The Music Industry Is Failing Its Musicians
A new report released by banking group Citibank has found new figures spotlighting the poor compensation musicians are receiving in the industry today, which comes to 12%.
While in the US listeners are spending $20 billion a year on music, – that’s more than ever before – and revenues are totalling more than $43 billion a year, musicians are getting just $5 billion of that figure. Whilst a lot of recent reports have focused on the revival of the music industry, and that is true to some extent, with the advent of streaming. These figures show that musicians overall are still getting a terrible end of the stick.
The report goes on to say that by in large this has been due to the growth of streaming which has killed the opportunity for artists to sell to fans directly eliminating the ownership of music for consumers. So the renting option in music has become easier for consumers.
The considerable surplus in the industry is purely down to the popularity of concerts and festivals. This explains why the figure has risen from 7% in 2000 to 12% where it is now. Musicians have found themselves touring more and more to pay their way.
One of the authors of the report spoke to Rolling Stone and said, the 12% is “amazingly low” and that the figure revealed “an unbelievable amount of leakage.”
So where is it all going? This graph should clear it up for you:
Yep, touring is still the top way for musicians to earn money -> Musicians only received 12% of the $43 billion the music industry generated in 2017, and it mostly came from touring https://t.co/xyqHISR3Cv pic.twitter.com/bmANYE97c5
— Glenn Gabe (@glenngabe) August 7, 2018
A large proportion of the revenues are going directly to middlemen so, tech companies, radio stations, and record labels. This is clearly an example of an industry that hasn’t been able to evolve into this new digital industry. Where antiquated industries still struggle to grow their business model.
The report concludes, “In most forms of entertainment, the artist captures the lion’s share of the spoils. because the music industry has so many intermediaries — and because the consumption of music is so fragmented across various platforms — the artist captures very little of the aggregate revenues.”
The report cites a few solutions to increase the % for artists that is both vertical and horizontal integrations, so, for example, concert promoters merging with distribution platforms like Spotify or distribution companies like Spotify taking ownership of music more acting like a label. And with Spotify ending 2017 on a high with 70 million subscribers and $5 billion in revenue, it’s about time.