After Adele snub, streaming services face new test with Coldplay

Coldplay's Chris Martin performing at the 2015 American Music Awards.
Coldplay's Chris Martin performing at the 2015 American Music Awards.PHOTO: REUTERS

LOS ANGELES (Bloomberg) - First Taylor Swift kept 1989 off free music streaming services and scored the best weekly album sales in more than a decade. Then Adele spurned Spotify and Apple Music with 25 and did one better: She shattered the record for opening week sales, set in 2000 by the boyband 'N Sync.

Is Coldplay next? The British rock group, who are scheduled to release A Head Full Of Dreams on Friday (Dec 4), have yet to say whether the new album will be available on streaming services.

Some of the biggest recording artists, while making a few new tracks available for streaming, are withholding music to boost album purchases, which generate more revenue. Coldplay, a group without the global appeal of Adele, kept their last two albums off Spotify when streaming was much newer. Now, the band members must decide whether they can repeat the success of Swift and Adele.

"I'm a little surprised more people haven't tried it," said David Bakula, senior analyst at Nielsen Music, which tracks the industry.

The list of big artists who have rejected streaming services is small, led by Beyonce, Swift and Adele. Beyonce released her previous album for sale exclusively on Apple's iTunes. Warner Music, owned by billionaire Len Blavatnik, declined to comment on possible streaming plans for Coldplay's A Head Full Of Dreams, which will be released by the company's Parlophone and Atlantic labels. A spokesman for Spotify also declined to comment, while neither Apple nor a representative for the band responded to requests for comment.

Coldplay and Apple have longstanding ties. They collaborated on an advertisement for a Beats By Dre speaker, which doubled as a trailer for the video of the band's new single, Adventure Of A Lifetime. Frontman Chris Martin performed at an Apple event in 2010. Some industry executives say the group made a mistake by not streaming in the past.

"It hurt them," said Ted Cohen, managing director of TAG Strategic, a consulting firm whose clients include Sony/ATV Music Publishing. "The sales didn't jump appreciably and there was a lot of fan backlash."

Streaming represents a growth market for the otherwise struggling record industry, which has been in worldwide decline for almost 20 years. Artists without the clout of Adele or Beyonce rely on companies like Spotify and Google's YouTube for exposure and to encourage sales.

"If you're not an A-list artist, you can't go out and try something new; you won't get discovered," said Bakula. "It's the tree falling in the woods."

No artist in the world sells albums like the British singer Adele. She sold 700,000 copies of her latest release over the weekend, and is poised to become the first artist ever to sell 1 million albums in consecutive weeks, according to Nielsen Music. 25 accounted for more than 40 per cent of album purchases in its first seven days as 3.38 million were bought, Nielsen said.

While the sales vindicate Adele's decision to withhold the album from streaming, they also underscore her unique position. Her appeal is so vast that she doesn't need much exposure. Which is why her success is unlikely to spur a stampede away from streaming, music industry executives say.

Swift used her decision to advocate for pay services and spark a conversation about whether free streaming devalues music. She withheld 1989 from Spotify last year only because the company insisted on offering it on both its paid and free services.

The publicity may have helped Spotify, even if the company didn't like being shut out, according to Matt Pincus, chief executive officer of Songs Music Publishing, which represents Lorde and The Weeknd. Music streaming has grown at a rapid pace without new albums from Swift and Adele - or older albums from The Beatles. Spotify doubled its subscribers from May last year to June 2015 this year, and has more than 75 million users worldwide.

"That was good for them from a brand awareness point of view," Pincus said. "Adele, maybe less so. These guys don't want to be windowed."

Apple executives reached out to Swift to secure 1989 for their new music service after she initially refused, Eddy Cue, head of the company's music business, told Billboard in June. Spotify chief executive officer Daniel Ek responded to Swift's criticism with a blog post addressing myths about the service, and last month the company expressed a desire for Adele's 25.

Albums Adele's success doesn't shed any light on whether withholding music would be an effective strategy for other artists, Pincus said. Kendrick Lamar, Meek Mill and The Weeknd released new albums in their entirety on Spotify at the same time as they hit iTunes and brick and mortar stores, and opened at No.1 on Billboard's rankings.

Labels are debating the potential of windowing, and Coldplay may be a more interesting case. Their most recent album is their worst seller, while Adele and Swift are at the peak of their popularity.

"I don't think Coldplay has the market leverage to do that unilaterally and not harm the brand," Pincus said. "It clearly helped Taylor."