Want to hear the saddest statistic in modern entertainment? It was effectively implemented last month by Jack Conte, co-founder and CEO of fan sponsorship app Patreon, is now worth $4 billion. “A study published a few years ago showed that 75% of children aged 6 to 17 want to be online video creators when they grow up,” Conte boasted. in a YouTube video. “There’s a whole generation of kids watching today’s creators make videos, create podcasts, shoot movies with friends, build productive businesses, make money. No wonder these kids want to be creative when they grow up! “
In Conte’s view, it’s reason for popular celebration that three-quarters of children are planning a career in webcam spying. In his words, this was the basis for a “second Renaissance” that would make da Vinci & his colleagues’ three-century effort “a blip in a history book”. (Yes, he actually said this.)
The question for the 75 percent index is not whether the next generation’s grotesquely optimistic living plan will create a new creative class; that’s the role the remaining 25 percent are expected to play. If everyone is a creator, who is the audience? Furthermore, in a supply and demand economy, when creators make up the majority and the audience minority – who pays whom?
Of course, Conte was not allowed to think about ramifications. He only intends to ignite the hopes and dreams of millions of online creators, which Patreon can then harvest for profit. Patreon makes money by revenue penetration of DIY entertainers and accounts for one percent of registered fans. Even if these creators are making meager money individually, as long as there are large volumes of them, Patreon will print cash.
To sustain this scale-dependent business model, Patreon, like many other creator-serving tech companies, makes an empty promise: If you’re born to create, there’s a chance The guild is waiting for you right around the corner. That’s it other the guy, who’s in the adjoining “For You” window, who’s the perverted Joe Schmoe; you, you, are a true artist, and your Art worth the money!
The online influencer community really should be careful with this Kool-Aid. For proof, they can gawk at the music industry – where a new generation, with the right metrics of streaming, is currently experiencing the crushing reality of the so-called “creative economy(Or as Conte and several other executives filmed it, “the passion economy”).
Just last week, politicians in the United Kingdom, After an eight-month investigation, it was concluded that streaming music‘s commercial apparatus is need a “full reset.” However, their report appears right on the first page: “Several successful, critically acclaimed artists have found that streaming income ‘isn’t substantial enough to keep the wolf away. far from the door,’ it said.
The problematic word there: “Success” – certainly intentional – is undefined. What? Was a successful artist in the age of democratizing streaming?
The quote “wolf from the door” is an overt reference to the famous British singer-songwriter Nadine Shah, who used the phrase when give convincing evidence for the politicians’ investigation in November, Shah said, with Covid usurping any hope of income from touring, she is struggling to pay the bills just from online revenue. She currently has 71,378 monthly streams on Spotify globally – that might seem like a lot on the surface. But thanks to so many creators currently calling for a finite audience to pay a fixed subscription price, that number is actually relatively small. Every day, Shah Fight with over 7 million fellow artists for a portion of Spotify’s zero global royalty payments.
Dig around Spotify Copyright Explainer “Loud & Clear” provides some insight into how the minimum requirements of “success” have become unforgiving. Spotify is proud to tell us that 57,000 artists now shares 90% of the royalties it pays. In 2020, Spotify paid about 5 billion dollars music collection and publishing royalties; 90% of that will be $4.5 billion. These 57,000 acts of sharing money are what we can rightly call Spotify’s “Golden Club”. They represent only 0.8% of the total number of artists on its platform.
So if you’ve reached the “Golden Club”, sharing 90% of Spotify’s royalties, that’s a success, right? Press releases suggest yes, but general feeling tells us probably not: 57,000 individual recording artists is enough to pack Madison Square Garden more than twice.
Where does the threshold for a “successful artist” actually fall?
The Spotify page informs us that there are only 13,400 artists (0.2 percent) generated $50,000 or more on the streaming platform last year. Of that pool, 7,800 generated more than $100,000; 1,820 generated over $500,000; only 870 artists earned over 1 million dollars.
Digging through these detailed statistics assures us that these 13,400 artists – the minority plus $50,000 a year in Our “Golden Club” 57,000 strong people – have accumulated a minimum $2.22 billion on Spotify last year. More likely, they generated over $3 billion.
That would leave a smaller sum, $1.5 billion, to be split between the second division of the “Golden Club” – the remaining 43,600 artists sitting under the $50,000 per year bracket.
Obviously, the more popular artists of these 43,600 will claim a larger share of Spotify’s $1.5 billion. However, even if this number were somehow divided equally among them, it would still only equate to $34,404 per artist per year. (Shah is in the lower end of Spotify’s “Golden Club,” with “Loud & Clear” ranking her among the top 56,000 most popular artists on the platform.)
All of this reveals a painful truth: Even among the elite 0.8% “Golden Club” of artists on Spotify, there is a huge disparity between success and failure, with the majority of artists are definitely in the second category.
Wolf, please remember to wipe your feet on the way in.
Apparently, the “passion economy” doesn’t work for 99.2% of Spotify creators outside the top 57,000. However, as demonstrated by Nadine Shah, it also did not work for a significant percentage of the 0.8% “Golden Club” elites who found themselves simply too far away from the title. The book spans 57,000 actions to make decent money from streaming.
We could argue whether a reworked payment model makes a difference here. If royalties are divided not from a fixed pie but through a fan-centric model at a per-stream rate, how could it greatly improve underpaid artists? Some reports hint that this change won’t make a big difference; SoundCloud’s favorites and now Portishead, would completely disagree.
It also notes that of course, artists like Nadine Shah can leverage their visibility on Spotify et al to build business elsewhere – e.g. radio stations, stores retail, direct-to-consumer stores like Bandcamp, or engaging direct programs five-star reviews in major newspapers.
But to say the creative economy alone working for successful musicians is a profound omission.
I want to focus back on Jack Conte, selling his creator utopia to 75% of kids who want to be video creators. Conte knows the millions of people involved in his “passion economy” not only bring their uploads to the party – but also bring their friends, family, listeners and subscribers; they bring online marketing and social media promotion; All the tools to fight the odds are stacked wild. The total of this self-started creator ad, across millions and millions of accounts, draws large audiences to the platform. Tech businesses make a lot of money and recruit a lot of subscribers, from this creator frenzy.
Perhaps, once the big tech boom from the “passion economy” became evident in the music industry – that 99% of artists don’t make a decent amount of money online – we You can see that 75% of children are restraining their interest in becoming creative. Perhaps artists like Shah and the millions with her will simply remove music from streaming services without rewarding them enough for making it to the top 56,000 artists worldwide.
Until then, the global size of the “passion economy,” combined with the participants’ hunger for attention, will keep the money for tech companies and their supporters. And those backers are happy: Take investment firm Tiger Global, for example, one of the biggest investors in Spotify before acquiring most of its shares in 2019. for $1.3 billion or more. Tiger Global just led a $155 million investment round, giving Patreon a $4 billion valuation.
In the same video announcing that funding round, Conte said: “There are podcasts on Patreon that make millions of dollars a year. There are YouTubers on Patreon making hundreds of thousands of dollars per month. These individuals, he assures us, are “living the monstrous dream!” As for the rest — creators struggling to keep the wolves out the door, in the case of Spotify musicians, about 99.8% of the population — he’s much quieter.
Tim Ingham is the founder and publisher of Worldwide music business, has been serving the global industry with news, analysis and jobs since 2015. He writes a regular column for Rolling Stone.
https://www.rollingstone.com/pro/features/music-creator-economy-spotify-patreon-1199388/ | Why the ‘Creator Economy’ Is Music’s Biggest Lie