I spent the last few months trying to find the next “Spotify for news” — only to discover that it doesn’t exist.
This might sound ridiculous, given the number of startups that purport to do just that: “newsify” the business model behind Spotify and Netflix of bottomless access to aggregated content from multiple sources for a monthly fee. Companies ranging from startups Inkl and Blendle to mainstays Scribd and Reuters have openly exploited the analogy for the press. Apple also saw strategic value in the idea with its recent acquisition of Texture, an aggregator often called the “Netflix of magazines.”
Even Spotify itself, with 157 million monthly active users across 61 countries, seems eager to become a Spotify for lifestyle coverage. Known primarily as a music streaming service, the Swedish company has its sights on becoming a farther-reaching multimedia hub, signing podcast deals with partners like BuzzFeed, Refinery29, and Cheddar. Same with Netflix, which just launched a new video series with Vox called Explained that provides 15-minute briefings on a variety of current events topics, from K-pop to DNA editing and racial inequality.
What does this idea have to do with membership in news? As a journalist, I’ve spent the last three years covering the intersection of music and tech — with a focus on how streaming services impact both the artist community and the complex business ecosystem behind them — and have found that the music and news industries face similar issues when it comes to engaging with fans and supporters.
The music, audio, and news industries have all been said to be “dying” for most of my lifetime, in part due to the emergence of Napster, BitTorrent, Facebook, and other disruptive forces in digital distribution. While many analysts credit streaming services with restoring the music industry to growth, the majority of streaming users still consume recorded music for free, and Spotify’s free tier is growing more quickly than its paid tier. The dominant consumption paradigm still devalues recorded music as a commodity, framing it more as a utility or public good accessible at little to no cost — a pervasive perception in the news world.
When I posed the possibility of extending the hyper-popular music and video subscription model to news to several entrepreneurs across music and media, they expressed only unanimous skepticism. While related, the core brands in the entertainment and news industries deliver different value to their audience members. A music streaming service, a daily metropolitan paper, and a specialized weekly email newsletter could all charge $10 to $15 a month for content access, but they’re ultimately fostering vastly different customer relationships — and their supporters have different motivations for paying. To conflate the value of these products in users’ lives is sloppy thinking.
Artists and fans alike are gradually understanding how a transactional subscription model is only one limited component of a much wider, holistic ecosystem for consumption, engagement, and monetization—a valuable lesson for cash-strapped news sites desperate to pin down a business model in the ongoing shift away from ads to reader revenue.
Cherie Hu
Researcher
@cheriehu42
Methodology
Starting in March, I interviewed founders, presidents, and community managers behind six membership-focused music and media ventures, including:
Discogs, an online, crowdsourced database and secondary marketplace for music on vinyl, CD, cassette, and other physical formats;
Drip, a creator-centric subscription platform acquired and recently relaunched by Kickstarter;
Genius, an online, crowdsourced collection of annotated song lyrics and musical knowledge;
Hot Pod, an audio industry trade newsletter that comments frequently on the relationship between podcasts and streaming services like Spotify;
Vinyl Me, Please, a record-of-the-month subscription club, and
VuHaus, a nonprofit aggregator of musical performance videos and artist interviews from 25 public radio stations across the U.S., including KCRW in Los Angeles and KEXP in Seattle.
Some companies, like Vinyl Me, Please, Hot Pod, and Drip, charge consumers subscription fees varying from $1 to $29 a month for access to their full, core product. Others, like Discogs and Genius, give users free access to their core community, while taking a cut of sales or leaning on brand partnerships, respectively, for ancillary revenue. VuHaus affiliate stations pay between $5,000 and $10,000 a year for benefits including but not limited to their own self-curated city page on the VuHaus platform, access to a national sales and sponsorship network, and collaboration with national editorial channels such as NPR’s Slingshot.
I asked these people how they positioned their own companies in relation to Spotify, SoundCloud, Bandcamp, and other music streaming services, and what pointers they might have for news outlets that feel pressured to apply this model to their own organizations.
An ephemeral catalog? Music vs. news as a format
Any comparative analysis of business models warrants a parallel discussion of product and content. What are the key differences in how a song and a piece of news coverage are created and published, and what might that gap tell us about the viability of membership and subscription in journalism?
