New tech that allows artists to interact with superfans — and turn their data into dollars — promises to open long-term revenue streams
Jessie Reyez loves to text, especially with fans. Using a phone number assigned through the celebrity text-messaging startup Community and shared on her social media accounts, the singer-songwriter makes time nearly every day to have one-on-one conversations with her most dedicated supporters where they share memes and talk about their lives.
“Some really kind fans send me heartfelt messages, and we have exchanges regularly now that I have them in my favorites,” says Reyez. “Distance between humans seems to be getting larger and larger. However, being able to get directly into [fans’] text messages has been a step in making a fan more than a fan.”
Along the way, Reyez is getting something just as valuable: a pathway to retrieve data about her superfans, who each opted in by way of sending a text and agreeing to an online consent form. Through sending mass messages to segments of her Community fan base, Reyez has pulled information — such as hometown, age and interests — to target her most-engaged fans with digital advertisements, strike brand deals and more. Community also helps her make merchandise decisions based on fans’ feedback and mobilize fans to get the attention of brands and artists she wants to collaborate with on social media. “There’s just so many ways that you can monetize these days, and Community allows you to do that, especially when you’re not touring,” says Reyez co-manager, Mauricio Ruiz. “Using every digital outlet that you can to make sure you’re still engaging with your fan base is incredibly important.”
The music industry has long ridden on superfans: the top 1% most-engaged, day-one die-hards who consistently stream their favorite artists’ music, buy their merchandise, pay to see their shows and share their music with friends. Executives interviewed for this story estimate that superfans on average make up 50% to 80% of an artist’s overall revenue. Yet on an individual level, superfans were long invisible to their idols, since artists and their teams lacked the tools to track fans’ information and habits.
That has all changed now as streaming and social media have unlocked a wealth of audience data — from basics like age and location to favorite TV shows, shopping habits and food preferences — as well as the ability to segment those fans into categories by engagement level. This data allows artists to pinpoint and engage with their most economically and culturally valuable cohorts — superfans — who, in turn, have an exponential promotional impact in the social media age.
“Superfans are this generation’s street team,” adds Reyez’s co-manager, Byron Wilson. “They’re the people that are out there in the world, screaming the loudest for us. We can always count on them to share content, engage with it and do what we need.”
A growing number of music executives is making strides toward simplifying artist access to fan data, and such efforts could change the economics of building a music career. At the forefront of that push are Shara Senderoff and Zach Katz, partners in music-tech investment firm Raised in Space, which they founded in partnership with Ithaca Holdings’ Scooter Braun and Ripple’s developer platform, Xpring. Alongside its investment in Community, the firm led a $6.7 million 2019 Series A investment round in Audigent, a data management platform for entertainment, sports and lifestyle brands that Senderoff says functions like a “GPS system” for reaching superfans.
Whereas artists usually need to go through platforms like Instagram and Spotify to retrieve audience data — and then pay the same platforms to advertise against those audiences — Audigent uses only first-party data from the artist’s owned and operated channels (such as an official website or merchandise store), eliminating the middleman. This means the artist gets to keep and directly monetize that audience data; the data is synthesized in one place; and the data has a high degree of accuracy, since Audigent automatically cuts out fraud, bots, duplicates and other useless traffic.
“We’re locked into this pattern of just going to silos — Facebook and Twitter and Instagram — but we’re renting those audiences over and over,” says Katz. “What Audigent does is that every time we touch those audiences, they become residents in our house. We go from being renters to being landlords.”
Along the way, and perhaps most importantly, Audigent only pulls data from users who opt in through a pop-up consent form and only analyzes fully anonymized data sets that are restricted to users’ content consumption, interests and affinities. Audigent doesn’t track personally identifiable information (aka PII), and users can opt out at any time. While tech companies like Facebook and Google have faced backlash for their handling of personal data, Senderoff and Katz see Audigent as an opportunity for the music industry to start its entry into ad tech on the right foot. “In past construction of these big social networks, you were sharing your data unbeknownst to you in a lot of ways,” says Senderoff. “We have to understand the responsibility of data and accountability when we’re aggregating it.”
