Category: Newsletter

As an independent artist or label, it’s important to realize what rules you are playing by. Too often, indies follow the rules set by the status quo, while it’s actually in the interest of indies to disrupt the status quo.

When you play by rules set by the status quo, all you can do is lose.

Instead, indies should be playing their own game, particularly the ones that don’t care about exact market share percentages. It’s up to you to decide what it means to be in music. You don’t have the budgets that major-backed artists have and you don’t own part of the streaming platforms where you’re competing for attention (eg. Spotify, Soundcloud).

In anticipation of the panel I’ll be in at AIM’s Music Connected (April 27, London), let’s look at some of the most important trends that let indies determine their own reality.

 

Fair Trade Music

A couple of years ago, discussions about how bad piracy is were replaced with the ‘rage against the stream’. People were upset with streaming platforms’ low payouts and growing increasingly impatient for their promises of a better tomorrow. A strange blame game started, obscuring what was really going on, but also bringing attention to issues with the way parts of the industry do their accounting. Where was the money going?

As a consequence, some have started looking for better ways to do things. The most famous example is Benji Roger’s blockchain initiative: he hopes to get the industry to use blockchain technology to create a worldwide transparent database that makes it easier to understand who to pay, how much, and for what. There’s also a public survey underway for it.

Other examples of music service initiatives that aim to provide something more fair and transparent are:

• Resonate, a cooperative that lets indie artists & labels own the platform
• The POLR, which believes micropayments can enable more autonomy
• Whitestone, which aims to reward anyone who contributes value

If you know of more, send me an email or tweet me.

 

New formats means new monetization options

Expect early adopters of VR to be an easy to monetize group, because they’re hungry for cool experiences on their new devices. They want you to show them all the things you can do with this medium and they’re happy to pay for it. Freemium models should work well here: give people something good for free and let them pay to upgrade or extend the experience.

YouTube channels and Twitch livestreams are other formats to consider. Further reading:

• Virtual Reality is going to change our music experience, forever >>>
• Streaming is not the future of the music economy >>>
• What the musicbiz can learn from YouTubers >>>

Direct-to-Fan Platforms (D2F)

An old theme, but there are some important developments to pay attention to this year, namely: consolidation. Crowdfunding platform PledgeMusic acquired fan engagement platform NoiseTrade and set.fm which makes it easy to sell high quality recordings of live performances.

Meanwhile Fullscreen, a Multi Channel Network (MCN) for YouTube, acquired direct-to-fan platform StageBloc, and rebranded it to Fullscreen Direct. Kickstarter made its first acquisition by taking in Drip, a direct-to-label subscription service on the verge of shutting down.

These acquisitions are meaningful and as product teams merge and collaborate, we’ll see an integration of these tools to become more full suites. This evolution is something many were hoping for when Beats Music acquired Topspin Media.

This time the acquisitions are coming from companies that are already inherently D2F. 2016 is going to be an important year for D2F services.

The Future of the (Indie) Music Business

If you’re in London on the 27th, be sure to catch the panel I’m in with Benji Rogers (PledgeMusic) and Philip Hutcheon (Dice.fm), chaired by Karim Fanous (Music Ally) at Music Connect. I imagine we’ll be going into depth on a lot of these topics.

The future is what you make it.

Design your strategy, plan carefully and support independent platforms and initiatives.

In the first edition of MUSIC x TECH x FUTURE, I took a wide view on why VR is music’s next frontier. Now, I want to take it a step further. VR is going to change product offerings, in-demand skill sets, live music and what it means to be a successful artist. Here are 4 key domains that are about to evolve and change beyond recall.

Music videos
Music videos are not merely going to become more immersive. Consumer adoption of VR will create a whole new branch of audiovisual song experiences. Music videos have always played a dual role of being part-promotion, part-product to be sold. Now we’re going to see more advanced business models added from the artist’s side, as well as from business who will spring up around this phenomenon. Examples:

• A music video with various characters. The free version lets you experience it from one character’s perspective. Pay-to-unlock to see it from other perspectives.
• Customize your video: pay $2 to put your friends’ faces on the band, then share it to them so they can see it for free. Can also function as a good viral, so you could opt to make it free like The Ugly Dance.
• Music videos where fans can contribute: give people a paint brush for the first half of the song and then send them through a world of fan art in the second part of the song. Just imagine a more interactive VR version of Jack Ü & Bieber’s Where Are Ü Now. This will obviously require some moderation(NSFW), though.
• A Netflix for VR music videos. This could come in the form of a more expensive tier on existing music streaming services, also.

Quite simply: at this point there is no standard, no default, so there will be a lot of experimenting until we land on a preferred format. Good days for creativity.

Dynamic music
If you’ve tried video games with 3D environments, you’ve probably experienced music shifting from one composition into the next as you change areas. This is called dynamic music. It has not yet had much application outside of video games, but I’ve mentioned some in an article on Techdirt last summer.