One important discrepancy between how people value music and news lies in the meaning of the word “catalog.” In traditional music industry speak, catalog refers simply to any songs older than 18 months, and currently accounts for the majority of revenue at the biggest record labels.
As music streaming services fight to maximize user retention, they favor content that either maintains or increases its value over a period of time. According to Will Page, Spotify’s director of economics, 40% of tracks uploaded to Spotify in the month of April 2015 had more streams during their second year on the platform (April 2016 to March 2017) than during their first year (April 2015 to March 2016). In other words, 40% of new tracks ended up being more profitable in year two than in year one.
Night Visions, the debut album by rock band Imagine Dragons, generated 177% more streams in its second 18 months of existence than in its first 18 months — showing the power of streaming services in extending the value of catalog. Visualization courtesy of Will Page/Spotify/Music Business Worldwide.
In contrast, the concept of a “catalog” of news articles that become more valuable and generate more revenue with age is aspirational for news organizations -- but often missing a sizable audience. While certain newspapers do maintain and monetize extensive archives that date back centuries, they generally do not optimize “evergreen” text, audio, and video content for a long shelf life as Spotify and Netflix can. Instead, news sites run a perpetual race against time, and take the ephemeral value of their core product as given.
News formats can be more malleable and dynamic than the form that recorded music usually takes. While there is one authoritative version of Taylor Swift’s hit song “Shake It Off”—and the only way to listen to that version is to buy the song, hear it live on the radio, or tune into a streaming service — there is far from just one “version” of an article about Facebook’s scandal with Cambridge Analytica, and a person can learn about the news through text, video, or word-of-mouth. Therefore, the value of a given publication has to come from someplace beyond its static “catalog” of articles—be that its mission, brand identity, or local community presence.
These product-centric differences lie at the heart of why streaming service models for news won’t work. As of today, the value proposition of a service like Spotify is about utilitarian access to a comprehensive, static catalog with increasing value over time. This positioning aligns neither with the fluidity of news distribution nor with the dominant reasons why loyal news readers choose to support their favorite media organizations, including but not limited to distinct news value, identity, inclusiveness, and participation. In an increasingly crowded online media landscape, these alternative value propositions are central to successful and meaningful membership appeals for both publishers and supporters.
In the Membership Puzzle Project’s other research into spaces outside of news, we identified that a key differentiator between subscription and membership sites is that only the latter cannot scale beyond their ability to serve individual members. Yet, both music and news organizations often relegate an outsized share of their distribution and marketing efforts to big-tech platforms with built-in audiences (Facebook, Google, Apple, Spotify, etc.), even if there’s a tension between corporate growth incentives and sustainable membership programs. Over-reliance on these platforms could mean running the risk of losing ownership over one's audience, and in turn losing the ability to serve individual members through those channels.
The utility-community spectrum
Working in the public interest, news organizations are arguably incentivized to involve their local communities more in their day-to-day processes, whether through gathering feedback on story ideas or through connecting with readers at live events. In contrast, Spotify’s primary user experience runs on isolated personalization, not social interaction, and arguably does not require community-oriented features to succeed. The service even shut down its own native inbox and messaging features in February 2017, citing low engagement.
“I’m not saying this as a criticism, but Spotify doesn’t need to have a community,” said Cassie Marketos, VP of Community at Kickstarter. “It’s a distribution utility.”
Many of my interviewees decided to launch their own adjacent music businesses because they were seeking a level of community connection and enablement that lacked in the dominant streaming landscape.
“You don’t feel like you’re part of a tribe when you subscribe to Spotify,” said Matt Fiedler, co-founder and CEO of Vinyl Me, Please. “You’re not getting together with other ‘Spotify members’ in your free time. That’s not part of the core subscriber experience. For us [at Vinyl Me, Please], it’s really about building that tribe, which involves helping members establish relationships with each other inside the community, both online and in real life.”
Fiedler’s passion for empowering “tribes” of music lovers is reminiscent of the frenetic activity around online music forums that peaked in the first decade of the 21st century. In a recent feature for The Guardian, Tom Ewing argued that Spotify’s user experience does away with this type of activity altogether, overlooking tight-knit networks of fandom in favor of personalization at internet scale.
