Ole Obermann

The Future Of Music Streaming

22 Sept. 2017 @ Schmidt Theater (Saal)

Speaker: Ole Obermann (CDO / Executive VP Business Development, Warner Music Group, US)

Go to programme here.

Where the future lies for music streaming formed the basis of a keynote from Warner Music Group’s Chief Digital Officer, Ole Obermann, during the third day of Reeperbahn. Firstly, the format brings the potential for music to create a profound cultural impact as geographical borders break down thanks to hits on streaming services coming from anywhere in the world. “Language is no longer a restriction,” said the exec. “Streaming breaks down barriers that radio and traditional media outlets have previously imposed.” The increased reach means it also takes a lot less time for artists to reach big audiences—as can be seen in the recent success of Danny Ocean, Lil Uzi Vert and Robin Schulz. “The power of streaming platforms lies in being able to take artists from wherever they start to the world in a very short period of time.”

According to Obermann, that reach is only going to increase. There’s currently around 130m paid subscribers to streaming services globally and opportunity in markets like Africa, Asia and Latin America means “we have hundreds of millions to go,” he explained. There’s still lots of growth potential in developed markets like Germany too, which has 15% market penetration for music streaming. Cable TV, on the other hand, has 75%. “It’s very easy to imagine that the potential for music streaming penetration is five to six times where we are at today. There’s also about 1.5bn people using ad supported streaming and video services. Once you start up-selling those people to paid subscriptions, you can see where the big addressable base is.”

A frequently addressed fear in the streaming, playlist and singles led world is the idea of the album becoming redundant. However, Obermann said Warner is still seeing huge album sales with over 50% of those for a global superstar coming from the physical and download markets. The album is still the core body of work, and one which provides a wealth of opportunity for derivatives. That could be in the form of Snapchat Lenses that tease singles, video and UGC content.

In terms of what’s to come, voice activation will “dramatically change how fans interact with music in a very positive way,” said Obermann. “Music will always be the best use case with voice activated speakers, which bring down any hurdles to engagement. The higher the engagement is, the more likely users are to convert from a free streaming tier to paid.”

He concluded: “Music is now the disruptor, not the disrupted. Every consumer facing technology company out there wants to use our music in their videos or service. We’re just getting started on what could be a very positive era for the music business.”

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