2020 in review: Ten takeaways from our top stories this year

By: Cherie Hu

Published: 2020-12-31

It’s the last day of 2020. Congratulations — you’ve made it through one of the most chaotic and challenging years in the 21st century.

Over the past ten months, the COVID-19 pandemic has not only led to nearly two million deaths globally, but has also morphed into and amplified multiple other kinds of crises. Beyond physical health, the world — and the music industry in particular — is grappling with wider issues of mental health, economics, employment, housing and race relations, the implications of which will likely reverberate for decades.

The music industry specifically saw the obliteration of the live-events business, forcing many artists to lose their top source of income and pivot their entire business models and priorities, bringing their teams and partners along for the ride.

In the process, 2020 also became a major wake-up call for the music industry about the importance of technology. This had already been par for the course in the recorded-music sector — but, for all the talk about how streaming has “saved” the music business,, thousands of artists’ bottom lines pre-pandemic were decidedly non-digital, relying heavily on touring, merch and other physical and in-person revenue sources.

In this sense, the pandemic has completely upended our sense of what is “industry standard,” and has rewritten the playbook for how to build a career and business as an artist in a 100% virtual world. Technology and the Internet are no longer just “important”; to a large extent, it’s all the industry has to keep itself running.

I’m extremely lucky to have played a small part, via running Water & Music, in helping people understand this fast-changing landscape, and in laying out where some of the most exciting opportunities lie for innovation, expansion and improvement. In part due to a heightened industry-wide interest in keeping up with music and tech trends, Water & Music has had a record year as a publication and as a business.

I’ll post a full recap in the coming weeks, but in short:

It’s wild to me that in such a trying time for music, all of you have been so generous with your time and money in supporting Water & Music directly and keeping this small but mighty operation going (I’m still the only full-time employee). Whether you just joined as a paying member this week, have been part of the crew since day one or are still considering joining the membership, any gesture of recognition and support really means a lot, and goes a long way in keeping Water & Music independent, sustainable and always reader-first.

My goal with this publication has been not just to report on and analyze the latest trends, but also to help open up your minds to what’s possible with the future of music, and to inspire you to apply the same levels of creativity we expect with the craft of music to the business of music. With that in mind, I hope I’ve helped spark new ways of thinking in your lives and careers this year, and motivated you all to keep doing the good, forward-thinking and culture-changing work that this industry is known for — and still direly needs.

To close out the year, I’ve gone through all of Water & Music’s top articles from 2020 and distilled ten key themes and north stars going into next year. This list comprises only around 60% of all the articles published this year, so I encourage you to dive back into the Patreon archives whenever you have the time to get the full scope of the topics we’ve discussed.

Thanks again for your ongoing support, and hope you have a healthy and fruitful new year ahead!!

1. WORD OF THE YEAR: PIVOT

Water & Music’s top article of the year was about a word that everyone in the music industry now understands: Pivoting. The sheer disruptive force of the pandemic has rendered the term “industry standard” irrelevant, compelling artists and their teams to rewire their entire business architecture and pursue a whole new set of guiding principles from what was previously accepted as given. The most popular kinds of pivots include thinking more empathetically about fan behaviors and preferences, pursuing new monetization models for music, experimenting with new technologies and treating digital media as its own, standalone experience, not just a means to an end.

2. THE GRAND LIVESTREAMING EXPERIMENT ISN’T OVER

In 2020, the music industry has dealt with livestreaming in three stages. The first stage, around mid-March, was quick and desperate — rushing to platforms like Facebook, Instagram and YouTube, to fill the void left by canceled tours and festivals with livestreamed events that suffered from technical issues and an inherent inability to monetize. The second stage, around July, was much more practical and methodical, with artists and platforms taking livestreaming income more seriously and experimenting with a wider range of business models, from real-time tipping to paid tickets, merch bundles and geo-fenced online “tours.” The third stage, which we’re in right now, is even more deliberate and embraces a more hybrid mindset — e.g. expanding the shelf life of a livestream video beyond just the event itself (see Dua Lipa), and/or thinking more strategically about how livestreaming can complement in-person concerts as the latter slowly returns to society.

3. DIRECT-TO-FAN TAKES CENTER STAGE

From Bandcamp and Shopify to Patreon, Discord and OnlyFans, platforms that facilitate direct-to-fan community and commerce have seen record growth this year. Disillusioned with the dominant streaming model, many artists have pursued direct-to-fan monetization channels that give them more control over product pricing, customer data and revenue flows. In a 100% virtual world, community, audience and fandom — particularly superfandom — has become an equally if not even stronger moat around an artist’s business than the product itself.

