Maria Schneider's whales
3 min read

Maria Schneider's whales

Once you find enough whales, you can leave Spotify or YouTube if you want.
Maria Schneider's whales

Composer-bandleader Maria Schneider said on the All That's Jazz podcast episode for April 1, 2021:

[I]n the streaming world, everybody's payment is tied first of all to a pot of money [...] That means that everybody is priced the same. It doesn't matter if you make especially niche music item with a tiny audience, or you're a superstar [...] Try spending a quarter of a million on a record in jazz and streaming it, and see if you make more than $10 back on it. As opposed to if I can set my own price, and I'm making $20 or $25 average on each person, it doesn't take that many people then to reach $200,000.

You won't find Schneider's music on Spotify, YouTube, or various other platforms in which she has no faith. Schneider's career is a stand against the industry 'plagues' she discussed in 2017, and it's hard to argue with her success.

The business model behind that success is in the "making $20 or $25 average on each person" part of the above quote. Schneider understands the whale type of customer: the person who enjoys your music more than everyone else, and pays more for it than anyone else.

I refer to this 2018 post by Eric Feng to summarize whales:

[A] company’s best customers are many many times more valuable than their average customer. If you can find a business model that allows you to take full advantage of that disparity, you unlock economic value for everyone: yourself, your current best customers, and all the rest of your customers who one day could grow into your future best customers.

If you're a young middle-class artist, your first whale might be a family member. Their unconditional support and cash flow allows you to "unlock" more opportunity and introduce yourself to more listeners.. When you can turn listeners whom you didn't meet into whales—bringing them along your artist's journey with multiple transactions—you start to have a resilient career.

Schneider knows that you won't find whales in a shallow pond. The online data publication Components addressed this concept in their report "The Chaos Bazaar", which mostly deals with Bandcamp but includes these Spotify insights:

Spotify's model ignores even the basic principle that 20 percent of buyers usually account for 80 percent of purchases. Instead, the value of each Spotify user is capped at a monthly subscription price.

Spotify underserves all whales. There is pop music—where you want to treat everyone the same—and everything else, where you want a less normal distribution. Spotify's cost structure matches pop music, and it doesn't suit everything else.

Every single one of Schneider's $20 to $25 customers would look like a whale in pop music. Willingness to pay $20 for a discrete recorded music experience goes beyond the maximum that Spotify will accept from you in one month.

I was in a band that sold CDs for $20, often as upsells after a $15-20 event ticket. On top of that, many of these customers also paid for dinner together before (or best of all, on-site at) the gig. They were older people: veteran audience members. They knew how to be the whale and have fun doing it, and our band reached many people by graciously taking their dollars and stretching them far. Only with a baseline like that could I venture into younger audiences who have much less discretionary spending across the board.

Once you find enough whales, you can leave Spotify or YouTube if you want. Schneider owns the customer relationship and can take that kind of uncompromising stance.

You need more than e-commerce to do that: you also need to consistently be the best. Schneider has internalized what it takes after winning seven Grammy Awards.

As Spotify flattens out everyone's willingness-to-pay, she will be a rare influencer—someone who can attract whales.

On top of that, an ever-shrinking Average Revenue Per User (ARPU) threatens to erode streaming revenues. When that happens, Schneider and her whales will be okay; she'll have the strongest position she's ever had, and her longtime customers will deserve much of the credit.