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Universal Music Group opened up about how the company plans to keep growing in amid an evolving streaming landscape on Tuesday at the company’s capital markets day. Held in the storied Abbey Road studios in London, UMG’s c-suite and various executives from Republic, Interscope, Virgin Music Group and more described how they build a world around superstars like Taylor Swift, The Weeknd and Olivia Rodrigo, and how they’ve launched new acts like the Afrobeats star Rema.
The crowd of mostly financial industry analysts and investors also got an overview of the collectibles UMG hopes superfans will open their wallets for, its talks with Spotify about higher-priced premium subscription plans, and it’s new strategy to keep streaming revenues growing by an 8-10% compound average growth rate until fiscal year 2028.
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Streaming 2.0
Despite industry reports that new streaming subscribers are hard to find in developed markets and that streaming growth rates in smaller music markets like Brazil, Italy and Germany are besting major markets like the U.S., UMG Chairman and Chief Executive Officer Lucian Grainge gave an overview of UMG’s new strategy — dubbed Streaming 2.0 — to get more revenue out of streaming.
“The addressable market — in both established markets and fast-growing high potential music markets — is massive,” Grainge said, referring to streaming subscriptions. “We expect more than a billion subscribers by the end of the decade, and we constantly ask ourselves, ‘How long could it take us to get to 2 billion?’”
“While streaming has delivered robust growth to UMG for over a decade, Streaming 2.0 will deliver a new age of innovation, consumer segmentation, geographic expansion and greater value through both subscriber and [average revenue per user] growth,” Grainge said.
The strategy relies in part on increasing the number of streaming subscriptions in developing markets where UMG says subscribers meaningfully contribute to monthly trade average revenue per user. Less than half of people in established markets have streaming subscriptions, with less than 25% of the population in Japan holding subscriptions, UMG chief financial officer Boyd Muir said.
UMG said it also expects a new wave of subscribers in these markets to come from a second cohort of older listeners starting up subscriptions and younger, digitally native music fans getting older and spending more on their streaming subscriptions. They also expect to target audiobook listeners and satellite radio subscribers for music streaming subscriptions.
Super premium streaming subscriptions
UMG’s Streaming 2.0 strategy also relies on innovation in streaming, possibly like the development of high definition streaming plans like the one Spotify‘sDanielEk hinted in June is on the horizon. Ek said that “delux” subscription could cost around $17-$18 per month for a single account.
UMG is in advanced talks to partner with Spotify on the development of that higher-priced subscription plan, Muir said Tuesday. During his presentation, UMG chief digital officer Michael Nash compared it to “another exciting” example of higher priced subscription plans — Tencent Music Entertainment’s super VIP tier, which costs five times as much as the standard tier.
Muir said “a double digit percentage” of TME’s subscriber base signed up for the super VIP plan. UMG’s own research tells it that 23% of current streaming subscribers would pay more for a “better music experience.”
Monetizing superfans
UMG execs spoke admiringly of the good old days when superfans lined up outside stores to spend gobs of money on Michael Jackson and Shania Twain CDs. The reason why? Devotees of artists in prior decades spent more per capita on music, merchandise, concert tickets and collectibles than streaming-era fans.
“Superfans, the most avid 20-30% of all music listeners, once drove over 70% of recorded music spending,” Muir said. “Streaming monetizes them, but not nearly as well in the past. This is an enormous opportunity. We are seeing dramatic growth in revenues that are complimentary to spending.”
He was referring to premium music — vinyl, collectible CDs and cassettes — and merchandise collectibles. UMG has seen its revenues from products sold directly to consumers through some 1,300 odd online stores grow at a 33% compound annual growth rate in recent years.
When something like a $55-Olivia Rodrigo Stanley Cup gets sold, UMG collects as much information as it can, and the purchaser becomes one of the 100 million fans in what Muir referred to as “our owned audience.”
Townsend Music, a U.K.-based distributor and direct-to-consumer retailer, has been acquired by Artone, a Dutch business with a portfolio of companies that caters to the physical music marketplace. Terms of the deal were not disclosed.
Townsend Music founder Steve Bamber called the acquisition “a clear opportunity to push its European expansion strategy forward quickly, with Artone’s well established sales, distribution and manufacturing facilities already in place.”
Artone can quickly scale up and meets its goal of becoming a global D2C company, according to sales director Bruce McKenzie. “Artone’s suite of services from vinyl manufacturing, EU physical distribution, and label services gives us perfect synergy to offer both our D2C clients and super-fan customers a super charged service,” he said in a statement.
Artone was formed in 2022 from the merger of Bertus Distribution and Record Industry, a vinyl pressing plant based in Haarlem, Netherlands. The portfolio of companies also includes Sound Factory, which provides artists and labels with solutions to sell exclusive content directly to consumers; two labels that release music in physical formats, Music on Vinyl and Music on CD; and V2 Benelux, which provides label services in the Netherlands, Belgium, France and Germany.
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“The acquisition is another welcome step for Artone’s continued expansion of its service portfolio and gives us presence in the UK market,” CEO Jan Willem Kaasschieter said in a statement. “This acquisition strengthens our position as a global leader in physical music distribution. We’re excited about the opportunities this will bring and look forward to driving the future of physical music together, developing further global reach and innovative solutions for the benefit of the music industry.”
Physical music sales continue to show strong growth as streaming takes a larger portion of the global market. In the United Kingdom, vinyl sales grew 13.5% and CD sales improved 3.2% in the first half of 2024, according to the Entertainment Retailers’ Association.
With vinyl sales continuing to rise and streaming growth slowing, the music industry is putting increased focused on reaching “superfans” willing to pay more for premium experiences and tangible products. The unmet opportunity to monetize superfans was a key talking point in Universal Music Group’s Capital Markets Day presentation on Tuesday (Sept. 17). “We’re creating and monetizing new ways to meet the superfans pent up demand for products, experiences and access that brings them closer to the music and to the artists that they love,” said CEO Lucian Grainge.
