Beyond the band-aid: How to create the music livestreaming platform of the future, now

Back in 2012 — long before the COVID-19 pandemic took the concept of monetized online concerts from under-the-radar novelty to necessity — I was working with a small team in a loft right off Hollywood Boulevard in Los Angeles, trying to build the livestreaming platform for artists. You may have heard of it before: It was (and still is) called StageIt.

At that time, the impact of music streaming on many artists’ careers was starting to become clear. From emerging acts to the top 1% of celebrities, the focus seemed to shift across the board from merely monetizing records, to staying on the road for as long as possible to compensate for the low margins on streaming and “make a living” via ticket and merch sales. Having formerly been a touring artist, and having spent time on the road with successful, veteran acts, I saw firsthand how unsustainable and unhealthy this model could be.

At StageIt, we set out to provide a solution to the 99+% of artists who neededa new, more sustainable digital revenue stream — not just the occasional break from the road. I worked as StageIt’s Artist Relations & Community Director from 2012 to 2015; during that period, it felt great to walk into the office every day and work heads-down on what we considered a key, innovative revenue driver for artists in the future. It was like the stories of early Nike, building through trial and error with athletes always top of mind.

Unlike Nike, though, we were way too early — eight years early, to be exact.

Fast-forward to 2020, and COVID-19 ultimately ushered in that future in a way we never expected. On the brink of shutting down, StageIt suddenly saw a huge spike in activity once tours were canceled, bringing in more revenue in the last two weeks of March 2020 than in all of 2019 combined. The playing field has become much more fragmented since then. MIDEM’s latest whitepaper on livestreaming and virtual events features over 40 different livestreaming platforms available at artists’ disposal today, many of which launched amidst the pandemic — from integrated features on existing platforms like Mixcloud, Bandcamp and Bandsintown, to dedicated standalone apps like Sessions, Dreamstage, Mandolin and Doors.

To me, though, it seems that the primary purpose of many of these platforms so far has been merely to provide the sturdiest band-aid over the festering, but temporary, wound of missing performance revenue for artists, promoters and venues. While this may be a helpful respite for the music industry in the short term, being a mere band-aid is arguably not a sustainable business model for a tech company in the long term. And this mindset has led to the offerings of music livestreaming platforms looking quite homogenous to date — offering live text chat, YouTube/Facebook/Twitch integrations, merch bundles, paid tickets if you’re lucky and… not much else.

Given how uniform the landscape has become, these newer platforms have been forced to focus on competing for the attention of well-established artists and their fan bases, instead of nurturing newer generations of artists. This is understandable, since it’s easier to launch something new on the back of big names. But it ends up being an expensive strategy that leans towards a winner-take-all dynamic.

When asking music managers how they choose the best homes for their artists’ livestreams, the response has become less and less about the quality of the actual technology or features, and more and more about which company can sign the biggest checks upfront. We should not be surprised, then, to see a growing number of livestreaming startups being acquired by traditional and established live music brands that already have access to that talent — e.g. Live Nation buying Veeps, or Sofar Sounds buying Seated. As Billboard put it, the natural endpoint of this trend is “survival of the biggest.”

But our outlook on the future of livestreaming doesn’t have to be so myopic. If we really care about the long-term future of music livestreams — and ensuring that all this experimentation with the format won’t be just for nothing — we have to start thinking beyond the band-aid.

How can we start to cultivate not just temporary ticketed streaming options for the biggest touring acts, but also new, internet-native solutions with the next class of artists and fans in mind — for whom performing and watching concerts live online is just as commonplace, if not more, than going to a club? How can we stop thinking about music livestreams merely as substitutes for IRL shows, and more as experiences that can stand on their own in the exciting middle ground between live experiences and digital media?

Based on conversations with labels and managers, several years of firsthand experience working with early music livestreams and observations around how internet fandom has evolved ever since, I’ve put together some concrete ideas of features and integrations that music livestreaming platforms should be prioritizing, if they want to ensure that they can be best positioned for success beyond the pandemic.

Why does this matter?

Before jumping into these features and priorities, let’s address a more fundamental question: If you take away the technology — which has become fairly simple at its most basic level, namely a livestream with ticketing — do virtual music performances even need to continue to exist?

Now more than ever, I believe the answer for both artists and fans is yes. Just as piracy compelled many artists to give away their music for free in hopes that fans would turn up at their shows, social media today has made many artists give away their time for free in the hopes that anyone would notice them at all.

