✘ From creator economy to broadcast economy
And: Average true range; Streaming fraud hurts everyone; Life and death of a start-up; The money behind the deals; Patreon acquires Moment
The creator economy is a passion economy. It’s the age where we can all take what we’re passionate about, create content around it, find a following, and start to monetize that audience. Recent research shows that 9% social media users consider themselves influencers and of those 76% say they earn enough from that line of business to sustain themselves. Now, 1 in 10 might not sound like a lot, but just consider the number of people on social media - we’re talking billions. Similarly, ask young kids (say 8 through 12) what they want to be and more often than not they’ll say they want to be their favourite YouTube or TikTok star. Put differently, the creator economy is as strong as ever. And yet, there’s a shift happening. All creators are also immediately broadcasters. More and more, the economics around the creator economy start to resemble that of the more traditional broadcast industry. In 2021, I wrote how music is the creator economy catalyst. Now, it’s also the broadcast economy catalyst.
The music industry is broken
Everyone who reads this newsletter knows it. Streaming has brought fantastic growth back to the music industry - especially the recorded side. But, growth is slowing and even the most optimistic outlook on the industry - from Goldman Sachs’ Music in the Air report - says that growth is due to come from emerging markets where ARPU [average revenue per user] is much lower than in the US and Europe. There’s also optimistic numbers from countries like Sweden, where stagnation isn’t hitting yet even though it was already expected. Meanwhile, DSPs like Spotify continue to toy with new ways to gain their share of the audience’s attention. Whether it’s with audiobooks or a video feed. At the same time, it feeds into music streaming snuggling up to the other creator economy platforms.
Besides the impossibility of keeping up with growth through streaming, there’s another broken aspect to our industry. The way things our structures means that data flows to those who control the infrastructure. There’s more data available than ever before, but having access to it and understanding which metrics to focus hasn’t developed at the same rate. As Michael Pelczynski has shown, changing the streaming model to provide a more user-centric vision of royalties also changes the way artists get to think about those who stream their music. Understanding who streams your music the most and being able to talk to them directly is a shift in approach. It’s not about getting on a playlist with tons of followers, it’s finding and talking to the people that intentionally search for your music. This, however, isn’t the standard, or a standard metric, in our streaming economy.
The broadcast economy
We’re all creators, but we’re not all broadcasters. The difference is in the intention. For sure, everyone who posts something on social media would like to go viral and enjoy the endorphin release associated with all those likes. On the flipside, going viral isn’t always the positive dream it’s made out to be. But let’s think about that 9% who think of themselves as influencers. They have to think about their approach to different platforms, different audiences. The ultimate example of this is Mr. Beast, someone who sits in the top 0.1% of creators and who built his own studios to accommodate that. Not every creator has that luxury. What’s more, algorithms change all the time. What works right now, won’t work next week. You can have garnered a great TikTok following, but then your TikToks won’t hit all those followers ‘For You’ feeds.
Being a broadcaster means you’re asking for attention. You’re always the next person in someone’s feed asking to stick around for a bit longer before your continue to scroll. There’s also always someone after you. Listen to what I made; look at what I crafted. Broadcasting is often thought of as a public good, funded by governments. The creator economy certainly isn’t, but even public broadcasters have taken to YouTube and Roblox to extend their usual TV audiences. That is, in a way, directly funding the platforms that allow creators to thrive. It’s also a direct threat to those creators. Here’s a public TV network with the kind of budget a single creator can never dream of. There’s a problem of scale here. Both in terms of who creates and who consumes. There’s only so many things you can spend meaningful time on.
Everyone’s a creator, nobody is a broadcaster
With the advent of creator tools, and now with the help of ever stronger AI engines, we are all creators. It’s becoming ever easier to create content and publish it. With that, it’s also becoming ever harder to find that elusive audience - let alone nurture them into fans. For that to happen we need connections. In the traditional broadcast industry these connections are fluid, distant, and one-sided. The creator economy has allowed direct interactions between fans and the person they admire. A broadcaster finds ways to approach those connections and embody them. We still need more tools to create these embodied experiences in our digital worlds, but it’s happening around us right now.
