MIDiA not too long ago, and completely, revealed that expanded rights now characterize 10% of the recorded music market with revenues of $3.5 billion. These revenues, derived principally from monetising the model of the artist (merch, sponsorships, branding, dwell, and so on.), characterize a shift in strategic focus for the worldwide music enterprise. It is shifting from a consumption economic system to a fan economic system. This is barely the beginning. To actually harness the huge potential of a fan economic system, three key issues have to be addressed:
- Image and likeness: The music trade’s present social media focus could be the UMG / TikTookay spat, however the true battle will probably be over the cultural worth of artists on social. As music creators make investments more and more extra time into making social content material, their photographs and likenesses are powering social media engagement and revenues. We are on the level the place some worth trade must be established. Back in 2021, we laid out the case for a creator proper (the linked report is free to obtain) that ensures creators are remunerated every time they generate worth, no matter whether or not their music is being carried out. With the ascent of generative AI, the idea is required greater than ever. The music enterprise is waking as much as the significance of picture and likeness. The catalogue deal for Tina Turner included these rights, whereas Bob Marley’s property bought his catalogue however retained his picture rights as a result of they’ve used them to create a international Marley branded empire. Likeness rights have a protracted historical past, with the primary huge ‘win’ being actor Crispin Glover settling with Universal Studios in 1990 for infringing his likeness after they altered the looks of one other actor to appear to be him with prosthetics as George McFly in Back to the Future Part II. This resulted in The Screen Actors Guild prohibiting its members from mimicking different actors. Music wants a George McFly second. The state of Tennessee defending artists’ voice and likeness could also be a primary step.
- Reconfiguring streaming: MIDiA has been saying for years now that there’s a lot Western streaming can study from China’s fandom-focused strategy to streaming. While Chinese fandom revenues have not too long ago taken successful resulting from governmental coverage shifts, the underlying premise of creating streaming about fandom and expressing identification stays essential. Artist subscriptions are an apparent subsequent step, making streaming about lean in fandom slightly than lean again consumption. We have written about artists subscriptions so much – not too long ago; greater than a decade in the past; and in governmental coverage submissions. James Blake’s escapes could have soured urge for food, however that’s, partially, as a result of stand alone subscription apps face an uphill battle. The most blatant alternative is to make them a part of the core streaming expertise. The previous web was ‘build it and they will come’, at the moment’s is ‘go where the audience is’. But there may be extra to do than artist subscriptions. Giving customers profile pages the place they’ll purchase and earn fandom badges might be a very powerful first step, one thing pioneered within the West by Audiomack and additionally seen on apps like Fave and Renaissance. HYBE is prepping Weverse for worldwide enlargement, Spotify seems to be set to make some strikes quickly, and each Sir Lucian Grainge and Rob Kyncl are main their respective firms on this course too.
- Nurturing, not harvesting, fandom: There are two risks inherent in document label superfan methods: 1) weaned on lean again streaming, superfans won’t be tremendous sufficient, and a couple of) it’s all too simple to give attention to monetising fandom slightly than nurturing it. As a lot as Korean labels like HYBE, SM, and JYP could be industrialising fandom and exploiting followers, they not less than perceive the significance of constructing and nurturing fandom (check out the chart from JYP’s earnings to grasp their fandom strategy). Record label expanded rights had been up 16% in 2023 and can proceed to develop strongly. It is incumbent on document labels to contemplate followers as a scarce useful resource to be cultivated, not merely monetised, in any other case the soil will probably be left exhausted and barren.
Along with non-DSP and vinyl, expanded rights characterize a part of the fashionable music trade’s multi-faceted fan technique and 2023 was arguably the primary yr of this new music enterprise period. Streaming shouldn’t be going away. Indeed, it will likely be a part of this future, however the consumption-focused strategy of the 2010s goes to be shunted to the facet as fandom takes centre stage. Not a second too quickly.
