Sony Music chief Rob Stringer spoke as part of an event for investors in its parent company Sony Group earlier today, setting out his perspective on trends in the music industry, and discussing some of the challenges and opportunities that have become big talking points in recent months. So that includes functional audio, streaming fraud, short-form video platforms and good old music-making AI.
Stringer was upbeat about the state of the music rights business at large and the ongoing streaming boom, though also highlighted some of the challenges in the music streaming domain. That, of course, includes the price point of subscription streaming, which pretty much the whole music community agrees needs to increase, at least in line with inflation.
Though, on that point, Stringer noted that “we have seen price increases from a number of our digital partners that have been long overdue, and we look forward to more digital service providers recognising that the value of music continues to rise”.
Assuming Spotify does follow the lead of its competitors and increase its baseline price point from 9.99 to 10.99, that means the main challenge in subscription streaming, as far as the majors are concerned, is the current model for allocating streaming revenues to individual tracks.
That current model treats functional audio the same as more conventional music – meaning an ever increasing amount of streaming income goes to the makers of mood music and background noise – and it’s also open to outright scams, with rogue entities gaming the system for profit.
Alluding to those challenges, and the huge quantity of music now being uploaded to the streaming services every day, Stringer said: “At Sony Music our attention is on identifying quality, and not purely quantity, as we face competition from many investors and new companies wishing to capitalise on this sheer volume”.
“We are convinced that consumers want the same quality”, he added, “and remain concerned that [streaming services] are watered down by low quality and meaningless volume which negatively impacts music fans and real artists”.
“In addition”, he went on, “as publicly reported, fraud on key [streaming services] is a problem that must be eliminated through aggressive enforcement by these [services] and distributors, or by changing payment methods to better reduce the incentive for fraud”.
Beyond subscription streaming, Stringer went on, “social media, short-form video and video games are all playing an expanding role in consumption today, particularly among Gen Z and Gen Alpha. Youth-led shifts to new music technology platforms are a constant in our business and we view the latest trends as indicators of another generational inflection point”.
“Young consumers are gaming-first in their entertainment orientation and highly engaged in creating and viewing massive amounts of content”, he added. “This translates into heavy use of short-form video, which is amassing total views well into the trillions. And overwhelmingly, they want music to be part of all these experiences. With this transformation, proper compensation of artists and songwriters is required”.
That, of course, requires Sony et al to put ever more pressure on the short-form video platforms to pay more for the music that their creators utilise. Though Stringer was keen to stress that, while that pressure needs to be applied, Sony primarily seeks to partner with digital companies to capitalise on the opportunities.
“With any potential off-shoot of our audio and visual content we can be a partner”, he said “and we support innovation throughout the digital landscape. We are aggressively leaning into numerous opportunities for our artists and songwriters, with the largest being in short-form video”.
“In gaming” he added, “we’re an established leader in activations for our talent including Travis Scott, Lil Nas X and The Kid Laroi. And as a member of the larger Sony family – where gaming has such core importance – we believe we’re strongly positioned to develop and maximise a range of new offerings in the space. Additionally, we’re supporting growth in promising areas like direct-to-fan solutions, creator-friendly licensing and, over the longer-term, Web3 and the metaverse”.
Which is all well and good, but what about bloody generative AI? That’s all anyone cares about at the moment, right? “We are at the gateway of a new technological era with AI”, Stringer mused. “And unsurprisingly, music will be a core component of this process”
“AI promises to provide us tools so that our artists and writers can create and innovate”, he went on. “It also heralds greater levels of insight through machine learning, as well as potential new licensing channels and avenues for commercial exploitation. There is a lot of opportunity in this area to be excited about throughout our company”.
Though, “we are greatly aware of the challenges ahead too”, he confirmed. “We will protect our creators on every level possible whether it be creative, financial or legal in basis. Infringement and unauthorised usage of their rights should be the basis for a unique new set of artist and songwriter protections industry wide. Tech does not simply overrule art”.
Protecting music-maker rights in the context of AI is another issue that currently unites much of the music community although – as with the plans to change how streaming monies are shared out – the devil will be in the detail, of which there isn’t much currently. It remains to be seen if the priorities of the corporates and the creatives in music diverge on all this at some point.