“The current experience of streaming is great at zooming in on you as an individual, or subsuming you into a vast playlisted datamass,” Ewing wrote. “But the middle ground between individual and mass — the small groups of friends who could thrill to or fight about new music — is entirely neglected.”
This open “middle ground” of listeners perhaps explains why music-focused public radio stations still thrive despite many stakeholders positioning streaming and terrestrial radio as direct competitors (including Spotify itself). While both streaming services and public radio present similar offerings of discovery-as-a-service, stations like KCRW and KEXP are naturally much more hyperlocal and mission-driven, and rely less on algorithms for their curation.
For example, through VuHaus’ partnership with NPR’s Slingshot, VuHaus affiliate stations collectively nominate and support emerging artists from their local music scenes through interviews, videos, and live events that are then featured on national NPR channels. “Individual stations can point their listeners to a program like Slingshot and demonstrate how the work they’re doing at the local level is giving smaller artists new, national breakout opportunities,” said Erik Langner, co-founder and president of VuHaus.
In contrast, “Spotify is such an addicting, intelligent, and engaging product, but I do not engage with the Spotify brand,” said Nick Quah, Founder & Publisher of Hot Pod. “Spotify as a brand is not a story in the same sense.” This is exactly why people in the business refer to that model as a utility.
Access and enablement: Music membership experiences beyond Spotify
If Spotify does away with the middle ground where community thrives, and where news organizations can seek members, what alternatives are people building that foretell the most hope for the music industry and for news? I asked interviewees to define how they’re fostering their own membership cultures outside the streaming ecosystem and to share any transferable guidance they might have for news organizations.
Michael Heal, deputy director of content at Genius, defines his company’s membership culture as “setting standards in collaboration with the community,” rather than simply handing community guidelines to them top-down.
“Not only do we treat our users as stakeholders — giving them a say in where our product and community culture go — but we also have our community staff with their boots on the ground doing the exact same things as our contributors are,” Heal said. “It’s not just one person on a Facebook page answering messages from angry customers. We’re actively annotating and editing lyrics and metadata and discussing things in the forums alongside our community every single day.”
Michael Heal, deputy director of content at Genius, maintains his own public profile on the site and contributes to lyric annotations and forum discussions alongside community contributors on a daily basis.
While Genius is far from perfect financially — the company announced its first eight-figure annual revenue numbers only last year, after raising a reported $79 million in funding over the previous seven years in the absence of a viable business model — it can serve as a template for news in how it breaks down traditional hierarchies and shares responsibility with community members. Colby Handy, community manager at Genius, hosts a weekly meeting on Google Hangout with site contributors, giving the group a collaborative tutorial on how to edit and annotate a Song Page on the Genius site. The community staff team also gives contributors a heads-up on new features and products, such as a recent Song Stories partnership with YouTube, weeks before they go public to gauge enthusiasm and allow contributors to share feedback.
Fiedler agrees that top-down approaches to building community will fail: “Your idea of ‘community’ has to be driven by what your customers are already doing, and how you as an organization can further enable that and make your customers feel more valued in the process.”
One example of how Vinyl Me, Please enables self-organizing community activity is its event series The Spins, which hosts listening parties in nearly 30 cities around the world on the same night once a month. Paying subscribers can apply to become local ambassadors for The Spins, which involves spreading the word on social media and volunteering in person at events.
“The series was borne out of what we already saw users doing,” said Fiedler. “They were hosting their own cocktail nights where they would listen to albums together, almost as an excuse to hang out with these new friends. The idea was not just to ‘create community,’ but rather to take that spark of what we already saw happening and try to replicate that across the wider community, and that’s really driven our growth.” Vinyl Me, Please pulled in a self-reported gross revenue of “several million dollars” in 2017 and claims to have been break-even since its inception.
VuHaus has a similar motivation of lateral engagement in public radio, giving its affiliate stations access to each other’s audiences and resources. “Before VuHaus, these stations were just throwing up videos on their own YouTube channels, without getting much real value in terms of branding or membership extension,” said Langner. Now, the stations have the benefit of a national sales and marketing entity to underwrite their ad deals (through Public Media Company, VuHaus’ founding parent company), and have already pooled resources for tasks such as hiring an attorney to help navigate music rights.
