Artists need to place themselves at the centre of fan community-led commerce

The solution to artist remuneration and the next wave of music industry growth is already here: fan communities.

Warner Music recently attracted attention with the news that it is developing a superfan app for artists, with the functionality to distribute content across multiple platforms and collect fan data along the way. It makes sense. After all, it is artists and label partners creating large volumes of content, yet they have relatively little control over it beyond some data dashboards and trickle-down royalty payments. Why not take a content management approach and collect that data so that artists and labels can monetise from there – with merch, special offers, digital products, physical formats, and more. This is the way many artists are already making more revenue than they do from streaming, albeit by working with myriad marketing apps, merch services, and running their own small businesses. The cottage industry that makes artists real money is overdue some serious professionalisation so that these ancillary revenues can scale to become primary income (and a much bigger part of the music business). Just look at South Korea’s HYBE, which makes roughly two-thirds of its revenue from non-recorded music sources — including its own fan app, Weverse. By comparison, under a quarter of Warner’s revenue comes from outside recorded music. 

The D2C fan monetisation strategy is even more critical in the post-Covid reality that the majority of artists and bands can no longer make a profit from touring. This puts streaming into stark perspective – for the majority of artists it remains minority income that is due to get smaller, despite the moves towards an ‘artist centric’ business model. Does this mean streaming cannot be fixed? The balance of power between labels and DSPs cannot do much to address the real problem of music’s chronic undervaluation. An 11-song album on a new release vinyl album currently commands an average song price of $2.70, compared with $.0035 per stream.

Many artists and managers have already seen the light. Erykah Badu’s ‘Badu World Market’ expanded way beyond an artist website during the pandemic. The National’s ‘Cherry Tree’ fan club is a fine example of nurturing a loyal fan base that has grown alongside the band – their connection goes way beyond The National’s share of real estate on a DSP or social network. 

Take My Morning Jacket’s new ‘One Big Family’ fan community. It is not an app (yet), though fans are encouraged to drop a bookmark to the web site on their phones instead. It provides the news, notifications on forthcoming shows, product offers and releases, and the fan shares around topics set by the moderators. In some instances, it could be considered more engaging than the band's socials. It is early days. The community is ‘powered by Medallion’, one of a growing handful of fan building platforms coming up to offer music artists a more customised D2C offer than platforms like Patreon – despite Patreon continuing to be an important player in the space.

While AI and song modifications are the fuel that powers the next wave of music consumption on growing tech platforms (of course, requiring new copyright licensing infrastructure), fan communities become the best way for artists to present their art in a finished form and build a real and meaningful connection with fans where they share the narrative – and maximise the value. This is not an arena exclusive to the lucky ones – the established artists who already have solid fanbases. Absolutely not.

Whatever the career stage, artists and their managers need to put themselves at the centre of all fan and commerce building strategies, with layers of service providers outside them – in a variety of models. The model works whether signed or DIY.

An industry in which fan communities proliferate also fosters collaboration and audience sharing, allowing artists to promote and sponsor each other's work in a way the current industry set up would see as competitive. There are no better platforms for up and coming artists than established artists.

Where does this leave label artist apps? It is hard to tell without seeing them in action, although the obvious flaw is that artist fan communities are built over many years – an entire career if done right – whereas artists are only signed with labels for a part of that. For too long now artists have been forced to play along in a game of music serfdom whereby their creative output makes more money for the distributors and gatekeepers than it does for them. Yet, through building their own communities from the start, they have direct communication, distribution, and commerce lines to the fans that want to see them succeed.

Below a variety of fan engagement opportunities for both emerging and established artists can be found. As for superstars, they have an even wider range of options.

Emerging artists – any size of community works. The first few hundred ‘lifetime’ members can invest or sign-up to be ambassadors. Implement a Substack and use it to build a diary experience so that fans feel more invested in your growth as an artist. Livestream to your community monthly, use services like Laylo to collect fan data from all social media drops, build towards the first 1000 fans, and launch your community through platforms such as Fave.

Established artists – build a bespoke experience enabling regular content distribution, such as a fan club. Create a Squarespace site or work with a bespoke community platform like Medallion or Fan Circles. Livestream at least once per quarter. Have a print-on-demand merch store and play invite-only fan shows. Have your own CRM platform built through a provider such as OpenStage or HubSpot.

Way beyond the current wave of growth in vinyl and merch, fan communities form the basis of a whole new wave of direct-to-fan opportunities – live streams (already successful for many artists), meet and greet experiences, digital products, artwork, limited edition exclusives and, of course, fan sponsorship and investment.

There is no need for artists and managers to wait for the next big tech platform innovation – the fan space is yours to innovate right now.