Industry Health Check

This is your democracy, America. Cherish it. Here's why some of your favorite artists are voting. Join them on Tuesday.

Industry Health Check

Q3 earnings reports from this week reveal a music industry in full bloom. Live Nation reported an eye-popping $3.8B in revenue and robust growth in concerts, sponsorships, and ticket sales, including an 8% growth increase in concert attendance. Apple reported $10B in revenue from its services, which include Apple Music and iTunes. Spotify reported 87M paid subscribers, up 40% from a year ago, and 109M ad-supported subscribers. Spotify is so big in fact, that label execs are starting to fret about the platform "doing a Netflix," and rendering labels unnecessary. Artists already find strong incentives to list directly on the platform. Despite its size, Spotify isn't quite making a profit yet. That might be about to change.

Ad Targeting With Listening Habits

Advertising generates only 10% of Spotify's revenue and this is their new target for growth. Similar to how Facebook created a powerful advertising tool by collecting personal data from its users, every time a user plays a song on Spotify, it becomes data for targeted ads. User listening habits are a valuable data point for targeted advertising, particularly as more brands rely on music for their marketing strategies. What a person listens to can reveal all sorts of information about someone’s emotional makeup. Spotify knows this, and is aggressively working to monetize it.

Music And Nostalgia

The emotional weight that music carries has enthralled evolutionary psychologists for years. Much of that weight remains a mystery. Why do we even listen to music in the first place? Why do the songs we listen to in adolescence stick with us for life? New research attempts to answer that one. Listening to music requires attention from several parts of the brain - sound processing, speech recognition, loudness, pitch, rhythm. When a song comes on from your teenage years, it reactivates those same pathways and triggers vivid memories from when those pathways were first used, resulting in a deep sense of nostalgia. And that's why a certain set of millennails will, until the day they die, hold a special place for "Call Me Maybe."




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This WeekMatt Pennington