Shares in Common Music Group surged after its US$40 billion (£29.5 billion) flotation on September 21, suggesting many individuals suppose the music enterprise has a robust future. Certainly one of them, Lucian Grainge, the corporate’s chief govt, believes growth might be pushed partly by altering shopper habits and the exploitation of undeveloped markets in among the world’s largest nations.
Trade statistics seem to assist Grainge’s optimism, with complete world income within the music trade rising by 54% between 2014 and 2020. The upswing, after greater than a decade of decline, is being pushed by on-line streaming, which now has a wholesome share (62%) of general income.
Most of that income finally ends up with the report labels, and as one of many “huge three” (together with Warner and Sony), Common stands to reap substantial rewards from this case. Certainly, the corporate’s double-digit progress in income over the past 12 months signifies the robust monetary well being of the music trade.
The streaming platforms themselves, although, have to this point struggled to turn out to be worthwhile companies – partly because of the costly licensing offers they should pay the report firms. Spotify has made substantial losses all through its existence. (Others, like Amazon and Apple, use music streaming as simply a part of their portfolios, making it tough to determine its exact contribution.)
Musicians, in the meantime, stay in probably the most precarious place, even whereas the trade they work in is booming. Within the UK, 62% of musical artists earned not more than £20,000 in 2019.
Previously, they have been in a position so as to add to what they made in streaming royalties – it takes round 250 performs on Spotify to make US$1 (£0.74) – by stay performances. However this has been severely curtailed by the pandemic, which has affected not solely ticket gross sales, but additionally merchandise and report gross sales at live performance venues.
Out of this fertile soil of discontentment have grown musician-led campaigns like Damaged File and Preserve Music Alive, whose affect within the UK led to an official authorities inquiry in 2020 trying into the economics of music streaming.
One of many major suggestions of its lately launched report is for the federal government to ascertain a mechanism for delivering “[equitable remuneration]” to musicians. This might goal to present them one thing like a 50/50 cut up with report labels from royalties, versus the present roughly estimated 55/30/15 cut up between label, platform and artist respectively.
The UK’s competitors regulator is now set to analyze the ability of the businesses that dominate the UK’s music trade. And whereas any suggestions would relate solely to the UK, because the world’s third-largest music market (after the US and Japan), it may nonetheless show influential elsewhere.
A unique tune
However huge questions stay in regards to the future course of the music trade. Relations between report labels and the streaming platforms will should be frequently scrutinised, particularly the place there are considerations of potential monopolies.
And whereas fairer distribution of income amongst labels, platforms and musicians will enhance the artists’ place, actual change can solely come from elevated income. One reply to this downside can be to rethink how a lot cash we’re ready to spend on accessing music.
Month-to-month subscription charges for among the main streaming platforms hover round £9.99, which is extraordinarily good worth for entry to many of the music that has ever been recorded.
This value level has been maintained for greater than a decade, maybe due to the final feeling that quick access to “freemium” fashions, notably YouTube Music, has positioned a ceiling on the price of subscriptions.
However the rise in vinyl gross sales in recent times, alongside the rising reputation of streaming platforms like Sonstream and Bandcamp, which allow listeners to pay their favorite artists straight, recommend that buyers have gotten extra conscious of the necessity to assist musicians.
Streaming is more likely to proceed to dominate the music trade. However there are modifications, pushed each by political inquiry and shoppers’ habits, which can hopefully set up a extra equitable ecosystem, and permit for a fairer method of paying artists for his or her work. For no matter enterprise mannequin for music lies forward, it can’t survive with out offering truthful monetary backing to maintain the creativity of latest musical expertise.
Andrew White doesn’t work for, seek the advice of, personal shares in or obtain funding from any firm or organisation that might profit from this text, and has disclosed no related affiliations past their tutorial appointment.