‘A lot of people are advocating for changes in the models of existing streaming services. I feel like that ship has sailed.’

Mar 19, 2023 | blog

MBW’s Inspiring Women collection profiles feminine executives who’ve risen through the ranks of the enterprise, highlighting their profession journey – from their skilled breakthrough to the senior tasks they now fulfil. Inspiring Women is supported by Ingrooves.

Back within the late Nineteen Nineties, Vickie Nauman, then working in radio in Seattle, began studying a few controversial new music service known as The service was being slated for permitting folks to steal music. Intrigued, she sat down at her Dell laptop computer with its 14.4 modem and (slowly) downloaded the Napster consumer to see what all of the fuss was about.

“I was scrolling through the interface, looking at millions of people and every song that was ever created. My first thought was, ‘This is going to be the most incredible change that I will probably see in my lifetime, in terms of how all entertainment content is going online. I have to figure this out.’”

Nauman left her radio job to affix one of many first legally licensed companies, which was known as MusicWeb — a JV between RealNetworks and the three main labels.

While there, she realised how little she knew about expertise and made it her mission to embark on a steep studying curve. Nauman was at MusicWeb for lower than a 12 months (“it was a really harsh working environment”), earlier than she returned to radio at KEXP to assist construct out its on-line streaming providing.

There, she learnt from groups from Microsoft and the University of Washington and went deep into the Digital Millennium Copyright Act. Next cease was to do an MBA in enterprise and innovation, whereas consulting on the aspect.

Since then, Nauman has expanded her expertise and perspective by working at Sonos (Global Alliance Manager) and Today, her work focuses on the alternatives in Web3 and serving to to bridge the hole between the music and video games industries. She additionally works with music and tech corporations on technique, merchandise, rights and information, licensing, partnerships and development.

Here, we chat to Nauman concerning the subsequent evolution after on-demand streaming, probably the most thrilling alternatives in Web3, why TikTok is likely to be on its method out, and rather more in addition to.

How has your perspective on the digital evolution developed since that first introduction to Napster and the way thrilling THAT idea felt TO you?

There are positively flaws within the on-demand streaming and UGC enterprise fashions, they don’t work for everybody. I’ve modelled these companies each method possible and it’s laborious to make them succeed in the event you’re the one which’s placing on the service. I divide artists into this huge pyramid and on the very prime, there’s the 1%. They’ve at all times performed effectively, they at all times will do effectively, it doesn’t matter what mannequin it’s. At the underside, there’s most likely about 40% hobbyists, individuals who simply need to put their music out. It’s that center layer of impartial artists, which is the place my fandom is available in — artists on impartial labels who’re most likely rather less pop — who the enterprise fashions don’t work very effectively for.

The streaming fashions that we now have now which might be all you may eat for $9.99 per thirty days, or round that value level, had been created emigrate folks off of P2P. For individuals who purchased one CD a 12 months, it’s a stretch, however for individuals who purchased 20 CDs a month, we’ve eliminated that potential to pay and categorical their love of music past $120 to $150 a 12 months. The streaming fashions want a refresh and a few of that can come from Web3. Some of it should come from the companies themselves as they proceed to attempt to differentiate.

How would you wish to see them refreshed?

I’ve labored inside these corporations — I understand how expertise and rights administration works. It’s actually, actually laborious when you could have an present mannequin, like an on-demand streaming and royalty mannequin with hundreds of rights holders adhering to it, to alter it after it’s already been performed.

We at all times speak about the way you divide the pie and lots of people are advocating for modifications within the fashions of the prevailing companies. I really feel like that ship has sailed. If you need to add extra fruit and fewer sugar to a pie, you do it at first earlier than you bake it. You don’t bake the pie after which determine afterwards that it’s worthwhile to change the ingredient make-up.

I’m taking a look at issues like Web3 and rising applied sciences that may actually change the panorama. When I discuss concerning the individuals who used to purchase 20 CDs a month, we’ve by no means been in a position to seize that worth, besides in dwell music. What excites me about this subsequent iteration of companies is issues which might be scarce and collectible within the NFT and Web3 world. That will be experiential issues within the metaverse, it may be in accumulating, it may be interactive fan golf equipment.

