Niche is the way forward: DSP’s need function, not features

It has never been easier to become a music creator. But, it has arguably never been harder to remain one as a full-time career. 

There are a whole host of reasons behind this, not least of which is a streaming economy that has upended the role of music in the daily lives of audiences, and a host of creator tools (including generative AI) that lower the barriers to music creation, to the point where nearly anyone can step over them with ease. 

Anyone being able to compete in the same arena for the same share of streaming revenue on platforms like Spotify makes the playing field too level for anyone who wants to do more than dabble to really succeed (unless, of course, their success pre-dates the current dynamic). Moreover, with marketing on platforms like TikTok taking up so much of artists’ time as a necessity to try to break through the clutter, but with the skills required being so different from those important to actually making good music, the people cutting through are not always the best artists. 

Deezer and Universal’s agreement to change their revenue sharing process indicates that the industry has reached a breaking point, and it is willing to shake up the status quo to try something new. This is clearly big news, even if a debate ensues on the merit of the methodology. 

But perhaps bigger change is afoot (or at least, it should be). As music listening habits evolve, so do audiences’ expectations. Music streaming is most often a background activity, yes, but the music audiences listen to is very important to them as being reflective of who they are – and streaming is only one way of many that they engage with music. They increasingly want to have an inside look, be part of the creative process, and try their hands at remixing and being creative themselves. 

The real problem is that all of these aspects are competing side by side on the same platforms, when in fact, they are very different things. We know that niche is the new mainstream. What if streaming platforms embraced this too? As a user with potentially dozens of apps on a home screen, choosing the app is choosing the function; look no further than how this is affecting social app usage. Going into an app that then offers too many different ways of engaging with it is added friction. Going into an app that offers too many ways to engage with it AND too much content that is impossible to sift through is even worse; algorithms have offered personalisation to combat this, but even they are reaching a natural ceiling of efficacy. Spotify is cluttered with everything from whale noises to TikTok remixes, and this is as much a problem for creators as it can be frustrating for audiences.

Imagine, however, a new dynamic where different music streaming platforms each targeted different parts of the music creation and consumption experience. 

An artist comes up with an idea for a song and shares snippets on a social-centric platform, like TikTok or BandLab. Fans can offer reactions, potential collaborators can send back their ideas, and the feedback loop can boost creativity. This is also a successful marketing tactic, leaning into audiences’ preferences for engagement and authenticity. And, of course, for fans, this is so much more than just marketing; it is being a part of the artist’s creative journey. Monetisation can also happen at this stage with social-oriented creator funds and potential sponsorships (monetisation is, of course, the current growing pain for this segment of the market, just like it was for the early days of YouTube. But if YouTube can fix it, then TikTok will probably be able to too). 

The artist can then come up with a rough full version of the song, and go to a platform like SoundCloud or YouTube, which already have a slight tendency towards more raw / in-the-works, user-generated content that is one step above the everyone-contributing vibe of social-first platforms, like TikTok. Here, superfans can listen to the raw tracks, thus getting their ‘first look’ perks for being a follower. Labels can also look here to scout talent, rather than trawling the everything-goes social platforms. Creators can earn from the creator programs on these platforms at this stage of creation, and potentially play around with remixes and other versions to see what performs better. And these streaming platforms can benefit from superfan audiences turning to them for the authentic, pre-polished quality of undiscovered talent.

Much of this, of course, already happens in an ad hoc and unevenly distributed way, but lacks a formal structure. Where the big shift should occur is the ‘big’ streaming platforms. Using their playlist promotion and ‘global top’ listings, they should lean into their role as curators of the ‘final product’. The change should come from barriers to entry: while anyone can publish whatever they want on TikTok, they should not be able to do so on Spotify or Apple Music anymore (it is surprisingly easy to upload). Proof of ‘professionalism’, be it a label backing or per-stream quotas from the ‘entry level’ platforms, should be a requirement – which would go a long way towards stemming the potential flood of AI-generated ‘music’ as well. Labels could play a role here as certifiers of quality, while still licensing the tracks to be used on social. Mainstream audiences can turn to these platforms for background listening and easy, trusted, curated discovery. Labels can partner with them for artist promotion. Creators can, again, earn from streaming revenue shares here – and the platforms will have their own distinct audiences, overlapping with the others, but not competing directly. 

This three-tiered system would allow audiences to choose where to go based on what kind of listening they want to engage in. The beauty of it is that the pieces already exist, as do plenty of case studies of artists successfully using parts of it. Those successes can be multiplied once put into this clear framework of successive tiers. It would let fans have inside exclusivity, and allow creators to monetise every stage of the creative process while actually developing a track, rather than rushing to get it out. It would also give labels a new purpose aside from ‘services’ support, and allow streaming platforms to each carve out a niche rather than compete head-to-head with everyone else (including social). 

The system proposed is something of a clean-up job, making the brands in each tier even clearer to users – as opposed to the current situation, whereby every platform has sprawled so as to be unnecessarily cluttered. Implementation requires platforms to realize that more is less; making a clear role for rightsholders in helping to show them exactly that. 

With every challenge comes opportunity. This is music’s opportunity to reframe, refresh, and adapt to the changing dynamics of music production and audience engagement, and truly embrace the interactive reality of web 3.0.