Celebrity Growth Hacker, Co-Founder of iNexxus & MusicPromoToday.
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An influx of new revenue models has appeared for modern artists on channels like Twitch, TikTok and even Twitter. These platforms are growing the music industry’s income at a record rate. But the technology’s role as portals to build a loyal following and achieve that point of sustainable living as a recording artist is beyond complex to maintain.
In a saturated and turbulent music industry, what the modern artist goes through to reach relevant, convertible listeners is beyond the difficulty of an uphill battle. A few decades ago, compact disks were sold through artists’ trunks. Slim Thug, a prominent Houston rapper, would release albums and drive around selling his projects to mom-and-pop record stores. Today, not only are streaming remunerations poor when distributing music digitally, but payouts are often late and can even risk cannibalizing an up-and-coming artist’s fandom by dedicating too much time to a single channel.
Digital music distribution is the dominant mode of consumption, making up 83% of recorded music revenues in the United States. Spotify alone has close to half a billion users around the world, including almost 200 million paying subscribers, but artists are paid out less than 0.004 euros per stream, on average.
Destroyed fandom can create cavities in a genre’s organism, ultimately leading to its downfall or stagnation as a style. While we have seen a resurgence of independent artistry distributing music independently and never seeking out label representation, today’s recording artists need to eke out every extra dollar they can get from their creativity to stay relevant. Fandom, identity, recreation, engagement and connection are an artist’s basic needs, but the center—consumption—forcefully flows through to streaming services and dilutes the cultural capital, costing more to produce than it earns the artist. A Kafkaesque reality is being addressed by the Web3 artist community and its creator economy industry, who hope to rid the world of this dilemma and offer alternative streams of income to the creators who make this world a prettier place.
1. The Rise Of Non-DSP Revenues
DSP is an acronym for “demand-side platform,” an automated advertiser-publisher platform where publishers generate revenue and advertisers promote content. It’s a technology that automates the digital media buying process.
Twitch and TikTok dominate non-DSP revenues for artists, and these channels are estimated to be close to $1.2 billion in 2021.
Whether it’s learning choreography for a dance challenge on TikTok like Juliet Simms, showing off artistic chops like Joshua Dun’s drum solo chronicles, or artists leaving room in songs for users to join viral challenges, music-driven content can encourage music engagement and fandom.
Fandom as a form of income generation is a primary need to build your following and can be one of the key passive income generators for an artist. It might be distracting and it might be ridiculous, but you are forced to be your own “TV channel” and create a hub of entertainment for your digital fans. Time to get shameless? Make sure to stay relevant!
2. Long-Term Investments
The classic adage “money never sleeps” is truer than ever before. With seemingly the greatest fluctuation in market factors since the Great Depression and subsequent post-war era, the last 15 years have seen the rise of crypto, real estate and private enterprise as key wealth generators for the new generation of professionals.
For example, in addition to building a solid following on Spotify, hip-hop artist Mondre Barnes invested in both his own private label and real estate projects early in his career to build long-term value for himself throughout his artistic apprenticeship. Sustainability does not just happen; it’s planned for.
Artists, especially those up-and-coming, should consider examples of this sort and diversify their portfolios by thinking long-term and investing in one of these avenues. Surf through Jay-Z’s, aka Shawn Carter’s, Pitchbook or Crunchbase page and look at his impressive portfolio.
3. Pivoting As Things Change
Music is not just a product; it is steered like a business and requires pipelines to direct its value or is caught dead in its own swamp. Capital is not something that will just arrive after you’ve made your 1,000th video. In fact, more content is often just a distraction from what can be played as a global move rather than a singular instance. Understanding this dichotomy of art and finance is key to seeing this point.
The industry is constantly shifting, and how you make your money is not the same thing as creating artistic products. Just look at Snoop Dogg who, within days of buying the Death Row label, launched an NFT collection with the release of his newest album. The NFTs grossed over $44 million in a matter of five days. The cultural capital is not the same as the investment capital, and so opportunities can be taken outside of simply flipping your tunes in new ways.
4. Teamwork Makes The Dream Work
Investing in the right team is pivotal for an artist’s ability to scale and adapt through cultural currents. You stand to be making three-to-five times what you spend on staff that help you market, sell, manage and create streams for your brand. Most importantly, they grow to know you and your art to its core.
The keys to longevity have always been the adaptability of a brand, product and personality. In the advent of the modern market, diversification of the revenue stream has turned to a necessary measure rather than an innovative twist to your business personality.
Being an artist is far from just a talent showcase. The modern artist needs to be clever, wise, a quick learner and be able to work smart and hard outside of their artistic competencies to excel financially in their craft. More music is being produced today than ever before, but will this innovative fire outshine the harsh reality of our economically driven society?
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