Once that data is pulled into an artist’s “audience bank” on Audigent, the artist can segment fans into different categories based on levels of engagement, including superfans. Audigent can generate insights about fans, using projections based on what people similar to that fan are interested in, purchasing, watching and more. From there, artists can target superfans with specific ads, route tours based on where superfans are geographically clustered (once touring resumes) and command more dollars from brand deals.
While brands normally focus on synch and name/likeness deals with artists and labels, access to data “opens the conversation up to discussing [buying] media,” meaning ad inventory, says Audigent co-founder/CEO Drew Stein. “If a brand spends $500,000 on a synch or name and likeness deal, they might spend 10, 20 or up to 30 times [that] on the media spend behind the deal,” he continues. “Labels and artists who have solid first-party data have the ‘crown jewels’ to discuss how they can provide real value to capture a piece of the media budget. Otherwise, the silos typically suck up all the media dollars and the labels and artists miss out.”
A potential game-changer is Senderoff’s suggestion that artists can use Audigent data to approximate the number of superfans needed to sustain their careers. The average American music listener spent $96 per month on music in 2020, according to MRC Data. Hypothetically, if an established artist knows that each of her superfans spends, on average, $250 per year on fandom — through merch, concert tickets and other purchases — then the “lifetime value” of each superfan is $250 per year. If that artist can build a community of 50,000 superfans, then she’s on track to gross $12.5 million annually from that segment alone.
Senderoff sees this approach as “hopeful” for the next generation of artists, who can use data about their audiences — and especially superfans — to optimize their businesses and maximize revenue independent of a major label. Audigent — which will soon debut its white-label product Music IQ for the music industry — also arrives amid the emerging industry of direct-to-consumer content on channels like Patreon and OnlyFans, opening up new revenue streams for artists who rely chiefly on their biggest supporters.
“The future artist has to be entrepreneurial in a way that builds things outside of the traditional record label system, which is, ‘Get an advance, never recoup,’” says Senderoff. “If we follow the path and say, ‘You need 50,000 fans’ — or less — we’re able to build revenue streams that are there, ready for us.”
Superfans have become all the more important amid the rise of music streaming, since Spotify and Apple Music’s “pro rata” royalty model means that rights holders are paid according to market share in a given time period. “The way revenues are distributed in the streaming realm means that superfans determine where almost all the money goes,” says Thomas Hesse, a music industry veteran who co-founded the livestreaming platform Dreamstage and music-sharing platform JAMM. “If you get to superfans, who listen to music all the time, you get to all the money — not just from those people, but you get all the money from everybody.”
In turn, labels have begun to focus on superfan data in recent years. When Elissa Ayadi joined Warner Records in 2016, she became the label’s first senior vp of fan engagement and digital marketing. “When we talk about moving people down a funnel, it used to be, ‘How do we move them from just discovering the band to streaming the band and buying the merch?’” says Ayadi. “That’s still important, but the funnel that we think about in my department is, ‘How do we move them from being someone who has never heard of the band to being a superfan?’”
Ayadi defines superfans as individuals who digitally interact with the artist in multiple ways, from liking social media posts to buying merchandise, listening to music across an artist’s catalog, visiting the artist’s official website and other indicators. (“They’re the ‘and’ fan — you find them everywhere,” she says.) As methods of culling data have become more sophisticated, Ayadi regularly puts together “psychographic” profiles of artists’ superfans. “You can figure out not just who bought the most merch, but who else are they? What other bands are they into? What TV shows do they watch? What shoes do they buy?” says Ayadi. “When you can get a fuller idea of who they are as a person, it gives you direction on the marketing strategy.”
