Disney+, Netflix and the SVOD music rush

As part of our research for this article, we’ve put together an ongoing database of over 70 exclusive music SVOD deals, including music documentaries and concert films, from the past five years. You can view the database here.

Taylor Swift, Shawn Mendes, Blackpink and Anitta on Netflix. Billie Eilish, Bruce Springsteen and Beastie Boys on Apple TV+. Beyoncé and Taylor Swift (again) on Disney+. David Byrne and the Bee Gees on HBO. Rihanna and the Jonas Brothers on Amazon Prime Video.

These are just a handful of examples of how major subscription video on-demand (SVOD) platforms are investing more than ever before in original, exclusive music content in 2020 — and how, in turn, today’s biggest artists and labels are seeing these SVOD platforms as must-have partners in their music marketing toolboxes.

This year alone, Netflix has released the widely acclaimed documentaries Miss Americana, Blackpink: Light Up the Sky and Shawn Mendes: In Wonder, as well as the concert films Shawn Mendes: Live in Concert and Ben Platt Live from Radio City Music Hall. To close out the year, a documentary about the Brazilian star Anitta, titled Anitta: Made In Honorio, is arriving on the platform on December 16.

Disney+ has also emerged this year as a major competitor for premium content around new album releases, with exclusives on Beyoncé’s visual album Black Is King and Taylor Swift’s folklore: the long pond studio sessions. Apple TV+, which launched in 2019, now has active documentaries about Bruce Springsteen and the Beastie Boys, plus a forthcoming, multimillion-dollar film on Billie Eilish arriving to the service in February 2021. Amazon Prime Video launched documentaries and concert films with Rihanna and the Jonas Brothers this year, and has the exclusive on a Rihanna documentary in summer 2021.

HBO has not been as active on the music partnerships front to date, but may be a sleeper contender going into next year, with a special featuring David Byrne and an upcoming documentary about the Bee Gees, to be released on December 12.

All in all, premium SVOD services will have collectively released nearly 20 original music documentaries and concert films by the end of 2020 — more than in any previous year.

The SVOD perspective: Subscriber acquisition and retention

Why this rush, and why now?

For one, the SVOD landscape seems to be getting more diverse, and more crowded, with each passing month. Apple TV+, Disney+, HBO Max and NBC’s Peacock all launched in the last year-and-a-half alone; like their predecessors Netflix and Hulu, they each charge a monthly subscription fee for unlimited access to their content slates, leading many commentators to cry “subscription fatigue.”

But for better or for worse, this is just the tip of the iceberg when it comes to future SVOD growth. The COVID-19 pandemic in particular has devastated the movie and theater industry, forcing many studios to embrace a direct-to-streaming or direct-to-VOD release strategy for the first time — and likely for good.

This means that SVOD subscriber acquisition will be expensive and competitive, and that these companies will have to get more creative with their content to reach out to a wider range of potential customers. “Video streaming platforms need to diversify beyond the beachhead formed by scripted drama,” says Mark Mulligan, managing director and lead music analyst at MIDiA Research. “They are branching out into new content formats in order to broaden appeal. Music content is part of this strategy.”

The quest for larger audiences is clearest with Netflix, which is increasingly investing in unscripted formats like reality TV and documentaries that both command a wider reach and are relatively cheap to develop. Music plays a significant role in Netflix’s expansive TV strategy, through shows like the rap competition Rhythm + Flow, the documentary series Song Exploderand the K-pop mockumentary YG Future Strategy Office. In fact, the latter show served as a gateway to deeper music documentary projects. “Netflix had been wanting to do a K-pop film,” says Caroline Suh, director of Blackpink: Light Up The Sky. “And so they had been working with YG to make that happen, and they brought me on board to make the film and we all kind of got together and agreed to do it together.”

To be clear, music still ranks relatively low on SVOD services in terms of overall presence; by our calculations, music documentaries comprise only 2% of Netflix’s total new content output per year (around 400 shows, per 2019 figures). That said, music programming is still appealing to SVODs because many of their existing subscribers likely know about and are interested in the artists featured, which can help to increase engagement and retention on the service as a whole. There were likely many diehard Beyoncé and Taylor Swift fans who didn’t have a Disney+ subscription before the release of Black Is King or folklore: the long pond studio sessions, and who are now one of the platform’s more than 73 million customers (13 million of whom were added in the months after Black Is King’s release).

