Monday, November 2, 2020

Experts panel: how can the music industry diversify its income streams? | Music Ally

Music Ally’s Global Experts panel is an international group of industry leaders, and each month we put a single, vital question to them about the state of the music industry, and what we should be doing to change it.

We hope that these Experts panels can help zero-in on the really meaningful issues, and describe the actions that make a real impact.

In our debut Experts panel, we asked our experts what the music business needed to do to thrive, post-Covid, and one recurring idea was the diversification of income streams. It’s a complex topic, with many different routes available – so our second question to the panel asked, ‘OK, but how?’.

“In your music industry sector – what is the most effective tool, idea, or approach to take in the next 12 months in order to best diversify your income streams?”

Our Experts didn’t disappoint, giving advice, sharing examples and explaining their rationale. Importantly, their message is not to panic – but to acknowledge that right now is the time for decisive action. Here are their answers, grouped into lessons.

Lesson 1: Now is the time to own your fans…

…and to connect to them with novel, inventive campaigns – both directly, and via carefully-chosen platforms:

“With a myriad of digital channels available to build and engage your fanbase, it’s still important to focus on driving them into somewhere where you can own the data and market to them directly. You don’t own your audiences on Instagram, TikTok or Twitch. Create products and experiences that are unique to your brand and use your first-party data to monetise their fandom. Get creative and try things!”
Aaron Boguki, Head, UK Marketing & Audience Development, AWAL Recordings

“Artists also have had their touring world turned upside down in 2020, and it’s likely not to fully recover for another year. Use this as an opportunity to try something new such as a ticketed live stream or perhaps a specific campaign with your Patreon fans or your email list. Music fans support the things they care about so don’t be afraid of asking your fans to join you in the process. And if you are an artist who has always meant to allocate some time to shore up your metadata or publishing registrations, do that now. Let clean metadata be one of the benefits you reap from a difficult year.”
Vickie Naumann, Principal and Owner, CrossBorderWorks

“In a world where we consume music and media through subscription services, it is critical that we enable our artists to connect with fans and have a direct and authentic relationship which is deeper. At Warner, we are focused on creating amazing products, experiences and merchandise that we can offer fans, adding value above and beyond. Our aim is to bring this connection to life. This is especially critical whilst ‘live’ is limited. The human connection of music and that fans are at the core of this can never be disregarded.”
Beth Appleton, GM Australia and SVP Marketing Australasia, WMG

“The impact of Covid and decimation of the festival and concert business has accelerated the need for every artist to acquire and retain engagement through multiple other channels. And with consumers socialising less in person and more online, managing artists’ presence and content on all platforms has never been so important, especially on DSPs that incorporate social and playlist functionality.”
Chaz Jenkins, Chief Commercial Officer, Chartmetric

“Diversifying the way your fans connect and see you will ultimately help you diversify your platforms and incomes. Logic is on Twitch – not for his music but to have a real conversation with his fans. Verzuz is about music – but it’s not just the music, it’s the whole culture and the surrounding story (and I imagine that’s why Ciroc was willing to sponsor it). Jason Derulo’s TikTok is compelling because it’s real; he does fun collaborations and he’ll even suffer through the challenges.”
Joe Conyers, Chief Strategy Officer, Downtown

Lesson 2: Music businesses can branch out…

…by using their existing skillsets, or even developing parallel businesses.

“It makes sense to first explore areas which you’re interested and passionate about and are somehow connected to the purpose of the organisation. In AEI’s case, food has always been a strong passion of ours, so we applied the skills we’d developed from curating music festivals, compilation albums and our Youtube channels to the food space this year, to launch our first hospitality venue – a cafe on the canal in Haggerston – which despite the wider challenges, has been a great success from the day we opened.”
Diluk Dias, Co-Founder & CEO, AEI Group

“Since publishing revenue is all about licensing (whether mechanical performance or sync) music publishers are quick to adapt and will continue to look for new licensable markets. Some publishers have already branched out into other “360“ areas, setting up management and labels, and it is possible that some more traditional publishers will join them – however there will always be those publishers who stick to their areas of expertise and focus on the licensable market.”
Jane Dyball, Founder, Laffittes Ltd

