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Going Direct-To-Fan In A Streaming World [By PledgeMusic President Benji Rogers]

Tab_widthApple recently made waves with the announced launch of their new Apple Music services. PledgeMusic co-founder and President Benji Rogers says it’s a seismic shift that means great things for both artists and fans.

                                                                           

Original Post Written By Benji Rogers on Pledge Music Blog

Two days ago, one of my long-term dreams for the music business seemed to come one step closer to becoming a reality when one of the largest purveyors of music on the face of the planet announced that direct-to-fan was not just an after thought or an add on but an actual feature of its ecosystem. And this is a good thing for everyone.

As I watched the introduction of Apple Music on Monday and read the ensuing commentary referencing Ping (Apple’s much maligned foray into the social networking space) & MySpace, it dawned on me that I’d just witnessed one of the most profound shifts to favor artists and fans within the music business in the last decade, if not longer. If artists and their teams truly embrace it, and the terms and conditions work in their favor, one of the most incredible outcomes for artists and fans will begin to take shape. Apple seems to have just opened up its first window into artist-to-fan connection.

iTunes is basically gone and along with it the concept of owning downloads in exchange for money is about to become largely irrelevant to an artist’s release strategy, no matter what is publicly being said.

With the move to a streaming model, the motivation for Apple shifts to subscriptions instead of downloads. For artists, this means that sales of digital downloads and their revenue will soon disappear, which makes the already important super-fan connection even more vital than before.

According to Mark Mulligan’s brilliant analysis, the super fan may only make up 17% of the music-buying population, but he or she accounts for 61% of industry revenue. What are these women and men to do now? Buy more subscriptions? Buy albums that they can stream for free on Apple Music or Youtube or Spotify?

Almost three years ago I wrote a blog stating that if artists could direct their fans to long-lead pre-order campaigns, tickets, or their own websites from streaming services, then it would be the artists themselves who would drive subscriptions. In other words, are fans subscribing to Spotify or listening on YouTube because they love Spotify and YouTube? Or is it because these are the easiest ways to access their favorite artists’ music or videos? Are you buying Tidal or Tidal’s music?

It is my belief that the reason that streaming has not yet been adopted by the mainstream public is because many artists aren’t truly behind it. If the majority of artists are not best served by driving their loyal fans to subscriptions on someone else’s service, then why should they? They were always going to make more money in sales, but since iTunes, the largest music download site in the world, is now a streaming service, the dynamic has changed. Apple Music’s Connect confirmed that artists are going to be able to message fans using text, video, audio and photos, and that these will be able to host links out.

What this means is that artists can drive their fans to the places that mean the most to them at the most important times in their music-making cycle, which will forever alter the pre-order landscape. This means that while Apple will not be able to share its data with artists directly, they will allow artists a way to gather this data externally and keep it. This was a founding principle of PledgeMusic and one that we have kept sacred to this day. Artists should own their own data. This is one of their most valuable assets.

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Previously one of the biggest impediments to artists letting their fans know about external offers was the fact that iTunes and services like it owned all of the fan data. Therefore, they owned that connection. Using Apple Music’s Connect feature, artists can let their fans know in real-time what they are working on, link out to their pre-order pages and gather their fan data into a destination that they actually use and control. Artists can post ticket links, bundles and exclusive content to those who want to see it and, consequently, control the conversation.

PledgeMusic community members spend an average of $55 per transaction on items and experiences related to the making of an album. As iTunes’ sales revenue declines -- and it surely will in favor of all-you-can-eat streaming -- direct-to-fan revenue will increase as these users who were previously driven to iTunes only to spend a mere $11.99 are now offered the ability to spend more on experiences and high-value physical products -- say $55 on average? Apple wins, because this will drive subscriptions to their service whilst also helping the indie artist to get his/her/their album made.

As we enter this new post download music economy, companies that truly value the artist-fan relationship will thrive because they will have the support of not just the artists but also super fans.

As long as the ingredients match what’s inside the box, and Apple sticks to what’s in the current Connect agreement, then I am very excited about the opportunity that this announcement presents.

The platform that becomes the thinnest skin between the artist and fan and fosters a meaningful two-way communication between them, becomes a bright part of the artist’s and industry’s future, no matter what.

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