FutureSound Conference Highlights: Innovation Drove The Discussion

Last week’s second annual Billboard
FutureSound conference in San Francisco brought speakers from all facets of the
music and tech relationship to speak about innovation in the music industry.  Labels, investors, start-ups, rights
agencies, artists, managers and music platforms all gathered for a positive
discussion looking at the future. 

Speakers
included keynotes with Deadmau5, Marc Geiger, Don Was, and Fred Wilson, and
panels and presentations with Bandcamp, Bandpage, Beatport, BMI, EMI, Epitaph Ford
Motor Company, Getty Images, Google, 
Gracenote, GVC Capital, Rhapsody, SoundExchange, TAG Strategic, Topspin,
WME, WMG and more.

 Bill
Werde, Editorial Director for Billboard opened the conference highlighting
it as somewhat of passion project for the team at Billboard who “believe in the
future of digital music”.  Discussing the
theme of innovation, he added; “We’re not looking to poke sticks, we’re looking
to find solutions”

Compensation and Licensing: 
The Day 1 issue of the discussion was the difficulty of licensing – although
the need to overhaul and standardize a licensing compensation model that works
was apparent throughout both days of discussion.  While compensation, accountability,
transparency, and fairness stood out as the concerns, the real issue was lack
of knowledge and understanding of the challenges that what each party faces.

The real real solution seemed to be
for parties to work together in order to develop an industry wide
compromise.  As the panel on Innovation
& Licensing discussed, the pointing of fingers at each other is what
creates problems.   DDEX was used as an example of labels, publishers,
and services that have simplified their processes by working together rather
than against one another.

The Fan Pyramid: 
Different variations of the fan pyramid (or funnel depending on the
speaker) were presented by Google’s Tim
Quirk, Topspin’s Ian Rogers, and GGV Capital’s Hany Nada, and referenced
by speakers throughout.  There are
different levels of how fans interact and support an artist, and purchase their
music.

Casual listeners are the largest
category of a fan with lowest spending (if any) and lowest engagement.  The higher the fan loyalty, the easiest to
monetize and engage fan group.  The key message
was to recognize and engage different fans differently depending on their level
of fan loyalty – including the levels in between.

Streaming and Fan Discovery: David Marcus, SVP of Worldwide
Artist Services, WMG later elaborated on how
streaming plays a bigger role into the fan ecosystem “streaming …is important
to get people into the pyramid…first you have to entertain people, they have to
feel excited about something…streaming leads into that”

Monetization and The Fan:  Hany Nada used the now infamous case of
Amanda Palmer to drive home a well built point on learning to engage and
recognize the different types of fans. 
48% of the million dollars raised by Amanda Palmer’s Kickstarter campaign came from only 4%
of Amanda’s fans.  An artist’s loyal
supporters are willing to pay much more than the casual listener. The need to
appreciate and engage the other 96% however, were just as important for
Amanda’s campaign to hit the famous million dollars.

“The way we monetize music is to
figure out what drives the fans.  I don’t
think we’re doing that today.” Concluded Nada 
“If anyone knows how to do that, give me a call.”

Billboard’s Innovators Showcase: Derrick Fung, CEO of Tunezy – the winner for the challenge – demonstrated
that what drives fans, is the opportunity to connect on a closer level with an
artist.  His start-up brings indie artists
thousands of dollars by selling experiences like Skype calls, or merchandise
like handwritten song lyrics.

Fung’s story captured the audience
and the entire point of the event.  A
year after spending his vacation attending Billboard’s first ever FutureSound
event, Derrick Fung stood on the stage and told the audience of how inspired he
had been.  He thought, “now is the time
for innovation” cashed in his bonus, and quit his job.

Tunezy
beat GetMixxd,  playground.fm,
swarm.fm, and Tixie
from the shortlist of start-ups chosen to demo at the event.

Direct to Fan: Topspin’s
CEO, Ian Rogers discussed the
correlation of bundling music and the profitability of the music industry.  While music sales will likely never return to
full-album purchase at just under $20 an album, there is large opportunity for
the artist in bundling.  The loyal fans
are willing to pay a high premium for exclusive or bundled product and fan
experiences.

Emily White, Co-Founder of Whitesmith Entertainment had an
even simpler way of looking at the direct-to-fan approach; “the highest margin
we see is direct-to-fan, so that is where we prioritize”.

Direct to Fan Challenge: “For the casual listener, how do I reach
that casual fan to tell them I have a show next week?  Asked “Zoe
Keating, Artist.  “The connections of
fans aren’t available to us” said David Marcus about the lost potential
opportunities with music services. 

Bandcamp,
CEO and Co-Founder Ethan Diamond
built on the missed opportunities in the music industry.  While Bandcamp does provide fan contacts and
data to artists, “the crime is that most artist’s don’t go in to get their
data”

This event coverage is by Kat
Drucker, Strategic Consultant for Canadian Music Week and Digital Media Summit
(@kitkat5656)