We’ve all heard about the ongoing battle for royalties among different players in the music industry. Even if not experts in the matter, we’ve all at least heard about Taylor Swift removing her music from Spotify as an act of protest to the fees that are currently paid to the artists. What we’re missing here is that the biggest source of incomes to artists is actually ticket sales, a space where attendance rates have plateaued at 50%, mainly because fans do not even know a show is happening.
I just did a random search in Ticketmaster for concerts in NYC in the next 7 days, and I got no less than 273 different results. This is pretty overwhelming if you don’t really know which specific artist you’re looking for. It is then safe to say that supply is vast for fans to choose from; nevertheless, curation is the key to transform this unstructured immense array of alternatives, into a relevant set of suggestions tailored to the customer’s taste. This is exactly what concert discovery app Songkick is doing.
Songkick, as well as its biggest competitor, Bandsintown, integrates with your music library and your Spotify account to learn your taste and notify you of upcoming concerts in your city. What differentiates Songkick from Bandsintown is that they have recently merged with CrowdSurge to integrate the ticket sale purchase process and bypass large aggregators as Ticketmaster or Ticketfly, who usually keep most of the fees.
Value creation to the users
This one is pretty simple. Songkick lets you know when your favorite artists are playing close to your city so you can plan ahead and not miss the show. It removes the hassle of having to actively search for upcoming dates and potentially enables users to go to more concerts, assuming that they would not actually invest time in searching for all the artists they would potentially like to see.
Value creation to the artists
In an industry where monetization has been a big challenge for some time, where physical records sales are plummeting and where the sharing economy has limited willingness to pay to a fixed pay of around $10 a month (regardless of the amount of music streamed), any source of additional revenues is relevant. Business models as Songkick’s are even more relevant to developing artists in the sense that it creates a path for early engagement with the audience if paired with the “discovery” features of music streaming platforms. Up-and-coming artists do not have a large marketing budget to advertise for gigs or tours (moreover, it is likely that they’ll be opening for other artists), so chances are you won’t hear about their concerts unless “someone” who knows you like them tells you about them.
This is where the recent merge with CrowdSurge comes to play. Integrating ticketing into their service will allow them to participate in the most lucrative part of the music business, allowing them to start making profits out of the value they are creating to both sides of the transaction.
Challenges and Next steps
The greatest challenge for Songkick to successfully tap into the ticketing space is to flip venues that have already signed exclusivity contracts with Ticketmaster and Ticketfly. With a 10 million highly engaged userbase and a superior algorithm to target the right audiences (compared to traditional ticketing platforms), they should be able to prove that they can bring real value to the venues through increased sales and hence, earn their share of the market.
Going forward, they could leverage the value created to the artists, by providing customer insights on the location of the largest volumes of fans “following” artists for concerts, to help them plan smarter tours in exchange for the ability to directly sell tickets to their concerts.