What DSPs can learn from Consumer Social Platforms 

ICYMI: How TikTok is reshaping the A&R process, Netflix's audio-only update and more

Happy new year! After a much needed 3-week break, I’m psyched to share Issue #6 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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Nostalgia Driven Engagement 

At the end of every year, we love to rewind and reminisce. Platforms have realized that looking back at the virtual portrayal of our lives promotes in-app activity and engagement. From Spotify Wrapped to Apple Music Replay, and the likes of TikTok launching their recap feature called ‘Year on TikTok’ - the year-end recap seems to have become a baseline feature in the consumer social as well as DSP space. By enabling low friction content creation and cross-platform promotion, platforms power a significant engagement spike in December. The ease with which one can make a shareable Spotify Wrapped image to post on Instagram is a function of deliberate design. 

If there’s one thing we might enjoy more than nostalgic recaps, it’s personality evaluations based on our past. Especially when they enable shared laughs: ‘How Bad Is Your Spotify’, an AI bot created by publication The Pudding, went viral around the holiday season. The bot analyzes your Spotify listening history and roasts you. And of course, I tried it out too — 

Arguably,  these year-end recaps are the only social feature that DSPs have had success with. 

Monetizing FOMO 

In a previous issue, I wrote about the ubiquitous access to music (via streaming) as a precondition that powers different contexts. While the FOMO from nostalgia fuelled recaps drives tangible engagement spikes, I see this as a potential opportunity to monetize by making the wrapped feature a subscriber-only feature, or even - 

Monetizing Status 

An additional fee for existing subscribers could also potentially power status games. Since there are no monetary benefits to fandom, the only incentives driving it are status. I believe that virtue signalling among fans is powerful and can be monetized. Spotify seems to have given this a thought, but with restrained consideration. In December, they announced six new features. Number 4 was of particular interest: 

Side Note: If Instagram is the go-to place for posting these recaps, does that mean they are benefitting from a funnel they haven’t even created? Possibly. It may take users “x” amount of time to create a Spotify Wrapped, but 10x time to actually keep up with all their friends’ stories on Instagram. Users have been using third party applications to post grids of their top nine most liked photos of 2020, but Instagram still hasn’t provided users to do this natively in-app  

Related Read: How Pop Music Fandom Became Sports, Politics, Religion and All-Out War | Joe Coscarelli, NYT 

Joe Coscarelli dissects the state of modern fandom and its inextricable link to pop culture — an overview of the psychology driving music fandom. 

“These people don’t even know who we are, but we spend countless days and months defending them from some stranger on the internet”

Artist as Entertainer — The TikTok Presence to Record Deal Funnel 

Variety recently profiled four popular TikTok creators who have used their accumulated social capital on the platform to sign record deals. 

“The 18-year-old Barrett started her TikTok account in early 2019, mainly posting lip-synching videos to popular songs. Nearly two years later, she boasts over 13 million followers on the platform [..] For Barrett, social media was a stepping stone on the road to a career. After posting a few clips of her singing on TikTok, Warner Records reached out, and eventually signed her. In July, her debut single, “Pain,” was released.” 

“Pain” has 14 million streams on Spotify and the music video has 10 million views on Youtube. 

This trend not only circumvents the traditional A&R process (an increasingly data driven science albeit gut driven art), it completely reinvents it. For better or worse, A&Rs are scouting social capital rather than musical talent. 

Why does this make monetary sense? A big part of the label's budget is allocated towards marketing releases. If new signings already have acquired social capital, the label can leverage this large base of existing fans. Why pay for an influencer marketing campaign when the artists are influencers themselves? 

As different forms of entertainment converge, accumulated social capital could be leveraged through different verticals. Music is just one of them. 

Related Read: Inside TikTok’s First Year-End Music Report

ICYMI

Square Is Said to Have Discussed Acquiring Jay-Z's Tidal | Lucas Shaw & Kurt Wagner, Bloomberg

Jack Dorsey is in talks with Jay-Z for a potential acquisition of Tidal, a streaming service the latter acquired for $56 million in 2015. 

Tencent Doubles Equity Stake in Universal Music Group; Street Remains Bullish | Daniel Plaks, Nasdaq 

Tencent Holdings doubled it’s stake in Universal Music Group from 10% to 20% in a deal valued at $37 billion. 

Netflix adds an audio-only mode to its Android app | Ashley Carman, The Verge 

A new audio-only mode in the Netflix Android App reaffirms the rise of ambient television. With audio-based social platforms like Clubhouse boasting 600,000 users and Twitter’s acquisition of podcasting platform Breaker, there definitely seems to be  a lot of optimism around this space. 

Disney, Netflix, WB Will Go to War Over Video Games Very Soon | Brandon Katz, The Observer 

Brandon Katz writes about the cross-platform cinematic universes movie studios’ plan to create around gaming franchises. 

Chernobyl creator Craig Mazin is tackling the long-form narrative of the widely celebrated post-apocalyptic video game The Last of Us for HBO. Netflix is reviving Assassin’s Creed and Resident Evil for new TV series. Warner Bros. will deliver a new Mortal Kombat movie in April and Showtime is sinking a ton of resources into a blockbuster Halo TV series.” 

What I’m Reading 

FarmVille Once Took Over Facebook. Now Everything Is FarmVille. | Daniel Victor, NYT  

Great piece by NYT on how FarmVille changed in-app consumer behaviour and pioneered now-established in-app spending strategies in the social gaming space. 

Best paired with: Mass market, mystery boxes and metric-driven design: The legacy of FarmVille

What I’m Listening To 

Thought I’d share something non-industry related. Dan Carlin’s Hardcore History has been one of my favorite history podcasts. Supernova in the East serves as a great primer. 


I'd love to get some feedback on your experience reading the newsletter. It'll really help me focus on what you'd like to see more of, and what would be best left out.

Reader Feedback

If You’ve Made It This Far.. 

You can make it all the way. 

What I’m Brewing — Peru El Condor (Kuelap) from La Finca Coffee Roasters, Granada 

What started out as an intended ‘caffeine tolerance break’ ended at La Finca Coffee Roasters, tucked away in a discreet part of Granada. 

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