IP(atreon)O, creator wellness, musical frontiers, winter world tours, and lost samples
January 22, 2021 Edition (#39)
Happy Friday, squad. We entered the week with just a bit of existential angst about reading the news; we’re exiting it with less. This qualifies as a good thing.
“I don’t like ironing, but it reminds me that once, long, long ago, there was a semblance of order in the world.”
IP(atreon)O
We can debate the rationality of the current tech IPO market all we want, but it probably [Ed.: definitely] won’t change anything. One thing is for certain: it is a good time to be a growth-stage tech company with public listing prospects. If you are feeling saucy, you suggest, gently, that you might be considering a public offering of one form or another. Depending on how that goes, you either raise a lot of money in the private markets from any number of firms who have an uncomfortably large amount of unallocated capital—the investing version of all dressed up with no place to go—or you say, eh, we’ll do it live, and you just go for it. It’s probably going to turn out pretty okay, at least for now.
This week, The Information ran an exclusive piece on Patreon—the OG fan funding company—that suggested that Patreon was considering a public listing this year, according to “a person with knowledge of discussions.” Patreon falls into the camp of “companies for which the pandemic has been a good thing,” with their business doubling YoY in the past few months. Impressively, Patreon is now pacing at $100M in annual recurring revenue, and has more than 6M patrons and 200,000 creators on the platform. The company did just raise $90M of funding in September—at a $1.3bn valuation—and is trading on strong momentum: six years to reach $1bn in creator payouts, and 15 months to get to the second $1bn in payouts. Not bad.
I’m interested to watch what happens with Patreon, particularly as a bellwether for other creator-focused companies that remain private but have accelerating trajectories (Kajabi, OnlyFans, Cameo). If you’re interested in learning more about Patreon’s history, check out this edition of NPR's How I Built This podcast featuring Patreon co-founders Jack Conte & Sam Yam.
A very 2021 theme: creator wellness
Venture capitalist Hunter Walk recently wrote a piece in which he described how social media apps are “burning out their creators.” Walk believes that we’re in “Phase 3.0” of the online content era, in which Phase 1.0 consisted of “the earliest days of ‘user-generated content’” and Phase 2.0 was the “beginning of Creator Health initiatives.” Whereas in Phase 2.0, these initiatives were essentially separate, off-product programs—Creator Academies and other training programs of various shapes and sizes—Phase 3.0 would see “Creator Wellness” initiatives built directly into creator-driven products.
It’s certainly true that many of my own conversations with creators come back to the unpleasant reality that one can quickly go from “this is my dream job” to “this is my hellscape” simply because of the pressures that come from regularly producing content for digital platforms. Many creators describe a sort of background-level paranoia about how algorithms would receive a slower pace of content production, and worry constantly about watching their audiences erode if they don’t maintain their posting velocity. Sadly, velocity and quality are often at odds, and this compulsion to produce because of audience or algorithmic pressure—not creative inspiration—typically doesn’t lead to a good place.
Many creators also say that they no longer answer any DMs from fans because of how overwhelmed they are by maintaining a consistent presence across different online platforms. Even creators who operate membership or subscription programs—on Patreon or elsewhere—describe similar anxieties: how much does one have to do to retain subscribers and, thus, a stable income? Subscription income for creators can be a powerful thing, smoothing out the spikes that often come with uncertain artistic pursuits, and enabling talented individuals without household names to persist (and subsist). But, subscription models come with an expectation of regular production, and the ever-present sense that one is on a hamster wheel that is difficult to get off.
Walk proposes a few ideas to mitigate these dynamics, including creator “seasons”—borrowing the paradigm from traditional entertainment—rate-limiting creator velocity as a way to improve creator wellness and (artificially) create scarcity for their content, and offering PTO to creators. Substack and others are already incorporating features that allow creators to “pause” subscriptions so that they can take a break without worrying that consumers will be frustrated by ongoing payment without commensurate return.
The question of PTO, and other creator benefits, is a nuanced one, largely because certain benefits connote an “employee” status; as we saw with Uber/Lyft and Prop 22 earlier this year, to cite just one example, this can rapidly become a rather loaded question. [Ed.: Or, to quote my most-despised work travel companion from my early career days, “a whole different flock of fish.” Note: not the way the idiom goes.] Nonetheless, considering how to mitigate creator burnout is a crucial topic, particularly given the extent to which the health and success of so many online communities rest on the contributions of these individuals.
Music’s new frontier
I enjoyed this article from Bas Grasmayer on Endlesss, a new collaborative music making app, and what it implies for music creation more broadly. Endlesss compositions consist of “iterative loops” or snippets of music (8 bars each) that, in aggregate, form a full musical piece. There have been apps like this for smartphones for many years, some good and some bad. [Ed.: LoopyHD and Animoog got me through many overnight flights, once upon a time when flying was a thing to do.]
What’s different about Endlesss is that this song creation is intended to be social, such that you can either observe songs being created by others, or actively participate in creation yourself. As you can imagine, this is a goldmine for people who like to remix existing samples, and a novel way for musical creators to collaborate and for fans to watch them at work.
As Grasmayer notes, this product also turns these recordings into “non-static” artifacts that can evolve over time. And, it means that songs on Endlesss are uniquely experienced on the platform; they’re not something you can simply access through your music streaming service of choice. I love where this is headed, not only because of the differentiation from “traditional” digital music products, but also because of the potential to harness the mimetic energy within Gen Z, as expressed across social media apps. [Ed.: And the expansion of online beat marketplaces and companies like Splice that enable musicians to create & sell digital products that enable others to create.]
A product like Endlesss that not only enables collaboration but also encourages remixing—and allows for Twitch-like observation of creation-in-action—feels timely. Of course, there’s no shortage of execution risks at play here, but the concepts are appealing and the current version of the product is compelling.
