Six years ago, no one dare argued with Thom Yorke’s statement that Spotify was the last arrow of the music industry. During that time, sales were pointing to a 13th decline in the span of 14 years. Since the turn of the century, the monetary worth of the music industry has been cut in half. But today, the industry is again poised to take the world by storm.
Numerous financial institutions have predicted this in recent years. In 2000, French Conglomerate Vivendi bought the largest record label Universal Music Group for $32 billion. It is now valued at $50 billion.
It is worth noting that these financial institutions that made predictions are linked to the industry, but to be fair, their predictions aren’t completely improbable. 2018 saw the fourth year of increase in global profits from sales and licensing of recorded music. This increase can be attributed to people who pay for their subscriptions of music streaming services. In 2013, Spotify implied that revenue will significantly increase once they get 40 million subscribers. At present, the app already has 100 million paid users. Analysts are looking forward to a million more subscribers once it takes on emerging markets including China and India.
However, despite all these predictions and revenue increases, those people who are actually making the music themselves are experiencing otherwise. The Music Industry Research Association’s recent survey showed that the professional American musician’s average income in 2017 was about $35,000. Most respondents shared that their earnings from music don’t cover their living expenses.
Industry players believe that streaming is turning the tables of the music industry in favor of the artists. But to date and for the longest time, the bigger share of revenues does not go the artists. Some experts even admitted that a lot of musicians who used to earn a decent living with their modest careers will have to let go of their dreams of making money from music.
Some artists believe that the streaming industry is for those who have a million-scale fan base, and not for those with only a thousand. With the expansion of the industry, the room for niche artists has consequently shrunk.
In 2000, a declining US economy and the proliferation of unlicensed file-sharing networks shattered the music industry, but after suffering from a short financial setback, labels figured out how to use the internet to their advantage. The labels recognized that switching to digital downloads will give them more profit than vinyl and CDs.
To date, there are only three major labels in the industry: Universal Music Group, Sony Music, and Warner Music Group.
And undeniably, they, along with streaming platforms like Spotify, are the ones who will benefit most from this predicted surge.
As for the musicians, the survey conducted by the Music Industry Research Association suggests that it will take long before they earn a decent profit from streaming.