Radio is still important for record companies, but program directors and music directors could show a bit more guts, says music industry expert Tony Wadsworth.
The chairman of BPI, who signed Robbie Williams and Coldplay for EMI‘s Parlophone label, spoke at Radiodays Europe 2013 about the state of the music industry and its relation to radio. He still sees radio as a relevant platform, although (especially commercial) radio’s playlist is very safe, like the current mainstream pop music cycle. “You win big by taking risks.”
“The picture is changing very, very rapidly”
Physical sales decline fast
“The demand for music has never been higher”, Wadsworth says about the fact that nowadays, people desire access to music at any time, any place, and anywhere. “Music is an ever-present soundtrack to people’s lives. But – and it’s a very big but – the picture is changing very, very rapidly”, he adds, referring to a decrease of physical (and increase of digital) music sales which he illustrates with the above graph. Even if the annual turnover from music sales is now a third of what it was at the beginning of the century, at least the downward trend of overall music industry turnover stopped a few years ago. “When file sharing became a reality, the music industry found itself very much behind the curve, as we grappled with how to create a new business in the online world”.
Tony Wadsworth feels like record companies have “come a long way since then” and successfully embraced the digital world. He’s reminding us that before iTunes came off the ground, the music industry launched their own digital services like MusicNet and Pressplay, even if they weren’t successful “for many reasons”. In any case, between 2008 and 2012 the share of digital has grown to about 50% of the music industry’s income in the UK.
360° deals are profitable
Another development besides digital distribution has been diversification through so-called 360° deals, where the record label pays an artist a chunk of money in return for a percentage of everything they make – from music sales to publishing, and from concerts to merchandising. The Robbie Williams deal in 2002 was the first big one, although they didn’t pay him 80 million pounds “and it wasn’t 60 million pounds either”. According to Wadsworth, it was a smart investment for EMI: “His album sales base was 6 to 7 million and he was producing an album a year, which is unusual nowadays. The deal ran into profit after two albums”.
“The ten-year market decline is going to reverse”
Radio & labels filter music
“Some people questioned whether labels would continue to exist in the digital world, where anybody can record a track and share it around the world, without leaving their bedroom”, Tony Wadsworth recalls. He thinks that as there’s so much to listen to, people do need a reliable guide: “The online environment has led to the instant availability of tens of millions of pieces of music of variable quality and style. So who can help filter through this digital clutter and guide you to the good stuff? That’s where labels, and radio, play a huge role.”
The British Phonographic Industry chairman sees a bright future ahead. “I believe we’re at the start of something big in the consumption of digital entertainment; especially music”, Wadsworth refers to the growth of 4G, the new generation of mobile network coverage. It means that smartphones are becoming crucial devices for the music (and radio) industry; a reason for BPI to speak to mobile phone operators to “turn this opportunity into a reality”.
Homes & cars offer opportunity
Tony Wadsworth sees networked home audio & video devices as another source of a potentially huge increase in music consumption throughout people’s homes, from radio listening to music downloading and streaming. Besides connected homes, there will also be a lot of opportunity in connected automobiles. Looking at these developments, his expectation is that “we’re on the cusp of a huge surge in the growth in music revenue. The ten-year market decline we’ve experienced is going to reverse and thanks to the industry’s embrace of new ways of doing business and new technologies, we’re going to start to enjoy the commercial rewards that come from giving the consumers what they want.”
“There’s nothing not to like about Adele”
Personal recommendation is effective
In an interview with Nik Goodman after his keynote, Wadsworth says that he believes that radio deejays still have more influence in terms of music recommendations than music algorithms. He refers to a panel session at SXSW 2013, where it was said that the majority of people still discovers new music through terrestrial radio, based on feedback from about 1 million people worldwide. “But it’s not the only game in town anymore. The message to radio is that you have to be very open to every new development.”
The music cycle of 2013 is dominated by acts like Justin Bieber and One Direction (photo) who are part of “a very safe environment” of mainstream pop music songs. “Whenever you feel that, things change”, is Tony Wadsworth’s experience. He’s expecting a music evolution in 2014 as “there are stirrings of new, rebellious guitar and dance music starting to come through. In the next year or so we will start to see more of that.”
Creative teams offer support
Speaking of what makes a great radio song and a worldwide hit record, British singer Adele is a good example. “There’s nothing not to like about Adele. She’s got probably the best female voice we’ve had in the UK since Dusty Springfield, a personality that draws people to her, and the record label has put together producers and writers that have resulted in her music being very substantial.” Are talent shows killing music in that respect? “I see TV talent shows as part of the TV industry”, Wadsworth says diplomatically. In his opinion, Simon Cowell is primarily working in television entertainment now. “Music is one of the byproducts of that.” At the same time, he recognizes the impact that The X-Factor has had on the huge success of One Direction.
“You win big by taking risks”
Taking chances pays off
Tony Wadsworth, who signed many artists and bands during his career in the music industry, explains that record companies sometimes do take a risk if they believe in an act and if they’re convinced that a certain musical choice will create the right image that they can market. Like releasing a 7-minute song full of tempo changes as a single, as was the case with Paranoid Android from Radiohead’s third album; OK Computer. From his perspective, he feels that radio sometimes plays it too safe by (only) scheduling music that is familiar and testing well. “I think you win big by taking risks. You need make an impact; you need to sometimes shock people. Just playing music that is already known, is fine on one level, but there’s a lot more to be gained by bringing new names to the forefront.”
Nik Goodman raises a relevant question by asking whether radio gets a fair share from the music industry in terms of marketing budgets, as record labels mostly advertise in other media to promote music. “I don’t have a very good answer, apart from to say that the record industry is spending less and less on TV as well”, Wadsworth replies. “The mix of the marketing money and focus for record labels changed completely with the advent of social media.”
Radio remains relevant medium
The British music executive likes to listen to BBC Radio 6 Music, which offers an eclectic selection of songs. For classical programming he tunes in to BBC Radio 3, and his favorite speech-based radio format is BBC Radio 4. “You may notice that I’m not listening to too much commercial radio there, and I apologize, but there’s only so much hours in the day, haha.” Is radio still an important part of the music marketing mix then? “What radio and record labels have in common, is that they’re full of people that a: love music, and b: understand music”, Tony Wadsworth answers. As long as this is the case, he is “confident that radio is a major, major factor in getting new music across to people.”