We live in a time when a single tweet can turn tides, and a hashtag can ignite a global movement. So, the concept of superfans has grown far beyond front-row screamers and poster-plastered bedroom walls. On top of all things, these people can very significantly change an artist’s financial bottom line. But as record labels and tech giants get deeper into the superfans' wallets with merchandise that ranges from the sublime to the ridiculous, I can’t help but wonder: are we sincerely celebrating someone’s passion or crossing into exploitation?
Unpacking the superfan phenomenon
Spotify study highlighted that, on average, super listeners — merely 2% of an artist’s monthly listeners — are responsible for over 18% of monthly streams. Beyond streaming, these fans are also the main purchasers of merchandise, accounting for more than half of merch sales. Interestingly, Latin America is a hotspot for superfans, with countries like Chile and Mexico leading the charge (and United States being #5).
Luminate's 2023 Midyear Music Report sheds additional light, categorizing 15% of the US general populace as superfans — those engaged in five or more forms of artist interaction. This engagement isn't just digital, it transcends into the physical realm with superfans being twice as likely to purchase music physically, which proves their substantial financial contribution to the music ecosystem.
Universal Music Group's revenue surge by 11.5% in Q1 2023 is partly attributed to leveraging such fan engagement. Lucian Grainge, UMG's CEO, envisions an “artist-centric” model that nurtures the artist-fan relationship, hinting at the untapped potential of superfan monetization. This strategy aligns with company’s Chief Digital Officer and Executive VP Michael Nash's insights during UMG's Q1 2023 earnings call, emphasizing that about 30% of subscribers are superfans of one or more UMG artists, spotlighting the immense monetization potential through direct engagement and unique digital offerings.
The subject has even captivated Slim Shady himself, with Eminem co-producing “Stans,” a documentary exploring the superfans' universe.
Superfans' heroic deeds
Superfans are the turbocharged, all-in, would-sell-their-grandma-for-a-concert-ticket kind of devotees. Their heroic deeds are legendary. And their potential for mayhem? Equally formidable. The social media, amplified by anonymity and virality, has weaponized fandom, turning Instagram followers into foot soldiers, ready to unfollow at the slightest provocation. Just ask Kylie Jenner, who saw her follower count plummet by one million as a result of Selena Gomez drama or allegedly another million when she posted support for Israel. Similarly, Hailey Bieber and Doja Cat experienced the sting of mass unfollowings, revealing the volatile nature of fan loyalty.
On another side, take Harry Styles and Lady Gaga, for instance. Styles reportedly earned a cool $22.9 million raked in from merch (and I am not even sure if it accounts for sales of his brand Pleasing, offering overpriced nail polish, clothing, fragrance and all things pleasing). And Gaga, not far behind with US$15.8 million, demonstrates the financial muscle of superfans. And there are superfans buying concert tickets at eye-watering prices — like the fan who shelled out $168,000 for a seat at Led Zeppelin's reunion gig.
There are also stories of profound connection. Billboard-charting singer Caley Rose shares a touching story of a superfan from Spain whose life was deeply impacted by her music: “My superfan first reached out by creating fan art of me. Her account had her art but not pictures of her, so I wasn't sure if she was trying to steal my identity! It turns out she IS a real person, a talented young female visual artist, who told me that my music helped her through some tough times and wished she had found it sooner. I finally got to see her on video during several live virtual zoom shows, even though she lives across the world in Spain!
“This incredible Superfan of mine has paid international shipping charges multiple times for shirts and merch to be shipped from the US to Spain. She has gotten up in the middle of the night at 3 and 4 am several times to catch live stream concerts I've played. She has shared with me how much my music has helped her through tough times. She is both my biggest cheerleader and the reason why I create: for young women like her. Her support means so much, and I am so grateful for her and the true friendship we've formed through music!”
Rose's story is a proof to the potential for genuine, mutually enriching artist-fan relationships in an age where cynicism often prevails. And that is probably one of the music industry’s greatest assets and most significant challenges.