Warner Music Group CEO Robert Kyncl has also made superfans a priority during his tenure. “One of the most important things is to figure out a direct relationship with the most valuable fans,” Kyncl said at the Morgan Stanley Technology, Media and Telecom Conference on March 6. “Because it’s not only important to monetization and new revenue stream, but it’s also important to launching new music, which is the core of what we do.”
Effectively reaching superfans could be a lucrative endeavor for record labels. In its latest “Music in the Air” report, Goldman Sachs analysts put the global superfan addressable market at $4.5 billion—nearly 16% of the $28.6 billion recorded music market in 2023, according to the IFPI. Much of that revenue could come from music subscription services’ high-priced, high-value offerings that go beyond the current premium subscription tier.
Physical goods are a proven way to connect with superfans. Market research firm MusicWatch found that 20% of U.S. music fans are superfans for their favorite artists who go to concerts, buy merchandise and albums and would be wiling to spend more for VIP experiences from the artist. At the same time, more superfan sales are coming from the types of direct-to-consumer stores offered by Townsend. In the first half of 2023, U.S. direct-to-consumer sales tracked by Luminate increased 20% year-over-year.
Last week, HYBE — the Korean label and music company behind BTS, among others — announced that Jason Jaesung Lee would become its new CEO, replacing Jiwon Park, as part of what it dubbed its “HYBE 2.0” strategy. Today (Aug. 1), the company unveiled more specifics as to what that will start to look like.
HYBE says the strategy kicked off at the top of the year, and will see the company lean into its superfandom platform, Weverse, around the world, while also partnering with other companies globally “to adapt to the fast-evolving market landscape,” the company said in a press release.
The priorities the company laid out will reorganize the company — which had previously been structured as Label, Solution and Platform — into a broader Music, Platform and “Tech-driven future growth initiatives” framework. As part of that, the company laid out four new initiatives and several executive-level appointments with new leaders atop its reformed division.
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The first is the formation of HYBE Music Group APAC, which will encompass the company’s labels in Korea and Japan, which will focus on doubling down on the company’s strengths and strategies in that region and exporting them around the globe. The current president of BIGHIT Music, Young Jae Shin, who has helped oversee the success of BTS and Tomorrow X Together, will now take on the role of president of HYBE APAC and lead the Korean and Japanese labels’ global growth.
The second is a doubling-down on what the company calls its “multi-home, multi-genre” strategy in the U.S., Japan and Latin America. That will mean a new label service launched under HYBE America — which is led by Scooter Braun — that will bring in a management element to its current label operations, in a bid to “bring the K-pop methodology to the American pop scene.” As part of that, HYBE America says it signed a new U.S.-based group, KATSEYE, through its continued partnership with Geffen Records. The company also said that its HYBE Latin America division — whose CEO Jonghyun “JH” Kah recently spoke to Billboard about their plans — will ramp up beginning in 2025, while HYBE Japan will continue to roll out new artists as well under newly-appointed chairman Youngmin Kim, who until now had served as general manager of SM Entertainment.
The third is the launch of a subscription membership tier for superfan platform Weverse, which will go live in the fourth quarter of 2024 and be available to all artists who use the platform. That will include ad-free videos, digital membership cards and a private Weverse DM feature, while the main Weverse platform will begin incorporating ads. Weverse president Joon Choi spoke to Billboard two weeks ago (July 19) about the platform’s plans moving forward, as well as the onboarding of Ariana Grande onto the platform, joining many of the Korean artists already in the HYBE stable. (Grande, who cut ties with Braun and HYBE last year, resumed working with them in June.)
Finally, HYBE is planning to “merge content with technology,” which it says will “ensure mid to long-term growth” for the company. That is where HYBE’s investments in gaming, AI, audio and voice technology and integrated online/offline experiences will live moving forward.
“HYBE 2.0 focuses on fostering our future growth businesses centered on music, platform and technology,” newly-announced CEO Lee said in a statement. “HYBE will continue to excel in the music industry, solidify its position as the leading player in the superfan business, and secure long-term growth drivers through tech-driven future growth initiatives.”
As a music journalist, I tend to look at fan armies with only professional interest — what they mean for the industry and how I can make sure they won’t figure out where I live. Last week, however, I suddenly had to face the fact that I’m in one — and I have been for the last 35 years. And I realized that many creators might need to change the way they think about cultivating and keeping superfans.
I went to Stockholm last week to see Bruce Springsteen, one of my favorite artists, for what must be at least the 30th time. I stayed in a hotel close to the venue, which was full of people like me — by which I mean Springsteen fans of a certain age (ahem) who wanted to see the concert enough to travel from all over Northern Europe and, in some cases, the U.S. Many came with spouses or children, and some planned on seeing a few shows — or even a couple of weeks’ worth. One couple said that they were happy Springsteen now gives himself a couple of days off between shows, since it gave them more time for sightseeing during the vacations they organize around concerts.
These people don’t think of themselves as part of a fan army. They don’t have a nickname or collect different versions of the same CD. I don’t, either. In fact, I feel a bit sheepish saying that this concert was one of the highlights of my summer, or that I spent a few hundred dollars to go, but it is and I did, and it was totally worth it. After the show, about two dozen people gathered in the lobby after the show to talk highlights and trade war stories, and some of them gathered again the following night after cancelled flights left them stranded in Stockholm. I feel even more sheepish about how much I enjoyed that.
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Whatever. From a music business perspective, this is just what superfans do. One difference between his and most is that Springsteen built his audience the old-fashioned way — with unforgettable live shows that convinced fans to come back and bring friends (and, these days, kids). The people in my hotel are obviously the exception — I’m talking about a few dozen people in a venue that holds more than 50,000 — but at this point I think Springsteen concerts mostly draw serious fans. (Springsteen opened with “Seeds,” which he only ever released as a live performance on a 1986 box set, so I assume he thinks the same.) And although it’s hard to be sure, I think most of them were won over by his concerts.
These days, music executives focus less on live acts — how live are most pop performances anyway? — and more on hit singles. Fan armies are built online, usually around the shared experience of hoping a song will go to No. 1 or buying extra copies in order to boost it. But how long will that last? The music you love when you’re young tends to remain in your life, but going to concerts might have more appeal over time than trading gossip about chart position online. Cultivating an audience devoted enough to keep coming back year after year can be much harder — but it can also be more effective.
