Hey! Today’s update covers Amazon Music’s growth to 55 million subscribers, the new Rihannazine magazine, and Sony’s focus in Asia why the The Big 3 all want in.
How far can Amazon Music go?
From Financial Times:
“Amazon’s music streaming service has eclipsed 55m users, making the ecommerce group a serious contender in the market that has been historically dominated by Spotify and Apple. That figure includes people signed up across six different price tiers, including a free service, but Amazon told the Financial Times that “nearly all” of them were paying subscribers.
“Amazon doesn’t talk numbers that much,” said Steve Boom, head of Amazon Music. “We felt like getting to this level of scale was something worth talking about.” At 55m users, Amazon is edging closer to Apple’s market share in music streaming. Apple last summer said it had 60m subscribers to Apple Music…
The company sought to differentiate itself with a more extensive menu of options ranging from free to $15 a month. “We’ve always been very focused on expanding the marketplace and offering customers lots of choice,” said Mr Boom, pointing to the US, Japan, UK and Germany as Amazon’s strongest markets in music.”
I’ll admit. I knew Amazon Music was growing, but I didn’t expect it to hit north of 50 million any time soon. In 2018, Prime Video reported a 26 million audience. That number’s now two years old, but I had expected Music lagged behind Video. That may still be the case, but it just shows how much we think we know about Amazon’s true stats.
This growth has been facilitated by the tiers offered. Six price tiers seem excessive for a consumer product, but it’s understandable given the company’s strategy. Amazon Music does not operate in a silo. There are over 100 million Amazon Prime members and 100 million Alexa-enabled devices. These price tiers integrate the accessibility of the existing customer base. It takes advantage of reduced friction, which increases the likelihood of adoption.
In contrast, Apple could care less than I own a $2,000 MacBook, $1,000 iPhone X, and a $300 iPad. Apple Music costs the same regardless of who you are.
The Verge broke down each pricing tier:
Amazon Music HD: The step-up audiophile upgrade to Amazon Music Unlimited launched last fall for $14.99 monthly ($12.99 if you’ve got Prime)
Amazon Music Unlimited: This is the true, proper Spotify and Apple Music rival and starts at the same $9.99-per-month price (or $7.99 for Prime subscribers). Amazon Music Unlimited subscriptions grew by over 50 percent in 2019, according to the company.
Amazon Music Unlimited (single-device plan): Maybe you lead a life of simplicity and only want to listen to music on the Amazon Echo in your living room. One of the more novel plans offered by Amazon is the single-device subscription, which can be used on supported Echo and Fire TV devices for only $3.99 each month. You still get the same 50 million song selection as regular Unlimited customers, but you’re just (very) restricted on where you can listen to them.
Amazon Music for Prime subscribers: Amazon Prime customers get on-demand, ad-free access to over 2 million songs through the Amazon Music service. There’s no added fee or subscription for this, apart from the regular Prime membership. It’s a nice perk if you’re not a picky listener and just want something without ads.
Ad-sponsored Amazon Music: If you’re not a Prime person and don’t want to pay for music, Amazon still has something for you. The free, ad-supported tier of Amazon Music gives you access to top playlists and thousands of music stations; you just lose the convenience of listening to any song you want on demand.
It leverages Amazon’s near ubiquity. In 2018, 70% of Americans with an income of $150,000 or higher have an Amazon Prime membership. Prime customers have to ask themselves whether Spotify, Apple Music, and Tidal are worth $2 more per month.
The potential challenge is Amazon Music’s ability to grow outside the U.S. Regional stats were not shared, but let’s use Amazon Prime membership as a proxy. Studies predict that around 60% of U.S. households have Amazon Prime. There are about 130 million U.S. households. That’s 80 million out of the total 100 million Amazon Prime customers. 80% in the U.S., 20% for the rest of the world.
Both Apple and Spotify have struggled to gain traction with their paid subscription services. In some countries, their rates are below $2.00/month, but that’s still a tough challenge to beat the Free.99 ad-supported video streaming on YouTube and the music piracy that still exists.
Amazon’s philosophy is to build an enterprise that makes life easier for the upper-middle class. That mentality holds with everything from AWS, Kindle Fires, Alexa, and Amazon Music. But the music industry’s largest growth is happening in the rest of the world, and it’s not the upper-middle class customers driving that growth.
Theoretically, the ad-sponsored Amazon Music tier should be the answer, but even that has an uphill battle against the frictionless journey of going to YouTube.com and listening to whatever song is there.
Did you get a copy of the Rihannazine?
From VICE (i-D):
This is Rihannazine, a special project that combines the creative mantras of Riri and i-D. In celebration of her ceaseless reign on the worlds of fashion, beauty and music, and our own 40th anniversary, we’ve collaborated to produce a one-off limited edition of the magazine co-curated by Rihanna herself. It champions the people reshaping wider culture across the worlds of fashion, art, cinema, music and activism. Everyone from Gigi Hadid to Lena Waithe, Alexa Demie to Paloma Elsesser, and Adwoa Aboah to Yolanda Renee King offer up their manifestos for the decade ahead.
