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User generated content & record labels
December 9, 2020

User generated content & record labels

How can the music industry take advantage of Social Media? Lately, we’ve seen many (many) articles on user generated content, and it feels like it can hold big insights for the next steps of music industry actors.

Before we get into a bit of analysis, let’s settle what we mean by “user-generated content” or UGC. The term has been thrown around pretty much everywhere lately, but here we’ll consider every content created by users of social online platforms, fans of artists, that have the potential to directly impact professional content. For example, Fleetwood Mac’s “Dreams” has been back up on Billboard’s chart, thanks to a skateboarder’s video going viral on TikTok. Perfect example of what I mean by UGC.

Social Media platforms, main stream of UGC

Let’s start off with taking a look at the current state of these new platforms. If we take a look at Social Media now in comparison to a few years back, whether we’re talking about the number of active users or the volume of created content, it rose up significantly. A quick number: Social Media platform advertising revenue reached $119 billion in 2019. Keeping in mind that 2020 has witnessed a massive increase of online activity on these platforms, we can’t wait to see the results.

During the pandemic, several new platforms entered the arena, giving way to new strategies to reach out to artists’ communities. I am thinking of TikTok, but also gaming platforms which include social components like Twitch. “Traditional” platforms were also overwhelmed by livestreams and other released contents to keep the public active. The real challenge for artists was to find a way to stay connected to their fanbase, sure, but also to find new streams of revenue, since live music has been shut down, and won’t be coming back anytime soon.

And this is precisely why we should take a closer look at user generated content. The Social Media platforms are real gateways to occupying the digital space, and for now there is very little that is being monetized. The marketing strategies, livestreams and other types of content developed for these platforms can’t be considered as a temporary solution anymore. Record labels need to lean into the trend and, globally, we need to find ways to make up for the missed opportunities.

User generated content for music artists

If you’ve been following our Weekly Roundups (every Friday, I recap a few news that caught our attention on our blog), you know that I often mention the feud between TikTok and its ban threat from the US. So why do I talk about TikTok all the time? UGC is at the very basis of influencers’ strategies: creating content is where it all starts. In the music field, the concept is the same: creating content, reaching new audiences, up until virtual live performances (free or not).

These strategies evolve around TikTok and similar platforms because they are a new way to reach younger audiences. Even the bigger Social Media platforms have seen a rise in their weekly active users, since we spend way more time at home now. For 16 - 19 year olds, Instagram, Snapchat and Spotify are accounting for a Weekly Active Users penetration 2,7 times higher on average.

However, it is interesting to notice the fact that YouTube remains the main stream of music consumption, music discovery is mainly focused on Social Media platforms. And yet, we’ve little to no monetization of these UGC. But there are many opportunities there. MIDiA Research estimates the UGC potential revenue for the music industry around $4 billion for 2020, so what now?

Music and Social Media platforms converging

We have witnessed several actions towards converging Music and Social Media platforms, and the first company we can think of is of course Spotify. Among other strategies of diversification, describing itself as a multimedia platform, Spotify is also building a social part on their platform, to allow users to dialog but potentially also become one of the main platforms for music related UGC.

There is the key right there: developing a concrete dialog between the music industry and the content / tech industries, working on digital rights management off these content. We’ve realized how difficult it is to manage music rights since the rules have been built based on countries’ law (see here, for example); now that digital content is all artists can create, these rules don’t allow a proper capitalization on content. For instance, many major apps developed their business and audience before thinking about licensing music. We all know the problems TikTok got into before sealing licensing deals or Twitch not being sure if they even protected music. Here is the full study made by MIDiA Research on all opportunities.

This objectively makes a lot of sense; music streaming subscriptions are increasing at a slower rate, and each platform is looking for a differentiating factor. Social Media platforms might be a solution. A good example of partnerships announcing the focus being developed on user generated content is Scooter Braun becoming an advisor for Loop Media, a company specialized in music video engagement and premium streaming content to consumers and businesses. UGC is not really a promotion mean now, it is a real way to deliver music to an audience.

Since we’re here, let us remind you that Reprtoir is a software dedicated to record labels to help them optimize their business online. With one secured workspace, accessible to your whole team at all times, you can manage your music catalog, musical works, playlists and royalty splits. Book yourself a free demo or plan a call with us to see how we can help you!

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