How (and why) Billie Eilish won Glastonbury

Glastonbury returned to great fanfare after the pandemic-enforced break, which meant it was the first one since 2019. The music world has changed a lot since then, with streaming getting bigger than ever and TikTok now established as a cornerstone of the music business. Back in 2019, the standard thing to do was to look at how much Glastonbury boosted streaming numbers of artists who were on the bill, but in today’s world, it is the impact on an artist’s fanbase that is arguably most important.

The BBC and Glastonbury partnership is a fandom engine room 

Glastonbury plays an important role because it is broadcast (TV and radio) and streamed in the UK by the BBC, which means it is a rare thing in today’s on-demand world: it is a cultural moment. Due to the splintering of culture and the fragmentation of fandom, cultural moments in music have largely gone, replaced by the asynchronous paradigm that streaming enables. In the past, summers were soundtracked by hits that everyone knew, now algorithms and personalisation mean that everyone has their own summer hit. Meanwhile, streaming has turned music into a utility, more of a soundtrack to our daily lives than a cultural touchpoint. If streaming has turned music into water, then what we now need are glasses to drink it from. In the UK, Glastonbury provides a counterpoint to that dynamic, presenting a few days in which everyone, from casual viewers through to due hard music fans, can watch great music – music that is, crucially, often outside of what they would usually listen to. The reason this matters is because streaming algorithms deliver us more of what we like and, thus, narrows our cultural scope. The handpicked and diverse line up of Glastonbury, amplified by the expert curation and programming of a national broadcaster, breaks music listeners out of the algorithm cage. There are not many algorithms that would present Wolf Alice alongside Diana Ross. The Glastonbury / BBC combination thus presents a real-world evidence point for how genuine discovery can be brought back into music. It is not instead of streaming, but, instead, amplifying it. 

Finding new audiences

So much for the consumer case, but what about the artist case? What an artist (and labels) really want is not just a temporary streaming boost, but a long-term lift to fanbases. Big streaming counts are a great calling card, but, unless they are huge, they do not add up for most artists. And a weekend bump is only of any real value if it provides the footprint for a longer term fanbase lift. So, what really matters is how a one-off event drives fandom growth. But how is that measures? Well, it just so happens that MIDiA is currently building a fandom measurement tool that we are calling Music Index. Let us take a look at some of MIDiA’s Index data to show just how much impact Glastonbury has already had on some of the artists who performed there.

One of the key things we do with Index is create artist cohorts to enable comparisons across similar artists, with the top performing artist in each category indexed as 100 and the others against that base. So, we defined a Glastonbury cohort to track fandom and engagement impact across these artists. Looking at the top five artists in our ‘engagement’ metric (a hybrid measure that includes streaming, YouTube, etc.), the clear winner was Kendrick Lamar, with AJ Tracey being a close second and Wet Leg a not-too-distant third. These three artists all saw the biggest gains during and after Glasto.

The vast majority of established artists do not rely on streaming as their primary income, so measuring engagement is only part of the picture. Which brings us onto our next metric, ‘fandom’, another hybrid metric that captures a large collection of fandom and social behaviours. What is interesting here is that the rankings are very different, with Billie Eilish, who was not even in the ‘engagement’ top five, not only coming out on top, but way ahead of the rest. Unlike with engagement, the distance to second and third spots is much larger. Notwithstanding, Kendrick Lamar grabs another podium spot and also saw a stronger uplift than Megan Thee Stallion, though the latter was already more highly ranked before Glasto and remains ahead.

One of the key inputs into MIDiA’s Music Index is Wikipedia. It is a heavily underrated artist metric that is front of mind for music marketers. Wikipedia is so useful because it reflects a consumer’s desire to go further, to learn more about the artist. It is a fandom lean-in metric. Whereas a Google search may simply be geared to going and finding a track, a Wikipedia view is a first step towards a deeper level of fandom. The Wikipedia spikes for the Glastonbury artist cohort demonstrates a very clear pattern of spikes in line with performances, thus highlighting the huge benefit of a widely broadcast and streamed live performance in penetrating new audiences for artists. Beyond the bigger acts, Sam Fender and Yungblud both saw strong spikes following their performances, further evidence of the unique power of the broadcast and streamed event helping artists connect with new fans.

Taken together, the Glastonbury impact can be defined as follows:

• Kendrick Lamar might have gotten the biggest consumption bump, but Billie Eilish is likely the one who ended up with the largest long-term uplift to her fanbase
• The Glastonbury / BBC partnership makes a compelling case for the power of building artist reach to wider audiences via tentpole, live performances broadcast and online 

Artists in the UK understand just how Glastonbury can create career-defining cultural moments – just ask Sam Fender. But the case here should be less about Glastonbury itself and more about how the live / broadcast / stream model presents a global use case for reinvigorating cultural moments in the era of splintered culture.

