How Nostalgia Took Over the Music Industry w/ Rob Jonas

26:02Yeah, yeah. I have done a lot of research on this labeling stuff. And, you know, there have been some streaming services that have come out ahead and tried things earlier than others. I think Deezer is a good example. They were there among them. I would say they are the most vocal streaming service. And for those who don't know, it's it's much more popular in France to use Deezer than maybe the States. But they've used a detection system to flag and tag AI music publicly for users to see as they are moving through Deezer. And I mean, there is always the challenge of what if you accidentally falsely flag something that is human made?

26:40And I think on a site like Deezer, they can maybe experiment a little bit more than something like Spotify that's always in the spotlight. Same thing with Apple Music just being the two biggest in the world. So how are you guys going to deal with the idea of false positives? Yeah, I think that comes down to the point I made around how it's really important for multiple organizations to work together to solve this. Okay. So we have our own detection systems. Apple have theirs. Spotify have theirs. Deezer have theirs. By aggregating all that signal into one place, you get to a better answer. So if four of us agree, it's probably correct.

27:13If five or six, seven, eight, it's definitely correct. The interesting thing is going to come when you have a differing opinion from different services around what is and what is not AI content. And that requires that we take a closer look. But getting it right is incredibly important. And that's why I think everybody's taking their time to do it properly. This episode is brought to you by the RAAA, or the Recording Industry Association of America. The RAAA represents hundreds of member companies, from major music groups to independent labels behind today's biggest artists and hottest newcomers, advocating for policies, protections, and rights that keep the American music industry strong.

27:47That means fighting for intellectual property rights, championing state and federal legislation like the No Fakes Act, and making the case for a music ecosystem where artists, labels, and creative partnerships thrive. RAAA's biannual reports show that collaboration drives revenue from streaming and vinyl to new investments in future stars. Beyond advocacy for the music business, the RIAA is also known as the organization behind the gold, platinum and diamond certifications that mark some of the most significant milestones in an artist's career. If you'd like to learn more about this organization and its role in your favorite music, head to RIAA.com.

28:25I want to go back to our topic with nostalgia, catalog listening, all that good stuff. I've been thinking long and hard ahead of this interview about why I think there's been an uptick in this over the last few years. And I think one of the things that has come to my mind first is that we've really now moved away from human driven curation. We're now in such a heavy algorithmic curation period of the music industry. I mean, even a few years ago, Spotify playlists could completely move the needle for an artist. it is less so now, according to a bunch of people that I've been talking to about this.

29:03It seems that the only thing that is working is TikTok or just getting algorithmically recommended on various streaming services. And when you have like a human gatekeeper, I'm not necessarily trying to defend the idea of human gatekeepers, but I do think one of the positive traits of a human gatekeeper is that there's a relationship that's formed. And like, for example, if I was a DJ, a radio DJ, and you worked at a record label, we form a relationship and you say, hey, here's our new single and we're putting it out on the state. And then I decide from there if I put it in rotation or not. Without that human connection, the algorithm is not receiving a pitch.

29:45They don't know what's new and what's old. I mean, yes, the metadata would bear that out, but the algorithm's just like, what keeps people on longer? We will just do that. And so, I don't know, do you think I'm onto something with this? Or do you think that there are other explanations that are more potent for why we're seeing more increased catalog listening on streaming services today? Look, I think there's a lot to unpack in terms of why catalog is becoming a larger and larger part, a share of music. I think, you know, you can have a debate on art versus science, right? The quality of the music that was created in prior years and how impactful that's been.

30:18I think Discovery is talked about is a huge part of it. And I think this younger generations looking to rediscover music they heard in their childhood is definitely a dimension as well. But I think to the question around algorithmic discovery, it really is the crux of the art versus the science debate. Oftentimes, we're sat on the science side of the argument. So looking at all the data and trying to work out what the right answer is and working out what the facts are. But there's a huge role for art in discovery and breaking artists. I think another thing that I've been thinking about in this area is, I mean, catalogs sometimes for these large music companies might be more lucrative if they take off.

