COVID has been hard on everyone, but artists and musicians have taken a particularly hard hit, second only to the food and hospitality industry (which coincidentally also supplements many artists’ income).
In the absence of concerts and festivals, streaming has become even more crucial to the artist livelihood even as it remains a non-economically viable revenue stream.
As a quick refresher:
streaming = more people access music + monthly recurring revenue = huge growth for the music industry
but…
more songs being uploaded to DSPs (Spotify) = revenue pie is cut into more slices = less revenue per song
And more songs are being uploaded to these platforms every day.
Existing artists have more time since they aren’t touring and everyone else has endless free-time to pick up a new hobby. Instrument sales and recording equipment have skyrocketed, as have subscriptions to distribution services such as Distrokid, Tunecore, and United Masters.
The revenue pie fractures alongside consumers’ attention spans. Many musicians are at their wits end evidenced by the recent worldwide #JusticeatSpotify protests..
Luckily there are some major undercurrents shifting the tides.
Three notable headlines just in the past month:
- Apple lead a $50 million fundraising round for United Masters — a platform that supports artists releasing and owning their music instead of labels
- Tidal was acquired by Square to, in their words, “make the economy work for artists ” They haven’t teased too many more details, but I picture some sort of reimagining of the iTunes Store to enable more seamless transfer of funds from fans to artists
- SoundCloud introduced “Fan-Powered” Royalties to distribute listener’s subscription revenue amongst the artists they listen to (rather than a collective pool)
Noticeably absent from this list are Spotify and Amazon, two companies that have strategically committed to cooperating with the traditional music industry players.
I recently had the opportunity to chat 1:1 with Spotify’s Head of Music, who took the position that streaming shouldn’t be the end-all for musicians, when you consider that album sales have never been everything.
While I still believe Spotify. has a lot of rethinking to do, I take his point that it’s worth considering how to grow other revenue streams for artists such as in Sync (TV/Film/Ad placements) and, sure, NFTs.