The problem is that this part of the business is hard to see in data. Industry executives often talk about how much superfans are worth in terms of the CDs or tchotchkes they buy, but it’s harder to measure the effect of fans who keep coming back over the course of years. I saw one Springsteen show this year and two last year, which doesn’t really move the needle. The 30-or-so shows I’ve seen would, of course, but those were over a period of 36 years — starting with, if you’re curious, the Tunnel of Love Tour in May 1988. (I was already enough of a fan to attend two of the five shows — and then I was really hooked.)
What keeps me coming back — and I think what keeps most fans coming back — is that Springsteen delivers shows that are both consistently great and fairly different. If he’s had an off night, I haven’t seen it. At the same time, he makes every tour different and varies the set list every night, with moments of genuine magic — in Stockholm he delivered a haunting “Racing in the Street” and pulled a kid up onstage to sing the chorus of “Waitin’ on a Sunny Day.” Others keep going back to hear rare favorites — seeing Springsteen play “Jole Blon” in September 2012 was a profound experience for me, even if most of my friends had absolutely no idea what I was talking about.
You could say a lot of these things about a lot of rock bands — there was a time when playing a different set every night was the rule instead of the exception. And it does seem to draw people in. Fans love a curveball of a cover, and some even appreciate the flubs — there’s so much more at stake without the artificial perfection that comes from a click track. Communities are built from appreciating, comparing and, yes, griping about difference performances. Just read the New Yorker story about Dead & Company to get the idea.
Like any true fan, I’m going to say Springsteen is different. More than any other current artist, he believes — and gets concertgoers to believe, at least for the time he’s onstage — that rock actually matters, that there’s more at stake onstage than entertainment, that this kind of music can actually sustain you. As I get older, with less time to drive down an empty highway for no reason at all, it gets harder to believe that. But I’d like to. Maybe in some way I need to — so much that I’ll be back next year and probably again the year after that.
In a move that highlights her selective engagement with social media, Ariana Grande, who deactivated her Twitter account years ago but remains the seventh-most-followed person on Instagram, is set to join HYBE’s superfan platform, Weverse.
Weverse Company tells Billboard that the chart-topping star will join the platform on Sunday (July 21), adding to a roster that includes BTS, BLACKPINK, JVKE, NCT 127, (G)I-DLE, Lauv, YOASOBI, Conan Gray, AKB48 and thuy. In joining the platform, Grande will have the ability to post messages and content to her own dedicated community, hold livestreams for members, read personalized fan letters, upload exclusive media content, share disappearing messages, and utilize the popular Weverse Shop, which sold more than 18 million pieces of merchandise last year to fans in more than 198 countries.
The announcement marks a significant moment for both Grande and Weverse, opening up a new way for the singer to deepen her connection with fans while showing a commitment to her continued business relationship with HYBE and HYBE America CEO (and Grande’s former manager) Scooter Braun.
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Since opening in June 2019 with Billboard 200 chart-toppers TOMORROW X TOGETHER as its first artist, Weverse now hosts 146 artists from countries including South Korea, Japan and the U.S. Its biggest artist community, for BTS, boasts 26 million members, while the ENHYPEN community has 9.8 million. Today, HYBE reports over 155 million lifetime downloads and an average of 10 million monthly active users across 245 countries and regions, with 90% of its user base now coming from outside Korea. Despite Warner Music Group (WMG) announcing plans for its own superfan app — as well as WMG and Sony investing early in rival superfan platform Fave — Weverse says its start with K-pop artists delivered important insights to entice top Western stars like Grande to join.
“What’s lucky for us has been that K-pop idols are the types of artists that have a very strong core fanbase,” Joon Choi, president of Weverse Company, tells Billboard of the company’s half-decade of growth that now includes investment from Universal Music Group. “As a platform and a business, we had already enjoyed the competitive edge or advantage of being there first and being there early to observe what superfans actually want.”
While artists can use Weverse to access first-party data for content delivery, promotion and to stay connected to international fans, the platform has expanded opportunities in live music with not only event streaming but its Weverse Con Festival and a Weverse by Fans tool through which fans can develop their own merch.
“We were there earlier and we have a long experience of observing the demands of our fans,” Choi adds. “That’s why we were able to create this one-stop fan service that includes merch development, merch selling, communities, videos, live streaming and even magazines…I do see the growth of startups or services that are entering this particular [superfan] market and that’s good. The more competition in the market is actually better for us because being the only player in that particular market sector makes us nervous.”
New competitors or not, Weverse continues to expand; currently, the company boasts a total of 400 employees in South Korea, 60 in Tokyo, and 20 in Santa Monica, Calif. (with the target to grow to 30 this year). And with a major star like Grande, there’s a slew of Arianators that could soon be joining the platform. Still, the executive admits he doesn’t know what to expect from the Eternal Sunshine singer once she officially joins. As he puts it, “It is totally up to the artists.”
Read on for more insights from Joon about Grande’s big move and what lies in store for Weverse’s future.
Weverse is adding new artists all the time, but Ariana Grande is a huge name with a worldwide fanbase. What have the weeks been like leading up to this announcement?
I just traveled a lot; I’ve been a globetrotter. We have offices in Santa Monica and Tokyo, and in each office location our leaders are currently meeting and contacting many artists and labels, so I believe our platform and business are becoming truly international and crossing borders. As we do that, we have opportunities to engage with and work with big artists, but also rising stars, so these opportunities are being created.
In the past, Weverse or artists have held special events or activities to begin their time on the platform. Will Ariana have a welcome party?
My simple answer to that question is that it is totally up to the artists. So, although we do have sessions where we offer guidelines or guidance in terms of how to better utilize the platform to cultivate the superfan culture or fandom, we do not necessarily engage too much [in terms of] planning activities or what’s going on the Weverse platform. I know that this might not be the direct answer that you’re looking for, but we have artists onboarded onto Weverse with a very good understanding of the difference between Weverse and other social media platforms.
What opportunities do you see for Weverse in welcoming Ariana Grade, and what opportunities are now open to Ariana?
