right time. We have leveraged our partners on a global basis to scale our business, while delivering a consistent experience across a variety of platforms. In the coming months, expanding and diversifying our portfolio of partnerships will be key to Napster’s growth. Consumer electronics companies, mobile carriers, retailers, and more are eager to integrate music into their experiences, and we already have expertise in partnering with companies in a variety of markets and industries. The re-introduction of Napster in the U.S. marks a new era for the global brand and we’re excited to keep finding new ways to bring music to every type of listener around the world.