A New Funnel for Music

The old, pre-digital structure of the music business led to a fan relationship funnel with multiple gatekeepers, primarily major record labels.

Artists used radio as their top-of-funnel channel, to get discovered. They subsequently went on tour as their mid-funnel device to re-engage fans through live concerts. And to make money, artists monetized fans at the bottom of this funnel at local record stores when they bought CDs. At each step of the way, labels had control.

TikTok and other social platforms are acting as potent top-of-funnel discovery channels for emerging music creators. ConvertKit’s acquisition of Fanbridge could help these newly discovered music creators re-engage fans. And recent developments around NFTs powered by platforms like Audius and Ditto Music could offer substantial and reliable monetiza... See more

Consumers transitioned from the ownership of physical CDs and Digital MP3s to accessing an unlimited catalog of music, for $9.99 / month (a price that has not changed almost 13 years later).

Today, platforms like Audius offer a blockchain-powered, decentralized version of Spotify, where fan-centric payments are inherently built in. Artists can set their own prices, retain control over their IP, and get transparent access to fan insights. Holders of $AUDIO also have the ability to give input on the platform’s strategy. A recently introd... See more

Ditto, a digital music distributor, is using NFTs to help music creators sell tokens that entitle owners to a share of revenue streams generated by a song, almost like a dividend-bearing stock.

There is an overload of music. 60,000 songs are uploaded to Spotify every day. Over 20% of those don’t get streamed even once. The ubiquitous access to almost every piece of recorded music in history has led to a paradox of choice, promoting passive and playlist-driven music consumption and creating winner-take-all effects for the biggest artists.

This is reflective of a broader trend—artists want direct ownership over the relationship with their fans, and to be compensated based on how these fans interact with their music. Case in point: SoundCloud’s recent foray into ‘fan-centric’ payouts, Deezer’s continued experimentation with user-centric payout models, and the ongoing parliamentary inq... See more