Tim Westergren Talks His New ‘Sessions’ Streaming Platform

Westergren took some time to talk to Pollstar about Sessions and why he feels it will succeed and stand out in a landscape rife with competitors. 

Pandora obviously exposed me to a huge part of the business, but there was one piece that was unfinished for me: “How do you actually make a direct impact on the economics and income of working artists?”

The history of digital music has been convenience and aggregation for consumers and access for musicians, but that has not translated to meaningful revenue for anyone but the top few. There are three main reasons this has been the case.

First, these services don’t really provide a presence for the artist. The artist places content on the platform, but it’s not as though they have a unique place to live and interact with their fans on Spotify, Pandora, Apple Music, etc. It’s not really a stage for them.

Second, there’s not a direct monetization mechanism for artists. You are seeing people trying to do this by retrofitting tipping into existing products, but none were designed with this revenue stream from fan to artist built in. The third thing is that these services don’t have a fundamental audience building capability. 

It’s essentially been like a club that says, “You can play here Thursday night but you have to bring the fans.” It’s not enough to create a pipe and let the artist use the pipe because if you don’t have an audience, the performance is a tree falling in the forest. In some ways COVID has brought this problem to the fore. 

With the pandemic, physical space has disappeared. Artists’ doorway to fans is now a computer screen, the digital domain. Artists who spent a lot of time building their online audience are suddenly realizing they can’t even access them. If you have 1 million followers on Instagram and you post to them, your post reaches less than 5 percent of your followers. You have to pay to access them. You’re actually kind of renting your audience.

What Sessions does is address all these issues, and I think we’re alone in that. We provide all the infrastructure and piping so artists have all the capability for livestreaming interaction, we have a great monetization structure, which comes from years and years of experience in the gaming world, and we know how to build audiences. 

In the first 6-9 months when we were in beta, we recruited about 150 artists from around the world, and these were all amateurs, hobbyists, people with no fans. People at home playing music, big dreams but no presence. We put them on the service, gave them an audience and started letting them perform. And now, a significant percentage of them are making good money. The highest earners are making from $500 to $700 an hour playing from their home and making a living. More recently, we started adding professional musicians, not huge global artists, but working musicians. And they are making anywhere from $5,000 to $20,000 per show. 

We had an artist, a few weeks ago, who made $10,000 dollars on a show with 300 people viewing. And this is an artist with virtually zero public presence. There is not a town in the country where this artist could fill a coffee house, but Sessions is proving to be an incredibly efficient way to bring people together in one place and give artists control of their destiny no matter what stage of their career they are at. 

The money comes from fans. There are two primary monetization mechanisms. There is digital ticketing –  which allows people to buy a ticket to a performance – and live micropayments, what we call “giving love.” 

The bulk of our revenue comes from the latter. You can give money to request a song, give shout out, send a gift, or join a chat. Money gets you participation, interaction, acknowledgement, membership, it’s an exchange. And it’s extraordinarily successful. 

We have the ability to cost-effectively bring audiences to the show and we pay for it. The artist just needs to make the most of the opportunity.

Now, we’re starting to see artists with larger scale are coming to us. I think the platform will do different things for different artists at different stages of their career. For the brand-new artist this can be a way to get started on a long and reliable career. For a working band this is a way to change the core economics of your business. Artists are now making more money in a show than they are from a very successful live performance. And for well-established artists this is a way to recapture the audience you have built on other platforms and make them your own, for good.

For most online music services, content is a cost center. The business model is reliant on reducing the cost of that content. That’s why you see downward pressure on royalty rates, why people are diversifying their content so they can play less royalty-bearing music.

You are seeing companies hire musicians to produce royalty-free music and right behind that is AI music, which platforms are investing in. My concern, as a musician, is that you don’t want musicians to become anonymous, faceless content creators just pumping content into services like a factory. And I believe Sessions is the antidote to that.

I think Pandora accomplished a lot. At the height of our popularity we were a radio product and we were paying performers, when radio had never done that before. So I felt good about that. 

But the nature of that business is such that even if Pandora monetizes like heck, even if it gives 65-70% of its revenue to the artists, which it did, the nature of the business is that it will never be enough to support the artist.

It’s a structural business model problem.  The artist is not paid directly. They have to wait for a downstream share, much diminished by many layers between them and the fan. Take the example of that artist who earned $10,000 in an hour. The amount of spins that would take on Spotify would put in you in the absolute top echelon. The efficiency of Sessions dwarfs anything that any mainstream, large-scale subscription or ad-supported platform provides, even a very well-monetized one.

Part of that is raw economics, how much is created per spin, per sub, etc. The other part is that the money generated on other platforms goes through multiple layers before it gets to the artist, so they only see a small percentage of the revenue as a royalty stream.

So playing live, not recorded music, there is a publishing royalty due. We do pay the songwriters through ASCAP, SESAC, BMI, and these other PROs all over the world and that income is distributed on a separate track. 

But the performer gets paid directly for their performance and doesn’t have to share any of it, unless they have a 360 deal or something like that. And we are not dealing with pre-recorded music, so we do not have to deal with master rights. Performances on Sessions are not recorded or archived. It is live and then it is done. 

When I put dollars into a guitar case for a busking musician, part of it is I am acknowledging them. Part of the reason I do it is for the reward of seeing the appreciation in the eyes of the artist; them knowing I appreciate them.

It’s a relationship, and that becomes strong when you see the person regularly. You also get acknowledgment from other people standing around watching. I’m being acknowledged by my peers and maybe, after a while, the artist gives you a CD or some other token of their appreciation. 

That kind of exchange also happens with virtual goods, but it’s not buying a product, it’s a relationship and this is really the key. 

What happens for new artists with Sessions is we provide them with a starting audience and some portion of that starting audience will not come back. They will not show love and will not come back. But after a while a core stays and over time they become more and more active patrons and become that artist’s  “crew,” their army. And as the artist invests in Sessions and builds their relationship with their fans, those fans help them grow. 

That’s why this is so powerful. When you’re streaming a playlist, you don’t have a relationship with the artist playing that music. That’s one of the great dangers of all these services, the artist becoming anonymous, they are wallpaper. Playlists are more like mood enhancers. Look at the names of playlists: “Chill” or “Saturday Night.” That’s a commoditization of music.

I think one of the silver linings of this COVID pandemic is artists are thinking about relationships with their audience and how to maintain them.

If you had talked to me two years ago, I would have been pretty pessimistic about the music industry. I felt everything was going in the wrong direction, artists were losing their grip and were a decade away from being completely replaced by computers. But I am of the opposite belief now. I believe we really may have found a solution.