Pre-orders for the print magazine are already sold out. Surprised? The supply was limited, but it follows the trend of Rihanna selling out everything that’s attached to her name.
While that’s true, we still need to acknowledge the work put in to ensure that Rihannazine (or her other Rihanna product) is successful. Artists and celebrities often fail at launching businesses. The “Umbrella” singer herself has had earlier products with lackluster success. Fame may increase awareness, but that’s just the first step in the funnel. The products Rihanna has launched in the past three years demonstrates understanding and control of her brand.
The Rihannazine includes runway models, plus-size models, global stars, LGBT activists, and more. It’s an extension of what her other brands stand for; Fenty Beauty and Savage x Fenty. If someone asked you what a Rihannazine would be, you would assume it’s either a) a collection of Rihanna’s photoshoots, or b) a celebration of inclusion in our standards of beauty. That’s a powerful brand association that most multi-hyphenate artists wish they had.
If we had to guess what a Drake-zine would look like, the answers would be all over the place. It could be anything from a Toronto Raptors championship celebration, a collection of sneak disses at Kanye West and Pusha T, or advice on beard grooming products. We honestly don’t know.
Four years ago, The NPD Group released a study that named Rihanna the most marketable of all big-name celebrities:
According to NPD, a celebrity is considered to be a strong endorsement opportunity for a brand if the fans of that celebrity are at least 50 percent more likely to use the brand. The endorsement score shown below reflects the relative marketability of big-name celebrities, based on the total number of brands for whom they would be a strong endorser. Rihanna’s index score of 367 means that she has almost 3.7 times as many strong brand endorsement opportunities as the average big-name celebrity. Besides those shown in the chart below, Rihanna outranks other well-known celebrities including Angelina Jolie, Tim McGraw, Coldplay, and Stephen Curry.
It’s one thing to be named on a list like this. It’s another to capitalize on it. She’s been intentional with each move she’s since.
The Big 3 are all in on Asia
“Sony Music Entertainment (SME) today announced it is more directly connecting its operations in Asia and the Middle East to the Company’s leadership team and business strategy through a new reporting structure. Moving forward, there will be new hubs throughout Asia and the Middle East that will report to Sony Music’s New York-based corporate leadership…
As part of these changes, Shridhar Subramaniam has been appointed to the newly created role of President, Strategy and Market Development, Asia and Middle East. He will continue to oversee Sony Music Entertainment India and the Middle East and add responsibility for strategy and market development for the Asia region. He will be based in New York.
In his new role, Subramaniam will partner with each Sony Music company throughout the region to recommend and execute strategic acquisitions, joint ventures, investments and partnerships for the Company and its artists in the Asia and Middle East territories. He also will strengthen strategic relationships with other Sony operating companies and engage in all aspects of SME’s digital and partner development for SME Asia and Middle East.”
Sony follows the lead set by the other majors. In 2019, Universal made a similar move by creating a new position, CEO of Southeast Asia. It also launched Def Jam Southeast Asia. Warner made similar moves that year by creating new positions and roles dedicated to the region.
The music industry’s growth in recent years has been primarily driven by Latin America, Asia, and Africa. Tencent has influenced a lot of that growth. The majors want to capture the momentum and hopefully sign these artists.
Growth is strong from an anecdotal perspective too. In 2018, South Korea was the sixth-largest music market worldwide, increasing nearly 18%. K Pop is a dominant force, and BTS is one of the most popular groups in the world. That trend shows no signs of slowing down. There’s still plenty of opportunities too.
In The Globalization of Hip-Hop, Part II, I wrote about the growth of shows like The Rap of China:
One of the most popular exposure-building opportunities in recent years has been The Rap of China, the Chinese rap competition show. When the show launched in 2017, it reached 100 million viewers within its first four hours of airing, and 1.3 billion in the first month. While the show had to adjust its content due to heavy Chinese government censorship, it has lived on to see its third season…
Several contestants prided themselves on rapping in both Mandarin and English. Bilingual lyricism was also a strong theme throughout Netflix’s Rhythm + Flow, the U.S.-oriented hip-hop competition show. In similar fashion, its popular contestants could rap in both Spanish and English. These are not coincidences.
The world has noticed the massive success of bilingual hits like Cardi B, J Balvin, and Bad Bunny’s “I Like It.” Even though a meme-oriented song like “Old Town Road” broke a record set by a bilingual hit like “Despacito,” and even though I wrote an article on how Lil’ Nas X will impact hip-hop, the global landscape will look more like “Despacito” than “Old Town Road.”
There’s an opportunity though, to blend both approaches. Given today’s landscape, someone’s probably working on it as we speak. And more likely than not, that someone lives outside the U.S.
The next “Despacito”-type collaboration may come from Asia. The major labels want to make sure they have an established presence when that happens. It increases the likelihood that their artists can be the ones to create the hit or hop on the remix.