Communities exchange value, or how no artist should care how much YouTube pays the industry

Music rights holders get paid astonishing amounts of money, but most artists cannot make a living from their art. All the major DSPs love throwing around the big numbers they pay out to ‘the industry.’ Yet, most artists cannot rely on them to put food on their plate. There are, however, many methods that allow musicians to step away from over-reliance on big tech companies or major labels. Most of them involve community, and more specifically community-building.

The big girls

So YouTube paid out $4 billion to music rights holders in 2020 and Spotify, by Music Ally’s calculations paid out more than $5 billion in the same period. In the US, in the first 6 months of 2020, the biggest streaming services together made up more than 85% of total revenues for recorded music. And during the recent DCMS hearings on the streaming economy in the UK, YouTube defended itself by stating that “record labels agree that it is possible we will become the music industry’s number one source of revenue by 2025.” That seems to be a good thing for YouTube more than anyone else as it probably means that even more than 2 billion people will be coming to the service “to experience music each month.”

A major argument that came out of those same DCMS hearings was to ‘simply’ grow the overall pie being paid out by the streaming services. BPI‘s Geoff Taylor, for example put forth that “[t]he total amount coming into the industry should be substantially higher and that would benefit everybody in the chain.” During the hearings, a counterargument surfaced, through BMG, that “the status quo gives the impression it was designed for the convenience of industry players, rather than with a view to the perceptions of artists and fans.” BMG used this point to set up their defence of user-centric payment systems. However, it also paves the way for another argument altogether, something BMG hinted at too in further evidence they presented: the importance of monetizing the artist-fan relationship more directly. And that should be done by building a community.

Focus on community

We’re not new to the idea of community as an important element in artists building out a living for themselves. Just last Tuesday Bas argued that “the one strategy that I feel almost any artist can apply is that of building a community of fans that can sustain you.” This related to DAOs and in my own article about why fans should want to buy NFTs one of the key arguments was that these tokens represent an opportunity for two-way communication between artist and fan. But there’s more to community-building than future-forward web3 technologies. What first of all needs to happen is a shift in mindset. One of the things that struck me in a recent podcast recording for The Daily Indie[in Dutch] is that so few artists actually experimented with building community during the pandemic.

Of course, Patreon, OnlyFans and their like saw fast growth during the pandemic. All the musicians who set up a subscription model or turned to monetize their livestreaming efforts did an amazing job. But for each one of those, there’s plenty others who still rely on their single-single-album release strategy. Why not flip it around? Take Dutch artist POSTIE who is social media first and recorded music second. He posts a video every Sunday and then after a while releases those songs as an album. Another way of putting this is that he doesn’t use social media to drive streams, but streaming services to drive followers.

Image by Alina Grubnyak via Unsplash

The community builders

Let me highlight two people who give some excellent advice on community building. First up is Anna Grigoryan, who writes a newsletter called Community Weekly in which she presents and explains tools to build community. My favorite advice of hers is to find your community mission. That’s where it starts. With the question of who you’re doing what you’re doing for. And then following that question with how you add value for those people. I would also add, that quickly after that, you should ask how your fans, your community, can add value for you. Anna is also very open about her own struggles in building a community around her newsletter. I find this very helpful when thinking about the communities I’m involved with for example.

This is where my next community builder comes in: Jen Lee. I came across her as the community manager from the Means of Creation fans Discord. First thing that happened when I joined the group was that I got a personal note welcoming me and encouraging me to post in a channel. She’s just been interviewed by Peter Yang and that message to me is pure strategy. In the interview Jen puts forward the following idea:

Like building a product, an online community needs to:

1. Exceed user expectations by personally welcoming new members.

2. Overcome the cold start problem by seeding the community with great content.

3. Deliver great UX by focusing the conversation on a few channels.

From these two community builders you have the starting gear to step into the studio. Whether you’ll focus on one of the subcriptions services (Patreon, OnlyFans, etc.), one of the social media (IG TikTok, etc.), the community platforms (Discord, Geneva, etc.), or turn your hand to web3 protocols (DAOs, NFTs, etc.) the basics are the same.

The Call-to-action

It’s as simple and easy as can be:

  • If you’re an artist start experimenting with community building. Do it now and be open with and towards your fans for feedback and interaction.
  • If you’re not an artist yourself, you’ll know them. Help them out by giving them these building blocks.

