What if Spotify compensated popular playlisters?The disruptive nature of the internet has dramatically affected a variety of industries, with music no exception. But what changes occur as early adopters of platforms like YouTube transition into being sponsored professionals, and what is the potential for the same sort of evolution on Spotify.
Guest Post by David Emery from David Emery Online
The other week I had lunch with a friend – the sort of lazy, Saturday-with-no-real-plans kind of lunch where you’re there so long one meal time merges into the next – and during our tenure a friend of his joined us. Let’s call this friend “Jack”. Jack identifies himself as a Youtuber.
For those of you who haven’t heard this modern Internet colloquialism, in essence a Youtuber is simply someone that runs a successful YouTube channel. They typically follow the form of a lone, bubbly presenter doing bits to camera about, well, anything really – from fashion to beauty to games to comedy (although interestingly rarely music, although bedroom covers artists are inexplicably popular as well). Youtubers are the inevitable result of a wildly successful video platform that allows anyone to upload videos themselves and build up a following – they are the internet’s native TV presenters. This is not some little niche either – popular Youtubers get viewing figures that can easily outstrip traditional terrestrial broadcasts, and boast subscribers in the millions.
It is a fascinating area, because as with so many technology-led movements it is fundamentally something different – the democratic nature of the Internet is allowing a whole new set of people broadcast themselves, free from the traditional gatekeepers. It is a story we have heard countless times before in other mediums, but is never any less interesting.
So Jack sits down and orders himself a pulled pork burger. He talks quickly and his eyes dart around the room, his gestures as vibrant as his speech. He gets right into what he’s working on right now: a show that he’s writing that he’s going to pitch to Channel 4. He’s got a brand interested to fund it, and hopefully next week they’ll get the green light to produce the pilot. It’s looking pretty good, he says.
He eats as quickly as he talks. “Look, great to chat but I’ve got to dash – got to finish up a little
short I’ve being doing for this other brand this afternoon.” And with that he’s off, cycling into the distance.
Jack is no different from many other Youtubers that I’ve encountered; even though he’s amassed a more then significant audience by himself, it is still just a stepping stone to more traditional media. Rather then replacing your TV, YouTube has ended up just being a stepping stone to get there. Which I don’t mean as a negative, but it isn’t quite the revolution it maybe it could be.
"The Professionalisation Of The Amateur Internet"
Jack also represents what is happening across a range of different fields: the professionalisation of the amateur Internet.
Youtubers now have agents. They now have million dollar sponsorship deals, they now have studios and production companies and book deals. If you want to work with a top Youtuber on a project make sure you’ve got at least five figures budgeted for them, if not six. This is no longer an amateur industry – while it is still very new, and still something of a Wild West, it is no doubt professionalised.
As the disruption caused by the Internet rolls through different industries – wave upon wave as technology unlocks different areas – there’s a clear pattern that’s emerging:
1) First, the early adopters play around in the medium and reveal some of the possibilities while not straying too far from the existing conventions of the traditional media.
2) Next, as it grows truly native content and creators start appearing and the medium starts exploding in popularity.
3) This growth then brings advertisers, brands and money to the medium and the new found stars of it.
4) Finally, this money in turn leads to businesses being able to base themselves on top of the medium, and what was previously amateur has become professional (at least at the top end).
Looking at music you can see this pattern having played out exactly with MP3 blogs. What first started as a bunch of folks posting tracks that they like on blogger or livejournal has grown, morphed and professionalised into multi-platform entities like Pitchfork who don’t really do business all that differently then the weekly music magazines they have effectively replaced.
So, if we’ve identified the pattern, what’s the next area to follow it?
The obvious place to look to is playlists. The ecosystem of Spotify’s public playlists is nicely sat in phase 2 of the pattern. There’s a massive surge in growth and popularity, but we’re – sort of, and I’ll get to why – not at the point where there’s the corresponding surge in money flowing in.
If you look at the top playlists on Spotify, in terms of the audience size and the plays they drive, you’ll see a lot of the same curators cropping up – a lot of them are created by Spotify themselves, but even if you ignore those you’ll see the same names appearing over and over again: Digster, Topsify and Filtr. Don’t sound familiar? How about Universal, Warners and Sony? Because that’s who runs those playlists' brands.
So the “sort-of” is that the largest playlists are already being financed, either by the platform itself or by the companies making money from the plays they drive. Which brings us to the crux of the issue with playlisters becoming professionalised right now – unlike YouTube or blogs, there’s no revenue that can go back to a creator of a playlist. You can’t have ads on a playlist, there’s no real room for brand placement and you certainly can’t charge for access.
If Spotify are smart though, they’ll do something about this. You’ll notice that I’ve been referring to Spotify exclusively in this discussion, rather than a more general catch-all like “streaming services”, and that is very much on purpose; at the moment they’re the only service with a large enough audience combined with a product that lets user created playlists be discoverable. This is Spotify’s potential killer feature – if they can leverage their userbase to generate content that keeps people hooked in to their platform, as opposed to an opposing service that doesn’t have public playlists like the freshly launched Apple Music, that could be very significant.
Rather than going head to head with Apple and hire a whole team of content curators – in the form of radio DJs like Zane Lowe – to win this fight Spotify needs to play offence the Internet way, and open up a way for playlist curators to make money. Whether that’s by allowing them to sell ads space or get a portion of Spotify’s revenue share of plays from that playlist, money flowing into this space will take it from an interesting – but niche – growth area into something potentially much, much bigger.
The company that professionalizes playlisters will become the YouTube of streaming, and if they can figure how to do it Spotify could be just that.