In other music biz news, Sony recently announced a new team “dedicated to reimagining music through immersive entertainment.” (Music Business Worldwide) The division, aptly named Sony Immersive Music Studios [Ed.: another promo for someone in Marketing?] is tasked with coming up with new music experiences through “the power of creativity and technology.” This is sort of like the press release equivalent of saying that “Trillium is persevering through the pandemic through the power of wine and lamb shanks.” It is accurate, but doesn’t really tell you anything you didn’t already know.
In all seriousness, it sounds like augmented reality and virtual reality experiences will be in scope for this team, along with a host of experiments around gaming, real-time 3D creation (using Epic’s Unreal Engine), and digital/virtual concerts. One such example, cited in the MBW piece, features artist Madison Beer filming a VR music video and creating an “ultra-realistic” avatar of herself.
A mid-winter Trillium World Tour
Once upon a time, we used to write about international startup news. Lest you thought that we’d forgotten our nomadic origins, there are a number of worthwhile globally-oriented reads to peruse.
First, TechCrunch’s Rita Liao wrote a good piece on how Douyin (TikTok’s Chinese version) is launching an e-wallet within the app. WeChat Pay and Alipay remain dominant in China’s digital payments landscape, but this is an interesting development for Douyin because of what it suggests about the product team’s aspirations for on-platform commerce. The example that Liao cites is around influencer’s promoting a product—via a standard affiliate link—and sending an interested consumer to buy the product via Douyin Pay. That makes sense, but I’d be more intrigued to see whether Douyin Pay foretells innovation around pay-for-content (or merch, etc) on the platform. Specifically, could it create the rails for consumers to pay creators directly, without ever having to leave the platform? Or, is this more analogous to the introduction of fintech products by Gojek/Grab, where ride-hailing was a hook for user acquisition—as content is for Douyin—while other products are the necessary drivers of user lifetime value?
Second, still in China tech news, Tencent Music Entertainment Group announced that it would purchase an audiobook platform called Lazy Audio. (Reuters) The acquisition price is $417M—significant, given that average U.S. market audio acquisitions seem to fall between $50-$200M—and will close in the first half of this year. Lazy Audio—[Ed.: seriously, what is up with these brand names?]—is a platform where various types of non-music audio can be sold, with most of its revenue coming from “pay-per-title sales, subscriptions, and ads.” That doesn’t really narrow it down very much—the revenue comes from people paying for things?—but pay-for-content is a more mature market in China than it is elsewhere in the world. This behavior is often cited as a reason for why the Chinese podcast market so dwarfs its U.S. equivalent, on a revenue basis.
Third, heading west to India, we wanted to check in on our old friends at Reliance Retail. This week, there was news that Ambani’s behemoth plans to “embed its e-commerce app, Jiomart, into Whatsapp” (LiveMint) within the next six months. This leads to proper “superapp” territory: 400M Indian users of Whatsapp will be able to buy products through Jiomart without ever leaving the app. The combination of distribution—for Jiomart—through Whatsapp, digital payments (via Whatsapp Pay), and proper commerce inventory & functionality—from Jiomart—in Whatsapp’s core messaging experience is hard to beat. And, as Whatsapp becomes a storefront for local businesses, Facebook’s unified messaging & “back-office” products (including Whatsapp Business) will become even more desirable for this class of merchants.
Fourth, and finally, Saad Khan wrote a fascinating longform article on Bigo (a Chinese livestreaming app). (Rest of World) I remember reading about the app a few years ago, as it rose to prominence in South & Southeast Asia and experienced both tremendous growth and the pitfalls that you’d suspect might challenge a livestreaming app with a very young audience. Today, the app is owned by Chinese tech company JOYY, Inc., and has 400M users across markets like India, Bangladesh, and Pakistan. I don’t want to spoil Khan’s excellent piece, so I won’t say much more, but encourage you to take a look at the article (which is made more tangible by videos of Bigo streams).
Khan writes about the impact of Bigo’s app ban in Pakistan, the way the app took off with Pakistan’s working class, and the types of marginalized performers that found an audience through their Bigo livestreams. He also details the economics for streamers on Bigo, and the increasingly exploitative revenue dynamics on the platform. It’s a worthwhile read that shines a light on a product that most of the Trilliuminati—myself included—have likely never used.
For your ears only
There’s the YouTube “rabbit hole” of investigative podcast fame (dubious) and then the far more magical case in which YouTube becomes a portal to music that I never would have found on my own: the digital equivalent of being in a record shop with no walls and global inventory. Over the past few weeks, I’ve found myself seeding YouTube with a song or artist that I happen to like, and just letting “the algorithm” take me wherever it wants to go. It’s totally cool, I can stop anytime I want. [Ed.: when you start seeing QAnon messaging drifting into standard Trillium fare, you’ll know what happened.]
Last week, I wrote about the upcoming Madlib/Four Tet album and pulled the tracks off YouTube. Because I was so deeply engaged in writing to the Trilliuminati, I forgot to pause YouTube, and what a glorious oversight it was. Because of the Madlib connection, the music brain at the core of YouTube took me into a world of obscure soul and pop music that I’d never heard before—much of which was, in fact, sampled by Madlib throughout his career. There were many gems to be discovered, including a track by a band called Rubba [Ed.: not SEO-friendly; seriously, don’t Google it.] After spam-texting erudite Reader PK about this group for a few hours, I tried to find whatever information I could about their origins, to little avail.
The band was active on De Wolfe Records from 1979-1983 and released one LP (now available on vinyl for the low, low price of $229). Enough said; listen to the instrumental below. It’s amazing, and has recently surfaced in records by Freddie Gibbs (prod. by Madlib) and Westside Gunn.
See you all next week.
N