If you are interested in learning more about MIDiA’s forthcoming Music Index tool (there is a LOT more to it than what was covered here!) then drop a line to stephen@midiaresearch.com

Live streaming’s second growth phase

Live streaming erupted in 2020 in the wake of the pandemic. As the year progressed, the market transformed rapidly from a bunch of bands playing guitar in their bedrooms to highly produced, ticketed shows with tens of thousands of viewers. New companies flashed into existence while older ones dusted of their websites and rode the new wave of demand and enthusiasm. Everything was going great – and then along came real life. COVID restrictions began to ease, vaccination rates rose and real life concerts were back. It almost did not matter that they were not yet back in full effect, because even a gradual return had caught the imagination of artists and their managers. Suddenly, the prospect of looking their fans in the eyes made sulking in front of a camera in an empty venue seem a whole lot less appealing. With the sting taken out if its tail, it would be easy to imagine the live stream sector going back into its pre-COVID shell. But it has not. Instead, the sector is laying foundations for longer term growth, as shown this week by Deezer’s investment in Driift, and Dice’s acquisition of Boiler Room.

Competition from IRL

Revenue from ticketed live stream concerts surpassed $600 million in 2020, and the market trajectory in Q4 20, combined with the pandemic outlook, suggested that the market was going to push on past $2 billion in 2021. But with IRL concerts and festivals making their comeback, the number of ticketed live stream concerts slowed in Q1 21 and only started meaningfully picking up again mid-way through Q2 21. Also, average ticket prices started to come down, likely in response to softening demand among audiences who were eagerly anticipating real concerts once more. Live streamed concert audience penetration stopped growing in Q2 21, but retains a solid base (as the data in a forthcoming MIDiA report shows). But IRL was always more likely rather than less likely to come back, so live streamed concerts were always going to have to plan for a hybrid future (by which I mean both hybrid concerts and co-existing alongside IRL concerts). If there was a surprise, it was just how quickly artists were willing to jump the live stream ship. 

The hype cycle

If 2020 was the Peak of Inflated Expectations in the hype cycle and the start of 2021 was the Trough of Disillusionment, then we are now in the period of slow, steady consolidation, where the real market is built out of the rubble of over-zealous hype. With so many investments made in 2020, there was always going to be a consolidation opportunity for those players with a sound, longer-term view. Mandolin, widely acclaimed during 2020, recently acquired indie focused platform NoonChorus. Then, this week, the next-gen ticketing platform, Dice, acquired long running dance music live platform Boiler Room.

Consolidation

While Mandolin’s move was straightforward consolidation, Dice’s is more disruptive. 2020 catalysed growth for Dice, with a neat positioning as an alternative to the big traditional ticketing companies that empowers venues with more control, as well as being the ticketing company of choice for many live stream concert providers. But with the acquisition of Boiler Room, Dice has just taken a leaf out of the playbook of the big, traditional ticketing companies – expanding across the value chain. However, as much as Dice will try to position the move as otherwise, it is now competing directly with many of its clients. Other next-gen ticketing companies focused on live streaming could be forgiven for seeing this as a great opportunity to differentiate and compete.

Investment

‘Value chain creep’ was already a defining feature of the live streaming vendor space in 2020, with many companies attempting to do multiple parts of the process rather than specialising. This looks great in investor presentation, but for artists and managers, it simply replaces the old boss with a new boss who looks just like the old boss. A number of companies forged a different path, focusing instead on producing high quality shows for artists. One such company was Driift, which this week received a strategic investment from Deezer, that had already previously invested in DREAMSTAGE. Deezer’s moves reflect an understanding that audio streaming and live streaming represent a strong overlap opportunity. Indeed, Deezer WAUs are more likely to watch live streamed concerts than other music service WAUs.

Long term, steady growth

2021 will go down as the year of adjustment for live streaming, following a year of exceptional circumstances in 2020. COVID catalysed secular growth but boosted figures higher than the natural level of the market at this early stage. The coming years will be characterised by steady continued growth, with hybrid and ‘pandemic proof’ solutions for venues, such as Live Nation fitting 60+ venues with Veeps capabilities. The live music sector did not experience the dramatic transformation wrought by streaming. Instead, the sector had to wait for the pandemic’s impact and the resultant COVID bounce for live streaming. Expect more investments and more consolidation as this market begins to set itself up for long-term, organic growth. 

Virtual concerts: A new video format

The global pandemic thrust the live music sector into chaos, with global revenues falling by 75% in 2020 compared to one year previously. The music industry was rocked by first-order impacts (no concerts, no fan engagement) and second-order impacts (many artists realising that streaming did not add up without live income alongside it). Necessity, though, is the mother of invention and an unprecedented period of innovation and experimentation followed, creating a whole new virtual concert ecosystem. One that presents great opportunity, but that also reflects the flaws of a hastily constructed industry – flaws that must be fixed for the sector to realise its ambition. Rather than the future of live, virtual concerts represent an entire new video format.

MIDiA’s new report ‘Virtual concerts: A new video format’ provides a comprehensive overview of the market with revenues, forecasts, demographics, vendor mapping and industry metrics. The report is immediately available to MIDiA clients. Here are some of the key findings. 

