The recorded music market has been growing for years, but are the reasons for growth negatively impacting small players in the music industry?
The State of Recorded Music
The market for recorded music has grown substantially for its 6th consecutive year. According to the 2021 IFPI Global Music Report, the market for recorded music grew by 7.4% worldwide in the midst of a rapidly intensifying COVID-19 pandemic. While the IFPI touts the consistent growth year after year, there seems to be hidden costs for both major and independent artists. With the live music market still in the recovery stage, an industry that has needed a breath of life for over a year is still questioning why some artists have not profited as much as they used to from the sales of recorded music.
An overview of the growth of global record music industry revenues since 2001, highlighting how streaming has been driving the growth of the recorded music market for the past 6 years.
Fallout of Formats
With streaming being the predominant reason for growth in recorded music over the past decade, digital downloads and physical formats have continued to plummet. In 2020 alone, streaming revenues grew by 19.9%, while revenues from downloads and other digital formats fell by 15.7% (IFPI). Even though revenues from streaming are growing, independent artists cannot rely on sales of recorded music as they once did. With streams generating fractions of cents after intermediaries and distributors take their cut, small artists are usually left in the hole. That’s the reason why so many musicians have been aching for reform. Paul McCartney, Kate Bush, and Noel Gallagher even signed a letter in the UK urging streaming revenue reforms. Even so, no significant or universal action has been taken to solve the problem.
Streaming access-models present differences from the physical and digital models that existed in the 2000s. A decade ago, artists could sell their music both at their own concerts and through physical distributors, while also drawing in profit from digital downloads. In 2021, most listeners and concert attendees would rather access music on their mobile device. Streaming royalties are rarely paid directly, and it may take a substantial amount of time before the money actually ends up in-pocket. This has crippled some small artists. However, there are strategies that some have been using to mitigate the problem (for now). Though the way people access their music has drastically changed with the introduction of new technology, so has the way music is recorded and distributed.
Though the ability for artists to make a living from recorded music has diminished, many have come to the realization that high quality musical recordings can be created and distributed without the help of a major label or studio. With at-home recording becoming increasingly popular during the pandemic, artists have been able to cope with lower streaming payouts by lowering their recording budgets. Instead of paying recording studios to record and mix tracks on an hourly basis, many are purchasing their own equipment and software to create their own recordings. Though music equipment can be a very expensive one-time investment, it is more affordable in the long run for those who record consistently. Earlier this year, Rolling Stone reported a 55% increase in Google search traffic for simple DAWs such as Garageband (*sighs* really?). This shows that musicians are shifting to home recording for a more cost effective solution to paid studio time. Furthermore, the ability for people to record and release music from their bedrooms has driven some of the recorded music market growth.
Social Media as a Driver
The growth in the recorded music market can also be attributed to new social media platforms. Tik Tok has led the surge in streaming with the introduction of micro-syncs. Furthermore, social media has vastly increased exposure opportunities for artists across the globe. However, exposure does not always equal fair compensation, and the payout from micro-syncs may not stack up to the amount of exposure. Much of the justification for low payouts is based on the idea or speculation that high amounts of streams may lead to sold out shows down the line. However, future speculations fail to pay the bills that are due today, and the concept of “making money down the line” is ultimately what causes so many record deals to fail.
Regardless, social media is also responsible for a great deal of success among artists. Furthermore, newer social media platforms have innovated to increase user engagement as much as possible. In the US and UK, Tik Tok surpassed YouTube for the highest average watch time per user. Furthermore, users of Tik Tok spent more time on the app than any other platform, suggesting that trending apps have developed new strategies to keep users engaged for longer. For the music industry, this simply means more exposure opportunities for artists. Oh yeah, and more streams too (of course). Social media has become an incredibly useful tool for artists and creators to reach their goals as musicians, and having the right strategy can lead to a wildfire of engagement with the right audience. Need help with finding better ways to strengthen your social media presence online? Check out Brain Candy’s marketing, branding, or graphic design services to get you started on how to bring your social media pages back to life.