How music companies can evolve the fan experience

To meet fan demands for new types of experiences, music companies will need to listen, engage and deliver in profoundly different ways.

In brief

• Robust customer data and analytics can help music companies deliver content and engage fans in meaningful ways through the channels they prefer.
• Digital commerce and Web 3.0 technologies can expand revenue streams for real-world assets and the monetization of virtual assets.
• Music companies will differentiate themselves if they focus on the fan experience rather than on their own bottom line.

The entertainment world is rapidly changing thanks to the explosion of digital technologies. The emergence and adoption of new technologies has accelerated, providing opportunities for fans to interact with their favorite artists in fundamentally different ways. How fans watch, listen, communicate and follow — and how they buy goods, support and even create content inspired by the artist — is changing.

Fans are becoming increasingly interested in digital events. They want exclusive access to artist content for “premier fan” experiences. And they want greater authenticity from artists through deeper connections, shared interests and memorable interactions.

Music companies and artists looking to keep pace with their customers’ shifting preferences must find markedly different ways to engage fans and deliver the experiences they’re demanding.

The music companies that are part of or have partnerships with media and entertainment conglomerates are particularly well-positioned to integrate their artists and music across different channels and assets in ways that create new fans and expand relationships with existing fans.

Immersive experiences convert fanship to friendship

Fans increasingly are demanding the ability to watch live performances on their terms, on their schedule and from a location they choose.

Leveraging the metaverse, music and entertainment companies are starting to merge the real and virtual worlds to create new immersive experiences. These experiences feed fans’ desires to make the leap from fandom to friendship. Making friends, creating, and collaborating are ways that fans are demonstrating their desire for exclusivity, proximity, and authenticity to and from their favorite artists. 

Streaming services allow fans to discover artists, but they hunger for more. In fact, 66% of social media users have discovered new artists on social media per the EY Fan Engagement in the Music Industry report. In response, artists are creating more exclusive content than ever to engage with their fan base, monetize acquired media channels and drive more traffic on their platforms. 

Digital commerce and social media can generate new revenue streams

The next phase in the evolution of the internet, Web 3.0, sits on a foundation of decentralization, openness and more user interaction. Three new Web 3.0 technologies allow consumers to move from fans to stakeholders.

• Non-fungible tokens (NFTs). Creators have been releasing NFTs to merchandise unique and tradable digital assets. 
• Music-enabling cryptocurrencies. Artists and music companies are exploring the capabilities of cryptocurrencies and blockchain in merchandising. 
• Decentralized applications or programs (DAPPs). DAPPs operate on a blockchain or peer-to-peer (P2P) network of computers, outside the purview and control of a single authority.

Five ways music companies can create and monetize amazing fan experiences

As fan expectations shift, music companies must do more to get to know their customers and what they want. However, with the rise of data privacy regulations and the demise of third-party cookies, companies’ approach to collecting and using customer data must evolve. 

So, what can music companies be doing to connect directly with their customers? According to the EY Fan Engagement in the Music Industry report, here are five ideas:

1. Collect first-party data in a way that builds trust and loyalty. First-party data is essential for creating personalized content and increasing fan engagement. By using first-party data to derive analytic insights, companies can expand content offerings; plan and promote new releases, events and merchandise; and deliver relevant, highly targeted advertising and marketing messages to fans. 
2. Craft tailored approaches based on granular fan segments and the platforms they gather on. Consumers are not monolithic. As such, their composition and how they engage with content will differ across platforms. Companies need to expand and deepen their understanding of their customers — the fans. 
3. Develop a detailed view of the user journey and an individual view of the user. To create and monetize experiences, companies need to apply data analytics to understand the fan’s mindset and needs. The Adobe Experience Platform and Adobe’s Customer Journey Analytics and Optimization solutions can help companies get a good picture of the current customer journey and where they can later enhance it. 
4. Listen to and engage fans when developing experiences. Companies need to become familiar with their customers to create the personalized, immersive experiences they want. Technologies such as artificial intelligence and machine learning, often combined with marketing technology solutions like the Adobe Experience Platform, can help companies gather customer data from the right data sources across the enterprise in real time. 
5. Commit to creating value for customers rather than only capturing it from them. Music companies can differentiate themselves by focusing on the fan experience rather than on their own bottom line. Companies need to think of entertainment as an ecosystem, where value is created and exchanged among all participants — companies, artists and fans.

The EY Fan Engagement in the Music Industry report was co-authored by Nuno Leal and Charley Shoemaker. Contributors were Helene Bedard, Senior Consultant; Jason Pepe, Senior Consultant; and Keith Nutter, Consultant, Business Consulting, Ernst & Young LLP.