MarshallStack_Slayer

What Full Stack Means to the Little Guy… & why all eyes are on the streaming services

By on March 11, 2016 in Music Industry

Posted Mar 7, 2016 by Adam Cardew on Midem blog.

The music industry thrives on buzz-terms and on creating echo chambers filled with new phrases, often without considering what it would mean for artists both large and small. Yes, change in the digital space often needs to filter from the top down to have an impact, but we should educate our artists in advance of those changes reaching them, so that they’re best prepared when it arrives. Hence, the following thoughts on what “full stack” means to the little guy, and how artists benefit from its emergence.

 

Full Stack as a Concept

Ian Hogarth, CEO of Songkick, wrote this excellent article in which he applied the term ‘full stack’ to music – the idea being that previously separate aspects of the industry (radio, on-demand music, gig ticketing) could collectively be bundled within one service (I’m also adding merch as a value-add in this argument, as I think this is another relevant opportunity for smaller artists). Ian’s article grabbed my attention not just because as an industry we’re sitting on a wealth of data that no-one’s begun using to use to its full potential yet, but also because I’d previously witnessed the first glimpses of full stack music in action when Songkick initially partnered with Spotify in 2013.

After their first integration, suddenly I was getting notified about gigs being played by both artists I listened to regularly and music that I’d listened to in a playlist in passing. More than once I ended up purchasing gig tickets to an act I’d all since forgotten – because Spotify had the data that (at one point in time) I’d streamed a track of theirs. Due to their full stack partnership, Songkick were able to target me as a potential fan and successfully convert me into buying a ticket to a local show. At a time where many emerging artists are asking what streaming can do for them, this is a simple anecdote of a value-add from making music available on all platforms.

The above is just one instance of how seemingly disparate services can be integrated with one another to provide net benefit to the industry – and more recently Spotify and Songkick have extended their partnership. Not limited to this, there are a number of other full stack integrations/acquisitions that have taken place. Last month YouTube made their own significant full-stack move into merchandise by buying Bandpage. In late 2015 Pandora acquired Ticketfly. And if you note these three examples alone: all are moves by streaming platforms who have attracted criticism at some point for being part of the reason that emerging artists find it so difficult to build sustainable revenue streams. Their partnerships and acquisitions may come from self-motivated reasons, but the aforementioned have the ability to benefit the artist community at large.

(Mark Mulligan highlights the full extent of full stack partnerships in this piece.)

 

How Full Stack Can Benefit Artists

What this means for the artist is that they should be demanding that revenue-generating platforms work with one another to amplify complimentary offers. More money driven back into the music industry means more revenue going back to artists. And in the same way that radio has always been be the entry-point of fan acquisition for artists, in the future on-demand streaming will be the entry point of data-rich fan acquisition for artists.

(For the record, I’m definitely not advocating that artists shouldn’t pay attention to being paid fairly for on-demand streams of their music – but the proposition is much more valuable if streaming companies can demonstrate how they empower artists to connect with those most engaged with their music and move them along the value chain into higher-grossing items, such as merch and tickets.)

To artists and labels, the opportunities are endless once streaming services empower them to connect with those streaming their music. For instance, the ability to offer your top X% of streaming fans an exclusive tee shirt or gig ticket makes for more effective targeting. Although I’ve mentioned Spotify above, this isn’t limited to them as a service – when streaming hits the mainstream, streaming platforms across the board should have their own solutions in place to help artists to target those most engaged and benefit from ancillary revenue.

This kind of model rewards the fans who are most actively absorbed in your music at that moment, whilst providing labels the chance to be more dynamic in their marketing. I honestly feel this is a watershed moment for an industry guilty of churning-out the same marketing strategy for years – leveling the playing field for artists who are most creative with these new tools to benefit ahead of those who stick to the status quo.

 

How we Move Things Forward

As with any groundbreaking new features in tech, there are things we should be cautious of. The tools for tracking those streaming your music and offering upsells should be made available to the whole community – not just to those at the top of the chain. For the opportunity to reach its full potential there need to be systems put in place that protect the fan from being bombardedand puts the power to run these campaigns in the hand of the artist, rather than held by a select few. That’s part of the reason artists should be educated about the opportunity available to them – so that they can bang the drum for a move toward artist-centric full stack solutions, requesting service features that benefit the industry as a whole.

As always, musicians will come up with more creative ideas to apply full stack as a concept. The sooner we can get them on board to understand how they could see a model moving fans from casual to die-hard, the more the industry will gain.

UNITED STATES - MAY 01:  MADISON SQUARE GARDEN  Photo of David BOWIE, performing live onstage on Low/Heroes 1978 World Tour  (Photo by Richard E. Aaron/Redferns)

David Bowie predicted the future of music

By on January 11, 2016 in Music Industry, News

Posted Jan 11, 2016 by  on @FortuneMagazine. Photograph by Richard E. Aaron — Redferns/Getty Images

He saw where the music industry was going long before anyone else.