Almost 10 years ago, early music livestreaming platforms like StageIt were built on the belief that an artist’s time has actual value. We also believed fans wanted to support their favorite artists online and keep them company in a deeper way beyond surface-level streams and “likes,” and in a way that didn’t require a certain financial background or geographical proximity to participate.

Virtual concerts offered a great, two-sided platform to bring together these incentives. Early on at StageIt, we saw fans spend an average of $12 per streaming show, including upfront ticket sales and real-time tips; most of these shows were organized with a pay-what-you-can price tag, and 60% of fans opted to tip the performer. The wide range of possible technical setups behind virtual concerts also offered artists and fans a distinct experience from a venue show, which our model was never intended to replicate or challenge in the first place. Artists didn’t just have to play through a premeditated set list like at an in-person show; they could also essentially monetize their downtime or prep time in a way that fans happened to love as well. They could broadcast acoustic, interactive play-throughs of entire albums as an open listening party, produce multicam, tricaster shoots on elaborate soundstages or do a worldwide fundraiser right from their rehearsal spot or studio.

One of my favorite early livestreamed music moments was watching Jay Sean on StageIt back in 2012; he enthusiastically walked fans through his sneaker closet, before sitting down and tearing through a stripped-down version of his hit song “Down.” More recently during the pandemic, we saw Timbaland and Swizz Beats create some of the most viral programming via livestreaming with Verzuz, which dominated cultural conversations and was quickly snatched up first by Apple Music, then by Triller. Meanwhile, multiple magazines have raved in response to Phoebe Bridgers playing late-night sets from her bathroom. Anything goes and all artists need is decent audiovisual quality, a solid upload speed and a creative idea.

The positives of the livestreaming model 10 years ago will be just as relevant post-pandemic: The format’s versatility in execution and the new connection it can create between artists and fans (and within the fan communities themselves) is, in my opinion, here to stay. I’m encouraged about where this model is currently, but even more excited about the work that needs to be done.

Business models: Artist-centric bundling & subscriptions

In the words of tech writer Ben Thompson, one of the core tenets of the burgeoning creator economy is that “people follow people.” This is nothing new in music, where people tend to be fans of artists much more than they are fans of just a few of their songs. Recent industry trends like the rise of paid membership models, user-centric royalties and NFTs (more on that later) point to this concept being reflected in the underlying, direct business models behind the next generation of independent artists.

Looking for long-term business models beyond just one-off ticketing and tipping, the music livestreaming platforms of tomorrow need to keep this artist-centric reality at their core.

A likely future scenario is that artists will treat livestreams as just one of many potential outlets for fan engagement and monetization online, in addition to the dozens of other social media, ecommerce and streaming platforms they have to keep track of. Bundling a livestream with other products or experiences can make this cross-platform digital engagement easier to understand on the frontend for viewers, and then analyze on the backend for artists and their teams to get a more holistic picture of fandom. Some companies like Seated have already reported early success in bundling one-off livestream concert tickets with merch and vinyl orders. Bandcamp’s ticketed livestreaming feature allows artists to showcase their existing Bandcamp profiles alongside their shows — and acknowledges fans who buy the artist’s music in real time during a stream, incentivizing engagement and monetization in the moment.

In addition, bundling multiple livestreams under a more affordable subscription model — whereby fans can subscribe directly to the artist over a longer period of time — helps frame livestreaming as a long-term community engagement tool rather than just as a one-off event. For the platforms, this means recurring revenue, which is crucial for survival in the current fragmented landscape. Twitch and YouTube already allow for direct channel subscriptions, while Patreon has allowed for subscription-based livestreaming perks for several years now through its native integration with Crowdcast. We’re seeing some newer music livestreaming platforms shift to this model in real time, such as Grouplove’s upcoming subscription livestreaming series on Moment House.

Importantly, for subscription models around livestreams to work, fans have to be able to subscribe directly to the artist. Some platforms like Bandsintown are attempting to create more aggregated monthly subscription options for virtual concerts, similar to the models that dominant audio DSPs like Spotify and SVOD services like Netflix and HBO Max offer. While this might sound like a great move on paper to showcase recurring revenue to investors, it arguably contradicts how the entire model behind virtual concerts is intended to help artists make more direct revenue from fans and earn their fair share of value that tech platforms generate off the backs of their music.

