Sonos boss: ‘We’ve reached a watershed for streaming music’

The following MBW blog comes from Sonos co-founder and CEO John MacFarlane. A fortnight ahead of Apple Music‘s launch, he suggests that a new dawn has arrived for streaming music – one in which only those who provide a true ‘home solution’ can dominate.

Over the past 10 years, we at Sonos have had the privilege of a front-row seat as streaming music has evolved; we’ve watched inspiring innovative ideas and technologies emerge and take shape.

Some of these flourished, while others faded away.

Through it all, two things remained constant: The passion music fans feel for their favorite artists, and their determination to do whatever it takes to listen to the music they love.

We’ve reached a watershed moment for streaming music.

Music fans are taking advantage of a rapidly evolving landscape of technologies and services that are redefining our music experience, and expanding our engagement with music and artists in ways that were previously unimaginable.

Graphic 1 - Music sources on Sonos

While music-streaming growth has long outpaced the purchase of digital downloads and CDs, we now see the tipping point globally. This sea change from ownership to access is comparable only to the invention of recorded music itself. We believe that by 2021, one billion people worldwide will be paying for streaming music.

Globally, 92% of all music listening on Sonos is streaming radio or paid on-demand — our customers are bypassing their existing music collections and enjoying the near-infinite choice streaming has to offer.

Another interesting fact: The most listened-to music source in the U.S. is Pandora — this service accounts for almost 50% of all listening.

In Sweden, more than 90% of our customers use a Spotify Premium subscription on their system. Now artists and labels are leaning in big time, seeking new ways to be heard and to connect more directly with their fans.

Music streaming will soon be music again

The recent debate on streaming has been focused on short-term concerns — issues of access, mobile convenience and remuneration.

As we accelerate up the path toward 100 million and then one billion paid streaming listeners, these are crucial conversations, of course.

Any fundamental transformation requires new business models, throwing up both the good and the bad. The industry needs to strike a balance that will benefit both artist and listener.

As the evolution of on-demand music has shown us, what matters most is the simplicity of the listening experience, which can often be at odds with the music business’s position.

Digital music’s relatively brief history is filled with examples of the extraordinary lengths music fans are willing to go to to access and enjoy the music they love — piracy was arguably a direct consequence of the lack of simple legal alternatives.

Graphic 2 - Music listening at home

Our ultimate goal as an industry must be to create a sustainable ecosystem that both ensures artists can succeed and flourish and provides music lovers with seamless access to that music alongside a revitalized listening experience.

Fully free on-demand services will most likely not exist in the future; it’s just not a viable model for artists.

But paid on-demand has reached a tipping point that we believed in from the beginning and that has tremendous benefits for music listeners and artists alike.

A plethora of streaming services — from pioneers such as Spotify, YouTube and Pandora to more recent entrants like Tidal and soon Apple — are introducing hundreds of millions of listeners to streaming music, and making sweeping changes to the listening experience via curated playlists, smart algorithms and other completely new, hyperconnected approaches.

Equally important will be a healthy stable of specialized offerings — regional services like Saavn, specialists like SoundCloud or 22Tracks that capture otherwise inaccessible content, experience layers like Pause, and niche offerings like Mixcloud — all vying to provide listeners with the music they crave.

Changing how artists and fans connect

The music industry’s focus on mobile has resulted in an array of acoustically compromised scenarios.

Music enthusiasts have been forced to piece together dysfunctional home audio systems — iPhones plugged into ancient stereos, portable Bluetooth boxes originally intended for beach and barbecue, blaringly inadequate laptop speakers.

The home listening experience, a former bastion of high fidelity excellence, was relegated to an afterthought.

This is in stark contrast with the way people actually want to listen to music.

Edison Research’s “Share of Ear” study shows that more than half of all music listening in the U.S. is happening at home (53 percent), followed by the car (30 percent) and the workplace (13 percent).

Our own global research confirms that same behavior.

Graphic 3 - Listening with and without Sonos

Only those music services that provide a true home solution will be successful in the long term.

But change is already under way. Smart speaker systems, connected to the Internet and capable of immaculate audio fidelity, are revolutionizing how music reaches people’s homes, facilitating unprecedented multi-room, multi-source, multi-user listening experiences, and once again making the home the best possible place to discover, enjoy and share music.

Another fundamental shift lies in music creators finding new ways to be heard and to build deeper, more connected relationships with their audience.

It’s a new standard that requires a different approach to curation and promotion, but one that offers artists exponentially enhanced control over the way their music is experienced.

Today’s music lovers demand a more hands-on engagement in defining their personal relationship to the music and the artists they love.

With smart speakers and smartphones in the middle, artists can enjoy a creative conduit to mining the power of streaming, using context as a creative opportunity and dynamically responding to real-time fan feedback.

The full potential of streaming to inform the creative process remains untapped and infinitely promising.

The future belongs to those who can create the most seamless connection between the listener, the artist and their work.

When the dust clears, it will be the artists who will define what the future of streaming is going to look — and more importantly sound — like, making music lovers the real winners.Music Business Worldwide

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