Let’s start with the left side of the diagram: music-focused brands that are trying to pivot or expand into lifestyle brands.
As discussed above, musicians and record labels
traditionally take this route: they first see recorded and/or live music sales as their core business, then gradually expand into “lifestyle sectors” by starting their own merch line, securing third-party brand partnerships and endorsements, acquiring or launching media companies
, and so on.
More importantly for the aggregate music business, music streaming platforms
are making the same strategic moves—cannibalizing their own reputations as music-only brands in order to improve their own profit margins. Spotify is particularly aggressive in this regard, beginning to promote podcasts, daily news and even possibly audio workouts
on the same level as music on its platform.
This is a classic audience-over-industry approach: now that Spotify has captured a loyal base of music streaming subscribers, they are up-selling that base into adjacent services that can satisfy different needs in those subscribers’ lives. (I wrote in a previous newsletter
back in July about how Spotify was trying to decide between vertical and horizontal integration; it seems to be focusing on the latter right now.)
Now let’s focus on the far right of the diagram: lifestyle-focused brands that are trying to expand more deeply into music.
As I mentioned above, there are a handful of individuals like Charlotte Lawrence and Lil Miquela who have expanded into music to complement their core lifestyle careers. But there are many, many more examples of this lifestyle-to-music transition at the company level. There’s no way to be absolutely exhaustive here, but I tried to include the subcategories that I thought were the most relevant in today’s current music-business climate.
Below are some more details about each subcategory:
Big-tech companies are investing in music as a key marketing pillar to drive sales of hardware, software, cloud storage services, advertising and other non-music revenue streams. Examples in this category include Apple Music, Amazon Music, Google/YouTube Music, Facebook, Tencent Music and Bytedance.
Food & beverage companies are investing in music as a sonic expression of a lifestyle-centric mission statement. Red Bull Music Academy is one of the most notable examples in the indie music world. Starbucks used to run a record label, and launched a new Spotify playlist to complement the launch of its premium line of Starbucks Reserve bars. Wendy’s notoriously released their own mixtape on Spotify and Apple Music.
Travel companies are investing in music to enhance their brands’ association with a cosmopolitan, cultured and/or jet-setting lifestyle. Aside from W Hotels, airlines like United and Southwest have both orchestrated music marketing campaigns in collaboration with indie and major artists. Airbnb Concerts has become a key component of the startup’s growing Experiences vertical for travelers.
Fitness companies are investing in music both as a scientifically-proven performance enhancer and as a driver of these companies’ transformation into full-fledged multimedia and entertainment brands. SoulCycle recently launched a new media division, and hired an in-house music editor. Peloton also acquired a B2B music-streaming company last year. As I’ve previously reported, more artists and labels are now inking partnerships with fitness-tech companies of all sizes for marketing and promotional support.
It’s important to point out here that the scale
of these companies’ audiences is much smaller compared to those of pure-play streaming services like Spotify. Spotify can manage to reach 200 million monthly active users
because most people in the world like some form of music, and want to engage with the art form regularly. In contrast, only a fraction of a percentage of the world’s population would consider themselves “monthly active customers” of SoulCycle or W Hotels—but that doesn’t mean either company can’t run a successful business (and Spotify has yet to turn a profit anyway).
Finally, let’s focus on the section in the middle of the diagram: brands that have strategically woven music and lifestyle together from their very inception.
Again, there’s no way to produce an exhaustive list of hybrid music/lifestyle companies, but here are some examples that have been top of mind for me recently—which will hopefully help clarify why I’m placing them in a different category altogether from the Spotifys and SoulCycles of the world:
- For all the talk about “content localization” in music streaming, I honestly have learned more about international music scenes by watching Anthony Bourdain: Parts Unknown than by browsing any streaming service. This is not a criticism of technology, but rather a praise of the power of multimedia franchises to shed artists in new, complex lights in a manner that static, audio-first environments cannot afford. Parts Unknown is not just a food show; in fact, shots of dishes or chefs in the kitchen account for only around 40% of actual footage in a given episode. The rest of the footage is dedicated to highlighting firsthand accounts of the power of geography in shaping local culture, including but not limited to music. It’s because of Parts Unknown that I now know about the history of techno in Berlin, country in Nashville, punk in Hong Kong and psychedelic rock in Nigeria, as told by the locals shaping those very scenes (over delicious meals). Anthony Bourdain’s distinct ambitions at the nexus of creative and culinary culture gave Parts Unknown a genuine, inspiring depth of perspective that made the show stand out in the crowded world of food TV.
