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Slush Music celebrates digital rebound

At the Slush Music tech event in Helsinki, music business insiders celebrated the sector’s digital renaissance – without forgetting old-school values.

Slush Music transformed the former Nokia Cable Factory. Image: Julius Konttinen

Helsinki’s main Slush start-up event kicks off on Thursday, but tech innovators and music entrepreneurs have already been swapping ideas at the prequel event Slush Music, which began on Tuesday. This lower-profile warm-up act, now held for the second time, began on Tuesday at the former Nokia Cable Factory in western Helsinki's dingy Ruoholahti neighbourhood.

Music business insiders were mostly in a heady mood, as the industry is finally showing signs of financial recovery after a decade and a half of losing ground. The flood of music available free online knocked out the foundations of the traditional record industry around the turn of the millennium.

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No slush, just rain outside the Cable Factory Image: Julius Konttinen

In the past two years though, music streaming services paid for through subscriptions and/or advertising have established themselves as a workable model for artists, listeners – and some of the myriad firms that try to mediate between them.

"The music industry hit bottom two years ago, but the business is improving. Since then revenues have been going up, and looking at the Nordic region as a bellwether we know with some certainty it will go up in the rest of the world,” said Göran Andersson, a veteran Swedish producer and "serial entrepreneur" now based in London.

"The streaming story is positive, but I would caution people not to get drunk on two years of success," countered Stu Bergen, CEO of International and Global Commercial Services at Warner Music Group. "We have to remember that some of the world’s biggest market regions are still mainly physical. And some genres including classical and country are not seeing their part in the industry recovery."

"Pennies and cents from streaming"

According to the music industry association IFPI, digital already accounts for half of all revenues from recordings worldwide. Streaming grew by more than 60 percent last year, with overall revenues up by around six percent. Still, many consumers listen to music from outlets such as YouTube, which pay artists infinitesimal sums. Even the giant of streaming, Stockholm-based Spotify, is hardly a pot of gold for most artists.

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Suad Khalifa Image: Julius Konttinen

"Yeah, it’s only pennies and cents from streaming services. When I get my royalties statement from Teosto (the Finnish performance rights organisation) it shows digital, but it’s a small part of it," says Finnish guitarist and arranger Joona Hasan, who performed at Slush Music on Tuesday with singer-songwriter Suad Khalifa.

Khalifa, who has just released her solo debut after years as a guest and backing vocalist, is also ambivalent about music apps.

"Soundcloud was great when I was first starting out; I could just put demos up there right away for people to hear," she says. "But I’m not sure about all these others. There’s money coming in, but it’s not going to the right places – it’s going to the companies, not to the artists. It’s basically the same problem that’s been going on for 50 or 60 years."

The question of whether artists need record labels or management has also been going for years, especially since the explosion of DIY electronic platforms. Again, digital can help but not always replace traditional models.

Suad, meanwhile, says she still appreciates physical records and record shops, which seem to be staging a modest comeback.

"Record shops are such a nice concept, the experience of browsing through and looking at the covers, it’s more intimate. Otherwise everything just comes at you so fast," she says.

"A good record store person knows you better than your family doctor and can prescribe what you need," quips Hasan.

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Presenting the Kieku app. Image: Julius Konttinen

Hearing that call for tangible, visual music products is the French distribution company Believe, which bridges the gap between indie artists and streaming and download services.

"We expanded from digital to physical, including vinyl, because the artists we are working with started demanding it," said Believe’s sales director, Romain Becker, formerly of YouTube.

Digital no substitute for audience contact

Despite all the tech buzz, the basic building blocks remain the same – meeting fans and industry contacts face to face, live concerts, the need to be part of genuine real-life communities, doing footwork, rediscovering physical records and shops.

"For artists, the one thing that hasn’t changed is the need to connect with audiences," says Andersson. "Digital can shorten the distance between artists and fans, and make it easier and faster to release music, but there’s a danger in expecting too much from it, expecting a miracle. You still need to do your homework. You still need to get out and do the footwork."

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The Music Tech Fest team at the Cable Factory. Image: Jussi Mankkinen / Yle

That includes old-fashioned face-to-face networking, according to Emilien Moyon, head of the Global Entertainment and Music Business Graduate Program at Berklee College of Music.

"Young social media natives may not necessarily realise that having 1,000 connections on LinkedIn is not as valuable as five real personal bonds with people who can champion you in industry," he said.

