Created Economy 038: Interview with Supermassiv's Jenna Hannon
How can a traditional commerce platform and NFTs help artists diversify their revenue streams and better connect directly with their fans? We talk to Supermassiv co-founder Jenna Hannon to learn more.
Supermassiv is a social and e-commerce platform that lets artists connect directly with their community. In this episode, Gregarious and Ken chat with its cofounder Jenna Hannon to get the full story, the need and the goal. Plus, why creators should think about the direct-to-consumer route.
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Highlights From the Interview
Some insights Jenna Hannon shared about what Supermassiv is doing, how the Creator Economy and Web3 can help artists discover new revenue-generating streams and more.
Why target musicians?
- "We think of musicians as the original creators," Hannon says. "They were creators before the online definition of creators became popular in the last 10 years."
- Unlike the Creator Economy of today, the music ecosystem is different. The tools that are available to artists to use are different from what other creators typically use.
How did she start Supermassiv?
- "I started my career at Universal in the licensing department. I actually graduated...with a music business background and thought I wanted to be in the music business for the rest of my career. And then once I got in there, it just felt like a lot of things were broken. It didn't feel at the time very innovative."
- It was after she connected with her co-founder Mark Z. that they really addressed what was broken in the music industry and what they wanted to fix. And the two co-founders wanted to bake in Web3 technologies into Supermassiv.
- But Hannon doesn't think of the company as a Web3 company: "We think of ourselves as Web 2.5."
- "If you look at how the industry has changed in the last 10 years, previously all artists had to go through major labels. And the reason why is because they were the gatekeepers to physical distribution. That's completely changed as music has gone to streaming. So now artists can go directly to their fans. And so the relationship with fans and building community has become more important than ever before."
- Hannon explains, "In the Web 2.0 world, the way that artists monetize was mostly through those distributions, through streaming. But the numbers are terrible. So it's extremely long-tail. There are 14,000 artists on Spotify [out of] 7 million artists that are making over $50,000 per year in streaming royalties. Then, if an artist is signed, they're going to share about 16 to 20 percent of that revenue with their labels and managers. And so the take-home pay from the Web 2.0 world of music was just not sufficient for all of the emerging artists."
- Ultimately, there needs to be a way for artists to earn directly from their fans so the system isn't catered to the top 0.1 percent of streamers.
- This is where Web3 helps Supermassiv: "We found Web3 unlocked a lot of elements that are not an option in Web 2.0. So part of that is NFTs having the concept of a non-fungible token of creating digital collectibles."
- Hannon cites gated access to content, saying Web3 allows artists to tie-in premium content, offering actual collectibles and ownership giving fans "a more intimate relationship with artists."
Why are major record labels slow to innovate?
- Hannon says while most labels are talking about Web3 and NFTs, "their business is working...they don't have a ton of incentive to change."
- She explains major labels control 60 percent of the industry and only sign 650 artists each year. One in every 2,000 will actually release a popular album on a major record label.
- "We think that's a massive miss, but majors, to them, their business is working. So they have an incentive to look at Web3, but they don't have to. You don't have to innovate until you have to innovate."
- To Supermassiv, it wants to create sustainability. "What we are looking to unlock is a larger amount of artists who are able to sustain, to grow the creator pool of artists versus the top one percent of artists."
- There are two options for artists today: The first is where you work with a major record label. "You play ball with the major labels, you hope to get signed, and that's going to unlock the doors. And you hope you are that small limited number of artists who have major success through the labels and that they really support, fund and market you, which is a very low probability, but not impossible."
- The second option is if artists go the independent route: "You own all of your music and you are in charge of all your marketing, all of your distribution. You are truly a creator. And the upside of that is that you get 100 percent of your earnings. The downside is you have no support." Hannon tells us this bucket is growing, thanks to streaming — it removed the need for physical sales and caused artists to use services like DistroKid and CD Baby to upload their songs and generate earnings.
- The two big revenue streams for artists pursuing the independent route are streaming and touring.
The goal of Supermassiv
- Hannon shares that her company's mission is to help artists identify who their top 10 percent of fans are.