“I think of on-demand streaming like radio. It works for some people and it doesn’t work for others, but you can’t avoid having your music on there.”

I consider on-demand streaming like radio now — it’s the baseline for the remainder of our digital economic system. It works for some folks and it doesn’t work for others, however you may’t keep away from having your music on there. It’s sort of the identical as terrestrial radio, which labored from a promotional standpoint however lots of people by no means obtained paid. Now it’s about discovering methods to construct extra excessive worth items that customers and followers will purchase that sit on prime of and above on-demand streaming.

Where are probably the most thrilling improvements within the Web3 area for music?

I’m bullish concerning the experiential aspect and what we’re seeing with concert events in Roblox or Fortnite. We haven’t seen the true potential of individuals having the ability to collect globally in digital worlds, for music and for dwell music, and I feel that this can be a large spectrum of issues. Right now, we now have avatars that we are able to see by logging into Roblox or Fortnite however it will evolve into hyperreal digital worlds that we are able to’t even think about but. With the experiential aspect of it, there’s huge potential there for us to reimagine what a live performance and an expertise seems to be like between followers and artists on-line.

NFTs is a little bit of a grimy phrase proper now due to the crypto fallout however I feel that’s very separate from this. NFTs and the decentralised tech that underpins it’s going to evolve into a extremely vast mixture of interactive fan golf equipment. Music is so tribal anyway and we’ve constructed these big tents with streaming companies. I really like the thought of small tents for music and getting extra folks into the small artist-based and token-based communities. I feel there’s a very completely different method of interacting with followers, and for artists and followers to work together, and for followers to be the material of a neighborhood in Web3. All of these items have the potential for being high-value scarce items that we misplaced on this iteration of the web.

When blockchain and decentralised expertise first began being mentioned within the music enterprise an excellent few years in the past, it was all about its potential to upend the established order and take away the necessity for among the main music corporations or have them relinquish some management. Do you see that taking place? Or do you suppose it has a very completely different use?

I by no means believed that and I’ve been a blockchain fanatic for the reason that starting. There was that period when there have been folks going all around the globe, doing speeches saying, ‘This is the end of labels and publishers, everything’s going to be on the blockchain.’ It’s ridiculous. That shouldn’t be going to occur. This occurs each time there’s new expertise. It occurred with AI, dwell streaming, on-demand streaming and it occurred with digital distribution 20 years in the past. When distribution grew to become digital, everybody was speaking about how there was no want for labels and publishers.

“people were saying, ‘This is the end of labels and publishers, everything’s going to be on the blockchain.’ It’s ridiculous. That is not going to happen.”

I’ve at all times believed that the blockchain has an unlimited quantity of potential to assist us clear up issues round rights and to replicate who owns what, transparently. There’s been resistance to transparency from the numerous conventional labels and publishers however as blockchain applied sciences evolve, it’s only a completely different sort of database that I feel we might use to assist clear up that drawback. What regularly occurs is, metadata leaves labels and publishers, it goes out into the ecosystem and when it comes again to the labels and publishers, it’s improper. Then, among the labels and publishers are additionally submitting incorrect data into the ecosystem. So we now have one thing that’s occurring on this actually sophisticated tangle that’s creating issues round music information.

The different use case for decentralised expertise is that this potential to make use of good contracts. In these worlds of collectibles and scarce items between followers and artists, they don’t essentially have to have anybody besides a sensible contract and a blockchain to replicate what they could personal, after which the power to promote it and generate profits off of it. And for the artists to take part within the secondary sale, whether or not it’s entry to a fan membership, or a collectible good, entry to tickets or some kind of different funding in fractionalising rights. All of these items are in a position to be performed actually elegantly with the usage of blockchain.

What are the most important challenges within the music and tech world at this time?

From a rights and rights administration standpoint, there’s nonetheless an inordinate variety of issues that have to be solved. There’s cash that may’t be settled, that’s collected and corporations can’t work out learn how to marry up the sound recording to the publishing to know who to pay out. There’s most likely a billion {dollars} a 12 months in tiny black containers everywhere in the world, together with big black containers just like the US mechanical rights.

