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presents....
The fine print of innovation in the music business.
This is issue #79, published on February 21, 2020.
Happy Friday!

Quick note before today's stories: This time next week, I'll be at by:Larm in Oslo, Norway to moderate a panel about music startup investments. Then I'm off to Stockholm for a mix of work and touristy stuff from March 1–4. It'll be my first time in both cities, so if you have any sightseeing/eating/drinking recommendations, please let me know! :)

- Cherie
Music-streaming services are losing their brand identity. Here's the visual evidence

Has anyone noticed recently that all music-streaming services are starting to look and feel the same?

Two pieces of evidence this week hit the nail on the head for me. First, Jack Appleby, strategy director at R/GA, discovered that the Instagram grids of Spotify, Apple Music, Amazon Music and YouTube Music were nearly indistinguishable. As you can see in his screenshots above (included with his permission), the majority of posts on each of the grids consist of a well-known artist’s face against a white or solid-colored background — with almost no signals to help identify the services themselves.

Inspired by his observation, I decided to take screenshots of the iOS homepages of Spotify, Apple Music, Amazon Music, YouTube Music and Deezer, and lay them out side-by-side. They also look almost exactly the same (see above).

These two sources of evidence tell me that the unique brand identities of the world's top music-streaming services are quickly eroding — an indication of the market becoming more commoditized and saturated.

This isn’t necessarily to say that the mobile homepage is the most vital part of a music-streaming service's user experience or identity. In fact, you could argue that the ideal streaming experience these services are striving for don’t have users looking at their phone screens at all, but rather have them listening to music in the background of other activities for hours on end — i.e. you could argue that listening in and of itself is the critical user experience, not the visual app that gets you there.

But it's nonetheless amusing to me that multiple streaming services seem to have given up on trying to differentiate on what users see the moment they first open their apps, which is still an important moment in a user journey.

How did we get to this incredibly boring point? After doing some research, I’ve found that two of the most useful and illuminating explanations come from outside the music industry — namely, from trends and theories in design and sociology.

Click here to continue reading.
Which is a better investment,
Warner Music stock or Spotify stock?
When WMG first announced its IPO plans, some early conversations I had with folks in the music industry centered around why anyone would want to buy shares in the major label if they already owned Spotify shares.

The inherent assumption was that Spotify was a better investment than WMG. Here’s roughly how I, and those who agreed with me, were approaching our thinking:
  • Major labels like WMG don’t own direct relationships with most of their fans or customers; tech companies and content aggregators like Spotify do, at the scale of hundreds of millions of users.
  • Even though WMG is profitable and Spotify is not, the latter brings in around 66% more revenue annually than the former, and commands a higher market value by around $10 billion to $15 billion by industry estimates. WMG is also the smallest of the three major record labels, and is only around half the size of the biggest major, UMG (which is also planning to go public sometime in the next few years).
  • Spotify is diversifying more aggressively into multiple kinds of content and media beyond music — particularly podcasts — whereas WMG seems mostly focused on music for now (unlike some of its other competitors like Sony Music).
But the more I dug into the issue, the more I also realized that in some ways, WMG and Spotify are actually quite similar in their business priorities:
  • Both are now in the IP business (music for WMG, podcasts for Spotify).
  • Both now own an ad-supported website and are trying to become digital-media companies.
  • Both need to invest more in artist services to stay relevant.
  • Both are equally dependent on each other financially.
In this members-only post, I break down each of these similarities between Spotify and WMG, pointing to their respective SEC filings as evidence, and how they make the titular question — which stock would be a better investment? — surprisingly hard to answer. (Full disclaimer: I’m in no position to give actual investment advice.)
Click here to access (members only).
Five lessons from my first year of running a Patreon page

Just over a year ago, on February 1, 2019, I decided to launch a Patreon page for my business writing. I've learned a ton since then about the benefits and challenges of running a successful editorial membership business, and thought I would share some of my takeaways from the experience with the wider public.