- Also, "we don't believe that music NFTs are going to disrupt the music industry."
- Supermassiv is starting with NFT drops, giving artists a simple way to work with the platform and mint these digital art pieces, built on Solana.
- "Our hypothesis is that an NFT drop can help you make that first identification. Only your top fans are going to buy a limited edition, exclusive track from you. And then once you start to identify those fans, then we want to start taking the next step of bucketing those fans into different tiers. And so the way you might do that is something like five tokens of your limited edition might have a one-on-one interaction with the artists. Ten of those limited edition tokens may have access to unlock a Discord where the artist is chatting directly with a group of fans. Another tier might be access to early ticket sales. And so you want to start segmenting once you've identified that top 10 percent.
- Supermassiv is betting that this is all going to be experiential and a lot of NFT platforms will design more of these features for artists, something Hannon calls for there to be standards. "You should give options to artists so they don't have to feel like they have to redesign each of these tiers and campaigns and experiences because, to your point of having to do all the business and create, and be a creator, that is overwhelming to any independent artist. So you need to give them really simple solutions."
A digital commerce-first approach
- We asked how this was different from other creator tools that targeted musicians, such as Linktree. "Our focus is digital commerce," Hannon replies. "And so how can you give an artist a commerce platform that's purely digital and monetize digital assets better? This is something that the game industry does really well. I briefly worked in the game industry and was super inspired by how well platforms like Steam do that. And so that could be anything from selling music, NFTs to access to content, to experiences — pretty much anything in the digital world."
- "The issues that we have with all these artists using platforms like Linktrees...there's no commerce there. And so you are creating, you are building your fan base on social media. You are creating a lot of content to engage your fans, and then you send them to a webpage of purely links that have no commerce element. That's no way to help an artist monetize. And so we think that's actually a super inefficient way...we see what they're trying to accomplish. You don't want to maintain a website anymore. Previously, websites used to have commerce and that's gone away."
- She explains that Supermassiv wants to be a storefront that'll replace Linktree, enabling artists to sell digital content direct to fans "and that should replace the link in their bio."
- Does Supermassiv help artists get discovered? Hannon believes that having commerce natively built into a platform, aids in things "like recommendation engines and discovery."
- "TikTok [and] Instagram allow you to discover content. And so that's a super important thing for artists is they don't just want a static page of commerce. So even if you add embedded commerce to Linktree, it's still a static page and you are responsible for 100% of the traffic that goes to Linktree because there's no recommendation engine and...no discovery element. And so that's the difference of why we've chosen to go the route as to be as native commerce, which it allows less customization — that's the downside."
Supermassiv's pitch to artists and creators
- "Artists actually are interesting when it comes to the creator bucket because they don't have a lot of options," Hannon tells us. "If you ask them what tools they're using, they actually wouldn't give you that many."
- "The pitch for a lot of artists, the main thing that they're looking for is different revenue streams. And so previously what they've been pitched to do that online are things like Patreon...But a very small number of Patreon's current users are artists. And so when we asked artists why that is, they told us the problem with Patreon is that it requires constant content, which is it's subscription-based so it requires, just like social media, you constantly having to be feeding that machine with more and more content."
- "An artist is recording an album. They're working on their music. Then they go on tour. They're not just constantly turning out. And so that's why we actually think Web3 is so powerful because NFTs have given artists the ability to take some of that content that they're creating and sell it in a single drop rather than try to constantly fulfill a subscription."
- Hannon doesn't think that the company will expand to other verticals any time soon. "If we do find there's some crossover, we'd absolutely explore it if we can build revenue streams for other types of creators...but the approach is quite focused to start."
- Supermassiv is currently in pre-launch and has a beta list of artists it's working with. The company hopes they'll launch the first campaigns on the platform either this spring or summer. Hannon says the team has 200 artists signed up.
- Artists that Hannon is working with are those with a fan base. A lot of them are in specific genres that "have these super fans that listen to that very specific niche..." It's not just pop music or hip hop, but more specialized.