How does technology reshape the audio industry in 2023? | RP 87

Hey friends!

Welcome to Rox’s Pick’s — a weekly newsletter about business, technology, and the history behind it.

Last week’s newsletter had a 42% open rate. The top link you clicked on was Matthew Ball’s essay on Epic Games’ Flywheel and the Unreal Engine. A warm welcome to the 8 people who signed up since then!

I was supposed to dissect two separate essays from investor and analyst Matthew Ball this week. After writing 1,000 words of commentary for one of them, I decided to make this newsletter all about a single essay.

You can check out Ball’s website for more about him, but I think Stratechery’s Ben Thompson has a great one. He describes Ball as “the guy that writes super intelligent stuff about streaming online and makes me feel threatened about my position in the universe.”

So. This week’s essay from Matthew Ball is entitled “How Technology Shapes Content and Business Models (Or Audio’s Opportunity and Who Will Capture It)”. Here, Ball zooms out and looks at the media industry as a whole. He analyzes business lessons from video and video games and applies these insights into the category that has been struggling to adopt and adapt to technology the most: music. As he writes in the essay:

And with that…

On technology & the audio industry —

How Technology Shapes Content and Business Models (Or Audio’s Opportunity and Who Will Capture It) by Matthew Ball

This Matthew Ball essay is about why technology has transformed the film and video game industries but does not seem have had the same magnitude of impact on the music industry.

I took three main ideas away from the essay:

1. Technology is media itself, not simply the way media is expressed.

2. Media categories that are strongly affected by technological change (like video and video games) have an advantage over those that are not (like music).

3. Narrative fiction, user-generated audio, and concerts will see a resurgence as the audio industry embraces new technology.

I don’t have the space to go into detail on each one, so instead, I’ll synthesize them into a coherent picture with a case study of an existing musician.

Some context: before streaming, entertainment companies made money from ads. This meant that showrunners had to time their content to ad spots. This is why Friends episodes are typically 22 minutes long, for example.

The advertising model for cable TV led to prioritizing content with a wide appeal, over niche, longform content. Networks needed content that was good enough to entertain a wide demographic of folks from 6 PM – 8 PM. This shows couldn’t rely on complex running narratives so viewers could feel comfortable watching new episodes, even if they missed previous ones.

Unlike a sitcom like Friends that had a recurring cast, crowd-pleasing jokes, and plenty of rerun potential, producers couldn’t really bet on a true crime docuseries or a narratively-driven show like Stranger Things. The drop-off would be steep if a viewer missed an episode or couldn’t make the time slot. (Sure, viewers could tape the episode but that doesn’t add to the show’s viewership and consequently, ad revenue.)

While TV providers optimized for shows that would likely draw the most viewers at prime time, a technology company like Netflix optimizes for watch time. It didn’t matter when the user watched the shows, as much as how much time they spent on the service.

According to Ball, there are three audio formats that will see the biggest opportunities: narrative fiction, user-generated audio like podcasts, and concerts.

Let’s zero in on concerts. Ball writes:

But in light of our previous discussion about TV, this begs the question:

Here’s Ball’s answer:

For example, five-time Grammy Award winning musician Jacob Collier is known for his powerful live performances. To start, here’s one of his at-home performances, appropriately done for NPR’s “Tiny Desk (Home) Concert” series:

Here, Jacob films four versions of himself playing different instruments while performing together as a one-man band. This virtual performance gave his fans a visual and auditory experience they couldn’t have in-person.

Here’s another example.

On his recently concluded Djesse tour, Collier gave himself a challenge to play an improvised cover, live on the piano every night. Collier eventually compiled eleven of these 70 live performances into a new album, Piano Ballads. In many of these tracks, you can hear his audience sing along spontaneously. His fans can now say that they’re on a Jacob Collier album. This made for a unique, unforgettable concert experience.

But he didn’t stop there.

Collier is known for conducting his concert audiences in multi-part harmony. For one of these Ballads covers, Collier had audience members film themselves singing a lyric of the song, and send the clips to him via a QR code. He compiled the submissions into this breathtaking rendition of "Can't Help Falling In Love With You”, featuring a global choir of over 10,000 voices:

How does this tie in with Ball’s essay?

Entertainment companies in video and gaming used new creation and distribution technology to give players and fans a new way to experience their favourite franchises.

Pokémon isn’t about how good the gameplay or the graphics are; it’s about taking on the fictional world of Pokémon with the player’s team or in Pokémon GO, with their friends.

Disney isn’t just about the cutting edge new film technology they invented; it’s about getting together with family and friends to watch the new Marvel movie on opening day, or going to Disneyland together.

In the same way, breakthroughs in audio creation and distribution isn’t about offering fans slightly better versions of the same product.

For musical artists and other media companies, the opportunity lies in using the technology to give the audience a vastly reimagined experience. Like Jacob Collier whose concerts are not about how good he is, but about how good his audience could be together.

As Ball says:

What’s next?

Ball’s essay is an almost 9,000-word deep dive into the nuances of technology and entertainment. If you’re interested in the music, film, and video games industry, I’d encourage you to read the entire thing and form your own conclusions! If you do, I’d love to hear them.

Some housekeeping before I go: You might have noticed that the newsletter looks different today. It’s because I switched newsletter platforms from Substack to Beehiiv. No additional actions are needed from you. I just wanted to bring it up, in case you’re wondering what happened.

I’ll be back next week with my thoughts on another Matthew Ball essay. This one is just 7,300 words, so it should be more manageable to dissect. 😂 

Have a great weekend.

Stay strong, stay kind, stay human.

roxine