The limits of the “platform economy”: why haven’t platforms taken over live music?

It is often assumed that the “platform economy” is in the ascendancy, and is taking over more and more economic sectors. Because of this, much research on the matter has focused on characterising and evaluating this change: what are the relative advantages and disadvantages of this kind of work compared to more “traditional” jobs? Should we be optimistic or pessimistic about it? Hence, most current research has looked at the experience of workers in industries which are already highly “platformised” (such as ride sharing, food delivery, or clickwork – doing digital tasks like data processing).

But given that the platform economy still involves only a small percentage of workers worldwide, it seems that some sectors must be more susceptible to platform takeover than others. Indeed, put this way, this sounds like a statement of the obvious. So it is surprising that so little research has examined which characteristics make a given labour market more or less hostile terrain for platform capitalists. Our study of live music in the UK and Germany suggests some answers to these questions.

Superficially, live music seems like the kind of sector that might be ripe for platformisation. High-profile early platforms intervened directly in the music industry, reshaping the relationship between musicians and their audiences (for example Napster or Myspace). Moreover, live music fits closely with the idea of the “experience economy” which features heavily in many platforms’ self-promotion. See, for instance, Sofar Sounds, which considers itself a dedicated live music platform and has collaborated with AirBnB and Uber to provide live music “experiences” in private individuals’ homes.

However, our research shows that live music is proving resistant to the platform model. We conducted a systematic review of live music intermediaries in our two countries, developing a comprehensive database of any enterprise which a) has a significant online presence, and b) aims to link up buyers and sellers in the live music labour market.

The sites we found included those helping musicians connect with other musicians; helping musicians connect with potential venues; or helping customers (such as individuals organising a private party or corporate event) to find musicians. We supplemented this with a number of interviews with key informants in both countries.

In the 160+ sites in our database, very few adopted a model consistent with the typical “platform”, and those that came closest to this tended to have a marginal presence, with little reason to believe they could become a major source of work for live musicians.

Why is this? First, we will summarise the kinds of enterprises we did find, and consider how and why they fell short of “platformisation”.

Types of (partial) digitalisation in live music

We divided our sample into clusters, identifying differing levels of digitalisation. In general, we found that, the more digitalised sites were, the more their function moved from that of a representative acting on the musician’s behalf (as with a “traditional” live music agent) towards providing a venue for amassing data and matching buyers and sellers.

The largest group, comprising almost half of our sample, were the websites of traditional music agents. Here, the online activity is merely one means of contacting an agency which likely does much of its business offline. Traditional agents typically represent a comparatively small number of acts, and are relatively selective about who is featured on their books. They may have a monopoly over specific acts, and being represented by an agent may constitute a significant career break for artists.

Traditional agents’ websites usually served as a means of advertising their bands and providing a means of contact. They do not tend to offer any kind of comparison-facilitating function (for instance, they rarely enable users to sort by price or “quality”, however defined). If a client wants to hire an act, they must then make off-site contact and the agent likely acts as the musician’s representative in negotiations. They may also actively prospect for work for their artists, and provide them with career development support.

Next, we identified a category which hybridises elements of the traditional agent model with characteristics of a digital platform. We called these the “digitalized agencies”. There were fewer of them, but they typically featured much larger numbers of acts. They normally catered to “function” work- ie where artists act as service providers, performing as hired entertainment or background music at private parties or corporate events.

These were different from the traditional agents in two main ways. First, they normally had much more open and accessible sign-up procedures (typically, acts had to fill in an online enquiry form including video or other media clips). Selectivity is generally lower. This explains the much larger lists of acts they tend to feature.

Second, the sites were more “customer-focused”, in that they marketed themselves primarily as a venue for customers to browse through and compare their acts: a price comparison site rather than an artist representative. Thus, they tended to provide more data: prices were often displayed up-front and could be used to order search results. And in some cases, acts could also be sorted according to rankings such as user-generated star ratings or other measures of “popularity”. These, however, tended to be rudimentary and sparsely-used, with few acts have more than a handful of user-submitted ratings.

Despite this greater digitalization, these sites still differed sharply from a genuine platform (even if some described themselves as one). The comparative data they amassed was highly limited. And most importantly, they retained significant human interlocution in organising transactions. Transactions were never fully automated: instead, the customer’s choice of an act was only a starting point, after which came further interpersonal negotiation, facilitated by a manager at the agency, to agree final arrangements with the band (which could be complex, given the unique circumstances of each gig which can affect the final price).

Finally, we identified a small group of sites which came closest to the platform model. Sites in this category usually marketed themselves towards musicians looking to build a profile as creative performers under their own name. Musicians and clients (such as clubs and concert halls, or even individuals looking to use their house as a music venue) could create profiles and post requests, to which others could attach their own profiles, leading to direct contact between account holders.

