How is the sharing economy impacting the music industry? Mike Williams, Founder of Studiotime, shares his thoughts on this topic
How has the music industry changed over the past few years?
In the past few years, I’ve seen a move towards artists and creatives having more control of their content, brand and distribution. Not only has there been a shift in terms of distribution and how artists are building their brand, but the way they are doing so. The sharing economy and social platforms have allowed artists and the industry to connect, create and leverage their brand and social platforms for distribution. In this way, we’ve seen a change in how quickly artists can rise from an unknown to a name and brand that can have a breakthrough on a social platform (also facilitated by collaborating with others).
‘The sharing economy removes barriers to entry, reduces the price premiums and makes the music industry more transparent, accessible, and sustainable’
Why have people in the music industry taken such an interest in the sharing economy?
The music industry is a good case for the sharing economy, which allows creatives to connect directly with others and access services, goods, and spaces. The sharing economy remove barriers to entry, reduces price premiums and makes the music industry more transparent, accessible and sustainable.
How has sharing economy impacted businesses in the music industry?
One of the big benefits of the sharing economy in the music industry has been allowing underutilised or idle assets and spaces to be rented out, which generates more revenue for their owners and helps make their investment and business more profitable and sustainable. The music industry is driven by a grassroots-level passion, which has not, until now, been matched by profits.
In what ways has the sharing economy impacted individuals in the music industry?
‘The music industry is driven by a grassroots-level passion, which has not, until now, been matched by profits’
Speaking from my experience of running Studiotime, the sharing economy has drastically reduced barriers for artists to create and collaborate with others, and also further their careers as musicians. The sharing economy offers entry-level spaces (or services) and also gives musicians a chance to collaborate and use the marketplace platform as they progress.
For whom is the sharing economy most profitable?
The marketplace has been most profitable to the studios, which range from artists, producers and engineers who operate their own spaces and rent them out to supplement their expenses, all the way up to top-line studios that have made healthy profits using Studiotime to generate substantial bookings and revenue.
How can businesses in the music industry use the sharing economy to their advantage and what differentiates them in terms of success and failure? Spotify and Apple Music are similar, for example, yet Apple Music is profitable while Spotify is struggling.
This simply comes down to the mission and way a business is run. Studiotime, for instance, has been profitable from day one. It reinvests profits directly back into the business and has built a revenue-generating business. We could have built a marketplace that was a venture-backed business and had negative-unit economics to try and achieve scale faster, and aggressively spend in order to do so. Instead, we chose to build a business that was so valuable that people were willing to pay for it and saw a positive net return on their investment, in terms of both time and money.
‘The sharing economy has drastically reduced barriers for artists to create and collaborate with others’