4. MUSIC MARKETING GETS SHORTER — AND LONGER

This one sounds contradictory at first, but actually speaks to the beauty of music as a creative medium. On the one hand, the deluge of online music and media content has compelled artists and labels to cater to fans’ fickle tastes and attention spans — releasing shorter projects at a faster clip, while leaning heavily on short-form video apps like TikTok for distribution and virality (whatever that means). On the other hand, the enduring power of streaming has proven time and time again that release day is just the first step of a wider conversation between the artist and their fans about their work. We’ve seen some of the most interesting approaches to catalog marketing emerge this year, wherein labels use new technologies to immerse fans in the stories and context behind their music in interesting ways. The current recorded-music environment favors not just songs that go viral, but also songs with infinite replay value; not just quick reaction times, but also patience and a willingness to embrace the old and the new in the same breath.

5. MAJOR MUSIC STREAMING SERVICES JOCKEY FOR MARKET SHARE — AND GET INTERROGATED

Incumbent DSPs like Spotify, Apple Music and Amazon Music are continuing to compete head-to-head for paid subscribers, with a focus on markets outside the US and EU (Spotify just announced their official plans to launch in Korea in early 2021). In pursuit of differentiation, they all are taking an increasingly multimedia approach to product development — particularly through audio/video integrations, such as Amazon Music’s integration with Twitch and Apple Music’s new 24/7 video channel. At the same time, as major tech corporations that have grown in a pandemic, these services are facing an ongoing crisis of identity (and public relations) with respect to whether they really care about music, and, more importantly, about musicians.

6. MUSIC IS A CANARY IN THE COAL MINE FOR PODCASTS — OR IS IT THE OTHER WAY AROUND?

Increasingly leaving music behind as a business-development priority, DSPs have also refined their focus on podcasts as a major chess piece in the wider game of subscriber competition. The main music/podcast trend of 2020 — and one to follow in 2021 — is not just about the podcast content itself, but also about the interplay between content and technology, and how, in their vertical integration of the podcast business, platforms are working to set the content agenda for the rest of the podcast industry. This means that podcasters will end up facing many of the same issues that musicians have had to grapple with over the past several years with respect to audience development, recommendation algorithms and overall content/platform power dynamics.

7. NEW MUSIC PARTNERS EMERGE, FROM TELCOS TO MEDITATION APPS

At the same time that DSPs jockey for market share, a growing range of outside sectors — meditation and fitness apps, game studios, telco brands, VR/AR/MR developers, avatar startups, SVOD streaming services, social apps like Facebook and Instagram — are inking deals with artists and rights holders at a faster pace, realizing the universal and evergreen cultural currency that music offers in a remote, digital world. These deals reinvent how we normally think about “brand partnerships” and “licensing agreements”; they integrate music catalog much more deeply with emerging user behaviors aside from just lean-back streaming, and present an opportunity for artists to build multidimensional worlds around their music and persona at an unprecedented scale.

8. THE COMPETITION FOR RIGHTS AND AUDIENCES INTENSIFIES

The catalog acquisition market is more frenzied (or, as some in the industry call it, “frothy”) than ever before, as legacy financial institutions look to invest the money that’s still on their hands in the least risk-averse assets possible. We should be on the lookout for more transparent data about these catalogs’ financial performance going into 2021 — as Warner Music Group, Hipgnosis and Round Hill are all publicly-traded now, with Universal Music Group (which just bought Bob Dylan’s publishing catalog) set to go public by 2022. At the same time, given that artist development and fan engagement have completely collapsed into digital space, so have organizational boundaries among competitors. Agents and promoters are increasingly interested in getting into the label game (and vice versa), raising the question of what an ideal artist partner looks like in 2021 when live and recorded music increasingly overlap online.

9. DATA BECOMES AN EVEN MORE VALUABLE CURRENCY

As much of the industry remains online, data literacy has become more important than ever across all sectors — from measuring an artist’s or company’s digital footprint, to making sure new music releases and livestreamed events reach the right people at the right time. Expect data to be an increasingly prominent clause in artists’ future contracts with labels, promoters and other business partners.

10. DIVERSITY AND EQUITY BECOME NON-NEGOTIABLE

From music-industry leaders spearheading the Blackout Tuesday movement in response to Black Lives Matter, to the likes of Kanye West, Taylor Swift, Megan Thee Stallion and Migos amplifying their contractual disputes with their labels, diversity and artist equity have not just entered the industry spotlight — they’ve become nonnegotiable for the music entrepreneurs, leaders and innovators of the future. This year has seen more and more scrutiny of racial equity at every level of the industry, from the artists on the charts and festival lineups, to the contracts they sign with business partners, to the assistants, marketers and C-suite executives leading operations behind the scenes. As stopgap solutions, we’ve seen donations, dedicated coalitions, the questioning of certain words like “urban” and revisions of a handful of exploitative contracts. But what’s next? Expect this conversation to stay top-of-mind and for accountability to remain at an all-time high, especially going into Grammys and Oscars season in early 2021.