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With concert touring still at a standstill, Spotify, SoundCloud and Encore Musicians are among those aiming to export China's creator tipping culture overseas
By IQ on 27 Apr 2020
‘Tipping’ artists, by making one-off, typically small payments during virtual events, is gaining popularity internationally, benefiting musicians who have been hit by the global stoppage in concert touring.
Virtual tipping has its origins in China, where the concept of donating to musicians, video producers, writers and podcasters has been the norm since at least 2013. Among the services that allow the tipping of creators are messaging app WeChat (for writers), podcasting platform Ximalaya FM and music streaming services QQ Music, KuGou and Kuwo. All are owned by, or have significant investment from, tech giant Tencent (which also recently acquired a 10% stake in Universal Music Group).
According to news site Ozy, the popularity of tipping on the three streaming services specifically is “credited by industry analysts for helping Tencent Music record a post-tax profit of [US]$263 million in the first half of 2018.” According to contemporary filing with the Securities and Exchange Commission, 9.5 million Tencent Music users – equivalent to 40% of its total paying user base – paid for tips in the form of virtual gifts and other ‘social entertainment experiences’.
Comparatively, the Ozy article adds, “Spotify reported net losses of $461.4 million in the second quarter of 2018, and Pandora lost $92 million the same quarter.”
Now, however, Spotify is hoping to develop its own virtual tipping culture, last week announcing the introduction of ‘Artist Fundraising Pick’, which allows listeners to donate via artists’ profiles using PayPal, GoFundMe or Cash App.
“This is an incredibly difficult time for many Spotify users and people around the world,” says the Stockholm-based company, “and there are many worthy causes to support at this time. With this feature, we simply hope to enable those who have the interest and means to support artists in this time of great need, and to create another opportunity for our Covid-19 music relief partners to find the financial support they need to continue working in music and lift our industry.”
Tipping is credited with helping Tencent Music record profits of $263m in H1 2018
As well as predominantly non-music services such as Twitch, which enables viewers to tip (‘cheer’) its video streamers, several music-focused platforms are aiming to help artists get paid while touring is off limits.
Encore Musicians – a UK-based marketplace that connects event planners with artists and bands – has introduced ‘Music Messages’ for its locked-down customers, enabling them to send personalised musical messages to their loved ones. The company’s co-founder, James McAuley, tells TechCrunch that recipients of the videos (which cost from £15 to commission, with £2.50 going to the UK’s National Health Service) have the option to add a tip, with many contributing up to £50 per video.
“The reactions from both the senders and recipients have been extremely heartwarming, and musicians are having fun with it,” McAuley explains. “This is also reflected in the success of the tipping mechanism, with people sometimes tipping more than the original video amount.”
Elsewhere, SoundCloud is building on its existing tipping capabilities – a partnership with Twitch, announced in March, allows creators to monetise livestreamed concerts – by allowing artists to add ‘support links’ to their profile pages, with links to either financial exchanges (PayPal, Cash App, Venmo, etc.) or online stores/fundraising pages such as Kickstarter, Bandcamp or GoFundMe.
The company says it will retain support links, or a version of the feature, “until more impactful solutions present themselves, or it is no longer necessary for our most impacted creators.
“We’re all in this together and it’s important to everyone that creative projects continue unabated. So, use this to fund your projects, offset bills or get whatever you need to stay on your feet.”
Speaking to IQ earlier this month, British singer-songwriter Emma McGann explained that her audience on YouNow – another live video streaming platform – is large enough that when her upcoming US tour was torpedoed by the coronavirus outbreak, she sold enough $20 YouNow ‘Virtual Tour Passes’ to cover losses stemming from the cancellation.
“On YouNow, fans can tip their favourite performers throughout a broadcast”
McGann is one of a handful of artists whose fanbases are primarily on YouNow, which has long had a culture of fans tipping creators. A recent Daily Dot article explains: “In addition to being able to purchase stickers and private messages with in-app currency and status, fans can use money to purchase ‘bars’ in packs, and tip their favorite [sic] performers throughout a broadcast, earning shout-outs in turn. YouNow stars who’ve made a name for themselves can join its partner program[me], which entitles them to a cut of the proceeds from the sale of this digital currency that gets spent on their broadcasts.”
“Most livestreaming platforms have a criteria you have to hit before your channel is eligible to be monetised,” explained McGann, who is a YouNow partner, “but the community you build should be your first concern over the monetisation aspect. Interaction and community [are] the most important part of your livestreams. Monetising that content will be difficult if you’re not consistent.”
On tipping specifically, she added: “Calls to action during your streams can help to push traffic to your music, your merch store or wherever your viewers can support you…”
One company, though, that isn’t joining the tipping revolution is Google, which has reportedly nixed plans in the US that would have seen it facilitate donations to popular websites, including those of artists and musicians. The tipping tool, linked to Google Pay, would allow a one-time donation of between 25¢ and $5 via a floating button at the bottom of the screen. (On Google-owned YouTube, fans already can tip creators using the ‘super chat’ feature.)
Google trialled the functionality with artist Miranda Sings, as well as the New York Times, Tech Crunch and the Points Guy, a travel advice site.
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