MBW Views is a collection of unique op/eds from eminent music business individuals… with one thing to say. The next comes from Matt Jones, CEO of Medallion and former CEO of Songkick.
Jones has spent over 15 years constructing direct-to-fan platforms and has facilitated a whole lot of hundreds of thousands in artist income by means of numerous fan engagement fashions.
Substack simply raised $100 million by proving how nicely direct commerce works for its creators. A scalable direct-to-fan mannequin might revolutionize music, however Substack’s subscription mannequin received’t work for artists, says Jones…
Final week, Substack introduced a $100 million Collection C funding spherical, including extra gasoline to a platform that’s already transferring a whole lot of hundreds of thousands of {dollars} straight from audiences to creators.
This funding spherical reinforces the truth that direct commerce within the creator economic system is right here to remain. It’s additionally a wake-up name for the music business. Not as a result of Substack is about to take over music (extra on that beneath) however as a result of Substack’s “magic mud” – the ideas of its enterprise mannequin – so clearly resonate with musicians.
In any case, Substack’s core clients (writers, journalists, podcasters, and so on.) and musicians have traditionally confronted comparable challenges. They’ve struggled to monetize their work, their audiences are unfold throughout a number of platforms, they usually’ve been pressured to take part in an ecosystem the place intermediaries seize many of the worth.
Whereas the music business has been debating (with out finish) streaming economics and artist compensation, Substack has quietly constructed a direct-to-fan platform that’s economically sustainable and grounded in three sensible ideas:
- Management: Unfiltered by algorithms, Substack creators have direct entry to their subscribers.
- Monetization: Slightly than counting on massive platforms that mixture demand and dictate financial phrases, creators earn straight from their audiences and thus hold the next proportion of revenues.
- Incentives: Substack solely makes cash when its creators earn cash – it takes a ten% minimize of paid subscriptions. This alignment means the platform’s success relies on creator success, not on maximizing advert impressions or protecting customers scrolling.
I’ve labored with artists – from small membership acts to stadium artists – for practically 20 years, and it’s arduous for me to think about one which wouldn’t be excited by these three ideas on the core of Substack’s enterprise mannequin.
So…why aren’t all musicians flocking to Substack?
After years of seeing artists attempting to carry to life ‘paid subscriptions’, I believe it’s due to Substack’s ‘1:1’ (i.e., creator-level) subscriptions.
Why Substack’s subscription mannequin breaks down for music
After facilitating a whole lot of hundreds of thousands of {dollars} in direct-to-fan commerce on behalf of artists and watching dozens of ‘paid fan membership’ experiments throughout each artist tier, I’ve seen some patterns that reinforce why music is completely different from Substack’s core creator industries:
- Whereas writers publish usually on predictable schedules, musicians have pure artistic cycles – durations of writing, recording, touring, and crucially, resting – that don’t align with an ‘all the time on’ publishing schedule.
- Musical artists face a dense thicket of stakeholders (and contractual preparations) that may have super affect on how the artist can finally monetize their IP or gate entry to make a paid tier attractive for followers.
- Musical artists have a singular (and extremely variable) monetizable IP ‘floor.’ Musicians can monetize all the things from grasp recordings to music movies, ticket pre-sales, unreleased music and behind-the-scenes content material. Accordingly, a direct commerce platform for music would wish to deal with a wide range of completely different fan UXs throughout reside, digital music and commerce. Options like ticket gross sales and merch product drops entice a lot of fan demand, and require a very completely different consumption expertise than simply distributing content material.
- Particular person musical style is broad and complicated. On Substack, individuals would possibly pay for a handful of their favourite newsletters. However our ardour for music works in another way. We don’t simply love just a few artists. We love completely different artists for various feelings, completely different reminiscences, completely different events. Music is biographical, and we would like entry to our full musical selves – ideally in a single place.
The chance in music: networks over silos
Our business’s subsequent breakthrough received’t come from incrementally bettering streaming payouts or preventing over playlist placement. It’ll come from constructing programs that give artists what Substack offers writers: artistic management, direct financial relationships with followers, and a platform that’s incentive-aligned with the creators it helps.
Music calls for a singular platform, a singular product expertise, and a singular financial mannequin. As an alternative of Substack’s 1:1 creator-level subscriptions, we should always discover fashions that create worth by means of community results, which is when a platform grows in utility as extra individuals be a part of.
Networks can create worth by means of entry and timing fairly than siloed content material gating. For followers, a networked expertise can ship a hub for participating with all the artists they love, together with different followers. For artists, a networked expertise can respect artistic cycles and cut back the fixed strain for content material manufacturing.
This, in flip, might produce collaborative dynamics between musicians. Due to ‘community results’, artists would grow to be one another’s distribution channels. If we make it simple for followers to entry all of their favourite artists, then general engagement goes up and all artists profit.
I constructed my profession on the assumption that artists deserve a a lot bigger ‘share of pockets’ from each fan they’ve than what they’ve been getting. I nonetheless consider that. However after watching numerous paid fan membership choices on a wide range of platforms launch with pleasure and quietly fizzle out, I’ve needed to confront an uncomfortable reality: aside from a really distinctive type of artist, an artist-level paid subscription is a terminally damaged monetization mechanic.
For 99.99% of musicians it doesn’t work and can by no means work at scale.
In my expertise, artists don’t wish to really feel like they’re profiting from their followers. And so they don’t need content material creation to really feel like subscription justification. They need genuine relationships that occur to generate income, not income streams that require manufactured authenticity.
The factor that can revolutionize music for artists and followers received’t be precisely like Substack. However the blueprint exists (and hats off to Substack for main the cost). The know-how works and followers are prepared.Music Enterprise Worldwide
