#016: Invest in Music Streaming Like It’s the Stock Market
“An investment in self-development pays the highest dividends” ― Debasish Mridha
Goldman Sachs has projected the growth of the recorded music industry from $21 billion today to over $41 billion in 2030 (1). What is the main reason for this growth? Music streaming.
Music streaming is the driver of all significant revenue and the lynchpin for obtaining a quality record deal in the music industry today. Outside of having a strong network of relationships with editors and support staff at the major DSPs (digital service providers, ie Spotify, Apple Music, etc) there are three primary areas to invest in music streaming: 1) streaming promotions, 2) influencer marketing and 3) digital advertising. Not only is it essential for any independent artist to invest in music streaming, but it is the one area that doing so is exactly that… the purest form of investing in future growth and carving a path to success. Each of the three investment areas above are analogous to a form for financial investing.
Digital Advertising is like the commodities/precious metals sector in financial investing; you are never going to make 20x back on an investment in gold/silver, but it is a historically strong and safe area for investment. A well coordinated Facebook and/or Instagram ads campaign — which always should have the “Listen Now” button added to them to drive potential fans to the streaming SmartURL — will always reach many people and have some impact on expanding the fan base, plus increasing streaming growth. But it would take a massive digital ad budget to break a song with this tool alone.
Influencer Marketing is analogous with day-trading. You can hit it big, but you can also lose it all. Influencers, now more than ever, understand their value and many even have top managers or talent agencies behind them. For this reason, the top influencers are incredibly expensive. So putting a $10/15/25K+ spend into an influencer has broke songs in the past; but it also can be a total flop. For that reason, the risk is incredibly high.
Steaming Promotions — when executed properly — is the most analogous to smart, long-term investing in the stock market. The weak (and sometimes even scammer) streaming promoters will simply offer paid playlist slots or to deliver a certain number of (bot) streams. Even if they deliver what they say, it only is impacting one song and won’t be the driver for breakthrough success. The quality streaming promoters will focus a majority of the effort in promoting the pre-save link. All of these pre-saves convert to Spotify followers on release day and these fans will be in the artist’s Spotify web for all releases moving forward. Additionally, the fans who pre-save will also all auto-save the song to their personal playlists — so Spotify’s algorithm is detecting a massive spike in playlist adds right out the gate — and many times there are ways to re-target these fans for future releases via Facebook Messenger or WhatsApp. With Spotify follower growth being the primary focus, this is the purest form of long-term growth that exists. Over time, and with more of these campaigns, the baseline level of expectations for streaming success continues to rise. Then, when a song really catches the algorithm and/or gets editorial support, it’s take off time.
Many artists are seeking that overnight success or seek a ‘fake it ‘til I make it’ mindset. That leads to actions like purchasing fake YouTube views, fake Spotify streams or Instagram followers. But the reality is that a ‘bot’ has never purchased a concert ticket or t-shirt of their favorite recording artist. In order to build a real and diversified career, investing in quality music streaming promotions is the best investment for an indie artist today.
(1) Christman, Ed. “Music Industry Will Hit $41 Billion By 2030 According to New Goldman Sachs Report.” Billboard, 29 Aug. 2017, www.billboard.com/articles/business/7949040/music-industry-will-hit-41-billion-by-2030-according-to-new-goldman-sachs.
____________________________________________________________________________________________
JAY’S SONGS OF THE WEEK
Spillage Village - “Baptize” (ft. JID & EARTHGANG)
mxmtoon - “ok on your own” (ft. Carly Rae Jepsen)
Khamari - “That Girl”
Joel Blackmon - “Get Over You”
Trippie Redd - “I Got You” (ft. Busta Rhymes)
Eric Dash - “I Just Need to Get Away”