Live streaming of concerts is not new, but the combination of a complex rights landscape and resistance from the traditional live sector stymied the sector’s growth. The fact that technology itself was not the problem is well illustrated by the dynamic growth in live streaming in other content verticals, gaming especially. Since the pandemic’s first impact, there has been a rapid rollout of new live music streaming solutions and companies, enjoying varied success both commercially and creatively. Nonetheless, artists now have a vast array of options at their disposal and the rapid shift is well illustrated by the Foo Fighters’ Dave Grohl joking during his band’s December 2020 high quality, ticketed live streamed concert that the sector had come a long way from artists playing piano in their living rooms earlier in the year.

One of the most important changes was the strong shift in the latter part of the year from free streams to more professionally produced, ticketed events. From June to November 2020, the share of live-streamed concert listings on Bandsintown grew from 1.9% to 40.7%, while the total ticketed revenue in December was up 292% from June. The shift to paid is crucial, especially considering the #brokenrecord debate (arguably the most important second-order impact of the cessation of live music). Traditional live is a scarce, premium product that generates many artists the bulk of their income. Yet the start of the live streaming boom was all about free, an uncanny rerun of when music first went on the internet. With the current wave of COVID-19 worse in many countries than the first, 2021 is set to be another highly disrupted year for the live sector. It is crucial that live streaming can pick up some of the slack as a meaningful revenue driver for artists.

Overall, ticketed live-streamed concerts generated $0.6 billion in 2020 with a flurry of ticketed events in the last two months of the year, including end-of-year spectaculars from heavyweights as diverse as Justin Bieber and Kiss.

Live streaming though has a long way to go, illustrated by the fact that penetration is just 9% and audiences have an early adopter, younger male skew. In many respects live streaming was not ready for primetime when COVID-19 hit. Unlike sectors such as video conferencing and home fitness tech, which had become well established before, music live streaming was a bit of an industry backwater. A whole host of new entrants swept in to tap the new opportunity, while pre-existing ones that had been limping along pre-COVID, gave themselves a new lick of paint.

The vendor landscape is complex and increasingly fragmented. But most importantly, it is characterised by companies wanting to own as much of the value chain as possible and trying to achieve as much as they can before the giants of the traditional live sector get back on their feet.

Live streaming has vast potential – not in some binary live music replacement equation, but instead as a new video format. In fact, live streaming could be to live music what pay-TV is to sports, creating in the long run a market that is even bigger than the core business. But between now and then there is a lot of hard work to be done.

Why Rishi Sunak is both wrong and right

Earlier this week the UK Chancellor of the Exchequer Rishi Sunak suggested that creatives such as musicians who had seen income dry up during COVID-19 should consider retraining for the new ‘opportunities’ the lockdown economy is generating. 

The principle makes sense from an economic perspective, but it is just that – an economist’s solution to a cultural problem. A guitarist becoming an Amazon van driver or a Just Eat courier will certainly have the desired economic output (i.e. more economic productivity), but the cultural damage is potentially irreparable. Perhaps more importantly, however, it is throwing in the towel after the first round of the fight. 

A quick lesson from history

Culture is one of the most important outputs of society and the more developed a society is, the more it normally invests in that culture. A brief overview of history illustrates the point. The Roman Empire, one of the first great civilisations, was focused on warfare and expansion. It spawned some famous philosophers and orators, as well as great art (sculpture and mosaics especially). Yet warfare was the defining trait of the empire, and so the majority of the great figures we remember are the military generals and emperors. Fast forward to the Middle Ages in the same Italian peninsula and we had the Renaissance, ironically rediscovering the lost art techniques of the ancients. Although Italy in this period was dominated by warfare, and although there are no shortage of generals and petty princes to fill the history books, it is the art and culture that the period is best known for. Artists like Leonardo da Vinci, Michelangelo and Raphael are the great names of this era. There was no structured art marketplace, however; instead, rich benefactors (bankers, princes, generals) patronised them, subsidising their art. They did so often in the hope of immortalising their own names, but instead immortalised the artists. Art does not always pay for itself. Sometimes it needs a helping hand.

Small venues create national economic output; virtual ones may not

Now to be clear, I am not advocating that music should become state subsidised. Nor am I comparing the musical output of a bedroom musician with that of a renaissance master (though Kanye does think that he is ‘unquestionably’ an even better artist than even those Italian greats). The lesson to learn from history here is that in tough times, society benefits from supporting culture. If small music venues continue to fall like flies,smaller and emerging artists will be bereft of real-world places to perform and to build audiences. The music market will stagnate with new talent having one more hurdle to success put in its way. Live streaming will pick up some of the slack and may even become a valuable alternative for many artists. For the UK government, however, that will mean swapping the economic output of UK venues for that of predominately American technology platforms. That economic output will leave the UK economy – and at a time of trade uncertainty leading up to Brexit, to lose music, arguably the UK’s most culturally renowned global export over the last century, would be a weighty hit.

