Music's 3 Futures: in summary

The evolution of digital music has passed through three distinct phases: firstly ‘fear & loathing’ (Napster 1999-’04), then the ‘the era of unbundling’ (iTunes music store 2003-’09). Thirdly, we have music’s outright submission to tech (streaming and the hyper growth of Spotify 2010-’24).?

We’ve now been in the third phase for longer than the first two combined, and the prevailing industry view is that a change is overdue. Some think it will come through A.I. Others talk about artist-to-fan platforms. Yet streaming is in such a steady state, even as the format matures, that it is hard to see music turning a transformative corner.

A common thread through all three phases of digital music thus far has been the relative exclusion of artists from ‘the business’. Musicians didn’t get a seat at the table during any phase. The culture vs. tech wars were fought and then settled by corporations. As a result, despite the disruption to music’s payment model and consumption methods, the music industry commercial value chain has remained (dysfunctionally) intact.

But changes are afoot, in three major areas:

Artist Funding - solved by fintech

Two phenomenal economic success stories, fintech and the creator economy, have now collided. The financing function of labels for new music releases will soon be gone, solved by third party fintech - offering artists a better alternative than to take out an expensive label/bank loan. The global fintech market is estimated to be upwards of $200 billion this year (some estimates are double that - a similar ballpark and range to the creator economy, as it happens). It’s only a matter of time before one sector solves for the other.

The process has already begun with artist funding platforms Duetti beatBread and other emerging players, employing AI and predictive analytics to quantify advances. These first generation fintech players may succeed, but in any event, a second generation is already on the way. A market-sweeping fintech solution removes labels from the funding part of the music industry equation, at least for new music.

Music Marketing - frontline & catalogue are more different than ever

Artists making new music don’t need wasteful and ineffective ‘campaigns’. Nobody cares one week later. They need teams to help them build fan clubs. They need smart audience-building tools and pollinating marketing tactics that build their brand listener-by-listener and fan-by-fan. This is a different discipline to the product-driven campaign marketing done by record labels. It requires a close-knit, inner circle of brand and fan builders.?

Now, labels will make some moves to stay relevant here of course. They will buy agencies and partner with martech tools at scale. Majors could make life more difficult for indies here, so more consolidation is inevitable. But the creativity and dedication of marketing teams will continue to make a difference, especially where campaign mindsets are replaced by fan builders. This means indies and agencies can enhance their role by moving quickly on this trend and bringing fresher ideas to the table for artists.

When it comes to catalogue acquisitions and ownership, there is a move upstream to newer material. More mid-career catalogue acquisitions will provide labels and funds with the fresh IP they need to grow. It’s exciting stuff for superfans (we’ll never get bored of Queen or Bowie, but we want new icons too). Established artists and songwriters are then able to convert capital into liquid assets, get a mortgage and live like grown-ups (or executives).

Music Consumption - commerce shifts to communities

Now that algorithms are serving up more of what we like, do we still need to access a celestial jukebox? If streaming utilities want to serve up more AI music, will they be bothered to keep on licensing all the human catalogue? As we speak, they are probably relying on not doing so for future profitability. This makes way for new services that are created to serve and build music scenes and communities. These can offer deeper experiences and selective catalogues more sustainably. For fans, they are ultimately a different experience that makes them feel more connected to the music and artists they appreciate the most.

Audiomack demonstrates the art of the possible here. So does Bandcamp . Services and platforms that serve misunderstood or misrepresented genres - or horizontal scenes - bring a depth of value algorithms cannot. Classical and jazz are already better served elsewhere than the major streaming utilities. Classic rock, metal and EDM would be my bet for what comes next - a boost for ‘cinderella’ genres that have been underserved or misunderstood by streaming, despite being sizable and in great shape creatively.

At the same time, artists are building their own communities more now than. They are all variations on a theme - fan clubs. Artist communities first had potential when the internet was created, but several major distractions (namely Napster, iTunes, Spotify) came along and got in-between. Artists couldn’t do anything but play along because they weren’t in on the deals. I know what you are thinking. These fan clubs don’t have the content. What content is that? The utility content of music and video libraries? Think diaries, journals, picture archives, exclusive vinyl releases, merch, exclusive tracks, sounds and stems, experiences.

This is the content fan clubs provide. It is the superfan content everyone was talking about for a while there.?Monetised responsibly, this is the most lucrative and direct way for artists to commercialise their art in the short and medium-term. It’s important that as this era dawns, artists don’t allow the corporate-tech layer to appropriate majority value.

There are a bunch of incredibly exciting companies and passionate people leading the movement to empower artists to be central to the next phase for music.

Are you one of them? If so I'd love to hear more, work with you and help you. Get in touch.

The full manifesto is downloadable here.