The artist and label perspective: Catalog consumption, fan acquisition — and big checks

Film’s impact on music consumption, especially on older back catalog, is well-documented, with recent biopics like Bohemian Rhapsody and Rocketman driving billions of incremental streams for their featured subjects. Beyond brick-and-mortar theaters, some industry commentators have suggested that the rise of SVOD platforms — and the billion-dollar content budgets that come along with them — will also help create new sync licensing opportunities for independent and international artists (even if the average license fees might be getting squeezed with higher supply).

The recent SVOD music boom seems oriented less around soundtrack-oriented sync licenses, and more around holistic artist promotion pegged to album rollout campaigns. This is especially pertinent in the context of a pandemic, with global fan bases spending more time at home and shifting their media consumption habits accordingly. Nielsen has reported in previous years that the average adult in the U.S. spends five hours and 46 minutes a day watching videos, but only around three hours and 50 minutes a day listening to music. And while studies have pointed to an aggregate decline in global music streaming activity during the pandemic (due in part to decreased travel and mobility), nearly all signs point to video consumption increasing. Such a gap has encouraged labels eager to retain fans’ attention to invest more in video content around both new and old releases.

Unsurprisingly, premium SVOD music content remains largely a major-label game, with the market skewed even more heavily towards incumbent corporations compared to the music industry as a whole. “Labels are usually, but not always, the ones driving these projects, with contractual permissions to drive the commercial strategy,” says Mulligan.

Out of the 30+ major music documentaries released exclusively on SVOD platforms in the past five years, a whopping 85% of them were for artists affiliated with major labels — and nearly 50% were for Universal Music Group artists alone.

For years, UMG has pulled ahead of its major competitors when it comes to film investments — from its first-look deal with Lionsgate, to its partnership with production company Grace/Beyond for the soundtracks of two Netflix original series. In October 2019, Barak Moffitt, VP of Content Strategy at UMG, shared on Ad Age’s Ad Lib podcast that the label sees themselves as “a music-based media company” and that they’re trying to expand beyond music licensing into more holistic video content production to support their artists’ wider brand-building ambitions.

Now, you might be thinking: Why partner with an SVOD platform if you can just release the video yourself? The artists featured in original SVOD music docs tend to be bigger names who do not necessarily need the exposure of being on a third-party video service, as they already have both a large dedicated fan base and an even larger casual listener base. The more dedicated fans are also likely less price-sensitive, and would seek out video content from the artist regardless of its format or source — presenting a major incentive for the artist to sell videos direct-to-fan and have a clearer stake in the upside. (Dua Lipa offers a timely example of this approach: She sold her “Studio 2054” experience direct-to-fan on a pay-per-view basis for $10 a ticket and drove nearly 300,000 ticket sales globally, implying solid seven-figure revenues and counting.)

Even though the direct-to-fan approach to releasing documentaries and concert films might make more sense from the perspective of revenue and data ownership, SVODs still bring a lot of added value to the table. For one, there’s the literal upfront check. Apple and Amazon reportedly paid $25 million each for their upcoming docs on Billie Eilish and Rihanna, respectively. As an anonymous source told The Hollywood Reporter almost exactly a year ago: “Every [film] producer is trying to figure out what artist is next for a doc that will spark an eight-figure sale.”

Aside from the finances, there’s the added benefit of marketing. The biggest SVOD platforms have massive global audiences — 195 million Netflix subscribers, 150 million Amazon Prime subscribers, 74 million Disney+ subscribers — that can help even the biggest artists in introducing their work to new fans, or converting casual fans to more dedicated ones, via easily available content on a service that they already have access to.

For example, if a Netflix subscriber had heard one or two Blackpink songs in the recent past, and then sees the ad for the group’s documentary at the top of the screen when they log on to the service, they may decide to watch the film and become an even bigger fan of Blackpink in the process. Netflix also has the benefits of its recommendation algorithms, which can more effectively serve music content to the right viewers at the right time.

