What is the future of the music industry?

What is the future of the music industry?

It has been at least a decade since the music terrain transformed from a world of physical products like vinyls, cassettes and CDs to a predominantly digital world of intangible transactions. When the world was a straightforward sale of physical products, there was little room for discussion as to where revenue would come from for music-involved parties (labels, artists, producers, etc.). Apart from performance royalties, which account for public performances like radio, royalties were simpler. You buy an album worth about $10–12, the label receives the wholesale price, the artist receives their split from the sale. Now, with the growing popularity of streaming music making up a notable portion of plays for a song, it has become harder and more ambiguous to earn revenue for a song or album.

As streaming and subscription-services become increasingly popular and downloads are on the decline, the music industry players that receive the biggest hit are the artist. Even in the foreseeable future, it is still elusive to predict how newer technology, such as augmented and virtual reality, will play a role in how fast top hits will turnover and how even more accessible music will be. Streaming revenue comes from advertisements and subscriptions with unlimited plays, meaning the value of a song is greatly impacted to less than pennies a play.

Due to where the direction the music industry is progressing towards, there will be some growing pains for new and up-and-coming artists. It will be sometime before more of the right people (like Taylor Swift’s temporary hiatus from Spotify), companies (like Tidal trying to give a higher payout as a streaming company) or tools which make a mark in the industry to help artists gain more clout when it comes to revenue.

The Dollars is in the Data

With the constant progression of revenue deriving from digital sales, an artist’s worth has fallen into greyer areas. The numbers that count will first and foremost be about the sales, but it isn’t just about the downloads. Even when we review the kinds of Billboard charts available, there’s a ranking for streaming, on-demand streaming, downloads, vinyls, radio and more. Views on YouTube are worthy points of discussion. With over dozens of digital service providers domestically and over 100 internationally available, understanding the numbers from all ends is paramount to having any weight for an artist during negotiations of any kind of business.

Demand for Transparency and Empowerment

As more stores are created and more revenue models come to play, there is a growing need to streamline all of the sources of revenue and activity for an artist. Tools will need to evolve to be able to handle the growing complexity of data from so many different sources. These include current activity, historical patterns, geographical activity, revenue sources and other insights to make decisions like strategic album releases and touring plans. A key development that helps to gain footing for such transparency across the web is automated and immutable technology. Developing companies, such as Soundeon Platform, work to bring the most transparency to those that use the data and empowers those that the data effects, such as the artists and consumers. There will be a tipping point, to which the independent artist will regain some power in the industry to become successful because of the continual development of these tools.

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