Tag: creator economy

Flipping the funnel: building your fanbase one fan at a time

Posted on | by Maarten Walraven-Freeling

When you’re a successful creator on YouTube, Twitch, or TikTok you need to post regularly. If you take two weeks off you break your business model. Some musicians are playing this game, others are holding on to single-single-album release strategies. They think about album years and work towards tours. This isn’t strange, since touring has been the biggest revenue-generating activity for artists in the past two decades. Part of the creator economy, though, is a move towards direct-to-fan, or perhaps more apt is to speak of direct-to-audience, monetization models. We’ve gone from crowdfunding to subscription and from just music to music experiences, or music that comes with perks that might have nothing to do with the music and everything to do with the personality behind the music. But what’s actually happening when you start monetizing your fans directly? Can you scale intimacy? And how do you flip the funnel to figure out which communities you should cater to in order to find your 100 superfans?

Scaling intimacy

Intimacy is first and foremost about creating a connection between two people or just a few people. Sometimes, a concert can feel intimate even if a band or performer is playing in front of thousands of people. Some musicians just have the skill and persona to give people the feeling they’re singing or playing to them directly. What this means is that they tap into the identity of the listener. One of the key elements of fandom is that the fan attaches their identity to the artist’s music they support. During a live show, this attachment can become a two-way street of interaction, or at least it feels that way for the fan.

Outside of the live concert, it becomes much more difficult to scale intimacy when it comes to music. Of course, it’s possible to livestream your music, but we’re still in the infancy of how to do that well and move beyond the horseless carriage syndrome. One option is to simply talk to your fans directly via meet & greets or similar. The success of this can be seen in the talent list of Looped, a service that provides the tech for various interactive experiences. There’s chefs, actors, athletes, but also lots of musicians. Most of the latter group don’t actually perform shows through Looped. Instead, they host ‘experiences’ where their fans get access to the artists they love in a way they otherwise couldn’t. This doesn’t scale like a concert, but it represents a form of digital intimacy. It can scale, for example, by doing it regularly, or by organising an hour of speed dating where an artist talks to 60 fans for 1 minute.

If we take a cue from some major brands, we see that they often achieve intimacy by finding alignment between their values and those of their consumers. In the creator economy, every artist is a brand and their fans want to align with their values. There’s a lot of over-the-top reactions to NFT drops and the environment, but it shows the power of this value alignment, especially when the alignment shifts. Put differently, intimacy at scale can only exist in a way that fits the values of the artist offering it. Similar to a company with a brand thinking about their ‘why’ before they do anything new and if that new thing fits that ‘why’, so too should artists consider if a new experience, or form of interaction, fits their ‘why’ and fits their community.

The importance of community

First of all, what is community? Or, what does community mean? For me, a community is about a sense of connection between people. To foster a community, or to build a community, means to foster those connections. If you’re good at that in an online environment, you have every chance of creating collective connections that people will want to pay for to be a part of. In one sense, music is the perfect conduit for community, because it inherently connects people. On the other hand music faces an uphill battle because it’s difficult to quantify that connection. Take Toms, the shoe brand that started the buy-a-shoe give-a-shoe model. This is a super easy-to-get model that aligns with a lot people’s values. It’s much more difficult for artists to create such a direct mission. Artists make music because they have an inherent need to. Externalizing that into things that represent the values of the artist and their music takes work.

The Toms comparison is apt in the sense that everyone needs shoes, just like everyone needs music. Some people care about the shoes they walk in, but some don’t care so much. Similarly, some people care what music they listen to, while others are happy to lean back and put on a playlist. If you want to monetize your fans directly, though, you need to be able to speak to them. In the playlist analogy, you need to get them to care enough to go look for you and your music elsewhere. How to get someone listening to a playlist to go your Bandcamp or Patreon page? Or, to put it more bluntly, how to find your 100 superfans?

The key element for Li Jin‘s thinking around 100 superfans is that you add real value to those fans’ lives to get them to pay you around $1000 per year. Premium content and community are strong elements of adding that value and extracting that money. So while we all love sharing our Spotify Wrapped data and that certainly creates a form of community, that’s not what Jin’s talking about here. Instead, this is a connected audience that interacts with the artist they’re all a fan of, but also interact with each other. In order for community to really work, the level of interaction needs to be sustained even without the person or band who built the community present. This allows for a different kind of thinking about how to build this community too, because you need considerable buy-in from the people inside the community.

