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Is the future of music-tech about "crutches" or "shoes"?

Happy Monday! One more day before Spotify celebrates an entire week on the New York Stock Exchange, w
Is the future of music-tech about "crutches" or "shoes"?
By Cherie Hu • Issue #26 • View online
Happy Monday! One more day before Spotify celebrates an entire week on the New York Stock Exchange, without anything too crazy sending the company off the rails (yet). One thing that might throw you off the rails is that the SEC apparently classifies Spotify as a “radio broadcasting station.” Telling, eh?
Today’s newsletter draws primarily from philosopher Andy Clark’s book Natural-Born Cyborgs (which I also referenced in my SXSW 2018 recap), but is also inspired by Spotify, Facebook and other key players in the wider music & tech landscape.
Clark’s book spills a lot of ink on the limitations of how humanity characterizes its own relationship with technology. One key analogy that Clark uses is that of crutches vs. shoes—arguing that tech research tends to focus too much on building “crutches” for our woes, instead of meaningful, long-term improvements and enhancements on our everyday lives:
A human with a broken leg may use a crutch, but as soon as she is well, the crutch is abandoned. Shoes, however (running shoes especially), enhance performance even while we are well. [Too much research] is geared to building crutches rather than shoes … We may become as accustomed to the crutches as the shoes, but crutches are designed to remedy a perceived defect and shoes to provide new functionality. Maybe new technologies should aspire to the latter.
A focus on “crutches” over “shoes” abounds in everyday business jargon. Salespeople and product designers are often trained to identify and frame pain points as the beginning of the customer journey. Naturally, the solution to a pain point is some sort of medicine or aid that helps users “heal"—but, as Clark alludes to above, these tech "crutches” are rarely prepared to provide long-lasting added value once said users have recovered.
This can have significant implications for brand value and recognition: few people aspire to be an ambassador for someone who makes “crutches,” but I bet you know at least one person in your life (maybe yourself) who is obsessed with a particular shoe brand, and who is more than willing to share that obsession with the world.
On this note, my friend Xiaoyin, who currently works as a product manager at Facebook on the music & rights-management side, recently wrote a great blog post about the importance of making tech more “ceremonial” and memorable, not just hyper-fitted to the end user. Too often, writes Xiaoyin, we hole ourselves into trying to “cut one more step of the onboarding flow to optimize user experience or build the best algorithm to improve time spent,” and forget to go the extra mile and enable the types of emotional connections that truly drive user loyalty in the long run.
She lists Facebook’s “Friendversary” feature, Pokémon GO and the SoulCycle rider experience as key examples of ceremonializing user achievements to drive loyalty and retention, and even encourages product-oriented readers to analyze and approach user journeys like a filmmaker would: “Think of yourself as a Hollywood director, and brainstorm how you can dramatize that moment,” she says.
Where does the ever-expanding world of music-tech fit into this conversation? Music is a fundamentally emotional, ceremonial activity; one of the reasons I’m personally so passionate about music is because of the emotional connections that it enables and celebrates, across geographic and demographic boundaries.
But are today’s music-tech companies honoring and enhancing the ceremonial nature of the art form they serve? It depends on where you look.
By necessity, most B2B music products are “crutches” that remedy perceived defects behind the scenes. As long as artists and commentators continue to claim that “the music industry is broken” (usually around rights/ownership data), I think the crutch will be the dominant B2B business model for music. Entrepreneurs will continue to enter the market with ambitious plans to “fix” and “heal” this “broken” industry, to take the guesswork out of ownership and attribution and to put the vast swaths of money left on the table back into the right hands.
A huge chunk of the music-industry conference circuit arguably revolves around these “crutch” startups, which isn’t a bad thing at all; it’s immensely important, long-overdue work to which I hope more people will dedicate themselves in the future. Yet, I can’t think of a single “crutch” music-tech company that’s survived and gained meaningful traction for longer than five years (unless a huge acquisition was involved, e.g. Nielsen x Gracenote; please call me out if I’m missing something).
Most music fans and consumers don’t perceive or encounter B2B defects on a daily basis; they’re just looking for the next “shoe.” Musical instruments and DJ/production software fit the “shoe” model perfectly; they’re not really remedying any inherent defect, so much as giving users newfound creative abilities atop their already-existing talent. Other examples of shoe-type music-tech experiences include secondary mobile video apps like Musical.ly, Snap and Sing! by Smule, virtual-reality apps like TheWaveVR and MelodyVR and VIP live experiences like Block Party Suites.
Understandably, many recorded-music businesses are hesitant to invest in “shoe” products, because 1) they still have so many internal “broken bones” within their own organization that demand temporary “crutch” solutions, and/or 2) the ROI for “shoe” solutions is difficult to measure because such solutions are naturally more emotional and brand-driven, complicating profit benchmarks that these recorded-music companies need to hit every quarter (particularly if they have corporate, publicly-traded parents).
That being said, one of my favorite panels at SXSW dived precisely into how this mentality is slowly changing, at least within major labels. Alex Kamins (senior director of business development, innovation & emerging tech at Warner Music Group and mentor with Techstars Music) discussed why “over-extracting cash for our content means we’re not cultivating a robust, dynamic ecosystem for incremental use cases for the future"—i.e. relying solely on "crutches” to stay alive means you’re not building the “shoes” that will keep your biggest fans and best customers/ambassadors around and emotionally invested in the long term.
Streaming presents an interesting conundrum here. I would argue that streaming services are simultaneously a “crutch” and a “shoe” for the music industry. On one hand, services like Spotify and Apple Music have built highly sophisticated, rich and engaging music experiences, either algorithmically (with Spotify) or through pure creative with the help of the most experienced, most prolific execs in Hollywood (Apple). Spotify in particular has successfully cultivated regular, “ceremonial” habits around many of its playlists, including Discover Weekly and Release Radar, as well as with annual campaigns like 2017 Wrapped. Hence, on the consumer-facing front, the biggest streaming services today are most certainly the “shoes” of music discovery and consumption.
On the industry-facing side, however, streaming services seem to have served primarily as crutches, at least up to this point. Major labels in the U.S. were so stringent in their initial licensing negotiations with Spotify—and ended up owning a significant stake in the company—precisely because they saw streaming as the best crutch for solving their revenue problems, and needed to ensure that Spotify would do the proper job of “healing.” As a result, Spotify’s still so deep in the red after over a decade of existence, with losses topping US$1.5 billion in 2017.
The indie/DIY situation seems even less rosy: execs with PR motives might say differently, but I rarely hear the phrase “Spotify is easy and great to work with” from manager-level staff members at indie labels, in part because of confusing or un-streamlined communications protocols, as well as platform limitations around community management (if you think otherwise, again, please call me out). But the reality is that Spotify has the largest number of both free and paid users of any streaming service today, and is therefore an important source (er, crutch?) for income and exposure. And when Spotify doesn’t deliver on said crutches, they get hit with billion-dollar lawsuits.
The “shoe” side of music streaming is what Wall Street investors and casual music fans love; its “crutch” side is what artists and their reps love to hate (or hate to love), and what might tarnish those optimistic Wall Street prospects. What’s more, because of its licensing model, the music industry as a whole is Spotify’s crutch for survival, in addition to the other way around. This is perhaps Spotify’s biggest handicap against competitors Apple, Amazon and Google, for whom music is a mere drop in an immense commercial bucket that doesn’t really need any “crutches” for healing.
What do you think is a more viable business model in the music industry today: crutches or shoes? If you’re a music-tech founder, which type of product are you building, and why? Are the boundaries between crutches and shoes maybe not as clear-cut as I’m saying they are? Let’s talk!