Together, we can make sure that the focus of the music industry starts to inch away from the shouting big numbers and boasting massive usage stats. Instead, we’ll focus on creating communities where artists and fans exchange value.

Why YouTube is the streaming service to watch

Spotify often gets contrasted with Bandcamp in order to explain the challenges of the music streaming landscape: low per-stream royalties versus much larger commissions on sales. The intensity of that discussion has moved all eyes from the actual one-to-watch, which is not Spotify, but YouTube – a service with a billion monthly active music listeners and 30 million subscribers.

Always has been

YouTube has of course long been on everyone’s radar due to the so-called ‘value gap’: the disparity between what YouTube was willing to pay for music & its perceived real market value. As the biggest music platform, YouTube was infamous for its low per-stream rates which, on average, are significantly lower than Spotify’s for music identified through its ContentID system (source). I chose to phrase things in past tense due to attention shifting to Spotify, but that does not mean rightsholders have found these issues to have been resolved.

Another concern is the power of YouTube and its mother companies Google and Alphabet, which is a common reason for complaints from music industry lobbyists about having imbalanced negotiations. Before I go into why I think YouTube is making all the right moves: the concentration of power towards tech monopolies is of big concern for me too (it’s why I deleted or deactivated my accounts on Facebook, Instagram, and WhatsApp). Keep this in mind when developing a strategy: always diversify, never put your eggs in one basket, and make sure you create ways to go direct-to-fan (e.g. collect phone numbers, email addresses, build communities).

YouTube’s evolution as a creator service

Google’s video service has long had something of great strategic value: not music. I mean that literally: it’s had content and creators that were not doing music. This has meant less complexities around licensing (but also poorer representation for creatives) and has allowed YouTube to experiment with new models.

The same is happening now with podcasts at Spotify and user-centric streaming payments at SoundCloud. Having ‘user-generated content’ from unsigned artists allowed SoundCloud to start trialing its ‘fan-powered royalty‘ model without every rightsholder having to opt-in through contract negotiations. Meanwhile Spotify is exploring new monetization models around podcasts, like paid podcast subscriptions. As a relatively new medium, podcasts don’t yet have the legal and political complexities associated with intellectual property in music.

YouTube & the next layer

Streaming is a base layer for music monetization. It’s shallow in that it leverages nothing but the relation between listener and catalogue. Monetization is driven by factors like accessibility (e.g. all devices, price), portability (e.g. offline) and convenience (e.g. catalogue size, search, recommendations). It’s absolutely basic: it’s not about the relation between fan and artist, it’s not about the quality of the art or music, it’s just about having the largest and most convenient store where you can access everything by paying from a magic wallet with your costs predictably capped at $10 per month. It’s a subscription business, not a music business – as Tim Westergren (founder of Pandora and now livestreaming service Sessions) also pointed out in my recent interview with him during Karajan Music Tech.

This base layer has advantages: it generates a huge amount of money for rightsholders and creates a foundational data layer which can be used to connect listeners to new artists and music or could be leveraged to learn more about existing fans and get new music to them. But streaming was never supposed to be the future of the music economy. It needs additional layers on top.

One of these layers is the Interaction Layer. This layer has been thriving during the pandemic thanks to a particular medium: livestreams. Livestreams encourage interactivity: fans can be exposed to each other in chats and the chat functionality can make fans feel like they’re seen by the artist(s) they care about so much. That means there’s value being created beyond simple music access. Value means opportunity to monetize and YouTube has seized that opportunity.

Image taken from my Water & Music piece about fan-centric streaming services (paywall).

Through its Super Sticker and Super Chat features, YouTube allows creators to monetize their livestreams. Super Stickers are big, fun and quirky custom emoji that appear in the chat in exchange for a small fee. Super Chat allows viewers to highlight and pin a message for a certain duration of time, depending on how much they pay. In the first months of the pandemic lockdowns, from March to June 2020, over 2 million new users spent money on these features.

The second feature that provides an additional layer is channel memberships. This allows creators to created limited edition content, similar to what they might offer on Patreon or a SFW OnlyFans. At smaller numbers, it even allows them to create semi-bespoke content.

