Direct To Fan’s Bright Future
How the music industry is evolving to a more sustainable and personal business.
Over the past 15 years we’ve seen a tremendous shift in how creative industries operate in content’s new “age of free.” Chances are as a fan or creator of music, movies or other media you’ve participated in this transition to a completely digital landscape.
No industry has been re-defined by these changes more than music. Free, P2P file-sharing took off in the early 2000's, at the same time MySpace was getting big. You may remember that ended up being an almost fatal combination for the label-driven music business. Labels’ grip on marketing, distribution and pricing weakened because music lovers had a place online to easily discover and share songs. And, artists started using MySpace as a direct-to-fan channel to build audiences. While that helped build awareness, it also made it harder for artists to make money.
Today, tech has made it easier than ever for people to find and share new music. But it’s just as easy to find and share books, movies, videos and television shows, too. The methods of discovery and consumption of all digital content are evolving as drastically as those that changed the music business. However, this time, there’s an effort to strike a balance between content access and the ability for creators to support themselves.
New technologies are shifting the balance of power in artists favor. Direct-to-fan platforms offer viral content distribution and even commerce. Discovery services such as 8tracks, Pandora and Soundcloud suggest content to their users. In turn, creators use them to reach new fans on a far more level playing field than the pre-digital era.
@DavidPorter, CEO of 8tracks and I talked about how artists build closer ties with their fans. “Inexpensive production tools and free distribution on the internet means new ways for artists to reach appreciative fans. But there’s an almost crippling amount of choice out there. The fans need a better means for discovery and artists need better promotion.”
So clearly the discovery side has improved, that’s great for consumers. But the consumption side still causes problems for artists. Instead of buying physical or digital music, consumers are migrating to free or subscription-based streaming models from aggregators.
As a result, the perceived value of music has fallen off a cliff. We expect free or cheap music, so that’s become the new model.
So it’s become obvious to many artists that it is no longer sustainable for them to have their music on aggregator platforms.
Music producer and independent artist Count Eldridge has strong feelings about this shifting landscape. Count’s history as a producer is storied. He’s produced and remixed artists such as Radiohead, The Rolling Stones, Frank Sinatra, New Order, No Doubt, Galatic, Zoe Keating, Tycho and Trombone Shorty. More recently he produced a movie financed entirely on Indiegogo called “Unsound,” which explores how artists are navigating the digital age—what he’s dubbed “the Age of Free.” Count’s passionate about the damage aggregators are doing to the artistic community.
“Aggregators are offering borderline free content and the only reason they are even able to exist is because of piracy. If it didn’t exist, labels would never have licensed their music like this. Aggregators make the fans think they’re winning, but really aggregators are destroying the ability for artists to create.” said Count Eldridge
Which begs a question: how can platforms such as Spotify, Rdio and Beats sustain themselves? They’re destroying creators’ ability to make a living. Direct-to-fan technologies provide options for artists and other creators to create direct relationships with their audiences and take control of their content and livelihoods.
Watch this space closely. Right now, big platforms like YouTube and Spotify control the monetized content market. But this is changing. Be prepared for at least one more shift in consumption that favors direct-to-fan relationships. You’ll see more middlemen cut to improve margins and add deeper fan engagement, I believe the recent acquisition of Beats by Apple is a key indicator into what is coming. Artists will begin to partner with brands and go direct to the consumers that overlap those interests for the benefit of everyone involved.
How will they know who to target? Data. Both the artists and the brands will have real data on their audiences courtesy of the direct relationship technologies. It’s the only way they’ll be able to afford to keep creating for all of us fans, replacing the current middlemen.
