Liz Stokes and David Balfour explore the strategies around Kiesza's recent multi-platform hit

01 May 2014 - Editorial

When Kiesza hit No 1 as a relative unknown earlier this month her single Hideaway had the familiar hallmarks of a viral hit. It had proven popular on HypeM, circulated on Facebook and Twitter and also been picked up at radio. What made this release especially interesting however was the fact that behind the scenes Virgin EMI and Spotify were testing the theory that streaming music on the service before a release date could actually increase download sales rather than cannibalise them. 

Spotify is clearly motivated to promote a strategy which encourages availability of songs on the platform as early in the release cycle as possible. The service is also increasingly keen to demonstrate its ability to work proactively with labels and increase exposure through its social channels whilst providing a depth of actionable data about its users. Spotify's Head of Label Relations Kevin Brown told us that the platform has evolved rapidly over the past 18 months to enhance the way it and labels can work together outside of a purely “commercial prism”.

Central to Spotify's strategy is a desire to be viewed not just as a platform from release date but as a promotional platform, in the same way that many already view services such as YouTube and SoundCloud. The presence of the social and viral tools within Spotify support this bid to be part of the process in breaking hits.

In the case of Kiesza, Tony Barnes, Head of Digital at Virgin EMI, told us that it was these social possibilities that delivered a positive impact on the record. After the song gained good traction online several weeks before it hit radio, Barnes and the team saw a chance to grow the lead-up more organically through encouraging conversations around it. “Social doesn't just mean social media now, it's conversation generally and awareness, whether that's in the pub, at work, at home – it's where ever the audience may be” Barnes says. “When you're on Spotify you can see what your friends are listening to, equally when you're on Facebook you can see what tracks they're listening to on Spotify and that creates conversation”. 

Outside of the social arena Spotify utilised its user knowledge to push the track via recommendations and with its new editorial capabilities. The conversations and discovery opportunities presented by Spotify appeared to go a long way for Hideaway. What the service is most keen to talk up is the fact that after its initial release on Spotify, the track still reached No 1 on the Official Singles Chart. Furthermore, that 'pre-release' presence also helped the track to achieve “the biggest pre-order ever at UMG”. 

Of course, the three-week exclusive Spotify stream which came before the release date was only a fraction of the wider plan put in place by Virgin (the track went to Capital the same day it hit Spotify). They key question raised is whether the success of this hit is real evidence that streaming availability doesn't cannibalise download sales. Both Barnes and Brown argue that each individual uses services differently, and for every person that is satisfied with a premium streaming subscription alone, there are others that will still crave ownership – whether in conjunction with paying for a streaming service or not.

Barnes further told us that Virgin had seen no negative effect on iTunes sales because of the early stream. We'd argue that this is a hard metric to assess, as clear like-for-like comparison between two strategies is impossible. It does seem fair to say however that there was little toxic effect on download sales caused by streaming availability in this particular case. We're not sure the major download platforms would support this claim, but it's useful for labels to have this pretty strong evidence of a possible 'peaceful coexistence' between usage-based and sales-based platforms. 

We'd also argue that as technology continues to move forward, the importance of ownership to many people will continue to decline. The tie-ins being seen with car manufactures and the strides forward in in-car entertainment systems are already edging out the need for CD players, just as home hi-fi systems are fighting for sales space. Whilst vinyl sales are on the up, their relative market sector is still low and they remain a niche product.

One concern voiced around the idea that Spotify can now 'get behind' a record is whether this support is only available to the largest or most vocal labels. A worry Brown is keen to quash. “We're totally agnostic about where music comes from. We look at each track on its own merits and with an open door policy in terms of people pitching us music, it can come from labels, artists, managers, whoever. We've got an expansive network of sources who send us music all the time it's not just restricted to our partners.”

The main factor as to whether Spotify pushes a record (outside of a track's own merits), is the label's openness to working with and on the service. Barnes tells us that the Kiesza strategy is one he's looking to do more with future releases, “nowadays when things are on radio they're at least on YouTube and I think that should be the same for Spotify. The service is growing so quickly so the quicker we can get the subscription rate up the quicker we can see growth in the industry. The best way we can move forward is to make Spotify the best service it can possibly be and that means having more music on there - when someone hears a record they should be able to hear it again on Spotify”.

The idea of on-YouTube-on-Spotify appears to makes sense, not least because the monetisation for artists and labels offered by Spotify is a hugely better on a per-play rate than that which is achieved on YouTube. YouTube also requires users to actively want to share what they're listening to, while Spotify (unless the function is turned off) will almost automatically spread the word of your listening habits thus spreading the word of new music. 

It's a fascinating case study which, whilst it certainly won't bury the debate about optimal release timing across different digital models, has provided some valuable data to help make that debate more informed. Of course as the debate progresses, it's also worth considering for how long the users of streaming sites and the 'record buying public' should continue to be viewed as distinct and separate groups.