Weverse is definitely a distinct platform, different from other social media platforms, so I’m also very curious how it will be utilized by artists like Ariana Grande. It really depends on each artist or label whether they discuss details about how they want to or plan to utilize Weverse. But in this particular case, we don’t know yet — that’s something that I’m closely watching.
But I would like to add that when I look at Weverse from my perspective as the leader of this business, it’s important to have enough resources and big enough clusters of a particular genre, specific country or culture. So, that’s why we’ve been working hard to onboard many artists. During the first half of this year alone, we have onboarded Nightly, thuy, Lauv, Umi, Conan Gray and JVKE. And then we have Ariana Grande. But Gracie Abrams has been very active as well; she’s good. So, when you see Weverse as a platform and in terms of the growth of our platform, it is very important that we have thriving clusters of certain music genres, countries or cultures to generate a network effect as well.
Weverse does a lot of business selling music, albums and merchandise via Weverse Shop, but Ariana isn’t only involved in music: she has R.E.M Beauty and perfumes; she’s in movies and television. Does she give you opportunities to expand into new commerce markets?
I can’t comment on an artist’s existing merchandise lines or albums since there must be agreements or contracts in terms of production and distribution in place. How merchandise is developed and sold through Weverse really varies by each artist. But a feature that we have on Weverse, Weverse by Fans, has been very effective and is gaining a lot of attention from artists because it is based on fan demand. Also, Weverse by Fans doesn’t require a minimum quantity of manufacturing goods for production. So, as soon as there’s enough demand for a certain type of merch, we can immediately produce and sell those.
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On one hand, Ariana Grande is one of the most followed people on Instagram, but she also deactivated her Twitter years ago and takes social media breaks. How were discussions with an artist who might have complex feelings about social media?
That’s a very good question. Actually, when we meet a lot of artists, we tell the artists to actively use other social media because Weverse is a little different. It’s a place where people who love the artist gather. This isn’t our claim — artists have been saying this particular characteristic makes Weverse a very friendly and safer platform for artists to engage with their fans and the public compared to [other] social media…and that’s not just specific to big-name artists. We have been having opportunities to work with rising rookies as well. We don’t really care whether it’s a big-brand artist or not; what’s more important for us is to seek and discover artists interested in cultivating superfan culture, regardless of how famous or how popular they are, to work with us and use Weverse.
Ariana is the seventh-most-followed person in the world on Instagram. Do you worry that adding an artist with such a wide audience could open Weverse up to trolls or those with bad intentions?
Our product features are already equipped and have the advantage of features like filtering, reporting and in-house moderators to prevent and manage ill-intended activities on Weverse’s platform. I do understand the concern that you raised regarding such potential, and I agree with you. However, such circumstances or ill-intended activities occurred for artists already onboarded on Weverse. So, it would not just be for Ariana Grande that such a thing could happen. But I believe we have about four years’ know-how in operating and managing trolls or activities like that. So, we are not too worried, although we are still being very, very cautious about how to manage that.
I’d add that we always tell artists when onboarded to Weverse that the best use case has been using live broadcasts to communicate with fans directly. K-pop artists have been doing so well in terms of using Weverse as a platform for that, and also through the membership, they can have closer, more direct interactions with their fans as well. So, we’ve been telling artists from the inception, from the moment that they are onboarded to Weverse, that these are some of the ways that are historically proven to be very effective to have a very long-term and sustainable fandom relationship.
What is the onboarding process like? Are you personally meeting top artists?
We’re not a service that allows anyone to sign up, [like] on a website like YouTube or other social media. We don’t know when that’s going to happen, maybe in the far future we will switch to such a model. But so far, we have been doing internal research to discover and identify artists who would have a potential benefit or whose fanbase overlaps with the user base of Weverse. These days we are getting a lot of inbound inquiries from artists or other labels themselves. In the past, we used to do a lot of outreach to discover or find more artists, but since last year, as words such as “superfan” and “Weverse” have become more buzzy in the industry and the market, we have been gaining a lot of attention.
It’s not just me but other teams; we call it a B2B team in Korea, but maybe in the United States, it’s called a customer success management team. We have internal resources that frequently discuss and follow up with labels and artists.
I’m personally curious as someone in media, do you ever imagine a day you might expand the type of people beyond musicians?
Definitely. We already have some actors and actresses onboarded, but this question is really good. We’ve thought about it, but the timeline is very important. The ultimate goal of Weverse is to create a superfan not only for human artists. While I believe Weverse is currently working the best for superfans of a person with a thriving fandom, we’ve already seen an interesting case of the virtual idol group in Korea called PLAVE with a significantly high engagement level within their community on Weverse, which is very, very noteworthy. That’s where we saw the potential of expanding this platform not just for human artists but also for virtual artists. However, we also see the possibility of extending this IP to include other types of artists; this is a fun future that we can imagine at the moment. We still have a lot of room for further growth within the music industry so that’s where we have greater focus.
Since you said this was your personal curiosity, I’m giving you my personal opinion and projection on that potential. [Laughs] My biggest question working at Weverse is, “How many people out of the entire human population would have the ‘superfan’ DNA?” That’s kind of the ultimate thing we are looking for. Someone might be a superfan of a certain sport or sports team — there’s always a superfan of something or someone.
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There’s the Weverse Con Festival, Weverse Magazine, there’s exclusive shows to stream. Why is Weverse developing IP beyond the platform? I imagine a HYBE Festival would be well received.
Weverse is a platform, so neutrality is the greatest value that we really emphasize and prioritize, which has been the case since Chairman Bang [Si-Hyuk] originated this platform. From day one, we really valued neutrality as an important value for us, but also in using such a new business model, we believe that we can lead innovation in the music industry. When you look back on the music industry’s history for the last two or three decades, it started by simply selling albums, then the touring business rose, and since 2000, technology has been disrupting the music industry. Now, it’s time for us to seek the answer to what’s next, right? I think Weverse is a platform and a business that has been most actively conducting experiments in order to answer what’s next for the music industry. If our experiments succeed, we can definitely offer benefits to artists all around the world, and that has been the basic philosophical foundation for our business and platform. We’re very, very, very, very serious about it.
