Viewpoint: NWN Blue Squared's Ed Niman on why exploring all funding options is vital for the biz

Having read Music Week since I was group financial controller at Mute in the late 1980s, writing this column has forced me to think about what keeps me - and I hope other readers - engaged. Despite so many influences ...

The Big Interview: SoundCloud's Raoul Chatterjee

Raoul Chatterjee doesn’t look like a man under pressure. Music Week meets him at MIDEM, where he cuts a rare cool, calm, deal-making figure amidst the hot and flustered Britpack coping with the searing Cannes heat. But surely even Chatterjee’s reserves of serenity have been tested since he joined SoundCloud as director of content partnerships, Europe, at the tail end of 2015. The unsung streaming platform – beloved of hipsters, DJs and fans with an aversion to paying for music, but unheralded and, sometimes, downright opposed by the music industry – has endured a torrid couple of years. Chatterjee arrived just in time to witness the platform’s licensing deal with PRS For Music, a few months after the normally mild-mannered collection society had sued SoundCloud. Deals with Universal and Sony followed (Warner had signed in 2014 and Merlin in 2015) and then, in May 2016, it launched its subscription service, SoundCloud Go in the UK. The service is now available on three tiers: SoundCloud Free, the mid-price SoundCloud Go (£5.99-per-month) and the premium SoundCloud Go+ (£9.99). But, despite a claimed 175 million users across all platforms (SoundCloud Go subscription numbers remain a mystery), SoundCloud has also seen the exit of several top executives. Chief content officer Stephan Bryan (now at YouTube), COO Marc Strigel, finance director Markus Harder and general counsel Neil Miller have all departed. Rumours of a sale persist (Spotify being the latest company linked with an acquisition). And, after its 2015 financials showed a €51m (£45m) loss, founder and CEO Alexander Ljung admitted the company could run out of cash. If any of this bothers Chatterjee, he certainly isn’t letting it show, coping with difficult questions with the sort of unfazed affability that nearly won Jeremy Corbyn the election. But then Chatterjee has seen pretty much everything the music industry in general, and the digital sector in particular, has to offer. He has previously held numerous positions at Warner Music, including leading its commercial division; worked in sales and digital for Ministry Of Sound; and did a stint at D2C pioneer Trinity Street. Most recently, he was SVP of music at 7Digital and served as chairman of the Entertainment Retailers Association. When it comes to digital music, he has been there, done it and downloaded the instant grat T-shirt. And, despite the platform’s problems, he’s clearly relishing the task at SoundCloud, where he’s been hard at work, securing licences for its operations around the world (it’s now available in 10 territories, with more to follow soon), opening up the platform’s Premier programme to producers and DJs, and helping to get SC an app slot on Xbox One (where even Spotify isn’t available yet). “I love the music business,” he says, affectionately. “I like working around the music business and SoundCloud is a great opportunity to do that, with a great team. It’s a fun place to work and I think we’ve got something special that will continue and prosper and will be an ever-more interesting and useful partner of the music business.” Time then, to retreat to the bar of this fancy hotel on the Croisette and grill him about subscription numbers, Spotify and why Ed Sheeran really should care about SoundCloud… SoundCloud Go has been up and running for over a year now: how is it going? It’s going really well. We’re very pleased. We’re happy that we’ve been able to launch both subscription services, so we have SoundCloud Go and SoundCloud Go Plus. SoundCloud Go Plus is the premium service that matches up to what you expect to see on a £9.99 service from anyone else, and then there’s the mid-tier service, which is SoundCloud Go. We have both tiers in every market we operate in. There’s not many services that have that, where the premium part of it actually has significant [additional] content. And what is that content?It depends on the label. We give every single artist and label the opportunity to select the music they want to only be available for the premium tier and each label has a different approach. Some labels are all-in free because they want to drive as much awareness, get as much traction and as many listeners as possible. Others are at the opposite end of the spectrum, where the majority of their music is only available to premium tier subscribers and wouldn’t be available to a free or mid-tier user, and then there’s a big blend in the middle. With us, you have a choice as to what you want as the right value for your music. That sits quite nicely with labels and managers who [get to] make decisions as opposed to decisions being made on their behalf. Are the different tiers difficult to sell to the public as a concept when they can get everything on Spotify for free? Obviously, the more level the playing field, the better. The more consistency in the way that the music is made available, the easier it is to communicate the reasons for the differences and the music that’s available in the different tiers. We look forward to the time where there’s a bit more consistency but, for now, fans of SoundCloud find that the services suit their needs. They’re clearly fans of the service, so having a new layer of music come in [on the premium tier] that wasn’t on SoundCloud a few years ago has been an added bonus for them. So how many people are actually subscribing to SoundCloud Go? We’re not discussing specific numbers on it. Is that because they’re not very good?(Laughs) No, it’s because we’re at a stage in our business where we are very keen to continue to invest in developing the business, be in more territories, drive our marketing and awareness and be out there as much as possible with the audience. We did some events with The Great Escape and South By Southwest that were all focused around SoundCloud Go and we’re going to be doing other similar music industry-focused festivals and events. We’re now really getting behind the brand and, at the right time, we’ll start to talk about numbers – but it’s not the right time for us right now. Other services have been revealing their numbers though. Don’t you put yourself at a disadvantage by not following suit? I don’t think so. We’re taking care of our business in the best way that we can. We’re obviously aware that people talk about SoundCloud, where it’s going to go and how it’s going to develop, but we have a project that’s underway that involves a lot of investment. We have certain areas where we are very different to other services and we have a very interesting place in the market, an interesting proposition for listeners, a great community for creators and artists. The next phase will be putting forward SoundCloud’s unique characteristics. And what are those unique characteristics? We’re a community of creators and listeners that empowers the creators to do things in a way tailored to their own position. We can support the creators’ ability to share music before they’re signed to any record label so we have this huge range of creators. There’s a pathway from joining our programme as an individual artist to working through a label or distributor to become established and become successful in a very organic, natural way that I don’t think is possible in other digital services. We’ve seen a lot of success from [independent] artists on the [revenue sharing] Premier partner programme, the most notable of which is Chance The Rapper. He won two Grammys this year and came out and mentioned SoundCloud. We are really happy and pleased to get