For those of you who don’t know me and wonder, “why is he writing about this?” I’m a startup founder, hold an MSc in Industrial Engineering, and used to make music as a side hustle. After making a gold-selling hit last year, my music project is now somewhere between being my main hustle and a side hustle. My approach is more business-like than artist-like. Here are some outside-in thoughts I’ve been having lately.
I’ve been signed to Universal Music Group the last year, and the two last emails I received were “Christmas on TikTok!“ and “TikTok Handbook“.
The creative gatekeepers
It used to be expensive and time-consuming to make music. You’d need a studio, someone to play the guitar, the bass, the keyboard, a singer and a sound engineer, and so on. Most musicians couldn’t afford this. Therefore they went to the Venture Capitalists of the music industry, the record labels. Sony, Universal, and Warner. These gatekeepers received many requests and only signed a minority of the artists. Then they invested money in the artists’ music production, CD distribution, and extensive marketing campaigns. In the same way startup investors get most of their return money from a small portion of their portfolio, labels get most of their returns from the Taylor Swifts, Drakes, and Beatles of the world1.
Breaking the moat
Then gradually, the moat of the labels started collapsing:
Production changed with technological advancements. Music production could suddenly be done from the comfort of one's bedroom. All you needed was a laptop.
Distribution became a zero marginal cost activity with iTunes and streaming services. No need to ship CDs all over the world.
Marketing transitioned to digital platforms, and the importance of large marketing budgets shrank rapidly. Social media and influencers replaced billboards, TV ads, and the marketing channels of the past.
The rivers flow differently
The fall of the record labels’ moat has drastically changed the music industry. Making music available to listeners is no longer a resource-demanding process. Music production is done in a matter of hours and costs just a few dollars in software fees. Now there are many, many more songs available. As a result, more songs are fighting for the listener’s scarce time. The average Spotify listener listens to 52 songs per day2. And they’re usually listening to playlists or their preferred artists, so those are not unique songs. That number might be around 40 songs. This means, in turn, that every artist is fighting for their songs to be among listeners’ top 40 songs, which is no small feat. They compete with every artist, including the Taylor Swifts, Drakes, and Beatles of the world.
Artists must define their audience, reach them, create awareness of their songs, convert them to listeners, convert them to frequent listeners, followers, and regular buyers that interact with content, buy concert tickets, buy merchandise, spread the word, and so on. And as you can see, all these activities happen after the artist has created the song. So to be an artist, you now have to take a vertically integrated approach to being a creator.
The Vertically Integrated Artist
For an artist to be “vertically integrated” requires very different skills than for an artist to be a musical genius. Because of this, more and more artists are not musicians. Instead, they’re influencers, reality show participants, or celebrities with a large social media follower base.
For non-gen Z and marketers: TikTok is focused on sound snippets. They can be voice recordings, sound from a video, or snippets of a song. Users can press the sound of any video they see and use it for their video. Therefore this has become an important marketing channel. Create a sound, try to create a dance or trend, and watch it spread.
Labels now tell their artists that songs are not ready to be published because they don’t have a good enough TikTok potential. "What’s the TikTok idea for this song?”. I signed with Universal last year, and the two previous emails I received were “Christmas on TikTok!“ and “TikTok Handbook“. Music is now less about art and all about marketing.
BYOB - Build Your Own Brand
Furthermore, the playlist structure of Spotify puts songs in the spotlight, not artists. I have 18 million Spotify streams under my artist name, Slæm Dønk (a Norwegianization of the basketball trick Slam Dunk). My most famous song, Mango IPA, and its’ remix have more than 7 million streams combined. It reached the Top 50 - Norway list on Spotify and has been streamed by more than 500.000 unique listeners. But few people know my artist name, and I’m often called “The Mango IPA Guy” at concerts.
In addition, the AI train is moving at full speed, with image generation, Lensa, and ChatGPT bringing AI to the masses for the first time. As a result, AI is radically changing creative industries in ways we don’t understand yet. For example, Tencent Music in China has released 1.000+ songs with AI-generated voices, of which one has 100M+ streams. An achievement less than 1.000 artists have achieved3.
So not only are artists competing against other artists with scarce time and resources. Music has become a zero-marginal cost product. It can all be generated and distributed practically for free.
An implication is that being an artist is more about building a brand and name for yourself. You can work hard to make a hit, but it won’t help your chances of making a 2nd, 3rd, or 4th hit. You have to find a way to connect with your fans. Focusing on songs rather than building a brand is like making one-off sales instead of selling subscriptions. Building a fan- and follower base is key to a long and prosperous career as a creator.
Every musician is now a startup founder
Creative, musical geniuses are losing ground to creative marketers, directing their focus to art and music. To keep up, they must adapt to the changes. Artists that don’t have the necessary skills to be vertically integrated (i.e., most artists) must engage their network. Get help from friends, family, and fools to build a brand and launch a career. Bootstrap the artistic project and outsource what they can’t do themselves.
Music and art will always be about creativity. But being creative about the music is now just the beginning. Artists must be creative about ideation, creation, distribution, marketing, PR, concerts, merchandise, retention, etc. Every musician is now a startup founder. That doesn’t sound like music to my ears.
The VC-like model of labels is tightly linked with critics for taking too large a share of artists’ income. They’re the tip of the iceberg. It’s a strong survivorship bias.
Footnote inside footnote: Many examples exist of music industry players taking advantage of musicians who do not understand the legal jargon and sign awful deals. That’s just intentionally lousy business practice - the opposite of bona fide.
https://chartmasters.org/most-streamed-artists-ever-on-spotify/
Thanks to Kjetil Holmefjord and Lise Fulland for reading drafts of this.