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The Superfan trend is growing - WR #207
Weekly Roundups
March 29, 2024

The Superfan trend is growing - WR #207

This week, we focus on the rise of the "Superfans", a trend that is redefining the landscape of artist remuneration. We also took a look at the initiatives launched by streaming platforms and record companies in support of artists, in a context where it’s difficult for them to get paid. 

#1. Spotify kickstarts video courses on music production

As part of a pilot program started in the UK, Spotify is now testing video learning courses. With this new format, the streaming giant aims to expand its user base to become a one-stop shop for all things audio and visual entertainment, as well as self-improvement. The platform has teamed up with educational technology companies like BBC Maestro, PLAYvirtuoso, Skillshare, and Thinkific to offer courses across four main categories: making music, getting creative, learning business skills, and healthy living.

Still on probation, Spotify tested the demand to adjust the price before release. For now, the cost of the courses range from $25 to $100 on average but the offer should be reduced.

Indeed, we can see that Spotify’s move reflects a broader trend in the digital media space, with companies increasingly striving to become all-encompassing content hubs to keep users engaged within their platforms.

#2. Universal Music Group invests in Superfans

In a recent announcement, HYBE sealed a major partnership with Universal Music Group , granting the latter exclusive distribution rights for its music for the next decade. This strategic partnership also includes a minority investment by UMG in HYBE's global superfans platform, Weverse.

The main objective of this agreement is to propel their growth in the North American market, while providing HYBE's artists and labels with privileged access to UMG's vast international network. In addition, they will join forces to orchestrate targeted promotional campaigns and marketing activities in North America, under the expert supervision of Scooter Braun, CEO of HYBE America.

This partnership comes at a crucial time, when platforms dedicated to superfans are becoming increasingly important in the music industry. UMG's financial commitment to a solution like Weverse reflects a clear commitment to harnessing the power of superfans to drive the growth of the music industry.

#3. Universal Music Groups inks another deal with Spotify

One of the biggest music industry stories of the year was the public dispute between Universal Music Group and TikTok. However, Spotify has a close but distinct relationship with UMG, and that relationship is about to intensify.

UMG has just announced the expansion of its "strategic relationship" with Spotify. The two companies will collaborate on new promotional and social tools for UMG artists on the Spotify platform. In addition, a new agreement will allow the streaming giant to broadcast video clips in the U.S., offering more immersive experiences to listeners. This announcement comes two months after TikTok lost access to UMG's music catalog.

UMG's CEO, speaking at Thursday’s announcement, stressed the importance of offering more in-depth social music experiences. He also highlighted UMG's commitment to expanding opportunities for artists and songwriters, with a focus on new music and artist-centric initiatives. Spotify CEO Daniel Ek also welcomed the collaboration, highlighting UMG's role in developing experimental products and tools to help artists stand out from the crowd.

This collaboration show the importance of streaming platforms in the music industry, and the willingness to adapt to the changing needs of artists and listeners alike.

#4. The artist community will become essential

The future of artist remuneration has always been questioned within the music industry. Today, we're heading towards an era where this remuneration will be based on fan communities. Increasingly, superfan applications will enable artists to distribute their content and collect fan data, opening up the possibility of creating new avenues of monetization via merchandising, special offers and more.

In a post-Covid era, where revenues generated by streaming and touring are limited, fan community platforms offer artists the opportunity to create more connections with their listeners and maximize their revenues as well as the value of their art. This means that it is vital to focus on fan development and direct sales, with or without label support.  The key is to build communities early in your career, offering direct communication and multiple revenue opportunities.

#5. The MLC has distributed over $2bn since 2021

The Mechanical Licensing Collective (MLC) has reached a historic milestone, surpassing the $2 billion mark in royalties distributed to publishers and songwriters since it began full operations in 2021.

Since January 2021, the organization has taken over the administration of general mechanical licenses, forcing streaming giants such as Spotify and Apple Music to pay considerable sums in mechanical royalties. These payments are then channeled to copyright holders and other rights holders, both in the U.S. and abroad. The MLC's recent monthly royalty distribution, in excess of $2 billion, attests to the reliability of the systems and processes put in place by the organization.

In addition, the organization actively collaborates with over 100 collective management organizations in nearly 130 countries to ensure adequate remuneration for rights holders worldwide.

Indeed, glowing feedback from industry players, from marketing directors to independent publishers and trade organizations, underlines the crucial importance of the work carried out by the MLC in terms of transparency, fair royalty distribution and improving the digital licensing landscape on an international scale.

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