Some people here might not like what I’m just about to say, but considering all the other [types of] content — it can be TV shows, movies, video games, everything — we think music itself, just as a piece of content, is the least compensated compared to all the others. So, we really have to think about that from a business perspective. …There is way more around music, right? There is no doubt that music is the core — and that’s why the mission statement of HYBE is, “We believe in music” — and that’s where we started from. [But] to make it a sustainable business, that’s where we can evolve from.
It was fun to see JYP Entertainment founder J.Y. Park perform with Chairman Bang at Weverse Con Festival last month. JYP is one of the last big K-pop agencies not on Weverse. Was this a hint?
We’ve always wanted all the artists from JYP, no doubt! [Laughs] But this time, it was just about the music. But of course, we’ve always wanted JYP — simple!
Removing yourself from work for a second, who or what are you a superfan of?
I’ve been a very big [music] fan since the ’80s: I listened to Casey Kasem with America’s Top 10, I was a Billboard kid. I think about all the famous songs and artists from the ’80s and ’90s — I’m that old guy [Laughs] — and then I had the recent memorable experience with PLAVE. The DJ JoJo [Wright] from KIIS FM actually visited Weverse Con Festival, held a lot of interviews with artists performing, and mentioned that one of the most impressive interviews he had was with PLAVE. From my perspective, from the ’80s and ’90s to virtual artists on the radio, that’s a very interesting journey to see and experience.
When NxWorries, the duo of Anderson .Paak and Knxwledge, released their second album on June 7, they made it available on vinyl, CD, and cassette. But fans had to wait a week to stream Why Lawd? The goal was “to recreate the nostalgic feeling of truly appreciating the experience of a physical product that we all grew up with in the pre-streaming era,” says Anna Savage, who manages Paak.
Not only that: “We wanted to do something special for their fans by giving them an opportunity to experience the record a little earlier,” adds Jason McGuire, general manager at Stone’s Throw, the label that supports NxWorries. Combined with a pop-up event in L.A., hopefully “more people [are] talking about the record leading up to the streaming date.”
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Most modern albums are released simultaneously on streaming services and in an array of physical versions — or they hit streamers first and the vinyl edition comes later. But as the streaming model is increasingly under attack from all sides, for undervaluing music and limiting artists’ ability to cultivate relationships with their fans, more acts are experimenting with alternative rollout strategies.
There shouldn’t be “a one-size-fits-all strategy,” says Andrew Jervis, chief curator of Bandcamp. “We’re talking about art here — we’re not talking about widgets.”
The hope is that different approaches can fire up the base and serve to re-engage some listeners at a time when album releases are increasingly rote, with all the magic of a morning commute. “The consumer is not happy with the way that they are consuming music right now,” says Enrique “Mag” Rodriguez, founder of EVEN, a platform that enables artists to sell albums and experiences directly to fans before their releases hit streaming services.
Testing alternate release strategies may also allow musicians to generate more money from their biggest followers. “If you permanently emphasize pointing your fans somewhere where they can simply listen to whatever they want, whenever they want, for this rental fee, it’s kind of hard to convince them to come back and open their wallet,” Jervis notes.
As former Spotify chief economist Will Page wrote recently, “for a streamer to provide a record label the same amount of value from an album as a vinyl buyer, a customer would need to press play over 5,000 times — or stream for almost two weeks straight without sleep,” a virtual impossibility.
“Consumers are paying more for the same with vinyl,” Page continued, “but paying less to access more with streaming.”
Notably, a lot of alternate rollout ideas echo debates from roughly a decade ago, when the music streaming model was starting to take hold. Rodriguez points to Nipsey Hussle, who famously sold 1,000 copies of his 2013 release Crenshaw for $100 a piece while also making the project available for free on various mixtape sites. The rapper said at the time that he was “focused on fully serving the [fans] that have connected already.”
Around the same time, multiple stars like Adele kept albums off the platforms for a time — 25 didn’t make it to Spotify until seven months after release, for example, which helped ensure a massive first week of sales. (Adele said new releases “should be an event” and called the streaming model “a bit disposable.”) Some artists debuted albums exclusively on Apple Music or TIDAL before making them available more widely, or made them available only for premium subscribers.
But these “windowing” strategies went out of fashion in the mainstream music industry. Major labels and prominent indies often want streams and physical sales to hit the same week, so they can maximize the first-week numbers that the industry uses to judge commercial success. More than 600 million people around the world now listen to music on Spotify every month — any artists looking for global scale are unlikely to turn their back on that potential audience. Plus they are wary of offending the streaming services by withholding releases.
Smaller artists and record companies are making different calculations, however. At this level, earning even just a few hundred extra CD or LP sales by temporarily withholding an album from streaming can provide a nice boost.
While Jervis “encourage[s] people to put their music in as many places as possible,” he has seen this boost firsthand. Last year, the duo Knower released Knower Forever exclusively on Bandcamp. “They were pretty forthright about, ‘we need to make some money, here’s where you can come and support us by buying this record,’” Jervis says. And that’s what fans did, purchasing “something like $85,000 worth of vinyl and some similar amount in digital.” The album didn’t appear on Spotify until several months later.
One of the Top 25 labels on Bandcamp is International Anthem, the jazz label co-founded by Scott McNiece; for about six months, the company has been experimenting with putting out physical releases and digital downloads a month before uploading albums to streaming platforms. Like McGuire, McNeice says, “we want to be serving people who care enough about that particular album or artist to directly purchase the music.”
International Anthem hasn’t “received any pushback yet from streaming services as far as other people getting the album before them,” according to McNiece. And as an added bonus, indie record store owners are thrilled with the label’s approach. “Especially with the dwindling media market for music, having people care about your music on the ground level at independent record stores is one of the main ways to get the word out,” McNiece continues. “We’ve gotten an enormous amount of positive feedback” from record store owners who are excited to have an exclusive release to tout to customers.
Both McGuire and McNiece believe that offering physical releases first will not cannibalize the streaming audience. The people who buy the record will probably stream it at some point anyway.
