What’s Going On In the Music Bu$iness?

I feel like it’s important for the Hip-Hop community to have these conversations.

Facts

  • Record revenues @ $15b (that’s $15,000,000,000)
  • Historic year to year growth
  • Music consumption exploding worldwide at historic rates

Current Issues — despite historic growth, much of the money is at the top (executive level)

  • A small percentage of corporations control much of the major music distribution channels.
    • It’s hard for artists to make money on music when most of the distribution options are controlled by companies like Apple and UMG.
  • Artists offset this by signing exclusivity deals and co-promoting with outlets to earn money.
  • The number of artists who are able to gain consistent financial revenues appears to be stagnating.
  • The end result might be more artists owning their own distribution channels (I think that artists should stream and sell via their own site). Especially if a company like Bandcamp, AudioMack, or Soundcloud can find a way to further extend the range of options artists have for selling and promoting their music. (thanks to Es1 for the insights)

Revenue breakdown

[IMG]

Interesting notes

  • Streaming is the fastest growing revenue stream
  • Subscription services grew (Apple Music, TIDAL, Spotify, etc) up to 81m subscribers from 41m in 2014
  • Digital downloads down 10%, even more than the 8% decline in 2014
  • Performance rights revenues up 4%
  • Physical albums sales decline but at a slower rate than 2013 and 2014.
  • Vinyl sales are up ~40%

The bottom line

  • A “value gap” is the reason why record labels and artists are suffering and not eating as they should despite historic growth

The “value gap” arises because some major digital services are able to circumvent the normal rules that apply to music licensing.source

I’m trying to find out where money can be made. This is a booming industry but feels like it’s in a drought to many. Where can we find profit at in the music industry?

Feel free to shed more insight.

Leave a Reply