Like VuHaus, Drip presents an interesting case for membership, as all of the platform’s “members” on the creator side are responsible for maintaining their own relationships with subscribers, yielding a multilayered, variegated ecosystem of support.
“I wouldn’t be comfortable lumping all of our creators and subscribers together into one bucket and pretending that they comprise a single, monolithic ‘community,’” said Marketos. “I think that’s almost disrespectful to them, because it dilutes the priority that the creator’s relationship with their audiences must take. I’m more interested in providing individual creators with the platform and tools to connect meaningfully with their audiences. That’s what we really mean by ‘creator-first.’” Marketos’ priorities in building out these creator-first tools include making it as easy as possible both to publish new content and to communicate with subscribers.
For Discogs, similarly to Genius, membership culture is about giving users full ownership over their contributions to the database, while encouraging lateral engagement on a commercial level by giving local record stores and economies access to a global marketplace. In 2017, over 10 million physical music products were sold on the Discogs marketplace, an increase of 20.4% year-over-year.
“It’s a symbiotic relationship: you have a community of contributors helping out our sellers with the data they provide, and avid buyers can’t buy if sellers can’t sell,” said Ron Rich, VP of Marketing at Discogs. “We pay the bills by facilitating that conversation on a more grassroots level.” One could see reporters and editors adapting similar elements in their own day-to-day practices, especially when it comes to asking for and recognizing a wide variety of member participation in the journalistic process itself.
Grassroots engagement also involves recognizing that online impact isn’t a substitute for in-person connection. Since 2013, Discogs has hosted its international touring record fair Crate Diggers in cities as far-ranging as Tokyo, Montreal, Amsterdam and Greece, in addition to multiple stops in the US. “Since we are community-built, we have to show up and give back as active participants in that community, not merely through having an ‘online presence,’” said Liz Maddux, community marketing manager at Discogs and co-founder of Crate Diggers. “It’s also just good business and good marketing to meet your core customer base where they already are.”
Music fans browse vinyl records for sale at Discogs’ Crate Diggers Record Fair in Tokyo on September 2, 2017. Photo credit: Takumi Yamamoto.
Will Spotify ever become a home for membership? Maybe...
Both the music and news industries are grappling with the hazy technological determinism encouraged by streaming when it comes to understanding people’s willingness and motivation to pay for content. Spotify is well aware of its own limitations in this regard, and is taking steps to move beyond its utilitarian core.
For instance, the streaming service is taking its massive online user base offline with a burgeoning live business — partnering with concert promoter Live Nation to put its playlist brands RapCaviar and Who We Be on tour, as well as holding secret, targeted shows for artists’ biggest fans as part of its Fans First campaign.
In September 2017, Spotify soft-launched Line-In, an online editing tool that crowdsources knowledge and metadata from Spotify users about any artists, songs, and genres on its platform, in a manner similar to what Genius and Discogs offer on their respective sites. As Amy X. Wang noted for Quartz, Spotify users “have a vested interest in making sure the data on the platform are accurate and up-to-date, because that makes their listening experience smoother.”
Screenshot from a hip-hop survey on Spotify’s Line-In metadata tool, asking respondents to select, deselect, and input mood descriptors for the rapper DMX.
A crucial difference between Spotify and sites like Genius and Discogs: once you input your data and feedback into the Spotify ecosystem, the means by which that data is accessible and attributable to individual members of the “Spotify community” remain opaque (just as the means by which news and other user notices in the Facebook newsfeed remain opaque). This dilutes the alleged value proposition of shared knowledge and full ownership over contributions.
As long as Spotify keeps its platform stripped of native social and community features and generates the majority of revenue from more utilitarian use cases for music, these tensions between Spotify’s subscription model and the unique demands of membership will remain.
“I hope that we'll establish a new kind of vocabulary around this industry, and that as a result the reasons people are willing to support will diversify,” said Marketos. “Things like the value of creators sharing their process, or the value of participating in an active community around somebody's practice.”
For news, making this new contribution vocabulary as robust as possible requires not just persistent articulation to readers, but also careful self-reflection about why people are paying for your product in the first place. Blindly chasing the hype of a neon-green logo will not do the job.
David van Zeggeren, Jessica Best, Emily Goligoski, Jay Rosen, and Lukas Kouwets contributed to this post.