David Bowie, who passed away on Monday after an 18-month battle with cancer, was a musical pioneer, thanks to his artistic blending of rock and pop and also a seemingly endless series of gender-bending personas. But Bowie was also a visionary when it came to the business of music and the future of that business.

In 1998, for example, at a time when most musical artists had probably not even heard of the Internet, Bowie launched his own Internet service provider or ISP called BowieNet. “If I was 19 again, I’d bypass music and go right to the internet,” he said at the time. In 1996 he was one of the first major artists to release a song as an online-only release.

 Bowie was also an early fan of music-sharing services like Napster, at a time when the record industry and virtually every other mainstream musician thought the service was the creation of the devil. He accurately predicted a future in which record labels and traditional distribution models would be disrupted, potentially even obliterated.

Bowie told the New York Times in 2002: “I don’t even know why I would want to be on a label in a few years, because I don’t think it’s going to work by labels and by distribution systems in the same way. The absolute transformation of everything that we ever thought about music will take place within 10 years, and nothing is going to be able to stop it.”

Music, said Bowie, would become “like running water or electricity. You’d better be prepared for doing a lot of touring because that’s really the only unique situation that’s going to be left. It’s terribly exciting. But on the other hand it doesn’t matter if you think it’s exciting or not; it’s what’s going to happen.”

Bowie also foresaw the emerging interactive future for artists, and how that was going to create an even richer and more varied experience for fans. He told British interviewer Jeremy Paxman in 2000:

“The idea that the piece of work is not finished until the audience comes to it and adds their own interpretation, and what the piece of art is about is the grey space in the middle. That grey space in the middle is what the 21st century is going to be all about.”

As a way of hedging his bets on that future, Bowie also helped pioneer a way for help established artists like himself make money from their existing hits. In 1997, he and financier David Pullman sold $55 million worth of “Bowie bonds,” a financial instrument that allowed investors to share in Bowie’s future licensing revenue.

As the music industry was transformed by downloading, just as Bowie expected it would be, the value of his bonds declined to the point where they were rated almost “junk” status (they liquidated in 2007, as they were scheduled to do). But that was hardly Bowie’s fault—in fact, it was even more proof that he was right in his expectations of where the industry was going.

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In 2015, 52% of All Music Spending Went to Live Concerts

By on January 10, 2016 in Music Industry, News

Posted Jan 8, 2016 by Paul Resnikoff  on Digital Music News

Question: In a typical year, about how much money do you spend on the following?

Concerts

Source: Nielsen Music 360 US, 2015.

Concert tours used to support album releases.  Now, there may not even be an album to sell.

According to just-released data from Nielsen, more than half of every dollar spent on music in the US went to live events.  The survey, conducted last year, showed a massive 52% of music-related consumer spending involved some sort of live event, with festivals commanding a 10% piece.  That said, smaller music sessions and DJ-driven events also claimed 10%, part of a broader shift away from big, single- or double-superstar artist bills.

Overall, Nielsen found the average American music consumer spent $152 over the course of a year.

All of that spells big money for a number of companies focused on live events, including heavyweights like Live Nation and AEG Live.  Others like Magnifi, Bandsintown, Songkick, and Jakprints are well-positioned against the trend, with analytics playing a far bigger role.  Just recently, Live Nation acquired data-focused BigChampagne with seriously regrettable results, though despite the quickly-shuttered ‘Live Nation Labs,’ data is definitely part of live music’s future.

Glaringly absent from the survey were items like music merchandise, frequently purchased alongside expensive concessions and parking at gigs.  Given the number of high-dollar add-ons at shows, it’s likely that live music spending is actually higher.  Separately, smaller, independent artists are gaining greater awareness of how to sell merch at gigs, thanks to startups like AtVenu.

Also not counted are smaller, independently-contracted gigs through companies like GigSalad, a growing source of artist income.

Among younger buyers, some major differences appear between tweens and Millennials, largely because the latter group has more disposable cash and far more freedom.  That would explain far higher live event attendance among Millennials, not to mention bigger overall spending on music.

Live Concerts

Looking ahead, live concerts are likely to command an even larger chunk in 2016.  Currently, ‘digital tracks and albums’ claimed 11 percent of total spending, though paid downloads are sinking fast.  According to separate data released by Nielsen Music, paid downloads from outlets like iTunes and Amazon slumped 12.5 percent last year, and 23.4 percent since 2013.

Other non-live categories are also sinking fast, particularly physical formats, thanks to continued bleeding around the CD.  Indeed, vinyl is the celebrated success story, but total vinyl sales remain a small percentage of the hefty billions once generated by shiny discs.

And that brings us to one of the biggest advantages of live gigs: scarcity.  In the end, a concert can’t be instantly copied and duplicated, and neither can the social, in-person aspects that come with it.