Flipping the funnel

Traditionally, the funnel is broad at the top and slim at the bottom. You start with a large group of potential customers or consumers and narrow them down to the people who are actually interested in what you offer. If you decide to become a creator on Instagram, for example, your potential audience is around one billion people. Or, if you’re a creator on YouTube, you start off with a potential audience of two billion. Now let’s say that you have 5000 subscribers on your channel. How many of those people will actually convert to tipping you during your livestream? Or how many of those people will actually shift into paying you a monthly subscription fee for your content and some added perks?

Now, if we think about community as this interacting group of people that care about what you do and share your values, we can flip this funnel idea. Instead of starting with your TAM – your total addressable market – you start with a few people who are already interested in what you do. If you’re just starting out it’s okay if this is your parents and your best friends. Start somewhere and convince those people to, for example, take on your subscription fee. Then you start building from there. To do this, you need tools and your first fans need tools too.

The whole premise of Web3 is based on this kind of community I’m talking about here. As such, most of the tools built for Web3 solutions can help artists out here. As we know, however, there’s a barrier to entry for fans, and for artists, to jump on this train. Thankfully, there’s also plenty of ways to start sharing what you do, and for fans to share what they like, outside of Web3. The key element to flipping the funnel is to build a fanbase one by one. This starts with talking to the people you know. Similarly, it starts with your fans talking to who they know. One way they can do this is through Bopdrop, a fairly new social media app that’s fully focused on sharing music. We all love to share what we enjoy listening to, and now we just need to add on that little push that tells people to support the artist we love so much that we think you should listen to them. Not just because you like their music, but because you get something else out of it: this can be perks, access to a creative process, learning how to better make music yourself, etc.

There’s another benefit to flipping the funnel and that goes back to what is often the first community for any artist, which is that of their fellow artists. If we broaden this out a little bit, and go back to the idea of the musician as a creator, the community becomes that of all creators. The next step is to connect the various audiences that all of these creators have. What I see a lot in GÂRDEN is that musicians play together in unique set-ups. Albertine, for example, took the opportunity to play with two musicians to perform her music. Going from one to three artists is an easy way to triple your audience. This type of audience-sharing is potentially a big win for any direct-to-audience strategy. If I like an artist enough to support them directly, I’ll be very susceptible to them telling me to also support another artist. Broadening the scope here, there’s an opportunity for creators of all kinds to share their audiences. Say I’m a watercolor painter with a medium YouTube following. If I then tell them I made this cool painting for this other artist and that people can support them directly: that works. It can be as simple as word-of-mouth and as strong as interpersonal interactions and recommendations.

One billion music creators: what does that look like?

Posted on | by Maarten Walraven-Freeling

Making a tune is now as easy as taking a photo and uploading it to Instagram. With its 1 billion monthly active users, Instagram has made photographers out of all us. As phone cameras improved, the Instagram filters did the rest. Music has spent most of this century battling the ghosts of piracy. The major labels first reinvented themselves as licensing models, using the IP in their catalogues to generate revenues that has propelled them back to pre-Napster times. More recently, everybody in the industry has become a digital media company: Warner invests heavily in gaming, musicians like Rihanna and Jay Z build out their brands far beyond music, and every indie artist has to navigate the digital world from social media to direct-to-fan strategies. Alongside these developments music creator tools proliferate. From Myspace to Soundcloud and now TikTok, sharing and discovering music has undergone changes in relation to the underlying medium. Each new medium led to new structures in pop music. Now, the next step is that everyone can become a music creator and it won’t be long before we see a medium where we consume music as readily as we adapted our thumbs to scroll through miles of photographic content each year.

Creator tools

In November 2020 MIDiA Research already claimed that creator tools were the present of the music industry. They showed that there were 14.6 million music creators using apps and platforms like YouTube and Soundcloud, but also Vampr, Bandlab, Loopcloud, Splice, Boomy, and many more.

