Streaming Artist Subscriptions: A Product Strategy Proposal

The following post is an excerpt from my forthcoming book: Meltdown

For all of the undoubted positive impact that streaming services continue to have on the digital music market one of the key challenges they pose is the subjugation of the artist brand to that of the music service.  With download services and CD stores the customer buys artist specific products, but with a streaming service the transaction is for all of the music in the world.  The brand of any individual artist is inherently diluted.   Artist apps are thus an artist-level subscription for the most engaged music fans, an opportunity to develop artist brand experiences across digital platforms.  However as more of consumers’ music experiences occur within access based environments, more needs to be done to build artist specific experiences within them. Doing so not only makes good business sense, it makes for better user experiences too: 20+ million tracks is a meaningless consumer proposition without an effective means of getting to the miniscule fraction of that content that any one consumer is interested in.

The solution is the introduction of artist subscriptions within existing streaming services, with users paying a small monthly fee – say $/€1 – for a month’s worth of artist content.   With the cost added directly to a monthly music subscription, users get access to a curated channel of artist content including:

  • Core catalogue: The entire standard catalogue of the artist programmed with editorial such as story of the making of each album and features such as musical influences.
  • Exclusive and rare catalogue: Music that is not available elsewhere on the streaming service, such as unreleased rarities from each album, remixes, specially made tracks for the artist subscription etc. This might require some rarer content being withdrawn from the main service to be held back for the artist subscriptions.
  • Exclusive programming: Non-standard music content such as acoustic sessions, simulcasts of concerts, music video etc.
  • Non-music content: Audio visual content that helps tell the artist story, such as editorial, photo shoots, artwork and video storyboards, artist interviews, back stage footage, live chat sessions with artists etc.

It is crucial that artists streaming subscriptions are not simply a collection of playlists.  Though delivering such a diverse suite of content types will clearly require a user experience above and beyond that of the standard streaming service. It does not however require a fundamental reworking of streaming technology architecture.  Instead these app-like artist experiences – and app-like experiences is exactly what they are – can leverage the app developer platforms most streaming services already have.  Indeed, the success of artist subscriptions depends upon them being immersive, programmed and interactive experiences, telling the artist’s story to new fans and enriching it for existing fans.  The programming effort will of course be significant and the burden will need to fall as much on the labels and as it will the services. Having labels co-run artist subscriptions also makes sense from the business perspective as it gets around issues of charging for streaming apps – TuneWiki’s demise is recent evidence of the problem created by 3rd parties not being able to charge for streaming apps.

To mitigate resourcing concerns, a template-orientated approach will ensure scalability as well as a consistent user experience.  It will also be possible to rotate a majority of the content over periods of 4 to 6 months.  This is because just as music buyers buy an album and listen to it for a time before moving onto a new one, artists subscriptions will be swapped around and changed on a constant basis by users. Most fans will have a few artists they will always want to keep connected to, but will also want to have ability to deep dive into a new selection of artists every month or two.

Artist streaming subscriptions not only create a rich user experience, they also solve multiple streaming business challenges by:

  •  Monetizing the mainstream: For as long as the price of mobile enabled subscription services remain out of the reach of mass market music fans they will struggle to have mainstream appeal.   Pricing experiments will play an essential role in the mainstreaming of music subscriptions but even more flexibility will be needed if they are ever going to match the spending patterns of an audience anywhere near as large and diverse as the current base of download buyers.  Artist subscriptions give consumers the familiarity and flexibility of a la carte spending dynamics but the user experience benefits of subscriptions.  Thus consumers can build their expenditure at a pace and level that matches their appetite.
  • Creating artist specific revenue: Artist subscriptions also help mitigate the threat of streaming services turning download dollars into streaming cents.  They do so by giving consumers the ability to commit spending to the artists they like, and by enabling artists to build rich, immersive channels of content and editorial around their music.  The revenue opportunity for artists can be extended further by tight integration of ancillary revenue retailing, such as exclusive live-streamed sessions, merchandize and concert tickets.
  • Ease free users into paid subscriptions: If artist subscriptions are additionally made available to free tier streaming users they present these users with the opportunity to ease themselves into subscriptions.  Zero to €/$/£9.99 is a big leap, but zero to a few dollars or euros is a far more palatable shift.  To deliver clear value artist subscriptions will need to provide mobile and ad free listening even when paid for by free tier subscribers.  This will additionally help drive free-to-paid conversion by accentuating the usability contrast with the rest of the streaming experience for free tier users. Once they have started enjoying the benefits of ad free mobile listening for a small selection of artists, the chances of migrating them to full subscriptions are much increased.  A careful balance will however need to be struck to ensure that consumers do not swap $/€/£9.99 subscriptions for 3 or 4 artist subscriptions.
  • Giving music fans the music they want: Artist subscriptions give users an alternative, and far more intuitive, way to navigate streaming services.  At the most basic level they can be thought of like smartphone and tablet apps, supercharged bookmarks, gateways to immersive and interactive artist experiences.  At a more sophisticated level they can become the foundations of the programming architecture of streaming subscription services.  Artist channels can be grouped into collections such as genres and decades to cerate music channels, which then can be sold as bundles in the same way a pay TV provider sells bundles of programmes. Instead paying for movies, sports and documentary packages, streaming users could opt for bundles such as ‘alternative rock’, ‘EDM’ and ‘Urban’.  The bundle approach is not without its complexities, such as how much of an artist’s standalone subscription content would get into a genre bundle, and which artists would make it in.  But the clear advantage of the approach is that artist subscriptions, and bundles of them, turn the amorphous mass of streaming services into richly programmed music content networks. The pay TV model translated for music.

