How Snapchat will change the music industry in 2017

It started with a Twitter video, announcing: New music coming Friday. Then, an Instagram video—revealing a beat, and some lyrics. 

But when globally famous pop star Ed Sheeran wanted his fans to experience the first true listen of his new music, he turned to Snapchat. With an augmented reality lens, people could put on a pair of sunglasses, surround themselves in lights, and listen to the first 30 seconds of Sheeran's new track. 

Fans who uncovered the hidden surprise along with fellow artists like Shawn Mendes (who isn't a stranger to the power of social apps) helped hype the track before Sheeran released it later that night. 

Sheeran's use of Snapchat is just the most recent example of how the app—and its community—have emerged as powerful distribution tools for new music. Where other digital platforms are plagued by piracy issues, Snapchat has taken on the role of a DJ, with artists hoping to partner up, and get their song played within innovative, fun, engagement-heavy formats. 

For example, over the last two months, Snapchat users have been able to wear a different pair of shades, and bob their heads to a clip of rapper Sage the Gemini's song "Now and Later." 

But unlike other marketing rollouts, for both Sage the Gemini and Ed Sheeran, there wasn't even any mention of the artist on the Snapchat filter. But users eventually found their way to the name of the song:

And the artist himself had the opportunity to close the mystique gap, and re-promote himself as the one behind the track:

"This type of partnership had never been done before with an emerging artist," said Chelsea Gavin, director of marketing at Artist Partners (who works with Sage the Gemini). 

"Together we were able to enhance a lens sonically," explained Gavin, "maximizing user experience, which translated into a lot of curiosity around the artist." In other words: They knew they had a good song on their hands. They delivered it to Snapchat's users. And Snapchat's users then went looking for the song. The plan was simple. The results? Substantial.

From November to December, Sage the Gemini's "Now and Later" jumped from 1.1 million to 5 million monthly listeners on Spotify. 

Snapchat's been getting deeper into offering a wide variety of different types of media, including news, politics and sports. In some cases, Snapchat is paying a licensing fee for the content. In others, there's an ad revenue split between publishers and Snapchat.

Entertainment and music are perhaps the most lucrative to (and in line with) the company projecting itself as a lifestyle brand as they convince influencers, publishers and advertisers to spend more time and money in the app. It's all the more important to the company's fate, as Snapchat prepares to go public later in 2017. 

While other digital networks like Facebook and YouTube combat the wrath of the music industry hoping to secure more rights, Snapchat has cemented a good reputation with the artists and label—for now. In order to keep its place of prominence, it's building more experiences that cater to the discovery and sharing of new music—a promotional machine for an industry that needs all the help it can get. 

An overdue duet

Snapchat's embrace of artists isn't that surprising, given Snap CEO Evan Spiegel's publicly evident passion for music. His tastes are available to peruse via his Hype Machine account, where you can see he's a fan of Goldroom, Chance The Rapper and The Chainsmokers. 

"Sometimes there can be challenges as a platform grows, but [at Snapchat], they're all passionate music fans, and have the interest of advancing the artist," said Chris Mortimer, head of digital marketing at Interscope Records. 

Regarding opportunities, Spiegel was once interested in buying a record label and partnering with video hosting site Vevo, as revealed in leaked emails by Sony Entertainment CEO Michael Lynton from the 2014 hack.

Those deals haven't come to fruition, and perhaps that's for the better. Running a label "means taking 100 shots and hoping you hit a couple, and focusing in on that," said Scott "DJ Skee" Keeney, founder of Dash Radio. 

"Evan has a great idea around cutting through the noise and focusing on talented artists to promote on his platform. However, this isn’t what a record label does. This is what radio does," Keeney said. 

This isn't the first time Snapchat's shown interest in promoting music. They featured a Goldroom song in the promo video for Stories. It was a partnership that began via a "cold email" from the Snapchat team to Goldroom. 

Snapchat's latest promo for its new video-camera product Spectacles used "The Less I Know The Better," by indie rock darlings Tame Impala. 

Snapchat works with each partner to make sure any music used in a lens or in a promo video is properly licensed. Specific terms are confidential. 

But typically Snapchat pays artists to license songs. For now, that doesn't mean you should expect a bidding war for access like you do with a traditional ad buy, according to someone familiar with the program. 

"Snapchat is very supportive of artists, and I think they'd always rather support someone they believe in over the highest bidder," the person said.

For lenses, in particular, it's unclear if Snapchat pays per stream or for a one-time license fee. 

Sheeran's lens had the prime placement from Friday to Sunday. That's more than $500,000 worth of real estate per day, according to people familiar with Snapchat's ad pricing. 

These experiences are organized by Snapchat's music partnerships team, which is led by VP of Partnerships Ben Schwerin and Head of Music Partnerships Glenne Christiaansen.

As evidenced by the Ed Sheeran and Sage the Gemini rollouts, the company's beginning to build serious, productive and personal relationships with artists and record labels, offering them custom experiences within the app. They're also a new kind of effective, viral experiences other social networks have yet to come close to rolling out—at least for the time being, Snapchat is in a league of its own. 

