PRODUCT OF THE MONTH | MAY 2021
By Brittney Rollerson
What do you get when you mix social media, music streaming, and music discovery? You get LÜM, a social music streaming phenomenon. LÜM is the first music streaming app to allow artists to earn monetary contributions from their supporters. Co-founder Endre Krumholz explains how LÜM swims in waters far different from the typical “talent pool”.
What or who were the inspirations behind the creation of LÜM?
It started with the idea of creating a better music experience for fans by bridging the gap between the social and streaming side of the music. Then, after looking deeper into the evolution of this industry, along with the business model and payout structure of major streaming platforms, we quickly realized that there was a need for disruption with the best interests for independent artists in mind. This prompted the team to find unique and exciting ways for artists to better connect and monetize their peer and fan relationships.
What was one of the biggest struggles you've faced when establishing LÜM?
We live in a time where music as an end product has become a commodity that consumers believe they have unlimited and free access to. So, one of the biggest hurdles for LÜM has been the cultural shift necessary to get fans and creators to understand the value in financially supporting the artists who create music every day. Unfortunately, most fans are unaware about the dismal payout rates from streaming royalties and that their subscription isn't actually supporting the artists they listen to day-in and day-out. This leads to artists feeling "stuck" working within the guidelines major DSP's have established creating a facade that streams are the holy grail as the most important metric of growth. The truth of the matter is with an estimated 20 million creators across the globe, about 90% of all royalty payouts go to the top 1% of creators of which only about 0.25% of total creators are bringing in a livable income (defined as $60k or more in royalty payouts, before considering the splits between the artist and their label) from streaming royalties alone. Additionally, the connection between artists and their fans streaming their music is virtually nonexistent and artists have no way to identify who is actually listening. The gap between music streaming and fan connection has left a significant void to be filled. We hope to create a better experience for artists and fans on LÜM that leads to a higher CLV for artists throughout their careers by providing the necessary tools to identify and connect directly with their fans.
If you weren't Co-Founder and Artist Relations Director of LÜM, what career field would you be pursuing, and why?
Honestly, I would be doing something around a body of water somewhere warm, likely working to help provide access to experience sailing and watersports for less fortunate individuals and groups who would otherwise be unlikely to get the chance to try.
Has the pandemic affected the growth of LÜM, if so how?
As a music-tech startup in an ever evolving digital world, we were fortunate enough to survive the challenges COVID-19 threw at us and our community. If the pandemic taught us anything, it is that the power of a community filled with like-minded people will band together and support each other through life's struggles. We used this as an opportunity to help our community through these times with our #LÜMCares initiative by slashing our prices for Note's (LÜM's in-app currency) and working with our partners to run collaborative competitions with thousands of dollars in cash rewards.
Through these initiatives, we were able to cultivate comradery within the LÜM community and witnessed everyone band together to help each other through these times. This helped propel LÜM to be selected as Apple's App of The Day in April 2020 and accelerate the development of our Android and Web platforms (released October 2020). The pandemic also inspired us to provide an easier way for creators to connect and work with one another from a distance, which resulted in the launch of a new pillar on LÜM called - The Exchange (released January 2021). The Exchange, dubbed as "the Shopify for music", is a music driven marketplace where creators can directly buy and sell music services from each other on the same platform they are already, networking and collaborating daily.
What do you believe the legacy of LÜM will be?
By shifting the power back into the hands of those who care most about music, artists and their fans, we hope to leave our mark on the entertainment industry by shifting the culture around artist support, through virtual gifting on LÜM, to become common practice in the same way we are expected to support waitresses and waiters at restaurants. The model LÜM has created is designed to help creators make more money and build a connection between the artist and fan, which will allow artists to create more music and content for everyone to enjoy.