His onstage sparring partner, Dean McCarthy of the London-based Music Tech Fest agreed on the importance of schmoozing at conferences such as this. Even the old-school practice of handing out business cards, he says, gives people a tangible reminder of your encounter that, again, could be more useful than a dozen electronic contacts.

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Halonen (centre) meets and greets. Image: Julius Konttinen

Among those working the room at Slush Music was Janne Halonen of the cross-genre Finnish-Beninese band Helsinki-Cotonou Ensemble.

"I’ve only been here a couple of hours, but I’ve already done some good networking," he said. "The guys from Music Finland introduced me to some people who might be of interest. I’m just getting a lot of new thoughts already, around the world music and jazz scenes. I’ve been to music conferences like Womex and Jazzahead, but they seem more like museums, about conserving the past rather than the future. And for instance if you look for jazz on Spotify, it basically offers you John Coltrane and Keith Jarrett and so on. Streaming services and world music and jazz seem to have forgotten each other; they need to create some common ground."

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Swedish investor Åsa Otterlund. Image: Julius Konttinen

Among the rows of booths presenting cutting-edge music technology, there was much that seemed familiar, including someone belting out Celine Dion’s "My Heart Will Go On” with help from the Singa karaoke app developed by a Helsinki startup, which this year has picked up 1.75 million euros in seed funding. Further along, another attendee nodded his head to a virtual-reality (VR) concert while others assembled playlists with Kieku, an app launched by a former Nokia R&D director.

Slush: The platform for new platforms

Indeed, there’s been a proliferation of new technical platforms to enjoy and sell music, many of which were on display or under discussion at Slush Music. Buzzwords this week included blockchain, a secure technology originally developed as the basis of the crypto-currency bitcoin and now touted as a way for artists to get paid securely and fairly without anyone fiddling the books. Others talked up content generated by artificial intelligence (AI), expanded with virtual reality (VR) and augmented reality (AR) or controlled by voice-enabled services like Alexa, Google Assistant and Siri.

"There are so many startups looking to solve specific issues, like audio fingerprinting at the granular level to identify samples. So you can use them to build toolkits, rather than trying to solve everything with one big company," says Andersson. "Then again a lot of big companies are buying up indie labels and startups now."

One of those is The Orchard, which bills itself as 'the world’s leading distributor of music, film and video'. Based in New York and owned by Sony Music, it licenses music for ads, TV and film, distributes indie music and film companies, attempting to claw back revenue for them from sources such as YouTube. Co-founder Scott Cohen, noted that streaming services now have 100 million subscribers and growing fast, and that while Spotify has yet to make a profit, it has a market value of 16 billion dollars.

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Cohen and Vesterbacka envision the future. Image: Julius Konttinen

In an onstage discussion, he and Peter Vesterbacka, co-founder of Slush as well as gaming firms Rovio and Lightneer, urged industry players to think beyond the traditional models of recording and releasing songs. They both forecast a future where music, film, gaming and even food will be combined in a new 'sensory experiences industry' as old boundaries melt away.

On the other hand, Kevin Cole, Senior Director of Programming at KEXP, a major public radio station in Seattle, says that traditional radio is far from dead – it’s simply expanded worldwide via the web. His station was the first in the US to begin offering an uncompressed live stream in 1999, in a partnership with the University of Washington and Microsoft co-founder Paul Allen.

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Kevin Cole does a guest DJ set. Image: Julius Konttinen

"We offer programmes on an on-demand basis for 14 days after they’re broadcast, with digital restrictions that block listeners from isolating or downloading specific songs. Instead we hope that our DJs’ curated playlists and background explanations will encourage people to go out and see bands and financially support their music," he explains.

"We also offer music business educational programmes for local artists and labels, as well as live events to help and keep Seattle’s legendary music scene vital. It’s all about building community in real life," he adds.

"Yes, streaming has changed the financial model for artists, but radio airplay still matters. Curated one-of-a-kind experiences still matter, and we need to be on the front end of that," says Cole.

Underlining the fact that radio still matters, the second annual Slush Music pitching competition was won by Danish startup WARM, which focuses on radio airplay monitoring. The prize, worth more than 30,000 euros, was presented in the form of a vinyl LP.

And some other things never change in the music industry: besides plenty of talk about diversity and attendance from 60 countries, the vast majority of the 2,000 attendees and 150 speakers were middle-aged white men. The more things change, the more they stay the same.