30:56I don't assume that everyone who's listening to this knows this, but there's been a trend towards friendlier and friendlier deals for artists at record labels and publishers, which is a great thing. You know, with the fact that you can go viral in your bedroom, artists are able to stay independent longer. And then once they finally do get to the table and they want to sign a deal, they have a little bit more leverage than, you know, yesteryear where you really were looking for a development deal. For that reason, I would say probably on average, label deals and publishing deals are more favorable to the artists than they have been in the past.

31:31I don't know, do you think that there's any merit to that as one reason why people would be looking back to their catalog and saying, hey, maybe we should do a marketing campaign for the 10th anniversary of this song or the 20th anniversary? I mean, we are, as a business, we're probably far from the signing and developing new artists part of the industry. We do a lot of work around data-driven A &R, but it's probably the most secretive part of our industry for obvious reasons. One thing we do know for sure, though, is that, you know, obviously developing new artists is still inherently risky. And for these, certainly the larger music companies, having a predictable high margin revenue and growing part of their business from catalog is incredibly important and again you know with investors coming in buying these catalogs and developing these catalogs in a very active way it's an incredibly powerful way for these organizations to grow their business and grow revenue but at the same time you know there's a genuine concern that not making investment in frontline artists today you know that's the catalog of the future.

32:37And where do we go from here if we're not developing and creating amazing talent going forward? I've also toyed with the idea of, is it possible that we're just growing the pie and growing the amount of time that we're listening to music? And it's not just that, you know, it's old music versus new music. What does the data say about that? We, as a business, are very good at understanding what, where, and how. We understand what's being listened to. We understand where it's being listened to in terms of what service it's on. And we understand how it's being listened to. Is it from a premium subscription?

33:11Is it ad supported? We have very little understanding of who, which is an important dimension, I think, to answer that question. We do a lot of survey work to understand what's happening. And I think that does agree with the fact that music is being listened to more than ever and in more ways. So I think overall, listenership is increasing. And I think that's an incredibly important part of why we continue to see growth in streaming every single year. At the same time, we've talked a lot about how growth in streaming and growth in music in the US has slowed and why we talk a lot about the fact that international is the next growth area.

33:48So I think overall listening to music is growing everywhere. And I think internationally it's growing even more so than a lot of folks realize. Yeah. Yeah. I mean, the international piece is really interesting, But I do understand that there can be diminishing returns for labels who start to seek international growth because there are some, you know, not all streams are created equal. So a stream in a country where there's less buying power among consumers is going to result in a lesser, smaller royalty per stream than what you'll see in the US. Are there any markets in particular that you are excited about that you feel like that do have a lot of growth potential and would be worth diving into?

34:26I think there's a lot of focus on the Indian market right now, which I think is fascinating. So obviously, one of the most populous countries on the planet. Streaming is growing very, very quickly there. Historically, it has been mostly free or ad-supported music. And there's a huge focus from the record companies and the DSPs to convert more streamers into premium subscribers in that market. I think the last time we looked at the data, I think for a few points market share change from ad-supported to premium in India. it's equivalent to a small international market in, for example, Southeast Asia in terms of its size and scale and impact.

35:01So it's a really, really huge market and a fascinating market as well. A long history of very local music. But the impact of global streaming services coming in has been really profound on the market. Yeah, that's so interesting. I mean, that's something, mark my words, guys, I will do an Indian music industry episode, but it is hard to get people over from India because it is very far away. Have you spent much time there? I've actually spent a lot of time there personally, not with this business, but historically I have. And we're now looking very closely at the market. India and China are very interesting markets for us.

35:32Yeah. Yeah. Y 'all moved into China pretty recently. So we've recently done... So for us to run our business, we have to put the data partnerships in place first. And we recently had a large data partner come on board in China, which has been very important for us. I think what's really interesting about that is our understanding of the Chinese music market is evolving pretty quickly. But folks we know there as part of this relationship have said they've watched the rise, obviously the huge rise of K-pop from the South Korean market. They've looked at now the resurgence of J-pop coming out of Japan and what's happening there.