These sites were the most readily accessible, enabling instant signup with no managerial vetting. As such they tended to be by far the largest group in terms of numbers of acts featured.

They were also usually more sophisticated in the data they amassed for providing comparisons. They often sought to sync with other social media platforms, in some cases giving users “scores” by amalgamating activity across their other accounts- Twitter, YouTube, SoundCloud, and the like.

They also sometimes provided automated forms of labour discipline: for instance, one site featured automatic disconnection from the platform if a musician withdrew from an agreed engagement on three occasions.

However, we judged these “live music platforms” to have very limited reach. Often, the vast majority of act profiles appeared dormant, and evidently only functioned very sporadically as sources of work for their users. Many of the gigs advertised were poor quality ones, in which artists were expected to play for free or for very low pay. At this stage they appear patently unable to seriously support a professional musician’s career.

Indeed, through our interviews, we found that more established platforms were seeking to make changes to their business models, notably trying to partner with traditional agents as a means of accessing new market segments. This suggests severe limits to the mileage of the platform business model in live music.

Why haven’t platforms taken over in live music?

We believe there are three main reasons why the platform model has weak traction in live music.

First, because of the subjective and qualitative way in which value is assessed. Looking through the sites we identified, it was striking how little-used and rudimentary the comparative metrics for establishing “quality” were. Many act profiles only had a handful of star ratings, nearly all of which were five star, rendering them largely useless as a basis for comparison. Instead, users were more often encouraged to view a wide range of video or audio clips provided, which did enable comparisons but hardly of the automated, rapidfire kind enabled by platforms.

Second, because the field of live music is so fragmented. Different kinds of work (“function” versus “creative”, and then the varied different “scenes” and segments within these broad groupings) have different ways of working. Buyers in them look for fundamentally different things. Norms around pricing and standards are completely different. Thus, while musicians themselves may happily work in many different contexts, they would normally use different avenues to obtain different kinds of work, rather than a “one stop” platform serving all market segments.

Third, because the transaction itself contains so many contingencies that have to be renegotiated. For instance, travel, accommodation if necessary, repertoire, food provision, equipment; all of these may involve specific requirements for each gig, to the extent that qualitative personal oversight of transactions is seen as essential by all parties involved.

Does this matter for music work?

While platforms have not taken over, the kinds of digitalization we did observe have some important consequences for live musicians’ working conditions.

First, digitalization makes intermediaries less likely to function as a musician’s representative, and more likely to provide a customer-centric venue for comparison. This creates new risks for music workers. Agencies are less likely to invest time and resources into promoting their acts, and more likely to require that artists produce these things themselves (for instance by assembling Electronic Press Kits which are uploaded to a band’s profile). There are up-front costs for artists to gain market access, with often a relatively weak chance of significant new work opportunities as a result.

Another dilemma this poses for musicians is those occasions where they are required to state their starting fee upfront, to be sifted through by potential customers. This means musicians have to commit to a rough fee before hearing the details of a particular engagement (though there is limited scope for negotiation before finalising the gig).

A more representative intermediary such as a traditional agent, would instead take responsibility for negotiating potentially higher fees depending on the perceived means of the buyer. Musicians are thus “frozen” into specific prices which have to be set with the lower end of the market in mind.

Second, the model magnifies price competition by creating a new forum where potentially thousands of acts can be rapidly compared. The vast “reserve army” of musicians is marshalled into a new and expanded “shop window”, and at the click of a mouse they can be sorted from least to most expensive or vice versa. Unsurprisingly, we found cases of extreme low fees on certain sites, including one where a four-piece band was offering a starting price of £100 for work in London (the average per-member fee of £25 compares to a Musicians’ Union-recommended going rate of over £150).

Finally, however, it was striking to note that many of these sites combined the wider reach of digitalization, with a continuation of highly opaque and “offline” methods of profit-extraction. For instance, some sites may take a suggested budget from a customer enquiry, and search through acts on their roster to find one who will work for the lowest fee. They may not reveal the customer’s actual budget to the band, and in this way they can accumulate huge commissions that might be as much as, or more, than artists themselves receive. Expanded digital reach does not necessarily mean greater transparency.

Limits to the platform economy?

These websites, in the vast majority of cases, are not platforms. Indeed, a detailed look at live music shows how some of the inherent characteristics of the sector militate against platformisation.

This means we need to reconsider the assumption that platform-type organisational forms are on an inexorable upward trend. While this may be true in some industries, we suggest there are other sectors- where the nature of services is complex and contingent, where markets are fragmented, and where judgements of value are highly subjective- which are likely to prove inhospitable for this kind of organisational form.

Nonetheless, the organisations we examined were increasingly creatures of partial digitalization, a sort of “missing link” between an offline service market and a platform. In many cases, this presented consequences for workers that resemble those already identified with genuine platforms.