From the time we popped in our first set of earbuds and spun our finger around the dial of our pocket-sized music players, we understood that music had indelibly changed. It’s hard to believe that was two decades ago. The iPod turned 20 this year.
In addition to changing consumer music habits, the iPod also effectively disrupted the traditional retail model for music overnight. Where record labels had been used to selling full physical albums, Apple introduced the sale of individual songs for $0.99 to entice consumers toward iPod sales. This essentially devalued the music in service of selling the technology, and it paved the way for streaming platforms like Pandora and Spotify.
Now, labels and other music “rights holders” can expect around a penny per stream from Apple, and half of that from Spotify, the largest music-streaming platform. What does this mean for artists? There are typically still third parties like labels and publishers that collect their cut from streaming first. Often, the result is negligible earnings for artists for their music.
In 2020, revenue from digital album downloads amounted to $319.5 million, which was less than half the figure recorded in 2016. Subscription and streaming revenues have been increasing annually and reached $10.07 billion in 2020, making up the vast majority of revenues for the entire music industry.
Many well-known artists make more on merchandise, performances, and acting, than on their music, and with live performances still in a precarious state thanks to the pandemic, it’s more important than ever for artists to understand how to bolster online sales.
For artists to be successful in 2022, they need to dial-in their e-commerce strategy – let’s take a look at how they can do that.
Get Intentional About Revenue Streams
Decide prior to a release whether music streaming is the right avenue. It’s a decision that shouldn’t be taken lightly, since streaming has benefits like artist discovery and social proof. If you decide not to stream, you’ll have to work extra hard to engage a large population of the consumer public, since most listeners are used to experiencing music via streaming services.
Do you have other ways to monetize your music? Events are popular sources of income for artists and musicians, and even though in-person concerts are uncertain, a number of technological solutions have popped up to fill the need. Platforms, such as In the Room, connect artists with fans based on a listening algorithm, and then facilitate a private virtual concert that viewers can attend digitally with friends.
You can look at streaming as just one revenue stream for your brand, in addition to a marketing tool. It will help you with consumers at the top of the sales funnel, by building awareness around your brand and your music, that you can then leverage with various digital touch-points and purchase opportunities.
Build A Direct-To-Consumer Audience
Creating a direct relationship with fans is an essential feature of an artist’s digital toolkit. Many artists use social media to build owned audiences that they can market their music and merchandise to.
Platforms like YouTube, Instagram, and TikTok allow artists to amass followings that they can communicate with directly, which allows them to introduce purchase opportunities for their music, merchandise, live events, and other revenue-drivers without middle-men like labels and distributors.
Other platforms, like Patreon, were developed with this creator economy in mind. Artists can market merchandise or exclusive experiences directly to fans to build recurring revenue.
“Art is featured in almost every facet of life. If an artist has a great fanbase you can have your art featured in all of the mediums possible. Because of my more famous clients my art has been included in movies, podcasts, video games, music videos, award shows, and TV shows. Today with the emergence of NFTs and different methods of monetizing art, the possibilities seem limitless,” says Teak Underdue of Hallway Productionz, who has notably worked with Ice Cube, Angie Stone, Dave Hollister, among others.
Align With A Cause
Social responsibility is increasingly expected by consumers. Aligning with a cause can be especially effective as an artist, because of the emotion that’s inherent in music. As an example, proceeds from TJ George’s upcoming album, Heroes and Legends, go to his non-profit Demand Impact which supports individuals in recovery from drug addiction.
The alignment opens doors to new audiences that share his values. Demand Impact provides funds to other non-profits and service providers that help recovering individuals, allowing George to tap into their dedicated audiences and foster a meaningful connection.
Leverage Like-Minded Talent
When artists collaborate with like-minded musicians, the cross-marketing opportunity generally benefits all artists involved.
George rallied artists from a number of famous bands to participate on his album – working with the likes of Bill Medley from the Righteous Brothers and Michael McDonald from the Doobie Brothers.
The key is to find collaborators with mutual interests and a stake in the project.
“Each of the contributors to this album have been impacted by the opioid crisis. When we found each other and shared our stories, we realized there was something really powerful here,” says George. “These are incredible artists who all are called to make an impact using their gift, and to see real change happen in our lifetimes.”
The music industry may have changed, but savvy artists are experiencing success by dialing in their digital strategies. Diversifying revenue streams and connecting directly with fans is a great place to start. Ramp up your strategy by collaborating with like-minded artists, and reconnect with one of the most powerful aspects of music: the impact that it has on listeners.