36:06And they've said, you know, C-pop is going to be the next global wave of music expansion. So we want to make sure we're well positioned to do that. And of course, by working with us, they have the ability to narrate what's happening in that market globally to the music industry. and be part of some of the research we do around export power and how music is moving between countries. So I think it's be very interesting to watch both the Indian and the Chinese markets going forward. Yeah, I'm very, very curious about China because, I mean, all the services are different. All the social media services are different.

36:36I recently met someone who is a Chinese music industry consultant for Western artists. And this is like a cottage industry that is popping up of people who are trying to help a Western artist who doesn't have access to these platforms just even manage their social media accounts in China so they can grow a fan base that they honestly have no other interaction with. It's fascinating. And when you talk about, you know, listenership and the scale of music, the market is enormous. Huge. And we'll see how artists start to move from the Chinese market internationally, as we've seen with other sort of export markets.

37:13I feel like it will take a while to develop, but it's going to be very interesting to watch. Yeah. Well, okay. So I wanted to dive into a specific genre. I saw this in your mid-year report just a few weeks ago, rock music. So in the report, you guys said that older music dominates in rock more than any other genre. 75 % of rock listening comes from tracks older than 60 months, marking a 5 % uplift in deep catalog listening from this time last year. So I understand that 60 months equals five years. It's not that old, but also can you give us like some more information about what this actually means?

37:50Yeah, it's definitely five years and older. You're right. Look, for the rock genre, we see that definitely skewing towards older demographics. And one thing we know about older demographics is they have a strong affinity to the music they discovered when they were younger. Yeah. And it plays and plays and plays and plays. I feel a little bit that way myself. I wouldn't say I'm a heavy rock music enthusiast, but I can skew that way when I need to. and the music I listen to is all from the 90s. And I think that plays out largely across demographic and genre in the way we see other trends playing across demographic and genre in Latin and hip hop and pop, for example.

38:27Yeah, well, I've thought a lot about some of these stats where it says, you know, 60 months and older. And I'm like, OK, so is it that most people are listening to something that's about six years old, which would be pretty current? You know, it would classify as old music, but it's not super old? Or is it that people are listening to Led Zeppelin all the time? And I don't know if you have any insight into that off the top of your head, but is it skewing towards 90s? It's definitely five years and older, and it goes all the way back to the 60s and 70s. And we're talking about Gen X, we're talking about boomer generations here, basically playing the music they discovered when they were younger and continue to play it.

39:03Yeah. I mean, is that something that should be concerning for folks in the rock industry, that it is skewing so heavily older? Is it concerning? I don't really know. I think it's, you know, obviously it's a generational demographic trend. I don't know how much you can control it. And of course, you know, for the folks in the industry who own those catalogs and are generating value from those catalogs, the fact that you can now discover that music easier than ever is, I think, a positive thing. Yeah. Also in that mid-year report, focusing on rock, you mentioned that there were some really positive moments in rock music this year one of them being Noah Kahn's The Great Divide which has been a huge hit um I honestly think of him as folk I'm wondering how you guys do classifications in general like how do do is it self-classified where the artist chooses um we rely so we could spend the rest of the the podcast talking about metadata which has got many many problems um the the genre classification ultimately comes from uh the label uh who is uploading that music to the DSP.

40:06And we work with that. We do a ton of work around classification. We do our own classification. We do classification for Billboard. There's many ways to categorize this music. But ultimately, we have to define a standard for a particular artist. And that's where Noah landed. Yeah. Okay. Fair. Fair. I'll say folk personally, but I get it. I get it. It does have a rock skew to it. It's not like a totally out of the realm of possibility classification. Another thing that I thought was so interesting about the mid-year report was talking about CDs and the surge of CDs. The growth of CDs sales this year has outpaced vinyl, but interesting caveat they all noted is that if you take out K-pop, then that's over half of the CD surge that we saw this year.