These tools range from a focus on distribution to collaboration and various stages of production like loops, mastering, and effect. If you look to collaborate in real time, you can. If you want to easily get your track mastered there’s no need to go to a studio. If you need a specific sound, there’s now any number of sample libraries you can turn to.

That number of 14.6 million calculated by MIDiA is sure to have grown in the past year. Similar to the number of tracks released on the streaming services, roughly 60,000 per day back in February, which will also keep increasing. If you look at an app like Bandlab, you see the potential wave of content generated through creator tools: users create 11 million tracks each month. That’s the total number of tracks released to streaming services over a period of 6 months. In other words, not all of those tracks are released. As these numbers continue to grow, the music industry will need to change to adapt.

How to stand out from the crowd? Or should you even aspire to it?

It’s already difficult to make sure you get your new track heard when you are one of 60,000. If you are an indie you may never get the chance to make it onto those New Music Friday playlists. A study released earlier this year shows how “independent label artists are getting far less than their fair share of access to the most popular playlists.” This kind of issue underlines the current power structures in music. But if we transpose the number of tracks currently released on Bandlab in a month to the DSP format, it could well be that that whole system would simply break down. Moreover, if we take the step to consider a billion music creators using an app like Bandlab each month the volume of created music would be close to unimaginable.

In a way, this is happening already. TikTok has more than one billion video views each day, and most of those include music. Snap, through it’s acquisition of Voisey, now has millions of users creating tracks each day to add to their snaps. And yet, there’s no dedicated medium for music yet that has attracted these one billion MAUs. Once we get there, though, it won’t be about standing out from the crowd of recorded music anymore. Instead, each creator will be subject to the same things anyone on a current social media-platform is: algorithms and community. It’s in the latter that we may see a different effect of music growing to the size of photography.

Since music is inherently collaborative, it means that all those creator tools also have these features built into them. Some of them in a very direct way, such as Vampr, others more indirectly, like Splice. But any medium looking to tap into people’s deep-seated desires for making music will have to build to cater to niches. As content will get churned out at an ever greater number people will find each other in shared loves of musical nooks and crannies and find ways to express their identities in relation to that.

Existential fright

Going back to the comparison with Instagram and photography we can use the development of commentary on the medium and digital photography more broadly to sketch responses to a billion music creators. 10 years ago the journalist and artist Chris Wiley wrote that:

“It is indisputable that we now inhabit a world thoroughly mediatized by and glutted with the photographic image and its digital doppelganger. Everything and everyone on earth and beyond, it would seem, has been slotted somewhere in a rapacious, ever-expanding Borgesian library of representation that we have built for ourselves. As a result, the possibility of making a photograph that can stake a claim to originality or affect has been radically called into question.”

So, in a way we’re moving into a world that’s thoroughly mediatized by the sonic in the form of melodies, beats, hooks. Some of these put together by people calling themselves artists, others by people who quickly threw together a few loops. The former might be looking to make a living from their art. The latter might just be enjoying themselves and have no ambition to share their creations beyond a few friends and like-minded people. The question of originality remains pertinent.

That question, however, isn’t new to this situation. Pop music simply doesn’t exist beyond a limited number of chords. And we’ve seen it before, of course. The advent of radio was thought to kill live music consumption – it didn’t. TV was then the death of radio – instead radio revenues increased. The music video would then kill the radio star – radio revenues increased again. The internet doomed the recorded music industry – and piracy had a serious impact, but revenues are now back to where they were 20 years ago. With each new medium, each new iteration of distribution, musicians kept creating and finding audiences.

Final note

Just as smart-phone cameras and Instagram filters have influenced a generation of photographers, so will the current boom of creator tools shape the sound of music for the next decade or so. It’s simply not necessary anymore to have any musical training in order to create music. Apps like Boomy allow everyone to play around intuitively and create sounds that feel like music. Similarly, Bandlab has a loop feature that allows anyone to create something with a pleasant enough melody. Should that lead to existential questions about what music is? Probably not. Instead, we would do well to focus on new niches popping up around shared interests in certain stems, riffs, drum rolls, etc. We may look at and listen to music differently if everyone can make it, but we won’t enjoy it less.