“CrossBorderWorks focuses on lighting up music opportunities in industries that are adjacent to music – fitness, gaming, finance, consumer electronics, podcasts… the list goes on. All of these sectors have opportunities for music but they don’t necessarily think like the core music industry – they think about products, market fit, consumer attach rates, engagement, and sustainable business models. They are most often technology-driven and want to zero-out risks and put cost structures into an Excel sheet and simply decide GO/NO GO. This doesn’t always marry up with the complex music industry rights structures or the relationship-driven aspect of our business dealings. My advice for both sides is to have an open mind, think about your business in stages, and take a longer term view of the partnerships you want to strike. What is right for an early stage company might be very different for one seeking growth.”
Vickie Naumann, Principal and Owner, CrossBorderWorks

Lesson 3: Start to use new platforms and apps…

…including non-obvious platforms like podcasts and fitness apps, and adjust your approach accordingly.

“I’d suggest you pick a platform, and lean into it until you have found some success and community strength before you venture to the next. If you can repetitively garner attention you can find ways to monetise. It doesn’t have to be music (it might even be better if music is only part of the story). I believe the artists and songwriters who are truly thoughtful (and spontaneous) about building their brands in the thick and thin are going to come out the other side with way more love.”
Joe Conyers, Chief Strategy Officer, Downtown

“One way artists and their teams can optimise their releases for non-traditional platforms is to release all formats through the distribution feed. These can include non-explicit singles (to bypass the parental controls on voice devices), instrumentals for sync and fitness equipment platforms like Peloton, and music videos properly ingested for new platform integrations – like Facebook’s premium music video offering.”
Cindy James, Head of Commercial Marketing, Caroline

“We’ve been looking at emerging markets such as podcasts and TikTok advertising as revenue streams for publishing. There are so many platforms that want to incorporate music into their experience which is fantastic for our writers, but it’s important to work together to find a deal that benefits both parties. We approach each new opportunity with a blank slate to work out a bespoke arrangement rather than applying a ‘one size fits all’ approach to licensing. As an independent publisher, we can be agile and flexible with our deals to ensure both fair compensation for our writers, as well as a simple and easy way for licensees to navigate the often complicated world of music publishing rights.”
Robyn Kennedy, Bucks Music Group

Lesson 4: Work on a local level in multiple new territories…

…to find brand partnerships, a new fanbase, and the global engagement needed for tomorrow’s industry.

“The biggest opportunity is ‘brands and music’. India is a unique music market and if planned right, there might be several options; including branded content, subsidising your content with brand placement, help with promotion etc.”
Tarsame Mittal, Founder, TM Talent Management

“The main objective for any artist over the next 12-months should be to ensure that [artists’ presence on multiple platforms] takes place on a global level. Potential growth rates in social engagement in European and North American markets are simply too low, compared to other regions. It may seem like a daunting prospect, especially with little likelihood of significant international travel in the near future. But despite that, we’ve seen a steady increase this year in emerging artists successfully building global audiences, without touring. Live streaming, intelligent brand and playlist partnerships and innovative video projects may get all the attention, but very few established artists have sufficient social engagement to be able to pull these off, unless they have built and retain social engagement at a global level.”
Chaz Jenkins, Chief Commercial Officer, Chartmetric

“We are looking for diversification by looking for brand partnerships where local companies make limited edition products, either designed by artists or inspired by an album. We recently did a campaign partnering with a local drinks company – they will be making a limited edition drink designed by a local visual artist. More recently, we have partnered with local businesses to amplify promotion in non-traditional Ways. One example is a famous Mexican restaurant which is well known within the entertainment and creative community. We had artists curate playlists for people to enjoy while ordering their meals to eat at home. This was promoted via their delivery services.”
Adel Hattem, Founder, Dmusic Marketing

Joe Sparrow


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