By Kyle Bylin of sidewinder.fm.
Here are two important questions for today’s artists and managers: What does the future of direct-to-fan marketing tools and services have in store for us? How will the landscape of these companies and their strategy shift in the coming years? In this interview panel on direct-to-fan marketing, four influential executives and thinkers in the music and tech industry weigh in on the future of direct-to-fan and how the landscape may soon shift.
I Foresee a Shift Toward Fan-Funding Platforms
Darren Hemmings | Founder of the digital marketing agency Motive Unknown.
Personally, I think it might shift more towards the fan-funding model, as shown by the likes of Amanda Palmer at one end, but also demonstrated by simpler services like the very excellent Beat Delete service where fans crowd-fund vinyl reissues of old releases. That removes some of the upfront financial liability but I think also empowers the fans that bit more and hence makes them feel more connected to the campaign. Songkick's Detour project is another fine example of that model in action.[[MORE]]
On the whole, it just feels more rewarding to all involved: the fans know exactly what they're getting, the artist or label isn't taking a gamble on creating a product or event upfront, and by dealing direct with fans the artists can potentially set out a solid level of remuneration too. To me fan-funding seems more likely to succeed as a concept, purely because it doesn't come with as much risk. If your product isn't right, it won't get the funding and won't go ahead — as Bjork's recent Kickstarter campaign demonstrated — but at least you won't have spent a ton of money getting the products made up, and hence can only learn and develop for next time, rather than being left financially ruined.
Elsewhere, I'd like to see the D2C marketing tools disconnected a little more from the retail elements. Topspin was a fine example: a huge number of people I know used them purely because their marketing tools (the email for media widget, the embedded players etc.) were exemplary. However, people wanted to use them to drive awareness of their product in major retailers — not to sell them something directly. Ironically, it feels like an area that's been really underdeveloped, too, with most people now just falling back on SoundCloud players and YouTube/VEVO embeds to market their release. So, a combination of better marketing tools and the fan-funded/crowd-funded model feels like a more natural development for the future at this time.
An Opportunity to Get Your Music To People
Virginie Berger | Founder and general manager of the creative and development agency DBTH.
In the direct-to-fan scheme, control is in the hands of the listener on one side and of the creator in the broadest sense on the other: musicians, composers, producers, labels in the historical sense of the term.
The big issue for direct-to-fan marketing tools and services, as simple as some may consider it, could be summed up as follows: the music sector discovers an “open” universe where new players rule and challenge their vertical model of operation; whereas, for the general public, the means to discover and access music are being modified by new uses and new technologies. In parallel, artists also use these same new tools to acquire notoriety and why not monetize it so as to sign a deal with the music industry or even better, earn enough money to live on their music and thereby remain autonomous. Still, other listening practices, such as streaming, keep on changing the model.
Of course, it's also just as misleading to tell artists that the Internet has made it easier to make a living in art. The lost of CD income has hit unsigned artists, too. And don’t forget about the theory of competition, the thought that anyone can do it themselves!
Everything became very short-term. Artists give away tracks with the hope that fans would buy eventually. Is it direct-to-fan? Really? A “submit or be torrented” world? And music must not be dominated by technology companies who want to tell artists what they should think… There’s only a certain time span, a certain window of opportunity for your record to do really well, and if doesn’t happen in that time then the public got a lot of other records on their schedule. In the coming years, direct-to-fan marketing tools and services must be able to say, “I’ve got a vision for THIS artist for the next decade.” Direct-to-fan must also try to get away from a classical ‘sales’ model more towards a venture capitalist approach with artists.
I’ve always had that philosophy: use every opportunity to get your music to people. And that is direct-to-fan at the end.
Many Changes Afoot, Much Competition Ahead
Jason Spitz | Independent online marketing consultant at The Spitz Agency.
Lots of changes are afoot in the D2F space. The major players have solid footholds and have staked out their market segments, but they aren’t making big leaps forward. Topspin is still the most powerful platform and the top choice for established artists and legacy acts, but they seem to be focused on GoDirect integrations like Beats (a.k.a. Codename Daisy, the streaming service that Ian Rogers now heads), and not on upgrading their core D2F e-commerce platform, which has languished without much attention for over a year. Bandcamp is chugging along steadily in the “small and independent artist” market, but their platform also seems stuck in stasis with little promise of significant new features or upgrades. Nimbit revamped their platform last December, but their store template still feels dated and lacks true customization powers.