I used to suppose that was one thing one or two corporations might clear up and now I don’t imagine that. I imagine we’d like tons of of corporations to resolve it domestically and there must be new methods. Blockchain will help and centralised databases also can work.

I additionally suppose there’s at all times an issue round getting new enterprise fashions to market. Every time we now have new expertise, whether or not it’s streaming or dwell streaming, or now Web3, there are much more corporations that have to get by means of a licensed funnel than there are folks at labels and publishers, who’re the gatekeepers. That is at all times a problem for innovation. If you want rights to have the ability to gentle a product up, you could have to have the ability to get these rights accepted by labels and publishers and there’s an unlimited funnel that has to get shrunk all the way down to get by means of these gatekeepers.

I do lots of work in gaming and see no finish in sight to how music can profit from gaming. When you concentrate on these two industries, music is predicated on friction and that funnel of getting lots of corporations in, who’s going to get rights, who isn’t and who can afford to pay for them. Gaming is about open entry and in-app monetisation. The largest problem for me, and that is the place I’m focusing a lot of my time and power, is getting these two industries to return collectively higher and create new enterprise fashions that can work between gaming and music.

Have you provide you with any new enterprise fashions? Or is that course of nonetheless within the early levels?

It’s nonetheless early levels. When you concentrate on the prevailing fashions that we now have, we now have a proposal of each piece of track, every bit of music ever created, both by means of UGC, social media or subscription platforms. No-one’s actually taking a look at that anymore. I really feel like that ship has sailed and I don’t see metaverse corporations or gaming corporations who really feel the necessity to have that a lot music.

Most of them are being rather more curatorial, they’re considering, ‘What’s the small quantity of music that I might have in my recreation? Who are the artists that I’d wish to have in my recreation?’ Then it turns into extra like synchronisation licensing, so that you’re stepping into and doing partnerships for a handful of songs. When you do this, you now not want tens of hundreds of labels and publishers to comply with the identical mannequin.

Then you could have room to be progressive in the way you do a income share. What is the combo of an upfront price versus a income share? Do you simply pay any individual upfront? Are there extra progressive methods to have the ability to do that? What Roblox is doing proper now with digital merchandise, I really feel is one thing that’s utterly untapped for the broader music business. They don’t fairly see the chance but as a result of it’s largely artists which might be creating the digital merch and collaborating in that.

“We’ve not even begun to understand the potential for music with in-game, in-app purchases that are based around engagement.”

With gaming, for years I used to be certainly one of these individuals who would flag this to the business and say, ‘The gaming industry is bigger than music and film combined and they make that money by building engaging and frictionless experiences’. The billions of {dollars} are largely being made by means of engagement round in-app buying. That doesn’t make sense to the music business as a result of the music business needs all their cash upfront. They’re very threat averse. We’ve not even begun to know the potential for music with these in-game, in-app purchases which might be based mostly round engagement.

There’s discuss of TikTok being banned within the US and there’s been dissatisfaction from main music corporations concerning the degree of royalties it pays out. What’s your perspective on that platform?

I’ve lengthy felt that it’s a promotional platform that can carry streaming. I’ve additionally thought that the business needs it to be one thing greater than promotions – so this can be a change that’s afoot. TikTok shouldn’t be going away however I imagine the business is pressuring for one thing extra. We noticed it with

“I have long felt that [tiktok is] a promotional platform that will lift streaming. I’ve also thought that IT’S TIME AS PURELY PROMOTIONAL WILL EVOLVE.”

You’re an advocate for extra feminine leaders and various leaders typically within the tech and startup area. What are the hurdles that stay in place?

If you’re a first-time founder, you could have a more durable climb than when you have based an organization earlier than. Part of [the reason for a lack of diversity] is that lots of first-time founders are girls and folks of color and they also might have a more durable time elevating cash. Fundraising is so vital to this and I’ve seen through the years such a marked distinction between first-time founders and founders who’ve performed one thing earlier than. Getting extra folks of color and girls into startups typically, in order that they’re uncovered to it, goes to offer them the next probability of success to be a founder.

