Spotify Still Gaining Steam

It's easy to look at the upcoming streaming music launches from Apple and Google and think that they'll automatically take the lions share of that end of the business, but that underestimates just how important Spotify is the current music industry.

Spotify is now responsible for 10% of the industry's total revenue as of the first quarter of 2015, if you can believe their Director of Economics Will Page. That's a number that few thought would ever be reached, at least from Spotify.

Considering that according to the IFPI, all streaming services combined equaled about 10.2% last year, that means that the company is a juggernaut in the space. Of course, it also means that the 10.2% mark has grown considerably in just 3 months.

Last year subscription music brought in about $1.5 billion, and Spotify accounted for about half that. According to Page, it also accounted for more than 90% of subscription music growth last year.

Granted, these numbers are coming from Spotify, so they're most likely biased, but it does show that the service has a real hold on the market that might be tougher to dislodge than any of the potential upstarts realize, regardless of how deep their pockets might be.

---

Any purchases made through our Amazon links help support this blog at no cost to you (just click here).

The New Bandcamp Subscription Feature And Why It Won't Work

Indie music aggregator Bandcamp recently launched a new feature that enables fans to subscribe to its artists for a fixed amount per year (like the $32 that the UK band Candy or artist Steve Lawson are charging). During that time, the fan gets access to all the material that artist or band creates. The fan also has the option of paying more than the subscription amount if they so desire.

While this might sound like a great idea and a good way for fans to support an artist or band, it's probably a feature that will benefit Bandcamp much more than any artist on the service. Here's why:

1. We're living in a different world than even 3 years ago. Fans are more interested in a song by an artist than the artist themselves in most cases. They can get the songs for free on YouTube or for a lot less money than subscribing if they already pay for a streaming service.

2. Most artists over-promise when it comes to future releases, but it's really difficult to turn out a lot of quality product over the course of a year and on a regular schedule. If the releases don't come as promises or they aren't as good as expected, the subscriber doesn't remain engaged. If there are fewer subscribers than anticipated (which is always the case), regular creative output becomes even more difficult for the artist.

3. Most artists concentrate on their subscribers or the non-subscriber fans, but not both. This leads to fan attrition rather than increasing the fan base.

4. You're competing against yourself if you expect people to buy your product on Amazon, iTunes, or  purchase a CD or vinyl. If they sign up for decreased subscription rate, that's a lot less money that you can get from someone who's already a fan and might be more willing to purchase on a whim.

That's not to say that subscription can't work in some cases (a jam band like Phish that's been around for along time and has a big catalog of recorded concerts for instance), but it's not a model that most artists will find useful, especially if you don't already have a large and well-established fanbase. The bottom line, Bandcamp may be trying to sell you on this feature, but it's not all it's cracked up to be.

----------------------------------

Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

An Artist Subscription Model That Works

Recently Jill Havercamp wrote an interesting article over at Music Think Tank called "6 Case Studies On Successful Online Music Marketing." Although all of the examples are good (some I've written about here before), one jumped out at me.

Matthew Ebel runs a subscription site for his super fans that he says provides him 26% of his income - all from just 40 fans! His packages range from $5/month to $15/month, but he has annual options that go for as much as $499, and that one's sold out.

So what do you get as a subscriber?
   * Members-only parties
   * VIP seating at shows
   * Access to new music as soon as he creates it
   * New live concert recordings every month
   * Sessions with individual tracks for remixing
   * Behind-the-scene sketches, drafts, and ideas, and more.

Now 40 fans isn't a huge number, and 26% of his income may or may not amount to much, but I think that just the fact that Matthew was willing to try subscription validates that this model is viable even for an artist without a huge amount of national attention. Most artist's would normally be afraid of subscription because you really need dedicated fans to make it work, and it takes a lot of work to make the subscription worthwhile to keep the fans happy.

Good work, Matthew. You're a great example of what can happen for an artist in Music 3.0.

You can view Matthew's site here and view his subscription page here.

-----------------------------------

Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

You should follow me on Twitter for daily news and updates on production and the music business.

Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.