“I chose Netflix because it’s a very vast, accessible medium to people who are just like, ‘Hey, what’s this? I’m bored,’” Taylor Swift told Variety in January 2020, speaking to the value of partnering with Netflix for Miss Americana. “I love that, because I do so many things that cater specifically to fans that like my music, I think it’s important to put yourself out there to people who don’t care at all about you.” The status and prestige that comes with an SVOD partnership — Miss Americana opened Sundance this year, and What Happened, Miss Simone? was nominated for an Oscar in 2016 — also reinforces the role that music docs play as PR vehicles for artists’ catalogs and brands.

When coupled with intentional and thoughtful album rollouts, the impact of SVOD music content on follow-on consumption is clear. Taylor Swift’s monthly listener count went up by 4 million in the month following the release of her documentary, according to Chartmetric. The week Shawn Mendes released his documentary and concert film on Netflix, his monthly Spotify listener count increased by 2.5 million. In the 30 days after the release of her second Savage x Fenty show on Amazon Prime Video, Rihanna’s monthly listener count on Spotify grew by 2.3 million — which was only around a 6% increase at the time, but still significant for an artist who hasn’t released new music since 2016.

Alternative platforms, licensing challenges and the importance of ecosystems

What does this all mean for artists who don’t have the privilege of signing to a major label, and for video streaming platforms that don’t have the luxury of reaching tens of millions of paying subscribers?

Amidst the music livestreaming boom, there’s a small but growing ecosystem of tech companies looking to serve artists’ needs when it comes to monetizing online performances after the fact. The likes of Stingray Qello have been in the on-demand music-doc and concert-film market for years, while newer apps like LiveXLive and Pillar are explicitly looking to combine livestreamed and on-demand music experiences in a single interface. The business model across all these platforms is similar, whereby fans get access to livestreams and/or exclusive archived content for a monthly or annual fee.

With that said, none of these music-focused services have successfully framed themselves yet as the go-to marketing partners for major artists, compared to larger and more generalist services like Netflix and Disney+. It’s likely a matter of the importance of audience reach for the artist — and of prohibitive licensing costs for smaller platforms. As Water & Music has covered previously, the legal complexities around livestreaming are vast; if you want to make a livestreamed concert available on-demand after the fact on your platform, that can invoke literally every single kind of copyright that exists in the music industry, including but not limited to master, mechanical, performance and sync licenses.

“It would be so costly and time-consuming to put up all the videos, and there’s no clear path to recoup that cost,” Brad Serling, Founder/CEO of popular music livestreaming destination nugs.net, told Water & Music in April 2020. “It’s not like with audio, where there’s a congressionally established rate on both the streaming and download side, so we can model out the costs. For video, it’s more complicated because there’s no statutory rate, and you have to get a separate sync license for every performance of every song. It’s frankly why you don’t see a lot of on-demand concert video subscription or download services, because the licensing is such a mess.”

It’s also important to consider the overarching business models and product ecosystems that help fund the major players in SVOD music content and cover these kinds of costs. For instance, Amazon and Apple have both audio and video streaming services, which could potentially talk to each other in a compelling way to craft new kinds of fan and viewer experiences. We’re already seeing inklings of this strategy with the integration of Amazon Music and Twitch; Apple Music also already offers a slate of shorter documentaries and concert films on its service from the likes of Wiz Khalifa and Kesha, suggesting a natural integration with Apple TV+. Content-centric bundles that include music, like the Spotify/Hulu bundle and the new Apple One bundle, will also provide major competitive advantages for the companies involved and will drive a higher volume of partnerships with the music industry.

Long gone are the days when fans would have to go to a brick-and-mortar store like Blockbuster to purchase individual concert films and music documentaries for $19.99 a pop. Today, fans have access to more multimedia content around their favorite artists than ever before, and for a much better, bundled price. The enduring popularity of livestreaming and online performances is also driving a surge in supply of compelling, premium music content, which artists can offer direct-to-fan on their own platforms before shopping them around within the fast-growing landscape of SVOD services hungry for growth and cultural impact — just like the music industry itself.