The different actually troublesome statistic is that funding for corporations which might be based by girls has truly gone down. It doesn’t really feel like we’re making sufficient progress. It’s not dissimilar to once I talk about extra about girls making an attempt to get jobs in expertise corporations or as senior degree executives and folks are likely to say, ‘Does this woman have the experience that we need?’ If you examine her to a person, you may say, ‘Well, he looks more like me, he’s obtained extra expertise that’s much like mine and so I’m extra comfy with him.’ It does create a homogenous workforce. People have to start out seeing that in the event you get girls and folks of color across the desk, your merchandise are most likely going to be higher. You’re going to have completely different views and completely different understandings of the panorama.

what do you would like you’d recognized at first of your profession that now?

At the start of my profession, I didn’t utterly perceive that the one method {that a} lady, particularly, goes to get something, is in the event you ask for it and, in some circumstances, demand it. I began out at Procter & Gamble, proper out of school. They stated, ‘If you do this, this is how you climb the ladder. Here’s the way you earn more money, right here’s how all of this works.’ I took that as a given. It wasn’t till most likely 10 years into my profession, once I did an MBA, began getting uncovered to completely different sorts of corporations and all kinds of various folks, that I in a short time realised there’s extra money and extra methods of getting expertise and into positions of energy. Now, I perceive. If I didn’t advocate, generally demanded, and made a case for myself, I wouldn’t have something proper now. If I had simply gone with the movement and brought no matter folks had been prepared to offer me, I might don’t have anything.

“If I didn’t advocate for myself, I wouldn’t have anything right now.”

Also, I’ve stop each single job I’ve ever had with out one other job to go to. When I used to be working full time in corporations, I’d get to some extent the place I’m simply performed. I’m not studying anymore, this isn’t working anymore, I would like one thing new and I would like a palate cleanser. I do know that my mind works in another way to individuals who can depart one firm on Friday and begin a brand new one on Monday. I’ve by no means ever had the urge for food to do this.

I feel we’re coming into into an period wherein work goes to essentially change by including AI into the combo and a brand new technology that thinks in another way. I really feel like there’s room for folks to carve out their very own path. For a few years once I was so taken with expertise and was doing initiatives in China, an MBA programme and dealing for these uncommon music expertise corporations, there have been many individuals who had been like, ‘Why are you doing that? Why don’t you simply go work for Microsoft or I didn’t need to do this as a result of I do know that once I go and work for an enormous firm, the overwhelming majority of what you be taught is how that firm works. I’ve such an enormous urge for food for studying issues that I need to and my profession path has at all times made sense to me. It’s been like, ‘Okay, I want to learn about streaming and digital and I’m going to do this at KEXP. I need to additional my training so I’m going to do an MBA. I need to study {hardware}, software program, content material integration and I’m going to do this at Sonos. I need to be taught concerning the ecosystem and the back-end methods of music, so I’m going to do this at 7digital’.

When taking over jobs and even new initiatives generally, I ask, ‘What am I going to learn?’ Not, ‘I can be thankful to you for hiring me’ it’s, ‘How are you going to give me new skills? How are you going to give me new knowledge?’ If I can’t reply that, if it’s simply one other job or one other challenge, it’s method much less attention-grabbing to me.

It’s humorous as a result of the identical individuals who used to ask why I didn’t simply go and work for Microsoft or Google, now say issues to me like, ‘How do you know so much? How did you gain all this experience and all this knowledge?’ I really feel prefer it’s as a result of I didn’t go to work for an organization like that. I don’t begrudge anybody who does work for these huge corporations as a result of they are often phenomenal methods to advance careers, generate profits, get inventory choices and perceive learn how to navigate an enormous company setting. But it isn’t the one technique to work.

MBW’s Inspiring Women collection profiles feminine executives who’ve risen through the ranks of the enterprise, highlighting their profession journey – from their skilled breakthrough to the senior tasks they now fulfil. Inspiring Women is supported by Ingrooves.Music Business Worldwide

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