40:51Exactly right. Yeah. And so we saw the release of really, really big K-pop albums this year, including one from BTS as a huge comeback for them. So I'm wondering, when you are thinking about the Western pop market, how much stock should they take in this CD surge? Should they be investing more in CDs or is this really a K-pop thing? I mean, CD phenomenon is fascinating, right? So we saw the surge in vinyl going all the way back to the pandemic. And now I think we're in year 20 of back-to-back year-on-year growth for vinyl sales, certainly in the U.S. market. Incredibly important, vibrant part of the music ecosystem.

41:28CD three or four years ago was very small. I think this year, according to our report, we grew 16 % year on year. And you're right. When you strip out BTS, it was more like 6 % to 7%. But that 6 % to 7 % is still higher than the 2.5 % that vinyl grew. So CDs are outpacing vinyl right now. What's driving that? You're right. K-pop is a huge part of it. The BTS release specifically had many variants available on CD. And you see this intense fandom around owning those different variants. And that's driven a lot of the surge in activity. But at the same time, we are starting to see some evidence of, again, going back to the nostalgia trend, certain demographics going back and listening to this music from the 90s and early 2000s on CD in the format it was released, which is another interesting trend we're seeing emerge right now.

42:17That is really interesting. I mean, I do know there was this big viral stat from you guys a few years ago that about half of U.S. vinyl owners don't actually have a turntable at home. I think y 'all have something similar for CDs, right? There's a lot of people who don't actually play their CDs. So in early 23, we came out with the, you're right, 50 % of millennials who bought vinyl did not own a record player. The good news is that's now decreased to a third. So there are more record players out there, which is great. We've now looked at the same stat for CDs, and it's pretty consistent. So about half of people or consumers who buy CDs do not own a CD player.

42:53Wow. Okay, so what does that mean about the value of a CD for a consumer? I think we get into the debate around some of these physical formats being very much collectibles. And one thing we know about K-pop fans is they have a huge, fierce affinity to their artists and the bands. And owning everything that's attached to that artist is an incredibly important part of their fandom. And we're seeing that play a little bit in that CD buying behavior. Yeah, I think it makes a lot of sense. And also for me, I think that when I go to a show and I go to the merch counter, the hoodie is 80 bucks. You know, the most basic T-shirt is$40.

43:31And so if there is an option to buy a cheap CD, so I can say that I got to go to the merch counter, bought it at the show, you know, you get the CD, not the hoodie. Yeah, I would. I would. Also, I'm not I'm not a big fan of hoodies, but that's just a personal preference. But, you know, like I do think that there is a lot of value in having a cheap offering for fans who really do want to participate in helping the artists. I think there's a lot of fans that do understand that, you know, maybe their favorite artist is only scraping by at this point if they're kind of a middle class artist. And so buying a CD or buying a vinyl record is a big boon to that artist.

44:08But it's also not too hard. There's not a big pay barrier to entry for owning a CD. I do also like the liner notes. That's pretty great. And that all doesn't have to replace me listening to that album on streaming. It's also interesting how many Western artists are adopting kind of this K-pop variant model where it's like, okay, how about we make 10, 20, 30 I don't know if it's ever reached 40. I know it's reached like 35 or so. I've not seen 40, but it gets up there. It gets up there of the exact same album, but with different cover art, different colored vinyl records or CDs inside. But I just kind of wonder where the ceiling is on all of this.

44:49Well, it doesn't seem we've reached it yet. One thing we're certainly seeing is this momentum around fandom and super fandom is not slowing down. Again, for a few years now, we've been talking about 20 % of music listeners being super fans, which means they engage with their artists they love in five or more ways. And that could be streaming, could be attending a live show, could be buying merchandise. There's various different criteria. And that 20 % has stayed pretty constant. But their willingness to engage and buy and develop a relationship beyond streaming with the artists and the bands they love is not going away.

45:24Yeah. Yeah. A previous guest on the show, I don't know if you met him before, Seth England, CEO of Big Loud. He was a great guest and he was talking about like the rise of country music. And he cited Illuminate report and some findings about super fandom. And his takeaway from reading over some of the stats on super fans was that it might be easier to convert a super fan from a different genre to love country music and to become a super fan also of country music or a specific country artist than it would be to get someone who's kind of a passive fan to become a super fan within country. I was curious what your thoughts are on that.