Artists need to experiment and innovate now more than ever before

This is bigger than national economic protectionism, and it is certainly bigger than the UK. To use that horrible management consultant phrase: change is difficult. We are cursed and blessed to live in interesting times. Technology has changed the recorded music business beyond recognition; now, because of the pandemic, technology is going to accelerate change in the live business as well. This process may be difficult, and it may be long, but it will result in a differently shaped music business in the mid-term future. Artists have an opportunity, even a responsibility, to innovate and experiment. Before COVID-19, live, merch, recording and publishing were – in varying degrees – the majority of the revenue mix for most artists. Live is unlikely to return to anything resembling normality until 2022. From this moment on, then, artists need to experiment with new models, new ways to engage with audiences and to generate income – whether that be writing for other artists on Soundbetter, making sound packs on Splice or Landr or selling digital collectibles via Fanaply. Artist income is more varied and sophisticated now than it was 10 years ago. The reality is that this trend is going to accentuate both in the lockdown economy and post-pandemic. 

However, new models take time to become viable. In this interim stage, if there is a role for state support, it is to provide artists and songwriters with the financial support and technical and business training to enable them to be winners in this new creative paradigm. Rishi Sunak was wrong to suggest that artists should retrain out of music. But he was right that they should retrain. They should retrain from being artists of the 2010s to artists of the 2020s, and that is where he should be providing support.

Why the struggle of small venues will affect the entire music industry

Prior to the dislocation caused by the pandemic, live music operated with a structure that gave artists a clear sense of where they were in their careers and where they could aim for next. Small clubs represented the starting point, before moving up a ladder of venue sizes to theatres, arenas and stadiums. Then along came lockdown, and the future of that lower tier of venues is now at risk. 

The plight of these smaller venues has had a fair amount of media attention, but the long-term impact of their potential demise will send shockwaves that will reverberate through the entire music business. Without this testing ground for emerging artists, an artist development gap is going to appear. One that could hold back the careers of the next generation of artists, affecting not just their live business but the entire spread of their careers – with clear implications for labels and publishers.

Streaming helped live, until it didn’t

Even prior to COVID-19, a strange dislocation was happening between live music and streaming. Streaming had built a symbiotic relationship with live music, delivering more listeners to artists which resulted in more fans at concerts. It was this very relationship that enabled artists to not worry much about streaming royalties until live revenue stopped with lockdown… and then the #brokenrecord debate kicked in. Alongside the previous, positive impact on live, there was a more insidious, unintended consequence: streaming was making a generation of artists less good at performing live.

Skipping rungs on the ladder

In the pre-streaming era, artist fanbases had growth guardrails that shaped how fast they could grow. If you wanted one million people listening to your music, on-demand, at home or on the go, then they had to buy your album. Selling a million albums is not something that many artists used to achieve, and it used to happen after a long, intense period of label marketing effort and TV and radio appearances. Now though, get picked for the right playlist and an artist could find themselves with a million streams under their belt overnight. Artists could look like superstars from stream counts long before they had comparable build-up.

The reason this matters, is that successful streaming artists often found themselves skipping rungs on the live venue ladder and going straight into theatres etc. Fans arrived expecting a quality of live performance to match the artist’s stream count, but instead got something that fell short. It turns out that putting in those hard miles, touring the country in a beaten-up van to play half-empty small clubs on a cold, wet Wednesday evening are often the making of a live act. It is the equivalent of an athlete putting in all the training sessions before breaking through to the team. 

Not made for live

Matters are compounded by the fact that much of the music that blows up on streaming relies heavily on production techniques and does not translate well to live environments. In fact, with many streaming-era artists focusing more time on the production of their music than the performance of it, live can sometimes feel like something that gets in the way. No surprise then that a number of artists Tweeted during lockdown that they were actually enjoying not being on tour and getting more time to write and produce.

The missing steps

Even though streaming distorted the path from studio to stage for many emerging artists, the importance of smaller venue tours is higher than ever. Yet these small venues are most at risk. Bigger live music companies and venues have access to bridge financing that will get them through the tough times, but smaller ones do not. Though some are getting state grants, many will struggle to generate profits with socially-distanced crowds – their capacities are just too small to make the staff-to-audience ratios work. . So we could end up with a gap where the first rungs of the live ladder are meant to be. Short term this will mean more opportunity for bigger, older acts that typically play the larger venues (not that they were exactly struggling before). Mid-term, artists, labels and publishers are going to have a talent development problem on their hands.

Changing cityscapes

The outlook gets even more complex when you factor in the changing nature of cities. With fewer people commuting into city centres daily and more people now moving out of cities, footfall for venues will decline. This means that the business models of many venues will struggle. An opportunity exists to put venues in the new commuter hubs that will emerge over time, but by definition those population centres will be less concentrated and so have less footfall. This may make it harder to build a business case for smaller venues. Larger venues that put on tent-pole events that people will travel to will, if anything, benefit from these population shifts.

So, long story short, unless the industry is careful, the bottom may be about to fall out of the live music business, and in turn the testing ground for tomorrow’s artists.

Who will own the virtual concert space?

