The longtail fail, tech's creator awakening, tip jars and multi-media stars
December 4, 2020 Edition (#34)
Happy December, everyone, and a Trillium birthday salute to Roaming Reader BNH (physical & spiritual whereabouts generally unknown since time of last contact). I hope that the American Trilliuminati had an enjoyable Thanksgiving-in-hopeful-isolation and that the rest of the crew enjoyed a few days of respite from your American friends and colleagues. As much as I cherished my time manhandling a stubbornly unthawed turkey while molecules of contaminated poultry-ice sailed across the Trillium HQ kitchen, it’s nice to be back in action.
The longtail fail
Marina Krakovsky wrote an interesting Medium post called, “What Everyone Got Wrong About ‘the Long Tail,’” referencing the famous 2004 Wired magazine article by then-Editor-in-Chief Chris Anderson in which he introduced the idea that “the future of entertainment is in…millions of niche markets at the shallow end of the bitstream.” Catchy. In essence, the concept was that, while the physical world is spatially constrained (only so many stores, movie screens and TV/radio channels), the “infinite shelf space” afforded to merchants selling goods of all kinds (physical, digital, spiritual) by the internet meant that small-scale sellers would flourish.
The central notion of a creator supported by a small but passionate community will sound familiar to anyone who has followed the various “passion economy”-related pieces that have proliferated over the past 18 months [Ed.: including in mainstream supermarket tabloids like Trillium]. Krakovsky’s rebuttal to Anderson’s original thesis is that, while it was correct in predicting the vast range of goods sold online, it didn’t foresee the centralization that has occurred and the benefits that have accrued to a small number of players (e.g., Amazon, Netflix). Effectively, while we can choose from a seemingly infinite selection of products, whether soap or song, those decisions occur in a small number of destinations.
I think that Krakovsky is generally correct about the centralization of power in various Internet markets, including those involving creators; one need look no further than the discussion around Spotify’s leverage in the music industry. I also think that it’s a mistake to conflate Shopify/BigCommerce—platforms that are essentially invisible to consumers and serve as the foundation for merchants seeking to sell “direct-to-consumer”—with Spotify, a dominant brand to which consumers are drawn and with whom artists and labels must do business in order to gain distribution. Krakovsky’s correct observation about centralized power in a small number of players comes from their control over distribution; this is also what allows these players to dictate economic terms that are not always favorable to the producers of the goods being bought and sold.
Krakovsky closes the post by talking about the “mixed” benefits that this era has generated for producers/creators, stating that “digital shelf space is unlimited…so creators have to spend more and more resources to try to stand out.” There are only so many hours in the day and dollars in the wallet, after all. The challenge is further complicated by both hit-driven/mainstream-focused recommendation algorithms and the fact that relatively few platforms have emerged for creators who want to build the same type of “direct-to-consumer” relationships that a brand like Warby Parker has fashioned in the world of physical goods. These ideas, along with the ever-present question of how to create awareness in a fragmented digital age, have been a theme of Trillium in the past, but I do think that some of these dynamics are starting to shift in creators’ favor.
Cash money still a company: Verzuz blossoms
Early in the pandemic, Verzuz—the virtual DJ battle webseries created by Timbaland and Swizz Beatz—became a mainstream phenomenon and media darling: an evocative shorthand for the ways in which Covid-19 has shaped our popular culture. From its humble roots on IG Live to its expansion to HD on Apple Music, the show has often captivated our collective imagination and made news. The most recent episode aired on November 19 and featured Jeezy (⛄) & Gucci Mane (🧊🐦). [Ed.: it feels appropriate to slip into the winter Verzuz season with an artist nicknamed “Snowman” battling another whose preferred adlib is “burrr.”]
It’s notable that Verzuz has persisted so successfully, particularly given that many Internet “moments” before it quickly fizzled. If you’re interested in learning more about the Verzuz origin story, I highly recommend Gerrick D. Kennedy’s recent GQ oral history: “Inside the Unstoppable Rise of Verzuz.” Bonus: if you click through, you’ll be greeted with a spectacular photo spread of Timbaland literally walking on water whilst wearing a leopard print ensemble (button down & matching shorts), looking like a Jungle Cat General MacArthur. Opposite: Swizz Beatz sitting on the hood of his McLaren supercar, shoes and all. For a related piece on the impact of Verzuz, and how artists are using it as a promotional platform, check out this post on Trapital. What will become of Verzuz, and livestreams or webseries like it, post pandemic? [Ed.: that question assumes that the pandemic will end at some point.]
