MBW Views is a sequence of unique op/eds from eminent music business folks… with one thing to say. The following comes from Matt Jones, CEO of Medallion and former CEO of Songkick.
Jones has spent over 15 years constructing direct-to-fan platforms and has facilitated lots of of hundreds of thousands in artist income by means of varied fan engagement fashions.
Substack simply raised $100 million by proving how properly direct commerce works for its creators. A scalable direct-to-fan model may revolutionize music, however Substack’s subscription model gained’t work for artists, says Jones…
Last week, Substack introduced a $100 million Series C funding spherical, including extra gasoline to a platform that’s already shifting lots of of hundreds of thousands of {dollars} instantly from audiences to creators.
This funding spherical reinforces the incontrovertible fact that direct commerce in the creator economic system is right here to remain. It’s additionally a wake-up name for the music business. Not as a result of Substack is about to take over music (extra on that beneath) however as a result of Substack’s “magic mud” – the ideas of its enterprise model – so clearly resonate with musicians.
After all, Substack’s core clients (writers, journalists, podcasters, and so on.) and musicians have traditionally confronted related challenges. They’ve struggled to monetize their work, their audiences are unfold throughout a number of platforms, and so they’ve been pressured to take part in an ecosystem the place intermediaries seize most of the worth.
While the music business has been debating (with out finish) streaming economics and artist compensation, Substack has quietly constructed a direct-to-fan platform that’s economically sustainable and grounded in three sensible ideas:
- Control: Unfiltered by algorithms, Substack creators have direct entry to their subscribers.
- Monetization: Rather than counting on massive platforms that mixture demand and dictate financial phrases, creators earn instantly from their audiences and thus hold the next share of revenues.
- Incentives: Substack solely makes cash when its creators make cash – it takes a ten% minimize of paid subscriptions. This alignment means the platform’s success will depend on creator success, not on maximizing advert impressions or preserving customers scrolling.
I’ve labored with artists – from small membership acts to stadium artists – for almost 20 years, and it’s onerous for me to think about one which wouldn’t be excited by these three ideas at the core of Substack’s enterprise model.
So…why aren’t all musicians flocking to Substack?
After years of seeing artists making an attempt to deliver to life ‘paid subscriptions’, I believe it’s due to Substack’s ‘1:1’ (i.e., creator-level) subscriptions.
Why Substack’s subscription model breaks down for music
After facilitating lots of of hundreds of thousands of {dollars} in direct-to-fan commerce on behalf of artists and watching dozens of ‘paid fan membership’ experiments throughout each artist tier, I’ve seen some patterns that reinforce why music is completely different from Substack’s core creator industries:
- While writers publish commonly on predictable schedules, musicians have pure inventive cycles – durations of writing, recording, touring, and crucially, resting – that don’t align with an ‘at all times on’ publishing schedule.
- Musical artists face a dense thicket of stakeholders (and contractual preparations) that may have large affect on how the artist can in the end monetize their IP or gate entry to make a paid tier engaging for followers.
- Musical artists have a novel (and extremely variable) monetizable IP ‘floor.’ Musicians can monetize the whole lot from grasp recordings to music movies, ticket pre-sales, unreleased music and behind-the-scenes content material. Accordingly, a direct commerce platform for music would wish to deal with quite a lot of completely different fan UXs throughout dwell, digital music and commerce. Features like ticket gross sales and merch product drops appeal to numerous fan demand, and require a totally completely different consumption expertise than simply distributing content material.
- Individual musical style is broad and sophisticated. On Substack, folks may pay for a handful of their favourite newsletters. But our ardour for music works in a different way. We don’t simply love just a few artists. We love completely different artists for completely different feelings, completely different reminiscences, completely different events. Music is biographical, and we would like entry to our full musical selves – ideally in a single place.
The alternative in music: networks over silos
Our business’s subsequent breakthrough gained’t come from incrementally bettering streaming payouts or combating over playlist placement. It will come from constructing programs that give artists what Substack offers writers: inventive management, direct financial relationships with followers, and a platform that’s incentive-aligned with the creators it helps.
Music calls for a novel platform, a novel product expertise, and a novel financial model. Instead of Substack’s 1:1 creator-level subscriptions, we should always discover fashions that create worth by means of community results, which is when a platform grows in utility as extra folks be a part of.
Networks can create worth by means of entry and timing slightly than siloed content material gating. For followers, a networked expertise can ship a hub for participating with all of the artists they love, together with different followers. For artists, a networked expertise can respect inventive cycles and scale back the fixed stress for content material manufacturing.
This, in flip, may produce collaborative dynamics between musicians. Because of ‘community results’, artists would grow to be one another’s distribution channels. If we make it straightforward for followers to entry all of their favourite artists, then general engagement goes up and all artists profit.
I constructed my profession on the perception that artists deserve a a lot bigger ‘share of pockets’ from each fan they’ve than what they’ve been getting. I still imagine that. But after watching numerous paid fan membership choices on quite a lot of platforms launch with pleasure and quietly fizzle out, I’ve needed to confront an uncomfortable reality: besides for a really distinctive type of artist, an artist-level paid subscription is a terminally damaged monetization mechanic.
For 99.99% of musicians it doesn’t work and can by no means work at scale.
In my expertise, artists don’t wish to really feel like they’re benefiting from their followers. And they don’t need content material creation to really feel like subscription justification. They need genuine relationships that occur to generate income, not income streams that require manufactured authenticity.
The factor that can revolutionize music for artists and followers gained’t be precisely like Substack. But the blueprint exists (and hats off to Substack for main the cost). The know-how works and followers are prepared.Music Business Worldwide
