If Spotify is Google, Is Patreon the Salesforce of the Music Industry?

ICYMI: Taylor Swift’s re-recording strategy, Bob Dylan’s catalog sale and more

Welcome to Issue #5 of Appetite for Distraction, a newsletter exploring how technology is bridging the gap between art and commerce. My goal is to make this a resource that cuts through the noise; helping creators and creative industry professionals make informed decisions. 

Thanks so much for subscribing, and please tell a few friends if you’d like! 

— Yash

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Patreon as a Fan Relationship Management SaaS

Technology has significantly lowered the barriers for creation and distribution of content. This has enabled an increasing number of aspirational content consumers to become independent creators building micro enterprises centred around the monetisation of their social capital and intellectual property

In academic terms — The Prosumers envisioned by Marshall Mcluhan and Barrington Nevitt share a strong causal relationship with the Artepreneurs envisioned by Engelmann.

In industry terms — This is leading to a decentralised passion economy as envisioned by Li Jin and Adam Davidson, an economy where multiple creators thrive by creating high value for niche audiences.

In the music industry, an increasing number of DIY artists run lean, self-owned and operated  businesses. If Spotify is the search-engine that connects listeners (consumers) with artists (enterprises), what tools are artist-enterprises using to form, maintain, and monetize relationships with them? 

Creator tools, social media and DSPs like Spotify are top-of-funnel. While direct-to-fan subscriptions are treated as bottom-of-funnel — a place where superfans end up.

Conventional businesses can attribute each customer’s relationship with the business in dollar terms.  An overly simplistic illustration would be — Email or Push Notification sent = purchase made / not made. The efficacy of CRM can be conveniently evaluated. 

Artist-enterprises not only have diverse revenue streams, but these revenue streams are often fragmented and not directly attributable to the commercial transactions fans make. That is to say —  the monetary contribution of each fan cannot be clearly equated. Therefore the efficacy of ‘FRM’ becomes hard to evaluate. 

Patreon’s direct-to-fan model differs from this. The financial contribution of each patron is clearly defined. Even though Patreon is currently seen as an end, a place for already converted super-fans can be monetized, Patreon may also serve as a fan relationship management software — A place where you can build relationships with fans who are neatly segmented based on their willingness to pay.  An even more telling sign of organic fandom than the coveted [follower:listener] ratio. 

[Side Note — Moving up the funnel to DSPs, a user-centric model for streaming payouts seems to be the best way to directly attribute consumption by each listener to the artist]  

Taylor Swift Update

Taylor Swift has started re-recording her masters and is playing the expected sync placement card. She recently placed the re-recorded version of ‘Love Story’ in a commercial for Match. 

Even though Shamrock owns her recordings, Taylor can still block the usage of the old masters because she owns the underlying songs. She can use this power to convince license seekers to use her new masters. They would prefer to deal with Taylor as their one-stop shop for clearance, instead of seeking approvals from Shamrock and (an inevitable rejection) from Taylor. 

Shamrock still has the advantage when it comes to streaming revenues. It will be hard for Taylor to replace her old masters on DSPs. Not to mention some of the inherent problems with re-recording old masters we’ve explored previously

The re-recording project definitely falls in line with her ninth studio album ‘Evermore’ embracing the ‘More Is More’ release strategy

Gaming x Music 

Grand Theft Auto V gets an 'underground club for everyone'| Stuart Dredge, MusicAlly 

In-game music promotion has seen monumental growth. Evidence: YouTube Gaming had its best year ever with more than 100 billion hours watched and League of Legends finals’ peak audience was 46m people.  Like I mentioned last week, in-game commerce is potent. Great place to sell your latest single, fall collection or $95 candle

More music x gaming reads: 

UMG Goes IP Shopping

UMG is acquiring long term IP assets as a stable and recurring source of revenue before their potential IPO. Their buying spree includes Lil Wayne’s masters for $100 million, and most recently — Bob Dylan’s entire songwriting catalog of 600 songs for a speculative $200 to $450 million. 


What I’m Reading 

Loyalty Tests  | Drew Austin, Real Life 

Drew Austin dissects how brands use subscriptions to layer normally mundane purchases with a form of imposed loyalty (the word is allegiance I believe?).

“Viewed from this perspective, brand loyalty appears less as a path that we’ve chosen amid a variety of options and more an alibi for coercive platform lock-in. Loyalty to Netflix or Amazon doesn’t arise organically as much as it is foisted upon us, ingrained via marketing after we’ve already subscribed in order to conceal our imminent lack of realistic alternatives. If a sincere feeling of loyalty does eventually emerge, it could just be Stockholm syndrome.” 

What I’m Listening To 

Eugene Wei, author of Status-as-a-Service and Seeing Like An Algorithm talks to Li Jin and Nathan Baschez for the Means of Creation Show. 

If You’ve Made It This Far.. 

You can make it all the way. 

What I’m Brewing — Brazilian Minas Gerais from Gigi Speciality Roasters 

Also check out Scott Rao’s manual brewing method. As a V60 purist, this was hard for me to watch, but he makes some really valid points. For those of us who are risk averse, James Hoffmann’s tried and tested method does the trick.

Thank you so much for reading! If you want to get in touch, you can respond directly to this email or reach out on Twitter or LinkedIn. Always excited to meet like-minded humans! 

Until next week,

— Yash