Layer integration

These features allow creators to monetize and connect with fans where they already are: YouTube (as opposed to onboarding them to Patreon or OnlyFans). This is the important distinction. These monetization options are not novel in and of themselves – many of them have been around for years or even decades. The important development is that these experience and monetization layers are integrating. Moving fans around various platforms causes friction, which means you won’t be able to convert everyone down the funnel from the streaming layer. It also keeps the data in one place instead of fracturing it.

Graphic from Streaming is not the future of the music economy, from the second edition of the MUSIC x newsletter, February 2016.

Over the next years we’re going to see many examples of artists successfully building models on layers that sit on top of streaming. YouTube is going to play a significant role in that. The conversation will move from leveraging streaming (still essential for discovery & connection to wider audience) to interaction & bespoke options.

Another service to watch in this space is Amazon Music, which is slowly expanding their integration of livestreams from Twitch (another Amazon company, which also allows micropayments and memberships like YouTube).

Livestreams mean original content and a different set of rights than what you negotiate for on-demand streaming. This has given YouTube and Amazon the flexibility to experiment with these new layers. Spotify’s business strategy has introduced similar functionality to podcasts, but will they be able to do the same for music given the complexities of licensing and the various rightsholders that will want a piece of the pie?

The music streaming landscape is in flux and it’s not about Apple Music vs Spotify or Spotify vs Bandcamp anymore.

For a wider read diving further into this trend, read my article The rise of the fan-centric music streaming service at Water & Music (paywall).

A special thanks to Vickie Nauman for some of the inspiration for this piece and to c/o pop and Germany’s association for independent music (VUT) for having us on a panel last week.

The value of piracy: future back thinking

We don’t talk a lot about piracy in the music industry anymore, but it still exists. In 2018, more than a third of music consumers still pirated music. In 2020, INCOPRO, on behalf of the UK’s PRS for Music, showed that piracy in the form of stream-ripping grew by almost 1400% between 2016 and 2019. The question is how to analyse this activity, how to analyse the pirates, and how to determine the effect and impact of piracy on the current state of the music industry.

How piracy has changed

Back in 1999, when everybody I knew used Napster and Kazaa, piracy involved quite elaborate peer-to-peer networks. The music I hosted, for example, would be shared and downloaded by others through those networks and vice versa. Nowadays, the main act of piracy comes through ‘stream-ripping’ which is most common from YouTube streams, but also happens from streaming services such as Spotify or Deezer. In 2019 MusicWatch published researched into ‘stream-ripping’ showcasing growth of the phenomenon. The two main reasons provided are: 1) being able to listen to songs offline; 2) liking a certain song, but not enough to buy it.

Both of those main reasons are exactly why streaming services displaced widespread illegal sharing and downloading of music. They provide ease-of-access and in paid tiers offline listening is available. Moreover, back around 2014, just before recorded music growth kicked back in, MBW wrote how amazing it was that piracy had dropped almost completely, giving the example of Norway as a country with an early high adoption rate of streaming services.

That third reason highlighted on the infographic is actually the more interesting one: random searches for music lead people to apps and websites that allow them to rip streams illegally into MP3 files. This signals a broader issue then a simple narrative of ‘bad pirates.’

The Ethnographic approach

Considering the financial impact of piracy on the recorded music industry it’s no surprise there is a vast body of empirical, academic research into it. A paper from Steven Caldwell Brown from 2016 aimed to make sense of how people engaged with and defined music piracy. This built on the work of many others who had previously shown how illegal downloaders also spent the most money on music. One example comes from a cross-cultural research by Joe Karaganis and Lennart Renkema and published in 2011. In their ‘Copy Culture in the US and Germany‘ they showed that those who spend more on music were also those who downloaded the most illegal music files. There’s a question whether that value that these file-sharing pirates placed on music is now captured by the likes of Spotify. If you previously downloaded illegal music files but also spent $100 on recorded music each month but switched to a Spotify paid account right when they launched it’s only now, after 12 years, that you will have matched your previous yearly spend on music.