What you should learn about the music business

Posted on | by Maarten Walraven-Freeling | 1 Comment on What you should learn about the music business

The business of music changes at a frightening pace. At the same time, we’re stuck with archaic methods of copyright. Being a musician today means balancing keeping abreast of new modes of distribution while chasing royalties. Crucially, the question of where your music sits in the broader soundscape and where you can find your audiences are more pertinent than ever.

Daniel Ek told investors in July 2020 that musicians should release more music, more regularly. This is the crux of streaming: musicians should be creators who churn out content to stay relevant to algorithms. What does it mean to embrace the creator economy as a musician? How can you play the game instead of being played by agents, labels, streaming services, etc.? And what do you need to do this?

The basics

Barry Zhou via Unsplash

The bible in the music business, and music business-related courses, is still Don Passman‘s All you need to know about the music business. The book tells you about what kind of people you need around you as a musician, record deals, copyrights, publishing, touring, merch. From there we get to issues of financing, PR, and marketing. There’s other books, for sure, but Passman’s is the one most people fall back on. And while he has done well to keep on top of new developments, there are elements in the reality of a musician’s every day life that aren’t captured in the book. Let’s run through the basics before turning to those new challenges.

To sign or not to sign, that is/was the first question

In the current landscape, most artists still face this question first: do I want to aim to sign with a major record label? Do I aim for an independent label or do I go DIY? There’s advantages and disadvantages to each one:

  • Major label deal means lots of support, global links, experienced people, and the potential to piggyback off of a bigger artist’s success. It also means losing some control over your work and signing away of your rights. You can also be seen as collateral for another artist instead of your own person with a creative vision.
  • Signing to an independent – in as far they still properly exist – gives you an international network geared specifically towards artists. Moreover, you won’t get lost in a large roster of others. There can, however, be a lack of financial leverage and knowledge outside of the bigger global markets.
  • Going DIY means having full control of your creative vision, your rights, and being in control of your communications. It also means you require your own capital, your own network, and a willingness to put in work you might rather spend making music.

Copyrights

Copyright is about ownership, but also about having the right to copy, perform, play, broadcast, and adapt a work of music. Copyright is valuable and always a partnership between various people involved in writing a song: usually 50/50 between music and lyrics. It’s important to note that for copyright to come into play a recording is necessary. Which leads into the issue of the master rights. Whoever owns those rights gets to decide how to exploit the recording. It used to be the case that whoever paid for a recording would own the master rights. This is, for example, why the archives of public broadcasters are so valuable: they paid for the recording and thus claim the master rights allowing them to put it on TV, YouTube, etc.

Touring

A painful topic while we’re still riding pandemic waves, but still very important. Touring can make for good income. Yet, how do you organise it well? First off, find the right people to book and manage your tour. Then, think about how to market yourself and how to take advantage of the marketing of the venues where you will play. Furthermore, think about ticketing and what you can do with dynamic pricing structures and VIP ticketing. Once you get a larger fanbase it also become an option to approach sponsors for your tours.

Financing

It’s important to know how money flows through the music industry. Moreover, it’s important to know who makes that money and how they do that. Traditionally, this involved record and publishing deals – with advances – touring, merchandise, royalties derives from CMOs, record sales and potential royalties of those. Of course, there’s also the potential to get on soundtracks or get into synch deals. Finally, there’s the option to go direct through crowdfunding, subscriptions, and donations.

Marketing

Any good marketing plan starts with asking why you do what you do and from there explaining why others should care about that too. Getting your marketing plan together can involve a PEST (political, economical, social, and technology) analysis of your potential demographic. You can also do a SWOT (strengths, weaknesses, opportunities, threats) analysis of your product – your music. From there, you can start to determine your market, your audience, which channels to use, and which tools to implement. Before you start anything, make sure you do a projection of the results you want. And ask important questions like ‘when will I make a profit?’

The everyday life challenges of right now

Gautam Arora via Unsplash

While those basics are necessary, it’s also important to keep up with new opportunities and changing technologies. Especially as and when they challenge the basic structures as described above. It’s easy to feel caught within a wide web of channels to engage with, algorithms to perform in, playlists to get put on, and audiences to speak to. However, it’s also possible to focus on specific tools, platforms, and technologies and build community.

