Are donations becoming a viable part of artists’ business models?
Bas Grasmayer

But it’s fine to leave your shirt on…

Monetizing virtual face time with fans

How the convergence of 2 trends opens up new business model opportunities for artists.

When I landed in Russia to get involved with music streaming service Zvooq, my goal was to look beyond streaming. The streaming layer would be the layer that brings everything together: fans, artists, and data. We started envisioning a layer on top of that, which we never fully got to roll out, in big part due to the challenges of the streaming business.

It was probably too early.

For the last decade, a lot of people have been envisioning ambitious direct-to-fan business models. The problem was that many of these were only viable for niche artists with early adopter audiences, but as technology develops, this is less so the case today.

Let’s have look at a few breakthrough trends in the last year:

  • Messaging apps are rapidly replacing social networks as the primary way for people to socialize online;
  • Better data plans & faster internet speeds have led to an increase in live streams, further enabled by product choices by Facebook & YouTube.

Messaging apps overtaking social networks is a trend that’s been underway for years now. It’s why Facebook acquired WhatsApp in 2014 for a whopping $19 billion. While 2.5 billion people had a messaging app installed earlier this year, that’s expected to rise to 3.6 billion in coming years. In part, this is driven by people coming online and messaging apps being relatively light weight in terms of data use.

In more developed markets, the trend for messaging apps is beyond text. WhatsApp, Facebook Messenger, and Slack have all recently enabled video calling. Other apps, like Instagram, Snapchat,, and Tribe are finding new ways to give shape to mobile video experiences, from broadcasting short video stories, to live streaming to friends, to video group chats.

For artists that stay on top of trends, the potential for immediacy and intimacy with their fanbase is expanding.

Messaging apps make it easier to ping fans to get them involved in something, right away. And going live is one of the most engaging ways to do so.

Justin Kan, who founded which later became video game streaming platform Twitch (sold to Amazon for just under $1 billion), launched a new app recently which I think deserves the attention of the music business.

Whale is a Q&A app which lets people pose questions to ‘influencers’. To have your question answered, you have to pay a fee which is supposed to help your question “rise above the noise of social media”. And Whale is not the only app with this proposition.

Yam is another Q&A app which places more emphasis on personalities, who can answer fans’ questions through video, but also self-publish answers to questions they think people may be curious about.

Watching a reply to a question on Yam costs 5 cents, which is evenly split between the person who asked and the person who answered. It’s a good scheme to get people to come together to create content and for the person answering the questions to prioritize questions they think will lead to the most engagement.

What both of these apps do is that they monetize one of the truly scarce things in the digital age.

Any type of digital media is easily made abundant, but attention can only be spent once.

These trends enable creating an effective system for fans to compete for artists’ attention. I strongly believe this is where the most interesting business opportunities lie in the music business at the level of the artist, but also for those looking to create innovative new tools.

  1. Make great music.
  2. Grow your fan base.
  3. Monetize your most limited resource.

This can take so many shapes or forms:

  • Simply knowing that your idol saw your drawing or letter;
  • Having your demo reviewed by an artist you look up to;
  • Getting a special video greeting;
  • Learning more about an artist through a Q&A;
  • Being able to tell an artist about a local fan community & “come to our city!”;
  • Having the top rank as a fan & receiving a perk for that.

Each of these can be a product on their own and all of these products will likely look like messaging apps, video apps, or a mix.

A lot of fan engagement platforms failed, because they were looking for money in a niche behaviour that was difficult to exploit. People had to be taught new behaviours and new interfaces, which is hard when everyone’s competing for your attention.

Now this is becoming easier, because on mobile it can be as simple as a tap on the screen. Tuning into a live stream can be as simple as opening a push notification. Asking a question to an artist can be as simple as messaging a friend.

So, the question for the platforms early to the party is whether they’ll be able to adjust to the current (social) media landscape, or whether they let sunk cost fallacy entrench them in a vision based on how things used to be.

There’s tremendous value in big platforms figuring out new ways for artists and fans to exchange value. They already have the data and the fan connections. Imagine if streaming services were to build a new engagement layer on top of what already exists.

Until then, artists will have to stay lean and use specific tools that do one thing really well. Keep Product Hunt bookmarked.

Written for my weekly newsletter MUSIC x TECH x FUTURE. If you liked reading this, do me a favour and click on the ❤️ below to share it to your network.

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