This column by RAIN guest contributor Mark Mulligan, Managing Director of MIDiA Research, was originally published on LinkedIn. See all his LinkedIn articles HERE.
In a brutally simplified view of the past, the recorded music industry had two lanes: retail and radio. Piracy killed retail. Streaming killed piracy, then went on to, if not kill, then seriously maim radio. The two lanes converged into one – reverse bifurcation.
At first, it was all upside: the consumers that retail had lost began spending on subscriptions, and audiences migrated from lower-paying broadcast radio to higher-paying streaming. However, artists and songwriters then became unhappy with per stream rates, contextualising them against retail rather than radio. Meanwhile, record labels realised they had inadvertently capped the spending of people who in previous generations had been high spending superfans™. This is the problem with squeezing two highly distinct models aimed at serving opposite ends of the music aficionado / passive massive spectrum into one space. In the growth phase – when everyone was waiting for the bright future – it felt like a best of worlds. When growth slowed, however, and everyone realised how things are now is how things will always be, it began to look like an unsatisfactory compromise that delivered the best of neither.
If streaming was only benchmarked against radio, in rightsholder remuneration terms, it would be an undisputed success. However, because rightsholders and creators alike also depend upon it for the income stream retail used to represent, critiques and criticisms have become part of streaming’s narrative. For the majority of mid-tail artists, streaming is in many respects like radio was 15 years ago. It is a badge of success, but you have little idea who listened – or any means of connecting with them. It sets up other income streams (live, sync, merch, etc), generates income (decent, but not enough to live on), and it builds audiences rather than fanbases.
Supremium: Can streaming monetise fandom?
Enter stage left supremium. The concept is logical: tap the latent spend of superfans by delivering them scarce and high value experiences and content from their favourite artists in the app where they do their music listening. The problem is that this might not be the best place to tap fandom. Streaming has made music listening more passive with playlists, stations, and other forms of algorithmic programming. Streaming took the price point from retail but the format from radio.
The risk with fitting a superfan product into streaming is that it commodifies and generalises fandom in the same way it has music. Music might be always on, but except for a small niche of obsessives, fandom is not always on for most people. Most people are fans of multiple artists and do not listen to them all the time. As our superfan report found, many do not even listen regularly to those they consider themselves fans of the most. Social has already done its bit to commodify fandom, compelling creators to become content factories to meet the algorithm’s insatiable appetite and not be forgotten by it. Social is free and so commodification is tolerated. The premise of supremium is premium scarcity – but in an always on, on-demand environment, users will expect something much more frequent than occasional. By making scarcity frequent, it will lose its specialness and, well, scarcity. Sometimes it is better to give people what they need rather than what they want, or in this instance give them less when they think they want more.
Music listening is like breakfast, you eat every day and generally do not put too much store by it. Fandom is like eating out at a fancy restaurant – something you typically do infrequently and make an occasion of. Think about the attention you pay to an artists’ YouTube notification versus their Instagram notification. The former is likely infrequent and so you pay more attention to it, the latter is ‘great, yet another notification’.
The future of music fandom
Digital fandom products can absolutely work (as long as the expectation is to convert superfans, not suddenly turn the passive massive into superfans). In MIDiA’s recent streaming pricing study, in fact, many subscribers showed willingness to convert to a tier unlocking ‘superfan’ features. However, it will be difficult for streaming to design a product that works for those it is intended to serve. It means building a mass-market, one-size offering for a consumer segment that is inherently niche and diverse. It also means that the more consumers who sign up, the less “exclusive” and scarce the subscription becomes – and therefore, success ironically breeds failure. Fandom products may need to be somewhere else to fulfil their potential. That might mean standalone apps, but we have had a good few years of fan apps trying to make
headway and realising that consumers already have more apps than they want.
So, the challenge is to work out where fandom products should live (and what they should be, if not the traditional retail offerings). Social platforms would be an even poorer choice. This leaves the Bifurcation go-tos of YouTube, SoundCloud, and Twitch – each of which has respective strengths and weaknesses.
The hard truth is that there probably is no ideal location for digital fandom products right now, but streaming is probably not the right place either. Artists and labels alike need a successor to retail. This does not necessarily have to actually be retail (e.g., Bandcamp) but it does need to be somewhere where people can be fans as frequently or infrequently as they like, converse with likeminded others, express themselves, and spend on their favourite artists, whether that be actual products or digital items. Social platforms may enable the former behaviours, but are far less efficient when it comes to the latter (spend), at least for music. Streaming may well have taken the retail part of its equation as far as it can. Now is the time for something else to grab that baton and run with it.