2020 will go down as a rough year for many artists, largely because of the income they lost when live ground to a halt. Unfortunately, the live music sector is still going to be disrupted in 2021 and it may take even longer for the sector to return to ‘normal’. In fact, we could see the bottom of the live sector thinned out as the smaller venues, agencies and promoters do not have the access to bridging finance that the bigger players have. So, smaller artists may find the face of live permanently changed for them in a way that larger artists do not. Whatever the outcome, one thing is clear: live music is not going to be the same again, and the innovations in virtual and streamed events are not simply a band-aid to get us through tough times. Instead, they are the foundations for permanent additions to the live music mix. The big unanswered question is, who is going own the live-streamed and virtual concert sector?

Bringing it all together

One of the most important things digital tech does is to bring things together. The smartphone is a perfect example. 20 years ago people switched between phones, calendars, diaries, computers, maps, phones, music players, DVD players etc. Now these are all in one device. Streaming did the same to music, taking radio, retail, music collections and music players and putting them together into one unified experience. Until now, live music was not subject to streaming’s great assimilation process. But COVID-19 changed all that. Live used to be separate because it required logistical assets like buildings, ticketing operations, relationships etc. The last few months have shown us that the virtual live sector can operate entirely independent of the traditional sector’s frameworks – which is one of the reasons so much innovation and experimentation has happened. Sure, lots of the early stuff was scrappy and of patchy quality, but is through mistakes that we learn the right way forward. Thus, we have new companies like Driift emerging to bring a more structured and professional approach to a fast-growing but nascent sector.

Disruption is coming

The big traditional live companies right now may be most concerned about whether the still-dormant venues are looking at the new ticketing models being deployed with the likes of Dice and wondering whether they can rethink their entire way of doing business when they reopen. While that may trigger what could prove to be the biggest-ever shift in the live business, the virtual part of the business is where the money is flowing right now: Melody VR bought pioneering but struggling streaming service Napster, Scooter Braun invested in virtual concert company Wave and Tidal bought seven million dollars’ worth of access into virtual concert ‘space’ Sensorium. Virtual reality (VR) spent much of the last couple of years in the trough of disillusionment but now COVID-19’s catalysing impact may see it starting to crawl onwards and upwards. Prior to COVID-19 VR was a technology searching for a purpose. COVID-19 has created one. This is not to say that all of VR’s prior failings no longer matter – they do – but it at least has a set of music use cases to build on. VR can now realistically aspire to be a meaningful component of the wider virtual event sector.

Streaming+

It is no coincidence that streaming is playing a key role. Nor is it just the smaller streaming services at play – Spotify has built the tech infrastructure for live events, while Apple is introducing artificial reality (AR) into Apple TV+, so it is not too big a leap to assume Apple Music AR experiences will follow. Live was the last major component of the music business that streaming could not reach, and that is all about to change. The value proposition for music fans is clear: why go to multiple different places for all your favourite music experiences when they can all be in one place? Think of it as Streaming+. Whatever the future of live is going to be, we can be certain about one thing: it will never be the same again.

Artists are Learning How it Feels to be a Songwriter

The ‘broken record’ streaming debate that continues to rage on is a natural consequence of the instantaneous collapse of live music revenue following lockdown. As soon as it was clear that live was going to be gone for some time, MIDiA predicted that the artist backlash against streaming royalties would be a natural, unintended consequence.

With many artists used to live comprising more than half of their income and streaming by contrast a sizeable minority, it was easy for them focus less on whether streaming paid enough and more on how many extra fans it was bringing to their concerts.

In the absence of live, all eyes are on streaming. As I’ve written previously, there isn’t a silver bullet solution to what is a complex, multi-layered problem. But there is a really important issue that artists’ lockdown plight shines a light on: the long-term plight of songwriters. Here’s why.

Streaming did not grow in a vacuum

The streaming economy did not grow in a vacuum. It rose in the context of a thriving wider music industry where artists were earning good money from live, merch and (for some) sponsorship. Nor did streaming ever consider its relationship to live as being neutral. Spotify in fact is vocal in its belief that it  ‘supports and extends the value of live’.

This matters because it encourages artists to think about streaming delivering a wider set of concrete income benefits than the royalty cheque alone. The streaming case is that without it, artists would be playing to smaller crowds and selling less merch. A high tide raises all boats.

Without the halo effect benefits though, artists would have found it much more difficult to adjust to the shift of paradigms from a series of large one-off income events (i.e. selling albums) to a longer-term, more modest monthly income, namely trading up front payments for an annuity. Artists would have found it as difficult as…well…as they are now. This is how it feels not to have live music and merch paying the bills. This is how it feels to be a songwriter.

Songwriters only have the song

Professional songwriters (i.e. not those that are also performing artists) may have many income streams (performance, sync, mechanicals, streaming) but they all depend on the song. The songwriter lives in a song economy. The artist lives in a performance/ recordings/ clothing/ collectibles/ brands economy. Songwriters do not tour or sell t-shirts. As a consequence, they have been paying closer attention to streaming royalties over recent years than artists have. Now that artists are also unable to tour or sell shirts (at least in the same volumes) streaming royalties suddenly gained a new importance to them also.