- YouTube is a potent petri dish for hybrid music/lifestyle ventures because of its inherently visual nature. I included just two examples in my diagram. First is Hot Ones, an internet video series on Facebook and YouTube that interviews celebrities as they consume sequentially hotter chicken wings. The series seems to be a popular destination for music interviews, particularly in hip-hop (previous rap guests include Lil Yachty, Wale, ASAP Ferg, Vince Staples, Anderson .Paak, Wiz Khalifa and Rich Brian). Second is 88rising, a label, management and creative production company that seems just as comfortable releasing music videos for their artists as they are producing campaigns for Adidas or filming ASMR sushi tutorials. When I wrote about the company last year, it immediately stuck out to me that artist management didn’t account for even half of the work they were capable of doing.
Studio Orca and Atmosphere are both companies that specialize in curating music for retail brands (the former’s owner Chris Golub was recently described in Billboard as “Chipotle’s official director of vibe”). I would consider this a hybrid music/lifestyle approach because 1) the featured music gains value only in the context of a lifestyle that a given brand is trying to sell, and 2) the product or experience for sale gains value only in the context of the music behind it. There is also ongoing corporate interest in this space, as Apple Music recently filed a trademark for “Apple Music for Business.”
- A small but growing number of musicians are trying to position themselves as lifestyle leaders from the onset of their careers. For such artists, brand partnerships and philanthropic initiatives get equally as much attention as new music releases, because they help clarify an artist’s point of view and differentiate them in a crowded indie music marketplace. One powerful example of an artist building a DIY career on this mindset is Madame Gandhi, a solo drummer and electronic artist who is also passionate about feminism and fitness. Her social media posts are just as often about womxn empowerment, menstrual activism and running half- and full marathons as about DJing, performing and making music.
• • •
While incomplete and imperfect, the above music<>lifestyle diagram illustrates the growing number of entry points into the music business from outside its immediate boundaries. And on the company level, as we established, music and lifestyle brands are trying to steal each other’s audiences by competing for attention on the same platforms.
One question remains: Who will win? Or more broadly, which direction of music<>lifestyle is most strategically sound and sustainable?
The harsh truth is that the economics of streaming makes it increasingly difficult to sustain a living or a company off of recorded music alone. As Union Square Ventures managing partner Andy Weissman once tweeted
, “‘music’ has historically been a culturally more important art form than it has been a big business.”
As a result, I’ve noticed that a growing number of music-business deals are framing music not as a standalone product, but rather as a culturally powerful tool to achieve larger commercial ends and drive sales from merchandise, health and travel experiences and other higher-margin revenue streams in non-music verticals. In other words, music capital is increasingly flowing to (and from) companies on the right half of the diagram, not the left. I predict that artists in 2019 will also be working to differentiate their brand to thrive more on the right side or in the middle of the diagram, instead of starting on the left as is traditionally done.
In various interviews over the past few months, several music-industry execs have also told me that streaming competition will increasingly ride on wider technological ecosystems, not just on content.
In other words, while Spotify remains the global market leader in paid music subscriptions for now, “pure-play” will become the exception rather than the rule for music streaming’s future. Tencent Music controls so much of China’s music market in part because it also owns WeChat, the country’s biggest messaging app. And there’s a reason why Apple Music is the fastest-growing music subscription business in the world, reaching 56 million paying subscribers in just 40 months: its parent company owns one of the world’s most popular ecosystems of smartphones and computers.
I would love to hear what you think: how do you think my diagram could improve? Which direction on the music<>lifestyle spectrum do you think is the most compelling or financially sustainable as an artist? Simply reply to this email and it’ll go straight to me!