Authenticity by design 

Snapchat's positive relationship with the music industry is also to the credit of the specific design and core functionality of Snapchat itself. The service has been able to cater to artists' needs, without being burdened by conflicts over the piracy issues that plague their contemporaries. 

Facebook and YouTube, where videos can last for an unlimited time and are saved permanently, both struggle with substantial piracy violators, and have devoted massive resources to fighting the uphill battle that is curbing these issues. Snapchat, on the other hand, has a core offering that consists of 10 seconds of video, which later disappear.

As the app expands from messaging to media, Snapchat's weaved music across its business. By showcasing concerts through the Live Stories tab, premiering songs and music videos, and connecting viewers directly to artists, Snapchat has melded the advantages of the old (radio and MTV-like visuals) with real-time conversation and cutting-edge tech like augmented reality.

"Using Snapchat to connect fans with a music experience is like editing a real-time documentary," Chris Williams, chief product officer for iHeartRadio, told Mashable. "Unlike the other social platforms where you curate posts, with Snapchat you are capturing and editing what you want to share on the fly, so there is an immediacy and authenticity to what we post."

Again, these projects have yielded the kind of demonstrable results that's made music industry insiders frothy to form a relationship with the app, the company behind it, and its user base. For Snapchat's Live Stories of the Video Music Awards, MTV generated 12 million unique viewers in 2015. 

For 2016's VMAs? 21 million unique viewers. 

Snapchat's also taken on a similar role to MTV by premiering and debuting music videos from Madonna, Goldroom and The Weeknd. While the company may be encroaching on the traditional fame of MTV by securing its own exclusives, MTV and other music-focused media companies have vied for and secured coveted positions on Snapchat's Discover network as well. 

"What’s great about Snapchat Discover is that you can tell a story around the music video premieres, and add context," said Bruce Gillmer, executive vice president of music and talent programming and events internationally for MTV. 

MTV's also producing original shows on the app—something Snapchat has prioritized for its partners going forward, and reportedly, one of the reasons Warner Music Group was removed from the platform. 

"We are second to none when it comes to giving fans access or exclusive interviews with iconic artists and emerging talent," Gillmer said, "making us truly stand out on this platform."

Both MTV and iHeartRadio have remained cheerleaders for Snapchat. 

"The future of music on Snapchat relies on great partnerships with recording artists who love the platform and trust iHeartRadio," said Ina Burke, vice president of original content for iHeartMedia’s Entertainment Enterprises.

Keep the artist happy 

Record labels and artists see mutual value in using Snapchat personally and professionally. Artists, just like any social media user, can be fickle to jump to the next platform, yet Snapchat's lifestyle culture and cool products are convincing them to stay. 

"It's one of the last places where it doesn't feel like you're curating a persona with every post," said electronic musician Josh Legg, aka Goldroom. "Snapchat is still my favorite platform for interacting directly with fans. They aren't burdened by character limits, and because it all feels more private, I think people get a better opportunity to see the real me."

DJs were some of Snapchat's earliest big creators. While Vine was a somewhat demanding and confusing network for creation and discovery, Snapchat offered them authenticity and simplicity.

"When I started to realize the demise, the Vine influencers weren’t the first to go. They obviously had a lot to invest. The ones that were first to go were the celebrities like Diplo and Skrillex," said one long-time former employee at Twitter, who used to work closely with Vine.

"Vine asked celebrities not to repurpose content from other platforms and only create original content, which just wasn't realistic," the insider continued. "Snapchat allowed them to create daily, lower production value content, which didn't live forever, and that just ended up being way more appealing," 

Searching for the next hit  

Snapchat has transformed into a new way to discover music. The latest integration with Shazam—where you can use Shazam at any point within Snapchat to identify the music playing around you—points to the potential for Snapchat to connect with other music apps like Spotify, SoundCloud, YouTube and Vimeo. 

"Music is an inherently social activity, and Snapchat’s incredibly popular platform seemed like a perfect fit," said Shazam CEO Rich Riley. 

Shazam declined to disclose if Snapchat is now taking a cut of the referral fees Shazam generates from music download stores. Yet: Even if Snapchat is now pulling some of Shazam's profits, the partnership with Snapchat's more than 150 million daily active users surely helps generate enthusiasm around Shazam, which is 18 years old, and last year, reported it had more than 120 million monthly active users.

Legg said he hoped for more integrations with music platforms in the future. "Personally I love to play music in my snaps, and I think I get asked more about the songs than anything else. I'd love to have some sort of simple connectivity with Spotify," he said. 

Mortimer of Interscope Records said he predicts a strong future of Snapchat, based on its past successes: "Snapchat has helped move mainstream adoption of two technologies: QR codes and augmented reality. I think what's next is Spectacles, offering a perspective that nobody has except the artist themselves."  

Those artists are exactly who Snapchat must continue pleasing if the company wishes to thrive—via continued user engagement and via sustainable revenue offerings—and avoid the fate of Vine. 

"As artists continue to innovate on Snapchat, fans will continue to follow it," Mortimer said.

BONUS: You can swap Snap Spectacle lenses - here's how