For example, artists could go after synchs and advertisements in the TV shows favored by superfans. Artists might also target different advertising assets to casual listeners versus superfans. “A casual fan may just want to know, ‘Hey, the record is out,’” says Ayadi. “Whereas a superfan may want to know, ‘You can go and experience the record in virtual reality.’” Ayadi even dug into data about superfans’ spending habits to help determine an agreeable cost per ticket for Dua Lipa’s Studio 2054 livestream concert in November (the label settled on $10).
Like other label groups, Warner Music Group also has a proprietary data management system, and in 2018 acquired the A&R insight tool Sodatone, which combines streaming, social and touring data to determine fan base loyalty, audience reactions to new releases and more. Sony Music Group’s Artist Portal offers a granular look at streams, video views, tags and shares of their music. And in November 2019, Universal Music Group launched its Universal Music Artists portal as part of a multiyear, multimillion-dollar project to transform the company’s data and analytics structure.
“Part of the transformation at UMG has been to put the music fan at the center of our thinking,” says executive vp consumer marketing Jaime Weston, to the point where the global insights team regularly bounces marketing and merch ideas off of a “fan panel” consisting of global music superfans across ages and genders.
Weston says that an artist can have as many as seven fan base segments, including multiple segments of superfans whose members are “completely different and distinct from each other.” As a hypothetical example, consider a mother and her teenage daughter who are both superfans of Billie Eilish. “How we serve those two groups of superfans must be thoughtful and authentic,” says Weston.
Another ongoing goal is to turn casual listeners into superfans. What excites Weston most about her job is the cohorts she terms “opportunity fans”: “music fans who don’t follow the artist today but show certain characteristics of interest, especially if the artist is putting out a new and different sound,” she says. Reaching those fans “is incredibly important in the ‘find it and forget it’ world that we live in today, where awareness is hard to achieve and interest can be fleeting.”
Often, that means encouraging superfans to share their fandom with friends. In December 2019, Weston and her team helped reach Post Malone opportunity fans with the first synchronized, dual-phone music video on Spotify for Malone’s single “Circles,” which required two listeners to place their phones side by side in order to unlock the complete clip.
Spotify itself has been catering to superfans since the 2015 launch of Fans First, a division of Spotify for Artists that curates invite-only events, merchandise drops and other experiences for fans in the top 1% of an artist’s listener base. That 1% is determined by fan actions and listening habits, such as following an artist, adding songs to a playlist and listening to a wide range of tracks in an artist’s catalog. “It goes beyond, ‘Do they love your viral song?’” says Spotify head of creator product marketing Sam Duboff.
Once the list of top fans for an experience is determined, Spotify notifies each superfan by email. Fans First experiences over the past year include a socially distanced Rainbow Kitten Surprise concert in Nashville in May and access to a 1,000-copy run of an exclusive print zine created by singer-songwriter beabadoobee, which promptly sold out at $6 each. The idea is to reward and encourage superfandom: “If you’re one of the 1,000 people who get an exclusive zine, that’s a badge of honor,” says Duboff.
Outside of Fans First, Spotify also encourages superfans to promote artists through digital badges of honor like the shareable “Wrapped” graphics that it awards annually to those who end the year in the top 1% of an artist’s listener base. Duboff says superfans have also “taken over” Promo Cards, a tool launched in October for artists to create custom promotional graphics for social media.
Indeed, thanks to the rise of social media and the influencer community, superfans’ online reach is nearly limitless. “That’s what makes superfans special in the age of social media: When everyone can be a publishing conglomerate just by having an Instagram and a Twitter, kids can really be so much more impactful than anywhere else,” says Ayadi. “I get inspired by the superfans all the time, because they live in that world almost more than the artist lives in that world.”
Even as platforms like Spotify ramp up their data mining capabilities for artists though, other executives join Senderoff and Katz in envisioning a future in which artists can independently pull and monetize data around their superfans.