The good news for artists is that live will recover (though it will take until late 2021 to be fully back in the saddle). The bad news for songwriters is that there is no easy or quick fix and things will get worse before they get better. One of the key imbalances is in streaming. Music publisher revenue is around 2.8 times smaller than label revenues but streaming royalties are four times smaller. As streaming becomes a progressively larger part of the wider music economy, if the current royalty mix remains, songwriters will earn a progressively smaller share of the total.

A generation of whom much is asked

Artists are fighting an important fight now, but when live picks up post-lockdown, songwriters will still be fighting their fight. This is not to in any way diminish the importance of artists getting a fairer share from streaming services and record labels, but it is to say that much of their pain will ease when their other income streams come back online.

Be in no doubt. Songwriters have a long and windy road ahead of them.

Songwriter’s streaming era plight reminds me of Franklin D. Roosevelt’s 1933 quote:

“To some generations much is given. Of other generations much is expected.”

But just as streaming does not exist in isolation, nor do songwriters. They are the foundations of the entire industry. There is a well-used saying that ‘everything starts with the song’. It doesn’t. Everything starts with the songwriter.

Quick reminder: if you are an artist and you haven’t yet taken our artists survey, then there is still time! We are keeping the survey live for a few more days. All individual responses are 100% confidential. All artists get a full copy of the summary survey data so you can benchmark yourself against your peers, including how they are dealing with the impact of COVID-19. The survey questionnaire is here.

The Future of Live

The almost total cessation of live music has sent shockwaves throughout the wider music industry. Though live companies are clearly at the epicentre, labels and streaming services are the in the blast radius too as the gaping hole left in most artists’ income is causing them to question their other income sources, streaming especially – with both labels and DSPs in the sights.

Finding both near- and mid-term fixes for live are therefore crucial for the wider music industry and artist community. There is a big opportunity here that goes far beyond lockdown era. This is more than the future of games and music, it is in fact an alternative future for live music. It is the ultimate lockdown legacy.

MIDiA’s latest subscriber report ‘Recovery Economics: Music, Games, Live Streams and the Future of Concerts’ has just been published and subscribers can read it here. In this blog post I am going to highlight some of the key themes.

Live streaming’s teething pains

From a value chain perspective, Lockdown came too early for live streaming; it is under-developed, under-monetised, under-licensed, under-professionalised. Unfortunately, the live-streaming surge is showing all the signs of a goldrush with a lack of clear structure and the first signs of artist backlash, with some artists feeling that some platforms are relying on them to build their audiences while performing for free.

Furthermore, quality is patchy and artists are becoming concerned with the impact on their brand image. Saturation is another Achilles heel: with traditional performances saturation is negated by artists moving from one city to another. Live streaming has no geographical constraints so the effect of multiple performances is analogous to playing repeated concerts in the same small town.

Virtual concerts, not live-streamed concerts

Arguably the biggest single mistake the music industry made with music streaming was to think of it as a format rather than a paradigm. As a consequence, the (western) streaming services lack differentiation and true feature innovation. We must think of the live opportunity as something that goes beyond live streams. Live streams are just one part of the mix. The true opportunity is virtual experiences, that can range from 100 attendee super-premium intimate sessions, through mass scale ad-supported YouTube streams, to avatars performing in games.

If we start this journey thinking narrowly, the scale of opportunity will be constrained. And right now, the industry needs to get as many virtual event innovations going as it can, because it will have to continue to carry the baton for live for some time yet.

In a best case scenario COVID-19 recedes later this year and we have a small number of limited capacity concerts happening before year end. Alternatively, we may see recurring waves of COVID-19 denting consumer confidence with fewer people wanting to go to concerts even if they could. Either way, artists are not going to get most of their live revenue this year.

It is this post-lockdown opportunity that virtual events need to meet. But there is a lot of work yet to be done. The biggest problem to fix is monetisation.

Fans pay around 80 times more per minute for a real-world live performance than they do for listening to music on paid streaming services. The value exists in the shared moment. The problem with live streaming in its current manifestation is that it is abundant and is delivered in a ubiquitous format that is implicitly low value. If this sector is to become a serious income stream for artists then we have to stop giving it all away for free. What is needed is a sophisticated freemium monetisation model that can cater both to large free audiences and better monetise fans.

A set of principles for virtual events

There is also a lot more that can be fixed. Here are some meta principles that virtual events should adhere to:

• Scarcity (fewer gigs, geo-restricted – Laura Marlin has just announced geo-restricted live streams – let’s make that the trailblazer not an isolated initiative)
• Better production qualities
• More sophisticated monetisation (freemium, pay-to-stay, super premium / VIP etc)
• More sophisticated segmentation of types of shows (not all live streams are the same, but we currently only have a one-size-fits all product
• Better platform segmentation (e.g. big tech platforms can play the role of stadiums and arenas while off-portal destinations like artist apps can host smaller, scarcer, super-premium events)
• Better discovery (the equivalent of the TV EPG needs creating for virtual concerts, Bandsintown has made a decent start but much more needs to be done)
• Better alignment between what artists want and what the platforms want

The birth of a new industry

COVID-19 will likely be a mid- to long-term part of life, so the traditional live sector will face a ‘cost of confidence’ as portions of artists and fans alike will initially stay away. Virtual concerts (live streaming and generative virtual performances) can become an important component of the live music sector as it builds out of lockdown. But it will not get there without concerted efforts to fix the problems that currently define this nascent sector.

