✘ Fans to communities & the expression of value
And: The future of NFT marketplaces; Amount of new podcasts way down; Virtual K-Pop girl group MAVE; Five creative lessons from Factory Records; Music streaming model makeover
There’s seemingly always a new start-up who’s mission it is to improve the artist-fan relationship. There’s also plenty of people with generic ideas of how to help artists better handle and monetize their fan relationships. All of this, seemingly, with the goal of helping more artists make a living through their music. There’s the success stories - Radiohead’s In Rainbows, release, Nine Inch Nails’ Year Zero campaign - connected to major artists opening up their success to their fans. However, these bands already had global success and masses of fans. There’s more success stories, though, like LaRussell taking the Patreon-model in his own hands and finding that fan pyramid that Li Jin and others have popularized. Or look at Web3, where artists like Violetta Zironi not only create the type of revenue most artists can only dream of, her fans also earned revenue through the secondary market.
But are these just examples to confirm the rule that most artists don’t make it? Spotify likes to taut how more and more artists year-over-year hit the magic number of $100k in earnings through streaming. There’s also 100k songs uploaded to DSPs every day - market saturation is upon us. As Tati Cirisano put it, if the majors are clamouring for change to the pro-rata streaming revenue model, it’s high time to think about what’s next. Most interestingly, her argument leans into how we need to think about the actions of listeners as consumers instead of asking ‘how to value music.’ To do that, she suggests to find a way to charge more for lean-in listening than lean-back listening.
It could work, as we’re seeing with Soundcloud’s fan-powered royalties. What this suggests, however, is a funnel where someone discovers music —> finds ways to consume more —> gets to know about the artist or band —> becomes a loyal listener. For that first part, streaming services work well, precisely because they’ve optimized for algorithmic lean-back listening - you get served music you’ll probably enjoy. Whenever that track you didn’t know yet peaks your interest, you can lean in and start a process which could lead to: a) loyal listening; b) more revenues. Currently, DSPs aren’t optimized for this and artists often need to tap into the creator economy of forever-new-content to grab people’s attention and get them to lean in.
Do fans always lean in?
Back in the 1990s, the recorded music industry was built on hundreds of thousands of people who happily spent $100 or more a month on their music consumption - mainly through CDs. From the 2010s onwards, the focus shifted to millions and millions of people willing to pay around $100 a year to have access to most music ever made. What this meant, is that most people who call themselves a fan, hardly spend any money on the recorded music of their favourite artists. Instead, fans have started paying for more experiential services. This ranges from pre-funding an album recording through a crowdfund to a paid membership providing access to the creative process to dedicated online interactions - remember Cameo?
I want to argue, however, that fans don’t always lean in when they do this. Often, these experiential services don’t involve listening to music. It’s more about getting close to the artist, finding out how they tick, etc. All of these actions help to bind people together with a common interest around something they love. Fans might lean into this love, and even pay heavily for the experiences that help them express it. This is different from listening to the same song or album over and over again. It’s not leaning into the music so much as leaning into ‘being a fan.’
What’s actually needed to create value
So perhaps we need a more sophisticated approach to thinking about fans, and we can include collectors in this. There are meaningful connections that people who spend money on music can make among themselves. Throughout this vast group who all share a passion there are varying levels of commitment, different behaviours, all kinds of needs, and a range of relations. The reality this paints is that we definitely don’t need another product or service to facilitate artist-fan experiences. Moreover, we don’t need more experiences to increase the ‘willingness-to-pay’ of fans. What we need, quite simply, is places to interact with as little friction as possible to help build out a group of people into a community. If you do want to talk about ‘willingness-to-pay’ - and we should talk about money when it comes to making music - you’ll find that fans will drive this amongst each other. People, however, tend to have their own way of expressing the value they find in music, and you’ll find that it doesn’t always have to result in a transaction. This makes it hard when you’re building a product, but it’s what makes it beautiful to build a community.
🧸 Who Makes It Through The Bear? Predicting The Future Of NFT Marketplaces (Finn Lobsien)
“If an enterprise—NFT or not—can’t maintain non-zero cash flows and equity values without a bubble, it shouldn’t exist. Web3 can only prevail if we create products and services people pay for—which creates businesses whose survival doesn’t depend on VC cash infusions.”
✘ We’ve had the existential crisis about secondary market royalties at the back end of 2022, but Finn goes much deeper into what kind of marketplace could perform best as we come through the current lower volume market.
👂 The Number Of New Podcasts Is Way Down (Jeremy Burchard)
“And that's exactly when new podcasts had their true hockey stick moment — a near 300 percent increase in one year. The only problem is, the drop since has been so drastic that 2022 actually lags behind even pre-pandemic numbers. The number of podcasts created in 2022 is only slightly greater than 2018's, but down about 35 percent compared to 2019.”
✘ Some fun facts about podcasts, still a major area of attention on all DSPs, even though production has gone way down apparently.
🤔 Virtual K-pop girl group MAVE: to debut next week (Angela Patricia Suacillo)
“Apart from this, however, not much is known about MAVE:. While Metaverse Entertainment has since revealed that the group’s name stems from the phrase “make new wave,” it is unclear if the members’ voices are also generated by artificial intelligence or how the group will host live performances or interact with fans.”
✘ It’s so interesting to see these developments, especially in a market where there is appetite for virtual groups. I’m curious to see what role AI will play in the music and whether we’ll find a cultural cross-over moment to the western world.
🏭 Five creative lessons from Factory Records (Austin Robey)
“One of the most notable qualities of Factory Records is the diversity and breadth of release types. While there are dozens of traditional albums and singles, there are also a wide range of less conventional releases, ranging from posters, objects, and events to ideas and concepts.”
✘ I have to admit my love for all things Factory Records, but this is a great recap of what made the label so awesome - it wasn’t just the music, it was a cultural movement.
⏭️ What comes next in the music streaming model makeover (Tati Cirisano)
“There is another possibility. A simple solution would be to have a higher royalty rate for lean-forward actions (like searching for a song or streaming “Liked” songs) and a lower rate for lean-back actions (like streaming radio stations and mood playlists). The hard part would be deciding what those actions, specifically, are. But this reset of the system would simply formalise a commercial model around where consumer behaviour has gone. It would also reward both scale and core fandom of the “1,000 true fans” type. Finally, it would avoid moral dilemmas of what makes music worthy. Whether a consumer actively streams whale sounds or actively streams Taylor Swift, it is their actions that are treated differently, not the songs themselves.”
✘ I referenced this article above as well, but it’s an excellent read with some great ideas in it on how to move forward.
I’m in love with this reimagination of Fela Kuti’s Lady by the awesome Ezra Collective. Listen, and it’ll be the best 6 minutes you spend today.