Yesterday’s news about Topspin’s Ian Rogers leaving to head up a new streaming music service from Beats by Dre called Daisy had a very interesting subtext to it that didn’t get as much attention as it probably deserved.
Once you get past the star power news of Rogers helming the effort, as well as Trent Reznor serving as chief creative officer, there’s the interesting tidbit about Beats’ investment in Rogers’ former company Topspin, and the intention to integrate the Topspin platform into the backend of the music service.
Here’s the part that got my attention (taken from the Topspin blog post announcing the deal):
The core of this partnership, then, is a shared belief that streaming services should do a better job helping fans discover artists and connect with them directly to buy merch, tickets and other products. And so, Topspin GoDirect will become the way the Daisy service gets photos, videos and products from artists, and both companies will work together to make sure fans see those products when they listen to songs.
In other words, the plan for Daisy is to allow fans to browse and buy artist photos, videos, merch and concert tickets while streaming their music. That’s a significant evolution of the music streaming “retail” environment we have today. It’s certainly been discussed before. This bundling of products was a central part of the MySpace Music strategy (if not execution). And Beats/Daisy isn’t the only streaming service to forecast this capability.
What’s exciting about this concept—bundling music, merch, and ticketing into one service—is that it has the potential to more accurately showcase the opportunity that streaming music services offer artists. The value proposition of on-demand streaming is one of monetizing discovery. But today’s debate over streaming music payouts to artists is stuck on the revenue provided by the streaming activity alone. But that’s not the whole story. Sure, those payouts will increase as usage increases among fans. But streaming services drive other artist revenue streams as well, such as merch, concerts and so on.
But without any strong data trail to connect the point of discovery with the subsequent commerce taking place, it’s all just theory. It’s a belief. And the debate over the “value” of on-demand streaming is reduced to one camp arguing their belief against another camp with an opposing belief.
Once these service begin directly connecting streaming music activity to merch bought or tickets sold, then artists or managers will be able to see the facts in their monthly/quarterly statements. They’ll be able to judge the benefit of the on-demand streaming services based on more than just streaming music revenue, but also that revenue along with merch and ticket sales.
That’s the future of digital music retailing. This industry is evolving past the silos of old, where recorded music sales were one thing, concert ticket sales another thing, and merch sales yet another. In the digital age, there is all kinds of money left on the table by not better connecting these dots into a more cohesive retail experience for the fan.
Physical record stores thrived by selling all things related to the fan’s music experience—CDs, t-shirts, magazines, etc. The digital replication of that environment has yet to fully catch up. So that’s why announcements like the Beats/Topspin/Daisy new of yesterday are so exciting. It shows that there’s still plenty of space for this business to grow. To evolve. To improve. Ultimately, our job as an industry is to monetize the music experience in all forms, not just one revenue channel or another.
Written By Antony Bruno is digitalmusic.org’s community manager. He will be moderating a panel at SXSW titled “Music Subscription & Artist Revenue” on March 13.