How to earn money with virtual concerts

Based on the newest numbers there are 60,000 songs being uploaded to Spotify every day. That’s almost 22 million tracks per year. A study has shown that of these, 1.2 million songs were released through major labels. DIY artists released 9.5 million tracks, meaning eight times as many. The remaining 11 million songs are covered by independent labels. But most of these songs drown in the flood of new music – because only a fraction of artists actually make bank.

57,000 artists account for 90% of streams

According to Spotify, there are 8 million artists on the platform who released a total of 1.8 million albums (including singles, they make up the aforementioned 22 million tracks). But out of these 8 million artists, only 57,000 are responsible for 90% of all streams on Spotify. That may sound like a small number, but it’s four times as many as it was six years ago. Spotify projects this number to go up to around 100,000 by 2023.

800 artists receive 20% of the total revenue

As of the status quo, it’s 0.7% of artists who rake in 90% of the revenues. At their “Stream On” event in 2020, Spotify announced that they paid out more than $5 billion. 4.5 billion therefore went to only 57,000 artists (or rather, their labels), which on average equals $79,000 per artist. But even among this this 0.7% elite there are massive differences: 800 artists received $1 million or more and 7,500 artists made over $100,000.

So, even in the top elite there are around 49,000 artists who made less than $100,000 per year, while only 0.1% of all artists made six figures. At the same time, a total of 800 artists received around 20% of the total payout.

The numbers emphasize why more and more artists are demanding a change in the way revenues are distributed. What such a system change can look like will be regularly covered in our iGroove magazine.

For a video to go viral on TikTok, you need to understand how the algorithm works. We’ll show you how to feed it properly. 

TikTok is a fast-moving and unpredictable platform, and it’s hard to predict what will generate a lot of reach and what will get lost in the flood of new videos. What certainly helps, however, is some understanding of how TikTok’s algorithm works so you can tailor your strategy accordingly.

How does TikTok’s algorithm work?

Put simply, TikTok’s algorithm works something like this: When you post a new video, the first step is to show it to only a portion of your followers. If it is well received, it is suggested to other users. If performance remains good, TikTok starts showing the video to people on their “For You” page. If the reactions remain strong, it will be shown to more users continuously until it eventually goes viral.

But how exactly does TikTok measure whether a video is well received by the people they show it to?

First, they check how often the video is watched to the end. This is sometimes one reason why many tutorials do so well, or videos where something is announced at the beginning and only resolved at the end. Generally it is said that you have to catch the viewer in the first 3 seconds. So you should always think carefully about the start of the video.

In addition, TikTok places strong emphasis on the reactions that a video evokes. Specifically, this means the likes, comments, shares, downloads, or even how many profile visits a video has led to.

Your videos should tell a story and arouse curiosity in users so that they watch your video until the end. Regular posting is also rewarded – preferably daily.

Influencers are no guarantee of success

How unpredictable TikTok is is also something to keep in mind when working with influencers. Even with a channel that has many followers, a video may perform less well. Therefore, you should never invest your entire budget only with one influencer because there is a risk that the video will still flop. It is better to spread your budget over several micro-influencers.

Choose the right snippet of your song

Reminder: Always provide the catchiest part of the song on TikTok. Hardly anyone will use your song for a video if you just upload the first 15 seconds of the song. So you have to think carefully about which part of the track is most likely to be used by other users. With some distributors, you can define which excerpt will be made available on TikTok. With iGroove, you can easily define the beginning of the snippet when you capture it.

All relevant streaming services pay musicians based on the so-called pro-rata distribution model. To put it simply, all streams are thrown into one pot and the revenues distributed by percentage. Suppose there are a total of 1 million streams and 10,000 of them are yours, that means you receive 1% of the total revenues. What this method doesn’t take into account is the individual listening patterns of the individual users.

System change is demanded

More and more voices are being raised demanding a fairer “user-centric” distribution model. In the user-centric model, the revenues garnered by each user would only be distributed to those artists that they actually listened to. While in the pro-rata model the Justin Biebers of this world will receive a portion of someone’s subscription fees even if they’ve never listened to them, this model would only support those artists that they actually streamed.

So, suppose that from someone’s subscription fees, 10 euros are distributed to the artists. If this person only listened to 10 songs from 10 artists, then each one of them would receive one euro. In the pro-rata distribution model, on the other hand, those 10 euros would just be thrown into a big pot and end up in some random artist’s account.

Is SoundCloud switching to User Centric?

After Deezer announced some time ago that they might change their model and nothing happened, things could take a more definitive form at SoundCloud.