A new virtual concert value chain is starting to emerge that traditional live companies are not – yet – well embedded in. The future market will be one defined by both incumbents and insurgents. The big live companies will bet big on virtual but we’ll also see new types of companies like virtual booking agents and avatar agencies. The whole concepts of what a concert is and what a venue is, can be turned on their heads. Fortnite’s Party Royale island is now hosting regular live streamed concerts. With 350 million users, Fortnite can lay claim to being arguably the biggest capacity venue on the planet. This may be the birth of an entire new ecosystem.

Recovery economics

The lockdown lag will create a whole new set of economics across all industries. Driving a recovery during this transition period will require innovation and a willingness to downplay old ways of doing things. For music it will be about exploring new income streams to recast a new music business. The first step is for live streaming to have a product refit that delivers a genuine value exchange for fans if it is to ever get out of its free / charity / tip cul-de-sac and become a genuine income stream of scale.

If you are not yet a MIDiA client and would like to learn how to get access to this report then email stephen@midiaresearch.com

If you are a client and would like to talk to us about the themes covered in the report then schedule an enquiry via enquiries@midiaresearch.com

Travis Scott has Only Scratched the Surface of Music Games Tie Ups

In February 2019 Marshmello caused ripples of almost tidal proportions across the music business when 10.7 million Fortnite fans watched him perform a ‘concert’ in the game. Then in April 2020 Travis Scott followed in his shoes with his own Fortnite concert, pulling in 12 million players. Given that this was in the COVID-19 lockdown the 1.3 million increase was a relatively modest increase. However, Fortnite publisher Epic Games had learned its lessons from the Marshmello event and rather than limit audience demand to one event, turned it into a residency with a further 15 million players watching over four subsequent replays of the event. This took the total to 27 million, though there will be a substantial number that attended multiple performances.

What is clear is that a format has been established and that Epic Games is honing its promoter skillset. Fortnite events are labour intensive efforts to put on and currently do not scale well (hence only two events in 14 months). But there is a much bigger opportunity here for artists and one that gains new significance in the lockdown era.

The impact of COVID-19 recurring

With the cessation of live music in lockdown, artists have seen a dramatic fall in income. Established artists can expect to earn between 50% and 70% of their total income from live—that just disappeared. However fast lockdown measures are eased, live entertainment is going to take a long time to return to normal. Indeed, it may never do so.

Virologists point to the Spanish Flu outbreak after the First World War as the relevant precedent for understanding how the COVID-19 pandemic may play out. That was a far deadlier outbreak, infecting a third of the world’s population and killing up to 50 million. But crucially, it was not a single event. It had four major outbreaks over two years. It is likely that COVID-19 will not simply go away but instead will return, either in waves or as a continual background oscillation of infection.

As of May 1^st 2020 less than half a percent of the world’s population has been infected with COVID-19. Even allowing for that being just a tenth of the actual cases, that means that 95% of the population has not had COVID-19. Consequently, the majority of consumers are going to be concerned about returning to potentially infectious environments.

The combination of easing lockdown measures and weak consumer confidence means that live is not going to return to normal anytime soon. Social distancing measures will likely see rows of empty seats in larger venues and smaller, standing-only venues may struggle to operate at all. Reduced, spaced-out crowds will both harm the live experience and prevent many live events from being commercially viable to operate. Consumer concern may even make it hard for reduced capacities to be met. So, artists are not going to be able to reasonably expect a strong return of traditional live income in the mid-term future.

Lockdown lag

Live’s lockdown lag may have the knock-on effect of making artists take a more critical view of their streaming income. When live dominated their income mix, streaming’s context was a meaningful revenue stream that built audiences to drive other forms of income. It was effectively marketing artists got paid for. Now that artists are becoming more dependent on streaming income, the old concerns about whether they are getting paid enough will likely come back to the fore. It is in the interests of both labels and streaming services, that labels use this as an opportunity to revisit their streaming splits with artists. Labels cannot afford to have artists united against the labels’ primary income stream.

Live streaming is not yet ready for prime time

Live streaming of concerts is gaining traction but lockdown came a little too early for the sector. It is under developed, under monetised, under licensed, under professionalised and lacks the discovery layer crucial to make it ready for prime time (perhaps an opportunity for streaming services). On top of this, it does not create the same scarcity of experience that live music does and the rise of virtual festivals with artists playing just a few songs makes live more like a playlist experience, which favours the platforms over the artists. Enter stage left games.

