It used to be so simple: you signed a record deal, made an album, went on tour and hopefully saw some royalty cheques come in. Today, though, it’s not so simple being a musician. In fact, the Byzantine nature of the structure of the new music business is almost beyond comprehension. Fortunately, Kristan Grant’s article in Medium offers a little bit of clarity–especially when it comes to music consumer data, which is the real Holy Grail.
It’s a long read, but if you’re a musician, it’s bloody essential stuff.
Once upon a time, when consumers bought cd’s, there was almost no way to find out who that fan was. There was no way to understand what songs they skipped over or which ones they replayed for hours on end.
Now that music is streamed online, it is possible to get to know a fan like never before. This information is becoming increasingly valuable for enhancing all aspects of an artist’s career from marketing to discovery. However, for the independent sector, getting access to the fan data that the independent’s need is a challenge, for two reasons. First, the vast majority of artists, labels and managers do not own their consumer information because they don’t own the platform on which it was streamed. Second, in order to access this information, they need bargaining power which, unfortunately, they lack. Bargaining clout is determined by a label’s overall market share of recorded industry revenue, which depends upon distribution. For these reasons, the independents have little bargaining power in a time when consumer data is becoming a fundamental tool of survival.
Ownership & Access
In order to address the first challenge, let us look at a cross-industry example — Netflix. Netflix is known for using its own consumer data to steer successful decisions from marketing to licensing original content like Narcos, House of Cards, and Orange is the New Black. It is producing hits and has grown to have over 70 million paying subscribers. Its success is partly the result of its market landscape.