Who are your audience(s)?

I’m purposefully ambiguous about the plural in the header for this section. You will have more than one audience, but it’s also important to start small. If you can find your niche that will give you a solid base to build out from. The reason I want to talk about audiences in plural is because even a niche will have multiple different audiences. A useful thought experiment, which I take from Jack Abraham, is to try and write down up to 100 different audiences for your music.

Tools & Platforms

There are many, many tools out there today to create and release music. So much, so that the number of creators that are self-releasing is growing fast.

MIDiA Research, Creator Tools (2020)

On the one hand, it’s wonderful to have the tools available to quickly release your music to any and all streaming providers. On the other hand, it’s impossible to do that and stand out from the crowd of 60,000 daily uploaded tracks. At which point it becomes interesting to look at other available tools, especially if you’ve started carving out your niche audience. You can, for example, monetize that audience directly through a subscription model. Or, you can consider what you should make to best speak to your niche audience. It might be the case that simply making and releasing music isn’t the best way to go about that. Instead, video might work better for you. Take livestreaming, which can be done in a concert form, but also in the form of a more narrative arc where you take your audience into your creative process.

Experiment

Once you start to think about your audiences and the great variety of tools and platforms available to build and speak to your community, it’s important to experiment. Not only should artists now act like entrepreneurs, they would do well to think like product managers too. Thinking about go-to-market strategies isn’t a bad thing, to give one example. For so long, the focus for musicians has been to create an album and release one or more singles in the run up to the album’s release. Nowadays, you might be better off giving concerts with your work-in-progress, or simply livestreaming your studio work. Whatever it is, you won’t find out if you don’t experiment. And whoever your community is, that first niche you tie to yourself or your band those are the ones you have to keep involving in feedback loops throughout your experiments.

A course to tackle the everyday

To try and work through the challenges of the everyday realities of musicians – and perhaps agents and label owners as well – I’m working on a short cohort-based-course with the aforementioned Jack Abraham. The course will first of all provide a global community of learners and practitioners. Secondly, it provides a problem-motivated and practical way to learn about what’s going on in the music industry today. It brings the most recent developments into the (virtual) classroom. Third, it gives people the tools to play the game instead of being played by the game. If you’re interested in this course, feel free to talk to me directly or help us about by taking a short, 5-question survey.

Data Autonomy, the Creator Economy and Web3

Posted on | by Bas Grasmayer

In the platform economy, your account, your username, your social connections: none of those belong to you. If you break the terms of service, or are merely suspected of doing so, the platform may revoke any or all of those and take away everything you’ve created or built (after it has reaped the benefits in terms of ad dollars from it).

I understand why people may be skeptical of NFTs and smart contracts, but I feel the budding Web3 solves issues left unsolved by the Web 2.0… and the space is heating up as creator economy trends coalesce.

“Would you consider selling the URL?”

A few years ago someone reached out to me to see if I’d be willing to part ways with my 3-letter username on a platform. I wasn’t really, but was open to consider it. I also knew that if I wrote that in an email and the platform to which I had registered saw that email, they’d have cause to revoke my account.

The URL, or the part of the username in there, is not mine to sell. It’s owned by the platform. My account, with all the content I had created and followers I had attained, was equally not mine to sell. Sure, it happens all the time, but with risk.

There are multiple reasons for platforms’ prohibition of selling accounts or any aspects directly related to account. The reason most talked about is to prevent scams like fake followers, astroturfing or username squatting. The other reason is because these platforms depend on data monopolies to survive.

Data monopolies & walled gardens

Early in the web 2.0 days, there was this dream of open APIs, services talking to each other, people forging completely new services by leveraging APIs. It wasn’t just a dream. People did so. Loads of cool hacks and apps launched this way – some survived by pivoting away from external APIs, most died. What happened?

In short, advertising happened. It seemed like the only viable business model at a time before most people were used to doing payments online. A time before modern smartphones. It doesn’t feel long ago, but the internet was such a different place. When you want to make money with ads, you need eyeballs and you need data; lots of it. That means people need to spend time on your platform, so their eyes are there and their data is yours. And so is their ad revenue. External APIs got crippled.