Snap your fingers for the Spotlight
Just before Thanksgiving, Snapchat made a couple of interesting creator-related announcements, including a feature called “Spotlight.” (Verge) [Ed.: not to be confused with Spawtlight: The Horrible Truth About Boston, which is not endorsed by Trillium.] Spotlight, in the Snapchat context, is a new program that aims squarely at TikTok and asks top creators to submit their Snaps for a chance to win a “share of up to one million dollars.”
Until the end of 2020, which cannot come soon enough, the company will pay out $1M a day to creators. Notably, the Spotlight program looks beyond “large followerships” and public profiles, and uses engagement signals the company collects on how people actually respond to the videos in order to decide which to reward and promote to its vast userbase. Creators who participate have a chance at a significant payout, almost as if participating in a sort of user-generated content lottery. As Casey Newton notes, it’s interesting that Snap has chosen to place the incentive “at the level of the content, rather than the creator,” thus reducing some of the pressure for a given individual to build a robust public profile.
This sort of spontaneity and lower-pressure environment is part of the TikTok magic. As I’ve mentioned previously, the general creator sentiment is that its simply “easier and more likely” to most creators that they could catch a break on TikTok (something that’s become increasingly difficult on more mature platforms like YouTube). Similarly, from a viewer’s perspective, TikTok feels more dynamic, partially because the product’s “For You” algorithm is so adept at highlighting a range of new content that feels fresh but still fits a given user’s desired content profile. In a world in which many platforms plan to pay creators in exchange for their mindshare and content—including TikTok’s proposal to pay $2bn to creators over the next three years (CNBC)—this sort of incentive-based experimentation is necessary.
Meanwhile, in other Snapchat news, the company acquired Voisey (an app to create music tracks & overlay your own vocals, per Tech Crunch) and inked a partnership with Levi’s (Input) that allows you to dress your Bitmoji in Levi’s. It sounds trivial, but this program is interesting to me in what it represents: a brand that typically sells physical goods (Levi’s) using augmented reality & avatars in a digital world (Snap) to promote its products.
Twitch expands; Pinterest evolves
As many consumer internet companies have realized, their ability to grow (and sustain) an ecosystem of high-quality user-generated content is crucial to their longevity. For public tech companies, it’s also crucial to supporting the ongoing growth required to keep earnings reports encouraging and stock prices buoyant. As new product-entrants arrive in the market and compete for the attention and adoration of users, incumbents tend to respond by evolving the tools and incentives that they offer to the people who create content on their platforms.
Some of this evolution is visible to us as consumers—think about new content formats on IG/YouTube, new ad inventory on Snap, etc—and some of it is buried behind the scenes in the form of “creator dashboards” and incentive programs. Regardless, all of it is designed to retain creator-users, accelerate their production of content on the platform in question, and thus attract more consumer-users.
In this spirit, Twitch has recently made a concerted effort to expand its target market beyond game-streamers (Vice). In recent months, “creatives from music, comedy, TV and so-called ‘variety streamers’” have used Twitch to reach new and existing fans. AOC even streamed on Twitch, and now has close to a million followers on the platform!
Twitch has now begun to court non-gamer creators, and to consider the features that these creators need in order to treat the product as more than a novelty experience. In theory, a diversity of streamers will lead to a diversity of viewers, and an unlocking of growth potential across secondary and tertiary markets. If you believe that Twitch has already saturated its primary gamer market, this growth is even more important for the platform’s future. Creators, meanwhile, are finding that the platform has a culture around “supporting creators,” and that it provides a valuable new digital revenue stream. Twitch, they say, also gives them a more interactive channel to engage their fan communities and, in some cases, to collaborate on communally-produced work.
