Record labels, agencies and the glue that binds them

10th November 2011, by Andrew Bowyer

I attended the IAB’s recent seminar, ‘Sound investment: What online audio can do for your brand’, to get a little inspiration and report back on the state of the nation for digital audio. 

The case studies – so well presented by Spotify, We7 and Last.fm (just 3 of over 400 digital music services) – were inspiring, but what left a greater impression was how digital audio providers like these are becoming the much-needed link between brands and bands, labels and agencies. 

The music industry has sharpened up. The decreasing income from record sales and the democratisation of the music marketplace have driven them to be more hungry, innovative and, most importantly, collaborative. Those labels believing that their business was to sell records have had a very rough time. 

But still, we see barriers between brands (and their agencies) and labels. We need a ‘glue’ in the middle: a group of people equally passionate about both commercial and creative elements, and that can talk both languages. Each speaker pitched a slightly different angle, but it was clear that these providers can be the key to making things happen, rather than being just a media platform.

Nicky Birch, from content creators Somethin’ Else, opened up and immediately presented a client list perfectly split between publishers, agencies, brands and labels, with them in the middle. Point made. She then went on to define their marketplace in 6 categories:

1. Music players
2. Broadcast platforms
3. Personalised radio
4. Listening rooms
5. Web aggregators
6. On-demand playlists

Of all of these, it was clear that the exciting areas are on-demand playlists, listening rooms (if they can make them work legally) and – above all else – personalised radio. The Holy Grail of all of this is surely a true marriage of online audio services and proper radio (with real talky bits).

The surprise of the night: how genuinely enthusiastic the speakers were about radio. 

James Cridland, a career radio man and part of the team behind iPlayer, summed up the importance of innovation and collaboration in this area with the line of the night:

“Stupid radio is doomed. If radio is nothing more than 200 songs in a row, it will die.” 

90.7% of people in the UK listen to the radio every week and radio still has an 82% share of voice. That’s only 18% left for everything else. What we’re seeing is that listeners are not after cheap, non-stop music – they’re after interaction and personalisation. This sounds a lot like a golden rule for brands looking to work in this arena.

At the practical end of the discussions, it’s clear that agencies have a role to play in developing personalised advertising. Of course, this is available now, but no one in the room successfully defended the quality of what we have currently. 

Last.fm’s Scrobbling technology may be the ‘glue’ in this challenge. Developed as a Southampton University dissertation, a Scrobble is a listening moment, a barcode of when and how someone listened to a piece of music. Last.fm holds 60 billion Scrobbles – that’s more data than Dunnhumby has for Tesco’s Clubcard.

Scrobbling data is available via an API for smart people to do great things with (try Exit Ahead). Can these smart people make personalised advertising work? 

So here’s what I learned tonight: agencies and brands are needed to push innovation in online audio. Listeners are willing to get involved as long as the quality and the personalisation are there. And most of all, there are some great creative technologists out there that are eager to get involved and make it happen.