The pandemic has accelerated the rise of the creator economy. It has made calls for fair compensation louder (see Spotify). It has made people go direct to their audience via newsletters instead of relying on Twitter or Medium. It has made people experiment with more direct forms of monetization through livestreams, virtual events, and fan communities on Patreon and OnlyFans.

And then there’s NFTs.

Your username as an NFT

We’re all familiar with the headlines of NFTs being sold for millions. Let’s look at the extra utility and how it matches creators’ demands for more autonomy & ownership of their data and the value they generate.

Recently I created a web3 primer video to set folks up with a crypto wallet and buy their first NFT using ENS. ENS lets you register a legible name as an NFT, like basgras.eth, that points to your wallet address (a hash code) in a way similar to how an email address points towards a mail server or a domain name points towards a host.

Services that support ENS allow people to display their .eth name as their usernames. So if someone wanted to ‘buy my URL’ or username on a service, I could just sell the NFT which only ever belongs to the person in whose wallet it sits.

What if we apply this concept of data ownership to more forms of data? We can apply it to social graphs via the community tokens someone holds in their wallet. Some of those community tokens may be specific to a small group of friends, like a group chat on Facebook or Telegram. Want to take those connections elsewhere? Just join another service and it automatically connects the holders of those tokens.

What about other data, like your posts? I expect they’ll become portable as NFTs with the media hosted through IPFS. It won’t be the incumbent platforms making the first step here. The autonomy and portability of NFTs will have to be created outside of them, so that they have no choice but to integrate them. That sets a new standard: “wait, I can bring my NFTs from outside in, but I can’t take my content out?”

This tension field is emerging and will likely strand incumbents somewhere between web2 and web3. How far it goes in terms of decentralization depends on the business models that get enabled (can this become bigger than advertising?) and how effective the trends are at confronting concentrations of power. What’s certain: People will expect to have more of a say over their data and they’ll expect ownership over the context in which they create value, which will become normalized through DAOs.

Facebook wasn’t MySpace’s web 2.0 successor: they were both web 2.0. Facebook’s web 1.0 predecessor was Geocities. The web 3 leap is larger: the successors to Spotify, Facebook and Twitter will look nothing like them, but will be able to solve the same problems & address the same needs. This time around, you’ll be able to move your data out. The incentive not to do so? You’ll own a part of them.

Thanks Dame.eth for the inspo

Sometimes a single sentence can connect all the dots.

Would you invest in a musician or band? Towards tokenized fandoms

Posted on | by Maarten Walraven-Freeling

Catalogue sales keep dominating the news, but would anyone actually invest directly in a musician or a band? What would the return need to be to get interest for this? And, can we move beyond investing related to future streaming revenues? Perhaps towards tokenized fandoms?

It’s still Hipgnosis that dominates the market news, just recently with their annual report stating that net revenue increased by 66%. Something that MBW learned from the report was that 60.2% of the Hipgnosis catalogue consists of songs older than 10 years. There’s more to the catalogue playing field than just Hipgnosis, with Universal Music‘s acquisition of Bob Dylan’s catalogue back in December particularly eye-catching. More recently, Reservoir acquired Tommy Boy‘s catalogue of songs. All of those catalogues share the common trait of consisting mainly of songs older than 10 years. This makes sense, because those songs have all proven their value and with music’s nostalgia factor will likely hold on to their value or grow it. This is much more difficult to prove or predict for new songs, let alone with the music of artists operating in more niche genres.

Are musicians creators?

First, we need to define what we’re talking about when I say creator here. I like to follow the following definition from eMarketer which they put forward in 2019:

Creators: People or entities that develop original video content for digital properties, and who consider creating that content to be their career or livelihood.

Swap video for audio, and that’s a decent definition of any musician or band. It’s necessary anyway to stretch this creator definition. At Snapchat, for example, creators include people who create AR features.

