Why Artists Should Stop Chasing Spotify’s Pennies And Focus On Top Fans

Why Artists Should Stop Chasing Spotify’s Pennies And Focus On Top Fans

 

fan400There has recently been a wave of pessimism about how little Spotify pays its artists, resulting in some high profile withdrawals from the extremely popular streaming platform. We found a compelling alternative view in an article by George Howard for Forbes Magazine, which suggests that musicians should focus on ‘passionate fans’ instead of payouts.

 

How should you do this?

See the full article here, or a short summary below:

  •  Howard suggests that musicians should stop fixating on whether the amounts Spotify pay are ‘right or just.’ He argues that this is an irrelevant distraction.
  • Some artists receive much bigger payouts (like JayZ), but this money is still ‘immaterial’ when seen as part of their overall income, just as a few streams for a less famous artist also account for a very small proportion of their income.
  • The consumer is the biggest beneficiary of the streaming model. Music listeners have come to expect a great range of music to be available to them for a fixed and relatively low price. This is beyond the control of the artist, and is hard to change due to the business models of companies like Pandora, which already loses 50% of revenue to artist payouts.
  • Artists need to stop expecting vague promises of increased payouts to be fulfilled. These are unlikely to happen soon, or make a significant difference.
  • Artists can understand their fans by dividing them into categories: Casual fans, Active Fans, and Passionate Fans. These groups go through the following stages: Awareness (casual fan), Consideration and Trial (active fan), Purchase and Re-Purchase (passionate fan).
  • When a fan converts from non-interactive services like Pandora to interactive services like Spotify, they are on the way to becoming an active or passionate fan, as they are choosing which bands to listen to repeatedly.

Fans are more likely to buy merchandise, concert tickets, vinyl, etc after using streaming services. Howard argues that these purchases will greatly exceed the value of any payouts you receive. He concludes: ‘artists must learn to use these services and benefit them in the same way the artists are being used by and benefiting these services.’

Do you agree with George Howard? Do you think that streaming services can help musicians sell more to their fans in future?