Melissa Etheridge’s Etheridge TV, which nets the artist over $50,000 a month, is a powerful case study in bundling both products and experiences, with a direct-to-artist subscription model at its core. The underlying content behind Etheridge.TV includes multiple different series — e.g. Cover Song Tuesday, the podcast-esque Linda and Me and Mamma’s Choice — that allow the singer to showcase multiple sides of her personality as well as her own community of friends and collaborators, beyond just performing a set of songs. Fans can buy either one-off tickets or a subscription for $50/month, depending on their willingness to commit to a longer-term experience. In addition, Etheridge.TV is powered by Maestro, a B2B, white-labeled livestreaming service that enables direct integrations with the artist’s or brand’s merch store, so that fans can watch and buy merch in real time if they’d like. Last but not least, fans who are even more eager to engage directly with Etheridge can sign up for VIP packages, which are monetized via Chatalyze and include access to live soundchecks and meet-and-greets for each show.

One challenge with the subscription model is that it can get expensive for fans and only add to the ever-growing plate of month-over-month entertainment charges, both inside and outside of music. I don’t necessarily love how the burden of building new revenue funnels for artists always seems to fall on fans, which is why it’s also important for music livestreaming platforms to build features with other funding models in mind.

Business models: Sponsorship funnels

In fiscal year 2019, Live Nation made $590.3 million from sponsorships and advertising. While that accounted for only around 5% of the promoter’s total revenue that year, the value of sponsorship in keeping live music brands financially sustainable, especially festivals, cannot be understated. Sponsors find value in having their branding and messaging reach different, engaged audiences night in and night out in physical venues; the same should be said for online music “venues,” i.e. livestreaming platforms, as sponsorships can help the latter keep the lights on and move closer to profitability and concrete artist revenue.

Many sponsored virtual concerts popped up throughout 2020, such as Justin Bieber’s virtual NYE concert presented by T-Mobile, Dua Lipa’s Studio 2054 show that kicked off her Puma partnership and Jessie Reyez’s subtle product placement of a Jameson whiskey bottle in her latest album release livestream. While celebrities at this level usually attract their own sponsors, livestreaming apps should be building their own ad and sponsorship opportunities natively into their artist offerings — whether through pre-rolls (already common on YouTube and Twitch) or through more innovative ad products like sponsorable stages or pop-up partnerships with restaurants and food delivery apps like Postmates, the latter of which can encourage fans to create a more tangible, memorable setup for their viewing experiences at home. (Postmates recently launched such a partnership with local music venues in Los Angeles called Sustain The Scene, although it was not tied to any particular livestreaming platform.) This should also take priority for platforms to build as it’s a promising source of potential turnkey revenue to set them apart from the growing pack.

I saw early potential for this model in 2013, when the singer-songwriter Tori Kelly performed a virtual concert on StageIt sponsored by ConAgra Foods, as part of the latter’s Child Hunger Ends Here awareness campaign. In addition to paying Tori’s artist fee and StageIt’s platform operation costs for the streams, ConAgra treated fans to the artist’s online shows free of charge — and fans still tipped the artist in real time.

The brand recognized the value of the positive sentiment and the captivated audience they reached with even the few thousand fans who viewed each show, bolstered by the social reach of the artist and conversation created across more mainstream social platforms like Instagram and Twitter. In a time when the value of a social impression is becoming more and more questionable, an online concert — especially one armed with compelling talent and a great fan experience — could bridge the gap between live events and digital media in exactly the innovative way that brands and sponsors have been looking for.

Fan features: Discoverability

Of course, having a captive audience for a livestreaming platform is far from guaranteed. You need to have either high production value tailored for a more premium viewing experience, or features that keep fans invested in livestreaming as a format long-term, independent of their allegiance to any one artist.

A lot of the historical excitement around music streaming platforms like SoundCloud and Spotify, as well as with more generalist livestreaming options like Twitch, has been in the notion of discoverability. While rising above the Internet noise is certainly challenging for any artist today, emerging artists are able to find new audiences (and vice versa) at a much faster and more seamless pace than in previous decades, thanks to the impact of technology and discovery algorithms.

One surefire sign that the current music livestreaming landscape is not “the future” of live music is that discoverability is sorely lacking. As mentioned earlier in this piece, this is likely because new entrants are competing head-to-head to recruit more established artists for the purposes of short-term audience acquisition. The winning strategy under this model is arguably more capital, not better software, in which case emerging artists and discoverability lose out.

The music livestreaming companies that will last are already giving serious thought to fostering discoverability, not just throwing money at top streaming talent until the well dries up. Of course, the challenge with discoverability is building up enough of a recurring catalog of shows to have content to discover in the first place — which suggests that livestreaming platforms that are accessible to more artists, such as Twitch, StageIt, Sessions and Instagram, have more wiggle room to experiment.

