What is a Superfan & Why do UMG, WMG (and everyone else) care so much?
Everyone is talking about the importance of music superfans to propel and monetize an artist’s career. But what is a superfan, and why do the CEOs of UMG and WMG, along with almost everyone else in the music business, suddenly care so much?
1000 True Fans: A Brief History of Superfans
Unlike last year’s (still important) music industry buzzword AI, serving the superfan is an older concept getting a much-justified reboot.
In 2008, Kevin Kelly wrote about the value of 1000 True Fans: “To be a successful creator, you don’t need millions…. you need only thousands of true fans,” each willing to spend $100 on your tickets, merch, Patreon, etc.
What is a Superfan?
According to Goldman Sachs‘ Music in the Air Report, Superfans, who collectively spend 80% more on music per month compared to casual listeners, are now a “$4.2 billion opportunity.”
“Followers may ‘like’ an Instagram post. Customers may buy a product. But “Superfans” will be your biggest supporters, wrote Patrick Flynn in his 2019 book Superfans: The Easy Way to Stand Out, Grow Your Tribe, and Build a Successful Business. “They will promote you and your products because they know you have made a difference in their lives. They will tell their friends. They will send you encouraging emails.”
Most studies classify 18 – 20% of an artist’s fans as superfans, and according to the Luminate Year-End Music Report, on average, they spend:
- 68% more money than most fans each month on music
- 126% more on artist merch
- 76% more on physical music
The percentage and commitment of superfans varies by genre. 13% of U.S. Gen Z Indie Rock fans report a willingness to go beyond buying music and merch to directly fund a favorite artist via Venmo, CashApp, or Patreon, making them +225% more likely to do this than the average U.S. music listener.
Why Do Major Label Care So Much About Superfans?
Here is what three top music industry executives are saying about the importance of superfans:
Lucien Grainge
Now that Spotify and others are moving toward artis-centric royalties, UMG CEO Lucuien Grainge wrote in a memo to staff that “the next focus of our strategy will be to grow the pie for all artists by strengthening the artist-fan relationship through superfan experiences and products.”
The world’s biggest music group is “already in advanced discussions with platform partners regarding this phase and will have more to announce in the coming months..” Grainge continued. “In addition, we will be building our in-house capabilities through groundbreaking partnerships that will accelerate our artists’ ability to create experiential, commerce, and content offerings for their fans. In short, we are creating the blueprint for the labels of the future.”
Robert Kynkl
“We ingest, organize, and make useful tremendous amounts of data on songs, users, platforms, etc. – to help artists more consistently succeed and stoke the blue flames of their superfans,” wrote WMG CEO Robert Kyncl in his the start-of-the-year memo to staff.
“Both artists and superfans want deeper relationships, and it’s an area that’s relatively untapped and under-monetized,” he continued. “The good news is that we already have initiatives in flight against most of these areas, and specific projects with momentum behind them.”
Michael Nash
“You now have hundreds of millions of subscribers, and maybe 20% of those subscribers are the market for a ‘super premium’ tier at a higher price point,” UMG EVP, digital strategy Michael Nash said in a keynote at the Music Ally Connect conference. “We’ve tested different product configurations, and we’re excited about what we might be able to develop with our platform partners.”
Those tests included “everything from early access to forms of premium content, to digital collectibles to fan badging and gamification modification of the fan experience.”
“Some platforms are in a position to to deliver a physical product in association with a digital subscription,” Nash continued.” And we feel confident that if we work with our artists and with our platform partners to execute the right product configurations, we can go after this 20% opportunity for adoption of subscribers of a ‘super premium’ tier.”
Follow The Money
Labels see superfans as a way to incrementally grow revenue from existing artist relationships, and that is far less expensive and risky than investing in new artists.
Artists see superfans as a way to further monetize streaming and sustain a career. That in turn, means more money for labels as well.
Superfan Week On Hypebot
From major label executives to startup founders and the artists they’re both hoping to monetize, the term “superfan” is everywhere. But what is a superfan? How do you find them, and once you have them, what’s next?
We’ll be exploring all this and more all week on Hypebot, and along the way, we want to hear from you.
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