The little one’s paradox | Music Industry Blog

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When the history books are written about our present day, the rise of designer culture will likely become one of the most impactful paradigm shifts. It’s a dynamic that extends far beyond music, but it has a more direct impact on the music industry than on other entertainment industries – in large part because the music industry. music is not yet configured for micro-audience savings. In the meantime, the misfortunes of artist royalty will remain a festering wound that risks infecting the entire company. Solutions will require a combination of a new approach to monetization and a realistic understanding of what streaming can really bring to an artist community that continues to grow faster than streaming revenue.

No more mouths to feed

Despite the challenges of the pandemic, streaming revenue grew 20% in 2020, with the number of subscribers growing even faster. During the same period, the number of outgoing artists has increased by more than a third. The arithmetic is bluntly simple: more new artists than more new music meant lower average income per artist. As economist Will Page says, there are more mouths to feed. Even within the fast-growing direct artist segment, where revenue grew significantly faster than the overall market (34%), the average revenue per artist grew only 2% to $ 234 per year. – that’s right, at only $ 234 per year, through all recorded music formats. And of course, that figure is heavily skewed by a few thousand independent “superstar” artists, the vast majority earning much, much less.

Big numbers, small incomes

With five million direct artists in 2020, there have never been so many people bringing their music to global audiences. This designer revolution is unprecedented and represents five million chased dreams. But with just $ 234 in annual income to earn, the reality is that almost all of those dreams won’t come true. It has always been that way with music, but the difference now is that expectations have been high, with things made worse by the fact that streaming numbers can seem big but generate little income. For example, a self-published artist who accumulates 100,000 streams might only earn $ 500, which could easily sound like a very modest return for an artist who doesn’t have a comprehensive understanding of how streaming royalties work.

The 0.05%

It’s the little one’s paradox: more artists can reach a global audience and generate significant streaming metrics, but have little to no realistic prospect of significant revenue. Much of the ongoing income debate has revolved around the fate of middle class artist, but the greatest dynamic at play is the creation of amateur amateur class. In the early music business, these artists lived in a different world from professional artists. They played in local bars and sold a handful of CDs there which they recorded in a local studio. Now they use the same creative tools as the pros and have their music on the same platforms. It may sound like you’re playing in the same league as the pros, but it’s not. If they’re good enough, do the right things, and get breaks then they can get into this league, but that’s only going to happen for 0.05% of them.

Dreams just out of reach

Having dreams that seem to be close at hand but somehow close at hand is fertile ground for breeding discontent and resentment. The parts of the music industry that negotiate in this segment (artist platforms, digital distributors, streaming services, creation tools) have a duty of care that must go beyond its current mission of trading on dreams of artists.

Setting streaming royalties will not make a difference. Even if you doubled the royalty rates, 100,000 streams would still only generate $ 1,000 for a freelance artist. Meanwhile, the streaming services would lose 40 cents on every dollar earned, and that’s just to cover the royalty rates, that is, without even considering things like having a product, people, offices. , marketing or operations.

Look for income elsewhere

Streaming royalties will never add up for most independent artists, the same way radio never would. And it’s not just a self-published artist’s problem: most artists will never get paid ‘enough’ through streaming, and trying to get streaming royalty mechanisms to do so is like running. windmills. As I wrote before, the music industry needs to develop its ancillary sources of income for music creators. There are already many options, such as:

  • Selling songwriting services on Soundbetter
  • Selling beats on Splice
  • Sell ​​products on Bandcamp
  • Sell ​​subscriptions on Twitch
  • Selling Royalty Free Music on Artlist
  • Sell ​​live concert tickets with Driift
  • Sell ​​artist subscriptions on fan circles
  • Selling digital collectibles on Fanaply

Record labels, management, distributors, streaming services, and creative tool companies all need to invest to help their artists grow their fan bases and revenue on these platforms. This investment in the income of their creators will ensure that they will be better able to continue making music that fuels the business models that all of these other entities have learned to operate in ways that most individual creators do. have not and can not.

Streaming services need to fix it … or someone else will

However, the market also needs something more – a platform glue that binds creation, audience and consumption. Compare a music artist with a game streamer. A game streamer creates, streams, finds and monetizes their audience on a single platform (for example, YouTube or Twitch). A music artist, however, creates music on one platform, brings it to another for distribution who then feeds it into streaming platforms where the artist has no direct relationship with their audience. . There are exceptions to the rule (Bandlab, Soundcloud and YouTube especially) but that’s it: exceptions, not the rule.

Either streaming services need to start backing up their creator language first with creator tools first, or look aside like someone else is doing for them. Whoever leads the charge, the little one’s paradox will eventually become a little less of a paradox.


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