The real business opportunity in music
Music has been a huge part of my life since an early age, when I grew up learning to play the piano, violin, and percussion. Playing and listening to music became a daily habit.
Music was such a strong passion that I managed to inject myself into the earliest music explorations at Riot Games, and after leaving Riot one of my very first angel investments was in 88RISING.
In recent years, the music industry has undergone a transformation. When iTunes ushered in the digital era, we had to pay for song downloads if we wanted to listen to them. This spawned p2p services like Napster and Limewire enabling people to pirate music for free.
YouTube and Spotify simply built upon this consumer expectation and have reinforced that music should be free, always available.
Interestingly, even as artists face these challenges, the music industry as a whole is booming. Post-covid, concert goers are flocking to live shows in record numbers as events have become a major business driver for music.
→ Blackpink have already surpassed $200 million in ticket sales with their Born Pink World Tour
→ Both Taylor Swift’s The Eras Tour and Beyoncé’s Renaissance World Tour are expected to gross over $1bn On the digital front, platforms like Roblox and Fortnite are serving as the perfect stage for digital events which are also blossoming into big business opportunities.
→ Travis Scott grossed $20m for his concert in Fortnite
→ Lil Nas X had over 33m viewers across 4 shows, grossing over $10m in merch sales for his concert in Roblox
Music fans are some of the most highly engaged consumers on the planet. While platforms like Spotify, YouTube, and TikTok have destroyed the business of selling music, they’ve opened the door to distribution and discovery enabling any musician to reach and build a community of fans.
And this leads us to the real business opportunity in music:
Fostering fan communities and monetizing fandom
Instead of retracing steps to paid music, or attempting to create new unwanted fan behaviors around investing in or earning money from music, the focus should be on crafting ecosystems around physical and digital products, and building a stronger bond between artists and their fans.
In raising two young girls during the pandemic, they introduced our entire family to the world of kpop, and we’ve collectively become huge supporters of BTS, Blackpink, Twice, and most recently (G)I-dle, Ive, Itzy and NewJeans. We’ve even subscribed to be official ARMY, BLINK, and BUNNIES members on Weverse. Kpop fandoms and concerts have become a core part of our most cherished family activities.
While music has long been considered a challenging area to make VC investments, it also centers on the largest and most engaged online communities, driving significant consumer spend and activity.
At Patron we’re excited about companies building the future of music fandom, helping artists better connect with and engage their fans.