Streaming subscriptions still have a long way to go before most doubts will be eased, but streaming artist subscriptions represent an opportunity to accelerate the process by simultaneously addressing concerns of sustainability, user experience and artist pay outs.  Streaming artist subscriptions are not the entire answer, but they can be a big part of the puzzle.

13 thoughts on “Streaming Artist Subscriptions: A Product Strategy Proposal

  1. This isn’t a terrible idea, but wouldn’t I end up having 150 artist apps on my phone to listen to what I want? Josh Rouse toyed with the subscription model in the early days of Topspin, and in my opinion, it led to him releasing a bunch of subpar crap demos and live takes of the same songs that diluted his brand.

    I wonder if this sort of thing puts the wrong sort of pressure on artists to get new material out there?

    I was wondering the other day — why doesn’t Spotify or any of the music services have a dedicated pool of revenue from each paying subscriber and divvy it up by percentage listened? So, for instance, if I pay $9.99/mo with $3 of that set aside for royalties, and I spend half of my monthly plays listening to Tom Petty (highly likely), then why doesn’t he receive $1.50, even if I only play 5 songs?

  2. Mark, it is a “meltdown” for no particular reason; more accurately, “head shrinking” on a living organism! The problem is that all major moves made in the music industry are made by the same ten key individuals (all of them at RIAA and the big three). Non of those individuals have ever noticed that music is a physical merchandise best suited for internet marketing! They are probably a subject to psychological case study. (it is almost a deja-vu of Nazi Germany and Holocaust)

    You will see the best time of music very shortly!
    If they will not wake up soon we will shrink them even more and build a new music industry on their ashes.

  3. Jeff has it right, streaming services take 30%, the other 70% should be divided up based on plays or time played for each artist. Instead it is pooled for all plays across the service and divided by percentage of the plays across the pools. That is really unfair.

  4. Visual content is the key here. Our devices we use to listen to music have these amazing HD screens that just aren’t being used while we listen to subscription music.. You have to be able to come up with a product that visually amazes, takes advantage of the power of the phones screen and promising, to create something that moves you!

  5. I think it’s a good idea, and it’s easy to imagine a service like Spotify adding artist subscriptions to the service and integrating them into the UI.

    The only problem is that as digital music matures, the concept of “core catalogue” becomes less clear. Just as the album has been diluted by iTunes in favor of singles, the distinction between core content and special subscription content could erode.

    Then you’re calling Spotify’s chief value proposition (comprehensiveness, ubiqutiy) into question. “I already subscribe to Spotify… why am I only getting a portion of my favorite band’s content?”

    The designation of “core content” vs “subscription content” then becomes a point of contention between the artist (who wants the premium sub revenue) and the service (who has to balance possible additional revenue with its chief proposition: delivering a comprehensive catalog).

    Maybe it’s surmountable through a consistent marketing message: “A Spotify subscription delivers audio files. The artist subscription delivers visual, dynamic, interactive, or artist-curated content.”

    Or something like that.

  6. I came across this while researching an idea that I have that for INDEPENDENT artists, who have a significant following, a subscription based content rich model would enable them to get their music, interviews, misc content out to their fans without using streaming services, which are not viable for unsigned artists. Simply put, if an artists has 150 thousand youtube subscribers, 40 thousand facebook fans, 40 thousand instagram followers and 20 thousand twitter followers, many of these fans are serious followers of the artist. Is it unrealistic to think that 10 thousand of their combined 200 thousand fans might be willing to pay a dollar a month to have access to the music that the record labels have decided is not worth the risk of signing and promoting the artist. Even if it is half or one quarter of that, does it not provide a base income for an aspiring artist? As a parent of one such artist, who has 300 songs in the catalog but sees no value to putting them out there because (A) streaming services pay them basically nothing for their songs and (B) any thing they release for download is instantly pirated at a rate that makes the music extremely hard to sell (since it is immediately stolen), a artist based subscription service (as opposed to label based or streaming services based) seems like a way for an unsigned artist to build their brand, connect with their fans, and make enough money to live on while they try and build their careers.

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  12. my idea is I DONT want ANYONE to hear the content unless they subscribe to MY app. I don’t want to publicly release product or sell it, because that would expose me to a compulsory license and pirates. I am thinking new business model here that gets around the compulsory license by NEVER releasing the content for sale or stream. Instead as an artist I sell access to a relationship with ME where you can come over to my place and visit and listen to music while you are hear, watch some videos, chat with me, chat with some of my other friends and leave when you have had your fill of me and my friends. If I am interesting and fun enough, you might pay a dollar a month to hang out here whenever you want. This is my answer to the bullshit that is going on in the music industry now. I don’t want to play a game on your field, because the rules are not in my favor, the officials are bought and paid for, and the game is rigged. This is my concept…

  13. Pingback: SupaPass Joins The Artist Subscription Fray | MIDiA Research

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