Since SoundCloud is less dependent on big labels than other streaming providers, it would be easier for them to take this step. Still, the challenge is not to be underestimated. Whether SoundCloud will really change their model or just introduce a feature which offers users the option to “tip” their favourite artists, remains to be seen in the first quarter.

Do artists benefit from the user-centric model?

One of the most frequent criticisms of the pro-rata distribution model is that it favours major labels. The user-centric model was devised to benefit independent artists in particular. It will certainly satisfy listeners more if they knew that the musicians that they actually listened to are also the ones being paid. But would artists really benefit from a system change? A French study has examined and compared the two models

The study shows that it would primarily be the top 10 most streamed artists who would have to deal with significant losses (17.2% on Deezer, 12.5% on Spotify). Percentage-wise, artists with the least number of streams will profit the most, although we are still talking about small amounts here. The share of paid royalties will only decrease for the top 10 artists.

In practice, this would mean a loss of several hundred thousand euros for the top 10 artists. The artists on ranks 11-100 would earn about an additional 9,000 each; those on ranks 101-1000 around 2,500 per artist. For everybody else it would only make a difference of less than 10 euros per year. A real profit would mainly be gained by most of the top 1000 artists, but for the large majority, the effect would be fractional.

Big losses for HipHop

Another profiteer would be the back catalogues of artists, which would now receive 52.1% instead of 48.9% of the royalties. But the real big changes would happen between genres. This is because niche-genres would benefit the most from a system change, especially classical music, hard rock, and blues, but also popular genres such as pop and rock. This change would mainly occur at the expense of hip hop releases, which would lose a big fat 40% of their revenues.

Meanwhile, a shift from big corporations to smaller distributors cannot be observed. On the contrary, the five biggest companies would actually increase their market share by 0.7%.

However, the study did note advantages in the prevention of fraud by buying streams.

The study further observes that changing the distribution model has high cost implications. This is probably one of the reasons why barely any streaming provider has considered the change so far.

But at the very least the numbers from this study also show that a system change would have little impact for the lower-tier compensation of artists anyway. As soon as new data appears or new models are introduced, you will find out about it here.

The study by the Centre National de la Musique (CNM) is based on numbers from Spotify and Deezer, as well as various major and independent labels. Other streaming providers refused to provide their data for the study. The analysis uses numbers from 2019 and was conducted exclusively on French users with a premium subscription.

A lot of artists are only in promotion mode when a release is coming up. But really, you should promote yourself and your music consistently and always remain active in between releases, as well. Even when you’re in the studio and working on new material, you should constantly keep in contact with your fans – because they are quick to forget.

There is always something you can promote

Even when there isn’t a release coming up, there is always something you can promote – whether it’s a new social media channel (e.g., you can now find me on Clubhouse, as well), a give-away, a new website, or a virtual concert. The main goal should always be to convert occasional listeners into long-term fans. It’s not enough for people to listen to your music every now and then. Hardly anyone can live off their streams or heaps of views on TikTok.

What you want to achieve is gain a lot of new followers and turn them into real fans who will check out your new releases.

Selling by storytelling

You don’t get there by constantly asking people to buy stuff from you. People want to be entertained by good music and creative content on your social media. Offer them a behind-the-scenes glimpse and let them be part of your musical journey, your studio sessions, etc.

Call to action

Even though you shouldn’t be too pushy, a call to action is always a must. The general attention span is short and with a call to action, you can lead people to where you want them to go.

Planning the release

A release takes planning and advance preparations. Before getting an album out there, it is imperative that you release and pitch multiple singles first and also make a couple music videos. That way you always have something new to promote.

Allocating the budget

As mentioned in one of our other posts, you should always have enough of your budget saved for promotion and not spend it all on production. At the beginning of a career, you have to invest more than you might get out of it.

Offer something special

In this pandemic, it has become clear that in most cases, streaming revenues are not enough. So, offer your fans something special like an awesome Deluxe Box, creative merchandise, a limited vinyl edition, etc.

Visuals

A lot of artists often neglect the visual aspect. A creative music video, cool photos and video content on social media, Canvas on Spotify, or an eye-catching Artwork increase the chances of people becoming interested in your music.

Newsletter

Social media posts only reach a fraction of your followers. Those who are really interested in your music will want to sign up for a newsletter, which is why it is one of the best tools for artists to advertise and sell their products.

You want to discuss your release and promotions plans? As an iGroove client, you can set up a call anytime with our promotion experts who will gladly set up an individual plan for you.

If you’re buying beats on the internet, you not only have a wide selection to choose from but also access to good quality at a great price. But there are also some stumbling blocks in the way. Here, we’ve put together all the things you need to watch out for.

