What Publishers can learn from Spotify: pivoting through disruption
The music industry was the first to be disrupted by digital, namely Napster and other streaming sites. But it was the first to emerge from disruption, and now generates more revenues from streaming than it used to in traditional formats. What can the publishing industry learn from the music industry as it approaches its own “Napster moment”?
Will Page was formerly Chief Economist at Spotify, and has just written a book, Tarzan Economics, exploring the lessons of the digital disruption of the music industry.
I interviewed Will on stage at The Publishing Show in September. He shared plenty of insights that are directly relevant to the publishing and media sector.
1. Scarcity of attention and shorter formats
All media are in competition for attention. Famously Reid Hoffman, CEO of Netflix, said that his main competition is sleep. Songs are getting shorter, few are more than 2 mins 30 seconds. And they get to the chorus quicker. A listen on Spotify is only counted after 30 seconds, so you don’t want to make your listener wait too long.
Publishers creating online content, video, or audio need to hook in the reader or viewer quickly.
2. Direct to customer
For their album In Rainbows, Radiohead decided to part with their record company and go direct to their fan base. They offered the album as an MP3 download on a “pay what you want” basis. They also released a deluxe CD box at £40, a standard CD and an itunes album. Overall they generated more revenue for this album than all their previous albums put together, and they got the cash instantly rather than the usual 12-18 month delay.
This tip jar model has been proven to generate higher revenues than a standard price. Bandcamp suggest a guide price of £10 for albums but allow listeners to name their own price. The average price paid is £14, 40% above the guide price.
In the media sector, The Guardian has surprised us all with its donation model. And maybe publishers should explore the “name your own price” model more. We are already tilting towards direct subscriptions rather than newsstand sales.
3. Multiple formats – thrill of a luxury
Radiohead discovered that the same people who paid £5 for an MP3 download would also pay £40 for a deluxe CD box set. And across the music industry, vinyl is having a renaissance – many music fans spend £25 on a vinyl album that may never get played. Vinyl is now 10% of music industry revenues.
Will calls this “the thrill of a luxury” and there is a definite connection to the publishing world. Already some publishers are upping production values and cover price and finding it more profitable. Readers see the magazine as a “collectible” item. It is also instructive that your biggest fans might want to buy content in multiple formats.
4. Communities encourage higher prices
Was one of the reasons for the success of the tip-jar model the sense that Radiohead fans were part of a community? Will has spotted that open models like crowdfunding or tip-jars encourage people to pay more. This was the lesson of Tupperware – when groups of consumers bought more product than they might do individually. Fans can also be first to discover and make a star. Billie Eilish was promoted by fans on Soundcloud before being signed by a record label.
The take-away for publishers is to encourage community and a sense of contributing to a much-loved media brand.
5. Drip feeding content
Smart music artists know that their fans are hungry for content. Drake drip feeds his audience with short pieces of as little as 42 seconds. Momentum in release schedules is important in the music industry.
This has direct relevance to publishing. TTG Media used to publish a weekly print title. This has now relaunched as a monthly, but backed up by continuous digital content, and a high-profile social media campaign on behalf of the industry, so their brand is always visible to their audience. Event organisers used to have a peak of activity followed by months of silence. Instead, now they are creating online communities to drip-feed content all year round.
6. Access to archive
Subscription models like Netflix and Spotify provide access to a vast archive of content for less than £10 a month. The music industry knows that any high-profile exposure for an artist results in instant interest in their back catalogue.
Publishers are now realising their archive content is a valuable asset, so long as it is easily accessible online, and they actively promote their evergreen material.
There is much more to unpack in Will’s book – with smart ideas on consumer behaviour, pricing and when beleaguered sectors should collaborate.
If you’d like to talk about new ways to package your content, experiment with pricing, build a community of loyal fans or generate more value from your archive, do get in touch for a chat. https://speciall.media/contact/
About the author
Carolyn Morgan has bought, sold, launched and grown specialist media businesses across print, digital and live events. A founder of the Specialist Media Show (sold in 2014) she now advises media businesses large and small on their digital strategy through her consultancy Speciall Media.