It’s going to become a lot more normal for people to enter into virtual 3D environments. This gives opportunities for people who want to explore alternate ways of music composition. This will be a very hot skill set for industries interested in building immersive virtual experiences, from gaming, to advertising, to Hollywood.

Concerts
Registrations of concerts are about to get a lot more valuable. Crews with 3D cameras are filming them and creating VR experiences, so you can experience your favourite bands from the first row, backstage, and on stage from your living room couch. A VR concert subscription service makes a lot of sense.

Bad news for those hoping to livestream these concerts: it’s going to take an enormous amount of bandwidth to stream this. I don’t think we’re quite there yet, but there are promising developments.

Virtual parties
Many of us have probably spent a weekend locked inside the house, playing music with strangers or friends on Turntable.fm instead of going out. Although Turntable.fm died, various internet communities have continued to set up special virtual events called URL shows or URL parties through social music services like Plug.dj (relaunching soon) and Dubtrack.fm.

The world’s biggest promoters and festival organisers should definitely paying attention to this trend. A good place to start is with Grimecraft, who made history this month by livestreaming the first DJ set performed entirely in VR.

I asked him about what he thinks VR will bring us:

“It will make shows more accessible for musicians who dont tour or fans who live in areas where their favorite DJs don’t tour. The biggest concerts ever could potentially happen in your own living room in VR.”

The next “social music services” will not be simple music sharing platforms, no, they will be platforms where people can organise and host virtual raves and shows. The gaming industry might be way ahead of the music industry with this one. Case in point: Grimecraft’s livestream was on game-streaming platform Twitch and not on a music platform.

Virtual reality is going to change our music experience, forever
The next couple of years are a very exciting time. A lot of the innovation in this new part of the music business will come from the fringes. There are so many different applications and things you could be doing, that’s why I don’t really believe in creating a music VR standard just yet (sorry, Benji).

Anything is possible and we don’t know what’s going to come out on top. Make your mark. Now.

The launch of Soundcloud’s new premium tier signals the arrival of yet another $10 all-you-can-eat streaming service in an already crowded space. While many people in the music business are happy that they found a way forward, and a way to survive, they’re also worried. As Mark Mulligan pointed out, this represents a pivot. People are concerned that, in having to compete with the established music streaming services, Soundcloud’s indie nature will get snowed under. It’s also not something that people were really waiting for: Soundcloud has always been different, so they expected something different, rather than more of the same.

There are structural problems facing the music streaming status quo right now:

• Premium users are capped at $10 / month, while they might be willing to spend more;
• The most casual listeners, who used to buy CDs occasionally, are only monetized through ads;
• There are no good options between $0 and $10, so we’re failing to monetize a large segment.

The concern: tiers with lower prices cannibalise the full premium tiers. The fact that this is a concern highlights that the industry already knows that the premium tier’s pricing is the product of artificial scarcity, rather than than the addressing of consumers’ needs. You can drop the “cannibalise” phrase and translate it to: “if users can get what they want by paying less, we can no longer force them to pay more for subscriptions that include things they don’t want”. If this sounds familiar, you’re probably thinking of those releases on iTunes where you have to buy the whole album to get a single track.

These are strategies you may choose to pursue and they can work, kind of. I believe we deserve something better.

The idea: unbundle feature sets and types of content. Introduce a $1 price tier for something very simple, like getting to offline sync 3 releases each day. This helps you establish a monetary relation with users and gets casual listeners used to paying for music. It opens up possibilities for upselling: sync extra releases for another $1, a radio app for another $2 per month, full on-demand access to music & videos from your favourite label or set of artists, a playlist building game, Tinder-style dating for music lovers, whatever – countless possibilities. Not only does it open up the way for getting value out of poorly monetized segments, it also gives you a competitive advantage when you can monopolize specific behaviours around music.

For a while, Spotify seemed to be heading there with its app platform, but I guess they couldn’t clear it with the labels or it was too much of a distraction, since they have to compete with Google (and later Apple) with ‘infinite’ war chests.

What’s next: new formats are creating new opportunities. There are exciting trends in audiovisual experiences, particularly driven by virtual and augment reality, that offer great opportunities for new platforms to emerge, existing platforms to expand, and new monetization models to be pioneered. It means we shouldn’t make the same mistake twice: the music streaming status quo solves one thing for $0 to $10 per user and that is piracy. What comes next will be more feature-intensive formats that are harder to pirate, so we can create a new monetization on top. Perhaps we don’t need all-you-can-eat tiers for this.

As a sidenote: when I was Product Lead at Zvooq, a large music streaming service in Russia & CIS, we pursued an unbundled multi-app strategy. We made a $1 and $2 tier app called Fonoteka. We couldn’t get all the major labels on board immediately, but last I heard, the team there managed to get it done. It’s good to see there is room for experimentation with these models, and hopefully we’ll see this move from developing markets with high piracy / low monetization rates, to key markets where the online music landscape is already more developed in terms of revenue.