First, some fundamental economics: As of publishing this article, my Patreon page has over 260 subscribers, collectively paying over $3,500/month. Each member pays an average of around $13/month for access to a range of benefits, including but not limited to a closed Discord server, members-only essays, company databases and monthly video hangouts and consultations with me. The lowest- and highest-priced tiers are $3/month and $200/month, respectively; the most popular tier is $7/month.

On a higher level, this means that I'm now making over half of my income directly from readers — a vastly different kind of business model than when I was spending 100% of my working time freelancing for outside parties.

There's an interesting catch, though. According to Graphtreon, my Patreon page is ranked in the top 5,000 of the 136,185 total accounts on the platform with at least one paying supporter. In other words, I'm already in the top 4% of Patreon accounts — even though I'm far from making a sustainable living on the platform itself.

To me, this is pretty eye-opening in terms of the purpose that Patreon really serves in the vast majority of creators' lives — and the difficult, uphill battle of building a membership business from scratch, even if you already have a sizable, non-paying audience elsewhere.

Click here to continue reading.
Good reads

Inside Soccer Mommy's Strategic Rise to Headliner Status (Billboard)
Most of the conversations I've heard about life as an opening-slot artist have centered on how tiring, thankless and cutthroat the job is, so it was great to see this article from Chris Payne that reframed the opening-slot life as a strategy, if done right. (Side note: I interviewed Soccer Mommy's booking agent Wilson Zheng in my article a few weeks back about how booking agents use data.)

Bootleg Podcasts Are a New Frontier for Unlicensed Music on Spotify (Pitchfork)
Back in June 2019, I found that someone was using Anchor to upload Cardi B's entire discography illegally onto Spotify in the form of podcast episodes, which somehow appeared towards the top of Spotify's Music Podcasts section. The company promptly took down the podcasts after I called it out on Twitter — but according to this piece by Andy Cush, it looks like that podcasts-as-piracy behavior has multiplied across songs from several other artists, including Drake, Alec Benjamin, Hobo Johnson and Childish Gambino, and is still appearing pretty prominently on Spotify's app. The rights-management and content-detection problems that arise from this feel very SoundCloud-esque...

Under Lockdown and Quarantine, China’s Punk Rock Bands Are Taking the Mosh Pit Online (Hyperallergic)
I've been closely following the rising trend of virtual concerts in the music industry, so was intrigued to find that the format also has a highly practical use in the context of the coronavirus epidemic. As Krish Raghav writes, in the wake of cancelled shows, several local indie artists and labels in China have banded together to stage virtual, festival-like "showcases" for longing fans on the live-streaming platform BiliBili.

The Day the Music Became Carbon-Neutral (The New Yorker)
A lot of musicians rely on international touring — read: international flights — to make a living. A lot of musicians also care about environmental sustainability and combating climate change. How does one possibly start to reconcile the two? Amanda Petrusich does a great job at examining all the potential options, spanning academic research, nonprofit work and artist-level case studies. A big part of the solution might involve fundamentally changing the value proposition of a tour and the way musicians work in general.

What I'm listening to

I'll be the first to admit that I'm so behind on the Music Writer Exercise (MWE). I haven't added a review to the thread since Valentine's Day (i.e. last week).

With that said, here are the albums I have to go through to catch up:

Let's listen together! To read my previous MWE tweets, click here. I'm also compiling all of these albums into a Spotify playlist, which you can stream and follow here.

If you’d like to support even more thoughts and conversations on music and tech, I encourage you to become a paying member of the Water & Music ecosystem on Patreon.

For as little as $3/month or as much as $200+/month, you can access a wide range of perks including:
  • A closed, members-only Discord server, consisting of regular updates and analysis on the most important music and tech news
  • Exclusive essays and article previews
  • Updates on my book research
  • Monthly video hangouts with me
…and much more! Thanks so much for reading! ❤️
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