How The Topspin, Beats Hookup Fortells The Future Of Music Retailing
By Antony Bruno, digitalmusic.org’s community manager. He's moderating a
SXSW panel, “Music Subscription & Artist Revenue” .
head up a new streaming music service from Beats by Dre called Daisy had
a very interesting subtext to it that didn’t get as much attention as
it probably deserved.
Once you get past the star power news of Rogers helming the effort,
as well as Trent Reznor serving as chief creative officer, there’s the
interesting tidbit about Beats’ investment in Rogers’ former company
Topspin, and the intention to integrate the Topspin platform into the
backend of the music service. Here’s the part that got my attention (taken from the Topspin blog post announcing the deal):
"The core of this partnership, then, is a shared
belief that streaming services should do a better job helping fans
discover artists and connect with them directly to buy merch, tickets
and other products. And so, Topspin GoDirect will become the way the
Daisy service gets photos, videos and products from artists, and both
companies will work together to make sure fans see those products when
they listen to songs."
In other words, the plan for Daisy is to allow fans to browse and buy
artist photos, videos, merch and concert tickets while streaming their
music. That’s a significant evolution of the music streaming “retail”
environment we have today. It’s certainly been discussed before. This
bundling of products was a central part of the MySpace Music strategy
(if not execution). And Beats/Daisy isn’t the only streaming service to
forecast this capability.
What’s exciting about this concept—bundling music, merch, and
ticketing into one service—is that it has the potential to more
accurately showcase the opportunity that streaming music services offer
artists. The value proposition of on-demand streaming is one of
monetizing discovery. But today’s debate over streaming music payouts to
artists is stuck on the revenue provided by the streaming activity
alone. But that’s not the whole story. Sure, those payouts will increase
as usage increases among fans. But streaming services drive other
artist revenue streams as well, such as merch, concerts and so on.
But without any strong data trail to connect the point of discovery
with the subsequent commerce taking place, it’s all just theory. It’s a
belief. And the debate over the “value” of on-demand streaming is
reduced to one camp arguing their belief against another camp with an
Once these service begin directly connecting streaming music activity
to merch bought or tickets sold, then artists or managers will be able
to see the facts in their monthly/quarterly statements. They’ll be able
to judge the benefit of the on-demand streaming services based on more
than just streaming music revenue, but also that revenue along with
merch and ticket sales.
That’s the future of digital music retailing. This industry is
evolving past the silos of old, where recorded music sales were one
thing, concert ticket sales another thing, and merch sales yet another.
In the digital age, there
is all kinds of money left on the table by not
better connecting these dots into a more cohesive retail experience for
Physical record stores thrived by selling all things related to the
fan’s music experience – CDs, t-shirts, magazines, etc. The digital
replication of that environment has yet to fully catch up. So that’s why
announcements like the Beats/Topspin/Daisy new of yesterday are so
exciting. It shows that there’s still plenty of space for this business
to grow. To evolve. To improve. Ultimately, our job as an industry is to
monetize the music experience in all forms, not just one revenue
channel or another.