Not only that, “before, when all the different formats were released on the same day, our energy was split with our messaging,” McNiece adds. Stream the album! Buy the vinyl! Under the new regime, though, “we’re able to focus a lot more energy specifically on driving traffic to those streaming platforms” once the albums are uploaded to the various services — a later streaming date provides a second marketing moment.
Rodriguez is also adamant that selling directly to fans before putting albums on streaming services is additive. “As fans purchase, they are more likely to share on social media, boosting artist algorithms,” he says. “This also translates to increased visibility on streaming platforms.”
EVEN, which raised more than $2 million in 2023, has run more than 3,500 campaigns for artists to date. Rodriguez likens his platform to traditional movie theaters and music streaming services to Netflix. “Most campaigns go live on EVEN 14+ days before their wide release,” he says. “The average album sells for $25, and the average single sells for $9. It’s all done in a pay-what-you-want model, where the fan decides its value, with a minimum preset by the artist.”
“We aren’t taking away from the traditional models that exist,” Rodriguez adds. “No one is squeezing the lemon in this way.”
Fan engagement platform Stationhead is now offering even more ways for users to connect with artists and each other.
Today (June 13), Stationhead announces an all-access tier that allows fans to get perks like a badge in fans’ profiles that verifies their fandom, the ability to create posts in their fandom’s threads, a priority placement on guest call-in lists when artists and hosts call in to speak during a live event, along with access to another chat populated exclusively by top-tier fans.
As reported by Billboard in April, Stationhead is a destination for dedicated fanbases of more than 1,000 artists.
Stationhead users can earn this all-access tier by engaging with the app daily and streaming events and release parties, with a data-driven feature determining the top superfans who’ll receive access. After seven days of daily use, fans unlock the All-Access membership tier for 30 days, which can be extended for each consecutive seven-day streak.
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Thus far, artists including Zayn Malik and Aespa have engaged with this new feature to do ticket giveaways and other offerings.
Launched in 2017, Stationhead has become a popular social music platform for artists and fans to stream and listen to live music in together, along with many other functions designed to connect artists and fans. The app functions much like a digital pirate radio station, where anyone with a streaming music account can host their own station and play music, with other users able to log on and listen, chat and even call in and speak to the DJ.
“It’s easy to toss around the idea of superfandom, to say that we need focus on superfans, but it’s hard to create something that really serves fans and gives them what they want,” Stationhead founder and CEO Ryan Star says in a statement. “We’ve done that at Stationhead by focusing on the fun and rewarding side of online events, instead of merely trying to extract value from passionate music lovers. All-Access builds on this and makes fandom feel even more engaging and rewarding, by highlighting the most enthusiastic people in an artists’ community.”
The company’s co-founder and COO Murray Levison adds that this new tier will help “turns fandoms into fan armies.”
In 1995, Peter Shapiro purchased the New York club Wetlands. “That was the home of the jam band, Grateful Dead scene in New York,” he recalls. At the time, though, “it wasn’t cool to be a Deadhead. And Wetlands wasn’t necessarily the cool play.”
But styles that were frowned upon by one generation are often taken up by the next. While many artists — and the mainstream music business — ignored jam bands for years, this has started to change. Intrigued by the scene’s genre-hopping open-mindedness and the unwavering devotion of its followers at a time when “superfan” is the industry buzzword of choice, the rest of the music business has started to take an interest in a space it long kept at arm’s length.
“If you’re a pop artist, and you see a bunch of bearded weirdo hippies able to do whatever they want on their own terms, that’s an appealing path to think about,” says Mike Luba, longtime manager of the String Cheese Incident.
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At festivals, “you’re seeing jam bands pop up on lineups that are traditionally more indie rock or haven’t really touched the jam thing in the past,” explains Dave DiCianni, who co-manages Goose along with other jam bands like Eggy and Pigeons Playing Ping Pong. “It’s cool to see it permeating into general pop culture,” he adds.
The Big Bang for jam bands, according to Shapiro, was the death of the Dead’s Jerry Garcia in 1995. “Everyone saw the Dead; they were the number one touring band in the 1990s,” Shapiro continues. “Garcia dies, and that audience of live music, improvisation-loving people splinters. That creates the jam band scene. Phish lifts up” — the band first cracked Pollstar‘s highest grossing U.S. tours list at the end of 1994 — “along with String Cheese Incident, Disco Biscuits, Medeski Martin and Wood,” and more.
Over the years, groups associated with the scene “will pop in and out of mainstream pop culture,” Luba says, pointing to Rusted Root and the Spin Doctors. But many of the acts in this space were overlooked, if not dismissed outright, by the mainstream music industry, in part because they didn’t generate chart hits or millions of streams, even as they moved lots of tickets. Nick Stern, whose management client Karina Rykman is “jam adjacent,” contends that the jam scene is “the most looked down-upon genre in the music business.”
For some artists, that gives it an inherent underdog appeal: “I’m interested in things that are unfashionable,” Vampire Weekend lead singer Ezra Koenig told The New York Times Magazine in 2020. He also noted that he finds Phish “more inspiring, forward-thinking, exciting and talented than a lot of what was higher up in the cool hierarchy;” Vampire Weekend recently hopped on stage with Goose, the new arena-filling stars of the jam scene.
Jam acts may also be benefitting from the catholic tastes fostered in the streaming era — as DiCianni puts it, listeners’ interests are now “less compartmentalized.” And artists and managers in the jam band scene posit that its emphasis on being present, in the moment, with a like-minded community for an ever-changing live experience offers an increasingly potent antidote to the distracted, frenetic, nichified, social media-driven world.
But there’s another reason why the mainstream music industry is increasingly interested in jam acts. “People outside the jam band space are coming to me almost in awe of the fandom in this scene,” says Ben Baruch, Goose’s other co-manager.
In interviews over the last six months, many of the most powerful executives in music have talked up the importance of cultivating “superfans.” Despite music’s popularity, it is poorly monetized compared to spaces like gaming. This is partially because the music streaming model currently offers artists few ways to foster meaningful connections with followers. Jam bands have been doing this for decades — perhaps because they didn’t get much support from the traditional industry, and have never depended on record sales or streaming.