It’s not just music

Outside of the music industry, piracy also played its role. Again, streaming services, such as Netflix or Amazon Prime Video, provided an ease-of-access and affordable way to access lots of content bringing piracy numbers down. However, the competitive model in video is much stronger than in music. There’s more focus on originals, differentiation of content, and exclusive deals. Take, for example, Batman Begins & The Dark Knight and imagine that happening to a major artist’s records.

The difficult thing is that with our audio streaming services we expect everything to be available. If that’s not the case, there’s a fear listeners will start downloading again. But that’s not necessarily a bad thing when those who pirate are also those who consume the most. Recent research by Omdia shows that even now pirates are just ‘content hungry.’

So why do these pirates pirate? Because they have reached a maximum they can spend on various streaming services per month or because they cannot find a specific title through legal services. In the video world, both of these reasons are fair enough. In music, they don’t hold up. Basically all music is available on each major streaming service. With a subscription to one of these you get access to all of that music.

The future back thinking we need

The problem with piracy isn’t a problem with pirates. In the music industry, those who traditionally pirate the most music files are those who, in terms of spend, value music the most. What we see in the video business is a big phase of unbundling: multiple subscription-video-on-demand services, cable TV operators, free-ad-supported-streaming TV, etc. In the music business, we have an era of the bundle: buy-one-get-all-music-ever. Those artists who lean into the creator and passion economies try to differentiate their income streams and escape the bundle. This differentiation is necessary because for the vast majority of artists the bundled streaming service system doesn’t offer a good valuation of their art. Due to the increased competition surrounding video, creators are better valued. Perhaps, then, piracy is a necessary evil in a system that better values the art created?

How SoundCloud should tackle fan-artist payments and reconquer lost ground from Bandcamp, Instagram & TikTok

SoundCloud is rumoured to announce new plans to “let fans pay artists directly” which some commentators interpret as the music streaming service exploring user-centric payment systems.

While user-centric payments definitely make the landscape fairer and realign incentives by making sure the money generated by fans of certain artists actually end up in those pockets, it’s definitely not a silver bullet solution to make up for the difference between desired and actual revenue artists receive from streaming services. In other words: for the vast majority of artists, the immediate change in royalties from a shift to user-centric would be negligible.

Furthermore, it’s complex to negotiate, as SoundCloud’s VP of content partnerships Raoul Chatterjee pointed out during a recent session of the UK streaming inquiries:

“The whole investigation into user-centric is a very detailed and complex investigation that needs to be taken. It’s one potential path we’re exploring… and it would require industry-wide conversations and support to be impactful.”

SoundCloud is doing ok (especially compared to a few years ago), is reporting growing revenues, but it’s losing relevance. SoundCloud does not have time for lengthy negotiations. As a platform, they’ve lost their footing at the center of music subcultures and the longer it takes for SoundCloud to regain its position, the harder it will become.

Keep the lawyers at the (virtual) negotiation tables, but in the meantime, claw your way back.

SoundCloud’s relative interest over time based on Google searches.

Instagram, Bandcamp, and the post-Covid landscape

Two questions.

Firstly, where do music scenes go to connect to stay connected with each other in 2021? I’ve argued that Instagram has usurped community building from SoundCloud. Of course it should be noted that TikTok is playing an increasingly important role there, especially for certain genres. To a lesser degree, groups on Facebook, Telegram, and Discord form places for people to share their latest tracks, get feedback, find people to do collabs or exchange remixes with, etc. As such, they’re also great places for fans to keep track of the latest developments in music.

Secondly, where did musicians turn when they struggled to make ends meet with just the income from Spotify, Apple Music, YouTube, etc.? They turned to Bandcamp in a massive way. SoundCloud, with its creator-centric roots, wasn’t well-positioned yet to accommodate these artists, because what it offers artists hasn’t changed much from its early beginnings. In 2020, being creator-centric meant helping creators make money – and SoundCloud didn’t have much to offer beyond what it offered artists since the service’s early days. That is: a place to upload your music and present it to other people. That addresses a pre-2015~ market need: making music easy to access. Access has been solved. Monetization hasn’t.

Another place that made music easy to access, YouTube, has been SoundCloud’s most important competitor. YouTube, since its early days, has offered social functionality similar to SoundCloud’s, in that one can follow creators (once innovative! Spotify only launched this 4+ years after launch), comment on tracks, and see other users’ profiles.