Writing
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Updates
I’m honored to be the latest guest on the music, tech & marketing podcast Music Growth Talks, hosted by Andrew Apanov (founder of Dotted Music). We talk about my artist-as-technology concept, my 88rising article and some of the most pressing opportunities and challenges in the Asian music market today. Take a listen!
I also was recently invited as a guest on Debatable, a SiriusXM Volume show co-hosted by veteran music journalists Mark Goodman and Alan Light, to talk about the future of smart speakers in the music industry. We were planning just to touch briefly on my Billboard article about the topic, but we ended up going more than 30 minutes overtime because of all the enthusiasm and questions flooding in from live callers and from Twitter—which taught me that the radio and smart-speaker markets are far from opposite factions, but rather are naturally aligned. There’s no audio recording available as of yet, but I’ll be sure to include it in this newsletter once it comes out. :)
Good reads
Who Counts as an Expert?
Obligatory potato
Potato = art. If you disagree, well, Stony Brook University disagrees with you. They’re currently hosting the art exhibit Potasia: Potatoism in the Eastfeaturing 19 commissioned pieces of potato-themed works by Asian artists, alongside selections from professor Jeffrey Allen Price’s collection of over 5,000 pieces of potato ephemera that he calls the “Think Potato Institute.” Allen coined the term “potatoism” to describe the act of examining how potatoes intersect with and influence culture, and occasionally performs in a band called Potatotron. Soulmate, amirite?
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Cherie Hu

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