The business of superfans
Superfans, by the numbers, are reshaping the music industry's revenue strategies. As highlighted by the Goldman Sachs report with music streams soaring 2.5 times since 2017, paradoxically, the revenue per stream has dipped by 20%. So that the superfans emerge as the industry's only gleam of hope. Goldman Sachs projecting that superfandom could usher in an additional $2 billion in revenue for streaming platforms by 2027, with this figure expected to double by 2030. This shift could amplify paid streaming revenues by a substantial 16%.
Luminate's 2023 Midyear Music Report also highlights this opportunity. Superfans’ love for collectibles and direct purchases from artists' stores not only proves their financial clout but also their growing influence over how music is marketed and consumed. Significantly, 42% of US Gen Z fans express a desire for more merchandising opportunities to support their favorite artists .
The corporate landscape has taken note. Recent investments by music giants in superfandom platforms are telling. And it’s not only the words during the earning call, it’s actions too.
Warner Music Group and Sony Music Entertainment have made notable investments in platforms designed to cultivate and monetize superfandom. According to Crunchbase data, Sony's foray into the space includes backing startups like Laylo and Fave, which specialize in connecting artists directly with their most dedicated fans through exclusive experiences and rewards. But the intrigue deepens with Warner's portfolio, a collection that reads like a tech enthusiast's dream. Fave, Beepr, a notification platform that provides real-time music alerts, creating communities of shared interests, and Beatmatch, a social app that helps music lovers find friends and things to do based on music tastes.
Interestingly enough, WMG investments include many startups in the field of NFT and augmented and extended reality productions — that’s probably your hint of what kind of goods and services the company is planning to sell to all those superfans. The list includes move.ai, motion capture platforms and tools to enable augmented and extended reality productions using AI and computer vision, and op3n, a super app that integrates all aspects of NFTs from creation to minting to community building. All of that suggests a future where fan loyalty might not just be rewarded with a signed poster, but with digital assets and experiences yet to be imagined.
On top of those investments just a few weeks ago Warner announced the intention of building a new platform to help its artists connect more closely with their top fans and ensure artists receive information about these dedicated fans.
Across the Pacific, Hybe's Weverse app stands as a great example to superfandom's global allure. With 10 million monthly active users, largely outside South Korea, Weverse is a cultural phenomenon, transforming how fans interact with stars like BTS. From livestreaming concerts to selling $64 light sticks, Weverse is about converting every click, every view, and every purchase into a finely tuned revenue stream. And it’s already taken some artists from Sony Music Entertainment on board and is expanding to the US.
However, this commercialization of superfandom raises ethical questions. With Lady Gaga’s soap and Harry Styles’s branded merchandise, the line between artist and product blurs. These ventures, often more closely associated with designers and marketing teams than with the artists themselves, raise ethical considerations. Are superfans being celebrated, or are they being commodified? As labels and platforms deepen their dives into the superfans' pockets, the industry finds itself at a crossroads between innovation and exploitation.
Direct connection over commercialization?
As music giants lay their stakes in the ground with investments aimed at redefining fandom — from augmented reality concerts to blockchain-enabled merchandise — one wonders about the true cost of these actions. Are we enhancing the fan experience, or commodifying it?
Take, for instance, the music video for "One Right Now" by Post Malone and The Weeknd, which prominently featured a Bored Ape NFT. Malone reportedly shelled out over $700,000 for two Bored Apes, joining a bandwagon of celebrities making headlines with their NFT acquisitions. Yet, the value of these digital assets has plummeted dramatically, with the average price of a Bored Ape NFT dropping from over 100 ETH (equivalent to more than $405,120 at today’s rates) to less than 15 ETH (less than $60,000). This scenario highlights a concerning trend where the allure of the artist’s name might lead to superfans losing pretty insane sums of money for nothing. Will we see more of that in the future? Feels like it.
Yet, in this rush towards digital monetization, there's a risk of overshadowing the authentic connections. Will the industry continue down a path where fans are seen as mere wallets to be opened with the latest digital gimmick? Or will we leverage these new tools to deepen the bond between artist and listener, ensuring that at the heart of every transaction lies a genuine exchange of value – emotional, not just financial?
The answer to this question will shape the future of music. It's a future where, hopefully, the industry remembers that the most valuable asset isn't the NFTs or the exclusive merchandise but the shared moments of human connection that music, in its purest form, offers us all.