In a related vein, Pinterest has also expanded its creator offerings by announcing a pilot program focused on “online events.” (Tech Crunch) The pilot centers on a feature that “allows users to sign up for Zoom classes through Pinterest, while creators use Pinterest’s class boards to organize class materials…or even connect with attendees through a group chat option.” As Tech Crunch’s Sarah Perez notes, Pinterest has become a hub for “remote learning resources” during the pandemic, and is increasingly seen as a resource for instructor-creators who want to organize their resources and, now, to offer a paid experience to interested consumers.
Tip jars & multi-media stars
The “Spotify Saga” seems to have taken over from the “Reliance Rampage” and the “TikTok Trials & Tribulations” as the latest serialized Trillium narrative. Over the past few editions, we’ve written about artist protests around Spotify’s payout structure, podcast M&A activity, and much more. As public awareness over Spotify’s increasingly antagonistic relationship with the musician community grows—[Ed.: not to mention media coverage of concerns amongst Spotify employees (WSJ) regarding the platform’s amplification of Joe Rogan’s more controversial messages]—we’re seeing more articles about how Spotify could/should compensate artists.
Slate’s William Ralston and Niko Seizov recently wrote a piece suggesting that Spotify should borrow from Tencent Music’s playbook and introduce a “tip jar” feature for artists. [Ed.: Because what every artist craves is that indescribable feeling of busking in a back-alley in Brooklyn.] Jokes aside, Ralson and Seizov make a fair point: streaming services like Spotify accounted for 79.5% of global streaming music revenues last year. Meanwhile, as the Trilliuminati know all too well, the top 10% of artists accounted for roughly 99.4% of streaming music payouts. It’s hard for most musicians to make a living.
In China, things look a bit different, as “micropayments from fans help compensate artists where royalties fall short.” Some of this is cultural, and some of it is due to the more rapid and widespread adoption of digital payments in China’s walled-off internet ecosystem. Interestingly, as Ralson & Seizov note, only 30% of Tencent Music’s revenue comes from subscriptions & advertising; a majority comes from commission on these micropayments. It’s conceivable that a similar model could work at-scale outside of China.
To date, it hasn’t. Spotify toyed with a tip jar/Artist Fundraising feature early in the pandemic, but most artists claimed that the mechanism didn’t contribute meaningfully to their earnings. Fan-funding platforms like Patreon are making strides in related direction, while Bandcamp continues to offer its “pay what you wish” option. Numerous other creator commerce efforts are coming from startups and public tech companies alike, and micropayments will doubtless feature in some of them. Part of the challenge is getting the economics to work for smaller contributions, and part of it is getting the digital payment infrastructure in place and adopted by a critical mass of consumers. Of course, micropayments are most effective if integrated into the platforms where the majority of media consumption is already taking place.
Spotify, for its part, has seemed more focused on its growing podcasting (and podcast advertising) business. For some reason, in a very #2020 move, they also recently introduced video stories (Engadget). The company continues to expand the content formats offered on its platform, building from its core of music to non-music audio (podcasts), animated images (Canvases that accompany some song), text/lyrics, and now videos. From the outside, parallel innovation around artist compensation mechanisms has been harder to track.
For your ears only
For each of the past several years, I’ve reluctantly looked forward to Spotify’s “Your Year Wrapped” playlist, largely because of the opportunity it affords to peel back the layers of my ever-shrinking & increasingly-addled mind. What, I typically ask myself, does it mean that so many of my top songs suggest that I am living somewhere inside the conclusion of a Martin Scorsese (or worse, Brian De Palma) movie? Or in a 2020 remake of Training Day?
This year, adjusting for sleep-hours and excluding time spent listening to mixtapes on YouTube, indie folks on Bandcamp, and my own extensive collection of Balinese yacht rock (local iTunes), I spent 16.8% of my waking-hours listening to music on Spotify. Given that I ostensibly have a full-time job that occupies many of those hours, and that I no longer have a 2-3 hour daily commute, that’s a lot of hours.
My top song, perhaps predictably, is rather on-the-nose given 2020’s treasures: “Stay Sane,” by Pink Siifu (prod. by Navy Blue). I listened to both artists a lot this year, and recommend them highly. What I love the most about “Stay Sane” is the 1960s Thai song that it samples, and which I then spent many hours (not counted by Spotify) tracking across the internet. Listen to Siifu’s sampled version and the original below.
See you all next week.
N