While I was at StageIt, we built and tested a Suggested Shows feature to expose one act’s fans to another act on the platform. We manually handled these suggestions, bringing a human element back to the curation most fans now expect from algorithms. Not only did the feature incentivize artists to book their follow-up gigs much more quickly or tell their friends about the platform, but it also helped bring fans back to the site for another show — something that will be increasingly difficult to achieve with so many acts spread out across so many livestreaming options right now.

Even for livestreaming platforms like Moment House and Veeps that focus only on major and established artists, an “opener” feature — where a given livestream starts off with a performance or featured video from a smaller or emerging act — could be a game changer. YouTube already has a feature called Live Redirect that technically enables “openers,” by allowing artists to host a livestream in advance of a scheduled premiere. Twitch lets creators do the inverse with Raids, which allow streamers to direct their viewers to a specific channel at the end of their broadcasts. Newer music livestreaming platforms might do well to follow suit; the newer generation of music fans who are becoming well-acclimated to livestreaming might look forward to tuning in earlier or longer if they knew they could discover a new, emerging artist, just as I discovered some of my favorite artists as a teen at in-person shows.

Fan features: Community-driven rewards and tokens (including, yes, NFTs)

For back-end and financial reasons that were probably too confusing and slightly boring for me at the time, we established a virtual currency on StageIt early on so that fans could opt to buy tickets and tip artists with any international currency. We also saw an overwhelming majority of show revenue on the platform come from tipping, which came with incentives in the form of VIP-style rewards like shoutouts, virtual meet-and-greets, custom merch, and even personalized songs. Today, many artists and creators on StageIt list out clear incentives for tipping ahead of their shows.

Nowadays, fans are much more accustomed to the concept of virtual currency and direct creator support. In the case of some of the world’s biggest music companies, like Tencent Music, direct creator support and tipping now account for the majority of their revenue, while platforms like Cameo that monetize personalized “digital VIP” experiences command billion-dollar valuations.

But upselling fans to increasingly expensive experiences is certainly not for every artist, nor does it actually make innovative use of new technologies at our disposal. More recent online trends point towards the value not just of unique digital experiences, but also of actual ownership of digital assets and goods, especially in the worlds of gaming and crypto. The ability for artists to create, mint and distribute one-of-a-kind digital assets might be one of the most intriguing features for newer livestreaming platforms to focus on, and could eventually move mountains in accomplishing what few have even tried to remedy until now: The massive amounts of lost revenue when people stopped paying for recorded music.

There’s also a way to bake in digital goods, badges or rewards in a way that optimizes for accessibility, not just for exclusivity or scarcity. In 2013, we created a feature at StageIt called “hitchhiking” that allowed fans to purchase tickets for other fans. Such actions helped increase the contributing fan’s supporter rank, which was previously dictated only by tipping the artist. Hitchhiking also created a way for artists to generate more upfront revenue beyond the base ticket price without the need to auction off gifts and experiences to the highest bidder. Since then, gifting has appeared elsewhere in the livestreaming world — either on the platform level, like with Twitch’s gift subscription features and Currents’ pass-it-on tipping mechanism, or at the artist level, like with Emma McGann’s “Community Pot” for her virtual tour passes.

The recent rise of NFTs and crypto communities in music could also help augment these fan ranking, gifting and rewards systems, in a way that aligns social music experiences with the business needs of the performers and platforms themselves. For instance, if a band like Weezer hosts a stream, they could mint a handful of different digital assets that are exclusive to the show; every ticket purchase that fans gift to others could earn those fans an entry to win one of these ultra rare digital objects.

Startups like Fanaply and Decentraland are currently working towards this reality, in terms of bridging NFTs with live events. In the future, certain technological developments like dynamic NFTs could also update the content and ownership of these tokens in real time based on events that happen during a livestream. The possibilities are pretty limitless, and more importantly, could be effective and fun.

Overall, I’m hopeful that music livestreaming will find a more solid, long-term footing, as 2021 progresses and we get closer to a reality that isn’t quite as reliant on the “bandaid” that the format has provided thus far. It only took a few months away from what StageIt was building for artists to realize how much it meant to me, and I couldn’t be more optimistic that all the conversations we were having back then are finally starting to see the light of day. It’s important for every stakeholder in the ecosystem to realize that they have the opportunity not just to stay alive as a business, but to embrace experimentation and not take the current status quo as dogma. From curation and discoverability to digital goods and integrations with existing music services, there are many potential paths forward for artists and platforms to make money in new, innovative ways through livestreams.

I never would have predicted, let alone willed, that a global pandemic would be the catalyst for this shift. But the opportunity to create a new piece of the revenue pie for artists is here, and I think the internet is finally ready.