By 2021, YouTube’s suite has evolved to include membership clubs with monthly fees, monetization through content identification, and livestream monetization through social features that make fans more visible in the chat (similar to Twitch).

This is the landscape SoundCloud must address & find relevancy in.

(more about this landscape in my piece for Water & Music about the rise of the fan-centric music streaming service (paywall))

The social opportunity

SoundCloud was strongest when it catered to its early adopter users or users who exhibit that type of behaviour. Behaviour commonly associated with early adopter users is word of mouth, being a power user, and a willingness to overlook certain flaws as long as the product delivers exceedingly well on its core value proposition. These users are not well-addressed, since the value proposition has diluted over time in order to target wider audiences (e.g. through its Spotify-like subscription service). SoundCloud has made some great initiatives to woo creators in recent years, but the unifying aspect for all users on the platform is its listening experience – and that’s a social one.

People go to SoundCloud to discover new music. To find what’s ‘Next Up’ before it’s uploaded anywhere else. If you’re into a particular type of music, you’ll follow many of the same artists as other fans of that music and you’ll see some of those fans appear in the timeline comments on tracks.

Timed comments on Masayoshi Iimori’s track Alcohol.

On profiles, which have the same feature sets for fans and for artists, this social functionality is also present by displaying who someone follows and is followed by, as well as any tracks they’ve liked and comments they’ve left. For users who don’t upload any music, the main profile real estate consists of reposted tracks (similar to a Twitter user who only retweets). All of that is social.

Do the majority of users explicitly engage in social behaviour on the platform? Unlikely and it’s probable that a small minority of users create most of the (visible) activity, as on Twitter. SoundCloud is a community product where a minority of users create the value that the majority of users get off of the platform. Unlike Spotify, which tries to help users get as much value out of the catalogue as possible, SoundCloud should focus on the value users can get out of communities and the artist-fan relationship.

Lessons from gaming

This is not dissimilar to what fueled the success of games like Farmville or Clash of Clans. In free-to-play games, the majority of users will never spend any money. Instead, they create value for the ecosystem, so that a minority of users becomes willing to spend (big).

In order to leverage these dynamics, and create revenue for artists, SoundCloud must double down on social. How?

  • Step 1: Leaderboards on tracks and profiles. Show off the top fans of tracks and artists. Dedicated fans will want to earn their spot as the top fan. It’s not just fans: if you’re part of a certain music scene and want to make sure you’re ‘seen’, you’ll play new tracks on repeat, so you appear on the leaderboards on day 1. (just imagine K-pop stans, if you find it hard to imagine how fan communities would approach these types of dynamics)

    This functionality already exists inside the stats dashboards artists have access to. All SoundCloud needs to do is make leaderboards visible on the various pages and perhaps create a setting so people can exclude themselves from public leaderboards.
Screenshot of the top listeners of a particular track in a 7-day time period (stats dashboard).
  • Step 2: Track and profile pages as real estate. Leaderboards create social competition and a way for fans to earn status. Now comes the monetization: let fans pay to claim pages in a non-obtrusive way, similar to how YouTube’s Super Chat feature lets you claim visibility in a chat during a livestream. You could let artists set prices or create some type of market dynamic for this.
  • Step 3: Place activity & payment on the same currency. As in gaming, certain users will spend more time creating value through activity and other users will fuel the economy through payments. By creating an on-platform currency, SoundCloud could reward active users with tokens that accrue value as people purchase tokens to spend on the platform with ‘real money’.

The tokens could then help artists mint their work as NFTs and create a more sophisticated dynamic for ‘tracks as real estate’. Basically, artists could earn money from playback, from selling tracks as NFTs, and by making commissions off of people speculating and reselling music NFTs (a commission percentage can be defined in the smart contracts associated with an NFT). From here, SoundCloud could come to function more as a protocol and create a metaverse-friendly version of its other early value proposition: music playback that embeds everywhere. This time with music as a vanity item that all can enjoy, but can only be owned by one person at a time while always staying associated with the creator – even when NFT ownership transfers from one person to another.

As the user-facing part of the platform shifts towards creating more value from the artist-fan relationship and the activity inside fan communities, subcultures, and scenes, lawyers can negotiate with industry gatekeepers to change royalty administration to a user-centric model.