Looking at musicians as creators, however, puts them in what I’ll call the Daniel Ek corner of needing to create regular output to satisfy the various platforms and their algorithms. This is a very (very) different mindset than the traditional music release strategy of record in studio, release single – single – album, tour, record, and start again. Instead, the creator mindset requires a strategy of audio and video with a big storytelling element that will further strengthen the bond between artist and fan.

Investing in royalties

The easy route to investing in a musician is to invest in future royalties. Quite similar to how a major fund like Hipgnosis works, it’s possible for individuals to invest based on future royalties. There’s a reason Hipgnosis and others are investing hard and growing fast: royalties seem a certain investment. Streaming revenues continue to grow and even if streaming services will be replaced by another mode of consumption, people will still want to listen to their favorite songs.

There’s myriad ways to invest in artists by buying a future share of their royalties. Examples are Songvest and Royalty Exchange, which are basically a marketplaces for trading royalties.

my screenshot

The three benefits for investing in music like this are clear from the screenshot. It’s seen as a safe bet. Moreover, it’s seen as easy investing because music as an asset operates outside of the regular marketplace and its volatility (it’s an uncorrelated asset) and it requires no effort for income generation (royalty distribution is mostly an automated process).

But it’s not just about the investor, it’s also about the fan. Other platforms focus more on fans, for example, helping their favorite musicians or bands create new music. It’s like crowdfunding with monetary benefits for the fans putting in the money. AmplifyX is one platform that allows this type of support and transition.

my screenshot

The details of the investment and the return are as follows:

deal terms Keithian offer on AmplifyX

This type of transaction resembles more regular financial structures. It works, basically, as a guaranteed return on investment. But that’s not how fandom necessarily works. For fans value can be measured in different ways.

Other models of investment and return

Fans are happy to help musicians they love achieve their dream album or global tour. Fans are also happy to help by taking out a subscription, especially if that comes with perks such as access to the artist, limited edition merch, etc. In a way that’s also investing but I would argue that these direct-to-fan monetization models are a small first step towards larger questions around ownership and collaboration. If we look at where we are in the development of the internet as a technology and its impact on our lives those same questions pop up.

Jeremiah Owyang tends to focus on that final stages of this map: modern wellbeing. But it’s interesting to see how he sees the ‘now’ era as the collaborative economy. The facilitator for pushing this economy forward is Web3.

Digital creators, musician or otherwise, have the opportunity through the tools and protocols of Web3 to not just collaborate but also to claim ownership. This is why YouTubers create their own websites to engage their superfans. This is also why locally organized raves should be DAOs.

Towards tokenized fandom?

A community doesn’t have to be big, it can be one artist and some friends or one band and 20 fans. However small or big the community, what’s important is that the model of investment becomes almost reciprocal. Hipgnosis is looking for ROI, but fans are not necessarily interested in purely monetary returns. They would, however, enjoy claiming some form of ownership over what they love. This can express itself in the form of song ownership with the benefit of future royalty revenues. It can also express itself as a form of patronage, where the fan funds the creation of the artist not for monetary reward but different rewards such as insights into the creative process. It’s when this investment becomes collaborative that value needs another revision in its definition. Tokens allow for this because they represent value but do so mainly within a community. All actions to build on that value thus strengthen the community. That’s an ideal worth investing in.

Inspiration for this piece came from this panel discussion on investing in creators.

Music is the creator economy catalyst

Posted on | by Maarten Walraven-Freeling | 1 Comment on Music is the creator economy catalyst

In his book The Passion Economy Adam Davidson argues that our current century is one where people set up businesses that centre around their passions. This contrasts with the main tenet of the previous century, where the focus was on commoditization, production and scale. This economic change underpins an important marker which Davidson generalizes as follows: “The Passion Economy is about quality and the conversation you have with your clients.” (p.38) Music is perfectly positioned to play into this shift and, indeed, does so already.

Davidson doesn’t specifically write about music and musicians. Similarly, if we look at the top 100 social media as defined by the Knight Institute at Columbia University, we see platforms not designed for music or musicians but used by them nonetheless.

