2021 Music Business Predictions & Trends [Nue Agency’s Jesse Kirshbaum]
Nue Agency CEO Jesse Kirshbaum lives at the intersection of music, brands, and technology which makes him more qualified than most to spot emerging trends and predict their impact on the future.
It goes without saying that the music business started the year in a very different spot than it finished. After serious declines in recorded music for most of my career, the business was seeing unprecedented, double-digit growth going into 2020. The live business was booming and more artists were touring, resulting in higher ticket sales. The festival business was continuing to expand globally in interesting ways. Social media was allowing artists to make meaningful connections with their fans, creating easy access to their most dedicated consumers and big D2C merchandise sales. Brand partnerships were going gangbusters and more VC money was coming into the industry via such verticals as publishing and music tech.
But one of the things 2020 has taught us is that we can’t predict the future. Nobody knew what this year had in store and, let’s face it, we all took it on the chin. The personal and professional losses have been insufferable, but the vaccine has brought hope. Now, we can finally start thinking about the opportunities of a new year ahead.
Here are some trends we see on the rise for the industry in 2021:
Trend 1: Licensing and Artist Partnerships Explode
In 2021, partnerships and collaborations go more haywire than ever. This was an area that was growing before 2020 but not at the rate we’re about to see. More artists are creative directors and CEO’s of their own service offerings and product lines. The evolution will be in licensing their names/brands to an ecosystem à la Star Wars. We saw it with the Grateful Dead. More artists can and will follow as the mass market becomes more important than ever.
Trend 2: Publishing Business Booms
In a world where 40,000 new songs are coming out each day on Spotify (and even more on Youtube), owning a cadre of classic songs has never been more valuable. There will be more and more investment as catalogs become safer and safer bets. Now is the time to sell your catalog. The bubble won’t last forever but as the catalog and song buying spree continues, look for the next evolution of content plays to make heritage artists uber relevant. Think about VERZUZ as a great way to make old songs hot again. TikTok has done this numerous times as well, most notably with “Dreams”. And the Broadway lover in me thinks about more plays and movies built around these classic songs as well.
Trend 3: Hits Become More Important
The Long Tail will fade as mainstream culture takes over more than ever. There are two main worlds in culture: the niches where we can go down rabbit holes for days, and the big mass-market moments. I think these tentpoles become more valuable as we look to reunite at the watercooler.
Trend 4: Splinter Agencies Emerge As The Majors Deal With Debt
WME was unable to go public in 2019 and 2020 due to a bunch of hiccups. Bigger agencies are overleveraged and their values are compromised. Are they beholden to their clients (eg the artists) or their shareholders and investors? Can they really service both and keep their employees happy? More and more agents will spin out as the dynamic shifts from major agencies to new boutiques that can super-serve their clients.
Trend 5: IPO & SPAC Boom Continues
WME will finally go public this year. Roblox and Triller, too. And Universal (probably). Maybe Tidal and SoundCloud. Don’t be surprised if it happens with labels and platforms next. The market is ripe and the future isn’t promised.
Trend 6: Live Music Moves To a Hybrid Model
The pandemic has changed consumer habits. We are all more used to live streaming now, artists included. Brands are more willing to back these types of events and, all in all, this is a market shift that will last past COVID. Events will get smarter with a hybrid model offering scale. I can already see SXSW virtually having an impact on a much larger scale. Attendance was down and this could bring it back to life. Furthermore, live stream tech will continue to improve as more and more players enter the space. Look for a much more interactive experience.
Trend 7: Digital Currency Finds More Use
We are experiencing another massive Crypto boom. The big win isn’t just in riding the value of the currency, it’s with the people building businesses off the back of these digital booms. Opportunities are flush if you have a vision for virtual goods, content, digital art, and exclusive drops.
Trend 8: Music and Gaming Intersection Grows
The hottest area in entertainment is gaming. Gaming could not buy better exposure and adaptation than it got from the pandemic. The gaming world loves music culture, celebrity, and excitement. Music needs to plug into the gaming world and ride the wave by partnering with gaming companies. In 2020, there were virtual world shows. In 2021, more and more artists will debut music with and alongside games. We see how much excitement there is in the space. Stay tuned for MusicGamingCon II.
Trend 9: AI Music Climbs The Charts
It’s coming. The robots are taking over, lol. In time, virtual artists are going to climb the charts and sit alongside the biggest pop stars in the world. Not only will man-made robots supplant social media stars, but computers will be writing the music. As avatars and AI-generated music collide, we will see real robotic artists taking the airwaves from human stars.
Trend 10: Fitness/Wellness Apps Will Lean Heavier on Music for Success
It’s clear as crystal to me: digital wellness is here to stay. When Peloton worked out their deal with music licensing, their business exploded. Headspace and Calm are both billion-dollar companies with thriving music strategies and partnerships. If you are launching a wellness brand in the 2020’s you will need to incorporate a music strategy.
Trend 11: Mood > Genre When Describing Music
“How does this song make me feel?” “When do I want to listen to it?” These are the questions we ask ourselves now. The 2010s were the end of the genre. Now, it’s less about a “hip-hop playlist” and more about selecting songs that optimize a vibe.
Trend 12: Collaborative Shows
The back half of next year, when (Lord willing) people start heading out to shows again, the market is going to be overflowing with touring artists. In 2020, collaboration and features were a great way for artists to grow their audience. But when you have artists with features on every song, it won’t translate as well live unless you shorten the sets and feature the features as part of the show. Look for collaboration sets and playlists coming to life as artists are vying for the limited attention span of fans looking to dip their toe back into live experiences.
Trend 13: Podcast Growth Skyrockets
Everyone had a podcast in 2020. But did they though? There’s a lot of blue skies left in the podcast world. Artists will start rolling out podcasts alongside record releases. We’ll see episodic deep dives — even choose-your-own-adventures — and podcasts will be a great way to break your music if you own your rights and are down to license tracks.
Trend 14: Sonic branding grows
With streaming services and “the internet of things” connecting your entire house, audio is more relevant than ever. The content will continue with more song creation and more podcast content, meaning more and more sonic branding. What does your brand sound like? Everyone needs to answer that question now.
Trend 15: The Roaring Twenty-Twenties
It’s no surprise that after the 1918 Spanish flu we saw people going out in style. As events come back, everyone will be dressed to the nines again. Look for athleisure to take a back seat as a glamorous era emerges.
Trend 16: Artists Build Out Robust D2C Businesses
In this industry, labels don’t traditionally know who their customers are. They deal with the stores and the DSPs. The streaming platform doesn’t really deal directly with the artists because the majority of those relationships are through the labels. However, influencers are doing a great job of creating ancillary businesses selling unique products direct to their fans. Artists are a special kind of influencer because they create and have clear talents. Look for artists to take a page out of this playbook and do it better, creating direct lines to their consumers to sell products, ideas, and beyond.
Trend 17: Industry Accountability
Staying home this year meant looking inward. We saw racial injustice, we saw through fake news and conspiracy theories, and a lot of people got called out for inappropriate behavior. This industry is built on faulty accounting and screwing over the artist. This will begin to change and Gen Z will make sure of it. Look for the youth to use their influence and buying power to help force the entertainment industries into systemic change.
Happy Nue Year 🎉 🥂