Beyond Streaming: The Future of Music Monetization in the Digital Age
How Technology Will Shape the Business of Music in the 21st Century
If you’ve ever fought your way through a mosh pit to the front rows of a concert, bought album merchandise at a tour stop, or followed your music idols on social media, then you already understand one fundamental aspect of the music business: the close encounters and experiences with your favorite artists matter.
Parasocial Relationships — the enthusiastic admiration fans develop for their beloved creatives — are a vital part of an artist’s path to success. Within the last decade, the internet, social media, and technology have made these relationships more intimate than ever.
This phenomenon has emerged because there has never been an easier time in history to make and self-publish music. Simultaneously, however, it’s never been harder for that same music to be heard and monetized.
While streaming revenue in the US continues to grow at 30% per year, the growth of new artists and content is significantly higher. Over 14.6 million new tracks are uploaded to Spotify every year and millions more to other platforms across the globe.
This mass proliferation of new music content translates into smaller payouts for newly minted artists. According to Digital Music News, independent artists receive $0.00543 per stream on Spotify, $0.00735 from Apple Music, $0.0125 from TIDAL, and $0.00074 from YouTube.
So herein lies the question: as technology continues to transform the music industry, how can we also leverage technology to reveal new revenue streams for artists and music professionals?
Outlined below are four examples of technological advances and companies that are striving to increase music monetization and enhance experiences for fans everywhere.
#1. AUGMENTED REALITY:
Niantic, AEG, Live Nation
There is still a need to offer listeners more engaging, emotional experiences through digital technology. That’s where augmented reality (AR) comes in.
One of the most impressive mainstream examples of AR comes from the former Google startup, Niantic, the San Francisco company behind immersive games such as Pokemon Go and Harry Potter Wizards Unite. The first millennial nostalgic game earned $10 million per day at its peak and hit $2 billion in revenue in just over two years. In 2018, the company introduced the Niantic Augmented Reality Platform, which will allow it to work with companies across multiple industries to create custom experiences.
In 2017, the Coachella Valley Arts and Music Festival introduced a new AR feature activated by the welcome box when purchasing a ticket. Download the Coachella app and experience a slew of features, including a packing list of everything you will need for the festival. You can view the video for this experience below:
Live Nation Entertainment also just announced their participation in AR initiatives starting with Atlanta’s Midtown Music Festival in September, where the company will create live broadcasting television in an AR screen within your tablet or handheld device.
Festival-goers will get to use AR face filters and unique backgrounds on the festival grounds. Live Nation also plans to use AR to give fans bonus content and experiences during intermissions, and even turn empty stages into another opportunity to sell sponsorships and advertising.
The Possibilities: AR
Media and entertainment companies have only begun to scratch the surface of what’s possible for AR. In an age where people thrive for curated fan experiences, the possibilities of creating a new immersive world for fans and listeners are endless.
Imagine a scavenger hunt-like experience where artists and influencers leave clues for music fans, provide them access to paid personalized enhancements, and offer rewards and other perks such as upgraded tickets, meet and greets, immersive festival experiences, music merchandise and more.
#2 ARTIFICIAL INTELLIGENCE :
Algoriddim, Apple, Spotify
Artificial Intelligence: one of the hottest debated topics within the music industry. It is unknown whether something like music founded so much on emotions can be breached by the robotic senses of AI.
On a consumer level, AI is already used across many popular music streaming platforms we know and love.
AI technology is used to enhance playlist recommendations and introduce subscribers to newly discovered talent. In 2018, Apple acquired Asaii, the AI-powered A&R company used to predict the next big superstars and match artists to opportunities as they look to match Spotify’s efforts to sign direct licensing and publishing deals with popular unsigned artists.
German-based Algoriddim recently released iDJay Pro 2 to the App Store, introducing a new “Automix” feature that utilizes AI to be your next DJ. When Automix is enabled, iDjay Pro scans the song’s rhythmic and harmonic patterns to determine where the best intro and outro sections are for transitioning to the next song.
It will choose the next song from your library that will best match with what’s currently playing, slowly fade over, mix out, and even apply on-the-fly EQing and filters during the transition.
The Possibilities: AI
While, several companies are already building AI-powered music production tools: IBM Watson Beat, Google Magenta’s NSynth Super, Jukedeck, Melodrive, Spotify’s Creator Technology Research Lab, and Amper Music, there is still room for companies to create more opportunities to use AI to attract customers.
From Siri to self-driving cars, company technologies are continuing to build the bridge between machine and humans to help the way we interact with one another.
Simply put, whether in music or another industry, Artificial Intelligence is here to stay, and the possibilities are limitless.
#3 VIDEO GAMES:
Video games are changing the music industry landscape — yes, you read that correctly. North Carolina based, Epic Games, developer of the cross-platform game Fortnite, has been the first to change the way millions of people are experiencing music.
Recently, Fortnite hosted its first virtual concert with Marshmello for over 10.7 million in-game participants. That doesn’t include the millions who were also able to live stream it on Twitch, YouTube and other services.
The Possibilities: Video Games
With over 40 million users that play Fornite every day, Epic Games has only begun to scratch the surface of what’s possible for video games to help artists capture a bigger worldwide audience.
From virtual performances to global release parties, video games have opened a new frontier for artists to gain massive brand awareness, show opportunities, and immersive fan experiences.
UJO Music, Viberate, Facebook
Cryptocurrency (i.e. Bitcoin, Ethereum) and blockchain technology have begun disrupting nearly every industry, and music is no exception.
Many of your favorite streaming services are exploring ways to leverage this new technology to decentral the process of releasing music, streamline royalty payments, eliminate expensive middlemen, and establish a point of origin for music creators.
UJO Music in New York, NY, is a blockchain-based platform, where artists can upload original works, self-publish, control licensing options, and manage distributions. The Ethereum platform erases the complexity of music ownership and pays artists using smart contracts and cryptocurrencies.
Similarly, Viberate utilizes AI technology to become the world’s largest live music database, featuring more than 300,000 artists and 90,000 venues.
Viberate’s curates artist profiles that highlight upcoming shows, social media engagement, and music videos. Viberate uses blockchain to manage millions of crowd-sourced data points, with real-time rankings and profiles.
While the cryptocurrency market still has some issues, from hyper volatility, transactional delays, and lack of global uniform regulations, I still wouldn’t count out the future potential of this industry.
Artists such as Lupe Fiasco, Pitbull, and Gramatik have long advocated for decentralized technologies to re-establish the way music is produced, bought, sold, listened to, and managed.
Facebook is also joining the crypto industry with the forecasted launch of its Libra currency, which is projected to reach millions of people across the globe, many without bank accounts within the Middle East and North African regions, where Spotify recently launched its service eight months ago.
Creating Fan Immersive Experiences
The convergence of music and technology has inspired innovation and originality and made an indelible mark on the music community. Without a doubt, technology will continue to serve as the catalyst to forge deeper and more intimate experiences for artists and their fans.
So whether you discover your next favorite song from an AI discovery playlist, purchase it using cryptocurrency, watch it performed in a video game, or receive credits to meet the artist in an AR scavenger hunt, technology has and will continue to transform the future of the music industry for years to come.