Brit Awards 2015: the music industry is ready for pay-per-view!

Monika | Thu Mar 12 2015 | Industry insights


Last month’s Brit Awards 2015 live stream to viewers on YouTube proves that live streaming shows fresh potential for the very same music industry that got a bit stuck in the subscription model. It's an obvious sign that the biggest players in the music world - who are always searching for faster ways to gather bigger revenues - are finally ready to embrace live streaming.

The music industry has been changing with near-lightning speed. Within just a few short years, we’ve been watching the format consumption shift from physical CDs to digital. Nowadays, it’s all about access – and not ownership - and the current music industry mix consists mainly of streaming and subscription services. Companies such as Spotify, Rdio, Amazon Music and Beats are the key players to capitalize on this trend, while more and more consumers are opting for on-demand audio streams instead of downloads and CDs.

This shift, which is presently highly visible in Norway, Sweden and the UK, has also reached the U.S. By the end of June 2014, there were 7.8 million paying subscribers in the United States, which led to a 13% drop in downloaded music when compared to the previous year.

Surprisingly, though, the popularity of streaming doesn’t necessarily go hand-in-hand with the spike in revenues. Spotify may have 60 million accounts, but only 1 in 4 of them is a paying subscriber. One reason for streaming subscription stagnation is the inflexible pricing models that don’t take into account users who are looking for more varied packages. The lesson to be learned from that is that one size doesn’t necessarily fit all. 

Also, many streaming services aren’t offering payments in local currencies, which affects their conversions. In addition to that, free music video, especially on YouTube, continues to be one of the primary ways that people discover new music.

Youtube, Vevo and Vessel have been trying to leverage that trend by following on the heels of the Netflix video subscription model, which has more than 57 million paying customers in the U.S.(source: Statista). Nevertheless, time will tell whether their attempt will be successful, since, up until now, the competition has been stiff (even though the artists themselves don't actually earn much due to the high royalties being applied).

As the Guardian states: the streaming music services have a 50/50 chance to become either a model or a nightmare for the music industry: "Sometimes it seems as if everyone is planning a music streaming service, just like a decade ago when everyone down to HMV and Walmart was offering music downloads. Unlike downloads, musicians do not universally love streaming".

Take, for example, Taylor Swift, who removed her new album and back catalogue from Spotify, saying that:

Valuable things should be paid for and that music should not be free.

The Brit Awards live coverage, on the other hand, proves that there may be a faster way for the artists to earn incremental revenues.

Matured successes of sports PPV make music content owners and publishers aware that live performances and merchandise sales have proven to be a reliable source of revenue.

The only challenge for now has been to plug it in online with a reliable and proven monetization solution.

Here are just a few arguments to support the potential of Brit Awards and music events monetization:

  • Live is a desired good: The exclusive nature of the live events is a full-proof way to attract thousands of viewers on a global level even faster than with solely a subscription offer.
  • It offers convenience: Accessible anywhere and on any device opens your online venue to remote audiences of all age groups.
  • It stimulates social conversations: Great for creating buzz quickly.
  • It is compatible and leverages other online business models:  You can easily plug its reply into a VOD/SVOD .

What are the challenges of pay-per-view?

  • Quality challenge: Quality is certainly a risk factor here, so “either do it well or don’t do it at all.You need to meet the expectations of the fans and provide a true-life experience, while using a reliable OVP platform, that guarantees you the best cloud based solution to stream and record your concerts.
  • Payment challenge: You need to make sure you offer a wide range of safe payment methods - especially for the international payments. You can read more here on how we do it here.
  • Piracy challenge: This real threat to live-streamed concerts needs to be addressed with the right watermarking solution.
  • Complexity: Managing 1000's of concurrent viewers per second, while at the same time delivering a live user experience on any device is mind-boggling to the uninitiated.

The good news for you is that there’s no reason to let the challenges defeat your efforts and goals because we at Cleeng have already tackled such challenges to help you present your concerts Live and online successfully as PPV!

Boost your revenues,

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