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Sony Music is quietly working to adapt to a market now devoid of a purchase journey

Sony Music UK believes it’s getting closer to answering a question baffling many record labels at the moment – how can money be made from acts now that people are more likely to stream tracks from rather than purchase?

By accepting that “there is no purchase journey to start with,” according to the company's senior director of insight Daniel Hall.

It’s once bitten, twice shy for a business that, along with its peers, was caught off-guard by music’s shift from analogue to digital but is determined not to be beaten again by the latest disruption to its business model – streaming. Sony’s riposte to streaming sapping download revenues is to move away from focusing all of its energies on pushing acts during release windows and instead spread its marketing over a longer period.

It means thinking about marketing, whether online or through merchandise, as part of a “continuous loop” – a strategy geared to keep people constantly listening and coming back to Sony's music catalogue, revealed Hall. Whether it's Spotify or YouTube, a traditional campaign or a product, those mediums should all work towards the same goal under Sony’s new approach, which will push to get people listening as much as they can – on whatever platform – in order to make money.

That mindset shift has been in part inspired by the changes industries such as publishing and fashion have made to keep people engaged, with both trying to commercialise how much they understand people instead of just peddling products.

“We’re the canary in the mine in terms of digital disruption and our business model is permanently evolving,” said Hall, who has hired innovation consultants Redscout to mastermind that evolution. “Now we’re moving from a product model to one that’s increasingly about access rather than permission. Streaming is becoming the biggest part of the audience and if you project over the next couple of years, it’s going to become an important platform.”

Details of how the model will unfold are still being shaped but it will be rooted in understanding the context that people are listening to music. Sony wants those insights to underpin what A$AP Rocky or Jimi Hendrix song, for example, it serves to someone when they need it.

“It’s a way of joining up all the different marketing parts because at the moment people are pushed along this journey but at the end there is no purchase,” outlined Dan Hauck, head of strategy at Redscout.

“You wouldn’t put all your marketing efforts into the first two weeks of an album just to get a few sales; you’d think about all the things you need to do within that ‘continuous loop’ to connect with people, whether they’re using social channels or a music platform or through a traditional advertising campaign…we just want them to listen as much as we can get them to because that’s how [record labels] now need to make money.”

However, Sony can’t get to that level of personalisation on its own and is hoping to partner with other companies in order to supplement the data listeners opt to share directly with it. Hall cited hotel chains as an example of the type of business it could work with in order to “understand the mindset people are in so you can start to be relevant in those moments”. The potential to surface older tracks from Sony's back catalogue is what interests Hall most about being to personalise its marketing, allowing it to sweat certain assets harder to make more money.

Futureproofing for a streaming-led world

There’s also an expectancy that the changes also affect the way Sony works with artists, though Hall admitted it was an aspect that hadn’t yet been as fleshed out as the other parts of the plan.

“At the moment it’s about getting the concept right and thinking about how the consumer engages with our artists and our content in a more relevant way,” explained Hall. “The opportunity for us moving forward is how we can anticipate the way people are going to behave, and what metrics and analytics we can use to determine the types of artists they’re going to want to listen to.”

Those investments will be informed by the learnings from a six-month research project that was able to put to bed certain assumptions and highlight some of the new attitudes towards music and how people want to consume it. Whether it's the fact people aren’t prepared to give up streaming yet, and do care about how artists make money or the finding that word of mouth, radio and live events still play a vital role in how people discover music, the study – in Sony’s opinion – is ample proof that claims digital has disrupted people's relationship with music are greatly overhyped – it’s just the way they access and listen to it that is different.

“Music is a lot more intimate than it used to be and it almost serves more of a functional role in people’s lives in the sense that it enhances other activities because it’s a lot more accessible,” said Hall. “People use music to perform a function in their lives or a capture a moment in a slightly different way than they have historically been able to do.”

While the strategy is focused in the UK for now, Hall suggested any changes could be extended to the wider business, a move that would chime with a global upheaval of its entertainment marketing. Last month Sony Entertainment chief executive Michael Lynton suggested that his business needs to stretch out how it releases music in a similar way to how Hollywood studios start with higher generating channels like cinemas before ending with lower-revenue outlets such as Netflix.

Seb Joseph

Hi, I'm the news editor at The Drum. Give me a shout if you have any questions about our news coverage or would like to pitch in a story.

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