The Future of the Music Industry – A personal approach

Much has been written about the future of music over the past 20 or so years as the internet has made universal distribution a technical possibility. Despite a few breakthrough success stories like Justin Bieber (discovered on YouTube) and Lorde the increased potential for creative work – especially music has mostly changed the business in a career limiting way for actual musicians.

Most of us are aware that despite it being easier and less expensive to record and produce music and other creative content than before; it is also much harder to make a living from recorded content.

If we can’t improve incomes for artists then this will slow down and may even stop the creation of new music. Existing catalogues are also important but the real risk is new music.

A recent New Zealand story about a local band made public some numbers that many have suspected for a long time. The true cost of streaming: Spotify paid Kiwi band with five-star reviews and 90,000 streams just $130 the short version is that despite relative local success the actual business returns show that the music industry is still structurally broken.

“• Local band She’s So Rad earned multiple 5-star reviews for their album Tango and have two songs on A-rotate on Hauraki.
• Yet they’ve only sold a total of 20 physical CDs and 50 digital albums.
• They have had 90,000 songs streamed on Spotify, earning them a projected $130
• Toy says: “It’s just much worse than we expected. I expected it to be bad, but this far surpasses it.”
Toy’s not a newbie to the music business, he’s been making music for decades in bands like Sommerset and Opensouls, working with a long list of artists like Anika Moa and Hollie Smith, working as a producer, beat-maker, DJ, and session musician. The first She’s So Rad album In Circles also received glowing reviews, they were nominated for the Taite Prize, and found interest in the UK, Australia, and Japan.

So he’s seen the industry change, and had low expectations for selling any albums this time around – but the reality surprised him.

She’s So Rad ( listen on Bandcamp)


Exactly what the solution is of course remains unclear. The best revenue streams for artists in terms of profit – digital and physical sales – are no longer as appealing to consumers as they once were.

“The idea of owning a digital file is not appealing to anyone and fair enough” Toy adds. “I pay for digital content not because I want to own a digital file, but because I want to show support to the artist which in turn helps make their art sustainable” Toy. “Streaming doesn’t help to keep music a sustainable resource.

“It’s tricky to work out what that means in the future. It just seems a pity that music can’t thrive because it’s an important part of our culture. I mean, I guess everyone could just be making it for free, which is essentially what a lot of us are doing, but everyone will burn out I think.

5 Practical Steps we can do to to Support Musicians

1. Cancel your Spotify* account ( unless spotify changes the payout rates greatly) Streaming is a good idea and suits mobile users especially but the payments to artists are miniscule. Maybe Tidal Music which is an artist owned label can tip the balance up by charging an “artists premium” but so far they don’t have that much of a catalogue.

*Clarification – see quotes below from Liam Boluk who thinks streaming services will be part of the answer. My view is that it is better as an artist to stay off them and as a consumer if you have a choice choose a higher value option.

2. Deal direct with the band. If they have a bandcamp account buy whole albums that way as more of the revenue (85%) goes directly to the band and they pay at the time of sale.. iTunes is OK but they charge 30% and pay months late.

Bandcamp is (in my opinion) the best service option that any musician can have to get music to the public. More on bandcamp here a post I wrote in 2011 and still true.

3. Become a patron by helping fund album productions via crowdfunding or presales for new work.

New albums still cost $10-50k at least. That is a lot less than it used to be and typically doesn’t cover any marketing or promotion. In the conventional model the music labels used to try and pick winners who they would fund to record new music.

4. Pay reasonable cover charges to see your favourite bands/ performers live.

In many venues the band takes the door fees and the venue makes it’s money from the drinks. Venue wants the door fee low to get more drinkers in the house but that pricing can work against the band. See Kiwi musicians no royals especially the insights about live venues.

A book referred to The Problem With Music In New Zealand And How To Fix It by Ian Jorgenson explains some of the local difficulties around venues. A review of that book by Graham Reid is over here.

5. Support discovery radio or live showcase performances to find new music.

Buying the same old bands you liked when you were 17 doesn’t build an industry.

6. Tell your friends this story. Be fair to musicians and pay them fairly. If you are active on social media hen let people know when you find great music. As someone who runs social and email marketing campaigns I can tell you that engagement rates on social media and emails are very low but they can be influential. For example an email campaign is lucky to get a 30% read rate – it is often lower and actual clicks and transactional clicks is more like 1% if you are lucky.

#befair2musicians A hashtag isn’t the answer but if it helps build critical awareness then lets do it.

Other recent stories include Apple Music another music streaming fail for Kiwi musicians

The Phoenix Foundation’s Samuel Flynn Scott said while Spotify and other services were good at distributing music, there was no money in it for artists. “If I’m making money it’s not enough for anyone to tell me about it. I wasn’t making any money before streaming services and I’m not making any now.”People always talk about streaming services in terms of ‘are you making money’ and it’s almost irelevant to be honest. I mean, it puts more people in contact with your music which is a good thing.”His band paid the bills by selling music through iTunes, on Bandcamp, at record stories and playing live.

In NZ commercial radio stations do pay some form of licensing fee to musicians by way of an industry organisation. although there is always debate about how these levies work and how much of that fee revenue gets back to performers.

Liam Boluk @liamboluk has also written about extensively about these issues from the U.S perspective.

“Music may have been the first media format to be upended by digital, but it remains deeply challenged even as video, publishing and gaming continue their path forward (however modestly). If the industry hopes to restore growth and fix the problems with today’s streaming models, it needs to confront its evolution: how have ecosystem revenues – from albums sales to concerts, radio plays, digital downloads and streams – changed and been redistributed? What is the underlying value of music? Did streaming erode this value or correct it? What’s the logic behind streaming royalty models and where are its flaws and decencies? How can it be improved? After 15 years of declining consumer spend, it’s time to stop focusing on what was or “should” be. Industries don’t rebuild themselves.”

….. Liam presents more data and background but his final paragraph offers his answer

“Services such as Spotify, Pandora and Tidal have the opportunity to reverse 15 years of declining consumer spend and B2B revenue. Their models will likely need to evolve, but most key metrics continue to improve even as the major services have scaled their user bases. However, many musicians – especially those sitting atop the industry today – will need to come to terms with the fact that their music could be worth less than they believed and that they’ll need to find new revenue opportunities outside the recording studio. This outcome is far from unique – it’s affecting publishing, gaming, television and film. Most importantly, however, artists must recognize that without new label agreements, their tide will never turn.”

I agree with Liam but I think that we can start those changes at an individual level by voting with our wallets and our feet when there is a chance to support a musician we like.

Andrew Dubber @dubber is a music industry specialist whose work I follow with interest.

Andrew is one of a number of music industry thought leaders who penned this music manifesto. Music Technologism

We discussed and debated what we thought to be the most important things about music and technology – and we came up with a declaration that reflects what we believe and what we hold to be important. Things like:

“We call on companies to produce music technologies that matter, that foster meaningful communities, that consider musical culture and user bases as much more than cash registers.”

What do you think?

Notes: Tks @StevePalfreyman
Patreon is a link that I had left out but it should be mentioned as another great way to support artists.