More and more artists look for the right beat for their songs on the internet. That way, you come in contact with producers that you would have never met otherwise and can secure quality beats without a hassle and often also at very affordable prices. But the devil is in the details, or rather, in the contract that you usually have to sign at the purchase. We will show you what you have to look out for.

Beat leasing limitations

If the beats are low priced, it is usually because you are not buying the exclusive rights, but are just leasing the beat. This means that one, the producer can still sell the beat to other artists, but also, that you are limited in your use of the beat. This could mean that you can’t release the song on streaming platforms or if you can, then only up to a certain number of streams/sales and for a limited time.

What’s almost always forbidden is the monetization of tracks via the YouTube content ID. The reason is simple: If multiple artists use the same beat, ownership conflicts will automatically arise.

Similar conflicts can come up when you make your song available on Facebook or Instagram. In both cases you should abstain from uploading if you don’t have the exclusive rights.

Advantages of buying exclusive rights

According to an article by Rolling Stone Magazine, there have been more and more instances where managers buy the exclusive rights to a beat as soon as a song goes viral. This doesn’t have to lead to problems right away, but when the license for the beat runs out, you will have to deal with a new negotiating partner and won’t be able to extend the license on the same terms and conditions. If it becomes apparent that your song is about to blow up, you should contact the producer ASAP and secure the exclusive rights.

Are the samples cleared?

If it’s not explicitly mentioned in the contract, you should always ask the producer whether the beat contains samples and if so, whether these have been cleared (which they most likely have not).

As already mentioned in our post on samples, in the worst-case scenario, you could get sued for using a beat with samples.

Leasing for the budget

Especially for artists who are still at the beginning of their career, it is advantageous to lease beats and keep costs low. The beat should never consume the whole budget; there should always be something left for the promotion.

In any case, you should read the contract closely, so that you know exactly what you can and cannot do with the song. If you’re absolutely certain of the quality of the song, it’s worth investing from the start and purchasing the exclusive rights.

It’s becoming more and more apparent that virtual concerts are here to stay even after the pandemic. This post explains why that is and what advantages come with virtual shows as an addition to live concerts.

Many view virtual concerts only as a makeshift solution during the pandemic or ignore the topic altogether. But it has become increasingly apparent that this form of concert will continue to exist post-COVID, as well. Of course, they will never replace a live event, but there are good reasons why they will still be present as an addition.

Live industry revenues at rock bottom

The concert industry has essentially been brought to a screeching halt by the pandemic. Globally, revenues in the last year dropped by 75%. Virtual shows have become one of the ways in which to compensate for at least a part of the cancelled events. Based on one assessment, virtual concerts in 2020 have brought in $600 million already. This, despite the fact that up until now, only 9% of the potential audience have effectively watched a livestream.

A survey has shown that 80% of viewers were satisfied with the experience and that 74% were willing to pay for it. It’s become more and more clear that a new video format is emerging and taking root. We’re not talking about some dude anymore who plays guitar in his kitchen and streams it on Insta with mediocre sound quality, but instead professionally organized shows with ticketing and excellent sound quality.

The advantages of virtual concerts

Here are a few examples of why virtual concerts are still a worthwhile addition even when we can attend live concerts again:

• Hybrid shows: If a concert is sold out, you can sell additional tickets for the stream
• You can reach fans which are not in the area in which you’re playing
• With a virtual concert you can reach fans who are too young for the live event, can’t afford a ticket, or can’t leave the house that night
• As a promotional tool: A virtual concert can, for instance, give a little taste for the live tour
• The concert market is competitive: With virtual shows you can prove to bookers that you put up good concerts and can attract people

Virtual concerts are well on their way of becoming a part of the relationship between artist and fan. You can build a different type of connection than you can at live concerts by responding to questions from fans, for instance, or even letting them decide on a setlist.

Virtual concerts as a addition to live shows

One day virtual concerts might be comparable to live broadcasts of sporting events. Of course, it’s more fun to watch in the stadium, but you probably won’t travel to every single away game, and even when it comes to a home match, you might sometimes prefer to watch from your homely sofa instead.

The combination between live and virtual concerts allows artists to perform more regularly and to give fans more options – with regard to pricing, as well.

A first few festivals have already announced that they won’t be taking place in 2021 either. The renowned Montreux Jazz Festival recently announced that in future, too, they will opt for a hybrid model consisting of both live events and digital projects.

Every artist who so far has generated a part of their income through live shows should by now be thinking about ways to reach their fans virtually, as well.

How to set up virtual concerts and make money with them, you will learn in this post.