Some of the above is actually what the Audius protocol is trying to accomplish. You could also go a lot further than what I’ve described, as Audius intends and as Mat Dryhurst explored in his essay SoundCrowd: Tokenizing & Collectivizing Soundcloud. Long term blockchain visions aside, for 2021, being a creator-centric company means being a company that helps monetize, so SoundCloud must focus on the short term and employ an “opportunities multiply as they are seized” type of strategy. That means: not standing still to evaluate distant forks in the road, because what you do along the way will determine the paths you can take from that fork.

User-centric is too slow for SoundCloud

Is user-centric streaming the right thing to do? Yes. Will it help SoundCloud in the short term? No, because artists will not see significant enough returns in order for them to drive more traffic to the platform.

How can SoundCloud be as significant to artists as Bandcamp was in 2020?

SoundCloud must emphasize its community nature, since that’s how the type of value can be created that part of its core users will pay for. That won’t be most of the audience that SoundCloud has been marketing its music streaming subscription to (which can’t beat catalog-centric Spotify or value gap YouTube).

The platform must be selective about what type of behaviour it wants to cater to and the value it can create out of that. For that, it makes sense to use its DNA as a social music platform – something that Spotify, Apple (through Ping & Connect), and others have not been able to figure out. It needs to focus on the users that can amplify community excitement around significant monetization functionality and help make SoundCloud as culturally relevant as it was half a decade ago.

Signed,

A long term SoundCloud user with a 3-letter username: Bas (and more recently Viva Bas Vegas).

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.

Free competes with paid and abundant competes with scarce

Facebook recently launched a sound library including tracks you can use for free on videos. People criticized the concept in a music business discussion group (also on Facebook, ironically). I would hear the same rhetoric that people have when they say bands shouldn’t perform for free, because it’s not just a bad practice, it is also bad for your peers.

But let’s look at the reality that people in music are complaining about.

1. There are many different types of artists

There are always going to be people who find it awesome to see their music used by other people: even if they don’t get any money for it. They may be college students who are just happy to see their music travel. They may be people working full time jobs who do a little music on the side and don’t depend on the income. They may be professional producers who put out these tracks to libraries as a type of calling card.

Either way: there is always going to be free music and you will always have to compete with it.

2. Giving your music away for free can actually work

You have to have a monetization strategy at the end of this, but the easiest way to win attention online is to make great ‘content’ (in this case music). This content should be available with as few barriers as possible: which means making sure it’s available for free. The second part of your strategy should include steps on 1) how to hold people’s attention after you capture it, and 2) how to identify opportunities to monetize your fanbase (I wrote about it in detail in this thesis).

But sometimes you don’t need a strategy for monetization. It’s not easy to get signed to big labels nowadays and it usually requires you to show that you can build up your own audience. One of my favourite examples of someone who successfully leveraged free is Alan Walker. An EDM artist with tracks that have more plays than some of the most popular tracks from stars like Kendrick Lamar. How? He released his somewhat odd music through NoCopyrightSounds, which specialised in providing YouTubers and Twitch streamers with music they could use for free, without fear that their videos would get taken down. Eventually, they soundtracked the whole subculture and put a new sound in EDM on the map (read more).

3. AI is going to one up everyone

We are seeing amazing developments in AI. The most recent example is Google DeepMind‘s AlphaZero, which beat the world’s best bot in chess after spending just 4 hours practicing. Startups from Jukedeck, to Amper, to Popgun, to Scored are all trying to make music generation easier.

We already see more music being released than ever before, but so far it has still depended on human output. Through AI, music is already being untethered from human productivity. Standing out in abundance is a minuscule problem compared to what it will be 5 years from now.

Free music libraries are the least of your problem

There is no singular music business or industry. Everyone is playing by different rules and all those rules will be upended every time there’s a big shift in technology. From the record player, to the music video, to the internet, to AI and blockchain, music is the canary in the coal mine and you have to have a pioneer mentality or else you are falling behind every day.

The people who are one step ahead may be underground today, but some are the stars of tomorrow.

By all means, let us discuss the ethics. But be careful not to let your opposition blind you to the point where you cannot see how a new generation of music is thriving and leaving you behind. Because then it’s too late. For you.