46:01Do you feel like super fans are adaptable and willing to kind of move across genres and adopt new artists? I think what we've seen a lot is sort of genre blurring. So there is some evidence and again, some of the research we run that shows that fans of a specific genre are starting to move into other genres. So it makes sense that super fans would make the same change. Country is a great example. I think we talk about country now more than we ever have done in the last five years because it's gone through a phenomenal surge, country and Latin music specifically. Probably four years ago, we started really charting the very rapid rise of Latin music.

46:35And probably two years ago, we started charting the increasing viewership, sorry, listenership of country music. Very different trends happening there. Global is a very important part of what's been happening. But the ability for fans to move between genres and bring that super fandom with them is definitely something we see as well. And I'm also wondering, so you said that vinyl growth this year was about 2%, maybe a little over that. Is that kind of slowing down? It's definitely slowed down a little bit. Again, the detail really matters here. Independent retail is an incredibly important part of the vinyl ecosystem.

47:10What we saw this year, though, is because we had these huge releases specifically by K-pop bands, they skew very heavily towards mass market retailers. Okay, so like Target, Walmart. Exactly. So when these 5, 10, 15 variant releases drop, Mass market has a really big impact on vinyl growth, and that can somehow dampen what's happening in independents. When those releases are absent, the vibrant growth within the independent retail sector is very, very clear. Very interesting. Okay, I feel like it's time to do some games. Sure, let's do it. We could talk about this for, honestly, the rest of the day, because I feel like there's so much to unpack.

47:48But we'll move on to this game that we call Spin the Record. It's a tradition here on On the Record. spin the record it's brought to you by the raaa and basically you're going to spin the wheel a few times we'll see what it lands on these are all just fun questions all about nostalgia and your work at luminate um and yeah okay okay these are custom for today oh yeah oh wow all right okay so personally are you a fan of vinyl cds or cassettes uh definitely vinyl uh buying more vinyl than I ever have done. Wow. And actually texted this to a friend of mine on Friday night who just given me a whole bunch of vinyl I really wanted.

48:28And it's music I've listened to for since I was a kid. And it's very clear that it just sounds better on vinyl. There you go. And I don't know a CD player anymore. So. Wow. Okay. Yeah. No, I actually just got rid of my car that had a CD player. And so I'm in the same boat. But I do think with records, it really depends on what your turntable and your sound system is. I agree. I do not have a good one yet. I'm working on it. Okay. Spin again. Again? Yep. Okay. What is Illuminate's stat that really intrigues you personally? I think probably our most recent one from this year, just under 10 % of listening in the US is now Latin music.

49:04Whoa. Yeah. Okay. And again, the rise has been very rapid. The Bad Bunny Super Bowl performance this year, which is incredible, has had a huge impact on that. We saw that it made a material impact in how this genre is being listened to. But I think that stat is probably one of the most fascinating right now. I love that. Okay. Let's spin again. What do you think is the most often cited Luminate stat? What do you hear the most often? Definitely the 100 ,000 tracks a day. Yes, which is now updated. Now updated to 150. Again, I think we talked about that probably three, four years ago now. And that has been cited over and over and over again.

49:44and is now updated. So we'll see how long it takes for the update. Yeah, well, it's going to start today for me. Well, okay, I'm really curious how much AI makes up of that. Do you know? I think I'll have to come back on in a few months and talk about that once we get a better understanding. Okay, TBD, TBD. Okay, let's spin one more time. Wow, beautiful work. What is a prediction that you have for the music business based on your data? We've talked about this a lot in the last couple of reports we put out. The way that music is moving globally is becoming incredibly complex. And it may always have been complex and it's now just much easier to understand.

50:26But we talk about these import-export rankings. So understanding whether a country is a net importer or exporter of music. Interesting. And how that changes. I think it's incredibly important. I think it goes hand in hand with the fact that one of the next waves of growth that industry is going to be in international markets. It is happening right now. But understanding how K-pop can now be the number three, or Korea can be now the number three import market into the US is a really fascinating change in how music moves around the world. And seeing how this evolves going forward is fascinating.

