The importance of streaming services to the music business in 2010 was rammed home at a packed house for the Spotify/YouTube MidemNet double-header keynote.
Spotify CEO Daniel Ek and YouTube director of video partnerships for EMEA Patrick Walker came on to wild applause — and even a few boyband-style screams — proof, surely, that this is the closest the conference will get to an executive-as-rock-star moment.
However, Ek played his cards close to his chest during the session, declining to commit to any timeline for Spotify’s long-rumored U.S. launch.
“The U.S. is a very important market for us, it’s top of our priority list,” he said. “But we want to make sure the industry understands what we’re trying to do. We’re trying to prove free drives paid and we’re talking to publishers, collecting societies, managers, labels to explain the model.”
Asked about claims that ad-supported streaming could never be profitable, Ek said Spotify doesn’t distinguish between its ad-funded and premium services — “We look at it as one experience” — but Walker said YouTube was on track for profitability, with 75 of the top 100 advertisers now running YouTube campaigns and 500 new partnerships signed in the past year.
Walker also said 2009 had seen a three-fold increase in monetized videos on the site, which now monetizes over 1 billion videos per week.
Whether artists were seeing money from streaming sites was also a bone of contention. Walker admitted YouTube had been unable to monetize the original clip of Susan Boyle on ITV1’s “Britain’s Got Talent” show in the U.K., but that both artist and broadcaster had ultimately benefited from the clip’s phenomenal popularity.
“‘Susan Boyle’ even out-ranked ‘sex’ as a search term for a couple of days,” said Walker, “And that doesn’t happen very often.”
“Just being present has value, even if you don’t monetize the clip at the point of access,” he claimed, saying far from cannibalizing the audience, Boyle’s record-breaking global album sales and the show’s blockbusting ratings were enhanced by “the distribution of the clip on a platform outside the main broadcast country.”
Walker also criticized EMI’s recent decision to block fans from embedding OK Go’s new video outside of YouTube (Billboard.biz, Jan. 19), saying it “contradicts the whole reason for OK Go’s popularity.”
“It’s an education issue,” he added, “But we’re not going to force people to push their content out to places they don’t feel comfortable.”
For his part, Ek said he was “surprised” at the amount of downloads being purchased through Spotify’s download partner 7digital.
“The truth is no one has figured out the advertising space around music or the subscription model,” he said. “But this is the first time in history when technology and the music landscape are aligned and that’s the key to Spotify having more than 250,000 paid subscriptions.”
