How 7digital plans to grow the music industry in APAC and beyond
The number 3.5 billion is 7digital’s magic bullet figure.
That’s the number of people around the world who listen to music each week on radio for free.
That’s in stark contrast to the 341 million users of paid streaming subscriptions globally at the beginning of 2020, according to the IFPI.
Paul Langworthy, CEO of London-based 7digital, believes that most of the 3.5 billion will translate to streaming subscribers.
Many are in the Asia-Pacific region, which is why the company set up an office in Australia under James Priestley to service businesses that are looking to create music experiences to engage with local markets.
“It’s absolutely a very exciting time,” he says. “We want to be in that region, we’ve got a very healthy pipeline of customers in there and we have put boots on the ground.”
7digital is a B2B music solutions company that enables brands to launch their own unique music experiences to their users.
It boasts over 80 million tracks, so 7digital’s customers are able to ensure that their users will have access to a comprehensive and global music catalogue. Plus, their music-platform-as-a-service can be utilised to manage the back-end capabilities of compliance in rights management through tracking, reporting, and payments.
The platform is flexible across different business models, including traditional streaming services, as well as newer models in social media, online fitness, and live streaming.
Langworthy expands: “The companies we work with range from new startups to multi-billion dollar companies set to invest and explore new opportunities in music.
“They want to offer their own tailored music experience to their customers without having to build the music ingestion and delivery, tracking and reporting themselves, which can be costly and increase time to market.”
In the last few years, the company has seen the growth of streaming boost music consumption, and spark a fundamental shift in consumer behaviour towards a pay-for-access model.
However, as mature markets saturate, and emerging markets put pressure on the all-you-can-eat 9.99 model, established brands and new consumer tech companies are rapidly identifying new sources of growth through diversification and segmentation of streaming audiences.
In addition, COVID-19 has given rise to new formats of consumption and models at an accelerated pace, most notably in online fitness and social media, where user-generated content has become a new paradigm for creation, discovery and consumption.
In each of these sectors, music streaming plays an integral role in customer engagement, and 7digital’s licensing, technology and catalogue capabilities to support these experiences is essential to powering this growth, not just for the companies but for the broader music industry.
“Music licensing is a very lengthy and complex space, more so in recent years where we’ve seen new business models emerging with user-generated-content, and digital fitness content. The benefit for these companies is that we can handle the complexity of the music industry, so they can simply focus on the customer experience,” Langworthy says.
Paul Langworthy, CEO of 7digital
To set the stage for growth, Langworthy’s strategy has been to focus the team on the technology and services that support the broadest set of models and consumption as possible.
7digital entered 2020 on a positive note with a transformed strategy, solid technology offering and healthy pipeline of potential clients.
While COVID- 19 created some initial uncertainty, it soon became clear that demand for streaming from a massive home-bound audience was creating opportunities for which 7digital has a strong product-market fit.
“The post-COVID world has totally changed the way people interact with music,” Langworthy points out. “It will be a semi-permanent behaviour shift, and that’s where the future is. A lot of doors are opening.”
As a result, 7digital has three focus spots:
- Social media: “We’ve seen a huge increase in music within social media as people use it to interact with friends during the lockdown and music is an important part of that.”
- Fitness: “During the lockdown, the sector has grown to be worth $90 billion, and music is also integral to that.”
- Artist Monetisation: “One way to replace lost income from live performances is through monetising livestreaming, including VIP tickets with Q&As, digital merchandising, bundling of tickets and records, marketing, strategies and attraction of sponsorships.”
Langworthy, when pressed for another growth sector, says: “Down the track, gaming is something we’d look at, especially in emerging markets. We haven’t scratched the surface with that one.”
Through 2020, 7digital struck lucrative deals with innovators in strategic categories with companies around the globe.
More recently, they inked contracts with smartbike and fitness platform Apex Rides, and Triller, a Tik-Tok competitor that is currently the #1 app in Australia and much of the APAC region, and eMusic Live, a first of its kind fully-monetised virtual concert platform offering critical support to live events decimated by the pandemic.
The company has recently announced that it raised £6 million, and Langworthy expects to deliver operational profitability by the end of the year as well as multiple new contracts and renewals in strategic verticals.