January 24, 2018:Trendwatch: fan relationships 3.0 and the rise of artist services

Trendwatch: fan relationships 3.0 and the rise of artist services

The first afternoon session in the second day of the NY:LON Connect conference focused on artist services, starting with a speech from Matt Young, EVP of Warner Music Artist Services.

He started by talking about the period, around 10 years ago, when 360-degree contracts started becoming a thing in the music industry – and Warner Music’s efforts to justify taking a slice of artists’ non-recorded-music revenue streams by proving that it could help them build those other parts of their business.

A definition of artist services: one, it makes money for the artist, and two, it helps them to acquire and engage fans. So anything from ticketing, email marketing, retail, strategic technology, licensing and now the Songkick concert-discovery business. Although soon that description will be inaccurate.

“We will be relaunching it shortly as more than just a service about ticket information or show dates… we see it as 15 million people visiting the website, two million people using the app: a new way to talk to fans,” he said.

Artist services at Warner Music generates “the same revenue as 15 platinum albums a year” claimed Young, stressing that the aim is to put the right product, with the right message, at the right time, through the right channel in front of fans. “The idea here is that it feels like it’s organic and authentically coming from the artist. it’s not a label saying ‘Hey! We think you should like this!'” he said. “We’ll talk to you like the superfan you are.”

He stressed that artists control these messages, citing a recent campaign with Metallica for a ticket bundle, selling music and concert tickets together, and gathering the data for the band to use in retargeting and other campaigns. “It moved the needle for them,” he said.

Young also talked about the structure that WMG uses, with a product manager in its artist services team liaising with the artist’s manager, as well as with the various partners and suppliers. “A one-stop shop, getting all the data, and feeding them that data and telling them what we think it means,” is how he explained it.

One of Warner’s more interesting campaigns: creating a perfume for artist Melanie Martinez, which was launched with a YouTube video, before the label worked with Spotify to contact her biggest listeners and promote the product to them. “15,000 bottles sold to date and counting,” said Young. Note, the perfume costs $49.95 a bottle, so that’s potentially $750k of gross revenue so far.

Young admitted there are challenges around artist services: counterfeit merchandise, for example, as well as the unwillingness of some online retail platforms to tackle the issue of bootleg product being sold through their services. Print-on-demand services are also providing a challenge: websites that show an image that only becomes a product once someone orders it.

Is there a more positive potential for user-generated content in this area? When a band has a mustard-keen fanbase creating GIFs and memes and artwork about the artist, could that somehow become officially-licensed merchandise?

“It’s really difficult to administrate, but we have done it,” said Young, citing a Twenty One Pilots initiative last year. “They have a art director on-staff who curates the stuff that fans bring in. They have a collection of 15 fans around the world who were generating Twenty One Pilots artwork.”

Those fans were flown to the finale of the band’s last tour, where their fan-art was put on show in a gallery format. Meanwhile, Warner has so far had one example of a piece of fan artwork that became merchandise, with the fan paid for the work.

Young said there could be more to come from this idea. “One of the ways to combat online piracy might be to legitimise UGC. The technology isn’t there, but it’s something we talk about every time with our tech partners,” he said.

Young’s speech was followed by a panel session on the emergence of artist services. Panelists included Vanessa Ferrer, CEO at Merch Cat; Patrick Mahoney, COO at Manhead Merch; Donagh O’Malley, SVP of strategy and business development at UnitedMasters; and Dominic Pandiscia, CEO of PledgeMusic. The moderator was Karen Allen, of Karen Allen Consulting.

Pandiscia talked about how artist services has changed over the years. “The majors were the leaders in the artist services business… I think now, the business has evolved, it’s about artist empowerment more than ever. Whether you’re totally unsigned or of a certain altitude, you’re empowered to make a lot more decisions… There’s no wrong answer, it’s just what’s right for you.”

O’Malley talked about what UnitedMasters is up to, with its famous $70m funding round. He said it’s a focus on three things. Tech, culture and storytelling.

“We think that digital music has to be more than just tech. It’s great that artists can get lots of information about how many plays they’ve had… but what do you actually do with that information? It’s just reporting on something that has happened, and it doesn’t necessarily reveal to you who those listeners are, or why they’re listening to you,” he said.

“Artists need tools that help them understand who their fans are, where they are, what they’re interested in, and what the best way to communicate with them is. We’re productising tools that enable artists at scale to talk to fans who are already engaged.”

At the moment, the main tool is a news feed of “cards” prompting artists to take certain actions. “They’re told to go and talk to this blog because it is in the sweet spot of your audience, and located in a place geographically that’s most relevant to your fans, or there are recommendations to ‘go and post on this channel now’, or recommendations that ‘you have not posted a video for a while, let us help you do that’,” he said.

“I think the artists will find us, if they’re attracted by a tool that gives them that level of insight and action, and a business model that allows them to retain their rights and their brand identity.” he said.

Pandiscia talked about PledgeMusic’s Amplify programme, which aims to support emerging artists. He talked about how it picks out promising artists. “What is their engagement? I’d rather have an artist that has 5,000 followers but every time they post to Facebook they get 800 likes, than an artist that has a million [followers] but only get 50 likes,” he said.

The conversation swung around to merch, with Mahoney explaining that some things haven’t changed in that space, in terms of what’s considered high-quality products. One change: pop-up stores, where “we can basically white-label our band’s perfect retail space for a few days”. Tying that in with a signing or a meet’n’greet can have real impact – with fans then posting on social media about their experience. But it really does make a difference if the artist can make an appearance.

Ferrer talked about merchandise as traditionally a “low-hanging fruit” in terms of revenue streams for artists: they could sell it at concerts and make a decent profit, with the money in their pockets that night.

“It’s always been important, but with music consumption moving to streaming, and people aren’t buying CDs and records any more, merch becomes a more important revenue stream that artists should be focusing on,” she said.

Allen asked the panelists for their views on merch bundles – tickets and music like Metallica, for example, or Taylor Swift’s controversial recent gamified campaign giving fans a better chance of getting concert tickets if they carried out certain activities, of which buying merchandise was one.

Pandiscia said that tiering is important: that fans have the option to spend more if they want and are able to, but that those who can’t shouldn’t be left feeling out in the cold.

O’Malley said he didn’t mind the gamification part. “But I wonder if there was another way of approaching it, and getting the same results but maybe leaving fans with a better feeling,” he said. “If data had been used and it was more like a reward: ‘You’re someone who’s watched my video five times, congrats, you’ve just jumped three places in the line’. Same effect, but it’s a different feeling.”

Allen asked about the famous ‘1,000 True Fans’ theory: the number of ‘core’ fans an artist (or any creator) needed, who’d be guaranteed to buy their stuff. Is that still a relevant number, she wondered?

“It’s not about the thousand number, it’s about identifying and nurturing the passion of that fan,” said Pandiscia, who talked about email as one of the most personal marketing channels to help with that goal. “As opposed to social media where you have thousands of people trying to get hold of you.”

“And the other thing is you own those email addresses. You don’t own your social media following,” added Ferrer. O’Malley noted that it’s the fan behaviour should inform the tools that the artist uses, and how they use them.

Stuart Dredge
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