51:04What it means for sub-Saharan Africa, what it means for the Middle East, how South America continues to export music, what it means for China, as we talked about, what it means for India. I think it's going to be fascinating. I think a world where music is more global and diverse than ever is a good thing. And measuring that going forward is going to be, I think, very important. I'm really curious, as a British person, do you follow the British music industry and how it's moving very closely? I do. And I do because I think if you go back a couple of years, there was real concerns that the UK had lost its power as a music cultural force.

51:41I think that's come back around in the last couple of years, certainly with the rise of artists like Olivia Dean and others. And the UK is now kind of back to where it was. So I think it's a positive thing. Yeah, that's why I ask. I don't know if you know Will Page. Of course. But I just met up with him in London. I was there a couple of weeks ago and he was giving me a whole presentation about what was going on with the UK music market. And it got me really interested. especially because truly, I don't know, I want a study done on this. Why are there so many CEOs that are British in American companies?

52:11I have no idea. One thing we were looking at on the UK music, you may finish this. I know you're a huge, I think you're a huge Radiohead fan. I am a huge Radiohead fan. So when I last looked at this sort of in the depth of despair around UK artists in the US, Radiohead was the top ranked British artist and act in the US. wait what yep but it was way out of the you know out of the top top and this was a couple of years back wow okay it's changed now i will say i i do see radiohead songs going viral on tiktok a lot which has been really surprising to me to watch because i don't think that their music is at all geared towards what you would think of as a tiktok viral song but i don't know jeff buckley is also doing really well that's an artist i love not british but just like i don't know why he is doing so well but he is fantastic and i love to see it but also it i i do get a little gatekeepy i'm like no everyone knows this deep cut radiohead song god i thought i was cool okay so we are going to move on to our second game okay which is what would you cue i have a few prompts here just pick one song per prompt that comes to mind okay so what would you cue to take you back to your childhood uh that one's easy mr blue sky by elo good pick which has gone through its own revival period with guardians of the galaxy um but uh that's the number one standout for me okay what would you cue to represent your favorite era of music this is a tough one uh i would actually go with uh blue monday by new order oh so originally came out in 83 i didn't get onto it until like 86 87 because it was the first cd i bought when i owned a cd player um doesn't own one anymore and that That took me down the whole odyssey of obviously New Order into, I was living in England at time, into the crazy kind of Manchester phase of the Stone Roses and the Happy Mondays and that phenomenal period of music in England.

54:07Yeah, that's a great pick. Okay, finally, what would you cue to represent the best concert you've ever been to? Right now, and it's pretty fresh, it's going to be anything by Paul McCartney because the best show I've probably been to in many years of going to shows was the Paul McCartney show in LA this year. So the undercard show when it was 1 ,200 people. How did people get in for that? Did you just get super lucky? I mean, industry. There was a lot of luck involved. A lot of luck involved. Yeah. No, I have a new favorite concert this year. Did you see the Rosalia tour when it came through. I did not.

54:46It was insane. I was thinking about flying to Mexico City to see her again. But then I realized that that was a bad use of my money. Actually, is that a bad use of my money? I don't know. I was pretty sure before I went to the Paul McCartney show that it was going to be the best show I ever went to, and it did not disappoint. I love that. Well, Rob, thank you so much for coming to On The Record. Thank you for having me. All right. Thank you so much to Rob Jonas for joining me to talk about all things nostalgia and catalog music. And thank you for listening to this week's episode of On The Record.

55:15If you liked today's show, give us a follow on Instagram or on our TikTok page at Billboard On The Record, where you can find new clips of this show every single week. We'd also appreciate it if you rated our show on your favorite podcast platform, because all these things help On The Record grow bigger and better than ever. Also, my glam for this episode of On The Record is sponsored by Booka, the new and easy way to book LA's most sought-after beauty and wellness professionals, all vetted, curated, and bookable in one place. You can check them out at booka.com. I'm your host, Kristen Robinson, and tune in next week for another peek behind the curtain of the music business.

55:49I'll see you then.

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