✘ Web2 or Web3, you still need to find the levers to get your network together
And: Triller's payment issues; Web2 & Web3 release strategies; modernizing vinyl production; Massive YouTube ads scam; Let's keep talking about Pollen; Resources for women in the music industry
A while back I wrote about how easy it may be to create music or build a platform nowadays, but how hard it is to find the consumer for it. I ended it by saying that it’s actually not about the consumer, but about a changing perception of what this consumer can be. A consumer isn’t just a consumer and a fan is not just a fan, they can be participants, members, contributors, etc. Since that publication though, I’ve kept thinking about how I actually didn’t really touch on how to find those people - however we define them or they define themselves. So let me try and address that here while exploring how this might not be so different in principle between Web2 and Web3 ecosystems.
Let’s start with subscribers. They come in many different shapes and forms and what these are is fully dependent on what the offer is. Do you talk to your potential subscriber directly? And do these potential subscribers get direct access to what you offer or do you ask them to take a leap of faith and pay before they get that access? Of course, it also makes a big difference if you’re an artist setting up a subscription through a Patreon or something similar, or whether you’re building a music platform where you bundle artists or music together. Whatever it is, it takes a funnel to get people to subscribe to what you make. There will be some that are interested, then a few less into exploring beyond a first discovery and less again who are keen to put their money where their curiosity is.
When you’re building a bundled subscription, the funnel is important because you want to reach as many as possible. Here, there is a big emphasis on network effects. On a major scale this looks like this:
The whole idea that Andrew Chen puts forward is that it’s superhard to start something that requires a bunch of people to use or pay for what you created. In that start, there’s no name recognition and zero social proof. What Chen analyzes in his book, is that to break through that it’s necessary to tap into network effects. Thinking back to that funnel, this means that instead of focusing it very broadly, it gets more narrow at the top of that funnel. This increased narrowness then allows networks to build more quickly and this subsequently leads to social proof when the next network gets tapped into.
When you’re an artist, there’s definitely a similar method. There’s conversion rates you can benchmark. Based on those, it’s possible to then, for example, decide how many Instagram followers you need before you know how many you can convert to your subscription platform. However, there’s always the fine line about whether you sell yourself or your music as an artist. In a sense, if an artist opens up beyond the music and the subscription provides a closer connection of some sort then the artist sells their personality - they become a brand of sorts. As I’ve argued before, at this point it becomes more valuable to flip the funnel and start with one to build out from there. This takes a cue from the Cold Start playbook in a way, because it is a way to break through that starting point of zero. Flipping the funnel also immediately sets up a network to become a community.
Different from subscribers, communities aren’t necessarily networks that involve monetary transactions. They can pop up anywhere. However, the intentional building of community requires a thoughtful approach similar to the practice of starting your network with one person instead of with a potential reach of 100 or 1000. The most important thing for each community building artist or platform to take into consideration is that it requires not just one-to-many communication, but many-to-many too. In other words, the people within the community need to start talking to each other to make it a community and to make that community sustainable.
It’s important, however, to know why to build a community. If you flip the funnel for your artist subscription page or token-gated server then there’s a why there - to gain access. But for a community, a bit more is needed. There’s no why there until the community is there, so finding that first person, or those first people, is extra difficult. Even more so, because communities thrive on organic growth - it comes from those people within the community. There’s an opportunity, for example, to think about community-market-fit just as product people think about product-market-fit. If an artist decides to build a community around themselves it’s important to figure out what fans would want from that community. Moreover, who could the first person be to step into the community? This can happen through knowledge of fandom - like an NFT purchase or a t-shirt purchase or a curated playlist, etc. First contact can be cold but transparent. Ask a bunch of people if they want to join a community around an artist. Maybe to learn about production or maybe just to support. That part is the ‘fit’ and should be decided on a case by case basis.
The golden egg
Thinking through all of this - and working through all of this in various ventures and talking to multiple artists - what’s become so clear is that there’s no golden egg. There’s no single way to do this. Every case is unique, whether it works with a funnel or whether it flips the funnel. There’s simply no one-size fits all for everyone. And yet the golden egg exists for everyone, it’s just that you first need to build the chicken who’ll provide you with it.
😡 A TikTok rival promised millions to Black creators. Now some are deep in debt (Taylor Lorenz)
✘ Basically, Triller doesn’t pay. Not even their own golden goose of Verzuz, as Timbaland and Swizz Beats have gone to court to seek their own due payments. What’s so striking is that in both cases the company comes out and says it has fulfilled its payment obligations. There’s too much smoke here for there not to be a fire.
🔮 Sound of Fractures’ effervescent dance EP ‘IRL’ spearheads his web3 ambitions (Billy Ward)
“As well as dropping across streaming platforms last week, the new EP was also released in web3 and NFT formats – an element of Jamie’s [Sound of Fractures] music that has set him apart from the pack in recent times and one he hopes will allow him to develop new forms of community and experiences between himself and his fans.”
✘ This is a great example of combining Web2 and Web3 strategies around music releases.
🥗 elasticStage tunes in £3.5 million to modernise vinyl production (Megha Paul)
“Yet to launch, the on-demand vinyl manufacturer creates vinyl using new techniques - via its patent-pending technology. elasticStage aims to eliminate the use of harmful chemicals, uses less energy and no PVC - offering a sustainable solution to creating vinyl. The company has created an ingenious way to manufacture and distribute vinyl for the music industry which is both sustainable and ethical.”
😮 How Did Two Unknown Latin Music Operators Make $23 Million From YouTube? The IRS Says They Stole It (Kristin Robinson)
“According to documents filed in Arizona federal court, over about a four-year period, Teran and Batista (along with a number of alleged conspirators) devised a company they called MediaMuv to siphon off $23 million in master and publishing royalties for Latin music copyrights they did not control. Much of these royalties were claimed through the popular rights management company AdRev, which is owned by Downtown Music Holdings. Teran, whose attorneys did not respond to requests for comment, pleaded not guilty and awaits trial in November. Batista, on the other hand, took a plea deal on April 21, admitting guilt to one count of wire fraud and one count of conspiracy. As part of the plea agreement, he revealed key insights to the court as to how the MediaMuv scam was committed. Batista’s attorney and an IRS representative declined to comment on this story because the case is still ongoing.”
✘ Go and read the whole article, it’s a pretty insane story and yet doesn’t surprise at all.
🗯️ We Need to Talk About Pollen... (Christine Osazuwa)
“A company that raised $150M is now in administration, headed towards insolvency. One month previously, they released their financial report saying they were confident in being able to pay their debts through 2023 which an auditor signed off on. People were hired into roles as recently as 2 weeks ago knowing full well they couldn't pay them. They were putting events for sale and signing contracts for events they knew they couldn't actually hold. People believed what they said and now can't pay bills, can't feed families, and owe their own debts. Until the time they announced the administration there wasn't even a sentence uttered that encouraged people to seek other employment or that there was even a slight chance the deal wouldn't happen. In fact, they sent emails vehemently assuring the rumors of insolvency were lies. They provided no insight as to where the $150M actually went and blamed COVID and the economy while ironically, Live Nation reported last week their highest quarterly attendance EVER in Q2 2022.”
✘ Let’s talk about this and prevent repeat actions.
A little bonus tweet to highlight today. Kristina London with a thread on resources for women working in the music industry.
And from the comments to that thread, this fantastic overview of female or non-binary led business in music by René Kladzyk.
Going to hit you up with some off-kilter and noisy hip hop from Dälek, released on Ipecac Recordings back in 2005. I love this for it darkness and enveloping sound.