Jam band devotees are impressively diligent about attending shows, buying merchandise, and streaming live performances, which change nightly. “They almost treat their favorite bands like a sports team, where they’re following along with what happens in every moment in every show,” says Ethan Berlin, who is co-agent for Goose, Pigeons and Rykman, among others. “They’re so invested — for years.”
And these fans have long had “ears that are a mile wide,” according to Rykman. At a time when the walls between the jam world and the rest of the music industry appear more porous, jam enthusiasts have flexed their muscles to help propel some artists from adjacent worlds to greater heights.
Take Billy Strings: The versatile guitarist and songwriter, now signed to Warner’s Reprise Records, has picked up Grammy nominations for Best American Roots Performance and Best Country Duo/Group Performance; he won the award for Best Bluegrass Album in 2021. At the same time, Strings has played with Bill Kreutzmann (a founding member of the Dead), String Cheese Incident and Goose, among others. He saw “there’s another whole world where traditional bluegrass can actually cross over and be accepted,” Luba says. Strings’ current tour includes multiple arenas.
Berlin is also the agent for Khruangbin, a trio whose dreamy instrumental grooves now attract 10,000 to 25,000 tickets per market; Berlin describes them as “not quite jam, maybe not even jam-adjacent, but definitely jam-friendly.” Notably, “they were embraced by that scene early in their career, ” he continues. “One of the first looks they had outside of Houston, where they’re from, was when they were invited to play Lockn’ Festival [one of the leading jam gatherings] in 2016.”
For Rykman, whose 2023 debut album featured guitar from Phish co-founder Trey Anastasio, this is one of “the beautiful things about the jam space.” “Myself, Khruangbin, Vulfpeck, we’re not jam bands with capital J’s — none of us play two sets, we still play three-minute songs,” she continues. “But jam band fans were early” to signal appreciation.
Similarly minded artists — what Rykman calls “singular groovy organisms” — might also want to court this community — music-loving superfans hiding in plain sight who can help them build the sort of formidable live business that ensures a long career. Another one of Baruch’s management clients is the Disco Biscuits; in the past 18 months, he says “they’re growing more than they have in 20 years.”
“What musician wouldn’t want that level of diehard fan?” Berlin asks.
This week, Sony Music Entertainment CEO Rob Stringer called on streaming companies to charge a “modest fee” for ad-supported streaming. “This would help develop this segment of the streaming business to be more than just a marketing funnel for paid subscription and still be a tremendous value for users,” he said during parent company Sony’s business segment presentations on Thursday.
Stringer’s comments didn’t come as a surprise. In March, after the RIAA released a report on the U.S. recorded music market in 2023, Billboard asked if record labels had become too reliant on subscription services for their revenues. With consumers proving willing to pay for rising prices, free streaming options aren’t producing the royalties to match their popularity.
Now, there’s evidence that subscriptions could become even more important for record labels, music publishers and creators.
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This month, Spotify levied additional price increases in the United Kingdom and Australia on top of a global price hike in July 2023. An individual plan now costs 11.99 pounds in the United Kingdom, up from 10.99 pounds, while a family plan was raised to 19.99 pounds from 17.99 pounds. Spotify has not announced a second wave of price increases in the United States and other major markets, but it’s reasonable to assume the United Kingdom and Australia won’t be alone.
The major labels have welcomed these price hikes as streaming’s importance to their bottom lines continues to increase. In the United States, subscriptions accounted for 59.3% of total recorded music revenues in 2023, up from 57.8% in 2022. Globally, subscriptions accounted for 48.9% of recorded music revenue in 2023, according to the IFPI, up from 48.3% in 2022.
Spotify and other platforms could soon offer a high-priced tier for superfans that would make subscriptions an even more valuable component of the music industry. Spotify first mentioned the possibility of “superfan clubs” in an online post in January. The next month, CEO Daniel Ek listed “superfan things” — as well as audiobook sales — among the products Spotify could offer if Apple did not take a 30% cut of in-app purchases.
In April, Michael Nash, Universal Music Group (UMG) executive vp of digital strategy, said during the company’s earnings call that internal research suggests 10% to 20% of subscribers would be willing to pay extra for a “super premium” tier. Nash wasn’t just thinking out loud: Given how carefully public companies choose their words, it stands to reason that he and other UMG executives are encouraging streaming companies to explore ways to offer an elevated service at a higher price.
Recent subscription price increases could be just the beginning of the sort of regular, ongoing price appreciation already seen in the video streaming market. Warner Music Group CEO Robert Kyncl said on the company’s May 9 earnings that call that it “will continue to advocate for further increases” and “ensure that the value that music provides to these platforms is properly recognized.” Reservoir Media CEO Golnar Khosrowshahi said during the company’s earnings call on Thursday (May 30) the company expects “a regular cadence of price increases” from streaming services.
Subscription price appreciation has put free streaming in a poor light, however. As streaming services have been raising prices, a weak advertising market has made free streaming even less valuable. Free streaming isn’t without value — it provides an opportunity to convert listeners into paid subscribers, just as marketing campaigns do. But labels clearly aren’t content with free streaming acting as a means to attract subscribers.
Goldman Sachs actually beat Stringer to the idea of charging for ad-supported music streaming. In the latest Music in the Air report released in early May, its analysts recommended an “advertising light tier for a small charge” as one way of evolving the ad-supported marketplace and floated the idea of using “content or feature restrictions” to make free, ad-supported streaming tiers a less attractive option, thereby pushing free users to a paid tier.
Concerns about free streaming carry over to short-form video platforms such as TikTok. While TikTok is a powerful promotional vehicle, the royalties it generates for rights holders and creators isn’t commensurate with the time people spend on the app. As Stringer said this week, short-form video platforms “are primary consumption sources and they need to be valued accordingly.”
Free options have their place in the marketplace. After all, not everybody is willing or able to pay for a premium service. Mass market products like broadcast radio exist because they are free to the end user. But free music could come under pressure in the coming years. And between additional price increases and possible superfan tiers, combined with overall weakness in ad-supported streaming, subscriptions are poised to command an even larger share of the industry.