that credit and for him to acknowledge that SoundCloud was part of his extended family in helping him reach the success he’s had. There’s been things he’s been able to do this year that he probably wouldn’t have been able to do if he hadn’t been able to reach his audience on SoundCloud. And the great thing about SoundCloud is the collaboration. People like Chance The Rapper aren’t just collaborating and sharing music with their fans, they’re working with lots of other talented creators, whether they are producers, other rappers, remixers or labels, and sharing their music around their network. That whole culture of collaboration and sharing is very much within the DNA of SoundCloud but I don’t think it is as present with any of the other services. It runs through our veins and has done since day one: it’s an open platform for sharing a huge range of diverse work. Breaking an act is tougher than ever for the industry. So, can you break artists on SoundCloud? We’re not the same as Spotify in that we’re not directing our listeners to specific artists in a very concentrated way. We have an array of features that allow people to discover new music, but they tend to be much more around algorithmic features. So we have recommended tracks, we have stations and we have a new feature called The Upload which is a personalised playlist given to you every day. We find they create a far more level playing field for music discovery on SoundCloud than on any other music service. The idea of breaking an act, it doesn’t quite sit with the way we see our role. Our role is to enable creators and artists to have as many tools at their disposal for getting noticed. Other platforms do gatekeeping in a way that is suitable to their proposition. So you’re not bothered about the in-house curation that every other streaming service seems to bang on about endlessly? We have 175 million people that come to SoundCloud every month and they’re listening to 12 million artists every month so our top 1% of artists is much more diverse [than on other platforms] and that’s a good thing. We are not trying to say to those 175 million people, You should listen to this narrow set of artists, because we thought the world was going the other way. We think the world is more open and accepting for more musicians, DJs and producers generating music that’s really interesting and, around the world, to different cultures, different communities and different scenes. So our approach is less about telling people what they should be listening to and much more about different communities sharing and providing each other with guidance as to who they should be listening to. So why would anyone listen to, say, Ed Sheeran on SoundCloud rather than Spotify? That’s a really interesting question because, if you look at the numbers, you’ll seen many millions of streams for Shape Of You on SoundCloud [20.8m at last count, versus over 1 billion on Spotify – Ed]. There’s a place for mainstream users on SoundCloud and people do listen to mainstream music on SoundCloud. Our voracious music lovers are going to be listening to well-known acts alongside less well-known, but interesting and talented musicians. Industry streaming conversations seem increasingly to be about Spotify and Apple. How do you make SoundCloud part of those conversations? Our job is to continue to talk to the industry and showcase the success that we’ve had and continue to let people know why we are different. There is an opportunity in music streaming now that is incredible. We have seen where the industry is in terms of growth and, in lots of major markets, streaming is becoming the dominant proposition for music fans and subscription is the leading revenue generator for that. What that means is the industry can open up to more and more ways of delivering and showcasing their music. I’m looking forward to a period where you have lots of different options for accessing music according to who you are, what your interests are in music, what your lifestyle’s like – and SoundCloud has really earned a place in that broader ecosystem. In the download era, there was only one major player and there was a narrowing of focus around [saying], Let’s work hard to deliver success on that one major player. But you come to an event like MIDEM and there are lots of digital services within different regions that are doing unique things. There is no one or two or even three sizes fits all in music streaming. There is an opportunity for lots of services to prosper. Everything that we do at SoundCloud is developed in order to give creators more opportunities to get in front of their fans, get their music heard, earn money and turn it into a career, rather than just a pastime. There’s a good reason for every single artist to be on SoundCloud. There’s a continuous conversation between the most prolific SoundCloud creators and artists with their fans, it’s more like a social network in that sense. A lot of people have left the company recently… A lot of people have joined as well! You know, the company is 10 years old. I worked with Stephen [Bryan] at Warner Music a few years a go, I’ve worked with Lyor [Cohen, global head of music at YouTube, where Bryan is now head of label relations] as well, so I knew them prior to SoundCloud. Stephen’s done a lot of great work here and we’re sad to see him go but happy he’s got an opportunity to do something new in his career with his old friend. Are they going to poach you too? (Laughs) There’s a lot of people who have worked with Stephen before! I’m very happy at SoundCloud. We’ve got a great team. We have over 300 people working at SoundCloud and we have more working today than ever before. It’s the largest the company’s ever been. It’s a good place to come and there’s a huge amount of talented, bright, smart people within the team that we get to work with. Is the constant talk of a sale distracting? People are aware that we’re talking to the investment community. We continue to do that and there are a lot of people within the organisation that have a lot of experience and that’s part of the work they do. It’s not the work that I do. I’m focused on the relationship with rights-holders; labels, publishers, artists, collection societies. So I’m cracking on with that and there’s a lot of interesting work to do there. I don’t feel as if it’s a distraction; it’s part and parcel of being around digital music companies. But only a few months ago your CEO said the company could run out of money… Doesn’t that make life much more difficult when you’re negotiating with rights-holders? We talk to those partners regularly. They understand where we are, we share our plans with them and keep them up to date on where we’re heading. There’s a lot of understanding, a lot of trust and a lot of goodwill between us that puts us in a good position to carry on developing the platform. I’m quite comfortable with how it is and I trust the people within SoundCloud to continue to develop the business to bring investment in when it’s required. So where do you see SoundCloud being in, say, five years time? I see it continuing to develop into an even stronger place where people come to share music and connect with creators and listeners. That will be the thing that sees us through so we are the most prominent sharing platform in audio. That’s going to be the thing that SoundCloud is known for. It used to be much more complicated to get a [music] career up and running and we’re levelling the playing field and democratising the opportunities for all creative communities to get their music out there. Phase one was making it available and generating awareness but phase two is about generating revenue for everybody involved. So that’s my goal: to see through this transformation from being a great place for sharing music to a place for sharing music and making money from it.