Social platforms sized by popularity. Source: Knight Institute

How creators create the most

The researchers at the Knight Institute call these bubbles ‘logics’ hinting at an underlying logic, or function, that connects what’s inside of the bubble. The biggest bubble is that of the ‘creator logic’ which the researchers define as follows:

“creator logic platforms are for everyone and enable users to share a specific type of media (like video, livestreams, or art), in a one-to-many fashion. They are home to “creators,” people who consistently make content for the platform, often as a source of income. Some examples of creator logic are YouTube, TikTok, Twitch, and Wattpad.”

Other platforms to include here are the subscription platforms such as Patreon, Currents.fm or Ampled. As Cherie Hu has argued last year, music is at the core of the the crowdfunding model underlying these platforms. What they may lack in popularity against platforms like Twitch, they gain in terms of the value they capture. Let’s go a little deeper into how music catalyzes these creator platforms and permeates the broader social media ecosystem.

Adding value

Whereas crowdfunding has strong roots in music, platforms such as Twitch, TikTok, and YouTube are first and foremost video-sharing services aimed at connecting people through experiences and stories. By now, we know how important music has been and still is when it comes to growth on these platforms. Twitch, for example, while still primarily being a platform for gamers, has seen massive growth in music streamers. Looking at Twitchtracker, the growth in channels and viewers between February 2020 and February 2021 is impressive. The number of channels broadcasting music tripled, and the number of viewers grew by almost 7x. Of course, the integration between Amazon Music and Twitch further establishes the role of music on the livestreaming platform. Similarly, music is a driver of growth on TikTok and music remains a key driver of traffic on YouTube with 22% of all views attributed to music videos. The reason, I argue, that music plays such a key part on these creator platforms is its ability to convey quality and trigger conversation.

A great example for this, which will immediately show how music permeates the wider social media ecosystem, is by going back to 2019’s biggest TikTok star: Lil Nas X. Besides having a breakout song that was ripe for conflict, perfect for meme-creation, ideal for dance challenges, etc., the artist also played into the feedback loops necessary to engage an audience. Moreover, he did so using a broad variety of social media, posting short snippets of songs on Twitter for example and asking for feedback. Of course, this requires a certain type of artist and not everyone is willing to engage in, what Jade Gomez recently described in Complex as: “commentary and memes that almost make them separate entities from their music itself.”

Capturing value

When, as an artist, you ask yourself how do I add value and how do I capture that value through my audience, it’s important to stay close to who you are. If you’re not the type of person who is happy to enter an endless feedback loop of commentary and memes, you can still look at how you can take advantage of stepping into a dialogue with your fans. The platforms are there and users are eager to engage with music. More and more, fans are becoming creators themselves, the dialogue between fan and artist becoming one where music-making is a shared passion. The creator tools for this are many and the business around it is worth almost $900million. Artists can draw the most loyal of their fans to places like Patreon, where they can give insights into their production processes and provide access to their own sound files for their fans to work on. A great example of this is Jamie Lidell, who sends out audio packs of all the sounds used during his podcast recordings to the higher-tier fans on his Patreon.

Big Tech and the Creator Economy

Recent developments show how the bigger tech companies are wisening up to the chain of feedback that allows artists, and creators more generally, to find audiences, cultivate them, and then capture their value directly. Amazon is one example of a company trying to create an integrated flow for this, but they miss the platform where people can take a megaphone and shout. A great place to do just that is Twitter. With their development of Spaces and the acquisition of Revue, Twitter seems to position itself as, what Peter Yang calls, “the full-stack platform for expert creators.”

Source: Peter Yang, creatoreconomy.so

The key element to this that Yang focuses on is the ability to mix content types. Again, this will have to fit the personality of the artist, but the message is clear: flip the value relationship between yourself as artist and fan and there’s a lot of value you can capture by directly adding value to the lives of your fans. This two-way street seems paved with music and while other creators can walk across it, it’s music that often acts as a springboard to growth and success.

Storytelling, a final word

Music drives the creator economy and permeates across all levels of social platforms. From Snapchat Stories to music subreddits, millions of people use social media every day to engage with music and musicians. As the Creator Economy continues to grow it’s the best storytellers that will reach the top. With a broad variety of available tools artists are primed to find, engage and connect with an audience that is just passionate, and sometimes even more passionate, as they are about their music. Let fans share in the story and capture the value they feel you’ve added to their lives.