That includes entrepreneur Ketan Rahangdale, who in 2019 launched Unitea, an app that lets artists monetize the data generated by their superfans’ listening habits. Unitea syncs with users’ Spotify accounts, then rewards users who stream and share their favorite artists’ music with points called “Karma” (at the rate of 10 Karma per stream) that can be exchanged for artist merchandise and experiences sponsored by brands like P&G and Urban Decay. Artists can use their Unitea dashboard to access data about their superfans (such as age and geographic location), directly message those fans and create new rewards in just a few clicks.
Rahangdale says that artists who offer an experiential reward on Unitea see an average 716% increase in organic stream rates for their music for as long as the reward is up, but that’s just an added perk. Unitea’s real benefit, says Rahangdale, is that artists are able to leverage their own superfan data to strike brand sponsorships. On top of that, Unitea — which takes a “data licensing fee” from brands — pays artists a “data royalty” based on the Karma redeemed for their rewards, which is equal to 50 cents per redeemed stream (roughly 100 times Spotify’s estimated per-stream royalty rate).
The invite-only platform has worked on nearly 13,000 experiential reward campaigns for over 1,000 artists. In one campaign last April, more than 12,600 fans competed to win five exclusive bomber jackets from electronic artist REZZ, generating more than 172,000 streams of REZZ’s music over three days. “Parents of children were calling our support team, saying, ‘My child has not slept in 23 hours straight; she has been on your app doing whatever she can to get Karma,’” says Rahangdale. The first five fans to redeem 250 streams (or 2,500 Karma) won the jackets, netting REZZ an $800 data royalty check from Unitea.
Like Audigent’s Senderoff and Katz, Rahangdale hopes that Unitea will inspire independent and emerging artists to build businesses around their superfans using data as a financial asset. “It shifts the whole paradigm,” he says. “It’s not about a million followers — it’s about having 10,000 fans that generate a million Karma.”
Of course, data has its limits. RCA Records senior vp digital marketing Tarek Al-Hamdouni warns against relying too heavily on superfans: “Sometimes the audience that got you where you are isn’t going to be the same as the audience that will take you where you want to go,” he says. “A lot of times superfans feel a sense of ownership in terms of your career, and if you’re not giving them exactly what they want, they’re going to vocalize that.”
When artists experiment with a new genre or try to broaden their audience, for example, superfans won’t always follow. “If you have a superfan audience that thinks you’re going to pop, and for me you’re getting away from what I loved about you, that could be a huge pop record that doesn’t get a chance, because it never reaches the pop audience,” he says.
That’s why Al-Hamdouni makes sure to always pair data with human insights. While working with Hilary Duff on new music in 2015, for example, he noticed that although Duff had an unusually high engagement rate with her superfans on Instagram, “When they engaged with her, it was never about music,” he says. “It was always about fashion or motherhood or acting.”
Artists and their teams must keep that in mind, he says, as superfan data continues to grow even more sophisticated. The rise of concert livestreaming has already led to more detailed audience data than physical touring could ever offer (as well as more data to begin with, given the limitless audience size of virtual events), with the ability to pinpoint the most-engaged viewers, the moment interest peaked, where users are tuning in from and more.
In the future, Senderoff and Katz think superfan data (and overall audience data) will become an asset not just for artists’ deals with brands, but their deals with each other. For example, an opening slot offer on an artist’s tour could include the ability to access the main artist’s data on Audigent and advertise against the artist’s fans for the duration of the tour. Similarly, if an artist pays a bigger star for a song feature, “Imagine being able to say, ‘We’re going to pay you $50,000 for that verse, but when we promote it, we want to be able to advertise against your Audigent audiences,’” says Katz.
Even as they are bullish about building that future, Senderoff and Katz make one thing clear: Building a superfan base takes time. While viral moments on social media may turn artists into superstars of the moment within hours, “There’s no such thing as an overnight career,” says Senderoff.
“You might shoot to fame, but if you don’t properly build that fan base, you’re not going to have anything in 10 years,” she continues. “The beauty of Audigent is that you’re investing in your future. Some people aren’t going to like that, because they want [fans] to buy something right now. But that’s a different strategy than, ‘I’ll get to them in five years, because I plan to be around.’”