Discover more from MUSIC x
✘ Fan engagement, streaming, and albums
And: Fortnite & Bandcamp for in-game music; Personalize your YouTube Music radio station; Water & Music on creative AI; Europe's generative AI startups, mapped; Spotify's AI powered DJ
A recent report by the Digital Media Association [DiMA] shows that people with a subscription to one of the streaming services are more engaged and spend more money on music than those who do not. This reminded me of the early 2000s, when most heavy pirates of music also spent a lot of money on music - merch, concerts, CDs, vinyl, etc. Since we’re hitting a point in the evolution of the music industry where the streaming economy looks like it might hit its peak, it’s an interesting parallel. It forces us to think about where to focus on. In the 1990s, the majority of the recorded music industry focused around two different types of consumers:
The casual buyer - people who bought no more than a few CDs a year
The habitual buyer - people who spent $100 or more on music a month
Of the latter group, there were hundreds of thousands. This was also the group who spent the most on those other revenue sources for music, such as merch and concerts. These were the die hard fans, the people who followed multiple artists and bands and made a lot of time for music in their lives. But the world has changed.
A change of focus
Since the 1990s, the focus has shifted. It took a while, of course, but since the mid 2010s, the large majority of recorded music revenues doesn’t come from a group of diehard fans, but from a much larger group of paying subscribers. We’ve moved from hundreds of thousands of people who pay at least $100 a month to hundreds of millions who spend around $10 a month.
This is, of course, just the US. But you can see how the rise of the CD led to a fantastic rise in average spend per consumer. This then declined as CD sales plummeted. And 2006 wasn’t the last year, the slump continued.
So, in recent years, average spend on recorded music has been creeping up again. Now, this research by DiMA, shows how this growth seems to be driven by those who stream music. What’s more, they claim:
“Streamers say they are more likely to spend money on, listen to, and explore music (discovery and rediscovery) than non-streamers. They also report a greater likelihood of following their favored artists on social media and attending live events. Streaming facilitates a deeper connection between music fans and the old and new music they love.”
To continue this logic, it means streaming hasn’t only pushed recorded music revenues to new heights, it’s given a whole new lease of life to artist-fan connections. Or, could that be ascribed to all dominant consumption models?
On the popularity, or lack thereof, of albums
The album has long been a staple of the music industry. Artists tell their stories through a series of connected songs on a single release. However, the peak popularity of the album is decades in the past now. There have been increasingly few since the mid-1990s. Fast-forward to now and we see how, for example, Adele’s 30 ruled 2021 sales while not being released until November of that year. As Lucas Shaw put it: “The music industry is getting bigger, but the hits are getting smaller.”
This can partly be attributed to a change of focus in our attention economy. If you look at the top artists on YouTube, for example, you see a lot of staying power. Almost all artists in the top 10 have been there for hundreds of weeks. While the DiMA report speaks of fan engagement through streaming, this means engagement on a different level than before. We all know that streaming services aren’t optimized to create that fan engagement - even though more and more we see things like concert listings, NFTs, etc. What definitely has happened, is that streaming, and the adjacent UGC short-form video platforms, have led to a change in consumption. What has stayed the same, is that people want to connect. Now, though, instead of having a favourite album that fans go back to time and again, they mostly have a song, or a playlist, or a mood, etc.
While it’s clear that streaming services drive fan engagement in the sense that people look up what they like and then spend money on that. However, that’s no different from radio, to name just one other distribution method. The stories told through the fragmented nature of most listening to streaming services is not the same as engagement to an album. There, the idea of fan engagement becomes murkier, and we see this in the myriad tools that most artists now have to utilize to find and reach their fans. I’m not sure this will lead to sustained fan engagement, and instead see this as evidence that weaving a narrative has become more important than ever. If you can’t tell your story through an album but need to work on the engagement levels of the current Internet tools, then that’s a change of focus that both artists and builders need to be aware of.
🕹️ Fortnite enlists Bandcamp to curate an in-game radio station (Stuart Dredge)
“How will those artists be paid for spins of their music in Fortnite? That’s a good question: since a flurry of headlines in 2019 about collecting societies seeking royalties from massively-multiplayer online games like Fortnite, news on the licensing frameworks around these franchises has been thin on the ground.”
✘ A first move that highlights how Epic will use its Bandcamp acquisition. I’m personally still waiting to see how the marketplace functionality will be integrated into some parts of Epic’s business.
“With this new experience, you can pick up to 30 artists when creating your own radio station. You can also choose how frequently these artists appear and apply filters that change the mood of the station. The experience lets you choose if you want the radio to only include the artists you’ve selected or if you also want content from a broader set of similar artists as well. There’s also the option to refine your results further by using specific filters, such as “new discoveries” or “chill songs.””
✘ This is a cool feature that anyone who wants something a bit more personal, but also doesn’t want to create a full-blown homemade playlist could tap into.
🤖 $STREAM Report Season 3: Creative AI (Water & Music)
“Our goal with this report is to bring more transparency on the current state of music AI to anyone with a stake in the outcome, including artists, rights holders, software developers, and startup founders. We hope our findings provide a helpful starting point for understanding the critical commercial, legal, and ethical issues at stake as AI continues to transform the business of creativity at large.”
✘ Some of the best research in the business, this season’s look into creative AI for music goes into tooling, legal, community, and overall industry sentiment. If you want to stay on top of the latest disruptive tech, check it out. It’s behind the paywall, but I encourage you to sign up. However, if you can’t, or you want to dip your toe in first, hit me up and I can provide you with a free trial.
📍 Europe’s generative AI startups, mapped (Tim Smith)
“So who are the European companies building with generative AI? Sifted drew on global data sets from Antler and NFX, as well our own sources, to build a list of 135 companies in the generative AI space in Europe (we’re aware that the list will not be fully comprehensive, so please get in touch if you’re building with generative AI and aren’t featured).”
✘ It’s always good to see people put this kind of overview together. It’s even more amazing, or at least I wasn’t expecting it, to see audio in second place after text.
🎙️ Spotify’s new AI-powered DJ will build you a custom playlist and talk over the top of it (Jess Weatherbed & James Vincent)
“The DJ’s artificial voice is powered by voice tech from Sonantic AI, a startup Spotify purchased last year. Spotify says the actual words the DJ is saying are created from a mix of sources, including a writer’s room filled with “music experts, culture experts, data curators [and] scriptwriters” and generative AI technology provided by OpenAI (presumably this means the company’s language AI models, though Spotify didn’t specify).”
✘ In a similar kind of move to the YouTube example above, Spotify also dives deeper into offering a lean-back experience with a more radio feel. In this case via the use of an artificial voice. It’s cool to see AI being integrated into Spotify’s platform like this.
I’m on my way back from Berlin - where Bas and I met for the first time! - as I post this, and whenever I’m in that city I hear this song everywhere. Not that it’s actually played everywhere, but I hear little resonances of the song throughout the city. It’s perhaps an idealized version of the city, but one I - as a tourist - hope to find when I go there.