Superfans have become an very buzzy topic within the industry since last summer, when Goldman Sachs projected that this segment of fans could put more than $4 billion into the music industry by 2030.
As previously reported by Billboard, in January Warner Music Group CEO Robert Kyncl called for “stok[ing] the blue flames of superfans” and additional “direct artist-superfan products and experiences”, while Universal Music Group CEO Lucian Grainge highlighted the value of “superfan experiences and products”; and Spotify hinted at future “superfan clubs” in a blog post.”
Defined by Luminate as listeners who “engage with artists and their content in five-plus different ways” superfans were a topic of conversation at IMS Ibiza 2024, which last week brought hundreds of electronic music industry figures to the island for three days of panels and parties.
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On Friday (April 26), programming included a conversation on superfans presented by industry knowledge platform Music Ally. The talk featured Evie Thomas of Atlantic Records and Warner Music Group UK, Jack Bridges of SoundCloud, Myradh Cormican of U.K. management company Frame Artists and was moderated by Marlen Hüllbrock of Music Ally.
The conversation cited statistics from Music Ally which found that superfans spend 80% more on music each month than the average listener and that 2% of an artist’s monthly listeners on Spotify account for more than half of that artist’s monthly merchandise purchases.
Additionally, superfans are 54% more likely to be the first among their friends to discover new music and new artists, and superfans are 59% more likely to say they want to connect with an artist on a personal level. Around 15-20% of all music listeners consider themselves superfans.
These are five other takeaways from the talk.
1) Even 100 Superfans Can Successfully Launch a Campaign — If You Can Find Them
Fanbases are spread across myriad platforms, which makes it challenging for artists to understand who their fans are. This is particularly true because given that data is segmented and also often controlled by third parties, meaning that artists have no direct access to fans and must rely on different tools and platforms to figure out who their superfans are.
Music Ally’s Hüllbrock noted that it’s “incredibly important” for artists and labels to figure out how to directly speak to their own fans, “because they’re battling the algorithm if they’re just posting on their own channels.” One solution here is cutting through the content clutter by taking artist/fan conversations to more more closed and direct spaces like WhatsApp and Discord.
“It’s about how to cut through the noise in an authentic way but also a relative way so even if an artist has 10,000 fans, they’re reaching a 1,000 or even 100 to successfully launch a campaign,” added Bridges. Thomas noted that it’s key for teams to test to see what different platforms are working and where engagement is happening for each particular artist, “as it’s not one size fits all; every artist is different; every community is different.”
2) Soundcloud Has Long Been a Home For Superfans
“I think there’s also been an underestimation of how much the superfans mattered before they were being properly identified,” said Bridges, citing the 2022 hit “Afraid To Feel” by U.K. duo LF System. That song “went to No. 1 but lived on Soundcloud for nearly a year before it got picked up and signed,” he added. “When that got signed and as part of the release strategy, it came off of Soundcloud, and straightaway the artists were inundated with messages every day asking where the record had gone.”
Bridges cites this as a moment “where the labels, the artists, the artist managers really realized how important it was to not mess with certain things or go to market without certain platforms.”
He says that over the last 18 months, as the industry has sharply focused on superfans, there’s been a change in strategy that’s seen “a lot more artists and labels go to Soundcloud early… and build records from nothing and by artists messaging their fans directly, because we have the tools to do that.”
3) Strategy Is Not One Size Fits All
“You have to look at how much time you have to invest, the reward you have made for your fanbase and where your fans really messaging you and commenting and which platforms are you seeing that on,” said Thomas, adding that ones those factors are sorted, the process can be very bespoke. “Maybe for a bigger artist with bigger budget,” she continued, “you can do something like Discord where you can bring in agencies and there’s a lot of paid features.” Meanwhile for artists that want a simpler solution, “something as simple as a WhatsApp group can be amazing.”
Cormican of Frame Artists cited Scottish DJ Arielle Free as a success story in terms of using WhatsApp to connect with superfans. “It’s been an easy lift thing to do, we’ve just given it space to develop,” she said, noting that the conversation in the group is often about topics beyond music and that many fans from the group meet IRL to attend Free’s shows.
The panelists also agreed that an artist’s language and tone should be tailored based on what platform they’re using and what fan group they’re talking to. On WhatsApp, the artist will likely be more open and relaxed, whereas Instagram caption will be shorter and sharper. Overall, the key is creating different spaces for different fan types.
4) Filtering Superfans By Territory Is Effective
When data is used to separate superfans by location, artists can easily reward these people with special experiences — meet and greets, guest lists, etc. — when they come to town.
Thomas cited Atlantic Records artist Fred again..’s March tour of Australia, for which the team cross-referenced people that were in the artist’s Australian fan community and anyone who had their birthday on the day of one of the Australia shows. The team then DM’d these fans from the Fred again.. account saying that they’d been put on the guestlist +2 for their birthday.
“That’s such a unique experience,” said Thomas, “I think it really heightens the user experience of that fan.” In terms of longterm benefits, she compared it to receiving a surprise upgrade by an airline: “You’re going to want to fly with that airline again.”
5) Bring Superfans Into The Narrative
When coordinating Chase & Status‘ 2023 Boiler Room set, their management at Frame Artists told organizers they wanted a small guest list dedicated to superfans “because,” said Cormican, “we wanted to have their energy in the room.”
This guestlist offer was distributed via the U.K. duo’s Discord channel. When the recording of this set was made live, there were a few people in the crowd who knew every lyric, danced the entire time and never once looked at their phones: the superfans who’d gotten in on the Discord guestlist.
The team from Frame Artists then messaged one of these fans, Don Lemons, and had him take part in a merchandise campaign. (And offered him “free guest list for life, obviously,” said Cormican.) When Chase & Status performed at the 2024 Brit Awards, fans from the artists’ Discord were invited to be part of the performance, as the team “wanted real ravers onstage.” This group got to take part in show rehearsals and the live show, and a video clip of this performance is now Chase & Status’ highest performing piece of content ever, with 100 million views. The video includes Dom Lemons “who,” said Cormican, “is now a legend in our scene.”