There will be more content, more people creating music and videos and images and texts and sharing it with the world. As this happens, the required skills for success change as well. It’s less about creating content, and more about creating meaningful connections. We’ll create together and, perhaps, we’ll also broadcast together - as a collective, scene, or club. It’s a different set of tactics. It’s no longer about the content as the end product, but the connections that can be established through it. Simply creating isn’t enough, interaction is the key to success in the broadcast economy.
🎨 Average true range (Stina Gustafsson & Chris Dake-Outhet)
“The art market is neither a hero nor a villain but mirrors society’s evolving connections with art, value, and finance. Art can do many things; it can depict the irreconcilable and the absurd, whether loudly amidst the daily discourse of society or discreetly as insiders obscure the underlying allusions.”
✘ This is a great piece on the economics in the art world and the way artists also look at that. I’m always baffled how music doesn’t seem to get into the position where it can gain value over time. Perhaps it’s due to its ephemerality but there’s a reappraisal of music economics that’s long overdue.
⚖️ Streaming fraud ‘hurts everyone.’ Beatdapp wants to change that (Elias Leight)
“The biggest revelation to us has to be that this is way closer to death by a thousand paper cuts than it is a top-of-the-market problem. If you asked us where most of the fraud came from 18 months ago, we probably would have pointed the finger at bigger artists because we would have thought they had the most to gain. But we were missing the point of most of this activity. It’s not about changing perception; it’s about making money. This isn’t a phenomenon that’s driven by major labels and major independent label artists or their top artists. The overwhelming majority, like upwards of 80% of what we see is fraud, is coming from — call it non-music content.”
Morgan Hayduk (co-founder & co-CEO Beatdapp)
✘ Pay attention. This is a topic few people talk about it but which deserves much broader attention.
🧫 Braid Is Dead, Long Live Braid (Amanda Peyton)
“Once we decided it was over, I spent the morning sitting in my Herman Miller chair that would soon be sold, zooming from one end of the office to the other. Could I put it off, just one more hour? The dread and loneliness in that moment is hard to overstate – sending out a final email to customers, laying people off, selling everything, telling the investors.”
✘ Nothing to do with music, but an honest story of the life of a start-up. Well worth reading and learning from - even if you think you’re not a founder yourself.
💰 The Money Behind the Deals: The Raine Group (David Turner)
“Raine helped advise in HYBE America’s purchase of Quality Control; guided Francisco Partners’ gobbling up of Kobalt; and helped Gamma, led by Larry Jackson; raise a billion dollars. I already raised my eyebrow at gamma when talking about Eldridge but again it’s hard to see what exactly is the vision for this company. In fact, when looking at Raine’s music moves as a whole it’s hard to really see any unifying vision beyond a drive for advisory fees.”
✘ If you squint it still doesn’t make sense, but at least after reading David’s piece you’ll know the facts. The money is being moved around and the investments aren’t always aligned.
🤔 Patreon acquires livestream ticketed events startup Moment (Aisha Malik)
“Patreon plans to integrate elements of Moment into its suite of tools for creators. A spokesperson for the company told TechCrunch in an email that livestreaming is one of the most requested features by Patreon creators.”
✘ Moment built a cool thing, but an acquisition was probably good for them. What’s interesting is how Patreon looks to integrate this. If it’s really just going to be part of a suite of tools available, the magic of Moment will disappear. That said, they already worked with podcasts, and podcasts are the ones with the biggest Patreons.
So much amazing music has come out this month. Within this cohort, Hania Rani’s Ghosts stands out. She’s growing as an artist and as a composer and it’s audible in this record. The emotion she’s able to bring through her music deep into the bones of the listener is pretty much magic.