Power to the People — A Game-Changing Year for Creators, Artists, and Audiences
It’s hard to talk about 2020 without making it all about the pandemic. But within the entertainment industry, the COVID crisis accelerated a dramatic shift that’s been a long time coming – and one that will remake multiple aspects of the business for years to come. The big takeaway: The pandemic-fueled disruption is spurring a redistribution of power back to artists and creators.
Amidst the challenges of the past year, longstanding business models struggled. Those at the bottom of the pyramid felt the squeeze the most – creators who relied on ad dollars, journalists who were let go, and freelancers whose work dried up. The struggles, however, also sparked a new wave of entrepreneurial thinking.
Innovators are building tools and resources that empower creators to turn their art or content into competitive businesses. And new voices are finding easier paths to audiences. It was a tough year, to be sure. Yet, for those in the media and entertainment business, it was a transformative one. Here’s a look at some of the significant developments from 2020 and what they mean going forward.
The creator economy takes center stage
The idea of creatives as entrepreneurs is not new. Musicians, producers, photographers, and more have been navigating the role of “solopreneur” for decades. But 2020 brought some unique hurdles (how’s that for an understatement?). For instance, the advertising model that many creators have relied on is steadily declining – and COVID only hastened its demise. In addition, studios, publishers, and labels that previously staffed or funded creative work faced budget cuts and layoffs in the wake of the pandemic. This put additional pressure on the creative workforce.
In spite of all this – or more likely, in reaction to – the past year also yielded a new generation of tools that empower creators like never before. There are now numerous powerful yet inexpensive technology platforms that allow creators to “rent” customized tech stacks to run their business. On the other end, COVID also drove new demands from audiences for influencer curated e-commerce, on-demand entertainment, and alternate sources for news. Creators seized the opportunity, building their own brands by curating and providing the direct-to-consumer commerce, entertainment, and journalism audiences wanted.
What sticks: The power has moved decisively to the ends of the value chain, and it will likely remain there. On one end, you have the people who make media, including artists, creators, and even athletes, and the technologies that support them from Patreon to OnlyFans. At the other end, conglomerate media companies have consolidated audiences and revenues through M&A – think Disney and AT&T. Unfortunately, everyone in the middle remains squeezed.
What’s next: The business management tools available to creators will get more even more robust and sophisticated. You can expect a growing industry of financial service infrastructure that specifically supports creator-entrepreneurs and freelancers. We’ll also see the rise of 99 Designs-style marketplaces for new creative services such as photography.
Audiences want what they want – and it’s not high-end short video series
It would be impossible to reflect on 2020 without talking about TikTok and Quibi. In many ways, TikTok is a throwback to what social video looked like a decade ago – superficial content that you watch once, share, and forget. Consider that the top YouTube video in 2010 was a meme, the “Bed Intruder Song.” Snapchat launched the following year. Since then, social platforms have focused on stickiness, using followers/subscribers to turn creators into stars and empowering users to curate their feeds. Then came TikTok. By leveraging powerful AI editing tools and curation algorithms, the short-form video juggernaut has flipped that model on its head – and enabled a whole new generation of creators to also become stars.
In 2020, Quibi represented the other end of the short video spectrum. There’s been no shortage of think-pieces written about the failed platform. However, it’s more interesting to place Quibi’s failure in the context of the chain of well-funded, but ultimately unsuccessful, short-form video platforms such as go90 and Super Deluxe. The common denominator? They all focused on scripted shows with high production values. The big lesson here is that users don’t value or even want high-end short-form series. When they have five minutes, they prefer someone lip-syncing Fleetwood Mac, while riding a skateboard and drinking cranberry juice.
What sticks: The above has been a hard lesson to learn, but the message has finally landed. It will be at least five years until we see studios attempt high-end, scripted short-form series again.
What’s next: Expect new entrants to the social video space to continue to attack TikTok, putting their spin on the short-form video craze. Startups will focus on innovative capture and editing tools to set themselves apart. Meanwhile, incumbent platforms will attempt to co-opt each other’s features and technology while doing what they can to retain and grow users.
Virtual events are more than temporary fix
The pandemic stopped a surging live events business in its tracks. There was no Coachella, no Broadway, no Museum of Ice Cream. Even the indefatigable Justin Bieber’s world tour was canceled. Instead, audiences watched Hamilton on Disney+, live streamed Machine Gun Kelly performing to an empty Roxy theater, and flocked to audio chatrooms on Clubhouse. The big question now is whether the virtual experiences were temporary adaptation – or indicative of something more permanent. Our new reality will likely include some of both.
What sticks: The virtual fans in sporting arenas, and virtual formats for concerts showed that the concept works. Still, the pent up demand for in-person experiences will help the event business quickly bounce back. As soon as it’s safe, expect audiences to resume paying high ticket prices for the opportunity to see their favorite artists and athletes live.
What’s next: The virtualization of events has also proved fertile ground for a whole range of innovations that will be relevant for all types events, virtual and in-person. For example, there’s a race to figure out how to ticket virtual events and finally break our reliance on antiquated paper systems. Other innovators are reimagining merchandise for the virtual fan.
“Only in theaters” is no longer a thing
It’s easy to blame COVID safety restrictions for the demise of an exclusive theatrical window for film releases, but it may simply have been the proverbial straw. Over the past several months, studios and exhibitors experimented with shortened or hybrid windows – always with the understanding that both sides would revert to “normal” as soon as possible. But with Warner Brothers’ December announcement that it would simultaneously release all of its 2021 films in theaters and on HBO Max, the toothpaste is out of the tube for good.
What sticks: Studios will keep experimenting with various release strategies, including short windows and day-and-date releases, while increasingly sending their films and series straight to their own streaming services.
What’s next: The next year for studios and exhibitors won’t be pretty. Anticipate a knock-down, drag-out fight between the two, followed by a series of consolidations. And don’t be surprised if a studio (most likely Disney) buys an exhibitor within the next two years.
Innovators look to democratize the music business
The much-publicized feuds between major music stars such as Taylor Swift and Kanye West and their record labels shone a spotlight on the mechanics of how artists make – or don’t make – money. The disputes revealed the lack of transparency that’s not only endemic to the business, but has long benefitted labels, DSPs, and music rights funds.
If the complicated contract structures and lack of standard deal terms have stymied artists, they’ve also kept industry innovators at bay. But that’s about to change. Multiple startups and investors are attempting to build solutions that untangle the mess and democratize the business of music for those that create it and those that invest in it.
What sticks: The progress of startups in this arena has been slow and steady. However, the sparks from Kanye and Taylor may very well ignite a firestorm of change. We may be headed for a new era of transparency that redistributes power back to artists.
What’s next: More and more artists want to operate as independent businesses. Streaming services combined with cloud-based, SaaS model products are making that possible. Artists can own their music and rent the infrastructure they need to start and run the business behind it. This is an inverse of the traditional model, in which labels owned the rights and the infrastructure and essentially hired the artists to work for them.
Many of these shifts were percolating pre-COVID, but they’re now full-steam ahead. For investors and innovators alike, they present a new spate of opportunities to be on the front-end of changes that reinvent, and ultimately, improve the industry. And for creators – many of these developments promise to give power to those who are doing the work.