Today more music is created and distributed, and music is more accessible, than ever before. At the same time, the music industry’s consumer boom is rapidly leading to a creator bust, according to MIDiA Research.
This week the market intelligence and consulting firm released a new report, “Music and Gaming: A new way to play,” in partnership with Twitch, the popular interactive live streaming service for gaming–and now also music, sports and entertainment–content. The report reveals that, as music companies and creators explore new ways of sharing their music and connecting with audiences, particularly through livestreaming, they must also rethink building and monetizing fandom.
Artists are discovering the growing opportunity to leverage the games industry’s fan economy to better connect with audiences, monetize their work and develop their careers. MIDiA Research report author and managing director Mark Mulligan says this can be accomplished by expanding and reimagining the ways in which they currently participate in the gaming opportunity, which largely focuses on marketing and promotion to drive streams on digital music services and ticket sales.
“For many, live streaming started out as a solution towards creating a live experience between artists and fans in the midst of the pandemic. However, its rising popularity as well as growing opportunity calls for the music industry to take a page out of the games industry and understand that digital intimacy is the key to opening the box to monetizing fandom,” Mulligan says, adding that the benefits multiply when they involve music fans who are also gamers, or audiences that will most quickly understand and translate the concepts of digital fandom across to music.
According to the report, artists are evolving fan relationships through the instant global reach, community development and direct monetization of live streaming performances. There is no longer a need for thousands of fans when a three-hour Twitch session yields a higher financial return than totaling one million streams. Live streaming performances are also now monetized through ticket sales, fan contributions and virtual and real merchandise as well as sponsorship and advertising revenue, decreasing traditional dependence on tours, agents and record deals that include handing over rights to songs.
Gaming environments offer highly-engaged audiences that are growing more diverse by the day. The report finds that, in 2020, in-game spending was worth $97 billion and gaming revenue was almost four times the total size of the global music industry. The trend is expected to increase with a huge in-game monetization opportunity.
As the coronavirus pandemic continues and touring remains on pause, artists like mxmtoon and Johnny and Heidi are fully engaged in live streaming platforms. Both acts are also embracing new ways of developing and monetizing fans, especially on Twitch.
“Twitch felt like a space where I could cultivate a community and share that love with other people,” says mxmtoon in the report. “Starting streaming just seemed like a natural next step in trying to connect even further with my audience.”
Johnny and Heidi report streaming performances for the past 20 months and says. “Streaming has given us the freedom and flexibility to perform and record the music we want, when we want, where we want. Just like in the gaming world, streaming music is a constant grind, but worth it.”
MIDiA Research report author, senior analyst and product manager Karol Severin says that games aficionados, or high-spending, highly-engaged gamers, over-index on both time and money spent across all entertainment formats compared to the consumer average. They actually spend more time listening to music than the music subscriber segment itself, he adds, which illustrates the powerful cross-entertainment nature of gamers and consumers.
“Artists and music companies should no longer think of gamers as a niche or simply a tangentially related segment,” Severin says. “Gaming is now a mainstream cultural phenomenon and literally every music genre can find its sweet spot in a game-centric environment, which doesn’t always have to be a game, if they identify the right partner and a way to execute.”
As even classical and jazz music creators begin exploring gaming opportunities, Severin says that music companies and artists need to start thinking of gamers as a concentrated pool of valuable music fans, not niche consumers. Then the relationship between artist and fan can evolve.
Though artists and fans already connect in various ways, Severin points out that the dynamic is often unilateral from artist to fan regarding finished products. As consumer trends grow towards expression, co-creation and participation, gamer-centric platforms are enabling artists to engage in more authentic and collaborative ways, thereby fueling fandom and positive, lasting sentiment.