Why Friday isn't on the biz's mind for single releases

Pop quiz: What do the following have in common: Haim, Liam Gallagher, Wolf Alice, The Killers, Shania Twain and Miley Cyrus? Well, they’re all stars who have released exciting new records recently, of course. But none of them did so on the so-called Global Release Day of Friday. GRD, as no one calls it, has been with us for almost two years now. It seems to have worked OK for albums but in today’s streaming-led world, it seems to be increasingly ignored for tracks. And you can’t exactly blame labels or artists for wanting to mess with the rules. The chart changes outlined by Music Week on P1 will help speed the chart up but, even with those measures in place, making an impact on the Top 40 with a new single is tougher than ever. The days of a fanbase launching a record to the top of the chart are gone for all but the biggest artists, so advantages must be taken where they can. And, with a crowded release schedule each Friday, launching on a different day can help generate more excitement than arriving amidst a host of other releases. 2017 has been notable for a flurry of big names dropping tracks at a moment’s notice and that’s helped contribute to the buzz around the biz. It’s odd to look back at Adele’s 25 campaign, as we do in this issue, and think how much has changed about the release cycle since then. Nowdays, the element of surprise is a key weapon in breaking a record and, whether that comes out on Tuesdays, Wednesdays or any other day of the week, Happy Days are here again for the industry. Mark Sutherland, Editormsutherland@nbmedia.com

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