Travis Scott fans are 2.3 times more likely to play Fortnite than overall consumers, but there are 80 other artist fanbases that are more likely to play Fornite than Scott’s. How do we know this?

Every quarter MIDiA fields a music brand tracker that – among many other things – tracks which games artists’ fans play. Looking across the 10 artist fanbases most likely to play three of the top games reveals a huge amount of untapped opportunity. The old model for games and music was sync. That is still a major opportunity but in the lockdown era the potential scope is so much wider.

Not every game is well suited to hosting virtual, gameplay concerts, but the console ecosystems can support so much more. Imagine if Flohio, Ben Howard, Koffee or Slowthai were to do put on exclusive performances live streamed to FIFA players via Xbox Live followed by a gaming session to which players would pay for a premium ticket to play against their favourite artists in an eSports type set up. Tickets would be limited, to create scarcity.

Lockdown economics

The lockdown lag will create a whole new set of economics across all industries. For music it will be about exploring new income streams to recast a new music business. Games will play a major part. No longer simply a place to sync music, games will become platforms for driving artist-fan engagement.

In the Attention Economy everything is connected. In lockdown economics those connections become productised and monetised, with benefits for all. Think of this like the K-Pop and Japanese Idol models, with superfans paying for extra access to their favourite artists. Instead of handshakes and meets and greets, we have gaming sessions and exclusive concerts. Artists benefit by connecting with fans and driving income; labels get to be participants in new revenue streams and help offset growing artist concern about streaming pay-outs; games companies get to add new revenue sources and products.

A dystopian virtual future

A final thought to leave you with. Tim Ingham’s recent piece suggested that Epic Games’ long view might be to create virtual artists, with the thinking being that the Marshmello and Travis Scott concerts were already in practice virtual artists. What if Epic Games is using these concerts to learn the ropes so that it could create its own roster of virtual artists. It could follow the Japanese and Korean music agency model of building rosters of employee artists, that operate under a work for hire basis. Epic Games would own 100% of all rights while the artists perform under stage names and as game avatars. Epic Games could make these virtual artists part of the Fortnite game itself to help build tribalism and fandom, and it of course already has a highly effective virtual merch store.

In doing so, Epic Games would create a games-centric music division that operates entirely outside of the confines of the traditional music industry. Dystopian perhaps, but also entirely feasible, which is why artists and labels should probably think less about becoming integrated into the games themselves and focus more on connecting their real selves with their gaming fans.

If you are a MIDiA client we will be publishing a report on this topic shortly with thousands of data points. If you are not yet a MIDiA client and would like to learn how to get access to this data email Stephen@midiaresearch.com

Why Stormzy as a Glastonbury Headliner Makes Sense Post-Streaming

This is a guest post from MIDiA music analyst Zach Fuller.

On the eve of Stormzy becoming the first Grime artist to headline Glastonbury, it is worth considering what this represents in terms of the link between the new streaming economy and live music.

The South Londoner’s slot is notable less for the now-obligatory controversy that greets any Worthy Farm headliner that isn’t an established rock band (as per Jay-Z and Kanye West’s turns at the festival), but rather should be viewed as a pivot in what the wider live audience ought to expect from the next wave of headliners. Those complaining that Stormzy is not headline material (although a number one album and single could easily suggest otherwise) seem to be missing the point in the transformation being undergone by the live industry – the headliners of yesteryear arrived in a completely different paradigm to the music industry of the present. Additionally, if people expect the live industry as it exists now to reflect modern music consumption, then they are sorely mistaken:

• Streaming and live genres are inverted: 20% of the top 25 Spotify artists (February 2019) are hip hop artists, compared to 12% of the top global touring acts. Meanwhile, rock represents just 12% of the top 25 Spotify artists but 28% of the top live artists. This disconnect between what people are streaming and what they are paying to see live is a potential fault line between two sides of the global music business. Live has always been a lagging indicator of taste, with artists’ live careers peaking later than their recorded careers. It is small surprise that the average age of the top 25 Spotify artists is 34, while for live it is 55.
• The festival boom points to the future: Listeners are less likely to invest in individual artists for an extended period of time, a trend caused by the increased choice among consumers that both downloads and streaming have facilitated. While festivals serve this audience better than individual shows, it could be argued that in the coming years, extended sets by a particular artist make less sense to someone who only streams a few songs by an individual act. The festival-goer’s desire for shorter sets may conflict with the artist’s desire for a longer show given the fee they are being paid. The current live show format of long performance sets looks divorced from consumers’ listening habits. Live venues are already preparing for this post-concert future, which bears greater resemblance to the variety act format so popular in Britain up until the early 60’s when the advent of rock gave rise to the traditional concert format.

The takeaway is that the live industry effectively must play catch-up with streaming if it is to have these types of headliners at all in the future. Even if Stormzy’s streaming numbers do not yet match those in the existing headline bracket, festivals NEED new artists to come through at that level if they are to keep the format together. Either festivals will break apart into niches (a trend already in process when reflecting on the British summertime festival calendar), or streaming acts will see themselves pushed into the big leagues early than anticipated