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Direct Subscriptions May Be The Next Level Of Fan Monetization

Bobby Owsinski
Senior Contributor, Forbes

One thing that every modern company wants is recurring revenue.

We’ve seen numerous tech giants (Amazon AMZN and Apple AAPL to name a couple) alter their business models from totally sales oriented to sales along with some form of subscription in an effort to maintain a steady income stream less susceptible to the whims of consumers. If that strategy works for tech companies, why shouldn’t it work in the music business as well?

As It Works Today

The recorded music business has always operated on a pure sales model, first with physical product, and now even with streaming when you think about it. It’s always been sustained by a hit artist releasing more frequent product. In the album days of vinyl and CD, singles were periodically released as a marketing strategy to keep the album selling. Today in our streaming world with album importance diminished, artists and labels rely on a constant flow of new material to keep that revenue coming in.

The problem with this model is that you’re only as good as your latest hit. Put something out that doesn’t resonate with your fan base and the incoming revenue drops. But what if you could keep the revenue steady regardless of the quality of the content? A number of artists are finding great success with direct subscriptions to their fans that might lead the way to the next level of income generation.

Enter Direct Subscriptions

No band today has a larger, more rabid fan base than K-Pop band BTS. The BTS ARMY has been a major factor in driving the band’s international popularity, and now the band and its label, Big Hit, are poised to take advantage of that popularity in a new way.

Although designed to also support Big Hits various acts, BTS stands to benefit the most from the label’s Weverse community app. Weverse is a way to converse with the bands via a translation into different languages, but it also features a store for buying merch. The app reportedly has 1.4 million daily active users while the store has 1.8 million users in over 200 countries. When it comes to BTS though, there is a premium subscription tier that costs $30 per year to become an ARMY member. There are no reports yet as to the number of subscribers, but it’s no doubt huge since BTS is the major driver of the label’s success.

Then there’s Cardi B, who’s reportedly already making $8 million month on OnlyFans. While OnlyFans is primarily a platform for middle class sex workers, Cardi states explicitly that she won’t be flashing her fans and instead will use the space to get closer to them and address criticism of her music. The subscription price is $4.99 per month, and it looks like Cardi is only scraping the surface as to what she can earn there. The OnlyFans earnings calculator predicts that she could make as much as $18 million a month based on her 70 million Instagram followers.

If you want an example of a classic rocker who’s also gone the subscription route, look no further than the Neil Young Archives. The paid level of the tier provides access to the high-resolution recordings of the complete Neil Young catalog as well as well as a host of other features for $1.99 per month or $19.99 per year. There are no reports on the number of subscribers, but you get the feeling like this is something that Neil would do for free to protect his legacy. It’s working.

While it’s true that many less successful artists are doing well using a service like Patreon for fan subscriptions, artists in the A+-tier are taking the idea to the next level. The three examples above show that there are multiple strategies that can succeed. The biggest question is, will other artists follow suit?

This article was written by Bobby Owsinski from Forbes and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to [email protected]

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