There’s a new funnel emerging in the music industry.
In the past week, several news events have occurred that may seem inconsequential on the surface, but when carefully examined, reveal a structural shift in the music industry that is gaining momentum:
- TikTok launched a set of immersive music filters for creators to use in their content.
- Newsletter publishing platform ConvertKit acquired FanBridge, a fan relationship management tool for musicians.
- Music distributor Ditto enabled fans to buy shares of musicians’ sound recording copyright, and subsequently earn a monthly dividend, i.e. royalties.
The best way to understand all of these events is to hang them together on a funnel:
- Top-of-funnel — discovery on TikTok
- Mid-funnel — re-engagement through email
- Bottom-of-funnel — monetization via NFTs
To be clear this is not a mainstream way to operate as a music creator. But in our view, we’re seeing early signals of an important shift. The new funnel will compete with the traditional music industry while empowering a new generation of artists to make a living online as part of the creator middle class.
To understand its significance, we’ll first trace the history of the old funnel, and then explain how and why it is being replaced.
The old funnel: Record labels controlled and monetized fan relationships
