Music Product Strategy Re-boot Time to Monetise Fandom, Not Access
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The 20,000 Foot View: As streaming reaches maturity in many of the largest music markets and middle-tier artists struggle to make ends meet with the live music hiatus, the time has come for a music product strategy re-boot – for a bold, new wave of music products that look to build beyond streaming, delivering increased income for both rights holders and creators. In this report, MIDiA presents a new product strategy framework and new formats within it.
- Artist discontent and the streaming slowdown create the market conditions for a rethink of music product strategy that puts artists and fans centre stage. The 2010s were about access, the 2020s will be defined by experience
- Labels have developed an attention dependency, with algorithm-friendly A&R and playlist hits becoming ‘music clickbait’
- The ‘spikes’ in success from playlist adds, TikToks and other attention grabs are decoupled from artists’ long-term success in building a loyal audience and sustainable career, due to the streaming business model
- Music companies monetise access, but games companies have a different focus – monetising consumption. In 2020, in-game spending represented more than half of all video games revenue and will reach by 2027
- Fandom monetisation is the solution and takes two key forms: monetising micro-communities to improve artist remuneration, and premium artist products for super fans
- MIDiA proposes three artist product concepts to illustrate the opportunity: artist sound pack; artist season pass; fan scrapbook
- There is an opportunity for labels to function on an agency-like basis, developing premium formats and monetising fan communities to help deliver fan dollars to supplement streaming cents
Companies and brands mentioned in this report: Arcadia, HBO Max, MusicNet, OnlyFans, Peacock, Stadia, Spotify, Tencent Music Entertainment, Twitch, ViacomCBS, Warner Media, Xbox Live