Meanwhile, small but hungry competitors are creeping into the space and gaining on the leaders. Gumroad has an extremely smooth, simple platform that powers the sale of everything from indie books and software to Bon Jovi’s new album pre-order packages. Its five percent transaction fee lets users keep more of their money than Topspin and Bandcamp, and its UI is faster and more intuitive. Other tools like Chirpify are taking aim at the social commerce space — a field that, in my opinion, does not hold great promise for revenue, but may be ripe for optimization. Meanwhile, other music tools are adding D2F tools to their platforms. For example, Bandpage recently launched a new feature called “Experiences” where a band can sell a one-time interaction or custom product/piece of media to a fan.
Most worryingly, the fan-funding model seems to be outpacing D2F in terms of growth, level of success, and broad market acceptance. Brand names like Kickstarter and PledgeMusic are gaining consumer recognition and trust, while individual artist stores still fight an uphill battle against bigger retailers. Fan-funding also has distinct advantages for fans and artists. Consumers get the same goods they’d buy through an online store, plus the emotional benefit of feeling like they are contributing to the creation of art, rather than simply purchasing a product. And bands who do fan-funding projects get paid in a lump sum, rather than wringing drops of revenue order-by-order over the course of a D2F campaign. D2F currently relies on super-fans and core audience support. If fan-funding pulls those customers away, will there be enough people left to make an online store viable? The question of whether fan-funding and D2F e-commerce can co-exist is an interesting one. As both models mature, we’ll see how they impact each other.
Game Changes When Direct-to-Fan Becomes Normal
Benji Rogers | Founder and CEO of the crowd-funding company PledgeMusic.
I think that platforms will dominate. Much like iTunes and Amazon, Spotify, and Pandora, direct-to-fan destinations will and should become the norm.
The Nielsen data that we presented at SXSW points to the fact that fans and even a larger segment of consumers across the entire spectrum want more experiences and participation in the process. It also identified that they like and want to have these moments with not just one but with multiple artists. When we built PledgeMusic, it was with the thinking that fans would want this particular type of direct-to-fan experience with just their one artist. We got this so very wrong. Immediately we saw that fans wanted more. They emailed us continuously to ask why there weren't more ways to discover new music on the platform. They wanted to have this experience with all of their favorites and it seemed that we were failing them by not giving them this.
To look at it another way these fans could browse any site or streaming service they wanted and find all the music by the artists they loved. They could go to the artists website and buy things from their web stores, join their fan clubs, and follow them on Twitter and Facebook. But they kept coming back to us because they wanted what our artists were offering: access and participation. We quickly realized that this experience wasn't something that could live in an artists website, because it was essentially a social experience albeit a private social experience, designed and created for those who wanted it. We also saw that once the fan had this moment with their artist then the straight up consumer experience simply paled in comparison. It was once put to me that we had ruined the process of buying music for fans because they wanted and were willing to pay for more but were offered only a CD, a download, or a stream.
The game changer will be when this type of process becomes normal. When you could be for example streaming a song by one of your favorite artists and get an alert that a new video form the studio or pre-mastered version of a track is available for you if you'd like to Pledge for it. The fan can then choose what their entry point will be and buy in from there and allow the rest of the process to come to them where ever they are. The strategy will be to make it easy to be involved and not harder.
When direct-to-fan becomes a way of discovering what's happening and not just what's on sale, we will see streaming become a truly meaningful part of peoples lives. It will bring the dissemination of music into an actual ecosystem that can sustain itself. When streaming goes direct-to-fan as it so easily could is when we will see a truly massive change. The creators of the music will own the means of communicating with their fans and customers, the streaming services will be about the present and not just the past and discovery can lead to a deeper connection than is possible by more free stuff being shoved in front of more people with a store tacked on to up-sell products or tickets.
Whether it's direct-to-fan services living within the skins of larger platforms or standalone destination platforms the future will be a place where the tribe can share something together and where the artist or label can own this connection.
This will make it sustainable for all involved.